Public perceptions and bond markets during the Great War: the case of a neutral country

Neutrality during World War I was not assured but depended on the ability of a neutral state to adjust to the major belligerent powers’ interests. How did Switzerland manage to adhere to its neutrality policy under those circumstances? This paper analyzes contemporary perceptions of neutrality by means of a structural break analysis. According to historiography Switzerland was endangered from within rather than by foreign actions. The analysis based on a newly assembled database supports this assessment in parts. In the bondholders’ view, Switzerland’s neutrality was most threatened by the events leading up to the general strike in November 1918.

     

Using the Results from Rigorous Multisite Evaluations to Inform Local Policy Decisions

Evidence‐based policy at the local level requires predicting the impact of an intervention to inform whether it should be adopted. Increasingly, local policymakers have access to published research evaluating the effectiveness of policy interventions from national research clearinghouses that review and disseminate evidence from program evaluations. Through these evaluations, local policymakers have a wealth of evidence describing what works, but not necessarily where. Multisite evaluations may produce unbiased estimates of the average impact of an intervention in the study sample and still produce inaccurate predictions of the impact for localities outside the sample for two reasons: (1) the impact of the intervention may vary across localities, and (2) the evaluation estimate is subject to sampling error. Unfortunately, there is relatively little evidence on how much the impacts of policy interventions vary from one locality to another and almost no evidence on the implications of this variation for the accuracy with which the local impact of adopting an intervention can be predicted using findings from an evaluation in other localities. In this paper, we present a set of methods for quantifying the accuracy of the local predictions that can be obtained using the results of multisite randomized trials and for assessing the likelihood that prediction errors will lead to errors in local policy decisions. We demonstrate these methods using three evaluations of educational interventions, providing the first empirical evidence of the ability to use multisite evaluations to predict impacts in individual localities—i.e., the ability of “evidence‐based policy” to improve local policy.     

Institutional law and economics

Behavioral economics provides one of the foundation for institutional law and economics (ILE). Improvement in predicting the performance of alternative laws will be built on ILE insights into how distribution affects productivity of labor and realization of joint gains. Our understanding of obedience to law as well as other categories of failure to be opportunistic (such as in high exclusion-cost situations) will be better understood from an ILE perspective that investigates learning to supplement specific sanctions.The boundaries of ILE inquiry encompass private property rights, regulation, and public spending and taxation since these are complements and substitutes. Public spending is not a good measure of the size of government, and regulation is not the opposite of freedom in the aggregate. This framework of ILE can usefully be seen as distinctive, even if all of its practitioners do not use the label and several of its propositions are shared with other paradigms. A better label might simply be institutional economics or political economy.