primitive accumulation agrarian reform and socialist transitions an argument this essay constructs a preliminary argument concerning the position of the peasantry in the twin transitions the first to industrialisation and the second towards socialism within orthodox marxian theory the two transitions are also sequential with the socialist order emerging from the crisis breakdown and overthrow of the capitalist system which in its maturity becomes a fetter upon further development and begets with the inexorability of a law of nature its own negation marx 1969 144 at this juncture the process of proletarianisation has been completed in the economy as a whole including the agricultural sector where the petty peasant producers and artisans have been separated from their means of production and have been reduced to the status of sellers of labour power while the landlords and or sections of the middle and rich peasantry have emerged as capitalist farmers who treat agriculture as a branch of industry integrated fully with the rest of the economy however this bit of marx s theory of history was drafted without the benefit of hindsight and thus far history has resisted conforming to what was expected of it the first socialist revolution broke the capitalist chain not at the strongest but rather at the weakest link and subsequent socialist transitions have also been initiated through revolutionary movements in arenas which display low initial levels of economic especially industrial development at the time of the revolutionary break with the past none of the present roll of socialist economies boasted an advanced industrial sector in none of them was the process of rural proletarianisation anywhere near completion indeed in most cases on both counts the situation was as far from the marxian postulation as could be imagined as such these countries have entered the socialist transition not through the crossroads of industrialisation instead they have launched upon the twin transitions simultaneously

original accumulation equity and late industrialization the cases of socialist china and capitalist taiwan abstract this paper explores two dynamic approaches to original accumulation one socialist and one capitalist in a search for clues to the developmental options available for pre industrial predominantly agrarian nations the comparative analysis of two cases which have been hailed in widely divergent literatures for their developmental implications highlights the human costs associated with each indeed it suggests the necessity to rethink the categories of socialist and capitalist development paths the analysis focuses on the relationships among the state the peasantry and the dominant landed classes in the struggle to control and channel the agricultural surplus and on state mechanisms to transfer resources from agriculture to industry and from the private sector to the state and the institutions it controls

political cycles in oecd economies this paper studies whether the dynamic behaviour of gnp growth unemployment and inflation is systematically affected by the timing of elections and of changes of governments the sample include the last three decades in 18 oecd economies we explicitly test the implication of several models of political cycles both of the opportunistic and of the partisan type also we confront the implication of recent rational models with more traditional approaches our results can be summarized as follows a the political business cycle hypothesis as formulated in nordhaus 1975 on output and unemployment is generally rejected by the data b inflation tends to increase immediately after elections perhaps as a result of pre electoral expansionary monetary and fiscal policies c we find evidence of temporary partisan differences in output and unemployment and of long run partisan differences in the inflation rate as implied by the rational partisan theory by alesina 1987 d we find virtually no evidence of permanent partisan differences in output growth and unemployment

political uncertainty and macroeconomic performance abstract it is often claimed that politically induced economic flucturations are harmful for the society in this paper we show that this conjecture is not necessarily correct and such fluctuations can actually improve society s macroeconomic performance

social norms and csr performance some institutional investors e g pensions universities and religious charitable and not for profit institutions are exposed to social norms and public scrutiny prior research indicates that these norm constrained institutions engage in negative screening and invest less in firms operating in sin industries we examine whether social norms also motivate these institutions to engage in positive screening where they invest more in firms with better corporate social responsibility csr performance and csr related activism where they promote improvements in the csr of existing investees we find that firms with superior csr performance have greater ownership by norm constrained institutions consistent with positive screening and we use a natural experiment to establish causality we also find that increases in the shareholdings of norm constrained institutions are associated with subsequent improvements in csr consistent with activism further we rule out an alternative explanation for our results where the positive screening and activism are profit driven rather than driven by social pressure thus our results suggest that the influence of social norms on stock markets is more pervasive than documented in the prior literature

who targets inflation explicitly abstract several countries have recently adopted explicit inflation targeting eit this paper applies probit analysis on data for 22 countries to show that the degree of central bank independence is positively correlated with the probability that inflation targeting is adopted there is also evidence depending on whether iceland and norway are included in the sample that the probability that eit is introduced is influenced by membership in the european union the commodity concentration and composition of exports which are correlated with measures of the importance of supply and external shocks and the degree of openness

political risk and the expectations hypothesis abstract this paper develops and empirically supports using 3 and 6 month interest rates a theory that political risk can explain the shifting term premia found in u s data we find that incorporating these political regime shifts yield results that support the expectations hypothesis

cyclical and political influences on the size distribution of income in the us 1959 1989 the quesion of whether the size distribution of income is subject to cyclical fluctuations in unemployment and inflation has been investigated in several studies in these studies however the fact that unemployment inflation and distribution may be influenced intentionally by policy makers is ignored in order to investigate whether any political influence on the size distribution of income actually exists a model is formulated in which the distribution not only depends on unemployment and inflation but also on a variable representing the political process the model is tested using time series data pertaining to the case of the us in the period 1958 to 1989 the results indicate that inequality tends to be negatively influenced by democratic administrations

real sources of european currency policy sectoral interests and european monetary integration in the thirty years before economic and monetary union was achieved european currency policies varied widely among countries and over time in this article i argue that the sectoral impact of regional exchange rate arrangements in particular their expected real effects on european trade and investment exerted a powerful influence on the course of european monetary integration the principal benefit of fixing european exchange rates was facilitation of cross border trade and investment within the european union eu the principal cost of fixed rates was the loss of national governments ability to use currency policy to improve their producers competitive position empirical results indeed indicate that a stronger and more stable currency was associated with greater importance of manufactured exports to the eu s hard currency core while depreciations were associated with an increase in the net import competition faced by the country s producers this suggests a powerful impact of real factors related to trade and investment and of private interests concerned about these factors in determining national currency policies

the agrarian barrier to industrial growth it is argued here that in transitional economies industrial growth depends not so much on the size of the agricultural surplus but rather on the rates of productivity growth and population growth in agriculture via their effects on the size of the home market for manufactures in developing this argument estimates of the agricultural surplus and inter sectoral market shares in post restoration japan and post independence india are compared a typology of agrarian systems is then suggested based on how alternative systems influence productivity and population trends in agriculture the typology is illustrated with historical comparisons from europe japan and india

macroeconomic policy in a two party system as a repeated game this paper considers the interaction of two parties with different objectives concerning inflation and unemployment and rational and forward looking wage setters if discretionary policies are followed an economic cycle related to the political cycle results in equilibrium this cycle is significantly different from the traditional political business cycle reputational mechanisms due to the repeated interaction of the two parties and the public or commitments to a common policy rule can improve upon the discretionary outcome by reducing or eliminating the magnitude of the economic fluctuations

political coalition breaking and sustainability of policy reform abstract this paper examines the need and potential for coalition breaking in policy reform efforts related to agriculture and the environment the objective is to consider traditional policy tools that can break existing political coalitions given the powerful noncompetitive role of strong interest groups such as government bureaucracy and large trading organizations choice of the policy mix is modeled as a cooperative game a modification of the nash bargaining solution is used to endogenize coalition formation this framework is then used to examine the potential for an external development agency to promote environmental interests in the policy formation process the results explain how in some countries a small increase in strategic aid may achieve a major breakthrough in policy reform even if past activities have been unproductive and how in other countries a major increase in aid may be fruitless

ec 1992 from a north american perspective completion of the european community s internal market will force important changes in the economies of member countries and the effects of those changes will spill over into the rest of the world within the ec the prevailing view has been steadfast in the expectation that the benefits of further integration will exceed the costs this has been especially the case among european businessmen who have been in the lead in this phase of economic integration 1 as the target date of i992 draws closer however the level of anxiety especially about the costs of adjustment appears to be rising in some sectors and some 2 countries attitudes in non member countries in both private and official circles have varied the initial response from the executive branch in the united states was favourable there has however been considerable fear among u s business and labour leaders that completion of the internal market would be accompanied by a conversion of europe into an economic fortress with sharply reduced access to foreigners in some european non member countries notably austria and sweden the prevailing view favours membership the insider outside issue is still being debated in switzerland and elsewhere and is likely to play a role in the trade strategies of a number of eastern european countries in north america the united states has entered into a free trade agreement with canada and is poised for negotiations with mexico some have suggested that american interest in regional trading pacts has been motivated in part at least by a strategic desire to strengthen the united states bargaining hand with the ec while regionalism thus thrives the trade talks of the uruguay round lie moribund if completed as planned the current process of economic integration in europe will replace a group of national markets segmented in various degrees by a proliferation of non tariff barriers with a single regional market if plans for monetary integration also reach fruition they will replace a system of multiple currency areas with a single regional currency domain from the perspective of the outsider there are three broad areas of concern about the external effects of the ongoing process of real and monetary integration in europe the first which is discussed in section ii deals with the implications of goods and resource market integration for outside industries and firms and for outside welfare generally this includes the direct effects of internal liberalisation and the effects of possible changes in the level of

election campaigns agenda setting and electoral outcomes framing effects and bounded rationality imply that election campaigns may be an important determinant of election outcomes this paper uses a two party setting and simple game theoretic models to analyse the strategic interaction between the parties campaign decisions alternations of power emerge naturally even if both electoral preferences and party positions remain constant

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

political business cycles 40 years after nordhaus the aim of this article is to survey the huge literature that has emerged in the last four decades following nordhaus s rev econ stud 42 2 169 190 1975 publication on political business cycles pbcs i first propose some developments in history of thought to examine the context in which this ground breaking contribution saw the light of the day i also present a simplified version of nordhaus s model to highlight his key results i detail some early critiques of this model and the fields of investigations to which they gave birth i then focus on the institutional context and examine its influence on pbcs the actual research agenda finally i derive some paths for future research

the political economy of inflation and stabilization in developing countries the traditional literature on inflation in developing countries has focused on three main determinants of inflationary pressures a money creation b fiscal imbalances and c cost push elements while the first two factors have been emphasized by authors of a monetarist persuasion cost factors have played a crucial role in the structuralist theories developed during the 1950s and 1960s however more recent analyses on inflation and stabilization have shifted their attention away from traditional direct economic causes of inflation such as money creation toward political and institutional determinants of inflationary forces this new literature which has come to be known as the political economy approach to macroeconomic policy has built on some important insights of game theory and the theory of public choice trying to explain why some governments decide to run large fiscal deficits and to rely heavily on the inflation tax typically in answering these questions this recent strand of the literature has emphasized the role of political instability credibility reputation and political cycles 2 in spite of providing some important new insights into the determinants of inflation this new literature is subject to two limitations first until recently most of the contributions have been theoretical without providing empirical tests on their most important implications and second the emphasis has been almost exclusively on the industrialized countries ignoring the developing nations the purpose of this article is to discuss selectively some of the most important insights of this new literature on policy making from the developing countries perspective i will emphasize the policy implications of this approach to inflationary analysis and discuss some of the limited empirical results

unemployment and inflation consequences of unexpected election results the empirical evidence toward rational partisan theory of business cycles is mixed and thus inconclusive this is due to the enormous heterogeneity of the existing empirical studies only a few of these test explicitly for the central theoretical innovation that post electoral blips in economic activity depend on the degree of the electoral surprise using polling data we present empirical evidence in favor of rational partisan theory for a panel of oecd countries

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

a positive theory of discretionary policy the cost of democratic government and the benefits of a constitution we offer an explanation of government s preference for discretionary policy action the main elements are asymmetric information and the ability and desire of governments to maximize reelection prospects discretionary policy imposes a social cost we show that the cost is eliminated if all voters have the same information as the government an optimal state contingent policy rule that precommits government through a constitution eliminates the cost by removing government s opportunities to exploit its informational advantage rules of this kind and constitutional restrictions are difficult to enforce in the presence of uncertainty and different information available to government and the public

political parties and optimum government financing empirical evidence for industrialized economies mankiw 12 argues that governments should equate the marginal losses of both taxation and seigniorage revenues to finance their spending his model the revenue smoothing hypothesisimplies that governments tax and seigniorage revenues must move together however different types of political parties might be more concerned about creating seigniorage the partisan theory argues that right wing parties adopt less inflationary policies than left wing parties this theory assumes that there is a short term exploitable relationship between inflation and output growth as the phillips curve suggests the theory also assumes that left wing parties are more concerned with the unemployment rate than are right wing parties therefore to decrease the unemployment rate left wing administrations adopt more expansionary policies at the expense of higher levels of inflation 1 3 4 7 furthermore burdekin 6 notes that countries which have a fixed exchange rate regime may face additional costs as they increase their seigniorage revenues increasing seigniorage revenue which causes inflation worsens the balance of payment deficit this paper analyzes the optimal government financing under different types of political and institutional considerations and argues that when governments must create additional resources to finance their spending they will then use both their seigniorage and tax revenues simultaneously moreover it incorporates the idea that right wing governments and countries which have a fixed exchange rate regime are more reluctant to create seigniorage revenue than left wing governments or countries which have a flexible exchange rate regime to finance their spending the revenue smoothing hypothesis assumes that a government uses its monetary policy to create resources to finance its spending however such a government also uses its monetary policy to decrease the effects of business cycles and the variation of interest rates 9 barro and gordon 5 show that a government may increase the levels of employment and of the gnp by increasing the money supply cukierman 8 argues that a government is concerned with the stability of financial markets a government may increase its money supply to decrease the interest rates when they are too high so that the financial system s likelihood of collapse will decrease later in this paper the implication of the revenue smoothing hypothesis with the partisan and

the vp function a survey of the literature on vote and popularity functions after 25 years vp functions explain the support for the government at votes and polls by economic and political variables most studies analyze macro time series we also cover studies of individual voters socio economic groups and regional cross sections the theory starts from the responsibil ity hypothesis voters hold the government responsible for economic conditions it works in two party block systems but not else voters in most countries are found to be sociotropic egotropic voting also occurs voters myopia is well established voting is retrospective as expectations are static it costs the average government almost 2 of the vote to rule

searching for political business cycles in germany one reslt of the revitalised literature on political business cycles is that there are signs in german data that elections and ideology have an impact however using monthly data for the period 1950 1989 and standard methods of time series analysis we reject both the nordhaus hypothesis of opportunistic cycles and the partisan approaches by hibbs ans alesina we show that some results are sensitive to the assumption of stationarity there are signs of policy cycles in m1 it is hard though to bring this in line with the rogoff hypothesis of rational opportunistic cycles because of the german institutional setting

political business cycles and macroeconomic credibility a survey there is clear evidence that government popularity and election performance is affected in part by economic performance suggesting that governments may manipulate the economy to political advantage simple models incorporating adaptive expectations which allowed the government to exploit this relationship were developed in the 1970s but fell out of fashion with the advent of new classical economics however modern theories of the political business cycle which are closely related to the macroeconomic policy game literature assume rational expectations and lead to forms of political business cycle driven by the existence of uncertainty of one type or another the international evidence suggests that some aspects of the theories apply although definitive conclusions are as we might expect hard to come by

agriculture for development new paradigm and options for success the role of agriculture as an instrument for industrialization had been rigorously conceptualized in the 1960s and 1970s under theclassicalparadigmofdevelopmenteconomics aftermanyimplementationfailuresunderimportsubstitutionindustrialization policies and protracted neglect of agriculture under the policies of the washington consensus that followed the debt crisis agriculture has gradually returned in the development agenda especially with the food crisis we argue in this article that a new paradigm has started to emerge as to how to use agriculture for development pursuing a broadened development agenda we explore the specifications of this paradigm and discuss conditions for successful implementation jel classifications b20 o13 q18

the cost of ruling cabinet duration and the median gap model in a recent article paldam and skott 1995 provide atheoretical explanation for an important empirical phenomenonin democratic countries incumbent governments tend to losevotes in this paper i show that paldam and skott stheoretical explanation for this cost of ruling ispotentially much stronger than they recognize specifically when generalized in a straightforward way their modelexplains not only the cost of ruling itself but also a secondwell established empirical fact that the longer an incumbentgovernment has been in power the more votes it loses further this generalization of the model produces twoadditional empirical hypotheses that have not yet been testedin the empirical literature

the european central bank independence accountability and strategy a review this paper reviews research on central banking and monetary policy with special emphasis on the position of the future european central bank nowadays it is often thought that an independent central bank with an explicit mandate to aim for price stability constitutes an important institutional device to assure price stability indeed the ecb will be one of the most independent central banks as follows from the codings of various indicators measuring legal independence still it does not follow straightforwardly from the literature that the statute of the ecb is optimal it is also argued that the accountability of the ecb is poorly arranged for in comparison with that of several national central banks finally the discussion about the monetary strategy of the ecb is reviewed

political budget cycles the case of the western german lander this paper focuses on the issue of the electoral andideological cycles in state government budget for the elevenwestern german lander we verify this hypothesis over theperiod 1974 1994 for the following budgetary variables totalexpenditures surplus deficit administration health care education roads and social security benefits while overallour results seem to show that generally the party variabledoes not play a systematic role in spending decisions theyprovide some support to the opportunistic cycle theory showingthat the only relevant phenomenon is the effect of theupcoming election on the government spending inclinations

a rational voter explanation of the cost of ruling it is well known that the average government loses votes the so called cost of ruling we show that the loss can be explained as a perfectly rational demand for change in a median voter model once the model is amended to let the two parties be visibly different

the role of agriculture in economic development visible and invisible surplus transfers the financial surplus of agriculture has been central to theories of the role of agriculture in economic development morrisson and thorbecke mt have used a constant price social accounting matrix sam framework to measure rigorously the financial surplus of agriculture and decompose the mechanisms of surplus extraction history and theory have however stressed the role of prices as an invisible transfer mechanism in addition to the visible transfers identified in the sam framework we extend the mt approach by defining and measuring the real surplus of agriculture and decomposing the mechanisms of surplus extraction between visible and invisible financial transfers using an archetype computable general equilibrium model for poor african nations we trace the generation transfer and use of an agricultural surplus created by a productivity gain in agriculture this shows that prices indeed play an overwhelmingly important role in transferring a surplus from agriculture to the benefit of the rest of

the influence of political distortions on economic performance alberto alesina is the nathaniel ropes professor of political economy and chairman of the department of economics at harvard university in this interview he discusses with brian snowdon his views on several important contemporary issues including politics and the business cycle budget deficits currency unions the european union the size of nations economic growth inequality democracy foreign aid ethnic fractionalisation and the welfare state in the us and europe

government partisanship labor organization and macroeconomic performance governments of the left and right have distinct partisan economic policies and objectives that they would prefer to pursue their propensity to do so however is constrained by their desire for reelection we argue that the ability of governments to further their partisan interests and preside over reelectable macroeconomic outcomes simultaneously is dependent on the organization of the domestic economy particularly the labor movement we hypothesize that there are two different paths to desirable macroeconomic performance in countries with densely and centrally organized labor movements leftist governments can promote economic growth and reduce inflation and unemployment conversely in countries with weak labor movements rightist governments can pursue their partisan preferred macroeconomic strategies and achieve similarly beneficial macroeconomic outcomes performance will be poorer in other cases these hypotheses are supported by analysis of pooled annual time series data for 16 advanced industrial democracies between 1967 and 1984

a theory of divided government this paper extends the spatial theory of voting to an institutional structure in which policy choices depend upon not only the executive but also the composition of the legislature voters have incentives to be strategic since policy reflects the outcome of a simultaneous election of the legislature and the executive and since the legislature s impact on policy depends upon relative plurality to analyze equilibrium in this game between voters we apply coalition proof type refinements the model has several testable implications which are consistent with voting behavior in the united states for instance the model predicts a split tickets where some voters vote for one party for president and the other for congress b for some parameter values a divided government with different parties controlling the executive and the majority of the legislature and c the midterm electoral cycle with the party holding the presidency always losing votes in midterm congressional elections

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

electoral and partisan cycles between us economic performance and presidential popularity empirical voting popularity research examines parameters that relate economic performance to voting and popularity not the interaction of these parameters with movements in economic performance which is what actually influences voting and popularity this paper examines that interaction for the usa from 1953 1 1990 4 by decomposing the response of popularity to economic performance by both political party and the quarter of the electoral term averaged over the electoral term economic performance increases the popularity of democrats but decreases it for republicans whereas near the election the opposite occurs overall the results appear consitent with a mix of partisan and electoral influences so that no single approach seems fully adequate

editor s choice active ownership we analyze an extensive proprietary database of corporate social responsibility engagements with u s public companies from 1999 2009 engagements address environmental social and governance concerns successful unsuccessful engagements are followed by positive zero abnormal returns companies with inferior governance and socially conscious institutional investors are more likely to be engaged success in engagements is more probable if the engaged firm has reputational concerns and higher capacity to implement changes collaboration among activists is instrumental in increasing the success rate of environmental social engagements after successful engagements particularly on environmental social issues companies experience improved accounting performance and governance and increased institutional ownership

the concept of the agricultural surplus abstract the concept of the agricultural surplus has occupied a central place in the history of economic thought and has been used in a variety of different senses the major objective of this paper is to offer a rigorous definition of the agricultural surplus based on the social accounting matrix sam framework a sam for indonesia distinguishing between agriculture and non agriculture is used to estimate quantitatively the magnitude of the agricultural surplus and its various components finally the various meanings which have been assigned to this concept in the literature are reviewed and confronted with the definition which we derived

behind the scenes the corporate governance preferences of institutional investors we survey institutional investors to better understand their role in the corporate governance of firms consistent with a number of theories we document widespread behind the scenes intervention as well as governance motivated exit these governance mechanisms are viewed as complementary devices with intervention typically occurring prior to a potential exit we further find that long term investors and investors that are less concerned about stock liquidity intervene more intensively finally we find that most investors use proxy advisors and believe that the information provided by such advisors improves their own voting decisions

another look at the evidence for rational partisan cycles in presenting evidence in favor of rational partisan cycles where electoral victories by leftist parties are expected to create temporary expansions and electoral victories by rightist parties are expected to create temporary recessions alesina cohen and roubini 1999 rely upon autoregressive time series intervention regressions these regressions however are not consistent with their model in this paper a model is derived which is consistent with the intervention approach in its reduced form the differences between the models are highlighted and new empirical estimates are presented on a panel of seven oecd nations which generally does not support the rational partisan cycle implications

inter country differences in voter satisfaction with the democratic process a study of world elections using data from the comparative study of electoral systems this paper examines differences between west and east european countries in their levels of satisfaction with the way democracy works compared to east european countries satisfaction levels were considerably higher in western countries west europe north america and oceania moreover there was considerably greater inequality in the distribution of satisfaction in east european compared to western countries when these facts were combined to construct equity sensitive satisfaction averages the gap between western countries and east european countries was even greater than suggested by a comparison of average satisfaction levels this raised the question of why satisfaction levels varied so markedly between these two sets of countries a logit model suggested that a number of factors were important for determining whether people were satisfied with the way democracy worked in their countries while there was a difference between western countries and east european countries in their endowments of these satisfaction inducing factors income gender participation education among others when the equations were estimated separately for the western countries and east european countries the coefficient responses associated with several of these factors also differed markedly between the two groups

the price of wine abstract using historical price records for bordeaux premiers crus we examine the impact of aging on wine prices and the long term investment performance of fine wine in line with the predictions of an illustrative model young maturing wines from high quality vintages provide the highest financial returns past maturity famous ch teaus deliver growing non pecuniary benefits to their owners using an arithmetic repeat sales regression over 1900 2012 we estimate a real financial return to wine investment net of storage costs of 4 1 which exceeds bonds art and stamps returns to wine and equities are positively correlated finally we find evidence of in sample return predictability

the political economy of deficit spending in nine industrialized parliamentary democracies the role of fiscal institutions this article analyzes the influence of four sets of factors on deficit spending in 9 industrialized parliamentary democracies during 1958 1990 this article analyzes the influence of these factors and introduces and tests the importance of an additional potential influence on the size of a country s fiscal deficit the strength of fiscal bureaucracy it is argued that the stronger a country s fiscal bureaucracy the lower its deficit ceteris paribus empirically the authors find that the state of a nation s economy heavily affects its deficit little systematic relationship is found between the ideology of the ruling political party and a nation s deficit or between the political strength of the ruling party and deficits in contrast to the findings of roubini and sachs finally it is found that the strength of a country s fiscal bureaucracy is an important influence on the deficit in these 9 industrialized parliamentary democracies

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

in search of the motives behind us fiscal macroeconomic policy in this paper optimal control tehniques are applieed to estimate the motives behind us fiscal macroeconomic policy starting from a range of possible objesctives and given the perception of policy makers about the environment in which they operate the priorities of policy makers are estimated on the basis of their past actions our statistical approach allows for testing the empirical relevance of alternative hypotheses with respect to the objectives of governments demoeratic and republican administrations are found to aim at different targets some support is also found to political business cycle theories the views expressed here are not necessarily those of the ductch central bank

wage bargaining in the presence of social services and transfers oecd economies were able to reconcile the pursuit of welfare state expansion and full employment during the first decades of the postwar period yet the trade off between these two policy objectives widened in recent decades to explore the question of why this change occurred this article extends familiar models of wage determination by adding a number of parameters that capture cross national differences among welfare states the model identifies the conditions under which unions deliver wage moderation in exchange for social policy benefits and transfers and explores how different labor market institutions magnify or decrease the impact of wage choices on the equilibrium level of employment next the author examines the impact of changes in the composition of social policy expenditures and in the level of the tax burden on unions wage choices she shows that mature welfare states characterized by high tax burdens and a high share of transfers devoted to labor market outsiders reduce the effectiveness of wage moderation in lowering unemployment the author tests the main propositions using oecd panel data for the period 1960 95

a political explanation of variations in central bank independence although central banks possess a similar function across the industrial democracies their institutional structures their levels of independence differ greatly my explanation of this variation emphasizes the informational asymmetries of monetary policymaking government ministers have informational advantages in the policy process potentially creating conflicts with backbench legislators and in a multiparty government coalition partners an independent central bank can help alleviate these conflicts politicians will choose an independent bank 1 if government ministers party legislators and coalition partners have different monetary policy incentives and 2 if government ministers fear that party legislators and coalition partners will withdraw their support over a policy dispute i statistically test the argument against the cross national variation of central bank institutions i also use the theoretical framework to examine episodes of institutional choice and reform in germany britain and italy

elevating the role of divestment in socially responsible investing the divest movement has focused attention on strategic and ethical differences in the practice of socially responsible investing sri and highlighted an unnecessary bifurcation of best of class engagement and divestment although best of class engagement is favored as a contemporary and pragmatic approach this paper calls for a more pronounced recognition of absolute dealbreakers and divestment as an underpinning for best of class engagement after linking divestment and best of class engagement to their foundations of absolutism and relativism respectively i critique best of class engagement and argue that without a distinct and explicit role for divestment best of class strategies are ethically and strategically fraught following a discussion of which types of issues suggest divestment or best of class engagement i identify the norway government pension fund as a noteworthy example and posit that divestment and engagement are best presented and employed in tandem particularly for issues that have yet to be addressed by law and convention

forecasting the money multiplier and the control of money supply in egypt this article investigates whether money supply control through the multiplier monetary base framework is possible in egypt it was found that such a procedure would not have been possible between 1952 and 1990 when the financial needs of the egyptian government dictated changes in high powered money it was found that the aggregate forecasting approach of the money multiplier provided satisfactory results while the component method did not it is argued that changes in policy since 1991 would provide for better control over the monetary base and greater predictability of the money multiplier

politics and business cycles in industrial democracies politics alberto alesina influences from political competition on macroeconomic policy are often thought to be a source of economic fluctuations politicians are described as being driven by two not mutually exclusive main motivations they want to be reelected and they harbour political or ideological biases when such theories are confronted with actual cycles in a number of industrial countries the pattern of inflation unemployment output and budget deficits indicates that partisan policy making is a fairly widespread phenomenon with more limited evidence that electoral preoccupations result in major fluctuations the combination of partisanship and electoral cycles may easily result in socially undesirable outcomes in particular the degree of politico institutional stability and the independence of the central bank have a bearing on macroeconomic outcomes these observations raise a number of important questions about the design of political institutions

policy mis representation and the cost of ruling u s presidential elections in comparative perspective the cost of ruling effect on electoral support is well established that is governing parties tend to lose vote share the longer they are in power although we know this to be true we do not know why it happens this research examines whether the cost of ruling results at least in part from the tendency for governing parties to shift policy further away from the average voter it first considers differences in political institutions and how they might influence cost of ruling owing to policy drift and then tests the hypothesis focusing on u s presidential elections which is an unfavorable case to find such an effect results confirm a clear cost of ruling effect in these elections and demonstrate that policy misrepresentation is an important mechanism that is the policy liberalism of presidents from different parties diverges over time as their tenure in the white house increases and the degree to which it does matters for the presidential vote policy is not the only thing that matters and other

the markup and inflation evidence in oecd countries in this paper we evaluate the dynamic inconsistency argument put forth by kydland and prescott 1977 and barro and gordon 1983 as an explanation for differences in the average inflation experience across oecd countries the focus is on the empirical evidence relating the overall degree of competition among firms as measured by the markup of price over marginal cost and inflation over the 1973 88 period the prediction is that higher markups raise the monetary authority s incentive to increase output leading to higher equilibrium rates of inflation we find that the markup does well in explaining cross country differences in average inflation jel classification e31 e58 d43 l ecart du prix par rapport au cout marginal et l inflation resultats pour les pays de l ocde ce memoire examine l argument mis de l avant par kydland et prescott 1977 et barro et gordon 1983 pour expliquer les differences dans le taux moyen d inflation entre les pays de l ocde on porte une attention speciale aux resultats empiriques qui relient le degre general de concurrence entre les entreprises mesure par l ecart du prix par rapport au cout marginal et le niveau d inflation entre 1973 et 1988 la prediction est que des ecarts prix cout marginal plus eleves augmentent l incitation des autorites monetaires a accroitre le niveau de production ce qui entraine des taux d inflation d equilibre plus eleves il s avere que l ecart du prix par rapport au cout marginal tend a expliquer bien les differences dans le niveau moyen d inflation entre pays

the distributional dimensions of revolutionary transition ethiopia this study attempts to investigate some of the distributional costs that have attended upon the process of revolutionary transition in ethiopia focusing on the crucial role of the rural sector in this regard the central variable through which this sector influenced national economic performance was the marketed proportion of output the study deals with this linkage and with the macroeconomic distributional outcomes of the growth process for the rural and urban sectors the probable distributional implications of the ten year plan are elicited and the sobering findings provide the motivational force behind a few strategic policy considerations that are briefly outlined it is argued that the national economic growth process was seriously imbalanced and the sluggishness of agriculture meant that the growth was financed through an inflationary process which passed on the costs of accumulation substantially on to the poorer sections of the population

distributive politics and spatial equity the allocation of public investment in chile abstractdistributive politics and spatial equity the allocation of public investment in chile regional studies this paper analyzes the influence of electoral concerns on investment distribution from the central government to chilean municipalities drawing upon panel data it shows that investment is mediated by pork barrel and political budget cycles as well as favouring the relatively better off areas estimations also reveal that resources are channelled to the municipalities where the vote margin in local elections is larger whereas national results are not relevant indicating that local governments lobbying capacity is prioritized over national electoral interests based on these results the implications for regional governance and for reducing the margin of arbitrary allocations are discussed