Representation or abdication? How citizens use institutions to help delegation succeed

Abstract. Modern democracy requires delegation. One problem with delegation is that principals and agents often have conflicting interests. A second problem is that principals lack information about their agents. Many scholars conclude that these problems cause delegation to become abdication. We reject this conclusion and introduce a theory of delegation that supports a different conclusion. The theory clarifies when interest conflicts and information problems do (and do not) turn delegation into abdication. We conclude by arguing that remedies for common delegation problems can be embedded in the design of electoral, legislative, and bureaucratic institutions. The culmination of our efforts is a simple, but general, statement about when citizens and legislators can (and cannot) control their agents.     

Is trust the missing root of institutions, education, and development?

We report evidence that trust is the missing root relating education, institutions, and economic development. We observe that more trust both increases education and improves legal and bureaucratic institutions, which in turn spurs economic development. We substantiate this intuition with a series of regressions that provide evidence that trust determines both education and the quality of institutions, and that education and institutions in turn affect GDP per capita.     

Ministers as double agents? The delegation process between cabinet and ministers

Abstract. Delegation from cabinet to ministers is complicated because the cabinet consists of the same ministers that are supposed to act as its agents. In the extreme case ministers are completely autonomous within their portfolio. This paper argues that the resulting potential for agency loss is limited, but not negated, by both hierarchy and collective decision–making in cabinet, or by establishing direct delegation relationships between legislative committees or political parties and ministers, bypassing the government. Appointments to ministerial office are the prevailing exception to ministerial autonomy. To the extent that ministerial preferences are not stable and exogenous, screening before appointments is an ineffective control, and ministerial identification with departmental interests is the most probable source of agency loss.     

Fiscal adjustments: do labor and product market institutions matter?

This paper investigates the role played by labor and product market institutions in determining the likelihood of initiating and of successfully concluding a fiscal adjustment. Using data for 16 OECD countries over the period 1970 to 2000, we find that a less generous unemployment benefit system—rather than temporary caps on spending (e.g., wage freezes)—contributes to the success of fiscal consolidation. Weaker forms of bargaining coordination and centralization facilitate the fiscal adjustment effort. On the other hand, product market deregulation and more flexible employment protection legislation do not contribute positively to fiscal consolidation.     

Do parties matter in delegation? Partisan preferences and the creation of regulatory agencies in Europe

The ideological orientation of parties in government has not been prominently featured in explaining the rise of regulatory agencies. This paper argues that theories based on political uncertainty and credible commitment can yield meaningful predictions regarding the relationship between government preferences and the establishment of regulatory agencies, when ideological orientation is linked with notions of party competence and issue ownership. The empirical section tests three such hypotheses with data on the establishment of 110 regulatory agencies in 20 European democracies between 1980 and 2009, thus providing one of the most comprehensive cross‐national analyses of agency creation to date. The results show that ideologically extreme cabinets are more likely to establish regulatory agencies and that right‐wing governments create more agencies in the economic than in the social domain. These findings partly qualify the view on the scarce relevance of government preferences in explaining the rise of the agency model in regulation and that the emulation mechanism of the diffusion process is the dominant force behind agencification.     

Do Belgian parties undermine the democratic chain of delegation?

The Belgian party-archy violates the ideal-type chain of parliamentary delegation in many ways, insofar as political parties play a predominant role at each stage. They channel the delegation of power from voters to MPs, from Parliament to the cabinet, from the collective cabinet to individual ministers, and from ministers to their civil servants. Hence, they can be considered the effective principals in the polity, and many actors of the parliamentary chain of delegation, such as MPs, ministers, and civil servants have been reduced to mere party agents. The extreme fragmentation of the Belgian party system in combination with its increasing need for multilevel coordination have further enhanced the position of political parties in the Belgian polity. Yet, at the same time (since the early 1990s), Belgium has also witnessed a gradual decline in the informal system of partitocratic delegation and clientelistic excesses, thereby giving back part of their autonomy to some formal agents, such as the cabinet, top civil servants and some MPs. Still, one can wonder whether these corrections are sufficient to counter the strong outburst of public dissatisfaction with the way parties have run the country in past decades.     

Public sector efficiency: the roles of political and budgetary institutions, fiscal capacity, and democratic participation

The purpose of this paper is to investigate whether efficiency in public service provision is affected by political and budgetary institutions, fiscal capacity, and democratic participation. In order to address this issue we take advantage of a new global efficiency measure for Norwegian local governments. We find that high fiscal capacity and a high degree of party fragmentation contribute to low efficiency. In addition there is some evidence that democratic participation increases efficiency, while a centralized top-down budgetary procedure is associated with low efficiency.     

How do interests,ideas, and institutions affect multisectoral governance? The case of tobacco governance in two Pacific small island developing states

Multisectoral governance has been recognized to be vital to regulate harmful commodity industries, yet countries struggle with reaching policy coherence due to government agencies' conflicting mandates and industry interference. Limited empirical evidence is available on how interests, ideas, and institutions intersect and influence multisectoral governance in low- and middle-income countries, particularly in Pacific small island developing states (PSIDS), often exploited by vested industry interests and whose non-communicable disease crisis commands urgent action to regulate harmful commodities. This study assessed the ways interests, ideas, and institutions intersect and shape multisectoral tobacco governance in PSIDS. Interviewee data collected in Fiji and Vanuatu show that the idea of individual responsibility, the limited recognition of commercial determinants of health, the centralization of authority, and the vulnerabilities of small island developing states, (including small population, land, economy, geographic isolation, and status as a developing economy), prevent these states from achieving policy coherence in multisectoral tobacco governance.     

City government structure: are some institutions undersupplied?

City councilors have a vested interest in maintaining the local government structure that got them elected. This resistance to change may result in non-optimal supplies of particular local political institutions as cities and metropolitan areas experience changes in population and diversity. Using unique data from the State of Florida, we show that there is an undersupply of cities offering larger council sizes. Our evidence also suggests that there is no undersupply of cities with the mayor-council versus the council-manager form of government or cities with at-large versus district election methods.     

Can't get no satisfaction with the Westminster model? Winners,losers and the effects of consensual and direct democratic institutions on satisfaction with democracy

Are citizens in consensus democracies with developed direct democratic institutions more satisfied with their political system than those in majoritarian democracies? In this article, individual‐level data from the second wave of the Comparative Study of Electoral Systems and an updated version of Lijphart's multivariate measure of consensus and majoritarian democracy covering 24 countries are used to investigate this question. The findings from logistic multilevel models indicate that consensual cabinet types and direct democratic institutions are associated with higher levels of citizens' satisfaction with democracy. Furthermore, consensus democracy in these institutions closes the gap in satisfaction with democracy between losers and winners of elections by both comforting losers and reducing the satisfaction of winners. Simultaneously, consensus democracy in terms of electoral rules, the executive–legislative power balance, interest groups and the party system reduces the satisfaction of election winners, but does not enhance that of losers.     

How can interactions among interdependent structures,institutions, and agents inform financial stability? What we have still to learn from global financial crisis

How national financial systems can avoid costly banking crises is a persistent and intriguing question for institutional scholars and policymakers worldwide. In this context, although considerable research has recently focused on structural, institutional, and agency-level factors in explaining the global financial crisis, it mostly offered each of these explanatory factors in isolation, thus leaving interactions among these interrelated factors incomplete. Building on a deviant case study on Australian exceptionalism examined in a comparative perspective, this paper introduces an integrative framework that views financial stability as a function of these interactions that reinforce prudent financial behavior. In doing so, it offers an insight into the previous research on institutional complementarity and how to guard against similar crises in the future. It suggests that financial stability (instability) is more likely when interactions among structural and institutional complementarities and agents reinforce conservative (opportunistic) banking.     

Civil society institutions or semi-public agencies? State regulation of parties and voluntary organizations in Norway

The relationship between the Norwegian State on the one hand, and political parties and voluntary organizations on the other, has traditionally been based on mutual trust. To assess the claim that civil society institutions are developing towards ‘semi-public agencies’, we review state regulation of Norwegian voluntary organizations and political parties. The State does demand more accountability and transparency in return for public funding, but many aspects are also regulated scarcely or not at all. This indicates that substantial mutual trust remains. This relationship might be characterized as a partnership based on interdependence, rather than colonization.     

For fear of popular politics? Public attention and the delegation of authority to the United States executive branch

Legislators are thought to delegate policymaking authority to administrative actors either to avoid blame for controversial policy or to secure policy outcomes. This study tests these competing perspectives and establishes that public attention to policymaking is a powerful predictor of the extent to which significant United States statutes delegate authority to the executive branch. Consistent with the policy‐concerns perspective, by one calculation statutes dealing with high‐attention issues entail 48 percent fewer delegating provisions than statutes dealing with low‐attention issues – a far stronger relationship than is typically found in the delegation literature. As per the blame‐avoidance perspective, a number of additional analyses yield results consistent with the notion that fears about future public attention motivate statutory delegation if legislative conflict is sufficiently great. Overall, however, the results suggest that conflict typically is not sufficiently great and that legislators are generally more inclined to limit statutory delegation when the public is paying attention.     

Do electoral institutions have an impact on population health?

There is an emerging political economics literature which purports to show that legislatures elected based on proportional electoral rules spend more and redistribute more than legislatures elected based on majoritarian electoral rules. Going a step further the authors of this paper consider whether degree of electoral proportionality has an impact on population health and, in particular, the health of the least advantaged members of society. A panel of 24 parliamentary democracies for the years 1960?C2004 is used to examine the relationship between electoral institutions and health. The authors find that greater electoral proportionality is positively associated with overall population health (as indicated by life expectancy) and with the health of the poorest (as indicated by a reduction in infant mortality). A panel of 17 countries for the years 1970?C2004 is then used to show to that electoral permissiveness modifies the impact of health spending on infant mortality.     

Dysfunctional institutions? Toward a New Agenda in Governance Studies

There is a wide‐spread perception among academics and commentators that institutional dysfunction has become increasingly common in important social, political, and economics arenas. Opinion polls show a decline in trust and confidence in major actors and institutions, including inter‐governmental organizations, governments, firms, NGOs, and religious organizations. For some, the core of the problem is that the hitherto well‐functioning states have become less effective in aggregating and acting upon citizens' preferences. Many policy initiatives of the 1990s – deregulation, privatization, new public management, private regulation, regional integration, civil society, and so on – seemed to have failed to meet expectations. This symposium seeks to identify important theoretical and empirical questions about institutional failure, such as why do institutions fail, why are they not self‐correcting, what might be a clear evaluative yardstick and analytic approach by which to measure performance, and to what extent contemporary theories of institutional evolution and design are useful in examining institutional restructuring and institutional renewal? Symposium essays by leading social science scholars offer important insights to inform future work on institutional performance and outline an agenda for institutional renewal and change.     

Getting away with foul play? The importance of formal and informal oversight institutions for electoral integrity

Electoral integrity is increasingly being recognised as an important component of democracy, yet scholars still have limited understanding of the circumstances under which elections are most likely to be free, fair and genuine. This article posits that effective oversight institutions play a key role in scrutinising the electoral process and holding those with an interest in the electoral outcome to account. The main insight is that deficiencies in formal electoral management can be effectively compensated for via one or more other institutional checks: an active and independent judiciary; an active and independent media; and/or an active and independent civil society. Flawed elections are most likely to take place when all four checks on electoral conduct fail in key ways. These hypotheses are tested and supported on a cross‐national time‐series dataset of 1,047 national‐level elections held in 156 electoral regimes between 1990 and 2012.     

The devil is in the shadow. Do institutions affect income and productivity or only official income and official productivity?

This paper assesses the relationship between institutions, output, and productivity when official output is corrected for the size of the shadow economy. Our results confirm the usual positive impact of institutional quality on official output and total factor productivity, and its negative impact on the size of the underground economy. However, once output is corrected for the shadow economy, the relationship between institutions and output becomes weaker. The impact of institutions on total (“corrected”) factor productivity becomes insignificant. Differences in corrected output must then be attributed to differences in factor endowments. These results survive several tests for robustness.     

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.