Globalization,government spending and taxation in the OECD

Abstract. This article assesses the impact of globalization on welfare state effort in the OECD countries. Globalization is defined in terms of total trade, imports from low wage economies, foreign direct investment, and financial market integration. Welfare effort is analyzed in terms both of public spending (and separately on social service provision and income transfer programs) and taxation (effective rates of capital taxation and the ratio of capital to labor and consumption taxes). Year–to–year increases in total trade and international financial openness in the past three decades have been associated with less government spending. In contrast, integration into global markets has not been associated either with reductions in capital tax rates, or with shifts in the burden of taxation from capital to consumption and labor income. Moreover, countries with greater inflows and outflows of foreign direct investment tend to tax capital more heavily.     

Transparency, Political Polarization, and Political Budget Cycles in OECD Countries

We investigate the effects of fiscal transparency and political polarization on the prevalence of electoral cycles in fiscal balance. While some recent political economy literature on electoral cycles identifies such cycles mainly in weak and recent democracies, in contrast we show, conditioning on a new index of institutional fiscal transparency, that electoral cycles in fiscal balance are a feature of many advanced industrialized economies. Using a sample of 19 OECD countries in the 1990s, we identify a persistent pattern of electoral cycles in low(er) transparency countries, while no such cycles can be observed in high(er) transparency countries. Furthermore, we find, in accordance with recent theory, that electoral cycles are larger in politically more polarized countries.     

Regulatory Transparency in OECD Countries: Overview, Trends and Challenges

The concept of transparency has rapidly gained prominence in Organisation for Economic Cooperation and Development (OECD) countries. It is particularly associated with the rise of the governance agenda, as transparency is a core governance value. The regulatory activities of government constitute one of the main contexts within which transparency must be assured. There is a strong public demand for greater transparency, which is substantially related to the rapid increase in number and influence of nongovernmental organisations (NGOs) or 'civil society groups', as well as to increasingly well educated and diverse populations.
Transparency initiatives now form a major part of the regulatory policies of many OECD countries: in 2000, 20 of the 30 OECD member countries had government-wide transparency policies (OECD 2002a). Many OECD countries have now made substantial investments in improved regulatory transparency, and have reaped important gains in terms of regulatory quality, legitimacy and accountability.
However, despite these gains, the results have in many cases fallen short of expectations. As well, the implementation of transparency has itself led to new stresses and problems within the regulatory process. This article considers why regulatory transparency is important and points to some of the main trends in improving regulatory transparency. It also considers a range of problems and issues that arise and suggests means of resolving these.     

Strategic fiscal interaction among OECD countries

This paper investigates whether OECD countries compete with each other for mobile factors by using various fiscal (tax-spending) policy instruments. We use a panel dataset of 20 OECD countries over the 1982?C2000 period. Results reveal evidence that international capital inflows (FDI) are affected by fiscal policy at home and abroad. Also, there is evidence that domestic capital tax rates react: (i) positively to changes in capital tax rates in neighboring countries, and (ii) negatively to changes in public investment spending in neighboring countries. In contrast, strategic interdependence over public investment spending decisions is not established.     

Tax Structure Turbulence in OECD Countries

This paper analyses whether and to what extent politiciansmanipulate tax structures strategically in order to winelections or for ideological purposes. We introduce anindicator for tax structure turbulence which measures thedegree to which a country's tax structure changes from oneyear to another. Using data on 18 OECD countries over theperiod 1965–1995, we find clear evidence of a politicalbudget cycle in national tax structures. More precisely, wefind that in election years, tax structures are changedsignificantly less than in other years. Further, thedispersion of political power significantly lowers the abilityof governments to change the tax structure. We do not,however, find any evidence of partisan budget cycles innational tax systems following political regime changes.     

Worlds,Families, Regimes: Country Clusters in European and OECD Area Public Policy

This article focuses on the notion that the policies and politics of states and nations constitute distinct worlds or clusters. We begin by examining the concept of clustering as it has emerged in the literature on policy regimes and families of nations. We then address a series of empirical questions: whether distinct worlds persist in an era of policy convergence and globalisation, whether policy antecedents cluster in the same ways as policy outcomes and whether the enlargement of the EU has led to an increase in the number of worlds constituting the wider European polity. Our main conclusions are that country clustering is, if anything, more pronounced than in the past, that it is, in large part, structurally determined and that the EU now contains a quite distinct post-Communist family of nations.     

Explaining public education expenditure in OECD nations

Abstract. This article seeks to explain cross-sectional variation in public education expenditure levels and change since 1960. Five possible explanations are located: the incremental push of programme inertia, demographic and related pressures, economic resource growth, the impact of party and the cultural impact of Roman Catholicism. A multivariate analysis demonstrates that educational expenditure is an arena in which monocausal explanations are wholly inappropriate. With the exception of programme inertia, each of the explanations is seen to have an important bearing on this aspect of the people's welfare.     

Electoral Competition and Agricultural Support in OECD Countries

Agricultural trade protectionism in developed countries remains a politically charged issue, yet few studies have attempted to explain the political dynamics behind this important trade issue. We consider agricultural subsidies as a type of distributive policy that targets the agricultural sector at the expense of consumers and taxpayers. Based on Cox (1987, 1990) and Myerson (1993) , we argue that electoral systems that encourage politicians to appeal to a narrow constituency tend to have a higher level of agricultural support. We test this theoretical hypothesis using OECD agricultural support data disaggregated by commodity and country. A cross-classified multilevel model is employed to account for complex variation of agricultural support across countries, commodities, and time. Our empirical results show that electoral systems that encourage politicians to target narrow (broad) constituencies are associated with relatively high (low) levels of agricultural subsidies.     

Government ideology and monetary policy in OECD countries

Public Choice - We examine the extent to which government ideology has influenced monetary policy in OECD countries since the 1970s. In line with important changes in the global economy and...     

OECD Symposium on the Future of Public Services

The OECD Ministerial Symposium on the Future of Public Services took place in Paris, 1–6 March 1996. Professional Developments reproduces below the Statement by the Chair at the conclusion of the Symposium. The OECD comprises 26 member countries, including the Commonwealth countries of Australia, Canada, New Zealand and the United Kingdom. It also now includes Mexico and the Czech Republic.     

IDENTIFYING HEALTH CARE COST CRISES IN OECD NATIONS

This study develops an empirical model for determining whether a nation's health care expenditures are experiencing a crisis based on the trend over time of the ratio of total health spending to total domestic expenditures. A dynamic regression model is applied to 22 OECD nations for the 1960–1994 period to estimate whether or not levels of health spending are converging towards a stable equilibrium and, if they are, what this equilibrium is and how long it will take to reach it. Crisis is defined as an empirically divergent process. The principal findings from this analysis are that: 1) three nations (France, Greece, and the United States) are experiencing a crisis according to this definition; 2) although the crisis potential is relatively high in all the OECD nations, there appears to be a critical region or threshold where the tendency towards crisis increases dramatically; 3) the time to reach equilibrium is generally quite long, indicating the opportunity for substantial policy intervention; and 4) Denmark stands out as a successful case where health costs have been contained.     

经合组织的规制改革政策及其对我国的启示

规制改革是经合组织国家政府改革的重要组成部分。本通过对经合组织规制改革献的研究，介绍了经合组织对政府规制概念的界定和分类、对规制改革的理解和推动改革的政策建议，并分析了对我国政府改革的借鉴性意义。     

Organizational power and distributional conflict within OECD nations

Abstract. This article claims that a predator-prey model of cyclical growth is a useful concept for studying the dynamic relationship between wage and salary shares of GDP and employment. The rate of growth of employment is considered as an indicator of union bargaining strength; the change of the wage share is treated as a reflection of an ongoing distributional conflict between profits and wages. The paper discusses some of the analytic properties of the formal model. It continues with an attempt to fit the model to West German data for the period from 1960 to 1985. Given the formal rigidity of the model, this strategy is only partially successful. As a consequence, a more complex model is introduced which also relies heavily on the idea of a predator-prey cycle. As a fully-fledged political-economic model of the OECD type of systems, it allows us to study, among other issues, the implications of different union policies under the constraint of a serious unemployment problem.     

Partisan politics,welfare states,and environmental policy outputs in the OECD countries, 1975–2005

Building on the burgeoning literature on the association between the welfare state and the environmental state, this study empirically examines how the politics of the former has affected the development of the latter. We suggest that the size of the welfare state shapes the calculus of environmental policy costs by partisan governments. A generous welfare state lowers the costs perceived by the left‐wing government, as large redistributive spending allows the government to mitigate the adverse impact of the new environmental policy on its core supporters, industrial workers. A generous welfare state also implies diminished marginal political returns from additional welfare commitment by the left‐wing government, which lowers the opportunity costs of environmental policy expansion. To the contrary, because of lower overall regulatory and taxation pressure, a small welfare state reduces the costs of environmental policy expansion as perceived by a right‐wing government. Our theoretical narrative is supported in a dynamic panel data analysis of environmental policy outputs in 25 Organisation for Economic Co‐operation and Development member states during the period 1975–2005.     

Economic vulnerability and economic voting in 14 OECD countries

The economic voting literature shows that good economic performance bolsters the electoral prospects of incumbents. However, disagreement persists as to whether voters in vulnerable economic conditions are more likely to engage in economic voting. It is argued in this article that a crucial factor in explaining individual‐level variation in economic voting is the degree of exposure to economic risks, because risk exposure affects the saliency of the economy in voting decisions. In particular, the focus is on job insecurity and employability as key determinants of economic voting patterns. The article hypothesises that the extent of economic voting is greater in voters who are more vulnerable to unemployment and less employable in case of job loss. Support for these hypotheses is found in a test with a dataset that combines survey data on incumbent support with occupational unemployment rates and other measures of exposure to economic risks.     

Economy,Type of Government,and Strategic Timing of Elections: Calling Opportunistic Early Elections in OECD Democracies

Although mainstream models of accountability assume that the election date is exogenously fixed, in almost any parliamentary democracy governments may choose it. This article proposes a theory of the strategic timing of elections that highlights the role of the economy and the type of government. First, incumbents will call early elections when the economy is growing and inflation rates are low. Nevertheless, coalition and majority governments will fall short of the ability and the incentives to do so, respectively. As a result, the effect of the state of the economy on the opportunistic dissolution of the parliament will be stronger when there is only one party in government, and it lacks a majority in the lower house. These patterns are examined by using data from 21 Organisation for Economic Cooperation and Development democracies between 1945 and 2010.