inequality and the dynamics of public opinion the self reinforcing link between economic inequality and mass preferences this article assesses the influence of income inequality on the public s policy mood recent work has produced divergent perspectives on the relationship between inequality public opinion and government redistribution one group of scholars suggests that unequal representation of different income groups reproduces inequality as politicians respond to the preferences of the rich another group of scholars pays relatively little attention to distributional outcomes but shows that government is generally just as responsive to the poor as to the rich utilizing theoretical insights from comparative political economy and time series data from 1952 to 2006 supplemented with cross sectional analysis where appropriate we show that economic inequality is in fact self reinforcing but that this is fully consistent with the idea that government tends to respond equally to rich and poor in its policy enactments

market integration and price transmission in consumer markets of developing countries abstract world prices for agricultural commodities surged in 2006 08 and then again in 2011 12 in many developing countries consumer prices for staple foods such as bread and rice mirrored these movements this paper examines whether prices in urban consumer markets within developing countries are co integrated with prices in world agricultural commodity markets using a single equation error correction model we examine the response of consumer prices for wheat rice maize and sorghum to changes in world market prices and exchange rates in urban centers of the developing world analyzing over 60 country commodity pairings we find that developing countries consumer markets are co integrated with world markets yet we also find that the transmission of changes in both world prices and real exchange rates to domestic consumer prices is not high and that the movement of domestic consumer prices to new equilibrium with world prices after a shock to the latter is relatively slow

rethinking climate change governance and its relationship to the world trading system international climate negotiations have thus far eschewed efforts to incorporate trade restrictions but they have also failed to achieve their objective of reducing global emissions because of this failure some countries are now inclined to act unilaterally and minilaterally in many cases by imposing trade restrictions against third parties such actions are likely to invite retaliation they could even ignite an escalating trade war the best way to avoid such conflicts is not to limit the use of trade restrictions but to make international climate negotiations effective ironically success in addressing climate change multilaterally may require incorporating trade restrictions in a new kind of climate agreement trade restrictions have been used successfully in other international agreements but in these agreements the primary purpose of the restrictions has been to encourage participation that is their primary purpose has been to enforce the agreement this is the role trade restrictions ought to play in a new climate treaty but for them to play this role the design of climate treaties must change if climate treaties are designed strategically the threat to restrict trade will suffice to enforce the agreement and if the threat to restrict trade is credible and the punishment associated with the restriction severe trade restrictions will not actually have to be used by incorporating trade restrictions in this way greenhouse gas emissions can be reduced without putting at risk the gains from multilateral cooperation in trade

the new political economy of taxation in advanced capitalist democracies earlier versions of this paper were presented at the 1999 annual meeting of the american political science association september 1 5 atlanta ga and the 2000 annual meeting of the midwest political science association april 27 30 chicago il the authors thank steffen ganghof philip genschel mark hallerberg alex hicks william keech dennis quinn and the anonymous reviewers and editor of this journal for many helpful comments and dennis quinn for generously sharing data duane swank thanks the german marshal fund of the united states and marquette university for support of work incorporated in this paper data utilized in this paper are available from duane swank marquette edu

workers of the world unite franchise extensions and the threat of revolution in europe 1820 1938 abstract we test the hypothesis that the extension of the voting franchise in europe was related to the threat of revolution we contend that international diffusion of regime contention and information about revolutionary events happening in neighboring countries generate the necessary variation in the perceived threat of revolution using two samples of european countries covering the period from 1820 to 1938 we find robust evidence which is consistent with the threat of revolution hypothesis we also find some evidence that war triggered suffrage reform

the political and economic origins of consumer confidence economic conditions the story usually goes influence consumer confidence which in turn influences both political evaluations and votes but we have little sense of the origins of consumer confidence itself it is generally assumed that monthly reports of the nation s level of consumer confidence respond to objective economic conditions we argue that politics is important for understanding consumer sentiment beyond what we know from economic conditions specifically we demonstrate a direct effect of political evaluations of the president s management of the economy the party of the president extraordinary political events and monetary policy as well as an indirect effect of media coverage of the economy on consumer sentiment after controlling for economic conditions when news coverage is positive citizens give favorable evaluations leading to more positive sentiment our findings suggest that understanding the political economy requires an emphasis on the causal effect of politics as well as economics

do natural resources fuel authoritarianism a reappraisal of the resource curse a large body of scholarship finds a negative relationship between natural resources and democracy extant cross country regressions however assume random effects and are run on panel datasets with relatively short time dimensions because natural resource reliance is not an exogenous variable this is not an effective strategy for uncovering causal relationships numerous sources of bias may be driving the results the most serious of which is omitted variable bias induced by unobserved country specific and time invariant heterogeneity to address these problems we develop unique historical datasets employ time series centric techniques and operationalize explicitly specified counterfactuals we test to see if there is a long run relationship between resource reliance and regime type within countries over time both on a country by country basis and across several different panels we find that increases in resource reliance are not associated with authoritarianism in fact in many specifications we generate results that suggest a resource blessing

does your hedge fund manager smooth returns intentionally or inadvertently abstract we propose an econometrically logical approach that distinguishes intentional from inadvertent smoothing of hedge fund return other than the hedge fund return y we introduce an explanatory variable a market portfolio of hedge fund returns x by connecting x and y some critical parameters are found to be effectively related to testing the two types of return smoothing using those parameters we develop distinct desmoothing algorithms against intentional and inadvertent smoothing our empirical results show that although intentional smoothing is partly responsible for hedge fund smoothing and is done more consistently than inadvertent smoothing return smoothing is mainly caused by the nature of underlying assets

does public support help democracy survive it is widely believed that democracy requires public support to survive the empirical evidence for this hypothesis is weak however with existing tests resting on small cross sectional samples and producing contradictory results the underlying problem is that survey measures of support for democracy are fragmented across time space and different survey questions in response this article uses a bayesian latent variable model to estimate a smooth country year panel of democratic support for 135 countries and up to 29 years the article then demonstrates a positive effect of support on subsequent democratic change while adjusting for the possible confounding effects of prior levels of democracy and unobservable time invariant factors support is moreover more robustly linked with the endurance of democracy than its emergence in the first place as lipset 1959 and easton 1965 hypothesized over 50 years ago public support does indeed help democracy survive

aid effectiveness and the politics of personalism this article examines how political institutions that provide an incentive to cultivate a personal vote condition the relationship between foreign aid and economic growth in developing country democracies politicians in aid recipient countries with high levels of personalism are more likely to pursue corruption and target government spending to narrow constituencies because personalism affects these outcomes it provides incentives to use foreign aid for politically motivated spending at the expense of investing foreign aid in growth promoting public goods using panel data from 61 aid recipient democracies from 1961 to 2001 the author finds that aid increases growth in democracies with less personalist institutions but decreases growth in countries with high personalism the author also shows that personalism conditions the relationship between aid and the composition of government spending aid increases spending on public goods relative to narrow particularistic goods in countries with low person

dynamic pie a strategy for modeling trade offs in compositional variables over time the substance of politics involves competition that evolves over time while our theories about competition emphasize trade offs across multiple categories most empirical models tend to oversimplify them by considering trade offs between one category and everything else we propose a research strategy for testing theories about trade off relationships that shape dynamic compositional variables this approach improves current methods used to analyze compositional dependent variables by addressing two limitations first although scholars have considered compositional dependent variables they have done so in contexts that were not dynamic second current approaches toward graphical presentations become unwieldy when the compositional dependent variable has more than three categories we demonstrate the utility of our strategy to expand current theories of party support and political budgeting in both cases we can extend trade offs across pairs of alternatives e g prime minister versus all other parties or spending on defense versus everything else to competition across multiple alternatives

immigration globalization and unemployment benefits in developed eu states at a time of mounting concern about how traditional welfare states will react to globalization there has been increasing interest in specifying how global economic forces affect welfare policies in industrialized states building on theories from the political economy and comparative institutional literatures we analyze the influence of an important aspect of globalization the flow of immigration focusing on states in the european union we present a theoretical model that illustrates the interactive relationships between immigration eu labor market integration and domestic institutions our findings highlight how immigration in conjunction with domestic political institutions affects unemployment provisions while labor market integrative forces remain in the background the story of immigration and unemployment compensation in the eu is less about the opening of borders and the market forces of integration and more about the domestic political pressures

money supply class power and inflation monetarism reassessed recent sociological work shows that pro market neoliberal policies across advanced capitalist countries are due to distributional struggle between classes in the 1970s and 1980s the orthodox monetarist view alternatively sees neoliberal reform as a nonpolitical attempt to end the stagflation crisis of the 1970s from this perspective monetary and fiscal expansions brought high inflation and central bank discipline and government austerity is the solution but the recent trend of low inflation despite accelerating money growth and government spending contradicts this view analyses of time series cross section data for 23 oecd countries from 1960 to 2009 support the thesis that the rise and fall of inflation is more about distribution of power between labor and capital than about monetary and fiscal discipline inflation in the 1970s originated from a strong working class and hurt capital more than it did workers while neoliberal repression of workers power has kept inflation low from the 1980s onwa

the political manipulation of macroeconomic policy conventional wisdom and some research indicate that macroeconomic policies follow cycles corresponding to political as well as economic forces using vector autoregression analysis i test three models of monetary policy determination for the united states 1953 1984 the electoral cycle model that reelection motivations on the part of presidents create a policy cycle the party differences model that policy changes reflect revolving presidential party administrations and the referendum model that changes in presidential approval create in effect a continuing referendum allowing presidents to monitor their success and change macroeconomic policies when necessary analysis shows that monetary policies as measured by the monetary base and short term interest rates respond to the election cycle and presidential approval although the effect on macroeconomic outcomes is ambiguous party differences are found in real income but are not very significant in other variables

the eurotower strikes back crises adjustments and europe s austerity protests the 2008 global financial crisis came with fears and for some hopes that a new wave of public mobilization would emerge in industrialized countries especially throughout the european union eu the epicenter of the crisis large protests were expected yet the energy with which social groups mobilized against the proposed austerity measures quickly fizzled this article provides new evidence for why this was the case in line with neo keynesian theory we argue that the interest rate adjustments and political announcements of the european central bank ecb limited the potential for mass unrest in the member states of the economic and monetary union emu affected by the crisis we provide evidence for our argument with yearly panel data and a new original data set of monthly political protests between 2001 and 2013 our analyses support the hypothesis that the ecb was able to successfully assuage dissatisfaction with the limited reform options of the eurozone member states in the wake of the eurocrisis

taking time seriously dramatic world change has stimulated interest in research questions about the dynamics of politics we have seen increases in the number of time series data sets and the length of typical time series but three shortcomings are prevalent in published time series analysis first analysts often estimate models without testing restrictions implied by their specification second researchers link the theoretical concept of equilibrium with cointegration and error correction models third analysts often do a poor job of interpreting results the consequences include weak connections between theory and tests biased estimates and incorrect inferences we outline techniques for estimating linear dynamic regressions with stationary data and weakly exogenous regressors we recommend analysts 1 start with general dynamic models and test restrictions before adopting a particular specification and 2 use the wide array of information available from dynamic specifications we illustrate this strategy with data on congressional approval and tax rates across oecd countries

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

a unified method for dynamic and cross sectional heterogeneity introducing hidden markov panel models conventional statistical methods for panel data are based on the assumption that unobserved heterogeneity is time constant despite the central importance of this assumption for panel data methods few studies have developed statistical methods for testing this assumption and modeling time varying unobserved heterogeneity in this article i introduce a formal test to check the assumption of time constant unobserved heterogeneity using bayesian model comparison then i present two panel data methods that account for time varying unobserved heterogeneity in the context of the random effects model and the fixed effects model respectively i illustrate the utility of the introduced methods using both simulated data and examples drawn from two important debates in the political economy literature 1 the identification of shifting relationships between income inequality and economic development in capitalist countries and 2 the effects of the gatt wto on bilateral trade volumes

global market integration and central political control foreign trade and intergovernmental relations in china prevailing economic theories predict that world market integration unleashes centrifugal forces from within and undermines domestic central political authority reversing the conventional bottom up demand side approach this article highlights the incentives of national level political actors it suggests that when institutionally empowered vis a vis the subnational units the center will seek to enhance political control over regions thriving in the global market to extract revenues remedy interregional disparity and maintain central rule through analyzing pooled cross sectional time series data for chinese provinces during 1978 to 2002 it shows that the chinese political center has manipulated its personnel monopoly power within the ruling communist party to exert a tighter grip over provincial party secretaries the top officials in the provinces more exposed to the international market furthermore provinces overseen by more controlled party secretaries actually received less favorable terms du

evaluating price transmission between global agricultural markets and consumer food price indices in the european union this paper uses error correction models to evaluate the extent to and speed at which world agricultural commodity price movements affect consumer food prices in the european union member states we consider three types of world commodity price indices each containing different commodities and weighting criteria results reveal a long run relationship between world agricultural commodity and consumer food prices in over half of the member states consumer prices in different member states and categories of member states respond differently to specific world price indices suggesting that there are disparities in the structure and the efficiency of their food markets the eurozone founders generally have lower transmission elasticities this should be taken into account when predicting the impacts of extreme world price volatility and consumer food price rises prompting governments to pay attention to the most vulnerable households

good times bad times postwar labor s share of national income in capitalist democracies this article returns to a classic question of political economy the zero sum conflict between capital and labor over the division of the national income pie a detailed description of labor s shar

remittances and social spending remittances are a significant source of foreign exchange for developing economies i argue that remittances due to their compensation and insurance functions will increase the general income level and economic security of recipients thereby reducing their perceived income risk over time this will dampen demand from recipients for government taxation and social insurance therefore i expect increases in income remitted to an economy to result in reduced levels of social welfare transfers at the macro level this dynamic can help us to understand spending patterns in developing democracies and the absence of demand for social security transfers in countries with high levels of inequality and economic insecurity i test this argument with a sample of 18 latin american states over the period 1990 to 2009 and subject the central causal mechanism to a battery of statistical tests the results of these tests provide strong support for this argument