should we use willingness to pay to elicit community preferences for health care new evidence from using a marginal approach abstract we describe a willingness to pay wtp survey in which values were elicited from the public for three disparate health care programmes previous applications of wtp in this context have revealed a high proportion of preference reversals between wtp values and ordinal ranking of the programmes in view of the doubts these findings raise over the use of wtp in this context our aim was to develop a method of eliciting wtp values which we considered would improve consistency between respondents explicit ranking of the programmes and their wtp values compared to the standard approach the structure of the new design the marginal approach reduced the number of possible preference reversals thus encouraging a degree of consistency among respondents despite this the marginal approach did not result in fewer preference reversal being observed in actuality thus casting doubt on the application of wtp in this context

statistical efficiency of double bounded dichotomous choice contingent valuation the statistical efficiency of conventional dichotomous choice contingent valuation surveys can be improved by asking each respondent a second dichotomous choice question which depends on the response to the first question if the first response is yes the second bid is some amount greater than the first bid while if the first response is no the second bid is some amount smaller this double bounded approach is shown to be asymptotically more efficient than the conventional singlebounded approach using data from a survey of californians regarding their willingness to pay for wetlands in the san joaquin valley we show that in a finite sample the gain in efficiency can be very substantial

the effect of political risk on the forward exchange bias the case of elections abstract the unsuccesful search for explanations of the forward bias has concentrated on variables suggested by traditional models of risk political news although important to foreign exchange traders has not been considered as a determinant of the forward bias i present a model in which the forward bias changes when the governing party changes elections in major industrial countries provide a natural test of the model the forward bias changed as predicted after half of the 13 elections in canada france the united kingdom and the united states between 1973 and 1985 politics provides useful information for foreign exchange traders which economists should not ignore

do ordering effects matter in willingness to pay studies of health care willingness to pay studies are increasingly being used in the evaluation of health care programmes however there are methodological issues that need to be resolved before the potential of willingness to pay can be fully exploited as a tool for the economic evaluation of health care programmes of particular methodological interest are the consequences of varying the order in which willingness to pay questions are presented to respondents in contingent valuation studies this paper examines the possibility of ordering effects in willingness to pay studies in health care that is when asking willingness to pay questions about three health care programmes within a single survey does the order the programmes are presented have an impact on the reported willingness to pay ordering effects are observed in the ranking of the programmes in the proportion of zero values reported and in the wtp for one of the programmes the results suggest that the best explanation for the ordering effects is one of fading glow whereby the first programme in any sequence captures much of the utility associated with giving

ideology and taxation in latin america this paper examines the impact of ideology on tax revenues in latin america using a panel of seventeen countries from 1990 to 2010 as a first approach a fixed effects model is used to identify the impact of government ideology on taxation left leaning governments are associated with increases in total tax revenues and income tax revenues of 2 2 and 1 3 percent of gdp respectively there is no effect on revenues from vat or social security taxes to deal with endogeneity problems an event study methodology is used to track the behavior of revenues around the time of the shifts to the left a comparison of revenues immediately before and after the shift in government ideology shows that revenues and income tax revenues increase by 1 3 and 0 8 percent of gdp

racing to the bottom or climbing to the top economic globalization and collective labor rights this article explores the impact of economic globalization on workers rights in developing countries the authors hypothesize that the impact of globalization on labor rights depends not only on the overall level of economic openness but also on the precise ways in which a country participates in global production networks using a new data set on collective labor rights the authors test these expectations their analysis of the correlates of labor rights in 90 developing nations from 1986 to 2002 highlights globalization s mixed impact on labor rights as climb to the top accounts suggest foreign direct investment inflows are positively and significantly related to the rights of workers but at the same time trade competition generates downward race to the bottom pressures on collective labor rights the authors also find that domestic institutions and labor rights in neighboring countries are important correlates of workers rights

the politics of speculative attacks in industrial democracies recent models of speculative currency crises contend that market expectations of policy behavior can trigger a speculative attack we argue that political processes and partisan objectives inform expectations about the government s commitment to the exchange rate first market actors anticipate periods when the partisan identity of a government may change through an election or a cabinet collapse second party labels provide information to currency traders about the policy objectives of a potential government consequently we contend that the probability of a speculative attack will be higher when markets expect the cabinet to end and when the cabinet dissolution is likely to produce a leftward shift in policy a discrete timesurvival model is used to estimate the probability that a cabinet will dissolve in any given month for sixteen parliamentary democracies from 1970 to 1995 the predicted values are then used as a proxy for market expectations in a model of speculative currency crises

measures of cabinet durability a conceptual and empirical evaluation the measurement of cabinet durability depends on the events that are considered to end the life of a cabinet such as a change in the parties composing it a change in its coalitional status a change of prime minister a cabinet resignation or a parliamentary election seven such events used in the literature are critically reviewed in this article the five most important measures are then correlated with each other and with the three independent variables one party versus coalition cabinets minimal winning versus oversized coalitions and the number of parties in the party system that are frequently used to explain cabinet durability all five measures turn out to be closely related to each other and all are basically acceptable but the simplest measure based solely on changes in the party composition of the cabinet yields the best results

fiscal contracting in latin america summary latin america has long been characterized as a region of high income inequality in recent years however many latin american countries have seen a decrease in income inequality and poverty levels and an increase in economic mobility fiscal policies have played a role in achieving these results one important explanation for changing fiscal policies is the increasing economic and political role played by the growing middle class in shaping the level and quality of collective goods and services and the types of taxes and relative tax burdens to fund these expenditures through a process we call fiscal contracting less unequal societies may be willing to pay more in taxes for expanded relatively universal public services

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

public vs private demand for covering long term care expenditures this article studies the determinants of the willingness to pay wtp for long term care ltc insurance coverage two alternatives are considered one compulsory financed through taxes the other purchased on a voluntary basis and paid through a premium wtp was elicited through open ended contingent valuation within a survey conducted in the italian region emilia romagna about ltc population needs we model information on individual wtp as a two stage process where respondents first establish their interest for ltc cover then state their wtp results show that interest and wtp are influenced by different variables and that differences arise also between the wtp for public and private coverage

supplying trade reform political institutions and liberalization in middle income presidential democracies correcting the relative lack of attention to the supply side of trade policy this article addresses how political institutions channel societal demands for protection i hypothesize that strong presidents with significant legislative powers and strong party leaders empowered through electoral rules that rein in the personal vote can help overcome protectionist biases these arguments compare with two institutional alternatives first that protectionism should decrease as electoral district size grows because elections become more proportional and second that the collective action problems in fragmented party systems thwart trade reform i evaluate these hypotheses empirically using pooled time series cross sectional data involving 18 developing countries from 1971 to 1997 i find that delegation to presidents and party leaders is significantly related to trade liberalization and some evidence suggests that the effective number of parties and the size of electoral districts may also influence levels of protectionism

are currency crises self fulfilling abstract this paper studies the respective roles of the fundamentals and self fulfilling speculation in currency crises we first present a model of a fixed exchange rate system in which self fulfilling speculation can arise following a bifurcation in the fundamentals we then estimate the model in the case of the 1992 3 crisis of the french franc and find some evidence that self fulfilling speculation was at work

politics and exchange rate forecasts abstract standard exchange rate models perform poorly in out of sample forecasting when compared to the random walk model we posit part of the poor performance of these models may be due to omission of political factors we test this hypothesis by including political variables that capture party specific election specific and candidate specific characteristics surprisingly we find our political model outperforms the random walk in out of sample forecasting at 1 12 month horizons for the pound dollar mark dollar pound mark and the trade weighted dollar mark and pound exchange rates

european monetary upheavals the european monetary system was thrown into disarray by the speculative crises from september 1992 to august 1993 the consequent widening of the permitted bands of fluctuation from 2 25 to 15 has added to the uncertainty in the european economic environment and cast doubt on the strategy for monetary unification set out in the maastricht treaty this book provides a response to the new situation from a variety of economic perspectives it includes analyses of the upheavals themselves separate chapters on monetary policy in france germany and the uk and discussions of implications for the future the papers are written by academic contributors from the usa and europe as well as the uk the book also includes a panel discussion in which economists from national and international institutions debate the future of european monetary integration

structural reliability of conjoint measurement in health care an empirical investigation this paper is concerned with the structural reliability of conjoint measurement when applied in a health care setting the clinical context was the diagnosis and treatment of knee injuries a conjoint measurement study was conducted which used the pairwise choice approach to preference elicitation each choice included two scenarios a conventional treatment approach to management arthroscopy and an approach using magnetic resonance imaging in order to test for structural reliability two separate conjoint measurement exercises were conducted exercise a where scenarios were defined in terms of three attributes and exercise b where scenarios included all four attributes the assessment of structural reliability involved a comparison of two random effects probit models for exercises a and b data were collected on a total of 176 students of sports science the results strongly indicate that the models for the two exercises are different although the instability is limited to the constant term and a sin

origins and consequences of changes in u s corporate taxation 1981 1998 foreign direct investment hat u s corporate tax policy is partly determined by partisan and organizational forces as well as by domestic economic forces is a standard theoretical view scholars find that democratic presidential administrations have differed from republican administrations in that the former tended to increase the tax burdens of corporate taxpayers other studies report that increasing business political activity has had an ameliorating effect on business tax burdens on the economic side corporate tax policy is counter cyclical investment inducing and linked with growth and investment in long run structural relationships in at least two important ways however the structure of the american economy differed in the 1980s and 1990s from earlier periods first the u s economy internationalized with the oil shocks of the 1970 s serving as globalization s annunciation second economic agents became increasingly sophisticated in anticipating how governments would respond to economic events and how these government policies would in turn affect economic events the rational expectations revolution led president reagan among others to conclude that traditional u s macroeconomic policies were ineffective some scholars argue that these structural shifts changed the dynamics of u s corporate tax policy they theorize that in open economies like the

validity of open ended and payment scale approaches to eliciting willingness to pay the open ended and payment scale approaches to eliciting willingness to pay wtp valuations are compared use of the payment scale led to a higher response rate a higher rate of completion of the wtp question higher mean and median wtp values a stronger association between wtp and ability to pay and a higher r2 in regression analysis of wtp on several independent variables taking these results in combination it can be inferred that the payment scale technique leads to more valid wtp values than use of the open ended approach

valuing health care using willingness to pay a comparison of the payment card and dichotomous choice methods this paper compares willingness to pay wtp estimates generated from the dichotomous choice dc and payment card pc approaches in a split sample wtp experiment concerned with allocating scarce health care resources across three health care interventions the dc approach is shown consistently to generate larger welfare estimates than the pc observed difference between pc and dc experiments cannot be explained by the inclusion of non demanders or methods of statistical analysis but may be partly explained by yea saying no evidence of range bias or mid point bias was found with pc responses data were also collected on respondents ordinal rankings of the three interventions and person trade offs ptos neither of these approaches converged with wtp future work must address the decision heuristics individuals employ when responding to valuation experiments

difficulties in valuing street light improvement trust surprise and bound effects previous empirical research has demonstrated an internal inconsistency that may occur in response strategies between the first and second valuations made to closed ended contingent valuation questions one possible explanation for this bound effect is the surprise of being asked the second valuation question which may be enhanced where there is a lack of trust this paper considers the use of closed ended contingent valuation to estimate non market benefits for an improved street lighting scheme where there is a lack of trust in the agency responsible for provision the results provide confirmation that surprise is an important determinant of bound effects however efforts to reduce such bias using a prior statement of the bid range were found to be ineffective in increasing trust and reducing surprise given the importance of this area of research directions for future research are considered

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

elicitation formats and the wta wtp gap a study of climate neutral foods we conduct a field valuation experiment where we vary the valuation method contingent valuation vs inferred valuation as well as the payment format dichotomous choice vs payment card willingness to accept and willingness to pay valuations are elicited in a within subjects design for foods with climate neutral labels we find a similar gap for valuations elicited with the contingent or the inferred valuation method however we also find that the gap can be muted by using a payment card elicitation format

using contingent valuation to elicit public preferences for water fluoridation the methods and results of a contingent valuation survey to elicit public preferences for water fluoridation are reported the study demonstrates that not only is it important to acknowledge that there will be losers from the introduction of such a programme but that losers must be allowed to express a value for the magnitude of their perceived loss two methods of valuing this loss are explored conventional willingness to accept compensation questions are compared with questions in which losers are asked to state their willingness to pay to prevent their water being fluoridated the results provide tentative support for asking willingness to pay to prevent questions instead of willingness to accept questions when evaluating certain types of public good the issue of protest responses in contingent valuation surveys is also highlighted and discussed

central bank independence and macroeconomic performance some comparative evidence this note uses information on a sample of sixteen oecd countries to assess the relationship between central bank independence and macroeconomic performance as previous work suggests politically controlled central banks are more likely to pursue policies that lead to high and variable inflation however the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth unemployment or the ex ante real interest rate copyright 1993 by ohio state university press

benefits transfer of willingness to pay estimates and functions for health risk reductions a cross country study this paper provides a first application of the techniques of benefits transfer to the health economics literature these techniques seek to transfer the value of some good from one survey context to a new policy context so avoiding the need for new valuation surveys each time a new policy question arises two approaches to benefits transfer are assessed the simple transfer of mean values and the transferral of value functions we develop a new methodology for the latter approach in which value functions are iteratively built up from theoretical principles with transfer errors being tested each time a new variable is added through a novel application of advanced statistical tests we show that this approach outperforms the transferral of statistically driven best fit functions the case study presented focuses upon the transfer of contingent valuation cv willingness to pay wtp estimates and associated value functions for reducing the health risks associated with solar ultraviolet uv exposure common format studies are conducted in four countries with transfers between all of these being undertaken by calculating errors in predicted versus actual values across countries we show that when transferring between similar contexts simple mean value transfers outperform more complex value function transfers with the magnitude of the former errors being encouragingly small however this result is reversed when transfers are undertaken across dissimilar contexts where value functions partially adjust for these differences in summary these findings provide support and guidance for future applications

exploring preference anomalies in double bounded contingent valuation double bounded dichotomous choice dbdc contingent valuation offers increased efficiency of willingness to pay wtp estimates compared with the single bounded format however evidence suggests dbdc generates anomalous respondent behaviour this paper provides the first investigation and explanation of these anomalies in health results suggest the incentives for truthful preference revelation are altered in the presence of a follow up question this result is found using both regression techniques and analysis of raw responses although findings suggest very certain respondents exhibit less anomalous behaviour inconsistencies remain across bounds the results of this study question the use of iterative valuation formats

opting out of the social contract tax morale and evasion we examine the individual level determinants of tax morale in low capacity states specifically latin american countries where the social contract is often perceived as fractured we argue that in

a stated preference approach to assessing health care quality improvements in palestine from theoretical validity to policy implications user fees have been promoted as a potential complementary funding mechanism for health care in developing countries in this paper we appraise the use of contingent valuation cv as a tool to help develop user fees schemes that could be used to assist in allocating and partially fund health care a random sample of 499 patients seeking care in primary health care centers in palestine were asked to reveal their willingness to pay values for specified improvements in the quality of delivered medical care empirical analysis suggests that in this context cv can lead to internally consistent results and useful policy implications

how people respond to contingent valuation questions a verbal protocol analysis of willingness to pay for an environmental regulation abstract this paper investigates what a respondent is thinking when answering a willingness to pay question in a contingent valuation using a think aloud technique from psychology called verbal protocol analysis the willingness to pay responses we observed seem to be constructed from a variety of considerations including an obligation to pay a fair share of the cost of the solution and signaling concern for a larger set of environmental issues the finding that respondents seem to construct their values at the time they are asked rather than reporting a more well defined value is seen as consistent with over two decades of research on the psychology of decision making potential uses of verbal protocols in contingent valuation studies are also discussed

the american political economy macroeconomics and electoral politics here is the most comprehensive and authoritative work to date on relationships between the economy and politics in the years from eisenhower through reagan extending and deepening his earlier work which had major impact in both political science and economics hibbs traces the patterns in and sources of postwar growth unemployment and inflation he identifies which groups win and lose from inflations and recessions he also shows how voters perceptions and reactions to economic events affect the electoral fortunes of political parties and presidents hibbs s analyses demonstrate that political officials in a democratic society ignore the economic interests and demands of their constituents at their peril because episodes of prosperity and austerity frequently have critical influence on voters behavior at the polls the consequences of eisenhower s last recession of ford s unwillingness to stimulate the economy of carter s stalled recovery were electorally fatal whereas johnson s nixon s and reagan s successes in presiding over rising employment and real incomes helped win elections the book develops a major theory of macroeconomic policy action that explains why priority is given to growth unemployment inflation and income distribution shifts with changes in partisan control of the white house the analysis shows how such policy priorities conform to the underlying economic interests and preferences of the governing party s core political supporters throughout the study hibbs is careful to take account of domestic institutional arrangements and international economic events that constrain domestic policy effectiveness and influence domestic economic outcomes hibbs s interdisciplinary approach yields more rigorous and more persuasive characterizations of the american political economy than either purely economic apolitical analyses or purely partisan politicized accounts his book provides a useful benchmark for the advocacy of new policies for the 1990s a handy volume for politicians and their staffs as well as for students and teachers of politics and economics

the effects of capital mobility trade openness and democracy on social spending in latin america 1980 1999 empirical studies measuring the impact of globalization on social spending have appeared recently in leading journals this study seeks to improve upon previous work by 1 employing a more sophisticated and comprehensive measure of financial openness 2 using a more accurate measure of trade openness based on purchasing power parities and 3 relying on social spending data that are more complete than those used by previous studies on latin america our estimates suggest that several empirical patterns reported in previous work deserve a second look we find that trade openness has a positive association with education and social security expenditures that financial openness does not constrain government outlays for social programs and that democracy has a strong positive association with social spending particularly on items that bolster human capital formation t he international integration of markets for goods and services over the past two decades is unprecedented amidst a broader context of international integration latin america has experienced the most dramatic change in its economic policy orientation since world war ii few regions have undergone as rapid and thorough an economic transformation how has economic integration affected the social welfare policies of latin american governments has it forced them to reduce spending on social programs in order to compete in the world economy or has it induced them to provide social safety nets for those hurt by economic competition has democratization in latin america compelled governments to spend more on social programs in relatively open economies

some issues in the application of closed ended willingness to pay studies to valuing health goods an application to antenatal care in scotland limited resources coupled with unlimited demands means that decisions have to be made concerning the allocation of scarce health care resources the economic instrument of willingness to pay wtp is one instrument that can be used to help this decision making process recommendations from the environmental economics literature suggest that the closed end ce wtp approach should be used this approach is just beginning to be used to value health goods this paper addresses the sensitivity of the closed ended wtp approach to three issues the design of the bid vector the upper and lower limits of integration and the method of analysis these are discussed with reference to a study looking at the value of alternative models of ante natal care in scotland the results are discussed and conclusions made concerning the use of the ce wtp instrument for valuing health goods

consistency between contingent valuation estimates a comparison of two studies of uk national parks bateman i willis k and garrod g 1994 consistency between contingent valuation estimates a comparison of two studies of uk national parks reg studies 28 457 474 recent years have seen a significant increase in the application of the contingent valuation method to the evaluation of environmental preferences in the uk recent theoretical and methodological developments suggest that this increase is likely to be sustained for the foreseeable future this paper examines the issue of consistency across studies carried out to date in the uk attention is initially focused upon two major studies which allow the comparison of a number of findings analysis is then extended to a large number of smaller studies these comparisons suggest that the results obtained to date are both consistent and logically ordered with reference to the environmental good and the change in provision under consideration across studies bateman i willis k et garrod g 1994 la coherence des estimations contingentes une

a comparison of two methods for eliciting contingent valuations of colorectal cancer screening willingness to pay wtp is being used increasingly in health technology assessment although a number of methodological issues remain unresolved using data obtained from a randomised questionnaire survey we investigated the metrical properties of two wtp formats the open ended question versus the payment scale in the context of screening for colorectal cancer approximately 2800 responses were analysed household income attitudes toward health promotion and personal risk perceptions were the principal determinants of the nature and value of response in comparison with the open ended format the payment scale achieved a higher completion rate and generated higher valuations we believe that a framing effect is the most plausible explanation for these differences in performance in contrast to previous findings we do not find subjects perceptions of the resource cost of interventions to be a convincing explanation for either their wtp values or inconsistencies between values and preferences although a proportion of respondents protested at the notion of valuation the majority offer positive valuations although typically of a lower value that non protesters

collapsing exchange rate regimes some linear examples abstract we construct a pair of linear examples to study the collapse time of a fixed exchange rate regime the first example is a perfect foresight continuous time model which allows calculation of the exact collapse time and the tracking of reserves the second example is a discrete time stochastic model which yields an endogenous probability distribution over the collapse time and produces a forward discount of the exchange rate

exchange market mayhem the antecedents and aftermath of speculative attacks exchange market mayhem the antecedents and aftermath of speculative attacks this paper evaluates the causes and consequences of episodes of turbulence in foreign exchange markets using data from 1959 through 1993 for twenty oecd countries we consider the antecedents and aftermath of devaluations and revaluations flotations fixings and speculative attacks which may not be successful we find that realignments of fixed exchange rates are alike devaluations are preceded by political instability budget and current account deficits and fast growth of money and prices revaluations are mirror images of devaluations speculative attacks resemble devaluations but money growth and inflation are more endemic and there is no last minute attempt to tighten monetary policy in contrast few consistent correlations link regime transitions like flotations or fixings to macroeconomic or political variables transitions between exchange rate regimes are largely idiosyncratic and are neither consistently provoked ex ante by systematic imbalances nor typically justified ex post by subsequent changes in policy we conclude that there are no clear early warning signals of many speculative attacks and no easy solutions for policy makers barry eichengreen andrew k rose and charles wyplosz

political responses to interdependence what s left for the left heightened economic interdependence in recent years is commonly argued to have generated great pressures for convergence in economic policies across the advanced industrial democracies interdependence has clearly had a great impact on the types of economic policies that governments can pursue they have been unable to pursue independent fiscal and monetary policies since the mid 1970s furthermore all governments have been forced to attempt to promote the competitiveness of national goods and services in world markets and to increase the speed and efficiency with which national producers adjust to changes in global markets there are however different policies consistent with these goals statistical analyses of economic policies since the mid 1970s show that governments of the left and the right continue to be able to enact distinctive supply side policies that promote competitiveness and flexible adjustment and simultaneously further their partisan objectives

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

households willingness to pay for health microinsurance and its impact on actual take up results from a field experiment in senegal abstractcommunity based health insurance schemes cbhis have been present in the region of theis senegal for many years yet despite the benefits they offer take up rates remain low this article measures the willingness to pay wtp for cbhis premiums in such a context our results highlight the role of income wealth and risk preferences as determinants of wtp we also provide an analysis of the predictive power of wtp on the actual take up of insurance following our offering of membership to a sample of 360 households results show that wtp has a positive and significant impact on actual cbhis take up

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