The Eurozone as a Flawed Currency Area

The European single currency system has come under unprecedented strain during the past three years and there is little reason to assume that this will diminish, in any significant way, in the near future. This article briefly explores the background to the current eurozone crisis before outlining a number of potential solutions. Specifically, we discuss how the credit crunch induced recession of 2008 triggered the problems within the eurozone regarding sovereign debt, looking at the issues of spill‐over and free‐rider effects, together with the implementation of EMU fiscal rules. The analysis is then extended by outlining a series of potential remedies. This consists of a critical evaluation of solutions that the EU has already instigated (i.e. moral persuasion, financial relief measures and debt default), together with a series of alternative propositions (i.e. fiscal federalism and a European Clearing Union) and even the collapse of the euro.     

The Cambusters: The Conservative European Union Referendum Rebellion of October 2011

The backbench rebellion that hit the Coalition government in October 2011 was one of the largest Commons revolts of the postwar era, on any issue. But it was not just its size that was noteworthy. This article outlines ten points about the origins of the vote, its timing, its composition, and the nature of the divisions it revealed. Facilitated by recent procedural innovations in the Commons, the rebellion was both evidence of a longer‐term rise in dissent amongst MPs of all parties, as well as other medium‐and short‐term factors within the Conservative party. It leaves the Prime Minister caught in an impossible triangle, attempting to satisfy his pro‐European Liberal Democrat partners in the Coalition, while keeping his Euro‐sceptic rebels happy, and yet retaining enough credibility in European capitals to negotiate successfully.     

When Oil Prices were Low: Petroleos de Venezuela (PdVSA) and Economic Policy-making in Venezuela since 1989

Abstract — There has been a considerable literature on the role of institutions in economic performance in general, in Latin America as a whole, and in Venezuela in particular. Venezuelan state institutions have been seen as highly patrimonialist and poorly performing, despite the advantages of long-standing democracy and large-scale resource wealth. This discussion calls attention to the highly significant 'special case' of the oil sector where the state company, PdVSA, has been bureaucratically autonomous and relatively efficient. Such a situation creates rather unusual policy-making problems given the fact that the economy is structured around oil income, in many respects to its disadvantage. There has been a considerable literature on economic policy reform in Venezuela which has hardly mentioned the oil sector at all. This article discusses the oil industry under Presidents Perez (1989–93) and Caldera (since 1994) to rectify the balance and to use insights derived from the study of the oil sector to offer some fresh perspectives on Venezuelan political history since 1989.     

Public Finance,Governance, and Cash Transfers in Alleviating Poverty and Inequality in Chile

As the Chilean government seeks to reduce poverty and inequality through cash transfers to poor households, local governments are responsible for both identifying the poor and allocating transfers. Until recently, however, evaluating the effectiveness of local governments in enacting these policies has been restricted by data limitations. This paper builds on recent evidence that cash transfers have highly variable impacts on poverty and inequality at the county level. In particular, we explore how local public finance and the strength of the governing mandate influence the efficiency of cash transfers. With a richly specified model, we find that public spending on goods and services, the fraction of available subsidies claimed by the local government, and the share of county land that is zoned for industrial purposes are all correlated with considerable reductions in poverty and inequality. In addition, the strength of the governing mandate weakly influences the efficiency of transfers in reducing poverty, but not inequality. These results demonstrate that a better understanding of such institutions can lead to more efficient targeting for social programs.     

Under the Knife

Last summer, I decided my impending move to Beijing should coincide with a shift in emphasis to health.Gone would be the