Budgets,Extra-budgets,and Small Treasuries: Illegal monies and local autonomy in China

In the wake of repeated crackdowns on the 'three disorders' and 'small treasuries', it is obvious that local governments in China collect substantial amounts of illegal monies. What is not immediately obvious is how illegal monies matter. In this article, I assess both the amount of illegal monies that local governments collect and their significance relative to local autonomy. I find that because illegal monies are not rival to legal monies but rather complementary, although illegal monies may give local governments a greater ability to pursue their own particularistic agendas, they do not fundamentally alter the principalagent structures that link the localities to the center.     

White Supremacist Activity and Crossburnings in North Carolina

This study examines whether the incidence of crossburnings rises in areas where white supremacist organizations, such as the Christian Knights of the Ku Klux Klan, have held rallies or demonstrations. Using data from two public interest groups, Klanwatch and North Carolinians Against Racial and Religious Violence, we track crossburnings and white supremacist activities in 100 North Carolina counties annually for the period 1987–1993. Various statistical models, including an event count analysis that allows each county to have its own level or reporting bias, indicate that the base rate at which crossburnings occur rises sharply in counties where a demonstration has taken place. Since none of the suspected crossburners has apparent ties to white supremacist groups, it may be that white supremacist rallies encourage fellow travelers to engage in this form of racial intimidation.     

The role of interest rates during the transition to a market economy

We construct a simple two period model of an economy in transition from being centrally planned to being market oriented. Using this model, we draw certain positive conclusions about economic policies that reduce distortions during the transition period. In particular, we focus on the role of interest rates, a market parameter that has previously been almost entirely ignored in planned economies. Using stylized data derived from Czechoslovakia, we show that increase in nominal interest rates can actually be welfare-improving by partially compensating for the distortions induced by the transition process. The model is sufficiently general to be applied to a number of transition economies, and we use the cases of Czechoslovakia, the USSR, and China as examples of some of the phenomena that we are trying to explain. We show that the model generates a constrained, suboptimal equilibrium. In particular, we see that raising interest rates during the transition period reduces repressed savings, brought about by shortages in the controlled market. An improvement in consumer utility can therefore be brought about.     

Political memoirs

Books reviewed in this article:
Butler, R. A. The Art of the Possible: The Memoirs of Lord Butler
Clark, Alan Diaries
Heseltine, Michael Life in the Jungle
Lamont, Norman In Office
Lawson, Nigel The View from No. 11: Memoirs of a Tory Radical
Major, John The Autobiography
Rawnsley, Andrew Servants of the People: The Inside Story of New Labour
Thatcher, Margaret The Downing Street Years