a sequential theory of decentralization latin american cases in comparative perspective both advocates and critics of decentralization assume that decentralization invariably increases the power of subnational governments however a closer examination of the consequences of decentralization across countries reveals that the magnitude of such change can range from substantial to insignificant in this article i propose a sequential theory of decentralization that has three main characteristics 1 it defines decentralization as a process 2 it takes into account the territorial interests of bargaining actors and 3 it incorporates policy feedback effects i argue that the sequencing of different types of decentralization fiscal administrative and political is a key determinant of the evolution of intergovernmental balance of power i measure this evolution in the four largest latin american countries and apply the theory to the two extreme cases colombia and argentina i show that contrary to commonly held opinion decentralization does not necessarily increase the power of governors and mayors

micro incentives and municipal behavior political decentralization and fiscal federalism in argentina and mexico summary this article analyzes the mixed results of political and fiscal decentralization in latin america by comparing taxing and spending policies in six cities in argentina and mexico consistent with previous studies we find that decentralization has been frustrated by overconcentration of power at the provincial level and large vertical fiscal imbalances though we characterize these as functional elements in a system of redistributive policy making that benefits a wide array of provincial and municipal actors we seek to add a new dimension to the literature by arguing that micro level incentives conditions and circumstances particular to specific places are more important determinants of municipal behavior than macro level structures those policy and institutional changes intended to make officials more responsive to local conditions federalism local elections intergovernmental transfers and own source revenues we conclude that the theory of decentralization relies on a flawed conception of the causal mechanisms that are hypothesized to create responsiveness in local officials

did the elimination of mandatory retirement affect faculty retirement a special exemption from the 1986 age discrimination act allowed colleges and universities to enforce mandatory retirement of faculty at age 70 until 1994 we construct a survey that permits us to compare faculty turnover rates before and after the law changed at a large sample of institutions with defined contribution pension plans after the elimination of compulsory retirement the retirement rates of 70 and 71 year olds fell by two thirds and were comparable to rates of 69 year olds these findings indicate that u s colleges and universities will experience a rise in the number of older faculty over the coming years jel j26 i21

designing subnational institutions regional and municipal reforms in postauthoritarian chile this article conceptualizes decentralization as a change in the institutional rules that divide political authority and governing capacity between levels of government by emphasizing the institutional dimension the author argues that different approaches to the study of institutions namely rational and historical institutionalism can generate analytical leverage on the contemporary trend of decentralization in the chilean case rationalist perspectives illuminate the country s continued status as one of latin america s most centralized polities comparatively weak subnational institutions directly reflect the strategic design considerations of national politicians however concepts central to historical institutionalism including critical junctures and unanticipated consequences explain how and why decentralization gained steam in the postauthoritarian period specifically chile s shift to more decentralized institutions is the legacy of pinochet era reforms of subnational government sequencing

northern ireland s property market crisis insights from minsky s financial instability hypothesis the financial crisis of 2007 has shown that standard mainstream macroeconomic models underpinned by general equilibrium theory fail to anticipate explain and provide guidance on how to respond to such events stiglitz 2011 evidence in the northern ireland context has further suggested that applying these models to property markets may be inappropriate given the underlying statistical properties of these time series gallagher et al 2015 these issues combined suggest that there may be merit in examining cases of financial crises through alternative theoretical frameworks and in adopting a more pluralist approach with this in mind this paper investigates whether minsky s 1975 1986 1992 financial instability hypothesis can assist in understanding the recent property market crisis in northern ireland which was severe by both national and international standards using qualitative evidence to analyse the behaviours of borrowers represented by property developers and lenders represented by banks over the course of the business cycle this paper assesses the relevance of minsky s arguments the findings show that minsky s financial instability hypothesis explains the incidents observed in ni s property market in recent years

too big to manage us megabanks competition by innovation and the microfoundations of financialization disagreements over the systemic implications the future of financialization can be traced in part to the absence of sustained attention to the role of banking firms in driving this secular shift forward that is the financialization literature lacks an adequate microfoundation accounting for the drivers of financialization processes solely at the macro level overlooks the problems of how these processes came about and whether they are sustainable this paper addresses this explanatory gap arguing that a key independent microeconomic driver of increasing financialization did exist the incessant efforts by money centre banks in the usa to break out of depression era restrictions on their size activities and markets these banks growth strategies in turbulent times led to an institutional meso shift the rise of a megabank centred shadow banking system that now shapes global financial architecture even while operating in ways that are unsustainable in short too big to manage megabanks are at the heart of the fragility and instability of the economy today

the link between pensions and retirement timing lessons from california teachers abstract i exploit a major unanticipated reform of the california teachers pension to provide quasi experimental evidence on the link between pension features and retirement timing using two large administrative data sets i conduct a reduced form analysis that leverages the nonlinearities in the return to work generated by the pension features and the reform induced shifts of these nonlinearities for identification the implied estimates of the elasticity of lifetime labor supply with respect to the return to work are centered around 0 04 in the medium run and are less than 0 1 in the long run

cognition market sentiment and financial instability the purpose of this paper is to explore the role for psychology within an open system structural theory of financial instability and to consider the implications for policy while behavioural finance has drawn on ideas from psychology in order to explain evidence of behaviour that deviates from the rationality axioms it is argued that the way in which psychology is framed by this approach is unduly limiting minsky s structural theory of financial instability with its keynesian and ultimately humean roots incorporates psychology into the theoretical foundations in particular cognition and sentiment are shown to be interconnected rather than separable it is concluded that the policy implications for addressing the current crisis while apparently similar between these different approaches are in fact very different the underlying theory involves different methodology and indeed different framing from behavioural finance the way in which the crisis is understood is therefore important for policy copyright the author 2010 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

financial globalisation and crisis institutional transformation and equity this paper comprises the long introduction to the symposium of five papers on financial globalisation published in the cambridge journal of economics volume 34 no 2 the paper discusses the impact of financial globalisation in a variety of spheres and shows how the five papers link together to provide a coherent view of the current economic and financial crisis in this paper we also examine the globalisation of finance more broadly both in historical terms as well as in relation to the current widespread failure in the financial markets we take up the policy question of how the interests of the poor in particular and developing countries in general could be safeguarded from the vagaries of financial globalisation questioning how much choice communities and countries have and what can the international community do to extend these choices

second generation fiscal federalism political aspects of decentralization and economic development summary this essay contributes to second generation fiscal federalism sgff which traces the implications of incentives created by political and fiscal institutions the approach explores how various forms of fiscal federalism work in the presence of political officials who rather than being benevolent social planners face various forms of political incentives the paper focuses on three sets of positive models first it explores self enforcing federalism that is how federal systems are held together given various tendencies for federal systems to become centralized or fall apart second it considers how specific political institutions such as democracy interact with decentralization finally it studies various political impediments to economic growth again highlighting the interaction with decentralization 2013 elsevier ltd all rights reserved

bailouts budget constraints and leviathans comparative federalism and lessons from the early united states recent research on federations particularly in the developing world emphasizes the importance of hard budget constraints and a strong central government to attenuate intergovernmental economic conflicts such research fails on two counts first it does not explain how hard budget constraints emerge or become self enforcing second it does not take into account the insight of the market preserving federalism literature that central governments strong enough to impose restraint on regions are likely too powerful to be checked in a manner consistent with the longterm health of markets unfortunately the market preserving federalism literature itself provides little insight into how to move from a market distorting to a market preserving equilibrium this article answers these theoretical shortcomings with reference to the evolution of political competition at the regional level and the representation of those regions at the national level more specifically whereas regional competition determines the s

racing to the bottom or to the top decentralization revenue pressures and governance reform in china summary china s decentralization has been praised for promoting inter jurisdictional competition that incentivizes local officials to promote economic development the downside of decentralization is that it enables these same local authorities to slow or block implementation of centrally mandated governance reforms especially when these may negatively affect local development goals we suggest that china s fiscal system and promotion system have created mismatched incentives that encourage cash strapped local authorities to disregard central governance reforms specifically we show that cities with weaker revenue bases were slower to implement new centrally mandated environmental transparency regulations additional evidence points to a bifurcation in development strategies in fiscally strong cities increased foreign investment leads to greater compliance in fiscally weak cities foreign investment is associated with decreased disclosure suggesting they aim to promote local development by becoming pollution havens similarly high levels of pollution induce fiscally strong cities to increase pollution disclosures while the opposite holds in fiscally weak cities these findings imply that mismatched decentralization policies can undermine other important governance reforms even ones that might be expected to be complementary to decentralizing initiatives

limited liability and the modern corporation in theory and in practice the catastrophic consequences of a lack of public control over the operations of large private corporations have been thrown into sharp relief by two major events in the recent past the global financial crisis and the deepwater horizon oil spill in the gulf of mexico while these events obviously differ in scope and nature they nevertheless turn the spotlight on a fundamental problem of contemporary capitalism an economic system that facilitates the privatisation of gains in the hands of ever smaller elites while also socialising risk losses in an anarchic manner to the detriment of the many is not politically viable in the long run this is the case in particular if a core element of this system s legitimacy is its claim to promote democracy at home and around the world based on principles of transparency and accountability both the global financial crisis and the deepwater horizon oil spill have already attained the status of watershed events mainly because the social economic and environmental risks inflicted by private actors on very large groups of people were extraordinary and the causes of failure to manage these risks were systemic rather than accidental at the heart of the systemic nature of these watershed failures lies the gradual evolution of the modern corporation into organisations with the power to re shape in their favour a changing and varied history of precarious balancing acts between public and private interests in advanced capitalist economies from its beginnings capitalism has been defined by the primacy of economic over political organisation most famously encapsulated in adam smith s metaphor of the invisible hand much later albert hirschman s insightful account of how the interests gradually came to outweigh the passions hirschman 1977 provides a detailed analysis of such early legitimisation patterns according to which the pursuit of individual freedom and economic selforganisation would be the driving force of political pacification and collective civilisation yet from the beginning such high expectations were curbed by warnings of potential conflicts between private and public interests if the former became too powerful thus adam smith himself pointed out that t o widen the market and to narrow the competition is always the interest of the dealers to widen the market may frequently be agreeable to the interest of the public but to narrow the competition must always be against it and can serve only to enable the dealers by raising their profits above what they naturally would be to levy for their own benefit an absurd tax on the rest

introduction the global financial crisis there cannot now be a shadow of a doubt that the flaw in his ideology admitted by alan greenspan in response to a question by henry a waxman chairman of the us house of representatives committee on oversight and government reform whether he felt that your ideology pushed you to make decisions that you wish you had not made is both significant and permanent the current financial and economic crisis that has forced the likes of greenspan to question the coherence of dominant conceptual frameworks is unprecedented in global reach and systemic gravity some basic figures speak for themselves according to mckinsey s mapping global financial markets october 2008 global financial assets rose from us 12 trillion in 1980 to us 196 trillion in 2007 the international monetary fund s global financial stability report imf 2009a estimate for the latter figure is considerably higher at us 241 trillion global cross border capital flows more than doubled between 2002 and 2007 with foreign investors holding one in four debt securities and one in five equities while in 2000 only 11 countries had financial assets of more than 350 of gross domestic product gdp 25 countries had deepened their financial markets to the same extent by 2007 as early as 1990 money managers had increased their control of us corporate equities from 8 in 1950 to 60 porter 1992 p 6 whalen 2002 p 402 similarly pension funds had extended their share of total business equities from less than 1 to just short of 39 and their fraction of corporate debt from 13 to 50 ghilarducci 1992 p 117 whalen 2002 p 402 in the period from 1986 to 2006 the us financial sector as a whole increased its share of corporate profits from 10 to 30 while its outstanding debts grew from 20 of gdp in 1980 to 116 in 2007 fed 2009 according to gillian tett from the financial times outstanding credit defaults swaps cds today amount to no less than us 60 trillion with the risk embodied after discounting mutually off setting contracts still as high as us 14 trillion tett 2009 p 264 as we know the curtains have now come down on this dance of the trillions palma 2009 the immediate hang over in the form of a pile of toxic debt is surreal not only in its

financialisation oil and the great recession abstract this article addresses the role of world oil price hike of 2007 08 in serving to transform the financial and banking crisis into what is commonly referred to the great recession existing literature on the global crisis of 2007 09 tends to view it as a financial or banking phenomenon with analyses focusing mainly on state policies governance mechanisms and market dynamics in transforming the banking crisis of 2007 08 into the economic recession of 2008 12 13 although often attributing the global meltdown to wider phenomenon of financialisation rarely do existing perspectives delve into the role of the commodity sector in the global credit crunch in this paper we aim to fill this gap by inquiring into the role played by oil as a financial asset class in the political economy of the global crisis

economic theories of the break up and integration of nations abstract this paper surveys the recent political economy literature on the size distribution of nations the main themes of this literature are 1 a the spread of democracy leads to the creation of too many sovereign states 2 b the extent of factor mobility plays a key role in determining the incentives towards separation or integration 3 c economic integration through the development of international trade may require greater political integration to create and effectively maintain a level playing field in international trade at the same time economic integration by reducing the economic costs of separation increases the incentives towards political separation

rebuilding local government finances after conflict lessons from a property tax reform programme in post conflict sierra leone abstractthis research interrogates the factors underpinning the relative success of a property tax reform programme in sierra leone recognising the importance of politics in shaping reform outcomes it highlights reform strategies that have contributed to overcoming both technical and political barriers to reform it highlights three interconnected arguments first there is a need for long term hands on local partnerships that support local capacity help to confront political resistance and build a constituency for reform second there should be expanded focus on politically contentious efforts to strengthen transparency public outreach and enforcement among elites as they are critical to programme success and sustainability third a focus on the same politically contentious elements of reform can help external actors better assess the extent of local political commitment to reform early on and thus target reform funding and efforts more effectively

policy variation labor supply elasticities and a structural model of retirement this paper exploits a combination of policy variation from multiple pension reforms in austria and administrative data from the austrian social security database using the policy changes for identification we estimate social security wealth and accrual elasticities in individuals retirement decisions next we use these elasticities to estimate a dynamic programming model of retirement decisions finally we use the estimated model to examine the labor supply and welfare consequences of potential social security reforms

on the determinants of fiscal centralization theory and evidence abstract this paper presents a simple model that unifies most of the results of the literature on fiscal federalism the model describes an economy characterized by two levels of government one public good and a private good the predictions of the model are tested by using a new set of measures of fiscal centralization the main findings are that country size income per capita ethnic fractionalization and level of democracy are negatively correlated with the degree of fiscal centralization the model is tested using ols tobit and semi parametric estimators the paper also shows that the variables included in the regression are helpful in the prediction of changes in the level of centralization

building faith in a common currency can the eurozone get beyond the common market logic building faith in a common future which is at the core of the making of a common currency has been declining since the turn of the 1980s the economic neoliberalism that diffused worldwide after the collapse of the gold exchange standard and the economic crisis of the mid 1970s challenged the european project could a specific european model of social market economy help to forge the solidarity and discipline required to meet this challenge it turned out that members had different understandings of the european model especially regarding the role of central government meanwhile in all forced adjustments of the european union eu to a more open and competitive world be it enlargements new treaties or new institutions the german conception of social market economy prevailed mainly because germany was in a better position than its partners in most cases a rising discontent progressively eroded the faith in the eu project even in germany where a difficult reunification became a major national source of worries by the end of the 1990s when the euro was finally created the eu project had lost its momentum the relative success of the euro in the early 2000s was much linked with the weakness of the dollar answers to the 2008 financial then economic crisis that rest on harsh austerity plans can only worsen the situation a reconstruction of the eu project clearly needs a new pact of solidarity measures integration of the youths in all member countries stands as a good rallying common objective copyright the author 2012 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

solvency rule and capital centralisation in a monetary union brancaccio and fontana 2013 have suggested that the central bank influences the solvency conditions of firms and households in the economic system this solvency rule is examined here within a stylised model of a monetary union characterised by different rates of accumulation and inflation across its two member countries the rule highlights the existence of a relationship between the interest rate set by the central monetary authority and the allocation of ownership of existing physical capital among the member countries of the monetary union i e the rates of capital centralisation the paper also shows the nexus between solvency and government debt sustainability and examines the implications of deflationary or currency devaluation policies for the solvency conditions

federalism fiscal restraints and european monetary union a prominent feature of the maastricht treaty on european union is the restrictions it places on fiscal policy under the provisions of the excessive deficit procedure or edp the success of member states in avoiding excessive deficits during the transition to economic and monetary union emu is one of four criteria governing admission to the monetary union once monetary union has begun member states are unconditionally required to avoid excessive deficits a state has an excessive deficit when it is so declared by the european council upon a report by the european commission and a judgment by the monetary committee the edp is set in motion if a country s deficit and general government debt respectively exceed 3 percent and 60 percent of gdp the justification for these procedures is that member states participating in the monetary union must be restrained from overborrowing to avoid destabilizing the common currency if excessive deficits cause a debt crisis the european central bank ecb will come under pressure to bail out the imperiled government the bailout could be ex post in which case the ecb would monetize the government s debt or ex ante in which case it would keep interest rates low to lighten the debt service burden either way unfettered fiscal policies could create inflationary pressures that the ecb will find difficult to resist

fiscal decentralization a political theory with latin american cases theories of fiscal federalism explain the efficiency and other economic gains from decentralization but do not explain its extent and nature in practice the authors develop a political theory of decentralization that focuses on the lines of political accountability between politicians at different levels of government the more accountable central level politicians presidents and legislators are to subnational politicians the greater the extent of decentralization and the more it will conform to the preferences of subnational politicians for example with respect to the degree of the center s discretion the model is tested on five latin american countries that although formally decentralized in fact exhibit wide differences in the distribution of spending and revenue responsibilities the theory also helps explain a number of problems governments have encountered in decentralizing including subnational debt crises and a mismatch between responsibilities and resources

demand driven inequality endogenous saving rate and macroeconomic instability this article examines consumption dynamics in a cambridge model of growth and distribution the model endogenises the workers saving rate and incorporates out of equilibrium dynamics explicitly the analysis identifies a new mechanism of macroeconomic instability that emerges from the interaction between the kaldorian process of demand driven inequality and the workers saving behaviour the mechanism can generate perpetual cycles where the upwards phase is characterised by a prolonged period of falling saving rate and increasing income inequality the article discusses the empirical relevance of the formal analysis the article discusses the empirical relevance of the analytic results

the response of employees to severance incentives the university of california s faculty 1991 94 in response to huge budgetary shortfalls in the early 1990s the university of california offered its older and longer service employees financial inducements to leave this paper analyzes the responses of uc s faculty to three waves of buyout incentives it is estimated that an individual presented with 10 percent higher severance benefits has a 7 8 percent higher probability of quitting however quit probabilities are very difficult to forecast with accuracy this casts doubt on arguments that maintain that buyouts are superior to employer initiated layoffs as a mechanism to effect large employment changes

the congressional politics of decentralization the case of chile this article explains why legislators in a centralized polity support decentralizing laws using chile as a case study it assesses two standard explanations for this support party nomination procedures which is disregarded and electoral strategies which is accepted a novel finding is that party ideology is also a predictor of support for decentralization with parties of the right less likely to offer it the author also argues that a legislator with a sub national rather than national background is more likely to back such reforms in an attempt to enhance his or her reputation within the constituency the author tests these and other hypotheses by combining qualitative arguments and regression analysis the latter is performed on an original database of legislator biographical information party electoral performance regional gdp figures and individual legislator support for 46 decentralizing laws approved in chile between 1990 and 2006

economic voting and multilevel governance a comparative individual level analysis an important component of incumbent support is the reward punishment calculus of economic voting previous work has shown that clarity of responsibility within the central state government conditions national economic effects on incumbent vote choice where clarity is high low economic effects are greater less this article advances the clarity of responsibility argument by considering the effect of multilevel governance on economic voting in institutional contexts of multilevel governance the process of correctly assigning responsibility for economic outcomes can be difficult this article tests the proposition that multilevel governance mutes effects of national economic conditions by undermining responsibility linkages to the national government individual level data from the comparative study of electoral systems module 1 are used to test this proposition results demonstrate that economic voting is weakest in countries where multilevel governance is most prominent findings are discussed in light of the contribution to the economic voting literature and the potential implications of multilevel governance

accountability and decentralisation in government an incomplete contracts model this paper approaches the question of the appropriate level of decentralisation of power in government as a problem in the allocation of control rights under incomplete contracts the model of the paper compares allocations of power to local central and regional government as alternative means of motivating governments to act in the interests of citizens centralisation allows benefits from policy coordination but has costs in terms of diminished accountability which can be precisely defined as the reduced probability that the welfare of a given region can determine the re election of the government the model is extended to allow for conflicts of interest within regions and externalities between central and local governments in a federation it is also applied to determining levels of fiscal transfer between localities and to circumstances where governments may act as leviathans appropriating resources for their own use

comparative evaluation of post keynesian interest rate rules income distribution and firms debts for macroeconomic performance this article investigates the macroeconomic effects of firms debts and income distribution on economic growth and inflation under three different post keynesian interest rate rules the kansas city rule the smithin rule and the pasinetti rule by setting up a dynamic post keynesian model after reviewing debates on the post keynesian interest rate policies this article evaluates the relative merits of the three rules in their relationship with economic growth regimes and inflation dynamics accordingly this article explicitly shows that i a policy rule works effectively under some economic growth and inflation patterns but not necessarily under other patterns ii a policy rule contributing to high economic growth may not always be compatible with stabilisation of economic growth and iii the macroeconomic effects of debt and income distribution on economic growth and inflation are closely related to the choice of interest rate rule

beyond the fiction of federalism macroeconomic management in multitiered systems recent research on federalism is extremely divided while some tout the benefits of market preserving federalism others point to the fragmentation and incoherence of policy in federal states this research bridges the divide by analyzing the political and fiscal structures that are likely to account for the highly divergent economic experiences of federal systems around the world to test these propositions the authors use an original data set to conduct analyses of budget balance and inflation in fifteen federations around the world from 1978 through 1996 the empirical research suggests that the level of fiscal decentralization the nature of intergovernmental finance and vertical partisan relations all influence macroeconomic outcomes the findings have broad implications for the widespread move toward greater decentralization and for the theoretical literatures on federalism and macroeconomics

redemocratization electoral engineering and party strategies in chile 1989 1995 can the deliberate manipulation of electoral rules help achieve political moderation and stability an unusual electoral system in chile provides a dramatic albeit controversial instance of political engineering the binominal system promulgated by the outgoing pinochet government mandates two member districts for the upper and lower legislative chambers binominal electoral rules occupy a middle ground between majoritarian and pr systems in chile the binominal system has provided incentives to form broad alliances and has encouraged centripetal political competition without generating extreme disproportionality between votes and seats using lijphart s index disproportionality was 5 80 in 1989 and 5 75 in 1993 higher than most pr systems but lower than most plurality systems

accepting an early retirement bonus an empirical study the presence of special early retirement bonuses can change the work incentives of older workers this study applies a pension acceptance model to acceptance of an early retirement pension bonus probabilities of acceptance range from 18 to 33 it also simulates acceptance behavior without the bonus with probabilities of acceptance ranging from 11 to 30

estimating the effect of financial aid offers on college enrollment a regression discontinuity approach an important problem faced by colleges and universities that of evaluating the effect of their financial aid offers on student enrollment decisions is complicated by the likely endogeneity of the aid offer variable in a student enrollment equation this article shows how discontinuities in an east coast college s aid assignment rule can be exploited to obtain credible estimates of the aid effect without having to rely on arbitrary exclusion restrictions and functional form assumptions semiparametric estimates based on a regression discontinuity rd approach affirm the importance of financial aid as an effective instrument in competing with other colleges for students

adam smith goes to college an economist becomes an academic administrator the author asks whether it is useful to view universities in a utility maximizing framework and shows that university organizing virtually guarantees that the utility maximizing model is the incorrect approach he then discusses resource allocation issues at cornell and reflects upon how concepts that are obvious to economists helped or hindered decision making at cornell the author hopes to convey not that economic concepts are irrelevant in operating a university but rather that it takes a long time to explain to all the actors in the system why these concepts should matter and even longer to actually make them matter

second generation fiscal federalism the implications of fiscal incentives abstract first generation fiscal federalism fgff studies the performance of decentralized systems under the assumption of benevolent social planners second generation fiscal federalism sgff studies performance based on the fiscal and political incentives facing subnational officials the paper focuses on three aspects of sgff first it considers the design of intergovernmental transfers while fgff emphasizes correcting vertical and horizontal equity sgff emphasizes the importance of fiscal incentives for producing local economic prosperity sgff extends fgff approaches by showing how non linear transfer systems can produce both equalization and high marginal fiscal incentives to produce local economic growth second the paper raises the fiscal incentive approach showing how different tax systems produce different fiscal incentives for political officials to choose policies third the paper discusses the interaction of democracy and fiscal federalism

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

federalism chinese style the political basis for economic success in china china s remarkable economic success rests on a foundation of political reform providing a considerable degree of credible commitment to markets this reform reflects a special type of institutionalized decentralization that the authors call federalism chinese style this form of decentralization has three consequences first it fosters competition not only in product markets but also among local governments for labor and foreign capital this competition in turn encourages local government experimentation and learning with new forms of enterprises regulation and economic relationships second it provides incentives for local governments to promote local economic prosperity finally it provides a significant amount of protection to local governments and their enterprises from political intrusion by the central government

the rise and fall of money manager capitalism a minskian approach we are in the midst of a global financial crisis accompanied by a deep and probably long lasting economic downturn indeed some analysts are already calling this the first depression of the post world war ii era in this article i argue that this is a systemic crisis a crisis of what hyman minsky called money manager capitalism i link this to the analyses of hilferding and veblen of an earlier period finance capitalism and argue that this is in effect the second failure of this type of capitalism the essential characteristics of early finance capitalism are relatively small government use of external finance for investment and growing concentration of economic power in the hands of trusts or what we might today call megacorporations with varied interests and diverse affiliations across industry finance and insurance unlike the first phase the second phase of finance capitalism took place in the context of a big government neoconservative model minsky s analysis helps us to understand how the new deal and big government created a paternalistic capitalism after world war ii which favoured high consumption high employment greater equality and financial stability however that stability was destabilising because it permitted the rise of managed money over time innovation and deregulation increased fragility which generated increasingly frequent and severe financial crises while previous crises were resolved quickly enough to prevent it another debt deflation from happening again this crisis appears to be sufficiently severe that the very survival of money manager capitalism is thrown into question the article examines the contributing factors to the current crisis including the real estate boom and bust the rise of risky financial instruments such as securitised debts and credit default swaps the commodities market bubble and the fiscal squeeze the article concludes with some suggestions concerning the possible outcome of the failure of this form of finance capitalism copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press