in search of smoking guns what makes income inequality vary over time in different countries we investigate the forces affecting the distribution of income by analyzing an unbalanced panel of information for 16 industrialized countries for the years 1966 through 1994 income inequality is measured with the gini coefficient of equivalent disposable income individuals are the unit of analysis the statistical analysis uses panel methods the results suggest that many factors affect the development of income inequality some factors are strictly economic a decreased industrial sector generally fosters inequality and some support is found for the view that increased trade of manufactured goods from developing countries is also a factor other forces are outside a strictly defined market sphere low inequality is found when a large proportion of the labor force belongs to a trade union and also when there is a large public sector in addition demographic circumstances are important since the proportion of the population under age 15 has a positive effect on inequality we find however no association between the unemployment rate and inequality

the public economy and economic growth in western market economies this essay analyzes the impact of two welfare states one for households and the other forfirms on economic growth in twelve advanced market economies between 1962 and 1983 we find that both welfare states contain stimulative and depressing forms of spending transfers in support of household income stimulate growth while public production of goods and services largely consumed by households depresses growth transfers to firms may have a predominantly negative impact on growth while military spending has a stimulative impact on the economy we also find that increasing household tax burdens a correlate of postwar welfare state expansion slows economic growth national debates about economic growth have increasingly been structured as zero sum choices between the welfare state for households and economic growth this reasoning neglects the potentially stimulative components of the welfare state for households and ignores the potentially negative impact of the welfare state forfirms

the political economy of public subsidies the article presents a model to explain cross national variations in public subsidies the model incorporates demand and supply variables as well as the effects of policy linkages it predicts that public subsidies are higher in small countries where unemployment is high agriculture plays a large role in the economy left wing parties are in power and tariffs and social security transfers are low the findings tend to confirm six of the seven hypotheses the study supports cameron s 1978 assertion that the openness of the economy is a major factor in the expansion of the public economy even though the data do not clearly confirm or disconfirm any specific theoretical framework they are more consistent with the pluralist model with its insistence that political influence varies from issue to issue and that political actors play a major role in the policy process finally the most interesting finding pertains to the role of policy linkages

the political economy of government domestic expenditure in the affluent democracies 1960 80 despite the large number of studies of the determination of government expenditure in the affluent democracies most students of the subject admit that we know relatively little about the complex dynamics of spending change using multiple regression analyses of changes in nonmilitary outlays over the years 1960 to 1973 and 1973 to 1980 this study attempts to remedy some of the problems in the literature by providing new tests of several old hypotheses by introducing and testing several relatively new hypotheses and by evaluating such propositions in the context of an integrated theoretical framework and of analyses that span two distinct political economic eras results suggest that the dynamics of domestic expenditure change are partially conditioned by macroeconomic and political environments of particular eras overall the self interests and ideological preferences of policymakers the institutional and extrainstitutional political action of policy relevant groups and needs for state assistance emerge as principal sources of changes in domestic expenditure

collusion in second price auctions with heterogeneous bidders abstract we show that efficient collusion by any subset of bidders in second price private value auctions is possible even when the bidders are heterogeneous an important property of efficient collusion is that a bidder s net payoff from participating in collusion is independent of her valuation we show that the cooperative game whose characteristic function evaluated at a coalition is the ex ante collusive surplus of that coalition has a nonempty core a feature of more technical interest is the mechanism characterization when the private information of agents does not enter in a linear or even piecewise linear manner

trickle down or transfers postwar determinants of family income inequality the expansion of social welfare has been promoted as one means of equalizing the distribution of economic well being macroeconomic expansion has been touted as an alternative strategy for improving the lot of the poor focusing on the postwar era this paper provides an empirical assessment of these two competing theories of income redistribution for female headed families and unrelated men and women the growth of public transfers is seen to be the major force behind a reduction in income disparities only husband wife families and men living apart from kin seem to have experienced any distributional impact of business cycles

collusion and signaling in auctions with interdependent values abstract the standard approach to collusion in auctions posits an uninformed disinterested third party who prior to the auction designs and implements a collusive mechanism in environments where collusion agreements are likely to be both proposed and executed by the involved parties this approach may neglect information leakages from simply a proposal to collude we consider a model of collusion where one informed bidder proposes to another as in es and schummer 2004 we allow for general interdependent values and affiliated signals in contrast to third party modeling approaches collusion is inefficient from both a social perspective except for the case of pure common values and from the perspective of the ring both bidders are better off than without colluding but the surplus extracted from the seller is distributed asymmetrically between the bidders the potential for information leakage from proposing is bad for low types who reveal that they are weak competitors but is advantageous for high types because they are able to signal their strength we identify a so called briber s curse whereby acceptance of a proposal causes the proposer to downgrade her expected value for the object when there is additional competition in the form of bidders outside of the cartel the briber s curse significantly harms cartel profits and raises seller revenues

collusive bidder behavior at single object second price and english auctions models of collusive bidder behavior at single object second price and english auctions are provided the ind ependent private values model is generalized to permit the formulatio n of coalitions and a strategic response by the auctioneer cooperati ve strategies are found to be dominant in these models coalitions of any size are viable and the payoff to each member increases with th e size of the coalition in addition the collusive strategies of the coalition represent a noncooperative equilibrium the optimal respon se of the auctioneer is to establish a reserve price that is a functi on of the coalition s size these and other features of the model are found to be consistent with the essential features of actual behavio r copyright 1987 by university of chicago press

finance and income inequality in kazakhstan evidence since transition with policy suggestions abstractkazakhstan gained independence in 1990 and has undergone significant changes in economic social and trade conditions since then we analyse the effects of financial development on income inequality in kazakhstan incorporating economic growth foreign investment education and the role of democracy as the drivers we establish that income inequality in kazakhstan is impaired by financial development in summary we send three messages for policy purposes first strengthening financial sector is necessary to close the gap between haves and have nots second attracting fdi beyond the hydrocarbon sector is necessary to alleviate inequality finally adaptation of education system to the new social and economic environment would help in improving income distribution

elections keynes bureaucracy and class explaining u s budget deficits 1961 1978 the determination of u s federal budget deficits and surpluses during a period of keynesian fiscal activism is modeled in light of relevant social science literatures rational choice emphases upon electoral manipulation of the economy and keynesian stabilization marxian emphases upon monopolization andfiscal control of labor militancy organizational decision theory emphases upon budgeting inertia and a number of additional thrusts from other literatures are supported by time series regression analyses of 1961 1978 surpluses deficits the final model is statistically well behaved analysis of so called high employment measures of discretionary surpluses deficits supports all interpretations requiring discretionary policy making but an indication of automatic stabilization emerges as well a focus upon executive policy making roles is suggested as one means to further theoretical integration of explanations of state macroeconomic policy

the impact of primary schooling on economic development a review of the evidence abstract the contribution of primary schooling to economic development is greater than has conventionally been percieved this review of recent research shows that primary schooling increases labour productivity in both urban and rural sectors and that the economic returns to such investment are typically high in addition it reduces fertility improves health and nutrition and promotes other behavioural and attitudinal changes which are helpful to economic development investment strategies which give primary schooling an important place would be more conducive of growth with equity than many alternatives priorities for government and donor policies are indicated as are those for future research

collective labor rights and income inequality this article examines the relationship between income inequality and collective labor rights conceptualized as workers legal and practical ability to engage in collective activity although worker organization is central to explaining income inequality in industrialized democracies worldwide comparative studies have neglected the role of class based actors i argue that the repression of labor rights reduces the capacity of worker organizations to effectively challenge income inequality through market and political processes in capitalist societies labor rights however are unlikely to have uniform effects across regions this study uses unbalanced panel data for 100 developed and less developed countries from 1985 through 2002 random and fixed effects models find that strong labor rights are tightly linked to lower inequality across a large range of countries including in the global south interactions between regions and labor rights suggest that the broader context in which class based actors a

the college to work transition during the 1990s evidence from sweden this article analyses the time it takes for swedish college graduates to start a full time job that lasts for 6 months or more the focus is on the transition over time during the period 1991 to 1999 this period covers both upturns and downturns of the business cycle providing a unique opportunity to consider the importance of the timing of graduation the results show that the risk of unemployment and the unemployment duration have varied considerably with the business cycle both within and between cohorts for example the field of education is of more importance for the outcomes during recessions further the relative risk of unemployment has decreased over time for individuals with the highest degree of education whereas the unemployment duration has increased indicating that the selection into unemployment for this group may have changed over time this is interesting not least in the light of the sharp expansion of the higher educational system during the study period

electoral competition and the growth of public spending in 13 industrial democracies 1950 to 1983 this article examines a theoretically important issue that has received surprisingly little attention whether the process of democratic competition for public office has fueled the growth of domestic spending in the capitalist democracies since world war ii probably because it is difficult to measure electoral competition in multiparty systems existing comparative studies of public spending either ignore this question or use dubious measures of electoral competition this study presents and tests some conceptually more appealing measures of competition the results show a strong robust relationship between improved indicators of electoral competition and the growth of domestic spending from 1950 to 1973 and 1973 to 1983 the study concludes by analyzing the implications of the findings for economic performance in the capitalist democracies and for the democratic management of fiscal policy

foreign direct investment and income inequality further evidence abstract this paper examines the relationship between foreign direct investment fdi and income inequality special attention has been paid to data comparability and model specification by comparing models with and without geographical dummies this study shows that the statistically significant correlation between fdi and income inequality widely obtained in earlier studies might capture more of the geographical difference in inequality than the deleterious influence of fdi and to the extent that fdi does give rise to more unequal income distribution in the host less developed countries ldcs only east southeast asia ldcs appear to have been harmed by the inflow of fdi during the 1970s it should be noted however that the second result refers only to the marginal impact not the total impact apart from fdi our empirical evidence suggests that the level of economic development the direct role of government and to a smaller degree the significance of the agriculture sector in an ldc are crucial determinants of income inequality

unemployment duration unemployment benefits and labor market programs in sweden abstract standard search theory as well as some empirical evidence suggest that an unemployed individual s probability of entering employment increases as he approaches the time when unemployment benefits are due to expire this pattern may not carry over to a country like sweden where labor market programs are targeted at the long term unemployed at risk of benefit exhaustion the paper examines transitions out of unemployment using data on unemployed individuals in sweden a semi parametric competing risks model for transitions to employment labor market programs and non participation is estimated there is some evidence that the exit rate from unemployment to employment increases as benefit exhaustion is approached

age structure politics and cross national patterns of public pension expenditures this study examines the determinants of spending on public pensions unlike other programs pensions benefit an easily identifiable high voting group the aged and may be especially amenable to their political influence with that in mind we draw out predictions of industrialism and class theories for the explanation of public pension expenditures the explanations are tested with data on 48 nations at all levels of political and economic development for four time points 1960 1965 1970 1975 pooling the data allows multivariate analysis of appropriate determinants both within and across different groups of nations and detailed analysis of advanced industrial democracies industrialism variables such as percent aged social insurance program experience andfamily size have dominant effects however the effects of percent aged increase with political democracy suggesting that the aged wield political power in increasing pension expenditures class variables in contrast have little or no effect on pensions suggesting the importance of age politics over class politics in the spending for this program

on the political economy of welfare expansion a comparative analysis of 18 advanced capitalist democracies 1960 1971 this article elaborates the thesis that economic growth and various types of collective action by class linked actors determine the expansion and decline of welfare spending in rich capitalist democracies our multivariate model of this thesis specified to 1960 1971 growth rates in direct cash transfer payments as proportions of gross domestic product is supported strongly by regression analyses these indicate that economic growth notably facilitates transfer payment growth they also suggest that rightist party participation in government notably dampens welfare expansion while leftist centrist and christian democratic party participation in government are conducive to welfare expansion and they suggest that the political influences of both unions and large industrial corporations are conducive to growth in transfers payments as well in addition state authorities appear to augment welfare spending in response to working class protests strike activity and capital investment disinvestment activ

the provocative public sector domestic political protest and public sector growth in the oecd 1965 1982 the results shown in tables 1 through 8 above are consistent in that gg is repeatedly shown to be significant whether making cross national comparisons of dpp or predicting intra national variations over time therefore hypotheses 1a and 1b are confirmed the confirmation of hypotheses 2a and 2b shows that taking into account public sector size government growth is most provocative in countries where it represents a major socio economic change i e where the public sector is small government growth has a neutral impact where the role of the public sector is long established i e where the public sector is large

bribing and signaling in second price auctions abstract we examine whether a two bidder second price auction for a single good with private independent values is immune to a simple form of collusion where one bidder may bribe the other to commit to stay away from the auction i e submit a bid of zero in either of two cases where the potential bribe is fixed or allowed to vary the only robust equilibria involve bribing in the fixed bribe case there is a unique such equilibrium in the variable bribes case all robust equilibria involve low briber types revealing themselves through the amount they offer while all high types offer the same bribe only one such equilibrium is continuous bribing in all cases causes inefficiency

controlling collusion in auctions the role of ceilings and reserve prices abstract we examine a simple model of collusion under a single object second price auction under the appropriate parameter conditions in particular as long as collusion is neither too easy nor too difficult we find that the optimal policy involves both an effective ceiling as well as a reserve price set at the lowest bidder valuation

manipulation through bribes we consider allocation rules that choose outcomes and transfers based on agents reported valuations of the outcomes a bribing situation exists when one agent could pay another to misreport his valuations resulting in a net gain to both a bribe proof rule eliminates such opportunities we show that under a bribe proof rule each agent s payoff is a continuous function of other agents reported valuations furthermore on connected domains if the set of outcomes is finite or the domain is smoothly connected each agent s payoff is a constant function of other agents reports finally under a domain richness condition a bribe proof rule must be constant the results apply to a broad class of economies journal of economic literature classification numbers c70 d70

income inequality regime repressiveness and political violence death rate from political violence is postulated to vary cross nationally as a positively accelerated time lagged function of income inequality and as a nonmonotonic inverted u function of regime repressiveness the former hypothesis is consistent with approaches to the explanation of collective political violence that emphasize the general concept of discontent or more specifically relative deprivation the latter hypothesis is consistent with a political process version of the resource mobilization approach in the context of a multivariate model estimated across two decades 1958 67 and 1968 77 support is found for the inequality hypothesis support also is foundfor the regime repressiveness hypothesis in the decade 1968 77 for which the index of regime repressiveness is available the u curve effect of regime repressiveness appears to have stronger impact on variation in rates of deadly political violence than the positively accelerated effect of income inequality

government partisanship labor organization and macroeconomic performance governments of the left and right have distinct partisan economic policies and objectives that they would prefer to pursue their propensity to do so however is constrained by their desire for reelection we argue that the ability of governments to further their partisan interests and preside over reelectable macroeconomic outcomes simultaneously is dependent on the organization of the domestic economy particularly the labor movement we hypothesize that there are two different paths to desirable macroeconomic performance in countries with densely and centrally organized labor movements leftist governments can promote economic growth and reduce inflation and unemployment conversely in countries with weak labor movements rightist governments can pursue their partisan preferred macroeconomic strategies and achieve similarly beneficial macroeconomic outcomes performance will be poorer in other cases these hypotheses are supported by analysis of pooled annual time series data for 16 advanced industrial democracies between 1967 and 1984

bribing in first price auctions abstract i study a symmetric 2 bidder ipv first price auction prior to which one bidder can offer his rival a bribe in exchange for the latter s abstention i focus on pure and undominated strategies and on continuous monotonic equilibria equilibria in which the bribing function is continuous and nondecreasing when types are distributed continuously on the unit interval such an equilibrium if it at all exists is necessarily trivial its bribing function is identically zero i provide a sufficient condition for its existence and sufficient conditions for its nonexistence when the minimum type is strictly positive a non trivial equilibrium may exist but it must be pooling i provide a sufficient condition for the existence of such an equilibrium when types are distributed continuously on the unit interval and dominated strategies are allowed a non trivial non pooling equilibrium exists at least under the uniform prior

politics the state and basic human needs a cross national study this study examines ways that political processes influence the provision of basic human needs once the effects of aggregate national wealth are removed three general explanatory approaches are examined these are based on the size or strength of the national government the achievement ofdemocratic processes and the ideological orientation ofruling elites along a left right dimension these three approaches are analyzed by regressing an index of physical well being the pqli on measures drawn from each perspective for a sample of 1 16 contemporary nations the findings indicate that political attributes do indeed have an impact on the provision of basic needs even when controlling for aggregate social wealth democratic processes are related to positive welfare outcomes irrespective of state strength and ideological norms for regimes with a roughly centrist ideology state strength appears to make little noticeable difference one way or another for those on the left state strength promotes welfare performance for those on the right state strength is found to inhibit the provision of basic needs how do political processes affect the welfare of individuals this question in countless variants has motivated students of political economy at least since the advent of the modern nation state in its simplest form the empirical question becomes what kind of state achieves the highest level of welfare for its citizens although it may seem that there are as many answers as possible dimensions of states most analyses have centered on one or more of three general explanatory approaches the first focuses on the size or strength of the state apparatus as the essential ingredient in translating productive potential into welfare outcomes successful welfare performance hinges on the capability of the state because the state is considered the one social institution concerned with the material needs of the population as a whole a second model highlights procedural aspects of the political system rather than the budgetary strength of the state by linking successful welfare outcomes to the relatively even distribution of political power brought about by political democracy the third approach is distinguished from the other two by its emphasis on the ideological orientation usually on a left right continuum of ruling elites this model posits welfare

economic determinants of democracy the relationship between the level of economic development and the level of democracy found in most quantitative cross national research implies that the largest gains in democracy are experienced by countries at intermediate levels of development during the 1960s and 1970s however middle income countries were more likely to register declines in democracy than increases i explain this anomaly with the hypothesis that income inequality affects democracy and this effect often counteracts the positive influence of economic development because intermediate levels of economic development are associated with the highest levels of income inequality the independent negative effect of income inequality on change in level of democracy explains the declines in democracy in middle income countries cross national data from a sample of 58 countries support the hypothesis of a negative effect of income inequality on change in level of democracy from 1965 to 1980 this effect is robust when noneconomic determinants of democracy are taken into account and when sample size is increased

search benefits and entitlement in a simultaneous analysis of unemployment duration and search intensity we estimate a non structural search model accounting explicitly for two features of the benefit system benefit level and time remaining until exhaustion of the entitlement period residual entitlement special attention is paid to the number of search contacts as an indicator for search intensity to assess the effect of the benefit level and residual entitlement on the number of search contacts we estimate a poisson model our results suggest that benefits work through a reduction of search efforts whereas residual entitlement is effective mainly through the reservation wage

politics and inequality in latin america and the caribbean this article presents the first pooled time series analysis of the impact that politics and policy have on inequality in latin america and the caribbean the authors build on models consisting of sociological and economic variables adding the strength of the democratic tradition long term legislative partisan political power distribution and social spending to explain variation in inequality they analyze an unbalanced pooled time series data set for income distribution in 18 latin american and caribbean countries from 1970 to 2000 they show that the political variables add explanatory power a strong record of democracy and a left leaning legislative partisan balance are associated with lower levels of inequality as are social security and welfare spending under democratic regimes thus they replicate some and modify other well established findings from studies of organization for economic cooperation and development oecd countries in the very different context of latin america and the caribbean

union organization in advanced industrial democracies i suggest a new explanation of cross national differences in unionization rates the size of the labor force size matters because the gains unions are able to achieve in collective bargaining depend on the proportion of substitutable workers who are organized while the costs of organizing depend in part on the absolute number to be recruited the comparison of the costs and benefits of organizing new workers yields the conclusion that unions in larger labor markets will accept lower levels of unionization statistical analysis of cross national differences in unionization rates among advanced industrial societies in the late 1970s indicates that the size of the labor force and the cumulative participation of leftist parties in government explain most of the variance

the international labor organization and the welfare state institutional effects on national welfare spending 1960 80 national welfare programs are importantly affected by models of welfare activity institutionalized at the global level this article examines the impact of the welfare regime advocated by and within the international labor organization ilo countries that have recently ratified ilo conventions related to welfare show increased growth in spending net of national characteristics subanalyses show that the effects of ilo ratification are strong in the industrialized capitalist democracies particularly where prior welfare spending is low and the working class has a weakly institutionalized role in policymaking ilo ratification seems disconnected from spending in the less developed countries legislative case studies point to similar patterns these findings suggest that international norms contribute to policy where they offer compelling models that powerful actors can use to legitimate policy innovation

economic inequality and its socioeconomic impact abstract income inequality is of fundamental interest not only to economists but also to other social scientists a substantial literature in economics and the social sciences has investigated the relationship between income inequality and economic growth and a variety of social phenomena the links between inequality and economic growth are explored as well as those between inequality and such key social variables as political conflict education health and crime the analysis in this paper follows a two step process first a review of the empirical evidence relating inequality to growth and to each of the above social variables is undertaken second the various causal mechanisms that have been proposed in the social science literature to explain those links are surveyed

promise and pitfalls in the use of secondary data sets income inequality in oecd countries as a case study this paper examines the role of secondary data sets in empirical economic research taking the field of income distribution as a case study we illustrate problems faced by users of secondary statistics showing how both cross country comparisons and time series analysis can depend sensitively on the choice of data after describing the genealogy of secondary data sets on income inequality we consider the main methodological issues and discuss their implications for comparisons of income inequality across oecd countries and over time the lessons to be drawn for the construction and use of secondary data sets are summarized at the end of the paper

economic openness democracy and income inequality an empirical analysis scholars have studied effects of economic openness and democracy on national income inequality in two literatures in democracy studies scholars agree democracy reduces inequality but empirical evidence is ambiguous in globalization studies effects of economic openness on inequality are debated but have not been rigorously examined this article is the first systematic statistical study of the effects of both economic openness and democracy on income inequality these effects need to be studied together the authors measure national income inequality from a comprehensive gini coefficient data set economic openness is measured from trade flows foreign direct investment inflows and financial capital inflows the period studied is 1960 to 1996 the unit of analysis is a country decade and the sample includes 69 countries the authors find that democracy and trade reduce income inequality foreign direct investments increase income inequality and financial capital does not affect income inequality policy implications are discussed

a search model applied to the transition from education to work this paper presents the specification and estimation of a search model applied to the transition from education to work the theoretical search model includes the possibility of variable search intensity the empirical model with a reservation wage relation is estimated using maximum likelihood methods a data set containing information on new law graduates is used for the estimation finally the model is estimated for two separate subperiods to investigate the effects of market changes

politics institutions and welfare spending in industrialized democracies 1960 82 electoral turnout as well as left and center governments increase welfare effort that the welfare efforts of governments led by particular types of parties show significant differences and vary notably with the strength of oppositional and junior coalitional parties and that relatively neocorporatist centralized and traditionalistic polities are high on welfare effort overall our findings suggest that contrary to many claims both partisan and nonpartisan facets of democratic politics and political institutions shape contemporary social welfare effort

income inequality development and dependence a reconsideration we reconsider the role of foreign investment in income inequality in light of recent critiques that question the results of quantitative cross national research on foreign capital penetration we analyze an unbalanced cross national data set in which countries contribute different numbers of observations with a maximum of 88 countries and 488 observations dated from 1967 to 1994 random effects regression models that control for unmeasured country heterogeneity are used to investigate effects of foreign capital penetration on inequality measured as the gini coefficient against the background of an internal developmental model of inequality we adapt firebaugh s 1992 1996 critique of the literature on the effect of foreign investment on economic growth to the study of income inequality and find that the stock of foreign direct investment has an effect on inequality that is independent of the mechanisms identified by firebaugh we explore tsai s 1995 claim that the effect of foreign capital penetration is spurious and find that foreign stock has a significant positive effect on inequality net of region specific differences an alternative interpretation of the findings of the foreign investment inequality literature is discussed in light of the discovery of an inverted u shaped relationship between income inequality and foreign investment stock per capita we conclude that thinking on the relationship between income inequality and investment dependence should be revised in light of an investment development path relating the inflow and outflow of foreign capital to economic development

optimal collusion proof auctions abstract we study an optimal collusion proof auction in an environment where subsets of bidders may collude not just on their bids but also on their participation despite their ability to collude on participation informational asymmetry facing the potential colluders can be exploited significantly to weaken their collusive power the second best auction i e the optimal auction in a collusion free environment can be made collusion proof if at least one bidder is not collusive or there are multiple bidding cartels or the second best outcome involves a non trivial probability of the object not being sold regardless optimal collusion proof auction prescribes non trivial exclusion of collusive bidders i e a refusal to sell to any collusive bidder with positive probability

does liberte egalite a survey of the empirical links between democracy and inequality with some evidence on the transition economies the effect of the distribution of political rights on income inequality has been studied both theoretically and empirically the authors review the existing literature and in particular the available empirical evidence the literature suggests that formal exclusion from the political process through restrictions on the voting franchise appears to have caused a high degree of economic inequality and democratization in the form of franchise expansion has typically led to an expansion in redistribution at least in the small sample of episodes studied in a less pronounced way albeit more emphatically compared with the ambiguous results of earlier research recent evidence indicates an inverse relationship between other measures of democracy based on civil liberties and political rights and inequality the transition experience of eastern european countries however seems to some extent go against these conclusions this opens possible new vistas for research namely the need to incorporate the length of democratic experience and the role played by ideology and social values

diffusion development and democracy 1800 1999 while a trend of growth in democratization over the past two centuries has been generally observed it is the remarkable growth in the democratization of the world over the past 30 years that has truly captured the imagination of social scientists policymakers and the general public alike two major sets of factors have dominated studies attempting to predict democratization one set characterizes endogenous or internal features of countries and may be referred to as socioeconomic development the other set less often tested characterizes exogenous variables that influence democratization via forces at work globally and within the region in which a country resides this set may be referred to as diffusion processes this study provides the first systematic comparison of these two sets of variables when assessed alone development indicators are robust predictors of democracy but their predictive power fades with the inclusion of diffusion variables in particular diffusion predictors of spatial pr

inequality and political violence revisited in their 1987 article in this review muller and seligson used logged ordinary least squares lols to estimate the effect of income inequality on cross national levels of deaths by political violence t y wang challenges the robustness of the main conclusion and argues for the application of a maximum likelihood approach the exponential poisson regression epr model rather than lols he concludes that the widely used lols approach yields misleading conclusions when applied to event count data dixon muller and seligson replicate previous work using both lols and epr approaches and conclude that in most but not all respects the two approaches yield similar results supporting the effect of inequality when the specifications are identical they also argue in response to concerns expressed by brockett 1992 that the inequality results are robust when account is taken systematically of the best information on underreporting of deaths

the political economy of deficit spending in nine industrialized parliamentary democracies the role of fiscal institutions this article analyzes the influence of four sets of factors on deficit spending in 9 industrialized parliamentary democracies during 1958 1990 this article analyzes the influence of these factors and introduces and tests the importance of an additional potential influence on the size of a country s fiscal deficit the strength of fiscal bureaucracy it is argued that the stronger a country s fiscal bureaucracy the lower its deficit ceteris paribus empirically the authors find that the state of a nation s economy heavily affects its deficit little systematic relationship is found between the ideology of the ruling political party and a nation s deficit or between the political strength of the ruling party and deficits in contrast to the findings of roubini and sachs finally it is found that the strength of a country s fiscal bureaucracy is an important influence on the deficit in these 9 industrialized parliamentary democracies

the relationship between unemployment spells and reservation wages as a test of search theory the theory of stationary job search predicts that controlling for other factors that affect the probability of leaving unemployment duration and reservation wages are likely to be positively associated the paper tests this prediction for british cross sectional data from 1982 using an estimating equation implied by search theory simultaneity is crucial in the evaluation of this prediction with single equation and instrumental variable estimates differing markedly perhaps surprisingly given the extreme paucity of both job interviews and offers in the sample the main finding is that reservation wages play a significant role in the determination of duration

comparative statics in dynamic programming models with an application to job search abstract this paper presents a technique for qualitative comparative statics analysis in dynamic programming models let the value function be the fixed point of a contraction mapping which depends differentiably on some exogenous parameter ten the derivative of with respect to exists and is also the fixed point of a contraction mapping since this derivative is the fixed point of a contraction mapping its qualitative properties can be investigated using mathematical induction this comparative statics methodology is illustrated with an application to a model of job search

politics and the structural dependence of the state in democratic capitalist nations i explore empirically a central claim of the structural dependence thesis namely that capitalists ability to disinvest fundamentally conditions policy choices in democratic capitalist systems utilizing time series data for 16 affluent democracies from 1965 to 1984 i find that indeed low rates of business investment are associated with reductions in corporate tax burdens and that these reductions are more pronounced in periods of economic crisis moreover low rates of capital formation engender cuts in personal income taxes during periods of economic stress however i also find that the magnitude of responsiveness of taxation to low rates of investment is relatively small and that analyses of the political context of investment and taxation indicate that governments have choices the responsiveness of corporate tax burdens to capital formation may under some governments be part of a policy mix designed to maintain adequate investment and to address the demands of core constituencies

explaining the dominance of legacy unions in new democracies comparative insights from indonesia the continued dominance of legacy unions state backed unions inherited from the previous nondemocratic regime has received little scholarly scrutiny through an analysis of indonesia this article presents a focused theoretical framework for analyzing the staying power of legacy unions and the strategies they pursue to maintain their dominance the author argues that the capacity of legacy unions to survive is a product of inherited advantages membership institutional and legal and the transition context economic conditions union competition and partisan links legacy unions adopt three strategies for survival carrots sticks and reform and pursue a strategy of reform only when they retain meager inherited advantages and face an unfavorable transition context the article also offers suggestions for additional research to further develop the theoretical framework

welfare policy expansion in botswana and mauritius explaining the causes of different welfare regime paths how come two developing countries with similar economic institutional and democratic attributes have developed vastly different welfare regimes drawing inspiration from the welfare regime literature the author subjects botswana and mauritius to a comparative historical analysis that explores the economic and political trajectories of their welfare policy development the findings offer both support and modifications to the established and mostly western oriented literature first politics affect welfare policy development in developing countries the rural population can promote welfare policy expansion but it is middle class interests that shape the direction of policy development second given the importance of politics conceptualizations of welfare policies need to include both the spending and the financing side finally the causes of different welfare regime paths need to be examined with attention to the particular economic contexts of developing countries and how welfare and economic poli

explaining the growth of government in sweden a disequilibrium approach previous studies aimed at explaining the growth of government in a particular country have failed to distinguish between explanatory variables acting on the supply and demand side respectively alternatively they have tested one explanation at a time implying explanatory equations that are misspecified in addition no allowance has been made for the fact that the interaction between supply and demand can hardly be assumed to be a self equilibrating process where the price of public goods and services adjusts to equate the two instead a framework of disequilibrium seems more appropriate for the analysis of the growth of government

income inequality democracy and public sector size this study synthesizes and tests explanations of how public sector size and democracy affect income inequality the results based on unbalanced panel data for 64 developing and developed countries

simple collusive agreements in one shot first price auctions abstract the paper demonstrates that collusion in a private value first price auction is likely to occur even in a one shot interaction the strategies of the colluding parties must be mixed since agreeing to submit a bid equal to the reservation price of the seller provides the incentive for that bidder to cheat on the designated winner we deal with a complete information environment with arbitrary number of bidders we characterize the sensible equilibrium outcome where the two bidders with the highest valuations collude we show that the equilibrium outcome is unique and that the probability of collusion exceeds 1 2

collusion and information revelation in auctions abstract the theoretical literature on collusion in auctions suggests that the first price mechanism can deter the formation of bidding rings however such analyses neglect to consider the effects of failed collusion attempts wherein information revealed in the negotiation process may affect bidding behaviour we experimentally test a setup in which theory predicts no collusion and no information revelation in first price auctions the results reveal a hitherto overlooked failing of the first price mechanism failed collusion attempts distort bidding behaviour resulting in a loss of seller revenue and efficiency moreover the first price mechanism does not result in less collusion than the second price mechanism we conclude that while the features of the first price mechanism may have the potential to deter bidder collusion the role of beliefs in guiding bidding behaviour make it highly susceptible to distortions arising from the informational properties of collusive negotiation auction designers should take this phenomenon into account when choosing the auction mechanism

the kuznets curve and the great u turn income inequality in u s counties 1970 to 1990 the authors examine the determinants of inequality in the distribution of family income in approximately 3 100 counties of the united states in 1970 1980 and 1990 such a study provides a window on global trends in social inequality during the period which spans the tail end of the kuznets curve and the more recent upswing in income inequality results from random effects regression models that control for unmeasured heterogeneity among states reveal the continued importance of the kuznetsian pattern of declining inequality with economic development a positive effect of urbanization on inequality a declining positive impact of sector dualism an increasing positive effect of educational heterogeneity and a persistent effect of racial dualism several variables associated with the recent upswing in inequality have significant effects female labor force participation negative female headed households positive percent of the population over age 65 changes from positive to negative over the period manufacturing employment negative and unemployment ambiguous they also discuss methods of estimating the gini coefficient for income inequality at the county level and measures of sector farm nonfarm dualism racial black white dualism and educational heterogeneity

bribe proof rules in the division problem the division problem consists of allocating an amount of a perfectly divisible good among a group of n agents with single peaked preferences a rule maps preference profiles into n shares of the amount to be allocated a rule is bribe proof if no group of agents can compen sate another agent to misrepresent his preference and after an appropri ate redistribution of their shares each obtain as trictly preferred share we characterize all bribe proof rules as the class of efficient strategy proof and weak replacement monotonic rules in addition we identify the functional form of all bribe proof and tops only rules

bribing in first price auctions corrigendum abstract we clarify the sufficient condition for a trivial equilibrium to exist in the model of rachmilevitch 2013

political rights and income inequality a cross national test among contemporary nations the relationship between income equality and national wealth exhibits an inverted u shape low among the richest and poorest nations and high for nations with intermediate wealth to examine the reasons for this relationship i hypothesize that both political democracy and educational enrollment are related in a similar way to income inequality two data sets are used in this analysis modified version of muller s set of 62 nations circa 1965 1975 and hoover s data set multiple regression reveals that measures of political democracy and the educational enrollment levels have an inverted u relationship with income inequality national wealth gnp had no consistent direct effect on income inequality a satisfactory specification of national levels of income inequality must include the polynomial functions of political democracy and education

determinants of relative poverty in advanced capitalist democracies using relative poverty measures based on micro level data from the luxembourg income study in conjunction with pooled time series data for 14 advanced capitalist democracies between 1970 and 1997 the authors analyze separately the rate of pretax transfer poverty and the reduction in poverty achieved by systems of taxes and transfers socioeconomic factors including de industrialization and unemployment largely explain pre tax transfer poverty rates of the working age population in these advanced capitalist democracies the extent of redistribution measured as poverty reduction via taxes and transfers is explained directly by welfare state generosity and constitutional structure number of veto points and the strength of the political left both in unions and in government

strategic communication with lying costs i study a model of strategic communication between an uninformed receiver and an informed but upwardly biased sender the sender bears a cost of lying or more broadly of misrepresenting his private information the main results show that inflated language naturally arises in this environment where the sender almost always claims to be of a higher type than he would with complete information regardless of the intensity of lying cost there is incomplete separation with some pooling on the highest messages the degree of language inflation and how much information is revealed depend upon the intensity of lying cost the analysis delivers a framework to span a class of cheap talk and verifiable disclosure games unifying the polar predictions they make under large conflicts of interest i use the model to discuss how the degree of manipulability of information can affect the trade off between delegation and communication copyright 2009 wiley blackwell

partisan governance women s employment and the social democratic service state the causes of the expansion and cross national variation in the provision of welfare state goods and services are examined social democratic governance is by far the most important determinant of the public delivery of services and is one of the most important determinants of the public funding of the provision of welfare state goods and services christian democratic governance is an important determinant of public funding of services but is not related to public delivery state structure is also an important determinant women s labor force participation is an important determinant of the expansion of public social welfare services net of other social political and historical factors the analysis also shows an interactive effect of women s labor force participation and social democratic governance on public delivery of welfare state services we conclude that public delivery of a wide range of welfare state services is the most distinctive feature of the social democratic welfare state and that this feature is a product of the direct and interactive effects of social democracy and women s mobilization

the lot of the unemployed a time use perspective this paper provides new evidence on time use and subjective well being of employed and unemployed individuals in 14 countries we devote particular attention to characterizing and modeling job search intensity measured by the amount of time devoted to searching for a new job job search intensity varies considerably across countries and is higher in countries that have higher wage dispersion we also examine the relationship between unemployment benefits and job search

robustly collusion proof implementation a contract with multiple agents may be susceptible to collusion we show that agents collusion imposes no cost in a large class of circumstances with risk neutral agents including both uncorrelated and correlated types in those circumstances any payoff the principal can attain in the absence of collusion including the second best level can be attained in the presence of collusion in a way robust to many aspects of collusion behavior the collusion proof implementation generalizes to a setting in which only a subset of agents may collude provided that noncollusive agents incentives can be protected via an ex post incentive compatible and ex post individually rational mechanism our collusion proof implementation also sheds light on the extent to which hierarchical delegation of contracts can optimally respond to collusion

bribing in second price auctions an ipv 2 bidder second price auction is preceded by two rounds of bribing prior to the auction each bidder can try to bribe his rival to depart from the auction so that he the briber will become the sole participant bribes are offered sequentially according to an exogenously given order restricting attention to pure strategies and imposing a certain refinement i study the efficient equilibria of this game in any such equilibrium whenever the first mover offers a strictly positive bribe this bribe is given by his surplus his valuation minus the payoff that he would have received in the dominant strategy equilibrium of the auction i derive a necessary and sufficient condition for the existence of such an equilibrium i also extend this equilibrium s construction to a model with general valuations not necessarily ipv