Civil Servants, Economic Ideas, and Economic Policies: Lessons from Italy

Building on theoretically oriented and empirically grounded research on two key macroeconomic institutions in Italy, this article explains how and why civil servants can engineer major policy changes, making a difference in a country's trajectory. Italy provides a challenging testing ground for this kind of analysis, as it is generally portrayed as a highly politicized system in which political parties and politicians fully control public policies. Three general lessons can be learned, the first being that the role of civil servants in changing modes of economic governance depends on the resources that they master in the system in which they operate. "Intangible assets" are of primary importance in complex and perceived technical policies, such as monetary and exchange rate policy, which have high potential for "technocratic capture." Second, in these policies, certain intangible assets, such as specific bodies of economic knowledge or policy paradigms, have a considerable impact on policy making. Third, besides interactions in international fora, the professional training of civil servants is a mainstream way through which economic policy beliefs circulate and gain currency, laying the foundations for policy shifts. By highlighting the importance of the intangible assets of macroeconomic institutions, this research makes an unorthodox contribution to the primarily economic literature on central bank independence.     

Economic freedom, culture, and growth

How do economic freedom and culture impact economic growth? This paper argues that culture, as measured by the World Values Surveys, and economic institutions associated with economic freedom are both independently important for economic prosperity, but the strength of their impact can be better understood only when both are included in the growth regression. Our results indicate that economic freedom is more important than culture for growth outcomes, suggesting substitutability between the two. We posit that culture is important for growth when economic freedom is absent, diminishing in significance once economic freedom is established.     

Partisanship, Political Control, and Economic Assessments

Previous research shows that partisans rate the economy more favorably when their party holds power. There are several explanations for this association, including use of different evaluative criteria, selective perception, selective exposure to information, correlations between economic experiences and partisanship, and partisan bias in survey responses. We use a panel survey around the November 2006 election to measure changes in economic expectations and behavioral intentions after an unanticipated shift in political power. Using this design, we can observe whether the association between partisanship and economic assessments holds when some leading mechanisms thought to bring it about are excluded. We find that there are large and statistically significant partisan differences in how economic assessments and behavioral intentions are revised immediately following the Democratic takeover of Congress. We conclude that this pattern of partisan response suggests partisan differences in perceptions of the economic competence of the parties, rather than alternative mechanisms.     

Economic security, 1935-85

The economic well-being of both working and retired persons has improved significantly since the Social Security Act was passed in 1935. More people are employed now than at any time since then, despite declining employment among the aged and more years of school attendance among the young. The ratio of non-workers to workers--a broad measure of dependency--is lower now than at any time since the 1930's. Social security has grown and matured to become a strong foundation of retirement income, and other work-related employee benefits have grown in tandem with social security. Employer contributions for social insurance and related employee benefits have grown from being about a 1-percent supplement to aggregate wages and salaries in 1929 to nearly 20 percent today. Social security and Medicare account for just over a fourth of employer contributions, while other public and private retirement systems represent just over another fourth. The balance of benefits for active workers includes group health and life insurance, unemployment insurance, workers' compensation, temporary disability insurance, and related benefits. Pay for holidays, vacations, and sick leave is estimated to have increased from less than 1 percent of aggregate pay in 1929 to about 10 percent today. The improved economic status of the aged has been documented by a series of surveys beginning in 1941-42 and carried out from time to time until 1972 and biennially since 1976. The earlier surveys were supplemented with estimates from record data and tables from the Bureau of the Census. The income of the aged as a whole has grown by about 75 percent over the past 2 decades after taking inflation into account. The income of the aged as a whole grew faster than that of the nonaged in the 1970's and early 1980's when real social security benefits increased faster than inflation and wages lagged behind it. New beneficiaries in 1982 were in better health and were more likely to retire because they wanted to than was true of their counterparts in the early 1940's. Not only have benefits continued to be the main component of income of the aged as total incomes have grown, but also benefits have become much larger in relation to average earnings than used to be the case. Retired workers are much more likely now than in the early 1940's to have other pensions or income from assets to supplement benefits.(ABSTRACT TRUNCATED AT 400 WORDS)     

Economic Freedom,Government Policy and the Trade-Off Between Equity and Economic Growth

This study investigates the role that economicfreedom plays in economic growth and in the distribution in marketincome, the role of government policy in advancingeconomic progress and in promoting income equality, and the effectthat the rate of economic progress has on thedistribution of market income. Structural and reduced formmodels are estimated that reveal that economic freedompromotes both economic growth and equity, and that there is apositive but relatively small trade-off between growth andincome inequality.     

Economic Development,Violent Leader Removal,and Democratization

This article argues that autocratic regime strength plays a critical mediating role in the link between economic development and democracy. Looking at 167 countries from 1875 to 2004, I find that development strengthens autocratic regimes, as indicated by a reduced likelihood of violent leader removal. Simultaneously, greater development predicts democratization, but only if a violent turnover has occurred in the recent past. Hence, development can cause democratization, but only in distinctive periods of regime vulnerability. Although development’s stabilizing and democratizing forces roughly balance out within autocracies, they reinforce each other within democracies, resolving the puzzle of why economic development has a stronger effect on democratic stability than on democratization. Further, the theory extends to any variable that predicts violent leader removal and democracy following such violence, pointing to broad unexplored patterns of democratic development.     

经济全球化、当代资本主义和社会主义

在经济全球化条件下,当代资本主义的发展进入了一个新的历史阶段,即金融垄断资本主义阶段。金融垄断资本主义显示出资本主义基本矛盾发展的阶段性特征。这些特征成为当代资本主义历史定位的主要依据。同时,资本主义和社会主义之间矛盾对立统一关系的实质并没有改变,但是它们之间关系的内容和形式却发生很大变化。这种并存性没有也不可能改变资本主义的历史命运以及社会主义取代资本主义的历史发展趋势。     

Economic inequality,winner-loser gap,and satisfaction with democracy

This study analyzes how economic inequality affects electoral winners and losers' satisfaction with democracy. We posit that both the poor and the rich have more at stake in elections when inequality is high. Electoral losers, whether they are the poor or the rich, are more likely to be dissatisfied with democratic systems when facing greater disparity in wealth. In contrast, electoral winners confronting higher inequality are more likely to express satisfaction with democracy. Employing a multilevel analysis of Comparative Study Electoral Systems (CSES) data, we find that the gap in satisfaction with democracy between electoral winners and losers widens as income inequality increases. Broadening the conventional wisdom that electoral systems mediate the effect of citizens' winner-loser status on their democratic attitudes, we demonstrate that the mediating effects of economic inequality are more critical than the institutional effects.     

Fiscal Policy Composition,Public Debt,and Economic Activity

This paper uses a dynamic general equilibrium model i) toinvestigate how changes to different spending and revenue items of the budgetaffect economic activity and public finance; and ii) to evaluate thewelfare costs of alternative fiscal policy maneuvers. The paper shows that,unlike an increase in government purchases of final goods, an increasein public employment and transfers can have a contractionary effect onthe economy in the same way as a rise in tax rates. It also suggests thatfiscal adjustments implemented by cutting spending items increasehouseholds' welfare and are more effective in reducing the primary deficitand public debt than are increases in tax rates.     

Fiscal Consolidations: Quality,Economic Conditions,and Success

Recent research has demonstrated theimportance of good quality of fiscaladjustments for the success of governmentbudget consolidations. We extend thisapproach to analyze the importance of theeconomic conditions in which fiscalconsolidations are started for theirsuccess. The cyclical positions of thedomestic and international economy, theinitial debt level and the stance of fiscalpolicy in the OECD are all importantdeterminants of the likelihood of fiscalconsolidations. They also affect thegovernment's choice of consolidationstrategy, making them importantdeterminants of the success of fiscalconsolidations. In contrast, the monetarypolicy stance plays only a negligible rolefor fiscal consolidations. We use theanalysis to test for any Maastricht effectson the performance of European governmentsduring the 1990s. Such effects are weak atbest and occurred only during the firsthalf of the decade.     

Economic Integration,Party Polarisation and Electoral Turnout

Recent research provides evidence that economic integration has a negative effect on electoral turnout. Taking up these recent findings, this article explores the causal chain in more detail. Specifically, it argues that one way by which economic integration affects the calculus of voting is through the positioning of political parties. The expectation is that the polarisation between parties on an economic left–right scale is lower the more integrated an economy is. Consequently, electoral turnout should be lower with less polarisation in the party system. The article employs aggregate-level data from legislative elections in 24 developed democracies. Using data from the Comparative Manifestos Project, evidence is found not only that economic integration has a negative effect on party polarisation as measured on an economic left–right dimension, but also that this in turn exerts a negative effect on electoral turnout.     

Optimal Taxation,Economic Growth and Income Inequality

That there is a trade-off between equityand efficiency (economic growth) is wellknown. Two models have been developed thatlink government spending and taxation toeconomic growth. This paper uses thesemodels to provide estimates of thegrowth-maximizing tax rate. Then, a twoequation structural model is developed andestimated that is used to find thetrade-off rate between economic growth andincome inequality and the growth-maximizinglevel of income inequality for the UnitedStates over the period 1960–1990.     

Economic liberalisation,market institutions and labour rights

What effect do pro‐market economic policies have on labour rights? Despite significant debate in policy and academic circles about the consequences of economic liberalisation, little is known about the labour rights effects of pro‐market policies. Extant literature has focused only on the possible outcomes of market‐liberalising policies, such as trade and investment flows, rather than directly assessing market‐friendly policies and institutions. Moreover, this line of research has found mixed results on how these outcomes influence labour conditions. To provide a comprehensive assessment of this linkage, this article combines data on five distinct policy areas associated with economic liberalisation with data on labour rights for the period 1981–2012. The results indicate that pro‐market policies – except the ones involving rule of law and secure property rights – undermine labour rights. Thus while there are some positive economic and political outcomes associated with market‐supporting policies, economic liberalisation comes at the cost of respect for labour rights.     

Political Institutions, Public Policy and Economic Growth

The argument of the Rise and Decline of Nulions (RADON) opens up a new area of important social science research: to understand the social and political setting of economic growth. The paper tests the argument that institutionalization leads fo the decline of nafions slowing down the rate of economic growth. Employing several indicators on economic growth and controlling for a number of factors the finding with regard to the OECD-nations is that the Olson emphasis on institutionalization is confirmed.     

Charismatic Economies: Pentecostalism,Economic Restructuring,and Social Reproduction

Pentecostalism is one of the world's fastest growing religions, expanding most quickly in Latin America, sub-Saharan Africa, and parts of Asia. To make sense of this expansion in so many developing regions, I suggest that Pentecostalism fosters norms and behaviors that harmonize with neoliberal economic restructuring. I frame this theoretically with Polanyi's notion of double movement. In our current era of weakened state governance vis-à-vis neoliberal trade and fiscal policy, non-state sites of reaction have emerged. Pentecostalism is one such site, and, in contrast with Polanyi's example, I suggest that Pentecostalism has embedded the self-regulated aspects of neoliberal capitalism. I make this argument by using the feminist political economy theorization of social reproduction to interpret a number of empirical studies of Pentecostalism. Pentecostalism addresses dilemmas of social reproduction engendered by neoliberalism, and so may be said to embed this form of economic organization in human social life in a way that reinforces neoliberal capitalism.     

State Tax and Expenditure Limitations,Business Climate,and Economic Performance

The influence of state‐level tax and expenditure limitations on economic performance within the framework of the state's business climate is examined using a family of parametric and nonparametric tests of subsample equivalency. An index of tax and expenditure limitation strength or restrictiveness developed by Poulson is used to test for patterns in 84 separate measures of economic performance, business vitality, and development capacity. In general, we find no evidence that tax and expenditure limitations are associated with higher levels of economic performance or business climate. There is limited evidence that tax and expenditure limitations are associated with a poorer business climate and lower economic performance in some cases.     

Economic crisis,domestic politics and welfare state changes

Abstract

This essay re-examines the debate over the relationship between economic crises and welfare system changes and the role of domestic political factors which may refract the wave of influence from economic crisis. While acknowledging the inherent weakness of research design in a single case study, this study cautiously contends that an examination of the Korean case reveals that domestic factors continue to play an important role in welfare policy-making, even when decisive global economic forces are at work. Theoretically, this study argues not only for the continued theoretical relevance of the state-centered theory, but also in favor of a more integrated and configurational approach.     

Welfare Reform: Assessing its Political, Economic, and Social Effects

Books reviewed: Rebecca M. Blank, It Takes a Nation: A New Agenda for Fighting Poverty Anne Marie Cammisa, From Rhetoric to Reform?: Welfare Policy in AmericanPolitics Martha Shirk, Neil G. Bennett, and J. Lawrence Aber, Lives on the Line: American Families and the Struggle to Make Ends Meet Robert M. Solow, Work and Welfare