Tolerance and economic growth revisited: a note

Berggren and Elinder (BE) in this journal write on the relationship between the degree of tolerance in a nation and its rate of economic growth. They are disturbed to find in their cross sections that faster economic growth statistically goes together with intolerance of homosexuals. In this comment, we revisit the issue and demonstrate that the concern expressed by BE is unwarranted if we properly account for ??conditional convergence?? in the regressions for economic growth. Other things being equal, a country grows faster if it starts from a poorer initial position. In the BE dataset, China since the Deng reforms is a prime example. At about the same time, another group of countries managed to accelerate their economic growth after a long period of stagnation: the ex-communist countries in central and Eastern Europe. Many of these nations also grew exceptionally fast for a number of years, once freedom had been regained and the initial chaos overcome. With simple modeling of these historical initial conditions, we find no statistical pattern that associates bias against homosexuals with weaker economic growth. Our results are robust under alternative specifications.     

Parties and institutions: empirical evidence on veto players and the growth of government

Does the effective number of veto players in a political system explain the rate of government growth? Panel data analyses are conducted in order to test several measures of veto players against each other, and these results are compared with similar analyses of government fractionalization. The analyses indicate that veto players and especially government fractionalization exert a constraining effect on changes in the size of government, but also that the effect is not consistent over time: neither veto players in general nor fractionalization of government in particular exerted any constraining effect during the decades of rapid government growth due to welfare state creation and expansion in the 1960s and 1970s. The strength of government fractionalization vis-a-vis the veto player measures in explaining changes in the size of government suggest that the constellation of partisan veto players within coalition governments matters, while the effect of institutional veto players remains uncertain.     

The relationship between NGOS and businesses in the public arena: An empirical analysis for Spain

• At the beginning of this century, corporate social responsibility was included in the public agenda. In certain countries, policy‐making takes place in semi‐public forums, in which NGOs are asked to participate. However, a different situation may be found in other countries. This paper analyses the relationship between businesses and NGOs in the public arena in Spain. By applying grounded theory, the authors summarize this relationship in the dynamics of approach‐withdrawal. Firms have pushed to withdraw Advocacy NGOs from public forums, whose main purpose was policy‐making. The explicit argument to justify this collective decision is the lack of foundational legitimacy of NGOs. Firms understand that these NGOs are not legitimized to be a counterbalancing force of corporations.

Copyright © 2009 John Wiley & Sons, Ltd.     

The two freedoms,economic growth and development: An empirical study

Log-linear methods are applied to categorical data containing economic freedom, political freedom, the level of income, and the rate of economic growth for a panel of about 100 countries from 1975 to 1992. The main results are: given economic freedom, the rate of economic growth is independent of political freedom and the level of income; given the level of income, political freedom is independent of economic freedom and the growth rate. The analysis suggests the fundamental effects of economic freedom in fostering economic growth, and a high level of income as the condition of a high degree of political freedom.     

The empirical relationship between carbon emission and energy use of BRICS nations

In literature, there has been a large number of empirical research to examine the impact of CO2 emission on economic activity popularly known as the Environmental Kuznets curve having an inverted U shape relationship. The increasing environmental problem and environmental degradation are global phenomena due to increasing economic activities. In order to verify this relationship empirically in the context of BRICS nations, the present study intends to investigate the importance of energy use in the estimation of carbon emission while controlling GDP, industry value added and trade openness using Ordinary Least Square (OLS) and Fixed Effect (FE) Models. Our findings have confirmed that the relationship between CO2 emission and GDP confirmed inverted U‐shaped of the EKC. The direction of the relationship between squared LNIVA and LNCO2P further reinforce the inverted U‐shaped EKC. The relationship between LNEU and CO2P also satisfied the inverted U‐shape of the EKC. This may be due to the practice of energy efficiency and energy conservation measures in industrial sectors in BRICS nations. However, BRICS nations should also emphasize renewables and policies need to be aligned accordingly to keep CO2 emission at a lower level so that global warming could be kept to below 1.50°C, which is the target given by Paris Agreements.     

New evidence on the relationship between democracy and economic growth

It is often maintained that democracy is a luxury which comes at a price in terms of subsequent slower increases in national living standards. However, various recent cross-section studies on economic growth have found evidence that lack of civil and political liberties is negatively correlated with economic growth. Using a new measure of democracy, which is based upon the number of years that a country can be regarded as a democracy, the robustness of this relationship is examined. Both direct and indirect effects of lack of democratic liberties are analysed. Our main conclusion is that the relationship between democracy and economic growth is not rubust.     

Regulation and poverty: an empirical examination of the relationship between the incidence of federal regulation and the occurrence of poverty across the US states

Public Choice - We estimate the impact of federal regulations on poverty rates in the 50 US states using the recently created Federal Regulation and State Enterprise (FRASE) index, which is an...     

Staff growth in international organizations: A principal-agent problem? An empirical analysis

The analysis covers 27 international organizations in the years 1950–2001. From the first to the last year, staff increased at a compound average rate of 3.2% per annum, while the number of member states rose by only 2.5%. The pooled analysis of 817 observations (including task proxies and organization dummies) reveals that (i) the elasticity of staff to membership is much larger than unity (1.36), (ii) United Nations organizations have significantly more staff, (iii) international organizations in the United States and Switzerland have significantly less staff, (iv) heterogeneity in terms of per capita income limits the size of an international organization and that (v) its staff is larger if its membership comprises many industrial or (former) communist countries. In a reduced sample, the financing share of the largest contributor in combination with the party or programmatic orientation of its government has a significantly negative effect on staff because the size of the largest financing share determines the incentive to monitor. U.S. exit from an international organization reduces its staff significantly. Most of these results depend on the condition that the non-stationary component of staff size is not taken account of by time dummies or trends.     

Further evidence on the relationship between economic freedom and economic growth

Much of the literature on the power of elected officials and bureaucratic agencies argues, from an empirical perspective, that bureaus appears to exercise autonomy. In this paper, a theoretical model sets out the conditions under which the Congress, the President, and one agency (we use the U.S. Federal Reserve as an extended example) can dictate policy outcomes. The results of the paper include the “Congressional Dominance” theorem: If more than 2/3 of House members, and more than 2/3 of Senate members, agree on something, they get it. The theorem is obvious (the “proof” is in the U.S. Constitution), but often forgotten in the substantive literature. More realistic results are derived for situations where the preferences of members of Congress are more diverse. Powers of the President to influence policy with, and without, appointments are also analyzed.     

Corruption and the shadow economy: an empirical analysis

This paper analyzes the influence of the shadow economy on corruption and vice versa. We hypothesize that corruption and the shadow economy are substitutes in high income countries while they are complements in low income countries. The hypotheses are tested for a cross-section of 98 countries. Our results show that there is no robust relationship between corruption and the size of the shadow economy when perceptions-based indices of corruption are used. Employing an index of corruption based on a structural model, however, corruption and the shadow economy are complements in countries with low income, but not in high income countries.     

The effect of trade openness on economic growth: Some empirical evidence from emerging market economies

This study investigates the impact of trade openness on economic growth in a panel of five emerging market economies, covering the data period from 1993 to 2016. Based on the panel estimation methods, the empirical results confirm the long‐run relationship among trade openness, economic growth, financial development, inflation, labour force, and technology, whereas the findings of long‐run elasticities show that trade openness has a positive considerable impact on economic growth. Furthermore, the heterogeneous panel non‐causality tests indicate the presence of a bidirectional causality between economic growth and inflation and a unidirectional causality that runs from economic growth to trade openness and economic growth to financial development in the short run. Finally, the findings suggested that trade openness plays a substantial role in promoting economic growth while also promoting economic development in these five emerging market economies.     

Rent-seeking and the behavior of regulators: An empirical analysis

The main contribution of this paper is to describe empirically how the rent-seeking process takes place in a regulated industry through the consistency in Board decisions. Evidence provided by discrete-choice decision models of regulators confirms that the conventional rent-seeking view of regulation is correct, namely to distribute wealth between various groups differently from what market forces would do. First of all, the structure of the rent-seeking activities in the Quebec regulated trucking industry is well explained. There exist behavioral uniformities (Russell and Shelton, 1974) in decisions taken by the Quebec Transport Commission, given its wide range of choice provided by the absence of detailed regulatory standards by the Quebec legislature. Secondly, trucking firms and large shippers are the interest groups seeking to extract artificially contrived rents. The capture theory of regulation is not a dominant political strategy and therefore does not analytically explain various trades taking place among interest groups when a permit authority is requested. So logrolling by regulators is clearly essential to maintain their non-transferable investment of time and talent and protect their political afterlife. Thirdly, large firms are more successful, at the margin, than small firms in their expansion because of their political effectiveness. The regulatory agency gives more rents to those who offer relatively strong electoral support to its party. Finally, appointed regulators do not achieve other positive payoffs from the regulatory process than those which may result from the agency problem. So the regulatory agency does not promote its own policy agenda, but rather that of the elected politicians, given the organizational and control problem between these two.I am indebted to the Social Sciences and Humanities Research Council of Canada for its financial support, to Gérard Bélanger, Jean-Luc Migué for helpful comments and to Sylvain Veillette, Pascal Migué, Marc Leduc for valuable research assistance. I benefitted from useful comments by the editor of this journal. All the remaining errors are mine.     

Clientelism and polarized voting: empirical evidence

One must take country-specific institutional features into account when analyzing former communist countries’ transformation process to new political institutions. We do so for post-communist Albania, where the regional and cultural polarization that has existed for centuries has evolved to clientelism in the new democracy. We show how clientelistic parties give rise to very particular voting patterns. These reveal major differences across regions not only in party choice but also in voters’ responses to government policies. These responses depend on the party in government and on the region concerned. This is in sharp contrast with results obtained when applying the same model to a large number of more advanced democracies with similar electoral institutions. A proper evaluation of democratization in Albania thus requires looking beyond the formal institutions governing elections and taking clientelism and its effect on voter behavior into account.     

Liberty and development: A further empirical perspective

This paper uses the Wright ratings of economic freedom to investigate the relationship between economic freedom and economic development for most countries in the world. This relationship is apparently strong and direct for such economic freedoms as freedom of property and freedom of movement but inverse for freedom of association. These findings appear to be independent of the type of economic system or civil liberties, as measured by the Gastil ratings, which have their own important effects on economic development.With the statistical assistance of Laurie D. Still. Comments on previous drafts by Iraj Aberdian, Merle Holden, Brian Kantor, John W. Kendrick, Peter Kennedy, Jack Knetsch, Chris Lingle, Denton Marks, Peter Moll, Frank Vorhies, an anonymous referee, and the participants of seminars at the University of Cape Town, the University of Natal and Simon Fraser University are gratefully acknowledged.     

Political systems and distortions: An empirical study

This paper studies empirically why price distortions are more prevalent in some countries than in others. We find no significant difference between democracies and dictatorships, but frequent regime changes reduce distortions. Political systems (factional-subordinate) that encourage redistributive activities (RDA) tend to have more distortions. Allowing for different effects of RDA in democracies and dictatorships, there is a positive and significant effect of RDA on distortions in dictatorships. In democracies, “distortions-destroying” lobbying seems more important since no significant relation between RDA and distortions can be found.     

Consensus and direct democracy:Conceptual and empirical linkages

Abstract The first part of this paper draws a number of theoretical connections between various forms of direct democracy and the two types of democracy outlined by Lijphart. Plebiscites and mandatory referendums without quorums of consent are shown to correspond to majoritarian forms of democracy, whilst optional referendums and initiatives with quorums of consent are shown to share similarities with power–sharing forms. The second part of the paper offers an empirical analysis of the different use of citizen–initiated referendums (optional referendums and initiatives) in Switzerland's consensual systems (i.e., cantons) by examining to what extent the various elements of power–sharing are developed. It is argued that referendums and initiatives are used less frequently when government coalitions have greater strength and local autonomy is more developed.     

Consensus and direct democracy: Conceptual and empirical linkages

The first part of this paper draws a number of theoretical connections between various forms of direct democracy and the two types of democracy outlined by Lijphart. Plebiscites and mandatory referendums without quorums of consent are shown to correspond to majoritarian forms of democracy, whilst optional referendums and initiatives with quorums of consent are shown to share similarities with power–sharing forms. The second part of the paper offers an empirical analysis of the different use of citizen–initiated referendums (optional referendums and initiatives) in Switzerland's consensual systems (i.e., cantons) by examining to what extent the various elements of power–sharing are developed. It is argued that referendums and initiatives are used less frequently when government coalitions have greater strength and local autonomy is more developed.     

Campaign spending and office-seeking motivations: an empirical analysis

This paper presents econometric evidence on the relationship between campaign spending and office seeking motivations. Our results, using Spanish data, show that campaign spending per capita increases with the stakes for the winner, measured by the appointment power of the office. Moreover we find that campaign spending per capita increases with the level of self-government of the region. Our results concord with those reported for other countries with very different systems of campaign funding.