Domestic political determinants of inflation

Abstract. Political economists have advanced a variety of diverse and competing hypotheses to explain the domestic political dimension of inflation. With few exceptions, however, these hypotheses have been tested individually without regard to competing explanations. This study uses pooled time-series data on fifteen industrial democracies to examine five prominent political hypotheses that purport to explain either political pressures that cause inflation or institutional arrangements that insulate governments from these pressures. The results indicate that: (1) Central Bank independence provides an effective counterweight to inflation by insulating monetary policy making from inflationary (particularly, partisan) impulses; (2) Government spending increases caused by distributive and redistributive politics intensify inflationary pressures even in countries with independent Central Banks and neocorporatist arrangements; (3) Inflation is determined partially by the ideology of the party controlling government. Leftist governments in pursuit of income redistribution produce higher inflation than conservative governments; (4) Elections do not have significant effects on inflation under any structural circumstances; and (5) Neocorporatism does not consistently reduce inflation or contain the inflationary effects of partisan manipulation and fiscal expansion. However, neocorporatism may stop inflation if wage moderation by labour is accompanied by the government's commitment to pursue restrictive monetary policy.     

CAPITAL MOBILITY, DOMESTIC POLITICS, and FRENCH MONETARY DIPLOMACY

This article evaluates the role of increased capital mobility, sectoral interests, and domestic institutions in bringing about policy change in French capital markets. Capital mobility played an indirect role by making it more costly for French governments to pursue inflationary economic policies. But it was domestic politics, not capital mobility, that led governments to achieve lower inflation by stabilizing the exchange rate. The key domestic political factor was institutional change to regulatory practices, while financial markets reduced bank lending to industry and internationalized French finance, breaking the strong ties and comon monetary diplomacy interests of bankers, industralists, and policymakers, and thereby weaken the political priority of promoting domestic growth and industrial competitiveness.     

Bureaucratic Professionalization and the Limits of the Political Control Thesis: The Case of the Federal Trade Commission

This article explores the political control thesis in light of the literature on bureaucratic politics and agency professionalization. It argues that existing studies of political control have been limited by a failure to analyze the impact of organizational factors on policy change. The article tests political-control and bureaucratic hypotheses through an analysis of changing enforcement priorities at the Federal Trade Commission, The results suggest that the growing role of economists in the agency, rather than congressional oversight or presidential appointments, is critical in explaining the changing antitrust priorities of the Federal Trade Commission.     

The technocratic tendencies of economists in government bureaucracy

Economists are by many accounts the most influential group of experts in contemporary political decision-making. While the literature on the power of economists mostly focuses on the policy ideas of economic experts, some recent studies suggest that economists also hold particular technocratic ideas about the policy process. The article systematically tests this argument. Focusing on economists within government bureaucracy, the study is based on a quantitative analysis of a large-scale survey of Norwegian ministerial civil servants. It finds that economists are more likely to hold technocratic role perceptions than officials with other educational backgrounds only if they work in the finance ministry or in higher administrative grades. The findings contribute to scholarship on the political sway of economists and to debates about technocracy and the technocratic views of civil servants.     

Knowledge, Legitimation and the Politics of Risk: The Functions of Research in Public Debates on Migration

There is a striking lack of research on the utilisation of expert knowledge in public policy debates and party political mobilisation. Existing contributions in related fields of scholarship generate rather contradictory expectations. On the one hand, political communications literature points to the dumbing down of political debate, implying a limited role for expert knowledge. On the other hand, a number of prominent sociologists have noted the centrality of science in political debate on the politics of risk. This article suggests that the two theses are not necessarily incompatible. For knowledge to be reported in the media, it clearly needs to conform to criteria of novelty, drama and scandal, but scientific findings can and often do meet these criteria, especially in areas of risk, where there is enormous potential to scandalise government actions or omissions. The article illustrates these tendencies through an analysis of the use of expert knowledge in UK debates on migration from 2002 to 2004. It explores how research was used in parliamentary debates, speeches and newspaper coverage of three prominent episodes in the politics of migration. The examples demonstrate well how the mass media utilises research to expose political scandal. The analysis also suggests the ambivalence of political actors and especially incumbents in drawing on research. While governments are keen to utilise research to legitimise policies, they are also aware of the limitations of science in underpinning risky decisions. The article concludes with a discussion of how politics has responded to this dilemma.     

The failure of market failure

The concept of market failure was originally presented by economists as a normative explanation of why the need for government expenditures might arise. Gradually, the concept has taken on the form of a full‐scale diagnostic tool frequently employed by policy analysts to determine the exact scope and nature of government intervention. For some time, economists have known that the market failure idea is conceptually flawed. The authors of this article demonstrate why this is so, employing concepts drawn from the perspective of transaction costs. In a review of empirical studies, they further show how the market failure diagnostic leads analysts to make generalizations that are not supported by facts. Transaction cost analysis helps to explain the underlying processes involved. © 1999 by the Association for Public Policy Analysis and Management.     

Are economists more selfish than other 'social' scientists?

There is considerable professional disagreement among economists about whether economists are less cooperative than non-economists. It has been argued that once an individual has been schooled in the self-interest model of individual human behavior (s)he exhibits more selfish behavior than other, ostensibly similar individuals who have not been taught to fully appreciate Homo economicus. Heretofore, the empirical debate has centered around classroom experiments designed to compare the “honesty” of undergraduate economics majors versus non economics majors. However, methodological problems have plagued these studies, leaving both sides at an impasse. We offer unique and compelling real-world evidence that suggests economists are no less cooperative than non-economists. Indeed, after comparing the incidence of “cheating” on their Association dues, we find that professional economists are significantly more honest/cooperative than professional political scientists, and especially, professional sociologists.     

Can behavioral economists improve economic rationality?

Behavioral economists recognize that we are all subject to the cognitive biases they have observed and studied in laboratory experiments. Yet the leading behavioral economists exhibit far more interest in applying those biases to market decisions than to political decision-, and see irrational decisions making as another example of market failure which justifies correction by some form of government action. We treat this as a justification for comparing the distortions of cognitive biases on market decisions with the distortions of those biases on political decisions. We also make a distinction between the rationality of individual decisions and the collective rationality of those decisions, and question Thaler’s argument that people fail to learn much from the mistakes they make in markets. We conclude that behavioral economists would do more to increase economic rationality by making the case for eliminating government policies that are clearly economically irrational and destructive. Eliminating such policies would not necessarily increase the individual rationality of political or market decisions, but it would increase the collective rationality of both.     

National Institutions and the Globalized Political Economy of Technological Change: An Introduction

In the last three decades research across the social sciences has made great advances in the political economy of technological change. Nonetheless, many of these insights are solely tied to national, sometimes regional, explanations of industrial R&D and innovation rates. Meanwhile, the impacts of the international system, and of the actions of individual countries, on technological changes across many countries, are increasingly more pronounced. It is therefore imperative that we expand our theoretical conceptualizations. For these reasons we have gathered, in this special issue, economists, political scientists, geographers, and sociologists to explore in a comparative way what we view as some of the critical areas for research at two different level of analysis—business and nations. This introduction will outline their major research themes and provide a brief history of the debate.     

A Transition without Players: The Role of Political Parties in the Arab Revolutions

Academic scholarship regarding the role of political parties in the Arab world remains largely underdeveloped in comparison to analyses focusing on the role of political Islam or on authoritarian resilience. Although both of these fields of research contain useful paradigms for explaining aspects of the region’s political development, this overemphasis means that there is a lack of meaningful analysis of political participation. This article seeks to analyze the role of political parties in the light of regional transition processes since the Arab uprisings, claiming that the region’s political history and sociocultural makeup can help in explaining that much of the popular mobilization in the Arab world following the Arab revolutions took place outside of institutionalized politics. First, the article reviews and analyzes relevant theories of political parties. Second, the article presents a comparative analysis of existing theories and case studies of political parties being part of transition processes in Latin America and Eastern Europe. Taking this as starting point, the article, by looking at the Egyptian and Tunisian cases, demonstrates the limited role of political parties in connection with the regional transitory processes, with the ambition of presenting some relevant analytical tools as well as useful hints for further analyses of political transformation processes in the Middle East.     

Economic performance of 'weak' governments and their interaction with central banks and labour: Deficits, economic growth, unemployment and inflation, 1961–1998

Abstract.   Comparative political economists have conventionally claimed that the strength and stability of governments affect policy making and performance, and that what they call 'weak governments'– multiparty, minority and short-lived governments – show poorer economic performance. This article tests this and related hypotheses on deficits, economic growth, unemployment and inflation by examining data from 17 OECD countries. I find that there is generally little evidence to indicate that so-called 'weak governments', when considered independently, produce poorer performance than strong ones. However, the effects of different government types are partly contingent on central bank independence and labour organization. When central banks are independent, coalition governments exhibit better inflation and economic growth performance than one-party governments, but the opposite happens when central banks are dependent. I attempt an explanation for these relationships. I also find that independent central banks, under certain conditions, lead to lower growth and higher inflation. Thus, some of the benefits of central bank independence are context-specific, depending on other political-economic factors.     

Battles over numbers: the case of the Argentine consumer price index (2007–2015)

An unprecedented crisis of confidence in Argentina's public statistics rendered the declaration of a ‘National Statistical Emergency’ in 2016. This paper examines the battle over the Argentine consumer price index (CPI) between 2007 and 2015. It argues that in this dispute the index became the object of political struggle rather than a methodological controversy. The main characteristics of the Argentine CPI, its trajectory and the country’s inflationary history influenced the type of debate and the dispute that was possible and feasible. The battle was linked to the erosion of confidence in and social support for official statistics and to the emergence of alternative price indices. Both processes seriously undermined the government's ability to control inflation.     

Rejecting representation? Party systems and popular support for referendums in Europe

Under what conditions do citizens favor deciding political issues by popular vote? Models of support for popular vote processes usually consider the influence of individual attitudes such as political trust and interest in politics. But much less is known about the effect of institutional variables on support for popular vote processes. This article builds on research showing that disaffection with elected officials shapes support for referendums by considering the influence of the party system. First, an analysis of multilevel data from twenty-four European democracies indicates that individuals are more supportive of referendums in countries with fewer effective political parties. Second, a mediation analysis provides evidence that the number of parties influences referendum support through individual-level political trust and external efficacy. Where there are fewer viable parties, feelings that elected officials are unresponsive tend to increase popular support for referendums. These findings suggest a trade-off between available representation by political parties and support for direct influence over public policy.     

Rethinking Intersectionality: Towards an Understanding of Discursive Marginalization

In recent years, political science research on “intersectionality” has breathed new life into perennial debates about group politics, inequality, and marginalization, demonstrating that unitary identity categories are insufficient for understanding group interests. This article critiques this emergent body of literature, noting the theoretical tensions that have surfaced as the concept has taken hold within political science. It posits that the theoretical underpinnings of this growing research paradigm have to date relied upon a liberal conception of political power that advocates greater administrative attention to particularized subgroups. This pervasive liberalism glosses over the complex and dynamic power structures that both produce political marginalization and offer sites of political resistance. Using the internal tensions of LGBTQ politics as a guiding example, this article calls for a move beyond intersectionality and towards a notion of discursive marginalization to more accurately account for the processes by which citizen-subjects are produced.     

Why do so many people vote 'unnaturally'? A cultural explanation for voting behaviour

Abstract. The traditional class approach to politics maintains that the working class 'naturally' votes for left-wing parties because they represent its economic interests. Such traditional voting patterns have, however, become less typical, giving rise to the 'Death of Class Debate' in political sociology. Against this background, using data collected in the Netherlands in 1997, this article examines why so many people, working and middle class alike, vote for parties that do not represent their 'real class interests'. Critically elaborating Lipset's work on working-class authoritarianism and Inglehart's on postmaterialism, the article confirms that 'natural' voting complies with the logic of class analysis. 'Unnatural' voting, however, is not driven by economic cues and class. Right-wing working-class voting behaviour is caused by cultural conservatism that stems from limited cultural capital. The pattern of voting for the two small leftist parties in Dutch politics underscores the significance of this cultural explanation: those with limited cultural capital and culturally conservative values vote for the Socialist Party ('Old Left') rather than the Greens ('New Left'). Breaking the traditional monopoly of the one-sided class approach and using a more eclectic and open theoretical approach enables political sociologists once again to appreciate the explanatory power of the class perspective.     

The politics-violence frontier

ABSTRACT

This article analyses how early twenty-first century political activists in Italy construct the frontier between politics and violence. It puts these constructions into the context of more conventionally theoretical accounts of violence and politics. Analysis of internet discourse published by left/anarchist bloggers and group members focusses on how activists criticize the conventional view that electoral politics is non-violent, and endorse the view that violence is politics’ main means. This means that the role of violence in oppositional politics then has to be negotiated. Discourse analysis shows how ideas of resistance, and anti-state force, are articulated in such a way as to draw distinctions between us and them, and their politics and ours. The article discusses the significance of these articulations of the politics-violence distinction for the construction of political agency, and for the justification of forms of political action, seeking to show that boundary work is fundamental to political agency.     

Budget Deficits, Hyperinflation, and Stabilization in Ukraine, 1991–96

Since gaining independence in 1991, the former Soviet republic of Ukraine has been plagued by persistent fiscal deficits and punctuated periods of rampant inflation. Having few options to cover the fiscal deficit, Ukraine in 1992–94 largely resorted to money creation. The result was that hyperinflation broke out in late 1993, its burden falling mainly on households, but also eroding the capital of state enterprises. Falling revenues and robust expenditures—even in the face of the continuing output collapse—were exacerbated by a policy of lavishing large amounts of cheap credits on state enterprises. This article reviews and analyzes the causes of Ukraine's inflationary impulse, the descent into hyperinflation in 1993–94, its effects, and the subsequent drive to stabilization by 1996. It concludes that a substantial erosion of the inflation tax base by late 1995 propelled the government to pursue stabilization through an IMF-sponsored program of fiscal restraint. A two-year drive to fiscal and monetary stabilization ensued. Stabilization was largely achieved by mid-1996, permitting a currency reform in September.     

The Embedded Market and Ideology Critique

Abstract

When the Global Financial Crisis hit, major political economists were able to boast that they had long warned that "crazy times" were coming. By contrast, leading sociologists seem to have been wrong footed. Totalizing narratives of a new "risk society", "second modernity" and the like appeared to have sacrificed the grounds for weighing up the costs and damages of contemporary capitalism. Made famous by Karl Polanyi, the concept of the embedded market suggests a differentiated diagnosis of our times that should allow sociology to re-enter the discussion as a critic of an ideological attempt to block public discussions about losses and dam ages of contemporary capitalism. The following paper will explore several readings of this concept and will evaluate their capacity to revive sociology's critical powers.     

The Democratic Contribution of Political Market Researchers

Although we know that candidates, parties and governments conduct political market research and engage in heated debate about it, market research in politics remains a largely hidden activity. This article presents the perspectives of practitioners involved in collecting and using market research including advisors to 11 presidents and prime ministers and demonstrates that market analysis in politics is a multi‐varied activity, carried out within a complex context. The over‐simplistic criticism that political marketing means politicians simply follow focus groups needs to be revised, and although poor practice will always occur, practitioners are developing more fluid and mature ways to utilize research in politics. Political market research can play a valuable role in informing the decisions politicians make and enhance the relationship between the government and the public. Copyright © 2015 John Wiley & Sons, Ltd.     

Utopias Re-imagined: A Reply to Panizza

This article is a reply to Panizza's recent article, 'Unarmed Utopia Revisited: The Resurgence of Left-of-Centre Politics in Latin America'. It contests the claims that there are no alternatives to market economies and liberal democracy in contemporary Latin America. It does this by disentangling the conceptual assumptions that underlie the analysis presented, which, it argues, construct a loaded dice that makes the conclusions of the arguments seemingly inevitable and objective. It also explores the internal contradictions within the alternative presented. This analysis is developed through the use of critical social theory and with reference to the 'movements from below' engaged in the struggle to re-imagine and reconstruct utopias. This involves bringing to the heart of analysis a theoretical orientation in which structures become a series of concrete social relations, not objects, and power is mediated at a variety of spatial levels. It necessitates a conceptualisation of politics, structure and the agents and nature of structural change that expand the boundaries of traditional political science categories. Such conceptual expansion and theoretical repositioning make visible, and politically central, the movements from below normally categorised as marginal in political analysis.