The Political Importance of Financial Performance

Asset mobility is thought to constrain taxation, as firms with mobile assets can avoid taxation by locating their assets in low-tax jurisdictions. Firms with immobile assets then face higher taxes. By considering the political incentives that accompany widespread financialization, we identify a new limit to the targeting of immobile firms: Publicly traded firms with immobile underlying assets lose more value in financial markets when taxes are increased, as shareholders anticipate that these underlying assets cannot be withheld from taxation. When governments care about this loss in value, their incentive to tax immobile, publicly traded firms declines. Political concern for financial performance therefore limits the extent to which immobile assets can be targeted for taxation. We argue that broad-based participation in the stock market and democratic political institutions increase political concern for financial performance. We discuss the implications of the theory and findings for policy autonomy, firm ownership, and economic voting.     

Sanctioning Liberal Democracies

This article examines when economic sanctions should be imposed on liberal democracies that violate democratic norms. The argument is made from the social-liberal standpoint, which recognises the moral status of political communities. While social liberals rarely refer to the use of economic sanctions as a pressure tool, by examining why they restrict military intervention and economic aid to cases of massive human rights violations or acute humanitarian need, the article is able to show why they are likely to impose strong restrictions on the use of economic sanctions as well. After reconstructing the social-liberal case against economic sanctions, the article develops the argument that liberal democracies have reasons to support sanctions on other liberal democracies, even when they perpetrate injustices on a smaller scale. Liberal democracies share especially strong ideological, cultural and institutional bonds, and these peer group relations open them to mutual influence. When one liberal democracy commits serious injustices while still proclaiming allegiance to the democratic ethos, it can adversely affect the vitality of the democratic culture in those other liberal democracies with which it maintains close relations. Other liberal democracies therefore have the right and the obligation to condemn this behaviour, in order to preserve their allegiance to their values. The article defends the use of economic sanctions in light of some recent critiques, and concludes by providing an overall assessment of the factors which liberal democracies ought to take into account when they consider imposing economic sanctions on other liberal democracies.     

A Russian Citizen in Uniform? Assessing the Applicability of the German Model of Civil—Military Relations to the Armed Forces of a Democratising Russian State

A key element in determining the prospects for success in transforming totalitarian political systems into democratic political systems is the extent to which the armed forces can be included in the democratisation process and brought under constitutional, civilian and political control. In the aftermath of the 1998 financial crisis in Moscow and the probable retreat of democracy in Russia, this utterly critical question assumes even more importance. This article is concerned with the problem of devising a new system of civil—military relations for a democratising post-Soviet Russian state, particularly the relevance of the German citizen in uniform model to the armed forces of the Russian Federation. After a brief history of the German system of civil—military relations, the author proceeds to analyse the German model in detail. The paper then assesses the current context of the Russian state, society and armed forces before evaluating the prospects for the successful application of the German system of civil—military relations to Russia. The author concludes that the German system is inapplicable because Russia does not presently possess the socio-political structures and norms to sustain such a system of civil—military relations. However, the article proposes an immediately viable third strategy for democratising Russian civil—military relations which does not rely either on the inappropriate German model or on meekly managing the intolerable status quo.     

The Democratic Domino Theory: An Empirical Investigation

According to the democratic domino theory, increases or decreases in democracy in one country spread and "infect" neighboring countries, increasing or decreasing their democracy in turn. Using spatial econometrics and panel data that cover over 130 countries between 1850 and 2000, this article empirically investigates the democratic domino theory. We find that democratic dominoes do in fact fall as the theory contends. However, these dominoes fall significantly "lighter" than the importance of this model suggests. Countries "catch" only about 11% of the increases or decreases in their average geographic neighbors' increases or decreases in democracy. This finding has potentially important foreign policy implications. The "lightness" with which democratic dominoes fall suggests that even if foreign military intervention aimed at promoting democracy in undemocratic countries succeeds in democratizing these nations, intervention is likely to have only a small effect on democracy in their broader regions.     

Voting,Collective Action,and Liberalisation in Latin America: The Rise and Fall of the Hillinger Paradox

Chile's economic and political evolution after the 1982–83 financial crisis has been offered as a model for the rest of Latin America. This paper interprets the 1973 military coup, and national recovery during the 1980s and 1990s, in terms of the presence and absence, respectively, of the Hillinger (1971) paradox. The paradox arises when democratic voting on platforms consisting of several issues leads to majority support for a platform, itself consisting of issues, none of which is supported by the majority. In the early 1970s, a particular expression of the Hillinger paradox led Chile to the verge of a bloody civil war, and to a prolonged military dictatorship. In the mid 1980s, an important policy question, that of differentiated industrial protection versus free trade, was solved by a stable compromise in favour of the latter. This avoided the Hillinger paradox and eventually made electoral politics possible again.     

What the Age of Populism Means for Our Liberal Democracy

Populism has leapt from fringe protest to shaping, even dominating, mainstream politics in just a few years. Behind this political and social upheaval is an economic and political settlement that has failed to deliver good jobs, life chances and sustainable communities in many parts of the country, particularly outside urban centres. The failure of mainstream political parties to build a new settlement following the financial crash in 1998 has left a vacuum which now threatens the foundations of liberal, representative democracy. Progressive politicians need to build a new pluralist settlement based on a radical devolution of power that allows decision making to become less remote, more responsive and brings capital under greater democratic control.     

Reforming China's Stock Market: Institutional Change Chinese Style

In this article we examine the dual-track pricing system in China's stock market since its inauguration, a legacy of its economic transition and a major source of institutional predation in the market. We then examine the share structure reform initiated in 2005 that sought to eliminate the distortion this predation had elicited. We interpret the reform push as a process of institutional change and focus on the drivers and theoretical explanations of such changes in China's stock market. We thus advance a model for understanding institutional change, Chinese style. We argue that, initially, the institutional arrangement was constructed by the dynamics of transition – the juxtaposition of the Leninist state and the emerging stock market. This provided huge incentives for state corruption in the emerging market. As the market transition proceeded, the societal and political costs of corruption and market distortion also grew, which produced a crisis that eventually attracted the attention of powerful leaders of the party state. We argue from this case that the broader political context in which specific examples of institutional change occur needs to be examined. Specifically, we argue that powerful agents who are external to given institutional environments can play an important role in institutional change, thus highlighting the political dynamics of an authoritarian state amid systemic transition and global integration.     

Habermas,market‐friendly human rights,and the revisibility of economic globalization

This article examines the impacts, on citizenship rights, democratic practice and public policy, of the constitution‐like regimes for the protection of investor rights embedded within contemporary international investment treaties. It argues that a central objective of these investment treaties is to remove specific governmental functions from the stock of policy instruments available to national governments and to democratic polities. Drawing upon Habermas' discourse‐theoretic approach to law and democracy, the article argues that national states have the room to deviate, if not withdraw from the current configuration of economic rights advanced and enforced through international investment treaties. A robust proceduralist approach to rights and democracy would subject these agreements to critical democratic practice and open space to revise and roll back some of the rules and institutions associated with economic globalization.     

What are the limits of liberal democratic ideals in relation to overcoming global inequality and injustice?

According to many in the West, the liberalizing effects of North America’s free market ideals will generate equality and justice worldwide. I hold that we should be critical of those who justify imposing liberal democratic ideals on underdeveloped nations by simply suggesting that they promote equality and justice. In the West, entrenched disparities have shaped liberal ideals in ways that make inequality and injustice look natural and normal. Indeed, gender, class, and racial oppression have existed right alongside liberal democratic ideals. If liberal ideals can be molded to make inequality and injustice look natural and normal in the West, then these same ideals can justify economic interactions, technology transfers, military cooperation, and mutual benefit agreements that sustain global inequality and injustice.     

War and (the Democratic) Peace: Military Service,Citizenship, and the International Environment

Is there a significant relationship between military structure and political liberalization? If so, can military structure and organization be manipulated to influence the process of democratization for the purpose of enhancing inter-state peace? To test the implications of these questions, I will investigate a decidedly contentious premise. Military factors traditionally considered destabilizing in the international environment (to include large, well-trained armed forces organized for offensive or out-of-country operations) have, at critical junctions in the Western experience, had a distinctly positive impact on the emergence and maintenance of the liberal democratic state. If this is indeed the case, and liberal democracy can be shown structurally and normatively to produce inter-state peace, then the preferred policy of peace-desiring states should be to promote and implement military reform at home and abroad that most efficiently generates democratic structures and values, regardless of intuitive fears of international instability. In short, I will argue that if liberal democratic states do not go to war with each other, then the size, proficiency, and strength of their military forces should not be a security dilemma issue.     

Unlikely Democrats: Economic Elite Uncertainty under Dictatorship and Support for Democratization

Influential recent scholarship assumes that authoritarian rulers act as perfect agents of economic elites, foreclosing the possibility that economic elites may at times prefer democracy absent a popular threat from below. Motivated by a puzzling set of democratic transitions, we relax this assumption and examine how elite uncertainty about dictatorship—a novel and generalizable causal mechanism impacting democratization—can induce elite support for democracy. We construct a noisy signaling model in which a potential autocrat attempts to convince economic elites that he will be a faithful partner should elites install him in power. The model generates clear predictions about how two major types of elite uncertainty—uncertainty in a potential autocratic successor's policies produced by variance in the pool of would‐be dictator types, and uncertainty in the truthfulness of policy promises made by potential autocratic successors—impact the likelihood of elite‐driven democratization. We demonstrate the model's plausibility in a series of cases of democratic transition.     

Myths and numbers on whistleblower rewards

Whistleblower rewards have been used extensively in the United States to limit procurement fraud and tax evasion, and since the financial crisis their use has been extended to fight financial fraud. There is currently debate over their introduction in Europe, but authorities there appear considerably less enthusiastic than their American counterparts. While it is important that these tools are scrutinized in a lively democratic debate, much has been written – even by important institutional players – that has no empirical backing or openly contrasts the available evidence from independent research. In this paper we review some of the most debated issues regarding the potential benefits and costs of financial incentives for whistleblowers, while trying to separate existing evidence from conjectures with no empirical support, and myths in contrast to available evidence.     

Democracies and Deficits: Prospects for Fiscal Responsibility in Democratic Nations

The financial crisis had significant implications for the fiscal positions of OECD. As nations seek to cope with the economic contraction, budget deficits and debt have risen to near record postwar levels. As the crisis in Europe and other advanced economies has deepened, fiscal consolidation will have to be coupled, and even preceded, by actions to jump‐start crippled economies. Nonetheless, when fiscal consolidation becomes necessary, nations that procrastinate by waiting for a crisis to provide cover for the politically hard choices will pay a steep price indeed both economically and politically. Many in the academic and policy community have raised questions about whether advanced democracies have the political wherewithal to respond to gathering fiscal pressures through early and timely action. Recent fiscal actions in advanced nations suggest that democracies are not doomed to wait for market shocks and crises. Rather, leaders have shown that fiscal sacrifice can be achieved in ways that promote electability. In this article, we discuss the impetus for democratic fiscal actions and the strategies used to gain public support.     

Democracy in crisis? The declining support for national democracy in European countries, 2007–2011

The Great Recession that started in 2007/2008 has been the worst economic downturn since the crisis of the 1930s in Europe. It led to a major sovereign debt crisis, which is arguably the biggest challenge for the European Union (EU) and its common currency. Not since the 1950s have advanced democracies experienced such a dramatic external imposition of austerity and structural reform policies through inter‐ or supranational organisations such as the EU and the International Monetary Fund (IMF) or as implicitly requested by international financial markets. Did this massive interference with the room for maneuver of parliaments and governments in many countries erode support for national democracy in the crisis since 2007? Did citizens realise that their national democratic institutions were no longer able to effectively decide on major economic and social policies, on economic and welfare state institutions? And did they react by concluding that this constrained democracy no longer merited further support? These are the questions guiding this article, which compares 26 EU countries in 2007–2011 and re‐analyses 78 national surveys. Aggregate data from these surveys is analysed in a time‐series cross‐section design to examine changes in democratic support at the country level. The hypotheses also are tested at the individual level by estimating a series of cross‐classified multilevel logistic regression models. Support for national democracy – operationalised as satisfaction with the way democracy works and as trust in parliament – declined dramatically during the crisis. This was caused both by international organisations and markets interfering with national democratic procedures and by the deteriorating situation of the national economy as perceived by individual citizens.     

The political economics of agricultural price support in Turkey: An empirical assessment

The present study is an attempt to explain the variations in the extent of protection provided to the producers of four selected agricultural crops in Turkey by a set of independent variables representing various economic and political events of the 1962–1983 period. The economic variables were selected in order to assess the divergence between the intentions of the policy makers and their actions as reflected in the level of support actually provided; while the political variables were chosen to assess the impact of elections, military takeovers and noticeable shifts in the underlying philosophy of the policy makers on the support provided. The regression analysis suggested that the political power of the agricultural producers was an important determinant of the policies implemented, especially during times of democratic practices; that during times of military regimes, the agricultural sector tends to be less protected; that there is indirect evidence for the existence of political business cycles synchronized to political elections: and, that general conditions in the economy can influence the behavioral rule of the policy makers.     

Can democracy induce development? A constitutional perspective

We examine the constitutional design required for democratic societies to overcome poverty traps. Restricting agenda setting by ensuring subsistence levels of consumption and applying simple majority voting as a decision rule will not enable a society to overcome poverty. We show that a combination of suitable constitutional rules can, however, overcome poverty and induce economic well-being. Besides majority voting, these rules include rotating agenda setting, agenda repetition, and tax-protection rules. We thus highlight the crucial role of democratic institutions for economic development.     

The West's financial crisis

Western governments have recently taken exceptional measures to prevent the disintegration of their financial systems following a collapse in banking confidence. Whether these will be sufficient to quell extreme turbulence in money and stock markets is not yet clear. Predictions that the crisis will herald the end of American-style capitalism seem exaggerated. However, signs of a major economic downturn resulting from the financial crisis are already evident.     

民主的经济理论－－公共选择视野下的政治经济互动

文章研究了民主政治与政府经济政策的关系，探讨了赤字下的民主、公民的财政幻觉、政治经济据环、代议制民主的缺陷等问题。     

后现代主义身份政治的衰颓与新民粹主义的崛起

20世纪70、80年代,资本主义进入一个相对稳定的发展时期,大规模阶级斗争相对缓和,新自由主义乘势崛起。作为新自由主义主流运动的补充,后现代主义身份政治发展起来。后现代主义身份政治从经济决定论转向文化和意识形态决定论,从大规模集体行动的逻辑转向分散的斗争。美国金融危机以来,大规模社会运动复兴,经济议题回到政治运动的中心,后现代主义身份政治的文化和自我意识革命逐步衰颓,新民粹主义乘势崛起。在聚焦经济议题和强调集体行动方面,新民粹主义和后现代主义身份政治迥然不同,但是从强调族群的文化和身份差异的角度来说,新民粹主义又把后现代主义身份政治发展到了极端。后现代主义身份政治是与金融资本的上升期相适应的,新民粹主义是与金融资本的下降期相适应的,但二者都因不理解金融资本的本性而把民众运动引向了错误的方向。只有社会主义民主运动才能赋予民众运动以正确的方向。