Trade unions,nonneutrality and stagflation

The claim that in policy games nonneutrality and a stagflation bias emerge in equilibrium if the unions care about inflation, per se, is discussed. This assumption is shown to be not necessary to obtain a stagflation bias; the same applies to nonneutrality if a government acts in the economy. The question of whether unions should be envisaged as “institutions” (i.e., interested in variables unrelated to wages and employment) is also addressed. Two model-based alternatives providing “microeconomic” foundations versus “macroeconomic” foundations to unions' behaviour are presented. The conclusion is that the modelling of unions remains an unsettled problem.     

Granger causality,rational expectations and aversion to unemployment and inflation

This paper presents a new test for rational expectations. This is done within the context of public concern, or aversion, over inflation and unemployment. It is found that inflation aversion Granger causes inflation, but unemployment aversion does not Granger cause unemployment. This implies both that inflation aversion is partially determined by expected inflation and that such expectations have a rational element. However, rational expectations of unemployment do not determine unemployment aversion. The consequences of these results for political business cycle theory are then examined.     

Representative Democracy as a Necessary Condition for the Survival of a Federal Constitution

It does not follow from the supposition that the union is beneficialthat its terms would go unchallenged by its members. The argumentin this article suggests that federal stability (robustness)requires for itself a well-functioning democratic process, whichsatisfies a fairly restrictive condition. A necessary conditionfor the resiliency of the federal regime is a representativedemocracy; furthermore, it is the representative democracy inwhich rewards to the representatives are only in part vestedin their parochial constituencies, while in the other part comeform other sources, e.g., from an oversized at-large coalition.The requirement to the democratic process is, of course, onlya necessary, not a sufficient condition for the federal success.Yet, we argue in this essay that only the states with well-developed(properly institutionalized) democratic electoral competitionhave a chance to form a resilient federal union and sustaintheir federal constitutional arrangements not just in form,but in their political practice as well.     

Risk-aversion and prudence in rent-seeking games

This paper considers a common n-agent symmetric rent-seeking game. It derives conditions so that risk-aversion and risk always decrease rent-seeking efforts. These conditions hold for any regular contest success function when risk-averse rent-seekers are also prudent. Under n=2, prudence is a necessary and sufficient condition for risk-aversion to decrease rent-seeking efforts compared to risk-neutrality. An intuition for this result is given based on a self-protection model.     

Optimal central banker contracts and common agency: a comment

We explore a setting where the central bank is offered an incentive scheme by an interest group, in addition to the contract designed by the government. We prove that the inflation bias can be eliminated when principals do not cooperate and have different output or inflation objectives. These conclusions contrast with those of Chortareas and Miller (Public Choice 121:131–155, 2004). The reason is that our analysis takes into account the participation constraints of the central bank. We also show that, if principals cooperate, the inflation bias is eliminated when their output target is different but not when they disagree over the inflation objective.     

Inflation,unemployment and government popularity—Dynamic models for the United States,Britain and West Germany

There has been numerous attempts to model the relationship between unemployment, inflation, other economic variables and government popularity in a variety of industrial countries. However, there is conflicting evidence about the magnitude and significance of effects both between different countries, and within the same country at different points of time. The purpose of this article is to examine the existing literature, to provide a critique of the theoretical and statistical validity of many existing studies, and to specify and estimate a dynamic model of the relationship between inflation, unemployment and government popularity in three countries over the post-war period. This model is a multivariate transfer function with an autoregressive-moving average error structure which has been developed in its general form by Box and Jenkins. The results demonstrate significant relationships between inflation, unemployment and government popularity, but relationships which are relatively weak and unstable over time.     

Wire-Walking: Risk Management and Policy Experiments in China from a Comparative Perspective

Abstract

Policy scientists have long examined how policy innovation has emerged and diffused by focusing on the interaction between agents and policy programs. In contrast, this article focuses on how uncertainty in policy environments has affected the fate of policy innovation in an authoritarian state. Using original data from China’s official newspaper, the People’s Daily,it is found that the central government’s decision to promote sensitive policy experiments is a function of the perceived risks in the policy environment. The U-shaped relationship between the promotion of sensitive policy innovation and inflation reflects the wire-walking behavior of China’s central government. The central authority in China tends to promote fewer sensitive political experiments when inflation increases and resumes promoting experiments when the inflation rate passes a certain tipping point. It is also found that the central authority intentionally regulates the promotion of political experiments during important political events.     

The Walsh contract for central bankers proves optimal after all!

A recent paper argues that the Walsh linear inflation contract does not prove optimal when the government concerns itself about the cost of the central bank contract (Candel-Sánchez & Campoy-Miñarro, 2004). This result relies on assuming that the participation constraint does not represent an effective constraint on the central banker’s decision. We show that the Walsh linear inflation contract does produce the optimal outcome, even when the government cares about the cost of the contract, assuming that the participation constraint holds.     

Parteien, Vetospieler und der Wettbewerb um Wählerstimmen: Die Arbeitsmarkt-und Beschäftigungspolitik der Ära Kohl

The paper develops a model to explain the labour market and employment policies of the Christian-liberal coalition in Germany between 1982 and 1998. It takes partisan theory as its starting point, but expands it by taking into account the effects of party competition and veto players as well. For the first period of observation, the years 1982 to 1989/90, only moderate reforms can be observed. This can be explained by the fear of the coalition that more far-reaching reforms could exert negative effects on its electoral performance on the one hand, and by the strong influence of the labour union wing of the Christian democratic party on the respective policies on the other hand. During the first years after German unification the government could not implement far reaching partisan reforms either. This was due to the necessity of reacting to the external shock of the unification and the problems associated with it. Only during the last three years in office the coalition was able to push through more coherent reforms due to the huge problems on the labour marker which put the government’s re-election at risk. These reforms could be carried through because the CDU’s labour wing had lost its veto power and because the Bundesrat’s approval was not necessary.     

It’s all ‘bad’ news! Voters’ perception of macroeconomic policy competence

The purpose of the present paper is to consider how voters form perceptions about macroeconomic policy competence by focusing on the role of recent macroeconomic news: Do their perceived views of good news matter as much as bad news when they form beliefs about the incumbent government’s competence in managing the macroeconomy, in particular, with regard to their ability to control inflation and unemployment? We find that ‘bad’ news about unemployment persists when households are forming their perceived competence, whereas “good” news does not. That is, voters tend to display pessimistic bias when forming perceptions about the incumbent government’s competence.     

信息公开、公众参与和开放型政府建设

传统行政管理组织的不透明性、严格的等级制度等,造成了一系列的政府问题。要解决这些问题就必须建立一种新型的政府,即"开放型政府"。开放型政府是一个信息输入与输出的循环体,公众参与即输入的过程,信息公开则是输出的过程,而"开放"就是由一个输入和输出构成的不断互动的环路。建设开放型政府是全球化和知识产业化的必然要求,是民主的必然要求,是世界各国政府建设的必然趋势,它对中国意义更加重要。目前开放型政府建设还存在诸如信息公开不足、公众参与不够等问题,因此,要加强开放型政府建设应该从这两方面入手:通过转变观念、加强立法等促进信息公开;从扩大基层民主、拓宽公民参与渠道等推动公众参与。     

Political accountability for price stability and unemployment in a multi-party system with coalition governments

A model of party popularity for multi-party systems is presented and applied to the Netherlands. Main conclusions are: first, inflation and unemployment and their interaction affect the popularity of parties; second, it is important to take into account that voters may reckon with a trade-off between these variables; third, it is wrong to handle a coalition government as a homogeneous entity.     

Policy Stalemate and Policy Change in Israel's Water Sector 1970–2010: Advocacy Coalitions and Policy Narratives

This paper seeks to explain policy stalemates that persist despite recognition of their risks and damages, as well as the factors and processes that enable a breakthrough and lead to policy change. The paper seeks to fill a gap in the Advocacy Coalition Framework (ACF) theory by supplementing it with Narrative Analysis (NA). We claim that NA provides a link missing in the ACF that is required for the transformation of “necessary” conditions—like external and internal shocks to the system—into “sufficient” conditions for policy persistence or change. We use the ACF to delineate coalition members and their belief systems and policy positions, as well as external, internal, and structural shocks to the system. We rely on NA to analyze the narratives employed in the public arena, which turn conditions necessary both for hurting stalemates and for policy change into sufficient conditions. We illustrate the benefits of combining the two approaches through a study of Israel's water policy during four decades (1970s–2000s) based on government records and on information from interviews with key players.     

Variation in central bank independence across countries: Some provisional empirical evidence

In this paper seven hypotheses to explain variation in central bank independence across countries are tested. The predictions based upon the theory that delegation of authority by politicians to the central bank is used as a commitment device are not supported: central bank independence is not higher the larger the employment motivated inflationary bias, the higher political instability or the larger the government debt. Central bank independence is positively related to historical inflation experience and negatively with political instability. We do only find limited support for the view that countries with a universal banking system and countries whose central banks do not regulate financial institutions have more independent central banks.     

Both glue and lubricant: Transnational ethnic social capital as a source of Asia-Pacific subregionalism

Social capital not only forms and functions at the individual, group, and organizational levels, but also permeates and transcends the political and geographic boundaries of nation-states. This paper examines transnational ethnic social networks based on ancestral and kinship ties as a form of social capital that facilitates economic growth and transformation in a transborder subregional context. Transnational ethnic social capital works by gluing multiple economic actors on opposite sides of a border together and by lubricating economic transactions among them. When purposefully mobilized by government policies, transnational ethnic social capital in turn induces more responsive and efficient policy initiatives and implementation. This paper also considers whether ethnic social capital is both a necessary and sufficient condition for successful transnational subregionalism by demonstrating its interaction with certain crucial complementary or contradictory factors.     

Continuity and Change: The New South Wales Public Sector Under Labor

This paper analyses recent developments in wage bargaining in the New South Wales public sector under the Labor government. It contrasts the approach taken by the former Coalition government with that of its successor. The discussion is focused on the Memorandum of Understanding between the Labor government and the public sector unions. With the agreement of the unions, the government has reasserted both substantive and procedural control over public sector industrial relations. This has not, however, prevented widespread industrial action in schools, hospitals and public transport and continuing tensions between the principal public service union and the government.     

走向服务政府:洛克有限政府理论及其启示

随着国家治理现代化建设的推进,我国政府治理模式经历了管理型政府向服务型政府的转变.洛克有限政府理论在保护公民权利、实现政治国家与市民社会互动等方面具有积极的现实意义,但有限政府不一定等同于服务政府,在面对不同时期、不同国情下的市场失灵问题以及权衡德治与法治、自由与平等、作为与不作为等现实问题时,有限政府理论具有自身的局限性.而服务型政府必然是一个有限政府,洛克所提出的自然权利、社会契约以及权利让渡所构成的有限政府理论,对于新时代构建服务政府仍然有很强的借鉴意义.     

The Political Implications of American Concerns About Economic Inequality

This article presents a national measure of Americans’ level of concern about economic inequality from 1966 to 2015, and analyzes the relationship between this construct and public support for government intervention in the economy. Current research argues that concerns about economic inequality are associated with a desire for increased government action, but this relationship has only been formally tested using cross-sectional analyses. I first use a form of dynamic factor analysis to develop a measure of national concern over time. Using an error correction model I then show that an increase in national concern about economic inequality does not lead to a subsequent increase in support for government intervention in the economy. Instead there is some evidence that, once confounding factors are accounted for, an increase in concern could lead to reduced support for government intervention.     

Who should be chef? The dynamics of valence evaluations across income groups during economic crises

In this paper, we investigate partisan rationalization in valence politics by trying to better specify the direct and indirect effects of the economy on government support. To do so, we examine how income levels moderate the influence of objective economic conditions on perceptions of which party is the best manager of the economy during a period of economic crisis, 2004–2010, in the United Kingdom. We find that low-income voters are more responsive in their assessments of the incumbent Labour government based on unemployment, as are high-income voters in terms of inflation. In addition, high-income voters tend to behave in a manner consistent with partisan rationalization, while low-income voters do not. These conclusions offer important implications for the effectiveness of electoral control of government policy, as well as the quality of representation.     

Reaching Out or Pulling Back: Macroeconomic Conditions and Public Support for Social Welfare Spending

In economic hard-times, do Americans call for increases in governmental assistance, or do they clamor for declines in government assistance? We address this question by identifying the impact of state-level macroeconomic conditions on public support for social welfare spending. We analyze individual-level data from the 1984–2000 National Election Studies, combined with state-level macroeconomic indicators of inflation, unemployment, and productivity. We find that state-level inflation, not state-level unemployment nor state-level productivity, consistently and consequentially shapes citizens’ support for social welfare. With rising inflation, Americans become more supportive of means-tested social welfare spending. Our analyses generally reaffirm the value Americans place on the social welfare safety net, especially during times of economic duress. When the going gets tough, Americans reach out, rather than pull back.