The Distributional Impact of Austerity and the Recession in Southern Europe

Southern European welfare states are under stress. On the one hand, the recession has been causing unemployment to rise and incomes to fall. On the other hand, austerity has affected the capacity of welfare states to protect those affected. This paper assesses the distributional implications of the crisis in Greece, Spain, Italy and Portugal from 2009 to 2013. Using a microsimulation model, we disentangle the first-order effects of tax–benefit policies from the broader effects of the crisis, and estimate how its burden has been shared across income groups. We conclude by discussing the methodological pitfalls and policy implications of our research.     

Power Dynamics in an Experimental Game

We introduce a new experimental method for studying power. Drawing from multiple theoretical perspectives, we conceptualize power as relational and structural, as well as comprised of different forms through which basic human needs can be met. Thus, the method we introduce examines how, when faced with a particular need, people use multiple forms of power concurrently and within a “field of influence,” namely, the other players in a game. This enabled us to examine how one form of power is transformed into another and how power is transferred from one player to another through interaction, as well as to measure power as behavior, as the exercise of choice, as potential, and as outcomes. Two experiments using egalitarian start conditions and a survivable ecology demonstrated that participants used power to gain more power, creating inequality. Being the target of force made some players unable to “survive” in the local ecology. Theoretical and methodological issues in the study of power are discussed and the application of our game method to the study of power in other fields is considered.     

Breaking the Glass Ceiling: Local Gender‐Based Earnings Inequality and Women's Belief in the American Dream

This article ties together research on gender, income inequality, and political ideology, by exploring the effect of gender‐based earnings inequality on women's belief in a fundamental tenet of the “American Dream”—meritocracy. Focusing on gender‐based earnings inequality in women's local residential context, and drawing upon relative deprivation theory, this article argues that variation across local areas in the relative economic status of women should influence the ideological outlook of resident women. In contrast to relative deprivation theory, but consistent with rising expectations theory, I argue that ideological disillusionment should peak in contexts in which women's earnings fall closely behind men, and that ideological optimism should rebound in contexts in which women's earnings have achieved parity with that of men. Utilizing pooled survey data, I find strong evidence that individual women's belief in the American Dream varies according to whether local women's relative earnings indicate confrontation with or breaking of the “glass ceiling.”     

Financial Development,Entrepreneurship and Urban-rural Inequality

Based on the panel data of prefecture-level city over 2000—2012, this article shows that financial development can reduce urban-rural inequality through entrepreneurship. Furthermore, the above relationship is related to the degree of marketization. Among the three major regions of China, it is the most remarkable in the east area where degree of marketization is the highest, the least remarkable in the western area where degree of marketization is the lowest.     

What Difference Do Polarisation Measures Make? An Application to China

In recent years there has been much discussion of the difference between inequality and polarisation. The vast literature on inequality is held to miss out key features of distributional change, which are better described as changes in polarisation. Axioms have been proposed which capture some of these differences, and measures of polarisation, as distinct from inequality, have been suggested. The theoretical distinctions proposed in this literature are indeed interesting. But do the newly proposed measures of polarisation give different results in comparing societies over time? We address these questions for China, where dramatic increases in inequality and polarisation have been much discussed in the literature. We find that, contrary to theoretical expectation, the new measures of polarisation do not generate very different results from the standard measures of inequality. The paper ends by considering a different approach to polarisation which might better conform to the policy concerns expressed in the specific context of China.     

Institutions and Caribbean Economic Performance: Insights from Jamaica

We explore the impact of social institutions on economic performance in Jamaica through a reinterpretation of the plantation economic model. In its original form, the plantation model fails to develop a causal link between the plantation legacy and persistent underdevelopment. Despite its marginalization, the model remains useful for discussions on growth and development. Consequently, we offer a reappraisal using the causal insights from Kenneth Sokoloff and Stanley Engerman. We use two examples to demonstrate how inequality encourages the formation of institutions that are inconsistent with growth, and an empirical analysis to confirm the hypothesized relationship between inequality, institutions, and economic development. Since inequality is expected to influence growth indirectly, we use a structural specification, which follows William Easterly’s recent test of Sokoloff and Engerman’s argument. Our reliance on a time-series specification is unique. We demonstrate that the expectation that, on average, inequality and growth is negatively related and that institutions may compromise growth are accurate for Jamaica, the most cited Caribbean nation in the current discourse. Our results carry several policy implications, including support for the recent calls in Jamaica for political restructuring. However, both the paucity of similar studies and the importance of the implications for sustainable growth and development demand further analyses.

Reviews

Books reviewed:
Hassig Time, History and Belief in Aztec and Colonial Mexico
Baskes Indians, Merchants, and Markets: A Reinterpretation of the Repartimiento and Spanish-Indian Economic Relations in Colonial Oaxaca, 1750–1821
Caldeira City of Walls: Crime, Segregation, and Citizenship in São Paulo
Caulfield In Defense of Honor: Sexual Morality, Modernity, and Nation in Early-Twentieth-Century Brazil
Earle Rumours of Wars: Civil Conflict in Nineteenth-Century Latin America
Clarke Class, Ethnicity, and Community in Southern Mexico: Oaxaca's Peasantries
Jones and Munck, (eds) Cultural Politics in Latin America
CEDLA FRONTERAS: Towards A Borderless Latin America
Tulchin and Garland Social Development in Latin America. The Politics of Reform
Paley Marketing Democracy: Power and Social Movements in Post-Dictatorship Chile
Crabtree and Whitehead (eds) Towards Democratic Viability: The Bolivian Experience
Bailey and Godson (eds) Organized Crime and Democratic Governability: Mexico and the U.S.–Mexican Borderlands
Adams Dollar Diplomacy: United States Economic Assistance to Latin America
Smith (ed.) Democracy and International Relations: Critical Theories/Problematic Practices
Angell, Lowden Thorpe Decentralizing Development: The Political Economy of Institutional Change in Colombia and Chile
Itzigsohn Developing Poverty: The State, Labor Market Deregulation, and the Informal Economy in Costa Rica and the Dominican Republic
Nencel Ethnography and Prostitution in Peru
Potter Deeper than Debt: Economic globalisation and the poor     

Is informalization equalizing? Evidence from Kinshasa (DRC)

As a consequence of a concatenation of external and internal events, the economy of the Democratic Republic of the Congo (DRC) has informalized to an unprecedented level over the last few decades. A comparison of budget surveys carried out in 1975 and 2004 respectively allows us to ascertain the effect of this process on income inequality and poverty in Kinshasa. We find that the extent of inequality in the capital city of the DRC has remained largely unchanged, which strongly suggests that informalization has been a viable survival strategy for those at the lower-income end of society. Unexpectedly, whereas distinctions such as gender and age lost much of their profiling power in the period considered, other cleavages such as education and geography, which may be assumed to be much more intimately related to the formal sector, continued to play an important role in structuring inequality in Kinshasa’s deeply informalized economy.     

Inequality,the Crash and the Ongoing Crisis

The rise in inequality across many rich nations, but especially in the United Kingdom and the United States, was meant to lead to a bigger economic pie from which all would benefit. In fact, the increased concentration of income over the last three decades has led to more fragile and unstable economies making it a key cause of the 2008 Crash and today's lack of recovery. The evidence of the last 100 years is that models of capitalism that fail to share the proceeds of growth more evenly will eventually self‐destruct. More equal societies have softer business cycles. In contrast, more unequal economies are associated with more extreme cycles—they have exaggerated booms, deeper falls and extended troughs. The scale of inequality is not just an issue about fairness and proportionality, it is therefore integral to economic health.     

Income inequality,development and electoral turnout – New evidence on a burgeoning debate

In this article, we comprehensively analyze the macro-level link between income inequality and electoral turnout. First, we re-examine prior studies which affirm that higher inequality puts a drain on electoral turnout in wealthy industrialized Western countries. Second, we evaluate whether there is an association between the two concepts in a larger, more representative sample of democratic elections around the world. Third, we analyze if income inequality has a different influence on participation in the Western and non-Western countries. Controlling for nine theoretically informed covariates, we assess these claims in a multilevel framework with evidence from more than 550 democratic elections between 1970 and 2010. We find little evidence that electoral turnout is affected by income inequality. Our results also indicate that this “null” effect does not differ between the Western- and the non-Western world. However, we do find evidence that mandatory voting laws and more decisive elections boost turnout considerably.