the political economy of clientelism in this paper we argue that the political commitment problem provides an explanation for why much income redistribution takes an inefficient form particularly employment in the public sector a job is a credible way of redistributing when it provides rents such as in situations with moral hazard and employment is optimal ex post moreover a job is selective and reversible and thus ties the continuation utility of a voter to the political success of a particular politician we show that the need to make offers of employment incentive compatible leads to inefficiencies in the supply of public goods we also show that such inefficient redistribution becomes relatively attractive in situations with high inequality and low productivity inefficiency is increased when the stakes from politics are high when inequality is high and when money matters less than ideology in politics

on the practical limits to substitution abstract this paper considers the arguments for weak vs strong sustainability the weak sustainability position held by many mainstream neoclassical economists such as solow and weitzman is that almost all kinds of natural capital can be substituted by man made capital the contrary position known as strong sustainability holds that many of the most fundamental services provided by nature cannot be replaced by services produced by humans or man made systems the paper discusses the limits of substitution from a physical point of view it concludes that while there is considerable scope for substitution in some domains the limits to substitutability in the medium term at least are real and important in effect the paper supports the strong sustainability position

adaptive versus rational expectations and the fisher effect substantial controversy remains over the causes of interest rate fluctuations this controversy frequently focuses on the role of expected inflation the theoretical determinats of the nominal rate are examined usig the is lm as model and it is shown that the augmented fisher equation is sensitive to the expectations generating mechanism the model assumes that the nominal rate ceteris paribuschanges one for one with expected inflation the total impact however may take any value from zero to one the empirical analysis sequentially estimates reduced form equations based on adaptive and rational expectations the results confirm prior findings that nominal rates do not adjust one for one with inflation the results also yield some insight on the applicability of the assumption of rational versus adaptive expectations

partisan competition growth and the franchise we present an argument for changes in the franchise in which an elite split along economic interests uses the suffrage to influence implemented policies through the influence of these policies on the character of industrialization we analyze the effects of franchise changes on economic growth we identify in the social structure of society an explanation for the connection between enfranchisement and growth when 1 there exists an economic conflict among the elite 2 landed classes are not politically strong and 3 there exists a critical mass of industrial workers we observe both growth and democratization the lack of conditions 1 or 2 resolves in stagnant autocracies while the absence of condition 3 drives growth deterring democratic expansions we provide historical support for our argument by analyzing the experience of eleven countries

sluggish price adjustments and the link between money and price the simple quantity theory of money asserts that because the velocity of money and fullemployment output are constants if the money supply doubles the price level must also double 15 this view of the quantity theory of money is also supported by the policy ineffectiveness proposition put forward by lucas 16 sargent and wallace 20 and barro 1 the policy ineffectiveness proposition asserts that real variables like output and unemployment respond only to unanticipated movements in the money supply but do not respond to anticipated money supply associated with the systematic feedback rules one of the premises essential to the validity of this proposition is the perfect flexibility of prices the corollary of the policy ineffectiveness proposition as expounded by gordon 12 in invalidating this propositin is that because output does not respond to anticipated money supply changes and remains at the natural level the price level responds contemporaneously and proportionately to the anticipated changes in the money supply this conclusion is also consistent with barro s hypothesis that perceived movements in the money stock imply equiproportionate contemporaneous movements in the price level 3 565 66 this one to one relationship between the anticipated money supply and the price level has also been shown theoretically by barro 1 and hercowitz 13 it is this conclusion that needs to be tested by accounting for the speed of adjustments of prices the purpose of this study is to explore theoretically and empirically the link between money supply and price levels by incorporating a gradual price adjustment mechanism more specifically this study examines a the one to one relationship between the log of current money stock and the log of the price level purported by barro 3 b effects of unanticipated money growth on the aggregate price and c importance of anticipated money growth in determining the price level given the current money stock and the current and lagged values of the unanticipated money growth the key element of the study is the realization that the economy is comprised of markets with differing degrees of price adjustments numerous cases of price stickiness can be identified in modern economies as enumerated in survey work by blinder 4 also for instance devadoss and choi 6 observe that the u s agricultural program s price fixing policies such as price

government revenues and economic growth in weakly institutionalised states the lack of sustained growth in poor countries has often been attributed to fiscal weakness empirical evidence suggests that governments often fail to provide crucial public goods i argue that this failure may be the result of a political instability effect more resources fuel power struggles among competing elites and decrease the incumbent regime s time horizon in office but with a shorter time horizon it is less attractive to finance growth promoting institutions whose returns only accrue in the future the model further predicts the instability effect to be stronger in countries with little capital or in remote places which render technology adoption expensive

the dual policy in the dual economy the political economy of urban bias in dictatorial regimes in many developing countries public resource allocation is often biased against the rural population since a vast majority of the poor live in rural areas the bias is highlighted as one of the most important institutional factors contributing to poverty this paper develops a political economy model of urban bias in a dictatorial regime a novel result of the model is that urban bias can emerge in predominantly agrarian economies even if there is no bias in political power toward urban residents the empirical evidence from a recently compiled country level panel dataset on agricultural taxes subsidies is consistent with the prediction of the model

transparency and economic policy we provide a two period model of political competition in which voters imperfectly observe the electoral promises made to other voters imperfect observability generates an incentive for candidates to offer excessive transfers even if voters are homogeneous and taxation is distortionary government spending is larger than in a world of perfect observability transfers are partly financed through government debt and the size of the debt is higher in less transparent political systems the model provides an explanation of fiscal churning it also predicts that groups whose transfers are less visible to others receive higher transfers and that imperfect transparency of transfers may lead to underprovision of public goods from the policy perspective the main novelty of our analysis is a separate evaluation of the transparency of spending and the transparency of revenues we show that the transparency of the political system does not unambiguously improve efficiency transparency of spending is beneficial but transparency of revenues can be counterproductive because it endogenously leads to increased wasteful spending

the metabolic transition of a planned economy material flows in the ussr and the russian federation 1900 to 2010 abstract the study of long term historical trends in material flows has gained some prominence in ecological economics since the first studies for austria and the united kingdom were published as part of a special section in 2002 this research expands the existing knowledgebase by presenting material flows for the russian federation and its predecessor states employing a standard accounting framework the study of material flows for the russian federation provides an interesting and unique case of a planned economy and its transition to a market based form of economic organization we show that in spite of considerable differences in the physical economy the ussr developed material use patterns similar to that of western industrialized economies lower levels of consumption were more than outweighed by inefficient production the transition towards a market economy drove rapid improvements in resource productivity but also growth in metabolic rates the results indicate that the transition to an industrial metabolic profile proceeds largely irrespective of economic and political conditions an improved understanding of the evolution of socio economic systems and the material flows that fuel them is increasingly relevant for designing new systems of production and consumption and facilitating a transition towards a more sustainable industrial metabolism

a carrot and stick approach to agenda setting this paper models a legislature in which the same agenda setter serves for two periods showing how he can exploit a legislature completely in the first period by promising future benefits to legislators who support him in equilibrium a large majority of legislators vote for the first period proposal because they thereby maintain the chance of belonging to the minimum winning coalition in the future legislators may therefore approve policies by large majorities or even unanimously that benefit few or even none of them the results are robust but institutional arrangements such as entitlements can reduce the agenda setter s power by reducing his discretion to reward and punish legislators and rules such as sequential voting can increase a legislator s ability to resist exploitation

the behavior of money and other economic variables two natural experiments abstract the object of this paper is to test the performance of the quantity theory model and the related proposition of monetary neutrality in a context in which to use bernanke s phraseology money move d for reasons that were plausibly unrelated to the current state of the economy we investigate this question using data from two recent episodes of monetary policy regime change the move to floating exchange rates throughout the industrialized world following the breakdown of bretton woods in the early 1970s and the shift toward less expansive monetary policy that to varying degrees took place in these countries a decade or so later the results of this exercise are highly positive the money price relationship that we observe is fully consistent with theory growth shifts in the nominal stock of money and in the price level are highly correlated and bear a one to one relation to one another growth shifts in exchange rates are significantly related both to growth shifts in relative price levels and to growth shifts in relative excess supplies of money the classical neutrality proposition in this context superneutrality in general receives strong though not totally unambiguous support

political selection and persistence of bad governments we study dynamic selection of governments under different political institutions with a special focus on institutional flexibility a government consists of a subset of the individuals in the society the competence level of the government in office determines collective utilities e g by determining the amount and quality of public goods and each individual derives additional utility from being part of the government e g rents from holding office we characterize the dynamic evolution of governments and determine the structure of stable governments which arise and persist in equilibrium in our model perfect democracy where current members of the government do not have veto power over changes in governments always leads to the emergence of the most competent government however any deviation from perfect democracy to any regime with incumbency veto power destroys this result there is always at least one other less competent government that is also stable and can persist forever and even the least competent government can persist forever in office we also show that there is a nonmonotonic relationship between the degree of incumbency veto power and the quality of government in contrast in the presence of stochastic shocks or changes in the environment a regime with less incumbency veto power has greater flexibility and greater probability that high competence governments will come to power this result suggests that a particular advantage of democratic regimes with a limited number of veto players may be their greater adaptability to changes rather than their performance under given conditions finally we show that royalty like dictatorships may be more successful than junta like dictatorships because in these regimes veto players are less afraid of change

the soviet energy conservation dilemma abstract we have made an extensive analysis of the structure of energy use in the ussr since 1960 based on this work we find that the opportunities for energy conservation in the ussr are truely enormous were the energy intensities of the major activities in the ussr to fall to the levels of western europe energy use in the ussr in 1985 would have been one third lower than it actually was the problems in obtaining increased efficiencies are more institutional than technical the ussr has had little economic incentive to invest in more efficient energy use energy prices are determined by a central pricing authority and have not kept pace with world energy prices or with the costs of domestic energy production the dilemma for the ussr is that energy inefficiency is really a product of all the other inefficiencies in the soviet economy and can only improve if the entire economy improves changes in the mix of goods produced could also lower soviet energy use in industry and for freight however economic reform may also bring a surge in the demand for personal mobility home comfort and greater activity in the service sector important sectors of energy growth in the west thus economic structural change in the ussr will be a two edged sword

why did the elites extend the suffrage democracy and the scope of government with an application to britain s age of reform a new rationale is presented for why an elite may want to expand the franchise even in the absence of threats to the established order expanding the franchise can turn politicians away from particularistic politics based on ad personam redistribution within the elite and foster competition based on programs with diffuse benefits if these programs are valuable a majority of the elite votes in favor of an extension of the franchise despite the absence of a threat from the disenfranchised we argue that the evolution of public spending and of political competition in nineteenth century britain is consistent with our model i introduction at the beginning of the nineteenth century in most countries narrow elites had a disproportionate influence on public affairs even in england where parliament was an influential institution suffrage was mostly the privilege of the wealthy and some members of parliament were elected in boroughs with as few as 100 voters while cities such as manchester did not have any representative a century later most western countries had universal male suffrage with female suffrage to arrive shortly thereafter what brought about this democratic revolution in many cases the elites were forced out of power after violent revolutions however there are important examples such as england where democratization took the form of gradual extensions of the suffrage and these were accompanied by little overt violence it is the peculiar pride of england that the record of social and political reform is to be found on the statute book not in the annals of revolution cheyney 1931 p vii such peaceful democratizations are difficult to rationalize within the benchmark political economic models in those models extending the franchise dilutes the elite s power to influence policy and results

king makers local leaders and ethnic politics in africa much of the literature on electoral politics in africa has focused on one mechanism of electoral mobilization reliance on shared ethnic identity between politicians and voters on the contrary the author argues that politicians pursue two distinct modes of nonprogrammatic electoral mobilization 1 by directly relying on the support of voters from one s own ethnic background and 2 by indirectly working through electoral intermediaries local leaders who command moral authority control resources and can influence the electoral behavior of their dependents yet the power of local leaders varies greatly hence the option to use electoral intermediaries is not available in all settings the choice of electoral mobilization affects national electoral outcomes by severing the direct link between politicians and voters intermediaries reduce a campaign s reliance on shared identity and create cross ethnic electorates the evidence for this argument is based on original interviews with political leaders collected during fieldwork in senegal and benin during the 2006 7 electoral season media coverage of elections and a historical analysis of first mass elections in the 1950s

some international evidence on the quantity theory of money this paper develops a two equation model of money interest rates and inflation based on the simple quantity theory an d fisher s hypothesis about nominal interest rates the model has both within equation and cross equation restrictions that are tested on long run average cross country data covering the period 1962 88 the major finding is that the restrictions cannot be easily rejected and this suggests that the behavior of interest rates and inflation in a major part of the postwar period can be understood in terms of classical monetary forces copyright 1993 by ohio state university press

prospects for non opec oil supply abstract the political and economic importance which has been attached to the oil industry in recent decades relates to the rapid increase in the demand for oil over the period from 1950 1980 and to the dominant role played by the politically volatile middle east in its supply although global demand for oil has grown little over the last decade during which period the role of middle east supplies has fallen both relatively and absolutely contemporary conventional wisdom on the future of oil envisages the reestablishment of middle east supply dominance this paper will challenge the validity of this view in the context of a realistic evaluation of the longterm demand prospects for the commodity

incentives to cultivate favored minorities under alternative electoral systems a simple model is used to compare under different electoral systems the incentives for candidates to create inequalities among otherwise homogeneous voters by making campaign promises that favor small groups rather than appealing equally to all voters in this game model each candidate generates offers for voters independently out of a distribution that is chosen by the candidate subject only to the constraints that offers must be nonnegative and have mean 1 symmetric equilibria with sincere voting are analyzed for two candidate elections and for multicandidate elections under rank scoring rules approval voting and single transferable vote voting rules that can guarantee representation for minorities in multiseat elections generate in this model the most severely unequal campaign promises

an international comparison of prices and exchange rates a new test of purchasing power parity abstract this paper introduces a new approach based on divisia index numbers to test ppp with both short run and long run data for all major currencies simultaneously the short run results indicate that the predictions of ppp do not hold up at all well on the other hand however the long run data are quite consistent with the ppp hypothesis the results also identify five years as a broad measure of the length of the long run insolar as ppp is concerned

promoting democracy in fragile states field experimental evidence from liberia summary we use a cluster randomized field experiment to study two strategies to promote free democratic expression among rural voters in liberia s 2011 general election the context is one of a fragile state in which destructive legacies of liberia s 1989 2003 civil war continue to dominate people s lives a nine month civic education intervention administered by liberian civil society organization partners provided training on election procedures and a forum for monthly discussion of governance issues a nine month security committee intervention administered in partnership with the united nations peacekeeping mission in liberia provided a forum for villagers and international peacekeepers to discuss security threats and develop violence early warning and reaction procedures with the aim of improving citizens perceptions of security during the election we evaluate these programs effects on actual voter behavior in addition to surveyed attitudes we find that civic education increased enthusiasm for electoral participation produced a coordinated shift from parochial to national candidates and increased willingness to report on manipulation a program combining the two interventions had similar effects the security committees produced a modest reduction in parochial voting the policy implications are that third party actors can play a productive role in helping to overcome barriers to information voter coordination and security

on some predictions of the quantity theory of money recently efforts have been made to test some of the long term propositions implied by the quantity theory of money of these two of the more interesting studies are those of lucas 11 and lothian 10 lucas using time series data for the united states and applying fourier transforms detrends the series and then using scatter diagrams of these detrended series finds considerable support for the proposition of one to one correspondence between rate of growth of money and the rate of inflation and for the fisher hypothesis lothian 10 following upon a suggestion of lucas 11 uses cross country averages of time series data for twenty o e c d countries to test the classical neutrality hypothesis the monetary approach to the exchange rate determination and the fisher hypothesis his approach consists of treating the cross country averages to represent longterm steady state points and once again uses scatter diagrams of the appropriate variables he reports complete support for the first two hypotheses and partial support for the fisher hypothesis the aim of this paper is to reexamine two of the propositions implied by the quantity theory of money namely the neutrality hypothesis and the fisher hypothesis for six developed countries by using a methodology recently proposed by wickens and breusch 12 which is an elaboration of an earlier work by bewley 2 their methodology starts with the well known autoregressive distributed lag model which can be estimated to extract long term parameters of interest wickens and breusch s point of departure is that unlike this traditional procedure this model can be transformed in such a way that direct estimates of the long term parameters along with their standard errors can be obtained provided the model is estimated appropriately as explained below clearly this methodology is then ideally suited for application to the issue under consideration the outline of the paper is as follows the hypotheses and the models are explained in section ii the estimation issues are discussed in section iii the results are presented in section iv the paper concludes with a brief summary of the main findings

savings and predation we contrast the relationship between predation and the savings of its potential victim in two different simple models in the first model predation is an exogenous event in which savings are expropriated with some fixed probability in such a setting the higher the probability of expropriation the lower are savings in the second model we endow the predatory agent with a decision whether to expropriate or to devote his efforts to some productive endeavor in this second model the endogenous probability of expropriation can easily be positively correlated with savings in addition we show that predation is more damaging to the savings and utility of the victim in the second model jel d91 d74

ethnic diversity social sanctions and public goods in kenya abstract this paper examines ethnic diversity and local public goods in rural western kenya the identification strategy relies on the stable historically determined patterns of ethnic land settlement ethnic diversity is associated with lower primary school funding and worse school facilities and there is suggestive evidence that it leads to poor water well maintenance the theoretical model illustrates how inability to impose social sanctions in diverse communities leads to collective action failures and we find that school committees in diverse areas do impose fewer sanctions on defaulting parents we relate these results to the literature on social capital and economic development and discuss implications for decentralization in less developed countries

the physical economy of france 1830 2015 the history of a parasite abstract this article explores long term trends and patterns of material use in france for a 185 year period it is the first long term study of material flows for france with national and yearly data for most of the period based on a material flow analysis mfa that is fully consistent with current standards of economy wide mfas and covers domestic extraction imports and exports of materials we investigated the evolution of the french metabolism from industrialization to financialized capitalism over the whole period there is a 9 fold increase in domestic material consumption an expansion of material use per capita and a spectacular addition of abiotic resources fossil fuels and minerals to biotic materials using a world ecology framework we exhibit a specific metabolic path that of a state benefiting from successive world systems for its economic development through massive material imports

is polarization bad abstract the adverse effects of political and social polarization on government policies are empirically well documented yet some democracies seem to cope well or even benefit from diversity in this paper we develop a theoretical model to show how elections in polarized societies contribute to improve quality of government we consider both polarization among citizens and political actors political polarization where the second is endogenously determined by parties competing to win the support of the majority of voters we find that more heterogeneous societies are more likely to be politically polarized but that the divergence of positions in the political arena helps the electorate control government corruption by raising electoral stakes our results which are consistent with the findings of a substantial empirical literature suggest that when funneled into political competition polarization may help improving quality of government and policies

the control of politicians in divided societies the politics of fear autocrats in many developing countries have extracted enormous personal rents from power in addition they have imposed inefficient policies including pervasive patronage spending i present a model in which the presence of ethnic identities and the absence of institutionalized succession processes allow the ruler to elicit support from a sizeable share of the population despite large reductions in welfare the fear of falling under an equally inefficient and venal ruler that favours another group is enough to discipline supporters the model predicts extensive use of patronage ethnic bias in taxation and spending patterns and unveils a new mechanism through which economic frictions translate into increased rent extraction by the leader these predictions are consistent with the experiences of bad governance ethnic bias wasteful policies and kleptocracy in post colonial africa

the augmented solow model and the productivity slowdown abstract in an insightful and influential paper mankiw et al 1992 quarterly journal of economics 107 407 437 have suggested that an augmented solow growth model can account for 80 of the variation in output per capita across countries due to different steady state growth paths that result from differences in saving rates education and population growth this paper carries their analysis one step further and asks whether changes in the growth rate between the 1960s and the 1980s can also be explained by this framework our results provide further support for several of mankiw et al s key conclusions investment in physical capital population growth and the initial levels of output seem to matter a great deal however investment in human capital has no ability to account for changes in growth rates over time we conclude that investment in physical capital seems to be quite important for economic growth though the reasons for this importance may not be fully captured by the augmented solow growth model

endogenous institutions and political extremism abstract the election of extreme political leaders is often associated with changes in political institutions this paper studies these phenomena through a model in which the median voter elects a leader anticipating that he will impose institutional constraints such as constitutional amendments judicial appointments or the implicit threat of a coup that influence the behavior of future political challengers it is typically optimal for the median voter to elect an extreme incumbent when democracy is less fully consolidated when the costs of imposing institutional constraints are intermediate and when the distribution of potential challengers is asymmetric the median voter typically elects a more right wing incumbent when the distribution of potential challengers shifts to the left implications of the model for the consolidation of democracy and institutional constraints are discussed as are several related mechanisms through which politicians ability to affect institutions may lead voters to optimally elect extremists

the value of democracy evidence from road building in kenya ethnic favoritism is seen as antithetical to development this paper provides credible quantification of the extent of ethnic favoritism using data on road building in kenyan districts across the 1963 2011 period guided by a model it then examines whether the transition in and out of democracy under the same president constrains or exacerbates ethnic favoritism across the post independence period we find strong evidence of ethnic favoritism districts that share the ethnicity of the president receive twice as much expenditure on roads and have five times the length of paved roads built this favoritism disappears during periods of democracy jel d72 h54 j15 o15 o17 o22 r42

improved energy efficiency in the industrialized countries past achievements co2 emission prospects abstract this paper explores the contribution which energy efficiency might make to future reductions in co 2 emissions trends in key energy use sectors and recent changes that may signal a slowdown in the rate of improvement of energy efficiency are examined the oecd countries reduced their energy use through greater efficiency by nearly 32 ej or 16 million bbl day oil equivalent between 1972 and 1985 but the pace of these improvements in energy use has begun to slow prospects for increased efficiency in each sector and the barriers to achieving those increases are discussed

interest rates and inflationary expectations abstract the relationship between inflation and the rate of interest for the united states is examined within a dynamic specification framework which yields direct estimates of the long run as distinct from the short run coefficients the fisher hypothesis as a long run proposition is supported by the data the results are shown to be robust with respect to the choice of the interest rate

food regimes and their trade links a socio ecological perspective abstract the concept of food regimes has become a prominent theory in political economy we here provide socio ecological underpinning of the food regimes theory and thereby connect it closer to an ecological economics perspective we quantify physical trade with main agricultural commodities between world regions from the mid 19th century to 2016 and ask how trade patterns relate to issues of resource use in particular to land use soil fertility and the energetic basis of agriculture agricultural exports rose from a few million t yr around 1870 to 1 4 billion t yr in 2016 growth in trade and production did not follow a continuous trend periods of accelerated growth alternating with phases of relative stability can be distinguished rather than directed modernization we observe shifts in unequal relations of power physical exchange and environmental pressure between changing centers and peripheries the periods of growth in trade match with the periodization of food regimes we find that regime shifts are closely related to changes in societies energy metabolism in the resource base of agricultural production and also to agro ecological crisis our analysis emphasizes that food regimes not only reflect changes in power relations in the world system but also changes in societies natural relations

growth in global materials use gdp and population during the 20th century the growing industrial metabolism is a major driver of global environmental change we present an assessment of the global use of materials since the beginning of the 20th century based on the conceptual and methodological principles of material flow accounting mfa on the grounds of published statistical data data compilations and estimation procedures for material flows not covered by international statistical sources we compiled a quantitative estimate of annual global extraction of biomass fossil energy carriers metal ores industrial minerals and construction minerals for the period 1900 to 2005 this period covers important phases of global industrialisation and economic growth the paper analyses the observed changes in the overall size and composition of global material flows in relation to the global economy population growth and primary energy consumption we show that during the last century global materials use increased 8 fold humanity currently uses almost 60 billion tons gt of materials per year in particular the period after wwii was characterized by rapid physical growth driven by both population and economic growth within this period there was a shift from the dominance of renewable biomass towards mineral materials materials use increased at a slower pace than the global economy but faster than world population as a consequence material intensity i e the amount of materials required per unit of gdp declined while materials use per capita doubled from 4 6 to 10 3 t cap yr the main material groups show different trajectories while biomass use hardly keeps up with population growth the mineral fractions grow at a rapid pace we show that increases in material productivity are mostly due to the slow growth of biomass use while they are much less pronounced for the mineral fractions so far there is no evidence that growth of global materials use is slowing down or might eventually decline and our results indicate that an increase in material productivity is a general feature of economic development

incumbent performance and electoral control in the pure theory of electoral competition citizens compare the platforms of the candidates and vote for the one whose platform is preferred candidate strategies are identified with promises about future performance in office models of this sort have been developed in both static mckelvey 1975 and dynamic kramer 1977 i settings and all appear to have the property that if the set of alternatives is large enough in some sense equilibrium platforms rarely exist but these models have another feature that is quite as disturbing as their instability in the static setting discussed by mckelvey little attention is paid to the possibility that once in office the politician s preferences may diverge from those of his constituents and that he may therefore choose policies at variance from his platform instead it is simply assumed that promises will be kept whether or not such behavior is congruent with the interest of the officeholder it is sometimes argued that an enforcement mechanism may exist to discipline politicians for failing to keep promises but without a specification of the mechanism it is not obvious that it would be in the interests of the

purchasing power parity and the behavior of prices and nominal exchange rates across exchange rate regimes abstract the evidence presented in this paper shows that purchasing power parity as a long run proposition is indeed a very useful approximation we see this quite clearly in the panel data for three historical periods examined here the classical gold standard era from 1870 to 1914 the interwar period from 1921 to 1939 and the period after world war ii from 1959 to 1998 price level behavior across countries differs in the way that ppp suggests when monetary arrangements differ and is highly similar when monetary arrangements are themselves similar inflation rates adjusted for exchange rate changes in general are highly correlated and bear a one to one relation to one another within and across the three periods and the varied monetary regimes that prevailed

a political theory of populism when voters fear that politicians may have a right wing bias or that they may be in uenced or corrupted by the rich elite signals of true left wing conviction are valuable as a consequence even a moderate politician seeking reelection chooses populist policies i e policies to the left of the median voter as a way of signaling that he is not from the right truly right wing politicians respond by choosing more moderate or even left of center policies this populist bias of policy is greater when the value of remaining in o ce is higher for the politician when there is greater polarization between the policy preferences of the median voter and right wing politicians when politicians are indeed more likely to have a hidden right wing agenda when there is an intermediate amount of noise in the information that voters receive when politicians are more forward looking and when there is greater uncertainty about the type of the incumbent we show that similar results apply when some politicians can be corrupted or in uenced through other non electoral means by the rich elite we also show that soft term limits may exacerbate rather than reduce the populist bias of policies

ethnicity and development in africa a reappraisal 131 enroll while membership is an entitlement that can be activated the entitlement is restricted by family membership as in other developing regions formal institutions are weak in modern africa and persons therefore tend to organize economic relationships through social institutions one way of augmenting the stock of capital is through education another is through migration to the city to a great degree it is families who organize the flow of resources that promote both urban migration and the acquisition of skills recognizing the central role of families in the formation of capital one can achieve a better grasp of the relationship between modernization and ethnicity to a significant degree modernization is achieved through the process of human capital formation this process is privately organized that is to say it is organized by families families organize the flow of resources between generations and sectors thus promoting the acquisition of skills and urban migration and thus the modernization of societies it is by stabilizing the contract between generations within family units that ethnic groups facilitate the process of investment to illustrate i use data collected from a village in luapula province zambia which supplies labor to the mining centers of zambia and congo when conducting my field work i focused on links between town and country and found that the income rural dwellers derived from town varied systematically with the structure size age composition and education of their families the coefficients in the remittance function suggested that an additional child yields on average 3 23 kwacha in the form of financial those who study modern africa commonly highlight three features its poverty its instability and its ethnic diversity whether in lurid popularizations e g robert kaplan 1994 or in social scientific research e g william easterly and ross levine 1997 but see also paul collier and a hoeffler 1998 scholars reason that africa is poor because it is unstable and that its instability derives from its ethnic complexity ethnicity thus lies it is held at the root of africa s development crisis this essay critiques the conventional wisdom by mounting an alternative interpretation using both qualitative and quantitative data from africa this article argues that

patterns of change in material use and material efficiency in the successor states of the former soviet union the successor states of the former soviet union present a unique opportunity to study the changes in the socio metabolic profile of a cohort of nations which underwent a radical and contemporaneous shift in economic system that change was from being regions within an economically integrated centrally planned whole to being independent nations left to find their own place in the global economic system the situation of these nations since the dissolution of the soviet union provides a rare experiment in which we might observe the influence of the different starting conditions of each nation on the development path it subsequently followed and the attendant socio metabolic profiles which resulted here we take the opportunity to examine patterns for the region as a whole and for three individual countries we also examine the relative importance of three different drivers of material consumption using a version of the ipat framework finally an area for follow on investigation was suggested by a significant positive correlation observed between the economic growth of individual successor states and the degree to which they improved their material productivity this latter is of potential importance in assessing whether dematerialization acts primarily to accelerate or retard economic growth

inflation and monetary regimes abstract correlations of inflation with the growth rate of money increase when data are averaged over longer time periods correlations of inflation with the growth of money also are higher when high inflation as well as low inflation countries are included in the analysis we show that serial correlation in the underlying inflation rate ties these two observations together and explains them we present evidence that averaging increases the correlation of inflation and money growth in more when the underlying inflation rate has higher serial correlation

long run purchasing power parity in the 1920s abstract this paper presents an empirical analysis of long run purchasing power parity ppp during the 1920s float using recently developed methodology on the cointegration of economic time series our results are generally supportive of ppp as a long run equilibrium condition on which exchange rates tended to converge over the period for dollar sterling however there is some evidence of a non stationary drift away from fundamentals during the last year or so before britain s return to the gold standard perhaps due to speculation our results also appear to reconcile some apparently conflicting evidence in the literature

equilibrium relationships between money and other economic variables central to the quantity theory of money are a number of important propositions about the long run equilibrium effects of changes in the nominal stock of money on other economic variables a standard way of testing these propositions is to use quarterly or annual data explicitly model the lag structure and then derive the long run solution of the model from the empirical estimates an alternative is to use some type of smoothing procedure to approximate positions of equilibrium and then to use these transformed data directly in testing hypotheses the national bureau technique of averaging data over reference cycle phases is one such method robert lucas s application of fourier transforms in two illustrations of the quantity theory of money 1980 is another and john geweke s method 1982 of frequency decomposition is a third an entirely different way of approaching the problem is to use cross country average rather than time series data as the basic units of observation the advantage according to lucas is that since the two quantity theoretic laws that he examines are obtained as characteristics of steady states or limiting distributions of theoretical models the ideal experiment for testing them would be a comparison of long term average behavior across economies with different monetary policies but similar in other respects p 1006 in this paper i conduct such an experiment the data that i use are for 20 oecd countries over the period 1956 80 the specific relationships that i examine are those between money and the price level money and real income money and interest rates and money and exchange rates in the main the data accord well with the quantity theoretic model classical neutrality holds there is evidence of a fisher effect albeit a less than complete effect on interest rates finally the data are consistent with long run purchasing power parity and hence correspondingly with a long run monetary approach to exchange rate determination

testing the long run neutrality of money in a developing economy the case of india abstract seasonal integration and cointegration techniques are used to test the hypothesis of long run money neutrality using indian data on the basis of money real output and price level quarterly data empirical evidence is presented showing that money is cointegrated with prices but not with output at the zero frequency this evidence is interpreted to imply that money affects nominal but not real variables in the long run it is concluded that money is neutral in the long run

the search for equilibrium relationships in international finance the case of the monetary model abstract this paper considers some of the main long run equilibrium relationships in international finance we supplement the phillips perron test which has a unit root under the null with the new kps test statistic which is based on a stationary null and apply them to the various exchange rate fundamentals the application of the johansen test for multiple cointegrating factors finds evidence of the existence of stable money demand functions in both the usa and uk with relatively short lived perturbations however there appears to be insufficient information in the data to distinguish whether the real exchange rate has a unit root or is persistent and mean reverting the consequent persistent deviations from purchasing power parity appears the only source of rejection of the equilibrium monetary model

money growth output growth and inflation estimation of a modern quantity theory 1 introduction during the years 1980 1993 annual inflation averaged 81 5 in latin america 12 3 in africa but only 6 4 among 16 countries in the oecd within latin america inflation ranged from 8 2 in honduras to 374 3 in argentina and in africa from 0 6 in the republic of the congo to 61 6 in sierra leone what are the reasons for these large differences if cross country differences in inflation can be linked closely to corresponding differences in money growth the reason is clear but if the link is weak then other reasons must be sought several authors have recently rejected money growth as an explanation of inflation there are three lines of criticism the first typified by baba hendry and starr 1992 estrella and mishkin 1997 and cochrane 1998 argues that the income velocity of and thus the demand for monetary aggregates is so unstable that money growth is an unreliable explanation a second criticism closely related to the first is a time series issue if money the price level and output are not cointegrated then there is no stable long run relationship among them some researchers find evidence of cointegration hoffman and rasche 1991 baba hendry and starr 1992 stock and watson 1993 hoffman rasche and tieslau 1995 swanson 1998 carlson et al 2000 dutkowsky and atesoglu 2001 but others do not stock and watson 1989 hafer and jansen 1991 friedman and kuttner 1993 thoma 1994 the cointegration question remains unsettled a third criticism is quite distinct from the first two it argues that in dynamic general equilibrium models with infinitely lived households money in the household utility function and rational expectations there is a class of policy rules with a unique solution that shows that the price level is independent of monetary policy but dependent strictly on fiscal policy this fiscal theory of price level determination breaks any link between money growth and inflation the key fiscalist models were developed by leeper 1991 sims 1994 1996 and woodford 1994 1995 1998 a simple version is summarized succinctly by mccallum 2001 who demonstrates an alternative mathematical solution to a fiscalist model that yields a monetary explanation of the price level but the monetarist foundations are under vigorous attack 1 this paper specifies and estimates a modern version of the quantity theory of money growth real gdp growth and inflation its traditional feature is that a country s long run inflation rate increases with its money growth rate the modern wrinkle is that inflation is mitigated by real gdp growth i assume that real gdp growth is governed by exogenous forces such as growth in human capital physical capital formation and technological progress the model makes no attempt to explain gdp growth rates long run neutrality is presupposed i show that the quantity theory can be written as a regression model whose theoretical implications can easily be tested section 3 this paper then makes three empirical contributions the first is to estimate a long run version of the quantity theory and test its implications statistically sections 5 and 6 the estimates are long run in the important sense that inflation money growth and real gdp growth rates are annual averages computed for 81 countries over the 14 years from 1980 to 1993 short run changes in the series are excluded by design the second is to partition statistically the roles of money and real gdp growth as determinants of inflation section 7 the third is to conduct out of sample forecasts section 8 here we discover how well the model estimated for one group of countries predicts inflation in others this paper differs from previous work in three important ways first earlier research has not been based on theoretically grounded regression models friedman 1956 1968 klein 1956 friedman and friedman 1980 friedman and schwartz 1982 mccandless and weber 1995 rolnick and weber 1997

tax me if you can ethnic geography democracy and the taxation of agriculture in africa it is typically assumed that african leaders enact policies that benefit their ethnoregional group using all types of patronage crop production and political power are geographically concentrated in many african countries and this paper exploits this overlap to cast doubt on this conventional wisdom it shows using data on 50 country crop combinations that cash crop farmers who are ethnically identified with the head of state face higher taxes furthermore democratic regimes impose lower taxes this paper shows that farmers who have few alternatives face higher taxes african leaders have used local intermediaries to exert control over the countryside and to ensure that farmers do not support alternative candidates it suggests that as leaders are better at selecting and monitoring these intermediaries in their home areas they can extract more from the majority at home than abroad using taxes on cash crops which are regionally but not individually targetable

investment in the shadow of conflict globalization capital control and state repression in conflict prone societies the fear of expropriation that accompanies a regime change reduces capital investment these reductions in investments in turn harm the economy amplifying the likelihood of regime change this article studies the implications of these feedback channels on the interactions between globalization capital control state repression and regime change i show that processes that facilitate capital movements e g globalization economic modernization and technologies that reduce transportation costs amplify the likelihood of regime change in conflict prone societies and strengthen the elite s demand for a strong coercive state in particular to limit their collective action problem and manage the political risk of regime change capitalists support a state that imposes capital control we identify two conflicting forces the boix effect and the marx effect which determine when capital control and state repression become complements nazi germany or substitutes latin american military regimes in right wing regimes

the relevance of relative distribution favoritism information and vote choice in africa relative distribution whether one is favored or disfavored by government seems to matter to voters in many african countries but why i demonstrate theoretically that voters who do not have inform

what affects innovation more policy or policy uncertainty motivated by a theoretical model we examine for 43 countries whether it is policy or policy uncertainty that affects technological innovation more innovation activities measured by patent based proxies are not on average affected by which policy is in place innovation activities however drop significantly during times of policy uncertainty measured by national elections the drop is greater for more influential innovations citations in the right tail exploratory rather than exploitative innovations and for innovation intensive industries we use close presidential elections and ethnic fractionalization to address endogeneity concerns we uncover the mechanism underlying the main result by showing that the number of patenting inventors decreases with policy uncertainty political compromise we conclude encourages innovation

the political economy of hatred this paper develops a model of the interaction between the supply of hate creating stories from politicians and the willingness of voters to listen to hatred hatred is fostered with stories of an out group s crimes but the impact of these stories comes from repetition not truth hate creating stories are supplied by politicians when such actions help to discredit opponents whose policies benefit an out group egalitarians foment hatred against rich minorities opponents of redistribution build hatred against poor minorities hatred relies on people accepting rather than investigating hate creating stories hatred declines when there is private incentive to learn the truth increased economic interactions with a minority group may provide that incentive this framework is used to illuminate the evolution of anti black hatred in the united states south episodes of anti semitism in europe and the recent surge of anti americanism in the arab world

global patterns of materials use a socioeconomic and geophysical analysis abstract human use of materials is a major driver of global environmental change the links between materials use and economic development are central to the challenge of decoupling of materials use and economic growth dematerialization this article presents a new global material flow dataset compiled for the year 2000 covering 175 countries including both extraction and trade flows and comprising four major material categories biomass construction minerals fossil energy carriers and ores industrial minerals first we quantify the variability and distributional inequality gini coefficients in international material consumption we then measure the influence of the drivers population gdp land area and climate this analysis yields international income elasticities of material use finally we examine the coupling between material flows and between income and material productivity measured in economic production per tonne material consumed material productivity is strongly coupled to income and may thus not be suitable as an international indicator of environmental progress a finding which we relate to the economic inelasticity of material consumption the results demonstrate striking differences between the material groups biomass is the most equitably distributed resource economically the most inelastic and is not correlated to any of the mineral materials the three mineral material groups are closely coupled to each other and economic activity indicating that the challenge of dematerializing industrial economies may require fundamental structural transformation our analysis provides a first systematic investigation of international differences in material use and their drivers and thus serves as the basis for more detailed future work

is more information always better party cues and candidate quality in u s judicial elections abstract we investigate the influence of electoral rules on voting behavior and the quality of judges using newly collected data on judicial elections and ratings from 39 u s states we find that in partisan elections where candidates party affiliations are listed on the ballot party drives voting behavior and candidate quality has little effect on outcomes in nonpartisan elections where party affiliation is not on the ballot party has a much smaller influence on voting behavior and candidate quality has a substantial effect on outcomes if the primary task of public officials is not to represent voters ideology and their decisions have little variability across parties then we need to seriously consider the potential cost of partisan competition to the extent that partisan voting behavior crowds out the influence of candidate quality on voting outcomes the desirability of the partisan election system should be carefully assessed

multi country evidence on the behavior of purchasing power parity under the current float abstract using panel data for the united states and 22 other oecd countries for the current float this paper presents evidence that despite substantial short term perturbations purchasing power parity actually performed much better than commonly believed average rates of growth of real exchange rates over long horizons bear little relationship either to average rates of growth of nominal exchange rates or to average inflation differentials thus implying a close to one to one relation between average rates of growth of nominal exchange rates and average inflation differentials panel data variants of standard unit root tests suggest that the real exchange rates of these countries can be characterized as mean reverting

logrolling under fragmented authoritarianism theory and evidence from china this paper provides a rigorous theoretical and empirical analysis of the effect of logrolling between interest groups on social welfare in a non democratic political system in particular we focus on china where bureaucratic interest groups are separate vertical organizations reaching down from beijing to the provinces and cities the key question in this paper is what are the effects of the logrolling of parochial interest groups on state policies and social welfare in autocracies we address this question both theoretically and empirically the theory predicts a specific distortion in resource allocation because of logrolling while the empirical results confirm the theoretical prediction we find policy outcomes under logrolling are characterized by excessive spending on all the interest groups preferred goods and insufficient spending on public goods we test the existence of logrolling between the ministry of civil affairs and ministry of health in china our result shows logrolling between the two ministries lead to inefficiencies in social security and health care policies

the right type of legislator a theory of taxation and representation abstract we develop a theory of taxation and the distribution of government spending in a citizen candidate model of legislatures individuals are heterogeneous in two dimensions productive ability in the private sector and negotiating ability in politics when these are positively correlated rich voters always prefer a rich legislator but poor voters face a trade off a rich legislator will secure more pork for the district but will also prefer lower taxation than the poor voter our theory organizes a number of stylized facts across countries about taxation and redistribution parties and class representation in legislatures we demonstrate that spending does not necessarily increase when the number of legislators increases as the standard common pool intuition suggests and that many policies aimed at increasing descriptive representation may have the opposite effect

the physical economy of the european union cross country comparison and determinants of material consumption abstract in this paper we investigate what determines observed differences in economy wide material use among the eu 15 member states the empirical basis for our analysis is an extended and revised material flow data set for each of the eu 15 countries in time series from 1970 to 2001 this data set comprises consistent data for domestic extraction imports and exports as well as for derived material flow indicators broken down by 12 types of materials we compare the level and composition of domestic material consumption dmc in the eu 15 member states and identify determinants of the observed differences across the european union member states overall dmc per capita varies by a factor of three ranging between 12 tonnes per capita in italy and the united kingdom and 37 tonnes per capita in finland this variability of dmc in the eu 15 is in a similar order of magnitude as the variability of gdp per capita or total primary energy supply per capita linear correlation analysis reveals that national income and final energy consumption relate to material use but cannot fully account for the observed differences in material consumption by breaking down overall material flow indicators into 12 categories of materials and analysing their use patterns in detail we identified a number of factors socio economic and natural that influence the level and composition of economy wide material use many of these factors are specific for certain types of materials others are more general and quite some driving factors counteract each other regarding the direction of their influence concluding we summarize the most important driving factors for domestic material consumption stressing population density as largely neglected but important explanatory variable for material use patterns discuss issues of environmental significance aggregation and the use of different denominators in material flow accounting and suggest a re interpretation of dmc

industrial profitability and trade among the former soviet republics the break up of the soviet union claudia senik leygonie and gordon hughes this article looks at profitability and trade in the republics of the former soviet union looking at individual industries republic by republic there emerges a picture of some highly profitable sectors along with others with negative value added the most profitable industries mostly associated with oil and gas extraction are the least protected the least intensive in labour and already the most developed the least efficient industries include food processing and light industry and are the most protected ones trade patterns both within the former soviet union and with the rest of the world are unrelated to comparative advantage consequently sizable gains from trade are potentially available and the relevant industries are identified when the single trade balance constraint is replaced by constraints at the republic level it is clear that russia stands to benefit from not having to cover with its surpluses the deficits of the other republics russia again along with kazakhstan and ukraine should benefit from a shift to market based terms of trade

why do voters dismantle checks and balances voters often dismantle constitutional checks and balances on the executive if such checks and balances limit presidential abuses of power and rents why do voters support their removal we argue that by reducing politician rents checks and balances also make it cheaper to bribe or inauence politicians through non electoral means in weakly institutionalized polities where such non electoral inauences particularly by the better organized elite are a major concern voters may prefer a political system without checks and balances as a way of insulating politicians from these inauences when they do so they are e ectively accepting a certain amount of politician presidential rents in return for redistribution we show that checks and balances are less likely to emerge when equilibrium politician rents are low when the elite are better organized and are more likely to be able to inauence or bribe politicians and when inequality and potential taxes are high which makes redistribution more valuable to the majority we show that the main intuition that checks and balances by making politicians icheaper to bribe i are potentially costly to the majority is valid under di erent ways of modeling the form of checks and balances

the good the bad and the civil society abstract there are three signature features of autocracies first there is a wide variety across autocracies in terms of economic performance some do much better and some much worse than democracies second economic performance of a given autocracy is more sensitive to leader quality and exhibits higher volatility third all autocracies good or bad tend to have weaker civil societies than democracies do we attribute these features to the core of the autocratic political institution the incumbent leader selects the future leader as opposed to citizens at large selecting the future leader under democracy we deliver our analysis in an overlapping generations model where two kinds of dynamic free riding problems arise the first arises among different generations of citizens in implementing far sighted policies political leaders come in two types good ones aim to correct this first kind of dynamic free riding problem while bad ones do not care and only aim to steal public assets both types need a weak civil society to achieve their goals but a second dynamic free riding problem arises among different leaders when it comes to weakening the civil society the autocratic leader selection mechanism helps resolve this second dynamic free riding problem results in a continuously weakened civil society and generates large variations of economic performances both within a given autocracy and across different autocracies a rich set of comparative statics is derived

explaining african economic performance africa has had slow growth and a massive exodus of capital in many respects it has been the most capital hostile region we review and interpret the aggregate level and microeconomic literatures to identify the key explanations for this performance there is a reasonable correspondence of the two sets of evidence pointing to four factors as being important these are a lack of openness to international trade a high risk environment a low level of social capital and poor infrastructure these problems are to a substantial extent attributable to government behaviour and the paper includes a review of the political economy literature which addresses that behaviour

barriers to investment in polarized societies i present a tractable dynamic model of political economy where disagreements about the composition of public spending result in implementation of short sighted policies the relative price of investment to consumption is excessively large in equilibrium due to over taxation investment rates are too low which slows down growth along the transition in the long run this results in output consumption and welfare being inefficiently low the larger is the degree of polarization the greater is the inefficiency political stability mitigates the effects of polarization by making the incumbent internalize the dynamic inefficiencies introduced by the choice of growth retarding policies

the fisher hypothesis a multi country analysis this paper tests whether the fisher hypothesis holds for a sample of 26 countries by assessing the long run relationship between nominal interest rates and inflation rates taking into consideration the short run dynamics of interest rates the empirical evidence supports the hypothesis that there is a one to one relationship between the interest rate and inflation for more than half of the countries under study

monetary facts revisited abstract this paper uses data from 46 economies over the post war period to revisit two key monetary facts i the link between money growth and inflation and ii the link between credit growth and financial crises the analysis reveals that the former has weakened over time while the latter has become stronger this suggests that there is an inverse relationship between the two monetary facts the money inflation link is weak and the credit crisis nexus is strong when inflation is low and financial systems are liberalised while the reverse holds true in environments of high inflation and less liberalised financial systems

state capacity and repression a model of colonial rule abstract state capacity in colonial regimes can have spillover effects on the welfare of citizens if the colonizer is removed this work shows that when spillovers are positive investments in state capacity and repression by the colonizer are strategic complements the colonizer needs a larger repression when state capacity is high because the latter increases the incentives of the colonized to rebel therefore determinants of investment in repression such as geographic factors or idiosyncratic features of the colonizer can affect state capacity this work contributes to explain the heterogeneous levels of state capacity in non settler colonies and has policy implications for present autocratic regimes

kleptocracy and divide and rule a model of personal rule many developing countries have suffered under the personal rule of kleptocrats who implement highly inefe cient economic policies expropriate the wealth of their citizens and use the proceeds for their own glorie cation or consumption we argue that the success of kleptocrats rests in part on their ability to use a divide and rule strategy made possible by the weakness of institutions in these societies members of society need to cooperate in order to depose a kleptocrat yet such cooperation may be defused by imposing punitive rates of taxation on any citizen who proposes such a move and redistributing the benee ts to those who need to agree to it thus the collective action problem can be intensie ed by threats which remain off the equilibrium path in equilibrium all are exploited and no one challenges the kleptocrat kleptocratic policies are more likely when foreign aid and rents from natural resources provide rulers with substantial resources to buy off opponents when opposition groups are shortsighted when the average productivity in the economy is low and when there is greater inequality between producer groups because more productive groups are more dife cult to buy off jel o12 h00

real dollar exchange rate under the bretton woods and floating exchange rate regimes abstract the focus of the paper is on real exchange rates for the dollar over the period 1957 to 1985 most such exchange rates followed an almost steplike pattern showing relatively little movement in the late 1950s and 1960s falling abruptly and then remaining low in the 1970s and finally in the 1980s rising back to levels close to those that prevailed initially contrary to much recent commentary therefore the period that appears different is not the last five years but the decade that preceded them an important factor underlying this pattern of exchange rate movement according to results presented in the paper was the behavior of monetary policy and hence inflation in the united states what remains to be established is the precise mechanism linking money and real exchange rates and the relative strength of those links

political economy in a changing world we provide a general framework for the analysis of institutional dynamics in an environment in which payoffs and political powers change stochastically assuming that economic and political institutions as well as individual types can be ordered and preferences and the distribution of political power satisfy natural single crossing increasing differences conditions we prove existence of a pure strategy markov voting equilibrium provide conditions for its uniqueness and present a number of comparative static results we then use this framework to study the dynamics of political rights and repression in the presence of threats from extremist groups and the dynamics of collective experimentation

electoral competition under the threat of political unrest this paper examines how voting and the outcomesof majority rule elections are affected by factors beyond the control of the winning party we present a model that helps to predict how threats against the electoral process ineuence 1 platform choice by political parties 2 which party wins the election and 3 the policy outcomes enally implemented in a democracy where the majority winner sets policy dissatiseed groups including groups outside the electoral process may still be able to interfere with that policy a losing party may organize a coup voters may riot unions may go on strike investors may take their capital abroad terrorists and foreign powers may threaten disruption and loss of life foreign powers may withdraw aid or even impose a trade embargo we analyze the effect of these nonelectoral factors on electoral outcomes we consider a majority rule electoral competition between two political parties with ideal policies lying to either side of the median voter s ideal policy we allow for only a one dimensional policy space but the disruption possibility leads to a twodimensional outcome space as evident in the examples given above the actors threaten

regime type the fate of leaders and war we propose and test a formal model of war and domestic politics building on recent evidence on the relationship between regime type the effect of war on the probability of losing office and the consequences of losing office the less the outcome of international interaction affects a leader s tenure and the less punitive are the consequences of losing office the more a leader is willing to make concessions to strike a peaceful bargain we demonstrate that our theory successfully predicts war involvement among nondemocratic regime types moreover our theory offers an intuitive explanation for the democratic peace compared to nondemocratic leaders the tenure of democratic leaders depends relatively little on the war outcome and democratic leaders fare relatively well after losing office thus democratic leaders should be more willing and able to avoid war especially with other democrats

changes in the united kingdom s natural relations in terms of society s metabolism and land use from 1850 to the present day abstract in this paper we present our understanding of how society and nature have interacted in the course of history in terms of society s metabolic interchange with the biophysical environment presenting a theoretical model we begin by focusing on the interface between society and nature society s natural relations as conceptualized by the idea of metabolism which draws upon marxist theory complemented by a systems approach the concept of metabolism portrays society as a system which has to establish and maintain a permanent throughput of energy and matter to produce and maintain society s material components the amount of resource flow is operationalized by using material and energy flow accounting methods empirically these methods are applied to the uk s economy in a time series approach from 1850 to the present day we discuss different aggregates of inputs such as domestic material extraction foreign trade of materials energy input and additionally give an account of land use change obviously these changing natural relations are linked to socio economic activities hence we make a first attempt to discuss different periods of socio economic development by drawing from a regulation approach and try to link them to physical indicators such as direct material and energy input and domestic material consumption dmc thereby we hope to contribute to a historical understanding of socio economically driven environmental change within the framework of ecological economics

a theory of political entrenchment can an incumbent political party increase its chances at re election by implementing inefficient policies that harm its constituency this paper studies the possibility of such a phenomenon which we label political entrenchment we use a two party dynamic model of redistribution with probabilistic voting political entrenchment by the left occurs only if incumbency rents are sufficiently high low skill citizens may vote for this party even though they rationally expect the adoption of these policies we discuss the possibility of entrenchment by the right the scope for commitment to avoid entrenchment policies and the effect of state capacity income inequality and party popularity on the likelihood of entrenchment we illustrate our theory with a number of historical examples

monetary policy and the twin crises abstract after presenting a brief overview of the recent financial crisis and the european debt crisis that followed in its wake this paper goes on discuss monetary policy in the united states the united kingdom and the euro bloc prior to and during the course of the two crises the paper presents historical evidence for the three areas on the relationships linking the volatilities of output inflation and monetary growth in all three these relations are strongly positive there is therefore no tradeoff between inflation and output volatility the two move up and down together both moreover move up and down with the volatility of monetary growth viewed from this perspective the increased volatilities of money supplies and the monetary base in the united states the united kingdom and the euro bloc over the last half decade pose problems

two illustrations of the quantity theory of money of two central implications of the quantity theory of money that a given change in the rate of change in the quantity of money induces i an equal change in the rate of price inflation and ii an equal change in nominal rates of interest the illustrations were obtained by comparing moving averages of the three variables in question using quarterly u s time series for the period 1953 77 readers may find the results of interest as additional confirmation of the quantity theory as an example of one way in which the quantity theoretic relationships can be uncovered via atheoretical methods from time series which are subject to a variety of other forces or as a measure of the extent to which the inflation and interest rate experience of the postwar period can be understood in terms of purely classical monetary forces the theoretical background of the study is reviewed very briefly as it is familiar material in the next section the data processing methods are described and rationalized in section ii the illustrations

i discovered the peso problem irving fisher and the uip puzzle abstract irving fisher was the first economist to posit what has come to be known as uncovered interest parity relation he was also the first to offer a peso problem type explanation for important episodes in which it was violated after reviewing his theoretical and empirical work on this subject we go on to reexamine both his data and several other bodies two consisting of multi country panel data and a third consisting of a two century long time series for the united states and the united kingdom we find evidence in these data of the important role played by episodic phenomena in disturbing the uip relation like fisher we find that the influence of such phenomena dissipates over time over the long term these errors prove to be less important and uip receives empirical support