political and institutional determinants of fiscal policy in the european community in recent theoretical and empirical research the variation in political and institutional arrangements which may affect the process of national policy formation is examined in order to explain cross country differences with respect to fiscal policies pursued in this paper we build upon this literature and examine whether and how cross country differences in debt accumulation and public sector size of member countries of the european community during the 1980s can be explained we conclude that the growth of government debt is positively related to the frequency of government changes and negatively to sound budgetary procedures in countries with left wing governments the growth of the share of government spending in total output generally tends to be higher

a global assessment of human capital mobility the role of non oecd destinations discussions of high skilled mobility typically evoke migration patterns from poorer to wealthier countries which ignore movements to and between developing countries this paper presents for the first time a global overview of human capital mobility through bilateral migration stocks by gender and education in 1990 and 2000 and calculation of nuanced brain drain indicators building on newly collated data the paper uses a novel estimation procedure based on a pseudo gravity model then identifies key determinants of international migration and subsequently uses estimated parameters to impute missing data non oecd destinations account for one third of skilled migration while oecd destinations are declining in relative importance

gibrat s law for all cities two empirical regularities concerning the size distribution of cities have repeatedly been established zipf s law holds the upper tail is pareto and city growth is proportionate census 2000 data are used covering the entire size distribution not just the upper tail the nontruncated distribution is shown to be lognormal rather than pareto this provides a simple justification for the coexistence of proportionate growth and the resulting lognormal distribution an equilibrium theory of local externalities that can explain the empirical size distribution of cities is proposed the driving force is a random productivity process of local economies and the perfect mobility of workers

partisan politics and fiscal policy does the partisan character of governing parties play a role in the formation of fiscal policy the conventional view is that the left tends toward excessive deficits whereas the right practices a more prudent fiscal policy however strong arguments have been advanced that whatever room existed previously for partisanship in fiscal policy making has been sharply reduced by developments in recent decades these issues are examined with a series of models that have been estimated using data from 14 organization for economic cooperation and development countries for the period from 1961 through 1991 the evidence suggests that the relationship between partisanship and fiscal policy is contingent on macroeconomic conditions the evidence also suggests that these differences have been reduced over recent decades

on the economic geography of international migration we exploit the bilateral and skill dimensions from recent data sets of international migration to test for the existence of zipf s and gibrat s laws in the context of aggregate and high skilled international immigration and emigration using graphical parametric and non parametric analysis the top tails of the distributions of aggregate and high skilled immigrants and emigrants adhere to a pareto distribution with an exponent of unity i e zipf s law holds we find some evidence in favour of gibrat s law holding for immigration stocks i e that the growth in stocks is independent of their initial values and stronger evidence that immigration densities are diverging over time conversely emigrant stocks are converging in the sense that countries with smaller emigrant stocks are growing faster than their larger sovereign counterparts lastly high skilled immigration and emigration stocks expressed in levels or as densities all exhibit signs of convergence we conclude by discussing some competing mechanisms that could be driving the observed patterns including differing fertility rates reductions in emigration restrictions migrant sorting and selective immigration policies immigrant networks and persisting wage differentials

international migration transfers of norms and home country fertility this paper examines the relationship between international migration and source country fertility the impact of international migration on source country fertility may have a number of causes including a transfer of destination countries fertility norms and an incentive to acquire more education it provides provide a rigorous test of the diffusion on of fertility norms using original and detailed data on migration the results provide evidence of a significant transfer of fertility norms from migrants to their country of origin a one percent decrease in the fertility norm to which migrants are exposed reduces home country fertility by about 0 3 percent for origin countries

the causes of welfare state expansion deindustrialization or globalization an influential line of argument holds that globalization causes economic uncertainty and spurs popular demands for compensatory welfare state spending this article argues that the relationship between globalization and welfare state expansion is spurious and that the engine of welfare state expansion since the 1960s has been deindustrialization based on cross sectional time series data for fifteen oecd countries the authors show that there is no relationship between globalization and the level of labor market risks in terms of employment and wages whereas the uncertainty and dislocations caused by deindustrialization have spurred electoral demands for welfare state compensation and risk sharing yet while differential rates of deindustri alization explain differences in the overall size of the welfare state its particular character in terms of the share of direct government provision and the equality of transfer payments is shaped by government partisanship the argument has implications for the study and the future of the welfare state that are very different from those suggested in the globalization literature

counterfiscal policies and partisan politics evidence from industrialized countries according to partisan theories of macroeconomic policy left wing parties are more concerned with unemployment while right wing parties tend to weigh the costs of inflation higher an implication of partisan theories is that partisan policy differences should depend on the state of the economy with left wing governments conducting relatively more expansive policies during recessions we test whether left wing governments are more favourably inclined towards countercyclical fiscal policies than their right wing counterparts using a panel data set of 18 oecd countries from 1980 to 1992 the results are supportive of partisan theories the structural deficit is significantly higher under left wing governments when unemployment is high or rising while the ideology of the government party parties has no significant impact on the structural deficit when unemployment is low or falling

cities and countries if one ranks cities by population the rank of a city is inversely related to its size a well documented phenomenon known as zipf s law further the growth rate of a city s population is uncorrelated with its size another well known characteristic known as gibrat s law in this paper i show that both characteristics are true of countries as well as cities the size distributions of cities and countries are similar but theories that explain the size distribution of cities do not obviously apply in explaining the size distribution of countries the similarity of city and country size distributions is an interesting riddle

do professional forecasters trust in taylor type rules evidence from the wall street journal poll this article uses the monthly wall street journal poll between 2002 and 2010 to analyse whether professional economic forecasters believe in and thus apply taylor type rules for their own forecasts using their forecasts for the federal funds rate the inflation rate and capacity utilization we estimate whether these are internally consistent with the message of taylor type rules we find that the expectation formation can indeed be described by taylor type rules

why a stubborn conservative would run a deficit policy with time inconsistent preferences a conservative government in favor of a low level of public consumption knows that it will be replaced by a government in favor of a larger level of public consumption we show that the resulting level of public consumption is in between the levels the two governments would choose if each were in power both in the present and in the future in particular we show that if the conservative government is more stubborn in a particular sense than the succeeding government the conservative government will borrow more than it would had it remained in power in the future

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

zipf s law for cities an explanation zipf s law is a very tight constraint on the class of admissible models of local growth it says that for most countries the size distribution of cities strikingly fits a power law the number of cities with populations greater than s is proportional to 1 s suppose that at least in the upper tail all cities follow some proportional growth process this appears to be verified empirically this automatically leads their distribution to converge to zipf s law

political cycles and cyclical policies we test how government revenue and expenditure depend on ideology elections and economic activity we show how fiscal forecasts can be used to identify the determinants of government revenue and expenditure the approach is illustrated using a unique unpublished swedish data set of fiscal forecasts and forecasts of economic activity we find partisan effects but no election effects revenue and expenditure but also the fiscal surplus are lower with right wing governments fiscal policy has been countercyclical revenue varies positively with nominal earnings expenditure varies negatively with real gdp

income maximization and the selection and sorting of international migrants abstract two prominent features of international labor movements are that the more educated are more likely to emigrate positive selection and more educated migrants are more likely to settle in destination countries with high rewards to skill positive sorting using data on emigrant stocks by schooling level and source country in oecd destinations we find that a simple model of income maximization can account for both phenomena results on selection show that migrants for a source destination pair are more educated relative to non migrants the larger is the absolute skill related difference in earnings between the destination country and the source results on sorting indicate that the relative stock of more educated migrants in a destination is increasing in the absolute earnings difference between high and low skilled workers we use our framework to compare alternative specifications of international migration estimate the magnitude of migration costs by source destination pair and assess the contribution of wage differences to how migrants sort themselves across destination countries

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

partisan politics and public finance changes in public spending in the industrialized democracies 1955 1989 this paper evaluates the role that partisan politics plays in altering public spending levels the analysis covers over three decades of data on the developments of the public sectors in 16 oecd countries the results of the analysis lend firm support to the partisan politics model of special note is the distinction between the electorate and the government ideological preferences and the dominant role that the former plays the results also suggest contrary to conventional wisdom that partisan political influences have not been eliminated with the tightening of linkages to the international economy

the brain drain and the world distribution of income abstract skilled emigration or brain drain from developing to developed countries is becoming the dominant pattern of international migration today such migration is likely to affect the world distribution of income both directly through the mobility of people and indirectly as the prospect of migration affects the rate of return to education in both the sending and receiving economies this migration pattern will therefore affect human capital accumulation and fertility decisions in both the sending and receiving economies this paper analyzes these effects in a dynamic two country model of the world economy where agents in both countries make optimal fertility and human capital decisions the implications of the analysis for the world distribution of income are derived in the light of recent empirical findings of the brain drain literature the analysis shows that the current trend towards predominantly skilled emigration from poor to rich countries may in the long run increase inequality in the world distribution of income as relatively poor countries grow large in terms of population in the short run however it is possible for world inequality to fall due to rises in gdp per capita in large developing economies with sufficiently low skilled emigration rates

heaven s swing door endogenous skills migration networks and the effectiveness of quality selective immigration policies a growing number of oecd countries are leaning toward the adoption of selective immigration policies which are expected to raise the quality or education level of migrants this view neglects two important dynamic effects the role of migration networks which could reduce the quality of migrants and the responsiveness of education decisions to the prospect of migration we propose a model of self selection into migration with endogenous education choices which predicts that migration networks and the quality of migrants can be positively associated when destination countries adopt sufficiently selective immigration policies empirical evidence presented as background motivation suggests that this is indeed the case

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

the origins of financial openness a study of current and capital account liberalization theory we assess the determinants of the national regulation of international finance or the comparative degree of national financial openness or closure hypotheses partisanship interacts with a nation s factor endowments to account in part for different international financial policies by governments of the same partisan hue methods we offer a quantitative measure of international financial openness or current and capital account regulation for 21 member countries of the organization for economic cooperation and development for 1950 88 we use regression analysis employing panel corrected standard errors to discover the determinants of financial openness results our main finding is that political partisanship substantially explains openness but does so in complex ways differences in both political institutional arrangements and types of political economy also account for part of the differences in international financial regulation