Exchange rate policy modeling and forecasting the exchange rate: Indian rupee vis‐à‐vis the U.S. dollar

The exchange rate is a very important key financial variable that affects decisions made by the foreign exchange investors, exporters, importers, bankers, businesses, financial institutions, policymakers, and tourists in the developed as well as the developing world. Exchange rate fluctuations affect the value of international investment portfolios, competitiveness of exports and imports, value of international reserves, currency value of debt payments, and the cost of tourists. Movements in exchange rates thus have very important implications for any country's economy's business cycle, trade, and capital flows and are therefore crucial for understanding financial developments and changes in economic policy. The study will be looking at the various aspects of country's economic policy with respect to the exchange rate and modeling and forecasting the exchange rate. The study will be analyzing India's exchange rate story and will be discussing the structure of the foreign exchange market in India in terms of participants, instruments, and trading platform as also a turnover in the Indian foreign exchange market and forward premia. The study will be attempting to develop a model for the rupee–dollar exchange rate taking into account variables from monetary and microstructure models as well as other variables including intervention by the central bank. The main focus will be on the exchange rate of the Indian rupee vis‐à‐vis the U.S. dollar, that is, the Re/$ rate. The data will be covering from January 1990 through April 2013. This study will be examining the forecasting performance of the monetary model and various extensions of it in the vector autoregressive and Bayesian vector autoregressive framework.     

Policy Adoption and the Redefinition of Operating Procedures: Comparison Cases at UMTA

Political scientists often consider the place of standard operating procedures (SOPS) in shaping bureaucratic responsiveness to “top-down” direction, but our writing only infrequently considers the processes and ease by which bureaucratic routines, decision standards, and SOPS adjust to produce nm outputs. This article explores the change of routines, decision standards, and SOPs from a behavioral perspective to portray bureaucratic behavior and policy as something other than a static function of extant SOPs or a fully and fluidly malleable function of internal preferences and external incentives. In particular, the role of two organizationally “bottom-up” factors — careerists' policy approval and their policy-relevant working schema — are explored to suggest how readily “top-down” preferences for policy translate into pragmatic working arrangements. The empirical basis for the article is a structured set of cases in the Urban Mass Transportation Administration through the latter 1970s and early 1980s.     

Salience and Complexity in Supranational Policymaking: The Case of Subnational Interests

This study examined whether Gormley's insights about the effects of public salience and technical complexity on the patterns of participation in the regulatory process have explanatory power in an international setting. Specifically, I tracked 60 legislative proposals initiated by the European Commission and estimated the change made by the supranational technocrats in response to the requests of subnational politicians. I found support for the theoretical propositions about the differentiated effect of salience and complexity on political and administrative actors. Consistent with the notion of bureaucratic expertise, the Commission is less responsive when the policy issues require expertise to be tackled efficiently. Although the European Union has been pursuing various mechanisms to democratize its policy process, the technical character of supranational regulation precludes the broader public and elected politicians from assuming a larger role and bureaucracy will continue to be a major player in the international arena.     

SCIENTIFIC‐BUREAUCRATIC MEDICINE AND UK HEALTH POLICY1

One prominent method for controlling health costs is to find measures for the management of demand. Various options exist for this; and many of them have been tried during the fifty years of the UK's National Health Service. Current policy now focuses on what may be called “scientific‐bureaucratic medicine.” This policy is based on the assumptions that valid medical knowledge is derived from accumulated research evidence and that such knowledge should be implemented through clinical guidelines which are enforced to some extent. This UK development has parallels with the US Agency for Health Care Policy and Research whose experience, therefore, raises some policy issues for the UK.     

Bureaucratic expertise,overconfidence, and policy choice

Classic theory on bureaucracy suggests that one primary source of bureaucratic power in public administration and the policy‐making process derives from bureaucratic issue‐specific expertise. Studies in psychology and behavioral economics suggest that experienced experts tend to be overconfident in estimating their expertise, but few researchers have examined whether experienced bureaucrats are prone to overconfidence and, if so, how overconfidence may correlate with their policy choice. Drawing on past theoretical and empirical literature, this study is the first to investigate these questions by using survey data collected from 579 officials in various agencies related to climate change mitigation and adaptation. Our analyses demonstrate that (a) the level of issue‐specific expertise perceived by individual bureaucrats is positively associated with their work experience/job relevance to climate change, (b) more experienced bureaucrats tend to be more overconfident in assessing their expertise, and (c) overconfidence, independently of sociodemographic characteristics, attitudinal factors and political ideology, correlates positively with bureaucrats’ risk‐taking policy choices.     

A Strategic Theory of Bureaucratic Redundancy

Do redundant bureaucratic arrangements represent wasteful duplication or a hedge against political uncertainty? Previous attempts at addressing this question have treated agency actions as exogenous, thus avoiding strategic issues such as collective action problems or competition. I develop a game‐theoretic model of bureaucratic policy making in which a political principal chooses the number of agents to handle a given task. Importantly, agents have policy preferences that may be opposed to the principal's, and furthermore may choose their policy or effort levels. Among the results are that redundancy can help a principal achieve her policy goals when her preferences are not aligned with the agents'. But redundancy is less helpful if even a single agent has preferences relatively close to the principal's. In this environment collective action problems may cause multiple agents to be less effective than a single agent. Redundancy can also be unnecessary to the principal if the agent's jurisdiction can be terminated.     

A POLICY OF OUR OWN: LOCAL FEMINIST NETWORKS AND SOCIAL SERVICES FOR WOMEN AND CHILDREN

This article examines the ways in which a feminist family policy agenda has led to significant political action and change within American cities. Feminist groups, during the past fifteen years, became a part of emerging local women's rights policy networks that effected changes in several services for women and children: libraries (programming for women and non-sexist children's literature acquisitions policies); public education (gender equit under Title IX); social welfare (child care and displaced homemaker services); and criminal justice and health (the treatment of the victims of rape and domestic violence). This policy success stems not only from the workings of traditional interest group politics and policy networks but also from the astute use of political symbols, bureaucratic norms, and the federal system.     

Authoritarian responsiveness: Online consultation with “issue publics” in China

In recent years, public consultation has become a standard feature of policymaking in authoritarian regimes. While previous studies found evidence of government responsiveness to citizens' demands, they did not measure responsiveness in terms of real policy change. This article presents the first systematic analysis of Chinese central government policy responsiveness to consultative input. In 2008, the Chinese government unveiled a blueprint for health‐care reform, inviting the public to post their opinions online. Having collected 27,899 online comments, the government subsequently published a revised draft. This article analyzes a random sample of 2% of this corpus of comments, assessing the effect of comments on revisions while controlling for both media content and bureaucratic preferences. The findings demonstrate that public comments have an impact upon policy revisions and suggest that the Chinese government is more responsive to street‐level implementers than to other social groups.     

The politics of bank bailout in Japan: a cognitive capture and leadership view

Abstract

This article explores why the Japanese government did not decisively intervene on behalf of bank bailouts at the early stage of the banking crisis of 1997–98 and investigates the institutional and political context behind the use of fiscal money for bank bailouts in 1997–98, 1998–99, and 2001–05. In contrast with prevailing views, which emphasize the conflicts of interest or differences in policy preferences between politicians and bureaucrats and their captured nature either by bankers’ special interests or political/bureaucratic interests, this article argues that Japanese policymakers shared a congruent policy preference — that is, minimizing the disruptions in the existing institutional arrangement in government-bank-firm relations and this congruence in policy preference (or ‘cognitive capture’) compelled the government to take a creditor-centered approach to the banking problem — i.e., letting banks resolve their own problems. It also argues that a strong political leadership that can break with the ‘cognitive capture’ and sustain government's resolute commitment to solving the nonperforming loan problem is an essential factor for successful bank restructuring.     

Value Conflict and Policy Change

The analysis of policy change has produced a number of contrasting theoretical approaches, each offering a lens through which to view policy phenomena. This article suggests that the existing menu of approaches for understanding change can be usefully complemented by an understanding of the role played by value conflict. Using institutionalist analysis, I argue that the need to make value‐choices in a nondisruptive way shapes large areas of government activity, particularly in Westminster systems, and explains many observed patterns of stability and change. Building on work by Thacher and Rein, I describe and characterize six types of response to value conflict, giving examples of the role and implications of each. It is not claimed that all policy change can be understood in this way—simply that some types of change reflect the value‐based nature of public policy itself, and the fact that political and bureaucratic systems must evolve mechanisms for dealing simultaneously with thousands of competing and conflicting policy values.     

Business associations in Kenya: the success factors

Governments create the political and economic environment in which their countries' businesses operate, usually described as the ‘enabling environment’ or ‘investment climate’. In response, business associations seek to influence public policy to make it easier for their members to “do business”. Scholars suggest that interest groups are able to form lasting relationships with governments based on a resource exchange mechanism. This paper suggests that, at least in developing countries, a more nuanced explanation is necessary. Business associations, in particular, need proactively to pursue a logic of ‘competence’ as well as a logic of ‘positive relationships’. This paper assesses the outcomes of advocacy projects undertaken by business associations in Kenya in the period 2008–2013, considers the degree to which the associations contributed to the decision to change policy and then analyses the factors perceived by business associations to have led to their success in influencing public policy. We find evidence to support the expectation that business associations must develop a wide range of competences whilst building relationships with multiple stakeholders. The findings will be relevant to practitioners as well as to researchers and donors. Copyright © 2015 John Wiley & Sons, Ltd.     

Cooking the books: Bureaucratic politicization and policy knowledge

Accurate knowledge about societal conditions and public policies is an important public good in any polity, yet governments across the world differ dramatically in the extent to which they collect and publish such knowledge. This article develops and tests the argument that this variation to some extent can be traced to the degree of bureaucratic politicization in a polity. A politicized bureaucracy offers politicians greater opportunities to demand from bureaucrats—and raises incentives for bureaucrats to supply—public policy knowledge that is strategically biased or suppressed in a manner that benefits incumbents reputationally. Due to electoral competition, we suggest that the link between bureaucratic politicization and politicized policy knowledge will be stronger in democracies than in autocracies. A case analysis of Argentina's statistical agency lends credence to the underlying causal mechanism. Time‐series cross‐sectional analyses confirm the broader validity of the expectations and show that the relationship is present only in democracies.     

Managing for Legitimacy: Agency Governance in Its “Deep” Constitutional Context

Recent literature on bureaucratic structure has gone further than studying discretions given to bureaucrats in policy making, and much attention is now paid to understanding how bureaucratic agencies are managed. This article proposes that the way in which executive governments manage their agencies varies according to their constitutional setting and that this relationship is driven by considerations of the executive's governing legitimacy. Inspired by Charles Tilly (1984), the authors compare patterns of agency governance in Hong Kong and Ireland, in particular, configurations of assigned decision‐making autonomies and control mechanisms. This comparison shows that in governing their agencies, the elected government of Ireland's parliamentary democracy pays more attention to input (i.e., democratic) legitimacy, while the executive government of Hong Kong's administrative state favors output (i.e., performance) legitimacy. These different forms of autonomy and control mechanism reflect different constitutional models of how political executives acquire and sustain their governing legitimacy.     

Government, Interest Groups and Policy Change

Much of the British and European literature on the role of interest groups in the policy process focuses on their participation in policy networks of various types. Possibly reflecting the original development of the policy community and policy network 'models' in the late 1970s, these approaches tend to emphasize stability and continuity – of both networks and policies. However, the 1980s and 1990s have witnessed much policy change and instability in most Western European states. In particular, some governments have adopted a more impositional policy style, and interest groups have learned to exploit the opportunities presented by a policy process which is increasingly characterized by multiple opportunity structures. This is especially the case following Europeanization of many policy sectors within the fifteen EU member states. The article focuses on the possible causes of policy change, including the importance of state power; changes in the behaviour of interest groups as they adjust to and exploit the opportunities presented by multi-arena policy-making; the impact of new policy fashions, reflecting knowledge and ideas which can act as a virus-like threat to existing policy communities.     

Spillover Effects: Immigrant Policing and Government Skepticism in Matters of Health for Latinos

To what extent do people become less trusting of the government under threatening policy contexts? The authors find evidence that Secure Communities, a bureaucratic program that enhances immigrant policing through collaboration between local law and immigration enforcement agencies, spurs mistrust among Latinos but not non‐Latinos. This article focuses on the politics of immigration and health, two issue areas marked by large‐scale bureaucratic developments over the last 50 years. The authors argue that a major consequence of expanding immigrant policing is its trickle‐down effect on how individuals view public institutions charged with the provision of public goods, such as health information. The results indicate that Latinos in locales where immigrant policing is most intense express lower levels of trust in government as a source of health information. Through a policy feedback lens, the findings suggest that the state's deployment of immigrant policing conveys more widespread lessons about the trustworthiness of government .     

Separated Powers in the United States: The Ideology of Agencies,Presidents, and Congress

Government agencies service interest groups, advocate policies, provide advice to elected officials, and create and implement public policy. Scholars have advanced theories to explain the role of agencies in American politics, but efforts to test these theories are hampered by the inability to systematically measure agency preferences. We present a method for measuring agency ideology that yields ideal point estimates of individual bureaucrats and agencies that are directly comparable with those of other political actors. These estimates produce insights into the nature of the bureaucratic state and provide traction on a host of questions about American politics. We discuss what these estimates reveal about the political environment of bureaucracy and their potential for testing theories of political institutions. We demonstrate their utility by testing key propositions from Gailmard and Patty's (2007) influential model of political control and endogenous expertise development.     

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.     

Kantei diplomacy? Japan's hybrid leadership in foreign and security policy

This article operationalizes Japanese leadership in foreign and security policy, specifically the Abe administrations’ consistent China balancing. It will do so to dispel instances of Premier-centered diplomacy and posit that Abe's diplomatic agenda has rested on a ‘hybrid’ policy-making authority, where the leverage enjoyed by the Prime Minister's office (the Kantei) rested on little-appreciated politicized personnel appointments and demotions within the bureaucratic apparatus, specifically the Ministry of Foreign Affairs. Moreover, successful Japanese leadership has functioned especially when operating within the scope of the US strategic framework towards East Asia. While structural constraints, such as the ever-present influence of the USA and bureaucratic coordination, may constrain options, effective leadership in foreign policy-making can indeed make a difference within those boundaries.