The politics of mortgage credit expansion in the small coordinated market economies

Abstract

Recent contributions to the comparative political economy literature claim that liberal market economies are vulnerable to asset booms and busts because of financial deregulation, shrinking welfare states and a political ideology emphasising financial self-sufficiency. This article examines the rapid expansion of mortgage lending in three coordinated market economies (CMEs): Denmark, Sweden and the Netherlands. This expansion is puzzling given that all three countries are CMEs with generous welfare states. Yet the pattern of mortgage lending resembles the Anglo-Saxon or liberal market economies (LMEs) more than other CMEs. The article argues that mortgage bubbles in the small CMEs emerged as the unintended outcome of pairing neoliberal programmes to expand home ownership with collectivist housing institutions. This resulted in supply restrictions and rising property values which saddled households with extraordinarily high mortgage debts. In short, mortgage credit bubbles are not unique to Anglo-liberal welfare states and may have different origins.     

Designing a Choice Architecture for Regulators

The emergence of behavioral public administration has led to increasing calls for public managers and policy makers to consider predictable cognitive biases when regulating individual behaviors or market transactions. Recognizing that cognitive biases can also affect the regulators themselves, this article attempts to understand how the institutional environment in which regulators operate interacts with their cognitive biases. In other words, to what extent does the “choice architecture” that regulators face reinforce or counteract predictable cognitive biases? Just as knowledge of behavioral insights can help regulators design a choice architecture that frames individual decisions to encourage welfare-enhancing choices, it may help governments understand and design institutions to counter cognitive biases in regulators that contribute to deviations from public interest policies. From these observations, the article offers some modest suggestions for improving the regulatory choice architecture.     

GRANDPARENT VISITATION RIGHTS

In recent years, legislators in all fifty states have given grandparents rights to petition for visitation privileges with grandchildren that can be enforced over parental objections. Grandparent visitation rights reflect an effort to protect meaningful relationships children enjoy with nonparental caregivers, enlist the assistance of extended family when the child's nuclear family is disrupted, and defend the interests of grandparents themselves. This psycholegal analysis explores the direct and indirect consequences of grandparent visitation statutes for family functioning. Statutory provisions are summarized, and the effects of these statutes are evaluated in light of what is known about the role of grandparents in child development, how courts evaluate children's "best interests" in grandparent visitation disputes, and how these statutes can alter family functioning in informal ways. The authors conclude that there are risks as well as benefits to children and families in grandparent visitation statutes, and suggest directions for procedural and statutory reform.