IMF conditionality: An approach based on the theory of special interest politics

Financial assistance provided by the International Monetary Fund (IMF) and other International Financial Institutions (IFIs) aims to help member countries reduce their economic policy distortions. Because these distortions are endogenously generated, it is important to understand how IFI assistance interacts with the domestic political economy. In this paper, we review recent models of IFI conditional assistance that are based on the theory of special interest politics (Grossman and Helpman 2001). In these models, governments adopt inefficient economic policies and instruments because of lobbying by interest groups. IFI assistance helps reduce these inefficiencies, at least under perfect and symmetric information, and provided IFIs are representative of the general public in creditor and debtor countries. Factors limiting the effectiveness of conditional assistance as an incentive system are also identified. These are related to information asymmetries, the potential for political instability in debtor countries, and the IFIs’ own financial solvency.

Current challenges to multinational federalism in India

India’s multinational federation has experienced multiple challenges in the last 25 years, relating to the rise of coalition politics and the process of economic liberalization, both of which have increased the power of some of the states of the federation at the expense of others. The internal borders of India continue to be restructured, with the latest state, Telangana, created in 2014. India is often seen as a successful multinational federation, but it is important to recognize the limitations of this success, as well as the areas where the rise of an aggressive Hindu nationalism poses a powerful threat to India’s multinational federal democracy.     

Head versus heart: The ambiguities of non-sovereignty in the Dutch Caribbean

Whereas political scientists tend to make binary distinctions between sovereign states and subnational units, in recent decades the number of a third, hybrid category of federacies or non-sovereign jurisdictions has strongly increased. In this paper, we explore the benefits and downsides of non-sovereignty from the perspective of these territories’ inhabitants. We zoom in on the six islands of the Dutch Caribbean, which in 2010 experienced a profound change in their political status. Using data from two large-scale opinion surveys that we conducted in 1998 and 2015, respectively, we show that the population of the Dutch Caribbean islands maintains a highly ambiguous attitude towards the non-sovereign status. While many respondents appreciate the material benefits of the enduring link with the metropolis, there are significant emotional and ideational objections to this relationship. These findings are embedded in broader scholarly discussions about the position of decentralized and peripheral jurisdictions vis-à-vis their administrative core.     

Competition between unions as a stimulus for initiating reform: the Israeli case, 1958–2015

The article identifies characteristics and consequences of competition between two teachers’ unions as a component of multi-unionism. The study aimed to clarify the consequences of this competition for the education system following the splitting of one teachers’ union and formation of a new union, which challenged both its rival and the policy-makers. The study focuses particularly on the development of the newer union. Data was gathered from documents written between 1958 and 2013, and supplementary interviews were conducted with 15 key figures in the unions, the Ministry of Education, and the Treasury. While research literature usually describes the conduct of teachers’ unions on a continuum between hindrance and facilitation of educational reforms, the study’s findings add an additional dimension relating to the possibility that competition between two teachers’ unions can engender competitive proposals for educational reform and act as a catalyst for change in educational policy. The rivalry led to the emergence of two similar, but competing, educational reforms, accepted by government and in effect today in all the schools. The study provides information on different levels of competition between the teachers’ unions, and the leeway for action that a union has as an interest group.     

Decentralised governance and empowerment of county governments in China: betting on the weak or the strong?

Decentralised economic development initiatives empowering local governments have gained currency in both developed and developing contexts. The empowerment of county governments in China is a case in point. This study uses difference-in-differences (DID) and the fixed-effects model with panel data (1997–2008) in counties in Zhejiang Province to empirically investigate the different impacts of the empowerment reform on county economies and fiscal revenue (FR). The results reveal that the reform has not promoted county economies as expected but has significantly increased FR. The reform has had a larger impact on less developed counties than on developed ones, which suggests a positive outcome of this decentralisation policy in China with regard to revenue generation. This study on county empowerment in Zhejiang Province provides some policy implications for other regions in China or developing countries.     

Intergovernmental councils in the United States

ABSTRACT

This article focuses on intergovernmental councils (IGCs) in the United States in which prominent state-level executive politicians, that is, governors, play a leadership role. In the US case, these IGCs developed out of a desire to facilitate interstate information exchanges and a need for state governments to join forces to protect their autonomy vis-à-vis the federal government. In this latter role, the councils function as lobbyists for state government interests. The research question driving the analysis has to do with impact: what difference do executive-led IGCs make, either vertically or horizontally, in the US federal system? The question of impact is particularly relevant because growing partisan polarization in contemporary federal and state political institutions complicates collective action by states.     

Vertical influence or horizontal coordination? The purpose of intergovernmental councils in Switzerland

ABSTRACT

In 1993, the Swiss cantons established the conference of cantonal governments (KdK). While the literature on Swiss federalism generally acknowledges the important role of the KdK, little is known about its specific purpose, in particular compared to other, older intergovernmental councils operating in Switzerland. We therefore investigate the purpose of the KdK and contrast it with two other intercantonal conferences with nationwide scope, namely those on education and finance. To do so, we trace two of the most important federal reform processes of the last decade: the latest renewal of fiscal equalization and educational harmonization. We find a division of labour between the KdK and policy-specific councils. While the former aims at vertical political influence, the latter primarily engage in genuine horizontal policy coordination. This flexible and smooth interplay of the two types of councils has contributed to further strengthening the political role of the cantons in the Swiss federation.     

Collective learning and regime dynamics under uncertainty: labour reform and the way to autocracy in Russia

The article questions the structural approach to autocratic transition that sees government as knowingly and purposely building autocracy, and contributes to the tradition emphasizing the plurality of possible regime developments and the role of contingency therein, by providing a more systematic treatment of such contingency. We offer a path-dependent theory of political change and use insights from cognitive institutionalism to show how ad hoc policy reform practices become accepted as a trusted way of interaction by political actors and how they “learn” their way into autocracy. This intuition is substantiated with a case-study of the labour reform in Putin’s Russia. The early 2000s marked a surge in uncertainty in Russian politics caused by the succession crisis and the profound political turnover it triggered. This uncertainty could have resolved in a number of ways, each leading to a different political development. We trace the actual way out of this uncertainty and show that the major factor to condition further regime trajectory was the way social reforms were conducted. The course of these reforms determined the ruling coalition and the institutions that ensure credible commitment within its ranks (the dominant party), and contributed to crowding out the political market and opposition decay.     

Renegotiating the empire,forging the nation(-state): the Bohemian/Czechoslovakian case through the political–economic thought of Thomas G. Masaryk and Karel Kramář, c. 1890–1920s

This article explores the dilemma of the small Bohemian Lands/Czechoslovak nation(-state) in staying “in” or “out” of the larger Habsburg supranational entity in the late nineteenth and the early twentieth century. It does so mainly through the language of political economy (on national wealth creation and redistribution) articulated in the opinions and political actions of Czechoslovakia’s two founding statesmen, the first president, Thomas G. Masaryk, and the first prime minister, Karel Krama?. The article argues that their choice of staying “in” the large imperial space was premised upon renegotiating a better political and political–economic deal for the Bohemian Lands, whereas the option of abandoning it and of forging the Czechoslovak nation-state was essentially based on political reasons. And while both advocated an interventionist role for the state in the economy during the imperial period, they considered such a prerogative even more essential for their new nation-state.     

Best Practice Environmental Impact Assessment: A Model Framework for Australia

Environmental impact assessment (EIA) is a process that involves the identification, prediction, evaluation and mitigation of the environmental and other impacts associated with development proposals and policies, plans and programs. Australian governments were amongst the first in the world to introduce EIA in the 1970s. Since then, the federal, state and territory EIA regimes have undergone multiple changes. In recent times, the push for EIA reform has intensified as governments have sought ways to improve the cost‐effectiveness of regulatory processes. In light of the impetus for change, this article outlines principles and a framework for best practice EIA in Australia. The intention is to inform the policy development processes at the federal, state and local levels.