The political economy of churches in Denmark, 1300–2015

This paper reports new time-series for the numbers and sizes of churches in Denmark over a 715-year period. Per capita, the new series are termed church densities. A pattern emerges in the series that corresponds to the main development in the economy: until 1750, the economy was in the traditional steady state, where church densities were high and did not decline substantially. Modern development set in after 1750. Since then, church densities have declined more than five times. Moreover, capacity utilization of church rooms has declined, which means that the reduction in the demand for churches must have been even larger. We argue that this large decline is caused by a fall in religiosity that is caused by economic development as measured by the rise in incomes. In parallel with similar transitions in other sectors, e.g., the Agricultural Transition, it is termed the Religious Transition.     

The religious transition. A long-run perspective

Religiosity is defined as the importance of religion in all aspects of life. The definition is operationalized into a robust measure by aggregating 14 items from the World Values Surveys. Religiosity falls by 50 % when countries pass through the transition from being underdeveloped to becoming a developed one. A formal test shows that long-run causality is predominantly from income to religiosity. The transition slope is robust to measurement error and composition of the country sample. The empirical macro relation is rationalized by some micro theory: Most components of the demand for religious goods are reduced by rising income. Churches supply religious goods directly and through three additional channels: education, healthcare, and social security. Rising income caused churches to lose control over the additional channels.     

An essay on the rationality of economic policy: The test-case of the electional cycle

The literature on electional cycles is discussed in the light of the empirical findings by, in particular, the author. Two basically different types of explanations of such cycles are compared: (α) explanations based on the maximizing behavior of governments aiming at re-election. (β) explanations building on the insufficiently controlled pressures of events in a democracy. It is demonstrated that even when the most well known theory under (α) — the Nordhaus-MacRaemodel — is a rather fragile construction, a more robust argument, termed the ‘popularity investment argument,’ can be constructed yielding the same basic result. From the empirical literature it is concluded that almost the opposite pattern actually occurs in the data. It is finally demonstrated that the weak, but significant, empirical pattern is easy to explain by (β): The elections generate promises, which give most real expansion in the second governmental year and most inflation in the third year. An average behavior which hardly implies even medium-term maximization by governments as assumed under (α).     

Markets and Municipalities: A Study of the Behavior of the Danish Municipalities

The complex pattern ofMarket Orientation of the 275 Danishmunicipalities is analyzed. An MO-variableis constructed from a poll covering 12tasks, where municipalities are free toproduce the service or purchase it on themarket. Six potential explanations of theMO-pattern are operationalized. Four ofthose work: (1) MO is a modernization, (2)spreading by diffusion. (3) MO increases ifthe municipality is under economicpressure. (4) MO stays low if the fractionof the population that depends upon thepublic sector is large. Whilestakeholder/pressure group politics thusworks, explanations based onideology/partisanship fail. In theintegrated Copenhagen metropolitan areamost explanations fail.     

Public versus private production and economies of scale

The cost of producing the same good often differs substantially for public and private producers. We investigate the effect of organization in a case where the production technology is simple: The cleaning of Danish schools. Three forms of organization are used: Decentral municipal, central municipal or private. For small schools the organizational form has little impact on cost. For larger schools decentral municipal production is the most expensive. On average centralization reduces costs by 5%, while privatization reduces costs by 30%. Similar cost differences are reported in the literature for other cases, but it is a new result that the cost differences are due to economies of scale. Public choice theories predict that cost differences are due to ownership or competition. We find evidence that both theories help explain the cost differences.     

Can the two new aid-growth models be replicated?

Recent aid effectiveness literature centers on two competing models from the family of conditional models: The Good Policy Model, where the key feature is policy times aid, and the Medicine Model, where it is aid squared. Both models were reached on a sample of 1/3 of the available data. The models are simplified to be replicatable on more of the data. Within-sample the Good Policy Model proves fragile, while the Medicine Model is more robust. Both models fail in out-of-sample replications. A semi-parametric technique is used to test for an unknown functional form of the aid-growth term. It rejects that aid is statistically significant.     

The spirits of capitalism and socialism

The World Values Survey contains an item on ownership which is polled 200 times in 92?countries at the four waves of 1990, 1995, 2000 and 2005. These polls are developed into the CS-score that measures the aggregate mass support for capitalism and socialism. Four hypotheses are advanced and tested to explain the wide variation in the 200 CS-scores. It is due to: the cross-country distribution of income, and consequently the West stands out as the most capitalist-minded area of the world; institutions of the country such as legal quality; the left-right dimension in politics; and cultural differences.     

The VP-function: A survey of the literature on vote and popularity functions after 25 years

VP-functions explain the support for the government at votes and polls by economic and political variables. Most studies analyze macro time series. We also cover studies of individual voters, socio-economic groups and regional cross-sections. The theory starts from the Responsibility Hypothesis: voters hold the government responsible for economic conditions. It works in two party/block systems, but not else. Voters in most countries are found to be sociotropic. Egotropic voting also occurs. Voters' myopia is well established. Voting is retrospective as expectations are static. It costs the average government almost 2% of the vote to rule.