A free market bailout alternative?

It has been more than 3 years since the collapse of the investment bank Lehman Brothers and the beginning of the Troubled Asset Relief Program. Most recently, the sovereign debt crisis in Europe has led to the bailout of the governments of Ireland, Portugal and Greece. A main reason behind these bailouts is to support European banks loaded with government bonds on their balance sheet. In this article we analyze the detrimental consequences of the public bailout in 2008 and argue that a free market alternative existed. The alternative of a private bailout outlined in this article, consisting of the conversion of liabilities into equity and a private capital increase, largely avoids the problems of a public bailout. Similarly, a public bailout of governments of the Eurozone to sustain banks may be detrimental.     

Strategic rebels: a spatial econometric approach to rebel fighting durations in civil wars

ABSTRACT

Recent research on multi-actor civil wars highlights that rebel organizations condition their conflict behavior on that of other rebel organizations, with competition and free-riding constituting the core theoretical mechanisms. We provide a new actor-centric approach to explicitly model strategic interdependence in multi-actor civil wars. We argue that rebel organizations have incentives to remain mobilized until the end of a conflict to maintain their power to negotiate, power to spoil, power to enforce, and power to protect. This induces strategic complements that dominate duration dynamics in multi-actor conflicts. Based on a network game-theoretic model, we derive a spatial econometric framework that allows for a direct test of strategic interdependence. We find that the estimated duration interdependence is positive but partially offset in secessionist conflicts where the public goods nature of the incompatibility also induces strategic substitution effects.     

Who Inherits the State? Colonial Rule and Postcolonial Conflict

Postulating grievance‐based mechanisms, several recent studies show that politically excluded ethnic groups are more likely to experience civil conflict. However, critics argue that endogeneity may undermine this finding since governments' decisions to include or exclude could be motivated by the anticipation of conflict. We counter this threat to inference by articulating a causal pathway that explains ethnic groups' access to power independently of conflict. Focusing on postcolonial states, we exploit differences in colonial empires' strategies of rule to model which ethnic groups were represented in government at the time of independence. This identification strategy allows estimating the exogenous effect of inclusiveness on conflict. We find that previous studies have tended to understate the conflict‐dampening impact of political inclusion. This finding suggests that grievances have been prematurely dismissed from conventional explanations of conflict, and that policy makers should consider conflict resolution methods based on power sharing and group rights.     

Fiscal Consolidation and Australia's Public Debt

Australia has experienced one of the fastest growing public debt levels in the world post‐Global Financial Crisis due to a series of large federal budget deficits driven by high government spending. In this paper we examine the balance sheet implications of this escalating public debt, before proposing some macro‐fiscal objectives for determining its sustainable level. These objectives are to (i) restore the federal government's solvency; (ii) eliminate foreign public debt; and (iii) achieve budgetary balance over the business cycle. Empirically, we first examine how much fiscal consolidation is required for debt stabilisation at current levels, before considering what sized budget balances are needed to achieve the target debt to GDP ratios consistent with the proposed objectives. The results show that no target debt to GDP level consistent with the optimal levels will be met on current fiscal settings in the medium term. This implies significantly greater fiscal consolidation is required to minimise future fiscal risk.     

The More Fragmented the Better?—The Impact of Armed Forces Structure on Defection during Nonviolent Popular Uprisings

Authoritarian regimes frequently employ fragmentation to safeguard themselves against coups and reduce the power of the military apparatus. This article investigates the impact of structural coup-proofing in the setting of a nonviolent popular uprising that threatens the regime and its survival. It is argued that in such settings fragmentation can have unintentional consequences with respect to the question whether the army fulfills orders of repression or defects. If the security apparatus is highly divided, some armed organizations will seize the opportunity to defect and side with the protesters because the efficiency of counterbalancing decreases if more effective armed organizations are involved. This can be mainly explained through collective action problems that the security apparatus faces in such a setting. This article compiles data of nonviolent uprisings from 1975 to 2006 and data on armed forces structure for conducting a multivariate probit regression on the probability of defection. The findings indeed show a U-shaped relationship between armed forces fragmentation and the likelihood of defection during nonviolent mass uprisings. While security apparatuses with around two effective armed organizations display only a low probability of defection, minimally and highly fragmented forces indicate higher chances of defection from the ruling regime.     

Re-reading Weber,re-conceptualizing state-building: from neo-Weberian to post-Weberian approaches to state,legitimacy and state-building

This article analyzes how different interpretations of Max Weber’s work on the state and legitimacy have materialized in contemporary research on—and practice of—international state-building. We argue that the currently prevailing neo-Weberian institutionalism in state-building theory and practice is based on a selective interpretation of the passionate and polemicist ‘politician’ Max Weber, whilst omitting almost entirely the wealth of thought on interpretivist method and the anti-foundationalist approach to social sciences that he has developed in his scholarly work. The neo-Weberian institutionalist approach thus focuses almost exclusively on state capacity and institutions. In contrast to this restricted approach, we will show how Weber’s work on the historical and cultural dimensions of legitimacy is instructive in understanding the emergence and consolidation of social orders. Research agendas embracing such perspectives offer a viable way forward from the securitized approach to state-building and international intervention, in the process moving beyond the neo-Weberian orthodoxy.     

Structuring Judicial Discretion in China: Exploring the 2014 Sentencing Guidelines

In recent years, a range of western jurisdictions has introduced reforms designed to restrict and guide judicial discretion at sentencing. The reforms enacted include mandatory sentencing laws and guiding statutes prescribing sentencing purposes and principles as well as important aggravating and mitigating factors. However, formal guidelines are the most promising and well-studied innovation. We may now add China to the growing list of countries that have recognized the utility of guidelines. Over the past decade, China has slowly developed sentencing guidelines for its courts. The new guidelines contain both general directions with respect to the determination of sentence as well as specific numerical guidelines for common offences. The guidelines do not follow the approach taken by the US schemes, many of which employ a two-dimensional sentencing grid. Instead, China has adopted a strategy consisting of “Starting Point” sentences which are then adjusted by the court to reflect relevant mitigating and aggravating factors. This approach is much closer to the guidelines developed in England and Wales and those proposed but not yet implemented in New Zealand and Israel. In this article, we explore the new Chinese guidelines and provide a limited comparative analysis with guidelines in other jurisdictions. England and Wales is selected as the principal comparator since it has developed and implemented a comprehensive system consisting of both offence-specified guidelines as well as generic guidelines.     

Israel,the Arab Spring,and the unfolding regional order in the Middle East: a strategic assessment

Since 2011, geo-strategic interactions have exerted pressure on various political communities. In particular, uncertainty over the foreign policy intentions of new leadership elites and the nature of the unfolding regional security system in the Middle East have impacted the strategic questions Israel must answer: how can Israel rationally assess the new environment? What foreign policy approach would best serve Israel’s distinct national interests? Using insights from the levels-of-analysis framework and from the realist theory of International Relations, this article aims to explore Israel’s reading of recent regional developments and its attitudes and behaviours towards the attendant and emerging strategic challenges. The analysis reveals that the Arab Spring uprisings exacerbated the already anarchic Middle East environment, aggravating mistrust and antagonism in Israel. The urgency of the attraction of protectionism and militarism in Israel was an expression of the realist approach to Israel’s primary strategic consolidation. With time, the regional dynamic has evolved into a more predictable—but still complex—structure than it was during its early phase (2010–2013). Although there have been signs of potential regional political eruptions, other developments have promoted continuity in the Middle East, which plays to Israel’s strategic advantage.     

Spectator Violence in Sports: A North American Perspective

Spectator violence has long been associated with professional football in Europe. This article examines the issue of spectator violence from a North American perspective. We begin by noting that there is little systematic research into the scope of spectator disorder in North America. Perhaps for this reason there is little consensus about the true scale of the problem on this side of the Atlantic. It does seem clear at least that there is less spectator violence associated with professional sports in North America. After reviewing a number of explanations for this finding, we conclude that it has less to do with criminal justice policies or practices, than the social context surrounding the 'spectatorship' of sports in North America. Perhaps the most important explanation for the variance in crowd behaviour concerns the demographic profiles of sports spectators in European football and North American sports.