Labor market institutions and income inequality: an empirical exploration

This paper presents evidence on the impact of labor regulations on income inequality using a recently published database on labor institutions and outcomes as well as different panel data analysis techniques for a large sample of countries for 1970–2000. When applying our preferred technique we find that both de jure and de facto regulations improve the distribution of income although the former appear to be non-robustly associated with improving income inequality. This result partly reflects the fact that regulations are endogenous and, more interestingly, that different regulation yield distinct effects.     

Indignation or Resignation: The Implications of Transparency for Societal Accountability

International organizations, policy experts, and nongovernmental organizations promote greater governmental transparency as a crucial reform to enhance accountability and curb corruption. Transparency is predicted to deter corruption in part by expanding the possibilities for public or societal accountability, that is, for citizens and citizens associations to monitor, scrutinize, and act to hold public office holders to account. Although the societal accountability mechanism linking transparency and good government is often implied, it builds on a number of assumptions seldom examined empirically. This article unpacks the assumptions of principal‐agent theories of accountability and suggests that the logic of collective action can be used to understand why exposure of egregious and endemic corruption may instead demobilize the demos (i.e., resignation) rather than enhance accountability (i.e., indignation). We explore these theoretical contentions and examine how transparency affects three indicators of indignations versus resignation—institutional trust, political involvement, and political interest—given different levels of corruption. The empirical analyses confirm that an increase in transparency in highly corrupt countries tends to breed resignation rather than indignation.     

Squaring the speed of light? Regulating market access in algorithmic finance

Abstract

We examine the sociomaterial regulation of algorithmic trading against the background of the European Union’s directives on Markets in Financial Instruments (MiFID/MiFIR). Tracing the purification and translation of regulatory practices within a French brokerage firm, we examine the impact of electronic trading on the nature of market access. Central to our analysis is the ‘Blackbox’, a tool designed to manage market access efficiently by collating trade flows and automatically pairing them with trading algorithms. Our findings show that, through a process of ‘abstracting’, purification and translation are kept strictly separate, allowing the broker to meet the regulatory requirements de jure whilst retaining de facto the unregulated advantages of high-speed materiality. We discuss the implications for both the policy and practice of high-speed financial trading.     

Transnational Legitimacy in a Globalising World: How the European Union Rescues its States

This article addresses claims regarding the limited legitimacy of international institutions. It argues that the two original appointed supranational institutions of the European Union play a crucial, if systematically underestimated, role not merely in providing legitimacy for the Union itself, but also in shoring up that of its constituent member states. We illustrate that supranationalism enhances national legitimacy in functional, political and administrative terms. It does so by helping member states produce outputs they otherwise could not (particularly by enabling them to deal with transboundary policy problems they would struggle to confront if acting in isolation) and by embedding within national political and administrative systems legally enforceable obligations to respect the interests of actors whose voice is excluded or muffled (de jure or de facto) within purely national political processes. The article contends that the claims to legitimacy made by the EU and its member states are of distinctive character but interdependent and mutually reinforcing.     

Gauging the Impact of Transparency Policies

To what extent do transparency policies generate positive impacts? This seemingly rhetorical question has become the subject of increasing contention, partly because of two research‐based biases. First, researchers have been blinded by metrics and method. Using tools that are often ill suited to gauging the gradual, diffuse, and indirect effects of most transparency policies, research has found—unsurprisingly—spotty evidence of impact. Transparency studies would benefit from greater use of complementary approaches, such as careful tracing of impact processes and indicators, combined with sensible counterfactual reasoning. Second, researchers have been looking for impact with blinkered vision. In particular, a thematic fixation on accountability and participation has monopolized attention. Key preconditions—such as compliance with and implementation of transparency policies—remain relatively neglected, as do other areas of potential impact, including capacity building, how actors are leveraging previously restricted streams of information, and transparency's role in improving policy coordination and communication.     

The Committee on Standards in Public Life: Twenty Years of the Nolan Principles 1995–2015

In his recent memoir, William Waldegrave wrote that no country run by John Major and Robin Butler was likely to be in much danger of systemic corruption. The fact remains that a quarter of a century ago, John Major, with the guidance and support of his cabinet secretary, decided to establish the Committee on Standards in Public Life under the chairmanship of Lord Nolan. The apparent prevalence of ‘sleaze’ issues in public life—most notably the ‘cash for questions’ scandals involving Tory MPs—provoked the decision. Lord Nolan's committee immediately enunciated seven principles of public life: honesty, accountability, integrity, selflessness, openness, opportunity and leadership. Over the years, many of the Committee's recommendations have been accepted. There is today vastly greater transparency. The principles have been widely accepted; it is clear the public expects that they should be observed by public servants, including, perhaps especially, MPs. Yet it is equally clear that there is a widespread and still deepening mood of public cynicism on standards matters. The Committee is determined to defend the Nolan principles, but without more help from the political class it will be like Mrs Nupkins in The Pickwick Papers: inculcating moral lessons of great importance and generally ignored.     

Transparency in multilateral climate politics: Furthering (or distracting from) accountability?

This article analyzes the interplay between transparency and accountability in multilateral climate politics. The 2015 Paris Agreement calls for a “pledge‐and‐review” approach to collective climate action with an “enhanced transparency framework” as a key pillar of the Agreement. By making visible who is doing what, transparency is widely assumed to be vital to holding countries to account and building trust. We explore whether transparency is generating such effects in this context, by developing and applying an analytical framework to examine the link between transparency and accountability. We find that the scope and practices of climate transparency reflect (rather than necessarily reduce) broader conflicts over who should be held to account to whom and about what, with regard to responsibility and burden sharing for ambitious climate action. We conclude that the relationship between transparency and accountability is less straightforward than assumed, and that the transformative promise of transparency needs to be reconsidered in this light.     

Citizenship on paper or at heart? a closer look into the dual citizenship debate in Europe

This article seeks to promote an integrated approach to the study of citizenship policies, which pays due attention to their potential impact on migrants whose self-recognition are formally delimited by legal definitions. Through a novel approach that makes use of naturalisation processes as an empirical entry point into the narratives of citizenship embraced by Turkish migrants, this article investigates the role of dual citizenship policies in three European countries: Spain, the Netherlands and the UK. The evidence from the sample group displays a process of ‘self-bargaining’ prior to the naturalisation decision, which calls into question the link established between legal and emotional bonds of citizenship. The Dutch example demonstrates how Turkish migrants cope with the ban on dual citizenship by downplaying the identity-conferring role of citizenship status. This leads to a decoupling of legal and emotional aspects of citizenship and thereby to the adoption of a thin sense of citizenship. While Spain represents an in-between case that has a tolerant implementation despite a de jure ban, the British example shows how the process of ‘self-bargaining’ can result in the widening of emotional landscape, when dual citizenship is allowed. A thick sense of citizenship is therefore not only preserved but it can also be extended to the citizenship of the country of residence.     

Independent regulatory agencies in Turkey: are they really autonomous?

This article examines the autonomy of independent regulatory agencies (IRAs) in Turkey. It explores, first, the different factors that have led to the creation of IRAs and second, the legislative basis of their formal or de jure autonomy. Thereafter, the article assesses the extent to which this formal autonomy is really put in practice and how it is perceived by board members. The enquiry was conducted through a survey comprising interviews and a questionnaire applied to the same. It concludes that although formal autonomy is satisfactorily provided for by law, government tends to limit this autonomy through secondary legislation. Consequently, there are some constraints on the actual use of autonomy. Concerning de facto autonomy, survey findings show that boards are exposed to external and internal pressures and interference in their deliberations. Thus, the assumption that ‘the greater the autonomy the more efficient the management’ is questioned. The main sources of pressure on board members are from the regulated sectors themselves. These findings have an important bearing on democracy and the political–administrative interface, as it is confronted by market forces. Copyright © 2007 John Wiley & Sons, Ltd.     

Citizen Participation in City Governance: Experiences From Vietnam

The radical political and economic reforms sweeping through former socialist countries during the last several decades have facilitated economic growth and urbanization. During this period of market reform and urbanization, citizen participation is greatly needed yet easily lost to other priorities. We employ stakeholder theory to examine whether citizen participation differs between large and small cities and between the poor and non‐poor people in Vietnam. Using data from a sample of citizens in five centrally managed cities, we found that citizens in large cities and citizens that belong to “unofficially poor” groups participate less. For policy makers, this implies that citizen participation should be of central importance in the management of current cities' expansions. In addition, the categorization of “poor households” needs to be closely monitored to minimize the risk of de facto poor households being excluded from the group. Copyright © 2015 John Wiley & Sons, Ltd.     

The Impact of Public Officials’ Corruption on the Size and Allocation of U.S. State Spending

This article demonstrates the impact of public officials’ corruption on the size and allocation of U.S. state spending. Extending two theories of “excessive” government expansion, the authors argue that public officials’ corruption should cause state spending to be artificially elevated. Corruption increased state spending over the period 1997–2008. During that time, the 10 most corrupt states could have reduced their total annual expenditure by an average of $1,308 per capita—5.2 percent of the mean per capita state expenditure—if corruption had been at the average level of the states. Moreover, at the expense of social sectors, corruption is likely to distort states’ public resource allocations in favor of higher‐potential “bribe‐generating” spending and items directly beneficial to public officials, such as capital, construction, highways, borrowing, and total salaries and wages. The authors use an objective, concrete, and consistent measurement of corruption, the number of convictions.     

Parallel Systems and Human Resource Management in India's Public Health Services: A View from the Front Lines

There is building evidence in India that the delivery of health services suffers both from an actual shortfall in trained health professionals and from unsatisfactory results of existing service providers working in the public and private sectors. This study focuses on the public sector and examines de facto institutional and governance arrangements that may give rise to well‐documented provider behaviors such as absenteeism that can adversely affect service delivery processes and outcomes. We analyze four human resource management (HRM) subsystems: postings, transfers, promotions and disciplinary practices from the perspective of front‐line workers—physicians working in rural healthcare facilities operated by two state governments. We sampled physicians in one “post‐reform” state that has instituted HRM reforms and one “pre‐reform” state that has not. The findings are based on both quantitative and qualitative measurements. The results show that formal rules are undermined by a parallel modus operandi in which desirable posts are often determined by political connections and side payments. The evidence suggests an institutional environment in which formal rules of accountability are trumped by a parallel set of accountabilities. These systems appear so entrenched that reforms have borne no significant effect. Copyright © 2015 John Wiley & Sons, Ltd.     

Politics of E‐Government: E‐Government and the Political Control of Bureaucracy

This case study reports an innovative e‐government experiment by a local government in Seoul, South Korea—Gangnam‐gu. A new local political leadership in Gangnam made strategic use of e‐government applications to exert greater political control over the local civil service bureaucracy. The authors find that e‐government applications possess political properties that can be applied effectively by the political leadership as instruments to improve control over the government bureaucracy as well as to enhance essential government accountability and transparency. The political circumstances underlying e‐government development as well as its impact on local government are reported, along with key variables associated with this innovation and directions for future research.     

Cheap talk or incredible commitment? (Mis)calculating transparency and anti‐corruption

Why do “tainted” politicians in high‐corruption countries adopt transparency and anti‐corruption policies that risk exposing their wrongdoing? Using the cases of freedom of information and public asset disclosure in Romania, we assess three explanations: that these policies are meant to be mere window dressing, facilitate bottom‐up monitoring, or ensure access to information for the ruling party if it loses power. We find that decision makers adopt transparency and anti‐corruption policies because they want to signal their integrity and because they underestimate their consequences. Because they assume they will be able to control implementation, decision makers discount the potential costs of damaging information being released. Sustained political competition can keep corruption and lack of transparency on the public and political agenda, shifting attention from policy adoption to implementation and leading to increased compliance. Since politicians miscalculate the consequences of their actions, signals that are intended to be cheap can end up being quite costly.     

Norm Diffusion and Reputation: The Rise of the Extractive Industries Transparency Initiative

Transparency in the extractives sector is widely seen as an important tool for improving accountability and deterring corruption. Yet for those very reasons, it is a puzzle that so many governments in corruption‐prone countries have voluntarily signed up to greater scrutiny in this area by joining the Extractive Industries Transparency Initiative (EITI). We argue that EITI serves as a reputational intermediary, whereby reformers can signal good intentions and international actors can reward achievement. International and domestic actors thus utilize EITI to diffuse the norm of resource transparency and to advance reformist aims in a highly problematic policy area.     

Public enterprise reform: Managerial autonomy,accountability and performance contracts

The underlying assumption in this paper is that autonomy and accountability are both fundamental prerequisites for the effective functioning of state-owned enterprises. The paper first examines the traditional, dichotomous approach to the autonomy-accountability conundrum. This approach posits the relationship as process oriented, pervasive, quantitative and based on a priori controls. A more recent view of control and accountability as a posteriori, qualitative, strategic, results-oriented and non-zero sum is then briefly analysed. The paper presents a review of the theory and practice of performance contracts (PC) as tools to implement the latter approach. Three basic models of PCs—Senegal's contrat plan, Pakistan's signalling system and India's memorandum of understanding—have been analysed, comparing the negotiating process, major players, substantive elements and results. The contrat plan is more of a legal document, at least in formal terms, than the other two. None of the three models, however, provides any sanctions in case of a violation of the contract by the governments. Although the Indian and Pakistani PCs appeared to be more successful than the Senegalese contracts, the relationship between financial performance and performance contracts remains far from conclusive. In all the three countries, the contracts have failed to provide a single window through which government-enterprise interface can be effectively managed. Thus the problem of multiple principals and single agents remains unresolved.     

Jurisdictional integration: A framework for measuring and predicting the depth of international regulatory cooperation in competition policy

This article takes a new approach to international regulatory cooperation by developing a concept of the depth of cooperation, jurisdictional integration. A dataset of international competition policy agreements is compiled and ranked against an ordinal index of the depth of de jure cooperation in enforcing competition policies. There has been both a deepening and broadening of de jure cooperation over time. Statistical analysis finds that common membership of the Organisation for Economic Co‐operation and Development is a strong predictor of the depth of agreements to cooperate in enforcing competition policies; that we can be confident that the depth of agreements is low when signatories' substantive competition laws are dissimilar; and that the depth of de jure cooperation is a strong predictor of whether an agreement is “intergovernmental” or “transgovernmental.” The article puts forward a new way to map and measure international regulatory cooperation, and a new variable for use in research on its causes and consequences.     

Fighting corruption in developing countries: Some aspects of policy from lessons from the field

Corruption persists in developing countries despite the proliferation of legal, institutional, and other measures that have been put in place to fight said corruption. The cancer of corruption has therefore spread exponentially in most developing countries with devastating socioeconomic and governance consequences. This practitioner perspective draws on the author's field experience and backed up by the research literature. It identifies, outlines, and discusses some aspects of policy in 3 areas—institution strengthening, the development and implementation of national anticorruption plans/strategies, and political will and leadership—and the conclusions that can be drawn from them for policy development and implementation in the ongoing quest to fight corruption in developing countries.     

Black and (thin) blue (line): Corruption and other political determinants of police killings in America

Police violence is not uncommon in America, and the risk of civilians' being killed by police is considerably higher here than in similar countries, making it a major public health issue. For Black Americans the risk is significantly higher. In this study, we analyze the political determinants of police killings of Black Americans, with a specific focus on corruption in American states. Our evidence suggests that police can kill Black Americans with impunity because of a lack of accountability—exemplified by corruption—that is largely determined by political influences. Our findings point to ways in which the responsibility for police violence and killings is deeply rooted and influenced by the values of the wider society.     

Budget Transparency, Fiscal Performance, and Political Turnout: An International Approach

This paper attempts, for the first time, to assess the relationships between budget transparency, fiscal situation, and political turnout using a comparative international approach. With this aim, the authors build a comprehensive index of budget transparency encompassing 40 budget features based on international standards for a sample of 41 countries. They find a positive relationship between national government fiscal balance and budget transparency: The more information the budget discloses, the less the politicians can use fiscal deficits to achieve opportunistic goals. The univariate analysis shows a positive relationship between political turnout and transparency. This result gives some evidence of a positive answer to the question raised by James Alt and David Dreyer Lassen: Does transparency affect political outcomes such as turnout? To some extent, that the more transparent the budget reports are, the more incentives people have to vote. With respect to three variables—transparency, government fiscal balance, and electoral turnout—three clusters of countries arise: low transparency–fiscal imbalance, low transparency–small fiscal imbalance and high transparency–fiscal surplus.