cooperative and noncooperative r d in duopoly with spillovers contrary to the usual assumption made in most oligopoly models relations among firms are seldom of a wholly cooperative or noncooperative type in many situations they compete in some fields while they cooperate in others an important example is the case of cooperative research efforts bringing fierce competitors together two types of agreement are observed first r d cooperation can take place at the so called precompetitive stage companies share basic information and efforts in the r d stage but remain rivals in the market place 1 a second type of agreement involves an extended collusion between partners creating common policies at the product level the usual justifications of this extension are the difficulties of protecting intellectual property the idea is then to allow partners who have achieved inventions together to also control together the processes and products which embody the results of their collaboration in order to recuperate jointly their r d investments 2 what could be expected from these types of agreement is a reduction in r d expenditures because of less wasteful duplication and a reduction of total production because of more reprinted from the american economic review 78 5 1133 1137 1988 center for operations research econometrics 1348 louvain la neuve belgium we are grateful to jean

the political economics of redistribution inequality and tax avoidance a central result in the political economy of taxation is that the degree of redistribution is positively linked to income inequality however empirical evidence supporting such a relationship turns out to be mixed this paper shows how the different empirical reactions can be rationalized within a simple model of tax avoidance and costly tax enforcement by focusing on structure induced equilibrium in which taxpayers vote over the size of the income tax and the level of tax enforcement we show that more inequality may well reduce the extent of redistribution depending on two opposing effects the standard political effect and a negative tax base effect working through increases in the average level of tax avoidance and the share of enforcement expenditures in total tax revenue

structural gaiatsu international finance and political change in japan argues that the principal contributor to changes in japan s political economy is the decline of japanese governmental control over capital flows and foreign exchange rates brought about by structural gaiatsu or direct foreign pressure differs from previous analysis of gaiatsu by arguing that international capital and market forces generate gaiatsu not foreign governments and that its influence has been worldwide as well as deeper and more ongoing than bilateral negotiating sessions and joint communiques related to trade discusses how the change has catalyzed a major increase in foreign direct investment by japanese owned corporations a reduction in government s ability to control corporate behavior a diminution of intra corporate linkages conflict within national economic policies and the increased penetration of the japanese economy by foreign financial institutions describes how the change has resulted in an emerging socio economic gap in japan between individuals groups and organizations demonstrates how the japanese experience suggests the transformative power of global capital markets on national political economies particularly those that have been interventionist in nature

the mass political economy of capital controls this article examines mass public opinion toward international financial market regulations known as capital controls conventional wisdom maintains that most voters do not pay attention to or c

endogenous efficiency gains from mergers this article analyzes endogenous efficiency gains from mergers it considers oligopolistic homogeneous good markets and duopolistic and triopolistic markets under product differentiation pd quantity and price competition in a two stage game firms invest in cost reducing innovation with and without mergers and then compete in output prices it is found that in homogeneous good markets all possible mergers generate efficiency gains and that these are most significant when r d spillovers are very low or very high efficiency gains increase with the number of insiders and generally decrease with the number of outsiders with pd in most cases the merger generates efficiency gains when spillovers and or pd are sufficiently high with pd efficiency gains increase with spillovers but may increase or decrease with the level of pd the implications of the results for the relationship between competition and innovation outputs and for merger policy are discussed

in kind transfers self selection and optimal tax policy abstract this paper examines the role of public provision of goods as a redistributive mechanism when tax policies are designed optimally on the basis of the information available to the government we characterize pareto efficient allocations that are attainable through the tax policy and derive the conditions under which public provision will enhance welfare above the maximum that can be achieved through a mix of a general income tax and commodity taxes price subsidies first when there are two produced goods we prove that public provision is always pareto improving the improvement is achieved through changing individuals actual consumption levels second with no restrictions on the number of goods we derive a sufficient condition for public provision to be pareto improving this is achieved by weakening self selection constraints so that welfare improving tax changes are made possible suitable examples include provision of day care basic health care and rights to a minimum old age pension

great expectations financialization and bank bailouts in democracies accelerating financialization and rising societal wealth have meant that democratic governments increasingly provide bailouts following banking crises using a new long run data set we show that despite frequent and virulent crises before world war ii bank bailouts to protect wealth were then exceptionally rare in recent decades by contrast governments have increasingly opted for extensive bailouts well before the major interventions of 2007 2009 we argue that this policy shift is the consequence of the great expectations of middle class voters overlooked in existing accounts associated with the growing financialization of wealth rising leverage and accumulating ex ante financial stabilization commitments by governments these expectations are suggestive of substantially altered policy preferences and political cleavages since the 1970s when severe banking crises returned as an important threat to middle class wealth this pressure from below has led elected governments to provide increasingly costly bailouts with no historical precedent

third world indebted industrialization international finance and state capitalism in mexico brazil algeria and south korea the past fifteen years have seen two important developments in the international economic system the rapid industrialization of many less developed countries ldcs and their increasing indebtedness to private financial institutions massive bank loans have been used to fund industrial growth in many ldcs international financial markets have replaced multinational corporations as the third world s most important source of private foreign capital in four major borrowing countries mexico brazil algeria and south korea the process of indebted industrialization has its roots in the internationalization of finance the increasing role of the state and the use of funds raised on the international capital markets to finance industrial development the results include rapid expansions of ldc industrial production and ldc exports of manufactured products as well as the formation of an implicit partnership between private financial institutions and state capitalist elites in the third world

grounded globalization foreign capital and local bureaucrats in china s economic transformation summary how does a globalized context influence domestic development policies and the allocation of government resources in an authoritarian country like china this study explores the coalitional politics in china s transition from foreign direct investment fdi attraction to domestic technology upgrading which created winners and losers in the local allocation of government resources drawing on comparative case studies semi structured interviews and newly compiled data at the city level the study finds that the varied levels of government support for domestic upgrading are shaped by coalitions for or against the transition the major obstacle for bureaucrats within a city government to garner resources for domestic technology does not directly depend on the overall level of fdi rather it comes from the vested interest of international commerce bureaucrats these bureaucrats are more likely to form a cohesive coalition when the export share of foreign firms is large at the same time such a coalition is more likely to gain political influence when industrial sales are concentrated in large firms the direction and magnitude of foreign capital influence therefore is channeled and manifested through local bureaucratic coalitions this study sheds light on the politics of implementing development policies in an era in which globalization has cultivated fragmented interests within the local bureaucracy

partisan governments the international economy and macroeconomic policies in advanced nations 1960 93 this article examines the impact of parties domestic institutions and the international economy on the conduct of monetary and fiscal policies using time series cross section data from nineteen oecd countries for the years between 1960 and the mid 1990s the results are as follows partisan governments have affected alone and in interaction with the organization of labor markets the pattern of macroeconomic management still their impact has varied over time partly as a function of economic conditions but fundamentally as a function of the degree of financial liberalization and the exchange rate system in place after following broadly similar macroeconomic policies in the 1960s oecd governments pursued divergent monetary and fiscal policies in response to the economic slowdown of the 1970s even when they initially adopted countercyclical measures conservative governments quickly favored tight monetary policies and strove to achieve fiscal discipline by contrast taking advantage of generalized capital controls and floating exchange rates socialist cabinets embraced demand management policies in a systematic fashion mostly through budget deficits in corporatist countries and through both loose monetary and loose fiscal measures in noncorporatist settings as financial liberalization progressed in the early 1980s partisan and institution led differences in macroeconomic policies waned across countries

veto players and the choice of monetary institutions i argue that two types of veto players matter in the choice of monetary institutions party veto players and subnational governments which are strong in federal systems but weak in unitary systems a crucial issue is whether voters can readily identify the manipulation of the economy with party players a second issue concerns the national party veto player s ability to control either fiscal or monetary policy in one party unitary governments identification and control are clear parties where such governments are common prefer flexible exchange rates and dependent central banks in multiparty coalition governments in unitary systems identification is traditionally difficult and the ability to target benefits to specific constituencies under fiscal policy makes fiscal policy autonomy more attractive for coalition governments such governments prefer central banks that are politically independent but that finance government debt under federalism parties that constitute the central government have less control over fiscal policy and they prefer flexible exchange rates subnational governments do not support a dependent central bank that gives more power to the central government

power and the control of capital this essay reviews three recent books on the political economy of finance in postcolonial asia and latin america and suggests a framework for examining the relationship between political power and varying patterns of control over investment resources the stress is on the constraints different controllers of capital can impose on state leaders the conditions under which policymakers can subvert these constraints and how conflicts within the state over the trajectory of policy are mediated by who or what supplies critical investment resources and the institutional channels through which the resources flow

mergers of producers of perfect complements competing in price abstract the endogenous merger model of kamien and zang qje 1990 is generalized to price competition with perfect complements and used to show that some socially desirable mergers will fail to occur we also clarify the link between this merger model and the exogenous merger literature

interests and the wall of ideas germany s eastern trade policy after unification since 1989 germany s domestic and international environments have experienced significant changes thus it is reasonable to expect that the country s long standing foreign and domestic policies will adapt to novel challenges and pressures this article examines eastern trade policy an area in which one might expect to observe a greater degree of government intervention postunification in fact no such adaptation has taken place this empirical puzzle lends itself to analysis based on the interaction of interests institutions and ideas unification altered the prevailing constellation of material economic interests in germany as well as parliamentary electoral institutions however the events of 1989 to 1990 left untouched dominant ideas that shaped the west german political economy as well as crucial sets of domestic and international institutions linked to those ideas the authors conclude that the absence of an interventionist trade response stems from continuity at the nexus of ideas and insti

the dynamics of trade unionism and national economic performance i test two theories of the political processes of trade unions the first argues that wage moderation depends on a centralized labor movement the second contends that institutional conditions permitting unions coordination of bargaining strategies is sufficient coordination is most likely to he achieved when there are small number of unions that do not compete for members that is when union monopoly is high important empirical anomalies may be resolved by analyzing the effects of union centralization and monopoly separately rather than combining them into a composite index of corporatism reanalyzing comparative data from organization of economic cooperation and development countries between 1963 and 1985 largely corroborates the hypothesis that monopoly is more important than either centralization or composite indices of corporatism for national economic performance the conceptual rationale underlying indices of corporatism should be reexamined

the earnings of informal carers wage differentials and opportunity costs a substantial proportion of working age individuals in britain are looking after sick disabled or elderly people often combining their work and caring responsibilities previous research has shown that informal care is linked with substantial opportunity costs for the individual due to forgone wages as a result of non labour market participation in this paper we show that informal carers exhibit further disadvantages even when participating using the british household panel study bhps we decompose wage differentials and show that carers can expect lower returns for a given set of characteristics with this wage penalty varying along the pay distribution and by gender furthermore opportunity costs from forgone wages and wage penalties are estimated and found to be substantial

how do crises lead to change liberalizing capital controls in the early years of new order indonesia how do crises lead to change rationalist approaches to the question that emphasize inexorable structural responses and the pursuit of distributive preferences by newly dominant coalitions are inadequate because they obscure the social mediation of material events and the pervasive uncertainty that follows destabilization of the precrisis status quo the latter constrains actors from fully grasping their distributive preferences until uncertainty is reduced persuasion emerges as a key mechanism of change although constructivist approaches emphasize persuasive practices they have yet to adequately specify the scope conditions underpinning the selection of new ideas this article goes beyond much of the constructivist focus on domestic legitimacy and static notions of resonance by emphasizing external credibility and dynamic processes of resonance building by norm entrepreneurs the author specifies four features what he calls the four cs of crisis resolution that shape the process of idea selection carriers composition crossover appeal and credibility developing these arguments in the case of the early years of new order indonesia the article suggests that whenever a prominent and cohesive group of advocates promotes an idea that has sufficient ideational and distributive appeal and the endorsement of external actors whose seal of approval is perceived as important intersubjective belief change and thus institutional and policy change is more likely

dependency revisited international markets business cycles and social spending in the developing world while increased exposure to the global economy is associated with increased welfare effort in the organization for economic cooperation and development oecd the opposite holds in the developing world these differences are typically explained with reference to domestic politics tradables unions and the like in the developing world are assumed to have less power or interests divergent to those in the oecd interests that militate against social spending i claim that such arguments can be complemented with a recognition that developed and developing nations have distinct patterns of integration into global markets while income shocks associated with international markets are quite modest in the oecd they are profound in developing nations in the oecd governments can respond to those shocks by borrowing on capital markets and spending countercyclically on social programs no such opportunity exists for most governments in the developing world most of which have limited access to capital markets in tough times more significant incentives to balance budgets and as a result cut social spending at the times it is most needed thus while internationally inspired volatility and income shocks seem not to threaten the underpinnings of the welfare state in rich nations it undercuts the capacity of governments in the developing world to smooth consumption and particularly consumption by the poor across the business cycle the author would like to thank steph haggard kristin bakke wongi choe tim jones and seminar participants at duke university penn state university washington university mit and the university of new mexico for their helpful comments nancy brune mark hallerberg and rolf strauch and nita rudra were very generous in providing their capital account oecd fiscal and potential labor power data respectively

ideas versus resources explaining the flat tax and pension privatization revolutions in eastern europe and the former soviet union this article examines the rapid spread of pension privatization and the flat tax in former communist countries to understand why new policy ideas take hold and to elucidate the role played by mater

the political economy of the euro crisis this article introduces the special issue on the political economy of the euro crisis which aims to improve our understanding of the causes consequences and implications of the highly unusual nature of this crisis a financial crisis among developed countries within a supranational monetary union the article provides a brief chronology of the crisis discusses its underlying causes and reviews the ways in which comparative and international political economy can help us understand the crisis the article then discusses the individual and collective contributions of the articles in the special issue and discusses possible future research paths on the political economy of the euro crisis we conclude with a brief discussion of how a political economy perspective informs our understanding of the long term prospects for the eurozone and european integration

increasing returns to scale in financial intermediation and the non neutrality of government policy a general equilibrium model of imperfectly competitive financial intermediaries is constructed and used to study the effects of some standard policy experiments one time increases in the growth rate and in the level of the stock of money have non neutral and sometimes surprising effects on interest rates the quantity of intermediated borrowing and lending the number of intermediary firms inflation and the price level optimal government macroeconomic policy is shown to reflect a tradeoff between public sector frictions and the capital market distortion created by increasing returns to scale and imperfect competition in private intermediation

bringing capital back in or social democracy reconsidered employer power cross class alliances and centralization of industrial relations in denmark and sweden the political domination of social democrats in denmark and sweden beginning in the 1930s was stabilized by the absence of intense opposition by capital to reformist programs aggressively opposed by business and the right elsewhere in the world this quiescence was not a symptom of weakness or dependency rather it was a product of a class intersecting cross class alliance behind institutions of centralized industrial relations that served mutual interests of sectoral groupings dominating both union and employer confederations well organized and militant and backed by social democrats employers in the two countries used offensive multi industry lockouts to force centralization on reluctant unions analysis of these cross class alliances and their pay distributional objectives is used to challenge a widely held view that centralization and social democratic electoral strength are sources of power against capital it also occasions a reassessment of conventional understandings of farmer labor coalitions and the decline of industrial conflict in scandinavia in the 1930s according to the alternative view presented here capital was included rather than excluded from these cross class alliances and industrial conflict subsided dramatically in part because employers achieved politically what they had previously tried to achieve with the lockout

financial interdependence and the state international monetary relations at century s end as the twentieth century draws to a close one can find sharply contrasting views among leading scholars on almost every key issue in positive international political economy how strong are international as opposed to domestic influences on policy how important are issues of national security high politics versus economic considerations low politics what role do institutions international and domestic play in influencing and constraining the behavior of governments why is international cooperation rare but not unheard of the list goes on and on

what you want depends on what you know firm preferences in an information age information has become a core input for many companies this article examines how this affects firm policy preferences in contrast to national typologies of capitalism or microeconomic expectation

revisiting the single european act and the common wisdom on globalization the european program of liberalization launched by the single european act sea of 1987 is commonly seen as a powerful instance of globalization trends of economic integration liberalization and international institution building this article revisits the origins of the sea to argue that the extent and success of its liberalizing program depended on a causally distinct push for european institutional reform a retracing of concrete political patterns behind the sea greatly strengthens broader statistical and theoretical challenges to the notion of strong universal trends of globalization

a political economic critique on the theory of optimum currency areas and the implications for east asia in recent years dynamic debate has arisen as to the desirability and feasibility of creating a monetary union in east asia while the debate has relied heavily on the theory of optimum currency areas this theory has weaknesses in explaining the actual formation of monetary unions at this point political economy analysis appears to demonstrate stronger explanatory power this paper provides a systematic review of the main developments in the literature on optimum currency area theory and in the political economy literature on monetary union in addition it addresses the feasibility of an east asian monetary union by applying the findings in these two academic strands to the region it finds that even though formation of an east asian monetary union may be to some extent feasible from an economic perspective the region s political situation does not appear favourable for the creation of one

leaning right and learning from the left diffusion of corporate tax policy across borders there is an increased focus in comparative politics and international relations on how choices of governments are dependent on choices made by other governments the authors argue that although the relationship between policy choices across countries is often labeled as either diffusion or competition in many cases the theoretical mechanisms underpinning these labels are unclear in this article the authors build a model of social learning with a specific application to the diffusion of corporate tax reductions the model yields predictions that are differentiable from existing models of tax competition specifically the authors argue that social learning is most likely in the wake of tax policy cuts by left governments they test the model using an existing data set of corporate tax rate changes and an author created data set of changes in tax legislation covering 20 organisation for economic co operation and development countries the authors empirical findings show that social learning is an important determinant of corporate tax policy making

voting and turning out for monetary integration the case of the french referendum on the maastricht treaty this article analyses the voting and abstention patterns in french departments in the 1992 referendum on the maastricht treaty in light of the potential impact of monetary union we observe that departmental characteristics implying either greater benefits or lower costs from monetary union are significantly correlated with the approval rate this supports the view that the voting behaviour of individual agents depended on their self interest the impact of economic characteristics on the abstention rate is less clear indeed the variable that is most significantly correlated with abstention in the referendum is average abstention in other elections

societal preferences partisan agents and monetary policy outcomes if different producer groups have divergent interests concerning macroeconomic policies how do societal preferences translate into state policy outcomes i develop and test a party as agent framework for understanding the importance of societal preferences with regard to monetary policy under capital mobility following the principal agent model political parties function as agents for different societal principals rightist parties tend to represent internationally oriented business groups with preferences for monetary convergence while leftist parties do the same for domestically oriented groups preferring monetary autonomy under capital mobility i present statistical evidence showing that oecd leftist governments have been associated with more monetary autonomy and currency variability than their rightist counterparts even after controlling for basic economic indicators such as inflation the statistical evidence also shows that societal group size tends not to explain either autonomous monetary policy choices or exchangerate stability thus even large and wealthy societal groups may be unable to obtain their preferred policy outcome when their respective partisan agents do not hold government power

competition and integration among complements and network market structure this article analyzes the competition and integration among complementary products that can be combined to create composite goods or systems the model generalizes the cournot duopoly complements model to the case in which there are multiple brands of compatible components it analyzes equilibrium prices for a variety of organizational and market structures that differ in their degree of competition and integration the model applies to a variety of product networks including automatic teller machines real estate multiple listing services and airlines crs as well as to nonnetwork markets of compatible components such as computer cpus and peripherals hardware and software and long distance and local telephone services copyright 1992 by blackwell publishing ltd

small states in big trouble state reorganization in australia denmark new zealand and sweden in the 1980s in australia denmark new zealand and sweden in the 1980s coalitions of politicians fiscal bureaucrats and capital and labor in sectors exposed to international competition allied to transform the largest single nontradables sector in their society the state particularly the welfare state they exposed state personnel and agencies to market pressures and competition to reduce the cost of welfare and other state services the impetus for change came from rising foreign public and private debt rising public debt levels and expensive welfare states interacted to create a tax wedge between employers wage costs and workers received wages this undercut international competitiveness worsening current account deficits and leading to more foreign debt accumulation two factors explain variation in the degree of reorganization in each country differences in their electoral and constitutional regimes and the willingness of left parties to risk splitting their core constituencies introduction of market pressures is an effort to go beyond the liberalization of the economy common in industrial countries during the 1980s and both to institutionalize limits to welfare spending and to change the nature of statesociety relations away from corporatist forms of interest intermediation in short not just less state but a different state

voting for change calculation community and euro referendums referendum votes on adoption of the euro in denmark 2000 and sweden 2003 provide unprecedented natural experiments through which to study the political economy of money using exit polling data and multinomial logit statistical models that allow us to separate preferences for the euro from preferences for the european union eu we test economic calculation and political community as determinants of individual level preferences over adoption of the euro we find that calculation operates most clearly where as in sweden the choice of a fixed versus a floating exchange rate regime is at stake while community exerts strong effects across the two cases we would like to thank krister andersson jerry cohen robert fishman jennifer fitzgerald jeff frieden eric helleiner jacques hymans lars jonung kate mcnamara jennifer wolak and the anonymous reviewers for helpful comments and helga sverrisdottir for outstanding research assistance we are grateful to jens wagner of the danish data archive and torbja rn berglund of the swedish social science dataservice for providing the data used in this note neither these individuals nor their respective agencies are responsible for the interpretations contained herein

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

the rise in old age longevity and the market for long term care this paper analyzes how markets for old age care respond to the aging of populations we consider how the biological forces which govern the stocks of frail and healthy persons in a population interact with economic forces which govern the demand and supply for labor intensive care we test our predictions empirically using state and county level evidence on the u s market for long term care in nursing homes over the last three decades excerpt

de globalization theories predictions and opportunities for international business research de globalization now a distinct possibility would induce a significant qualitative shift in strategies structures and behaviors observable in international business ib coming to terms with this qualitative shift would require ib research to develop a much deeper integration of politics the key driver of de globalization to support such integration this paper introduces two relevant theories of de globalization from political science liberalism and realism both predict de globalization under current conditions but lead to different expectations about the future world economy liberalism suggests a patchwork of economic linkages while realism predicts the emergence of economic blocs around major countries this paper discusses the resulting opportunities in three areas of ib research political strategies and roles of multinational enterprises mnes global value chains and the role of the national context for political strategies and roles there is a need to explore how regular business activities and deliberate political agency of mnes affect the political sustainability of globalization for value chains questions include their future reach and specialization changes in organizational forms and the impact of political considerations on location decisions research opportunities on national contexts relate to their ability to sustain globalization and their connection with economic and military power

who will care employment participation and willingness to supply informal care the impact of informal care responsibilities on the willingness and ability of caregivers to undertake paid employment has been the subject of a number of studies in contrast the effect of employment status on willingness to undertake informal care has been less well explored this paper concentrates on this less studied direction of causality using the data provided by 15 waves of the british household panel survey we find that employment participation and earnings both impact negatively on willingness to supply informal care this evidence has implications for health and social care policy since informal care has been shown to be a significant substitute for formal long term care

modelling imperfectly appropriable r d via spillovers abstract we provide an extensive comparison of the well known r d models of d aspremont jacquemin and kamien muller zang exposing full or partial conflict in key conclusions and policy prescriptions using a mix of formal and or intuitive criteria we argue that the first model is of questionable validity for large spillover values the latter being characterized by jointly increasing returns to scale in the r d process an argument leading to equivalence between the two r d processes but not to agreement on some key conclusions is exposited in conclusion the models emerge as fundamentally different although a unilateral shift in the cost function of the first leads to agreement in all equilibrium outcomes

economic crisis and policy choice the politics of adjustment in the third world the acute economic pressures of the 1980s have forced virtually all of latin america and africa and some countries in asia into painful austerity programs and difficult economic reforms scholars have intensively analyzed the economics of this situation but they have given much less attention to the political forces involved in this volume a number of eminent contributors analyze the politics of adjustment in thirteen countries and nineteen governments drawing comparisons not only across the full set of cases but also within clusters selected to clarify specific issues why do some governments respond promptly to signs of economic trouble while others muddle indecisively for years why do some confine their response to temporary macroeconomic measures while others adopt broader even sweeping programs of reform what leads some countries to experiment with heterodox approaches while most however reluctantly pursue orthodox courses why confronted with intense political protest have some governments persisted while others have altered or abandoned course the answers to these questions are political not economic and they are examined here by thomas m callaghy stephan haggard miles kahler robert r kauman joan m nelson and barbara stallings

doctors with borders occupational licensing as an implicit barrier to high skill migration research on the political economy of immigration overlooks the specificity of human capital in skilled occupations and its implications for immigration preferences and policymaking conclusions that skilled americans are unconcerned about labor market competition from skilled migrants build on a simple dichotomy between high and low skill migrants in this article we show that natives turn to occupational licensing regulations as occupation specific protectionist barriers to skilled migrant labor competition in practice high skill natives face labor market competition only from those high skill migrants who share their occupation specific skills licensure regulations ostensibly serve the public interest by certifying competence but they can simultaneously be formidable barriers to entry by skilled migrants from a collective action perspective skilled natives can more easily secure sub national occupation specific policies than influence national immigration policy we exploit the unique structure of the american medical profession that allows us to distinguish between public interest and protectionist motives for migrant physician licensure regulations we show that over the 1973 2010 period states with greater physician control over licensure requirements imposed more stringent requirements for migrant physician licensure and as a consequence received fewer new migrant physicians by our estimates over a third of all us states could reduce their physician shortages by at least 10 percent within 5 years just by equalizing migrant and native licensure requirements this article advances research on the political economy of immigration and highlights an overlooked dimension of international economic integration regulatory rent seeking as a barrier to the cross national mobility of human capital and the public policy implications of such barriers

the labour market costs of community care this paper reports an empirical investigation into the influence of informal care responsibilities on the labour supply of women the objective is to examine the argument that the uk policy of caring for the chronic sick in the community involves a nontrivial opportunity cost in the form of the forgone labour supply of the informal carers upon which it relies we find that informal carers who care for less than 20 h per week are in fact more likely to participate in the labour market but tend to work for fewer hours per week than otherwise similar noncarers informal carers who care for 20 h or more a week are less likely to participate but only slightly however when they do undertake formal employment they tend to earn less per hour and work for fewer hours per week

death of the partisan globalization and taxation in south america 1990 2006 correcting the relative lack of attention to the revenue side of public finance this article examines to what extent globalization constrains partisan tax policy the author hypothesizes that political ideology is still a good predictor of taxation in the neoliberal era advancing this argument against the prominent globalization thesis that global economic pressures have supplanted political ideology as the driving force of revenue policy although research in developed democracies identifies a resilient link between partisanship and policy outcomes the impact of the drastic neoliberal transition on partisan policy making in the developing world remains poorly understood using time series cross section data to evaluate partisan taxation in south america the author finds that partisanship is a reliable indicator of tax revenue in the neoliberal era counterintuitively however the promarket right generates more tax revenue than the interventionist left the author argues that this previously unexpec

phoenix risen the resurrection of global finance of all the many changes of the world economy since world war ii few have been nearly so dramatic as the resurrection of global finance a review of five recent books suggests considerable diversity of opinion concerning both the causes and the consequences of financial globalization leaving much room for further research competing historical interpretations stressing the contrasting roles of market forces and government policies need to be reexamined for dynamic linkages among the variables they identify likewise impacts on state policy at both the macro and micro levels should be explored more systematically to understand not just whether constraints may be imposed on governments but also how and under what conditions and what policymakers can do about them finally questions are also raised about implications for the underlying paradigm conventionally used for the study of international political economy and international relations more generally

exchange rate theory and practice this volume grew out of a national bureau of economic research conference on exchange rates held in bellagio italy in 1982 in it the world s most respected international monetary economists discuss three significant new views on the economics of exchange rates rudiger dornbusch s overshooting model jacob frenkel s and michael mussa s asset market variants and pentti kouri s current account portfolio approach their papers test these views with evidence from empirical studies and analyze a number of exchange rate policies in use today including those of the european monetary system

the globalization of liberalization policy diffusion in the international political economy one of the most important developments over the past three decades has been the spread of liberal economic ideas and policies throughout the world these policies have affected the lives of millions of people yet our most sophisticated political economy models do not adequately capture influences on these policy choices evidence suggests that the adoption of liberal economic practices is highly clustered both temporally and spatially we hypothesize that this clustering might be due to processes of policy diffusion we think of diffusion as resulting from one of two broad sets of forces one in which mounting adoptions of a policy alter the benefits of adopting for others and another in which adoptions provide policy relevant information about the benefits of adopting we develop arguments within these broad classes of mechanisms construct appropriate measures of the relevant concepts and test their effects on liberalization and restriction of the current account the capital account and the exchange rate regime our findings suggest that domestic models of foreign economic policy making are insufficient the evidence shows that policy transitions are influenced by international economic competition as well as the policies of a country s sociocultural peers we interpret the latter influence as a form of channeled learning reflecting governments search for appropriate models for economic policy

union density and political strikes why do trade unions organize antigovernment strikes in some countries but not in others this article argues that there is a curvilinear relationship between union density and political strike activity political strikes are rare in countries with low union density since effective protests require a basic level of organizational capacity they are also rare in countries with high union density since a government that faces a strong union movement has powerful incentives to adjust its policies in order to avoid open confrontation but political strikes are relatively common in countries with moderate levels of union density since it is difficult for governments and unions to find viable compromises when the strength of the unions is not secure the empirical part of the article estimates the relationship between union density and the likelihood of political strikes in two samples of advanced democracies

investing in the peace economic interdependence and international conflict research appears to substantiate the liberal conviction that trade fosters global peace still existing understanding of linkages between cone ict and international economics is limited in at least two ways first cross border economic relationships are far broader than just trade global capital markets dwarf the exchange of goods and services and states engage in varying degrees of monetary policy coordination second the manner in which economics is said to inhibit cone ict behavior is implausible in light of new analytical insights about the causes of war we discuss and then demonstrate formally how interdependence can ine uence states recourse to military violence the risk of disrupting economic linkages particularly access to capital may occasionally deter minor contests between interdependent states but such opportunity costs will typically fail to preclude militarized disputes instead interdependence offers nonmilitarized avenues for communicating resolve through costly signaling our quantitative results show that capital interdependence contributes to peace independent of the effects of trade democracy interest and other variables students of world politics have long argued that peace is a positive externality of global commerce theorists like montesquieu and kant and practitioners like woodrow wilson asserted that economic relations between states pacify political interaction mounting evidence in recent years appears to substantiate these claims multiple studies many identie ed with the democratic peace link interstate trade with reductions in militarized disputes or wars 1 while we concur with the evolving

partisan and electoral motivations and the choice of monetary institutions under fully mobile capital central bank independence and pegged exchange rates have each been viewed as solutions to the inflationary bias resulting from the time inconsistency of discretionary monetary policy while it is obvious that a benevolent social planner would opt for such an institutional solution it is less obvious that a real world incumbent facing short term partisan or electoral pressures would do so in this article i model the choice of monetary institutions from the standpoint of a survival maximizing incumbent it turns out that a wide range of survival maximizing incumbents do best by forfeiting control over monetary policy while political pressures do not in general discourage monetary commitments they can influence the choice between fixed exchange rates and central bank independence i highlight the importance of viewing fiscal policy and monetary policy as substitutes and identify the conditions under which survival maximizing incumbents will view fixed exchange rates and central bank independence as substitutes in so doing i provide a framework for integrating other contributions to this volume

your next of kin or your own career caring and working among the 50 of europe an increasing demand for both formal and informal care is likely to result from the ongoing demographic transition at the same time as there is a further move away from the traditional domestic division of labour public policy making that aims at increasing the supply of informal care necessitates knowledge about the relative importance of various incentives for individual care providers this paper takes as a point of departure that the willingness to supply informal care is partly explained by the extent to which it adversely affects labour market outcomes and analyses the effect on labour market outcomes of providing informal care to one s elderly parent s among the 50 of europe data from share survey of health ageing and retirement in europe was used to examine the association between on the one hand hours of informal care provided and on the other 1 the probability of employment 2 hours worked and 3 wages respectively the results suggest that giving informal care to one s elderly parents is associated with significant costs in terms of foregone labour market opportunities and that these adverse effects vary between countries

public inflation aversion and the political economy of macroeconomic policymaking do the macroeconomic priorities of citizens differ across countries if so what accounts for this variation and what are its consequences for explanations of the choice of monetary institutions macroeconomic policy and international monetary cooperation this article uses survey data from twenty advanced economies to examine individual preferences about macroeconomic priorities the analysis establishes three key findings first the results suggest that economic context defined by inflation and unemployment performance has a substantial impact on the public s economic objectives in a way that is broadly consistent with the specification of utility loss functions in the theoretical political economy literature second the results suggest that there is significant cross country variation in inflation aversion controlling for economic context third some of this variation is accounted for by national level factors affecting the aggregate costs of inflation and unemployment these results have significant implications for optimal monetary policymaking the explanation of variation in economic outcomes and for accounts of the choice of institutional frameworks for policymaking i thank the bank of england the center for basic research in the social sciences and the institution for social and policy studies for research support and jim alt andrew bailey bill bernhard lawrence broz john freeman jeff frieden jim granato shigeo hirano david lake jeff lax simon price rose razaghian ron rogowski david stasavage gabriel sterne mike tomz jim vreeland the editor and two anonymous reviewers for helpful comments all views expressed are those of the author and do not represent those of the bank of england

political parties and monetary commitments we argue that political parties will choose monetary institutions in order to help them win elections and retain office increased levels of economic openness in the industrial democracies have complicated the pursuit of office by altering the policy preferences of constituents and decreasing the ability of cabinet ministers to deliver promised economic outcomes we contend that monetary commitments can help political parties manage diverse constituent interests restore policy effectiveness and ultimately maintain their position in office therefore we expect that fixed exchange rates and central bank independence can improve cabinet durability especially under conditions of economic openness in the first section we discuss how fixed exchange rates and central bank independence can insulate cabinets from the political shocks of increased economic openness to determine the political value of these commitments we then test the effect of exchange rate commitments and central bank independence on cabinet durability in the second section in the third section we use the results of our statistical models to generate expected cabinet durability for the countries in our sample under alternative institutional configurations by comparing the expected durabilities we show that most monetary reforms have helped or at least not hurt expected cabinet durability

the origins of persistent current account imbalances in the post bretton woods era why do some countries run persistent current account surpluses why do others run deficits often over decades leading to enduring global imbalances such persistent imbalances are the root cause of many financial crises and a major source of international economic conflict we propose that differences in wage bargaining institutions explain a large share of imbalances through their effect on the trade balance in countries with coordinated wage bargaining wage growth in export industries can be restrained to ensure competitiveness leading to persistent trade surpluses we estimate the contribution of these institutions to trade balances in organisation for economic co operation and development oecd member countries since 1977 and find ample support for our hypothesis contrary to much of the literature the choice of fixed or floating exchange rate regimes has only a small effect on trade or current account balances in other words internal adjustment in surplus countries via wage bargaining institutions trumps external adjustment by deficit countries

political parties and the supply side of the economy the provision of physical and human capital in advanced economies 1960 90 theory partisan tenure of government in contrast to institutionalist and structural approaches is used to explain the nature of governmental strategies to affect the supply side of the economy the provision of the input factors capital and labor hypotheses supply side economic strategies are a function of the party in office left wing governments spend heavily in physical and human capital formation to raise the productivity of factors and the competitiveness of the economy rightwing governments rely instead on private agents to maximize economic growth the organization of the domestic political economy and the international economy which place heavy limits on the capacity of parties to affect the conduct of macroeconomic policies hardly constrain the choice of supply side economic strategies methods regression analysis of data for levels of public spending on gross fixed capital formation and on education in oecd nations from 1960 to 1990 results supply side policies conform to partisan preferences throughout the period examined the institutional configuration of the economy affected policies jointly with government partisanship until the oil shock but not afterwards economic openness does not constrain the choice of supply side policies

product differentiation process r d and the nature of market competition abstract we investigate the relationship between process and product rd ii bertrand firms have a stronger incentive for product rd and iii cooperation in product r d promotes both types of r d relative to competition whereas cooperation in both types of r d discourages r d relative to cooperation in just product r d

postponing retirement the political effect of aging abstract conventional economic wisdom suggests that because of the aging process social security systems will have to be retrenched in particular retirement age will have to be largely increased yet is this policy measure feasible in oecd countries since the answer belongs mainly to the realm of politics i evaluate the political feasibility of postponing retirement under aging in france italy the uk and the us simulations for the year 2050 steady state demographic economic and political scenario suggest that retirement age will be postponed in all countries while the social security contribution rate will rise in all countries but italy the political support for increasing the retirement age stems mainly from the negative income effect induced by aging which reduces the profitability of the existing social security system and thus the individuals net social security wealth

capital mobility and the origins of stock markets i illustrate the accepted though hardly researched idea that political institutions play a role in locking in factor specificity across sectors space and borders i use the emergence of modern capital markets in the nineteenth century a process that threatened to redeploy financial resources away from land and traditional sectors to heavy industry as a test case to ascertain the degree of domestic financial capital mobility in nine advanced industrialized countries the main finding is that cross national variations in financial capital mobility holding constant the level of economic development reflect the degree of state centralization

majority rule and the public provision of a private good this paper extends the literature on the socialization of commodities by developing a model of voting over the public provision of a private good health care

public provision of private goods government may provide a good that can if legally permitted be supplemented by private purchases policy is determined by majority rule under standard assumptions on preferences a majority voting equilibrium exists a regime of positive government provision with no restriction on private supplements is shown to be majority preferred to a regime of either only market provision or only government provision combined public and private expenditure on the good is higher under this dual provision regime than under either of the alternatives under some preference configurations the median income voter is pivotal under others a voter with income below the median is pivotal

economic actors lobbying influence on the prospects for war and peace political scientists and economists have long been interested in the role of special interests in the policymaking process in the past few years a series of important new books have argued forcefully that the lobbying activities of economic actors have an important influence on the prospects for war and peace all of these analyses claim that whether economic actors enhance or decrease the likelihood of conflict ultimately depends on the domestic political balance between economic actors who have a strong vested interest in pushing for peace versus those that do not i advance two contrary arguments at least among the advanced states i posit there are no longer any economic actors who will be favorable toward war and who will lobby the government with this preference all of the identified mechanisms that previously contributed to such lobbying in these states have been swept away with the end of colonialism and the rise of economic globalization in particular i show that the current structure of the global economy now makes it feasible for foreign direct investment to serve as an effective substitute for conquest in a way that was not possible in previous eras my second argument concerns those economic actors in advanced states with a preference for peace i posit that it has become unnecessary for them to directly lobby the government to avoid war on economic grounds because economic globalization the accumulation of decisions by economic actors throughout the globe now has sufficiently clear economic incentives for leaders

international institutions and domestic compensation the imf and the politics of capital account liberalization certain governments have been faster than others in relaxing their restrictions on the cross border movement of capital how can we explain the timing and extent of financial liberalization across countries since the 1970s we argue that imf stabilizationprogramsprovideawindowofopportunityforgovernmentstoinitiatefinancialreforms butthatpolicymakers are more likely to seize this opportunity when welfare expenditures are high large loans from the imf shield policy makers from the costs of financial reform while welfare expenditures provide credibility to the government s ex ante promises of compensation to individuals who are harmed by the reforms we test this hypothesis on data for 87 countries from 1975 to 2002 we employ a spatial autoregressive error sample selection model which accounts for the nonrandom participation of countries in imf programs as well as the processes of international policy diffusion the results provide strong support for the interactive effect of imf programs and domestic welfare expenditures on financial liberalization

competition policy and innovation l article analyse les complementarites et les tensions entre la concurrence et l innovation tant du point de vue des instruments d analyse que du point de vue des politiques economiques

asset specificity and the political behavior of firms lobbying for subsidies in norway previous research into endogenous trade policy has described extensively the political incentives of firms with specific assets but no studies have shown directly that firms behave as predicted we adopt insights from transaction costs economics to develop measures of asset specificity and to investigate how variation in these measures affects the political behavior of firms in particular we examine the lobbying choices of norwegian firms in the 1980s given available subsidy funds from norway s oil boom and some government decisions in the 1970s firms with more specific assets faced potentially greater losses from adjusting to new activities in the face of competitive pressures and thus had greater incentives to lobby for subsidies to protect themselves joint contacting of parliament and government on behalf of firm interests by representatives of both management and labor should be particularly likely where firms had specific assets data analysis shows that asset specificity as indicated by r d intensity and job immobility predicts joint contacting independently of plausible alternative explanatory variables like firm size and export orientation

openness and the politics of potable water improving access to potable water has become an increasingly urgent concern for developing nations in the current era of globalization according to standard wisdom if developing countries undertake certain domestic reforms such as investing in infrastructure and engineering then safe and clean drinking water will improve this analysis uncovers however that in addition to such domestic efforts one of the greatest factors affecting water uncertainty is in fact internationally induced trade surprisingly both scholars and practitioners have neglected the potential impacts of expanding trade on access to potable water this analysis is the first large n cross national study of water that focuses on the interplay of trade and politics both international and domestic as the primary driving forces behind improvements in or constraints to water access the author hypothesizes that growing export pressures are constraining drinkable water in poor countries but a particular domestic condition can mit

the impact of m a on the r d process an empirical analysis of the role of technological and market relatedness abstract using information on 31 in depth cases of individual m a deals we show that technological and market relatedness between m a partners distinctly affects the inputs outputs performance and organisational structure of the r d process while the findings in the literature on the effect of m a on r d are quite mixed we can sharpen results by analysing data at the level of the r d process this comes at the price of a smaller sample and more qualitative data for which caution in the interpretation is necessary m a between partners with ex ante complementary technologies result in more active r d performers after the m a in sharp contrast when merged entities are technologically substitutive they significantly decrease their r d level after the m a moreover r d efficiency increases more prominently when merged entities are technologically complementary than when they are substitutive these two findings on the r d level and the performance support the scope economy effect of m a on the one hand and reject the scale economy effect of m a on the other next for cases in which partners were active in the same technological fields before the m a the reduction of r d is more prominent while the r d efficiency gain is smaller if merged entities were rivals in the product market prior to their merger than if they were non rival this suggests that rival firms reap little technology gains from mergers

international macroeconomic policy coordination when policymakers do not agree on the true model the authors relax the assumption of the literature on international coordination that policymakers know the true model t wo countries will still be able to agree on a cooperative policy pack age that each believes will improve the objective function relative t o the nash noncooperative solution however the bargaining solution may move the target variables in the wrong direction these points ar e illustrated with monetary and fiscal multipliers taken from simulat ions of ten leading econometric models out of 1 000 possible combina tions of models that could represent u s beliefs non u s beliefs and the true model monetary coordination improves u s welfare in on ly 546 cases copyright 1988 by american economic association

from populism to neoliberalism labor unions and market reforms in latin america in the late 1980s populist labor parties which had advanced protectionism and state intervention in the postwar period implemented market oriented reforms in argentina mexico and venezuela in all three countries market reforms hurt their union allies the interaction between allied unions and governing labor parties however varied across countries and across sectors within the same country while some unions endorsed neoliberal reforms others rejected them despite their long term alliance with governing parties while some unions obtained concessions others failed to do so this article argues that the incentives created by partisan loyalties partisan competition and union competition explain these interactions partisan loyalty results from the long term affiliation of unions with a political party partisan competition takes place among union leaders affiliated with different political parties for the control of unions union competition occurs in diverse national and sectoral contexts among labor organizations for the representation of the same workers loyalty derived from a long term affiliation with the incumbent party facilitates collaboration between labor unions and the government yet if partisan competition makes loyal union leaders afraid of being replaced by activists affiliated with the opposition parties their incentives for militancy increase as a way of showing their responsiveness to the rank and file hurt by market reforms union competition for the representation of the same workers makes coordination more difficult thereby weakening unions and making them less likely to obtain concessions from the government despite their partisan loyalty the article presents empirical evidence from eighteen cases including national confederations and individual unions in five economic sectors in argentina mexico and venezuela to test this theory

globalization taxation and burden shifting in latin america most researchers interested in the relationship between global markets and public policy focus on advanced industrial democracies in contrast we examine competing hypotheses as to globalization s effect on governments by expanding the scope of the discussion to include developing nations more specifically we investigate the relationship between international market integration and the evolving burden of taxation on capital as well as the subsequent response of markets to shifts in tax policy in latin america since the late 1970s consistent with our theoretical expectations we find that global market forces are more constraining vis a vis tax policy in latin america than in the world s wealthiest nations despite these market based pressures however national politics continue to influence tax policy in latin america in a manner consistent with findings on advanced industrial democracies as such developing nations continue to have some room to manipulate policy though within the context of a more strictly neoliberal context than their counterparts in advanced industrial democracies

the origins of financial openness a study of current and capital account liberalization theory we assess the determinants of the national regulation of international finance or the comparative degree of national financial openness or closure hypotheses partisanship interacts with a nation s factor endowments to account in part for different international financial policies by governments of the same partisan hue methods we offer a quantitative measure of international financial openness or current and capital account regulation for 21 member countries of the organization for economic cooperation and development for 1950 88 we use regression analysis employing panel corrected standard errors to discover the determinants of financial openness results our main finding is that political partisanship substantially explains openness but does so in complex ways differences in both political institutional arrangements and types of political economy also account for part of the differences in international financial regulation

the political economy of long term care we build a two dimensional political economy model to explain the provision and financing of long term care and income redistribution voting agents differ in need and income opening up two conflicts one sets families with disabled parents who are in favor of a public long term care program against the ones without such parents who oppose public financing the other sets the poor against the rich with the former preferring heavier income taxation than the latter we show that a structure induced equilibrium always exists and that it is unique if informal care is provided in equilibrium the equilibrium not only explains the negative association of income inequality and long term care financing but also allows predictions about how demographic change might impact long term care arrangements and expenses

national tax systems versus the european capital market capital taxation alberto giovannini the current structure of taxes on capital income across ec countries can be exploited by corporations to reduce tax burdens skilled individuals can indulge in tax avoidance too the liberalization of capital movements stands to turn tax avoidance into a cottage industry this article provides a primer on capital income taxes and describes strategies which reduce the tax burden from a policy perspective the question is how to avoid massive tax evasion after 1992 there is no need to harmonize if the right taxation principle is adopted two principles are contrasted the territorial principle according to which taxes are levied on domestic investment irrespective of the country of residence of the beneficiary and the worldwide principle according to which taxes are levied on domestic savings irrespective of where they are invested it is shown that the worldwide principle involves much fewer distortions than the territorial principle a strict application of this principle would effectively solve the problem of tat evasion in europe without requiring full harmonization of the tax systems its full implementation would require the abolition of withholding taxes the elimination of tax deferrals which are quite pervasive throughout europe and an in depth review of blocking and secrecy laws

democracy and markets the case of exchange rates the relationships between the workings of democratic institutions and currency markets are studied severa competing propositions about how political re equilibration affects currency markets are derived and tested the results support the view that democratic politics affects currency markets expectations and uncertainty about electoral outcomes and government survival affect the probability of switching between currency market equilibria additionally opinion polls about chief executive performance have a direct effect on the probabilities of switches between currency regimes suggesting that these polls cause currency traders to revise their expectations about the stability of governments and or the contents of public policies electoral institutions mitigate the impact of politics on currency market equilibria political effects are weaker in countries with proportional representation electoral systems than in countries with majority plurality systems there is less evidence that central bank independence consensual corporatist systems or political coherency reduces the effect of politics on currency markets he study of democracy and markets is at the heart of political economy understanding how political equilibration and economic equilibration are related is one of the main challenges facing this field the size and nature of currency markets make them especially important cases substantively with globalization currency markets have become important constraints on elected governments reducing their room to maneuver analytically in comparison to most goods markets currency markets are informationally efficient asset markets with distinctive equilibria today s exchange rate is determined by currency traders fully informed expectations about tomorrow s exchange rate the sensitivity of these markets to the arrival of new information therefore makes them particularly well suited for studying the effects of political news and uncertainty on economic equilibration 1 this article demonstrates there are informationally relevant political factors insofar as exchange rate determination is concerned factors that directly affect the transition probabilities between currency market equilibria moreover these factors vary in important ways across democracies some electoral institutions lessen the effects of politics on currency

growth volatility and financial liberalization we examine the effects of both equity market liberalization and capital account openness on real consumption growth variability we show that financial liberalization is mostly associated with lower consumption growth volatility our results are robust surviving controls for business cycle effects economic and financial development the quality of institutions and other variables countries that have more open capital accounts experience a greater reduction in consumption growth volatility after equity market openings we also find that financial liberalizations are associated with declines in the ratio of consumption growth volatility to gdp growth volatility suggesting improved risk sharing our results are weaker for liberalizing emerging markets but we never observe a significant increase in real volatility moreover we demonstrate significant differences in the volatility response depending on the size of the banking and government sectors and certain institutional factors

the efficiencies defence in merger cases implications of alternative standards we compare alternative interpretations of the efficiencies defence provided under canadian competition law for mergers found likely to lessen competition substantially we find the respective percentage reductions in long run marginal cost required for a profitable merger to satisfy the total surplus price and two weighted surplus standards given pre merger market structure we find that when efficiency spillovers are low and markets are concentrated the cost reduction required to satisfy the price standard is over four times higher than is required for a profitable total surplus increasing merger and the cost reductions required to satisfy the weighted surplus standards are nearly twice as high les auteurs comparent diverses interpretations des strategies de defense en terme d e cacite pour les fusions dont on pense qu elles vont reduire substantiellement le concurrence dans le cadre de la loi sur la concurrence au canada ils identifient que les reductions en pourcentage dans le cout marginal de longue periode qui sont requises pour qu une fusion profitable satisfasse aux normes du surplus total du prix et des deux surplus ponderes compte tenu de la structure de marche avant la fusion il semble que quand les e ets de debordement d efficacite sont faibles et que les marches sont concentres les reductions de couts requises pour satisfaire la norme de prix soient quatre fois plus elevees que ce qui est requis dans le cas d une fusion profitable qui accroit le niveau de mieux etre et presque deux fois deux fois plus elevees pour satisfaire la norme des surplus ponderes

monetary union and wage bargaining institutions in the eu extrapolating from some member state experiences this article considers the question of how monetary union in the eu is likely to impact the preferences of governments employers and unions regarding the organization of wage bargaining european monetary union involves a decentralization of wage bargaining centered at the national level in relation to monetary policy centralized at the european level drawing on recent literature and on the experience of two member states italy and spain which prior to emu underwent periods of intense bargaining fragmentation the author argues that the imposition of restrictive monetary policy in a fragmented wage bargaining context in which workers nonetheless have substantial bargaining rights tends to have perverse effects these effects ultimately led governments and bargaining actors in italy and spain to seek a reorganization of bargaining that gave national actors greater control over wage setting the article considers to what extent a similar dynamic might play out in the euro zone

invested interests the politics of national economic policies in a world of global finance capital moves more rapidly across national borders now than it has in at least fifty years and perhaps in history this article examines the effects of capital mobility on different groups in national societies and on the politics of economic policymaking it begins by emphasizing that while financial markets are highly integrated within the developed world many investments are still quite specific with respect to firm sector or location it then argues that contemporary levels of international capital mobility have a differential impact on socioeconomic groups over the long run increased capital mobility tends to favor owners of capital over other groups in the shorter run owners and workers in specific sectors in capital exporting countries bear much of the burden of adjusting to increased capital mobility these patterns can be expected to lead to political divisions about whether or not to encourage or increase international capital market integration the article then demonstrates that capital mobility also affects the politics of other economic policies most centrally it shifts debate toward the exchange rate as an intermediate or ultimate policy instrument in this context it tends to pit groups that favor exchange rate stability against groups that are more concerned about national monetary policy autonomy and therefore less concerned about exchange rate stability similarly it tends to drive a wedge between groups that favor an appreciated exchange rate and groups that favor a depreciated one these divisions have important implications for such economic policies as european monetary and currency union the dollar yen exchange rate and international macroeconomic policy coordination

competing commitments technocracy and democracy in the design of monetary institutions in this article i refine and expand the agenda for research on monetary institutions first i evaluate the analyses and research designs presented in this special issue of international organization out of this evaluation several ideas about how to produce a third generation of research on this topic emerge specific ideas include how to create a better synthesis with certain branches of economics such as information economics broaden the welfare criteria on which institutional choices are made deepen the analyses of coalitional and other political processes on which the choice of institutions are based and strengthen the tests that are offered in support of these choices in the second part of this article i explore questions of how popular sovereignty over economic policy and institutional choice are achieved i show that the institutional regimes proposed in the special issue are in a sense democratic as long as the public s perceived consensus about economic policies and macroeconomic outcomes is real however if as new work suggests there is genuine dissensus about policy and macroeconomic objectives it is no longer clear that the regimes proposed in the special issue are democratic in the conclusion i briefly discuss a possible crisis of imagination in institutional design