Political Competition,Constitutional Arrangements,and the Quality of Public Policies in Costa Rica

This article explains why Costa Rica, by the mid‐twentieth century, began to depart from the all‐too‐common mixture of political instability and economic stagnation characteristic of much of the developing world. The article argues that this country has benefited from better‐than‐average public policies, a conclusion based on a major comparative ranking of state policies. It further argues that interminable political stalemates gradually democratized the struggle for power and laid the groundwork for an innovative constitutional framework, one that allocates the technical functions of government to a set of autonomous institutions. A central implication of this argument is that institutional design is the backdrop for development‐enhancing public policies.     

Finanzplatz deutschland: National or European response to internationalisation?

Germany's has long been held up as a competitive, bank‐based financial system, providing long‐term and secure finance for industrial and service companies. The emphasis here is on the international market and regulatory conditions which have helped to transform the the financial system. In the 1980s, the government remained averse to any ‘Big Bang’ experiment, adapting national securities markets to policy initiatives in the US, and in London and Paris. This aversion was rooted in Bundesbank opposition to the development of money markets, and to the practice of corporate‐bank‐insurance cross‐shareholding among Germany's big publicly listed corporations. The politics of ‘Finanzplatz Deutschland’ achieved a balance between maintaining national institutions and adapting them carefully to international markets and regulation. Implementing monetary union and the European financial area in the 1990s and beyond amounts in effect to a ‘Big Bang ‘ policy which is already under way. The prospect of a liquid ‘Euro'‐market for securities, and increasingly competitive banking and insurance markets, spells a shift in German corporate policies towards Anglo‐American practices. National cross‐shareholding corporate structures will not long survive a single currency.     

The Exoteric Politics of Bank Mergers in Australia

The Australian government's 1997 policy ban on in-market mergers among the largest four domestic banks has been a key intervention shaping the direction of bank consolidation in Australia as such mergers significantly accelerated from 1997 through 1999 in developed economies. This paper will show that the knowledge about the social and economic impacts of the bank mergers and the Treasurer's merger veto power made the policy debate exoteric (political and public) by including interests outside the banking policy community (i.e., interest organisations of employees, customers, and farmers, as well as political parties, and the broad public). Thus, the merger policy discussions were not esoteric, technical and limited to a small number of influential public and private sector institutions leaving policy discussions vulnerable to be structured to favour the interests of large, financial firms over other interests. This, in turn, created significant pressure on government for to retain the policy. The paper also outlines the significance of the domestic political conflicts and electoral politics in a world of global finance.     

The Failures of Neo‐Liberal State Building in Iraq: Assessing Australia's Post‐Conflict Reconstruction and Development Initiatives

This article examines Australia's post‐conflict reconstruction and development initiatives in Iraq following the intervention of 2003. Overall, it finds that Australia privileged the neo‐liberal model of post‐conflict state building by investing in projects that would enhance the capacity of the new Iraqi state, its key institutions and the private sector towards the imposition of a liberal democracy and a free‐market economy. To demonstrate, this article documents the failures of the Australian government's stated aims to “support agriculture” and “support vulnerable populations” via interviews conducted in Iraq with rural farmers and tribal members and those working in, or the beneficiaries of, Iraq's disability sector. It concludes by noting that such failures are not only indicative of the inadequacy of the neo‐liberal state building model, but also that these failures point the way forward for future post‐conflict reconstruction and development projects which ought to be premised on a genuine and sustained commitment to addressing the needs of those made most vulnerable by war and regime change.     

“Corporatism With Adjectives”? Conceptualizing Civil Society Incorporation and Indigenous Participation in Latin America

Ethnodevelopment is a relatively new type of participatory policy that targets the poverty of marginalized ethnic groups with a focus on identity and self‐management. While observers have recognized the empirical significance of this new paradigm, little has been done to conceptualize ethnodevelopment. This article argues that national‐level ethnodevelopment implementation is a form of corporatism. Examining ethnodevelopment institutions in Ecuador, it shows that the state has structured, subsidized, and partially controlled the indigenous sector through ethnodevelopment policies and agencies. However, certain components of classical corporatism, such as monopolies of representation, do not characterize this paradigm. This article therefore classifies ethnodevelopment as a diminished subtype of corporatism. It challenges corporatism's long association with a particular historical period in the region and finds that Latin American states and social groups have called on historical institutional repertoires in responding to the newly salient ethnic cleavage in the region.     

The New Swiss Employment Puzzle

Switzerland has traditionally had a better employment performance than most other European countries. In the past, this could be explained with a specific foreign workers policy and to the buffer role women played in the labor market. In the late 1990s, however, foreigners and women occupy a considerably more stable position in the labor force than in the 1970s. Therefore, other factors must explain this good employment performance. International comparisons show that advanced economies tend to perform well in employment creation if, a) there are big wage inequalities (USA), or b) if there is a large public sector (Sweden). We show that Switzerland has none of these features, and that on the basis of prevailing theories of post‐industrial employment creation, it is difficult to account for the Swiss labor market performance in the late 1990s. We put forward and assess a number of possible explanations for this “new puzzle”, and conclude that a successful research strategy in this area should combine elements of welfare regime analysis with a focus on labor market institutions.     

Shifting Priorities or Business as Usual? Continuity and Change in the post-2011 IMF and World Bank Engagement with Tunisia,Morocco and Egypt

Following the popular uprisings that erupted across North Africa in 2010 and 2011, international financial institutions have embarked on a significant re-engagement with governments in Morocco, Tunisia and Egypt. New lending arrangements and project initiatives by the World Bank and International Monetary Fund, in particular, have emphasised a supposed turn towards pro-poor policies, social inclusion and public engagement with economic decision-making. This article analyses the content and logic of IMF and World Bank lending to these three countries, examining whether this re-engagement represents a substantive shift away from the neoliberal policies that characterised pre-2011 IFI relationships with the region.     

Using grid-group theory to explain distinctive Japanese political institutions

Particularly for Americans, Japanese political institutions present a paradox. On one hand, in comparison to other advanced industrial societies the size of Japan's public sector (as a proportion of GDP) is extremely small. On the other hand, Japan's small but expert state is highly interventionary, leaving far less to the vagaries of markets than the United States or even the more statist societies of Europe (Johnson 1982). This contrast leaves many American analysts, particularly economists but others (Esping-Andersen 1997) as well, in a quandary as to whether Japan is a liberal individualistic society. I draw on Douglas-Wildavsky “grid-group” theory to explain these seemingly contradictory institutional characteristics as the result, not of liberal individualistic influence, but of conflict between and the alternation in dominance of two factions of Japanese hierarchy. My primary focus of attention rests on showing how these two hierarchical factions produce a public policy orientation with a predisposition toward state social intervention but periodic restraint with respect to public social programs that accounts for the modest fiscal size of the active Japanese state. I also examine Japanese public policy responses to recent difficulties in overcoming recession and confronting increasing immigration to clinch the case that Japan is a society in which various factions of hierarchy, rather than liberal individualism, dominate.     

States as Gender Equality Activists: The Evolution of Quota Laws in Latin America

This article examines two decades of strengthening, expansion, and diffusion of gender quota laws in Latin America. The analysis departs from studies of quotas’ adoption, numerical effectiveness, or policy impacts, instead focusing on states’ use of coercive power to integrate women into public and private institutions. Viewing these policies in light of feminist theories of the poststructuralist state reveals how state institutions act to restructure government and promote gender equality. In building this argument, the article presents an up‐to‐date empirical survey and conceptual understanding of quota evolution in Latin America, including recent developments in countries such as Chile, Colombia, Bolivia, Ecuador, Mexico, Nicaragua, and Uruguay.     

The semi‐formal sector and the Turkish political economy

The general dichotomy in developing economies between the ‘formal’ and ‘informal’ economic sectors needs to be refined to account for the ‘semi‐formal’ sector: one whose activities appear to be governed by formal rules and procedures but are, in fact, largely unregulated and unrecorded by the state. Using Turkey as an example of a transitional, developing economy, the paper situates the semi‐formal sector in relation to the other two. Also important to examine is the level of autonomy which the semi‐formal sector enjoys in relation to the state and other economic sectors. Autonomy depends on access to resources, and the use of these resources in pursuit of economic, political, or socio‐cultural agendas. Three comparative lessons can be drawn: 1) despite state endeavours, a sizeable portion of seemingly formal economic activities go unreported and unregulated; 2) the semi‐formal sector helps the perpetuation of a mutually beneficial relationship of mutual neglect between state and society; and, 3) the sector's political agendas may best be characterised as one of ‘oppositional pragmatism’.     

The Political Communication of Independent Regulatory Agencies

Since independent regulatory agencies (IRAs) became key actors in European regulatory governance in the 1990s, a significant share of policy‐making has been carried out by organizations that are neither democratically elected nor directly accountable to elected politicians. In this context, public communication plays an important role. On the one hand, regulatory agencies might try to use communication to raise their accountability and thereby to mitigate their democratic deficit. On the other hand, communication may be used with the intent to steer the behavior of the regulated industry when more coercive regulatory means are unfeasible or undesirable. However, empirical research focusing directly on how regulators communicate is virtually non‐existent. To fill this gap, this paper examines the public communication of IRAs in four countries (the United Kingdom, Germany, Ireland, and Switzerland) and three sectors (financial services, telecommunications, and broadcasting). The empirical analysis, based on qualitative interviews and a quantitative content analysis, indicates that the organization of the communication function follows a national pattern approach while a policy sector approach is helpful for understanding the use of communication as a soft tool of regulation.     

Having Your Cake and Eating It,Too: Can Regulatory Agencies Be Both Independent and Accountable?

Independent regulatory agencies (IRAs) were created in various sectors and on different governmental levels to implement liberalization policies. This paper investigates the link between IRAs' independence, which is said to promote regulatory credibility and the use of technical expertise, and their accountability, which is related to the need for controlling and legitimizing independent regulators. The literature on the regulatory state anticipates a positive relation between the independence and accountability of IRAs, but systematic empirical evidence is still lacking. To tackle this question, this paper measures and compares the independence and the accountability of IRAs in three differentially liberalized sectors in Switzerland (telecommunications, electricity and railways). With the application of Social Network Analysis, this piece of research shows that IRAs can be de facto independent and accountable at the same time, but the two features do not necessarily co‐evolve in the same direction.     

Rural economies and leadership change in Central Asia

ABSTRACT

This article applies a political economy approach to questions of presidential succession in Central Asia. Using the cases of Uzbekistan and Kyrgyzstan, it examines how institutions governing rural economies generate, channel and distribute rents within these authoritarian regimes. In some, these institutions concentrate rents under long-standing rulers; in others they diffuse rents away from rulers. The article then specifies obstacles to leadership change that arise from these rural economies, and the crises those obstacles may pose for authoritarian regimes in the region.     

Constructing Reform Coalitions: The Politics of Compensations in Argentina's Economic Liberalization

It is frequently argued that the key to "successful" economic liberalization is to marginalize interest groups that profit from existing regulatory regimes. This paper contends that some established interests can craft public policies to protect their rents in the new market setting. The state may shape the interests of social actors and create proreform constituencies out of old populist and interventionist groups. In Argentina, this coalition building was achieved by constructing reform policies that granted rents in new markets to business and organized labor and by deliberately avoiding unilateral deregulation in sectors where reform would hurt traditionally powerful actors. This argument is developed through a comparative analysis of policy reform in the labor market institutions and protected industrial sectors, areas where the costs of deregulation are said to be unavoidable for the established actors.     

Politics,Economic Crises and Corporate Governance Reforms: Regulatory Capture in Malaysia

Following the 1997 Asian financial crisis, the regulatory system involving governance of the corporate sector was subjected to major legislative and institutional reforms, primarily in response to exposures of serious cases of corruption and abuse in the financial sector by well-connected businesspeople. However, the 2008 global financial crisis indicated continued occurrence of irresponsible forms of corporate development and practices, underscoring structural weaknesses within the regulatory system in spite of these reforms. This article argues that the reforms that had been introduced ignored how state-business nexuses shape the way firms operate, a core reason for the persistence of unproductive and speculative forms of corporate development, grand corruption and cronyism. Utilising Malaysia as a case study, this article indicates that institutional reforms involving devolution of power to regulatory institutions are imperative to provide them with the autonomy to objectively institute prudential controls and indict errant firms that violate legislation overseeing corporate activities.     

Credit policies for Kazakhstani agriculture

This paper reviews the characteristics of the agricultural credit policy in Kazakhstan with a particular focus on emerging rural financial institutions. It is not easy to evaluate the real effect of credit policies due to the limited funds directed at agricultural production. Kazakhstani experience shows that commercial banks are used almost exclusively to provide agricultural producers with credit, while the new specialized credit institutions emerging in the agricultural sector only cater to a very small fraction of the total demand for credit. Presently, there are discussions in Kazakhstan concerning the creation of a specialized agricultural bank; however, this idea has some shortcomings that should be taken into consideration. Lack of credit is one of the main reasons for insufficient investment in agriculture. The underdeveloped land market in Kazakhstan makes formal credit institutions very cautious about accepting agricultural land as collateral.     

Ending Up in Pizza: Accountability as a Problem of Institutional Arrangement in Brazil

Brazilians often complain that investigations of corruption by public servants drag on for years or bring few legal sanctions on the perpetrators. This lack of accountability is so pervasive that a slang phrase, acabou em pizza , is often invoked when investigations are inconclusive. This article investigates the role of four Brazilian public institutions charged with keeping public servants accountable. For analysis, it breaks the accountability process into its three component stages: oversight, investigation, and sanction. Through a study of six prominent cases of corruption, it shows that the weakness of the accountability process in Brazil is due not entirely to the toothlessness of individual institutions of accountability, but also to the independence of such institutions at each of the three stages. These findings suggest that institutional arrangements influence the degree of accountability, and thereby also public trust and confidence, in Latin America's largest democracy.     

Was It Worth It? The Territorial Reform in the Canton of Glarus

This paper examines the financial impact of the 2011 reform of the local governments and jurisdictions in the canton of Glarus. After a popular vote 70 public entities were reorganized to form three large uniformed communes. Previous research showed that amalgamations do not automatically lead to savings in public expenditures and economies of scale. We empirically apply the synthetic control method and show that the territorial reform realized some savings in public expenditure. However, the effect of the reorganization of tasks and responsibilities between the canton and the communes was more influential. The reform must be understood as a horizontal and vertical venture that encompasses both the communes and the canton, much more far‐reaching than a pure local territorial reform.     

Parliamentary oversight and corruption in the Caribbean: comparing Trinidad & Tobago and Grenada

Parliamentary oversight is a key determinant of corruption levels. This article presents research findings on parliamentary oversight in two Caribbean countries: Trinidad & Tobago and Grenada. Our results cast doubt on the results of previous research and also indicate that certain facets of ‘the Westminster’ system need to be relaxed, to reflect contextual reality in smaller island economies. Political will to adopt our recommended reforms is critical, but, as in other countries, inertia often dominates the political environment. Until citizens demand that their elected representatives establish various oversight and anti-corruption mechanisms and ensure these mechanisms are free of political influence, the institutions will be ‘window dressing’ and corrupt actions will go undeterred and unpunished.     

INTRODUCTION

Abstract

In the last issue of 1994 the Bulletin of Concerned Asian Scholars (BCAS) presented a special “Notes from the Field” section on the Bretton Woods institutions. The ten contributions to that section provided case studies of specific projects in Asia and overviews of International Monetary Fund (IMF) and World Bank policies. In sum, they mounted a comprehensive critique of the historical and contemporary policies of these global financial institutions.