The Negotiated Political Economy of a Heavy Industrial Sector: The Norwegian Hydropower Complex in the 1970s and 1980s

What effect does a sector-based negotiated economy have on industrial transformation, and what are the institutional mechanisms involved in negotiated sector-regulation? These questions are tentatively answered through an analysis of the political economy of one of Norway's most important industrial sectors: the hydropower and energy-intensive industry. The study focuses on factors that have allowed the sector to continue to expand throughout the 1970s and 1980s in spite of failing economic return and extensive political opposition. The over-expansion is explained through the partial closure and self-refercnciality found in the sector's regulatory system, which provides it with relative autonomy in relation to us economic and political environment. It is suggested that the pattern found in the hydropower and energy-intensive sector may be typical of heavy industrial sectors in modern economies.     

Learning and Change in 20th-Century British Economic Policy

Despite considerable interest in the means by which policy learning occurs, and in how it is that the framework of policy may be subject to radical change, the "black box" of economic policy making remains surprisingly murky. This article utilizes Peter Hall's concept of "social learning" to develop a more sophisticated model of policy learning; one in which paradigm failure does not necessarily lead to wholesale paradigm replacement, and in which an administrative battle of ideas may be just as important a determinant of paradigm change as a political struggle. It then applies this model in a survey of U.K. economic policy making since the 1930s: examining the shift to "Keynesianism" during the 1930s and 1940s; the substantial revision of this framework in the 1960s; the collapse of the "Keynesian-plus" framework in the 1970s; and the major revisions to the new "neoliberal" policy framework in the 1980s and 1990s.     

REAGANISM AS CORPORATE LIBERALISM: IMPLICATIONS FOR THE AMERICAN FUTURE

The "corporate liberal" regime that held together in America from the end of World War I1 to the 1960s was marked by broad agreement on ideology, public policy and a stable ruling coalition centered in the Democratic Party. This regime unraveled in the late 1960s and 1970s with the relative decline in American military and economic hegemony and the rise of a "left liberal insurgency". Key corporate liberal intellectuals and constituencies migrated to the Republican Party under Reagan. Reaganism will not sustain itself because its coalition partners are too disparate, its failure to transform the Republicans into a majority party, a lack of consensus on many issues, and the continued decline of the U.S. in the international economy. Corporate liberalism will find itself migrating to a revitalized Democratic Party, under a centrist leadership favoring fiscal responsibility, government-corporate partnerships, and a more efficient military.     

Managing economic reform: An alternative perspective on structural adjustment policies

The structural adjustment policies of international development organizations have been undermined in many developing countries by weaknesses in administrative capacity to manage economic reforms. If economic reform policies are to be implemented more effectively in the future, international organizations must take a broader view of the development process and assess more carefully the administrative and political capacity of the state to guide the decisions of public and private organizations toward development goals in four policy arenas. The experience of developing countries that were more successful at economic and social development during the 1970s and early 1980s, indicates the characteristics of development administration that policy analysts must assess in order to determine governments' capacity to implement economic reform policies effectively.     

Coping with Budget Deficits in Sweden

During the late 1970s and early 1980s Sweden's budget deficits grew more rapidly than in probably any other country of Western Europe. Government policy responses developed in three phases. In the late 1970s there was very little action taken to cope with run-away deficits. From 1980 to 1982 a strategy was formulated and partly implemented which heavily emphasized austerity measures through expenditure cuts. From late 1982 a 'mixed' strategy has been pursued which combines less drastic cuts with selected revenue increases. The virtual lack of response in the late 1970s and the turn-about in 1980 may be explained by reference to four major categories of factors: the severity and longevity of the economic crisis itself and the prevailing interpretations of its root causes; the dynamics of public sector growth and the understanding of the processes involved; the ideological and policy predispositions prevalent among policy-makers, economists, major interest groups and the public at large; and, finally, a set of 'organizational' factors mainly associated with the parliamentary situation in Sweden.     

The Economy Effect: Conceptual Innovation and Benefit Corporations

What kind of thing is the economy, and how might we act to change it? This article draws on the work of Timothy Mitchell and J. K. Gibson-Graham to suggest that the economy may be fruitfully understood as a structural effect, or an appearance of difference maintained through the repetition of acts and practices. It then employs Reinhart Koselleck’s theory of conceptual change to argue that the economy effect may be altered through efforts aimed at conceptual innovation. If the economy effect is maintained through repeated acts and practices that delineate the distinction between the economy and everything else, then conceptual innovation with respect to those concepts that inform these acts and practices could alter the manner in which this distinction is produced. The benefit (or public interest) corporation serves as an example of how such efforts at conceptual innovation might produce change in the structural effect that we call “the economy.”     

Economic models as devices of policy change: Policy paradigms,paradigm shift,and performativity

Can the emergence of a new policy model be a catalyst for a paradigm shift in the overall interpretative framework of how economic policy is conducted within a society? This paper claims that models are understudied as devices used by actors to induce policy change. This paper explores the role of models in Danish economic policy, where, from the 1970s onwards, executive public servants in this area have exclusively been specialists in model design. To understand changes in economic policy, this paper starts with a discussion of whether the notion of paradigm shift is adequate. It then examines the extent to which the performativity approach can help identify macroscopic changes in policy from seemingly microscopic changes in policy models. The concept of performativity is explored as a means of thinking about the constitution of agency directed at policy change. The paper brings this concept into play by arguing that the “performative” embedding of models in institutions is an important aspect of how paradigm shifts unfold that the current literature has neglected.     

How Economic Superpower China Could Transform Africa

Against the conventional wisdom that Chinese involvement cannot transform Africa’s economy for the better so as to end much of the poverty and also to spark high speed growth, this paper finds that China is already in the process of transforming Africa. While the conventional wisdom sees corrupt regimes and weak state capacity in Africa frittering away Africa’s opportunity to rise by plugging into Chinese dynamism, China is found in this paper already to be exporting entrepreneurial talent to Africa and to be dynamizing the African economy through East Asian practices. Chinese can bring industry to Africa much as Japan brought it to Southeast Asia in the 1960s and 1970s. Africa could therefore be incorporated into Asian economic dynamism.     

It's (Change in) the (Future) Economy,Stupid: Economic Indicators,the Media,and Public Opinion

Economic perceptions affect policy preferences and government support. It thus matters that these perceptions are driven by factors other than the economy, including media coverage. We nevertheless know little about how media reflect economic trends, and whether they influence (or are influenced by) public economic perceptions. This article explores the economy, media, and public opinion, focusing in particular on whether media coverage and the public react to changes in or levels of economic activity, and the past, present, or future economy. Analyses rely on content‐analytic data drawn from 30,000 news stories over 30 years in the United States. Results indicate that coverage reflects change in the future economy, and that this both influences and is influenced by public evaluations. These patterns make more understandable the somewhat surprising finding of positive coverage and public assessments in the midst of the Great Recession. They also may help explain previous findings in political behavior.     

The Gnomes of Washington: Four Myths of the 1976 IMF Crisis

The IMF settlement of December 1976 looms large in popular and partisan views of the politics of the 1970s. It is argued here that conventional academic wisdom has come to embody several misleading myths about its impact on economic policy. Evidence is presented to challenge four such myths which suggest that the IMF forced the Labour government to launch an attack on public spending, introduce cash limits to control public spending, introduce monetary targets and abandon the pursuit of full employment through demand management.
Although the language of the [IMF] negotiations reflected the arcane terms of international finance… the decisions required of the British Government were profoundly political… behind the technical financial decisions lay fundamental differences over the appropriate balance between the private and public sectors, the priority between capital accumulation and social welfare, the relative weight to be given to incentives and equality… What was at issue was the future shape of the political economy of Great Britain.¹     

Ideology and Voter Preferences as Determinants of Financial Globalization

We propose that the global spread of ideas affects international economic openness policies, and that to omit ideology as an explanatory variable for economic globalization is to risk omitted variable bias. Using voting data, we create measures of global ideology regarding economic openness and propose that changes in both global and domestic ideology influence how open or closed to international finance an economy is. We also test other influences on liberalization, including proposed state-centered diffusion mechanisms. Using PCSTS and system-GMM models, we estimate the determinants of change in international capital account regulation for 82 countries, 1955 to 1999. We thereby examine diffusion of both liberalizations (1950s and 1990s) and closures (1960s and 1970s). Changes in both global and domestic ideology robustly influence liberalization and closure. The capital account policies of neighboring countries (positively) and of the leading economies (negatively) also influenced a country's capital account liberalization.     

The fraying of the socio‐economic fabric of Hong Kong

Abstract

Since the 1980s, Hong Kong has undergone momentous socio‐economic changes, which in turn have greatly affected public attitudes toward society and the economy. Interpersonal trust and the sense of community have weakened. Hong Kong as a society is increasingly seen as unfair in the sense that it is not perceived as a land of opportunities for the hardworking. The capitalist rules of the game are increasingly considered by the people to be unacceptable. Public demands for more governmental intervention in the economy, particularly in the area of income redistribution, are increasingly raised. Nascent feelings of class antagonism are palpable as economic inequalities are getting worse. As social conflicts of various kinds proliferate, public anxieties about Hong Kong's fraying socio‐economic fabric have come to the fore. People expect the government and the legal institutions to strengthen social order. At the same time, however, public trust of all social, economic and social authorities is declining. Accordingly, as social discontent and anxieties accumulate, the socio‐economic system of Hong Kong will face serious challenge in the years ahead.     

The evolution of employment in Mexico: 1895-1980

Employment figures from the Mexican national census are the basis for this analysis of employment changes in Mexico between 1895-1980. The work identifies longterm trends in the volume and composition of employment and distinguishes 3 main periods in the evolution of employment. The first period, from 1895-1930, marked the end of a stage of development lasting until about 1907 in which sufficient internal stability was achieved to support Mexico's entrance into the world market. Export of agricultural products and metals was the principal focus of economic growth. Construction of roads and railroads was a central element of progress. But economic and social problems manifested in regional disparities, concentration of wealth, conflicts between economic sectors, low pay for agricultural workers, and fierce social and political control characterized the period and culminated in the Mexican Revolution. After the first decade of the 20th century the ability of the economy to absorb new workers began to decline, and the falling of crude activity rates was not reversed until the 1940s. During the 1920s, total employment increased less than 6%, reflecting a net increase of 403,000 male workers and a decrease of 110,000 female workers. The second major period of employment from 1930-1970 saw the change from an economy based on export of primary products to one based on manufacturing for the internal market. There were 2 subperiods, a stage of transition from 1930-50, the economy registered marked fluctuations, but by the 1940s the consolidation of state power and important reforms permitting expansion of the internal market were factors in an accelerated growth of employment relative to the preceding intercensal period. Despite considerable increases in agricultural employment, the relative share of the agricultural sector in total employment was beginning a decline. Employment registered the highest growth rates of the century in the 1940s and exceeded population growth. The increased employment was explained by accelerated growth and accumulation in manufacturing along with increases in commerce, services, construction, and agriculture. From 1950-70, industrial development was consolidated, and there was a generalized expansion in employment in manufacturing as well as in the secondary and tertiary sectors. The economy was less able to absorb new labor, primarily because the agricultural sector had reached the limits of expansion in both the commercial and peasant sector by 1965, at just the time that population growth was most rapid. During the 1970s, manufacturing employment grew less rapidly because of modernization, almost exclusive orientation to the internal market which limited expansion, and scarcity of funds for importing capital goods. A new model of growth will be needed if Mexico is to escape its present stagnation, and a significant share of economic activity will need to be oriented to export. Until this process is consolidated, the national economy is unlikely to show signs of sustained recuperation.     

Remaking New Zealand's Economic Policy: Institutional Elites as Radical Innovators 1984–1993

During the mid-1980s and early 1990s the New Zealand economy moved from being one of the most regulated outside the former communist bloc to among the most liberal in the OECD. Largely unheralded and begun by an ostensibly social democratic Labour government, changes included the floating of the exchange rate; extensive liberalization of financial, capital and other markets; lowering of trade protection; fiscal restraint and monetary disinflation; changes to the machinery of government; corporatization and then sale of state assets; and changes to industrial relations frameworks (Castles, Gerritsen and Vowles 1996). Known as Rogernomics after Minister of Finance Roger Douglas, these economic policies were heavily derivative of neoclassical economic theories, such as the New Classical and Chicago schools, public choice and new institutional economics (Boston et al. 1996, ch. 2; Goldfinch 1997). This article explains how such radical economic restructuring occurred through the influence of a select group of strategically located institutional elites.     

Finding Exits and Voices: Albert Hirschman's Contribution to the Study of Public Services

Albert Hirschman makes an important contribution to the study of public services with his book Exit, Voice, and Loyalty (1970 Hirschman, A. O. 1970. Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations and States. Cambridge, MA: Harvard University Press. [Google Scholar]). Hirschman shows that exit and voice are the two main responses to dissatisfaction, with voice being more effective and desirable. His core claims are that a lack of exit opportunities increases voice, and loyalty reduces exit. The exit, voice, and loyalty (EVL) framework is very suitable for understanding how public services can perform effectively and responsively, as there are a range of exits and voices available to citizens and employees when they are dissatisfied. Though there are extensive citations of Hirschman, relatively few scholars fully apply the framework. The main exceptions are the literatures on urban services and on intentions to exit by public employees. Yet the topics of service quality, performance, competition, choice, and participation continue to be of core interest to scholars of public administration. Hirschman's insights and framework foster understanding of the relationships between different kinds of citizen responses to dissatisfaction and how to achieve better-quality public services.     

Social Democrats and Neo-Liberalism: A Case Study of the Australian Labor Party

Social democratic parties have been agents in the neo-liberal transformation of public policy in recent decades. There has been debate about the reasons why social democrats have embraced market policies, with particular emphasis given to ideological trends, globalisation and electoral factors. This paper aims to shed further light on this debate by examining the case of the Australian Labor Party (ALP), which was a prominent social democratic exponent of neo-liberalism during its time in office in the 1980s and 1990s. In Labor's case, the primary cause of the shift from pledging social reform and interventionist government to neo-liberalism was the lower levels of economic growth that followed the end of the post-war boom in the 1970s. Social democrats rely on strong economic growth to fund redistributive policies. Thus when recession occurred in the 1970s it eroded the economic base to Labor's programme. While this paper focuses on the story of the ALP, it may provide some answers as to why social democrats elsewhere have adopted neo-liberalism.     

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.     

Administration in a small capitalist state: The Hong Kong experience

This article is primarily concerned with the functions of bureaucracy in a minimal state and with how those functions might change in response to economic growth. It is predicated on the assumption that bureaucracy is necessary for economic growth even in those countries which seek to achieve such growth through the relatively free operation of the economy within the rubric of a capitalist state. Hong Kong is a case in point. Although it has often been taken as the epitome of the benefits which can be derived from keeping government out of the economy, the bureaucracy has in fact played a critical role in support of economic development. Aside from the functions which must be performed by any state, such as the maintenance of law and order, the administration of justice, and the provision of public works, three features of Hong Kong bureaucratic practice appear to have been important in the definition of the bureaucracy's tasks in the economic growth process. These are ‘value for money’ and the constant need to justify government expenditure; effective line implementation; and the ability to manage crises. If these constitute minimal essential requirements for such governments, they may provide useful criteria which small or micro-states, following capital growth models but not yet experiencing rapid economic development, can apply in assessing the capabilities of their own bureaucracies.     

Governing the Chinese Economy: Regulatory Reform in the Service of the State

Pursuant to its extensive program of market reforms, China’s government tried to restructure itself to support a market‐dominated economy. Reform efforts have included elements that are familiar to scholars of public administration: streamlining government, strengthening bureaucratic capacity, distancing government from firms, and establishing independent regulators. But how deep have these reforms been, and with what ultimate goals? This article examines a crucial segment of the economy—China’s so‐called lifeline industries—to show how reforms to China’s economic governance system have been mapped onto an existing system characterized by extreme institutional fragmentation and an inability to imbue new governmental bodies with authority. Moreover, for these key industrial sectors, the Chinese party‐state’s strong interests in ownership, revenues, and social policy dictate that it use a variety of tools to protect these interests.     

The provision of lighthouses services: a political economy perspective

Ronald Coase’s 1974 article on lighthouses and the Trinity House case, in particular, has triggered extensive debate on the notion of a public good, but also on the possibility of private production of public goods. The resultant literature has discussed the concept of private property and the characteristics of a public good, and offered an economic analysis of the status of lighthouses. This contribution sets out to situate the debate in the context of an economic policy for which the lighthouse is an asset subject to political rent seeking. Thus, it highlights the fact that the characteristics of rivalry and exclusion, which define the public good, are in fact influenced by governments, which decide the nature of the services produced by lighthouses. The weight of the institutional setting, together with political competition for the control of lighthouses, calls for interpretation relating to rent seeking. In this respect, the lighthouse, prior to being a capital asset, has already emerged as a political object that is a source of revenue for certain individuals.