The Political Economy of Transition in Post-Socialist Systems: The Case of the Baltic States

The nature of the failed socialist systems calls for a transition which is as comprehensive in its objectives as were the systems themselves before they failed. Hence, the transition to democracy in the post-socialist systems cannot be treated as separate from the transition to a market economy and national independence. The critical part of the transition is the economic reforms inasmuch as the institutions of the planned economy are the major power base for the conservative elites. To be successful, the economic transition must be able - in both the short and the long term - to command political support, to achieve social acceptance of the distributional consequences involved and to be compatible with democratic institutions. Analysis reveals that in the case of the Baltic states widespread support for the transition to a market economy can be detected and that the democratically elected governments have so far been fairly active in establishing a legal framework for transition, but appear unable to implement the necessary stabilization policy. The reforms have produced strong social protests, and the governments have been under pressure to maintain social guarantees during the period of transition. The non-Baltic minorities in particular defend previous social privileges and are distressed by their uncertain status after independence. The ultimate outcome of political and economic transition in the Baltic states, therefore, remains in doubt.     

The Political Economy: Political Attitudes and Economic Behavior

It has long been recognized that voters bring their political behaviors in line with economic assessments. Recent work, however, suggests that citizens also engage in economic behaviors that align with their confidence—or lack thereof—in the political system. This alignment can happen consciously or, as we suggest, unconsciously, in the same way that positivity carries over to other behaviors on a micro-level. Using monthly time series data from 1978 to 2008, we contribute further evidence of this relationship by demonstrating that political confidence affects consumer behavior at the aggregate level over time. Our analyses employ measures more closely tied to the theoretical concepts of interest while simultaneously accounting for the complex relationships between subjective and objective economic indicators, economic behavior, political attitudes, and the media. Our results suggest that approval of the president not only increases the electorate’s willingness to spend money, but also affects the volatility of this spending. These findings suggest that the economy is influenced by politics beyond elections, and gives the “Chief Economist” another avenue by which they can affect the behavior of the electorate.     

Political Positions,Hierarchies and Political Markets: Towards a New Theory on Political Recruitment*

This article adresses itself to the problem of political recruitment. Most recruitment studies are based on models of recruitment where the model presupposes more candidates than positions. Studying local committees we cannot presuppose excess demand for political positions. The article tries to introduce economic theory into the study of political recruitment. With concepts of market, supply, demand and prices, the article discusses recruitment to various types of positions. When we have extreme market conditions with either excess demand or lack of demand, the recruitment processes can best be understood in terms of hierarchical forces. The sales of less important positions in a situation with low demand for these positions could best be understood in terms of market mechanism. Comparing an economic market with a political market, the article finds variation in the transaction structure. The economic markets have a specific transaction structure, with specific obligations linked to transactions, while the political markets have a more unspecified transaction structure with more unspecified obligations linked to the transactions. A less specified transaction structure has lower transaction costs in a hierarchy than in a market. This, the author believes, could explain why some transactions take place in markets while others take place in hierarchies.     

The States, Federalism and Political Science: A Fifty-Year Appraisal

The role of the states within the Australian federation has evolved significantly over the past 50 years. So has the interpretation of that role by political scientists. Until the early 1970s, the states seemed to be declining into financial and policy subservience notwithstanding their continuing primary responsibility for the delivery of public services. They then experienced a political and policy renaissance, accompanied by a more balanced political-science appreciation of the virtues of federalism. Since the early 1990s, the states' trajectory has become more uncertain.     

Anomalies in Political Economy

Results in cognitive psychology and experimental economics indicate that under identifiable conditions individuals do not act in an economically rational way. These results are important for Political Economy. Anomalies appear in the behaviour of voters, politicans and administrators. Economic markets do not fully eliminate anomalies in the aggregation process. It is shown that political aggregation by democracy, bargaining or bureaucracy may weaken or strengthen such individual anomalies. Moreover, institutions can partially be interpreted as endogenously emerging as a result of individuals' demands to cope with anomalies.     

Intolerance and Political Repression in the United States: A Half Century after McCarthyism

What consequences for political freedom arise from high levels of political intolerance among the American public? Comparing surveys from 1954 to 2005, I document the level of perceived freedom today and consider how it has changed since the McCarthy era. Levels of intolerance today and in 1954 are also compared. Next assessed is whether restrictions on freedom are uniformly perceived or whether some subsections of the population are more likely to feel repressed than others. I find that while intolerance may have declined somewhat since 1954, perceived constraints on individual freedom have actually increased. These findings produce telling consequences for the subtheory of pluralistic intolerance. During McCarthyism, intolerance focused on the Left; today, many groups are not tolerated, so the loss of freedom is more widespread. Heretofore, many thought that pluralistic intolerance tended to be benign. At least in the case of the contemporary United States, it seems not to be.     

Understanding the Political Economy of Cross-Strait Security: A Missing Link

This paper explores how and why China has been perceived as an economic threat in Taiwan through an examination of Taipei’s post-Cold War economic policy with respect to the mainland. While Taipei’s restriction on trade and investment across the Taiwan Strait until mid-2008 was widely considered a failure by both opponents and supporters of closer cross-Strait economic ties, this analysis points to an overlooked function of Taiwan’s economic policy that was not just about tackling the problems of the security externalities or promoting the island’s economic development. What appeared to be an ineffective policy can be understood as a successful boundary-drawing practice that discursively constituted a vulnerable Taiwan under Chinese economic threat, hence conducive to the (re)production of Taiwanese national identity.     

The Political Economy of State Failure: A Social Contract Approach

By employing the contract approach of state theory, this article provides a conceptual framework for the analysis of state failure phenomena which puts the emphasis on structural conditions as the root cause of state fragility and state failure. The article argues that the deep social fragility of some post-colonial societies, augmented by self-serving external interventions by foreign powers, is at the heart of their failure. Deep social fragility makes societies unable to cooperate and thus renders them powerless to discipline their leaders. Meanwhile, by linking leadership survival to the decisions and policies of a self-serving foreign power, intervention provides flawed incentives to the state leaders, which increases their predatory behaviour. In such situations, state leaders, rather than strengthening formal state institutions, again intensify the collective action problem and increase social fragility as mechanisms for survival.     

Digital Government: A Primer and Professional Perspectives

Digital technology is a critical enabler of public administration reforms. It can improve the efficiency and productivity of government agencies and allow citizens to transact with government anytime, anywhere. It can also deepen the democratic process, empowering citizens to participate in policy formulation. In this article Andrew Botros, the director of Expressive Engineering, and Maria Katsonis, from the Department of Premier and Cabinet (Victoria), explore the challenges of the digital world for the public sector. Katsonis presents a primer on digital government tracing its evolution from the e‐government movement of the 1990s to Government 2.0 in the 2000s to today's digital‐by‐default agenda. As technology and its role in public sector reform have progressed, so too have the governance, cultural, and leadership challenges deepened. Botros examines NSW approach to open innovation with the Premier's Innovation Initiative in NSW, the state's open data experience, and Transport for NSW and its management of public transport data. He argues NSW's approach involves a significant innovation trade‐off, requiring fresh thinking in digital‐era collaboration.     

Equity and Political Economy in Thomas Hobbes

Thomas Hobbes is often viewed as a seminal figure in the development of the homo economicus philosophical anthropology central to the acquisitive, bourgeois morality of liberal modernity. The present study challenges this interpretation of Hobbes as an antecedent to free market ideology by arguing that his political economy presupposed a complex relation between contract, law, and social networks of credit informed by prudence and robust norms of equity. The normative claims of equity permeate Hobbes's holistic account of political economy and inform his vision of liberal statecraft that gave priority to prudential judgment against economic determinism, especially as Hobbes understood trade, taxation, allocation of resources, and the provision of social welfare. I will conclude by reflecting upon how Hobbes's political economy both reveals the internal diversity within the liberal intellectual tradition and can help us to better understand and critique contemporary liberal states and democratic theory.