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Article

Martin Marchman Andersen

Consequentialism is a theory of moral rightness, where the domain of morality is to be understood in the broadest sense, covering politics and normative economics as well as more personal morality. It holds that an action is right if and only if no other available action leads to a better outcome seen from an agent-neutral perspective. Thus, according to consequentialism we must maximize the good seen from an agent-neutral perspective. Consequentialism is demanding not only because our actions are right only if they lead to the best outcome—second or third best are never good enough—but also because the evaluation of what the best outcome is should be given from an agent-neutral perspective: The reasons we give, for acting in one way or another, should be reasons for anyone. Consequentialism is a basic moral theory in the sense that we need to specify its values for it to be operational, for it to tell us how to act, what to do. Our considerations over the values of consequentialism must result in answers to several questions, most importantly as to what it is we should maximize. This includes the specification of not only the consequentialist currency, for example, welfare, but also how that currency ought to be distributed, for example, by maximization, and between whom it ought to be distributed, for example, conscious human beings. The most famous version of consequentialism is utilitarianism, holding that actions are right if and only if they maximize the sum of welfare.

Article

Cuba in the second decade of the new millennium remains as interesting as ever, commanding a place on the world stage much greater than its small size would indicate. Fidel Castro passed away in November 2016 after 10 years of retirement from public life, during which time his brother Raúl assumed the leadership of the country and led Cuba through some very important political and economic changes that are still being played out. In 2011, a long delayed Communist Party congress mandated the scaling back of government employment and the re-creation of a services sector of the economy dominated by private economic activity. These market mechanisms have threatened the island’s vaunted egalitarianism but have moved the economy forward after years of stagnation. In 2013 Raúl declared the political reform of a two-term limit on the presidency, and in 2018 Miguel Diaz-Canal, a man in his 50s, assumed the presidency, signaling a shift of political control to a generation born after the revolution triumphed in 1959. The final results of these political and economic reforms, especially in the face of continued hostility from the United States, are not clear, but if they succeed, it will not be the first time that Cuba will be an inspiration to those in the world seeking a successful model of social justice.

Article

Latin America has seen recurrent episodes of resource nationalism, particularly in oil and gas, characterized by increased state control over the industry and investment expropriation. These episodes tend to occur in cycles induced by structural forces, in particular high resource prices and the end of successful investment cycles, increasing production and reserves. State-owned enterprises tend to play a dominant role in the region, which is magnified during the resource nationalism episodes. During such episodes, governments increase taxes and renege on contracts with private investors. Ideology and institutions can limit or exacerbate the intensity of these events in each country, but the cycle is largely driven by the structural factors. The reverse occurs with resource price busts and when a new investment cycle is needed, countries liberalize the oil sector and the state retreats. Between 2002 and 2012, the production boost produced by the liberalizations of the 1990s, combined with the oil price boom, led to a powerful wave of resource nationalism, including contract renegotiations and nationalizations, in Argentina, Bolivia, Ecuador, and Venezuela. Even in Brazil, the country with the most successful and stable oil policy in the region, state-control increased. In contrast, after 2014, a new liberalization period has been prompted throughout the region by the decline in commodity prices, the financial weakness of state-owned companies, and the need for a new private investment cycle. Understanding the dynamics behind resource nationalism in the region is crucial for designing institutional frameworks that limit the cycles and induce long term resource policies that foster the development of the abundant resource endowments in the region.

Article

Timothy Hellwig and Dani M. Marinova

Connections between the economy and vote are commonly invoked to evaluate political accountability in representative democracies. A principal motivation for studying economic voting lies in its value as a gauge of whether democracy works or not. In recent years, however, researchers have cast doubt on the assertion that economic conditions influence voters’ evaluations of political incumbents. Criticisms hail from several directions. Some, adopting a cross-national perspective, cite the instability problem as evidence against economic voting’s existence. That is, variance in the economy-vote relationship across different national contexts is sufficiently large so as to undermine claims that the economy registers a systematic effect. Other critics charge that the electorate lacks sufficient knowledge to incorporate economic conditions in their decisions at the polls. Still others remind us not to mistake correlation for causation. They charge that the voters’ perceptions of how well the economy is performing are viewed through a pre-existing partisan lens. All told, these and other reservations cast doubt on the use of economic voting as a means to evaluate accountability and, in turn, democratic performance. These charges against the fidelity of economic voting require further examination. Rather than join a growing chorus of observers concluding that the economic vote is a chimera, this piece posits that recent critiques should push us to reconceive rather than discredit economic voting. Recent work in psychology and behavioral economics provides a basis for constructive and meaningful reinterpretations of the economy’s influence on voter decisions. These new directions include an emphasis on framing effects—be it on the part of strategic elites or from the media, an emphasis on what voters know about the economy, and a wider consideration of just which “economy” matters to which set of voters. While many in number, each of these new directions advance understanding by embodying deeper conceptions of voters and elected officials.

Article

Nick Sitter and Elisabeth Bakke

Democratic backsliding in European Union (EU) member states is not only a policy challenge for the EU, but also a potential existential crisis. If the EU does too little to deal with member state regimes that go back on their commitments to democracy and the rule of law, this risks undermining the EU from within. On the other hand, if the EU takes drastic action, this might split the EU. This article explores the nature and dynamics of democratic backsliding in EU member states, and analyses the EU’s capacity, policy tools and political will to address the challenge. Empirically it draws on the cases that have promoted serious criticism from the Commission and the European Parliament: Hungary, Poland, and to a lesser extent, Romania. After reviewing the literature and defining backsliding as a gradual, deliberate, but open-ended process of de-democratization, the article analyzes the dynamics of backsliding and the EU’s difficulties in dealing with this challenge to liberal democracy and the rule of law. The Hungarian and Polish populist right’s “illiberal” projects involve centralization of power in the hands of the executive and the party, and limiting the independence of the judiciary, the media and civil society. This has brought both governments into direct confrontation with the European Commission. However, the EU’s track record in managing backsliding crises is at best mixed. This comes down to a combination of limited tools and lack of political will. Ordinary infringement procedures offer a limited toolbox, and the Commission has proven reluctant to use even these tools fully. At the same time, party groups in the European Parliament and many member state governments have been reluctant to criticize one of their own, let alone go down the path of suspending aspect of a states’ EU membership. Hence the EU’s dilemma: it is caught between undermining its own values and cohesion through inaction on one hand, and relegating one or more member states it to a second tier—or even pushing them out altogether—on the other.

Article

A substantial body of scholarship has considered the impact of regime types on public spending and basic service provision, much of which has implications for education. While some of the theoretical and empirical conclusions from this work are globally applicable, there are also important ways in which the relationship between democracy and education may be influenced by the African context. The most useful theoretical arguments for why democracy may influence public spending, and spending on education in particular, focus on the political incentives generated by multiparty electoral competition. Related but distinct arguments focus on how this may impact in turn on education outcomes, and on why these dynamics may vary because of factors that are particularly pertinent in many African countries. These include variations in the degree of electoral competitiveness and political competition as well as in levels of economic development and ethnic fractionalization. A large body of empirical evidence investigates these various arguments, evaluating the impact of democracy on both education spending and education outcomes. Although evidence for the positive impact of democracy on education is compelling, evidence for this relationship in Africa remains limited and is hampered by limitations to data. In particular, although evidence suggests democracy may have a positive impact on access to education in Africa, there is less evidence for its impact on the quality of education. Future work should continue to address these issues while seeking to investigate sources of heterogeneity in the impact of democracy on education in Africa.

Article

How does domestic politics affect international cooperation? Even though classic work on international relations already acknowledges the central role of domestic politics in international relations, the first generation of scholarly work on international cooperation focused almost exclusively on the international sources of cooperation. Theories that explicitly link domestic politics and international cooperation did not take a more prominent place in the scholarly work on international cooperation until the late 1980s. Recent research analyzes how interests and institutions at the domestic level affect the cooperation of governments at the international level. The analysis is structured along a political economy model, which emphasizes the decision making calculus of office-motivated political leaders who find themselves under pressure by different societal groups interested in promoting or hindering international cooperation. These pressures are conveyed, constrained, and calibrated by domestic institutions, which provide an important context for policy making, and in particular for the choice to cooperate at the international level. This standard political economy model of domestic politics is embedded within models of international cooperation, which entail decisions by governments about (a) whether to cooperate (and to comply with international agreements), (b) how to distribute the gains and costs from cooperation, (c) and how to design cooperation as to maximize the likelihood that the public good will be provided. Domestic politics is significant to explain all aspects of international cooperation. The likelihood that governments engage in international cooperation does not only depend on international factors, but is also and sometimes predominantly driven by the demands of societal groups and variations in institutional structures across countries. Domestic factors can explain how governments behave in distributive negotiations, whether they can achieve advantageous deals, and if negotiations succeed to produce an international collective action. They also contribute to our understanding about whether and how governments comply with international agreements, and consequently, how the design of international institutions affects government compliance. More recently, scholars have become interested in the democratic responsiveness of governments when they cooperate at the international level. Whereas research is still sparse, emerging evidence points to responsive conduct of governments particularly when international cooperation is politicized at the national level.

Article

The Economic and Monetary Union (EMU) is one of the most important policy areas of the European Union (EU). Academic research on EMU in political science is well established and ever-evolving, like EMU itself. There are three main “waves” of research on EMU, which have mostly proceeded in a chronological order. The first wave of scholarly work has focused on the “road” to EMU, from the setting up of the European Monetary System in 1979 to the third and final stage of EMU in 1999. This literature has explained why and how EMU was set up and took the “asymmetric” shape it did, that is to say, a full “monetary union,” whereby monetary policy was conducted by a single monetary authority, the European Central Bank (ECB), but “economic union” was not fully fledged. The second wave of research has discussed the functioning of EMU in the 2000s, its effects and defects. EMU brought about significant changes in the member states of the euro area, even though these effects varied across macroeconomic policies and across countries. The third wave of research on EMU has concerned the establishment of Banking Union from 2012 onward. This literature has explained why and how Banking Union was set up and took the “asymmetric” shape it did, whereby banking supervision was transferred to the ECB, but banking resolution partly remained at the national level, while other components of Banking Union, namely a common deposit guarantee scheme and a common fiscal backstop, were not set up. Subsequently, the research has begun to explore the functioning of Banking Union and its effects on the participating member states.

Article

Hyo Joon Chang and Scott L. Kastner

Recent studies on commercial liberalism have paid more attention to microfoundations linking economic interdependence to peace. Using a bargaining model of war, these studies have specified and tested different causal mechanisms through which economic ties function as a constraint, a source of information, or a transformative agent. Recent scholarly efforts in theoretical development and some empirical testing of different causal processes suggest the need to consider scope conditions to see when an opportunity cost or a signaling mechanism is likely to be salient. Future research can be best benefited by focusing on how economic interdependence affects commitment problems and empirically assessing the relative explanatory power of different causal arguments.

Article

Mary Stegmaier, Michael S. Lewis-Beck, and Lincoln Brown

In democracies, we elect our political leaders by choosing among a rival set of candidates or parties. What makes us pick one over all the others? Do we carefully weigh the platforms of all the candidates and then select the one closest to our personal desires? Or, do we select the candidate our friends and neighbors recommend? Perhaps, even, to save time, do we just vote for the same party we did last time? All of these are choice strategies, and there are many more. Here we focus on a well-known explanation of how voters decide, commonly called the Michigan Model, so named for the university where it was developed, in a path-breaking scholarly volume—The American Voter. The authors systematically gathered data, via scientific survey research, on individual voters in American presidential elections, measuring different traits, perceptions, and attitudes that they hypothesized might influence vote choice. They arranged these different factors, or variables, into long-term forces and short-term forces that acted on the voter, and could be arrayed as if they were spread along a funnel of causality: from more remote, fixed variables, such as social class or party identification, to more proximate, fluid variables, such as issue preferences and candidate attributes. All these variables generally mattered, but those that concern us here deal with issues, in particular economic issues. How do voter evaluations of the economy help the voter decide what party to favor? Is it the national economy or the pocketbook that counts? How important are economic issues compared to other issues? What conditions make economic considerations more (or less) impactful? Does economic voting operate differently in different countries? These and other questions are addressed herein, with special attention to three leading democracies where economic voting has been heavily studied—the United States, Britain, and Germany. As demonstrated, economic considerations are pervasive and powerful elements in the democratic voter’s calculus.

Article

Stephanie J. Rickard

Policies as diverse as tariffs, exchange rates, and unemployment insurance vary across democratic countries. In an attempt to explain this cross-national variation, scholars have turned to the institutions that govern countries’ elections. The institutions that regulate elections, also known as an electoral system, vary significantly across democracies. Can these varied electoral institutions explain the diversity of policies observed? This question remains unanswered. Despite a growing body of research, little consensus exists as to precisely how electoral institutions affect policy. Why is it so difficult to untangle the effects of electoral institutions on economic policy? One reason for the confusion may be the imprecise manner in which electoral institutions are often measured. Better measures of electoral systems may improve our understanding of their policy effects. Improved theories that clarify the causal mechanism(s) linking electoral systems to policy outcomes will also help to clarify the relationship between electoral systems and policies. To better understand the policy effects of electoral institutions, both theoretical and empirical work must take seriously contextual factors, such as geography, which likely mediate the effects of electoral institutions. Finally, different types of empirical evidence are needed to shed new light on the policy effects of electoral institutions. It is difficult to identify the effects of electoral systems in cross-national studies because of the many other factors that vary across countries. Examining within-country variations, such as changes in district magnitude, may provide useful new insights regarding the effects of electoral institutions on policy.

Article

The 1992 Salvadoran peace accords ended a 12-year civil war and forced modest democratic reforms on a state long dominated by a ruthless oligarchy and military. However, the new system represented a shallow version of democracy that remained largely unresponsive to the population. For two decades the far-right Alianza Republicana Nacionalista (Nationalist Republican Alliance [ARENA]) party held the presidency and used it to enact pro-business economic policies of austerity, privatization, and deregulation. In 2009, the left-wing opposition party, the Farabundo Martí National Liberation Front (FMLN), won the presidential elections for the first time. Yet despite winning some notable progressive reforms, the FMLN did not seek, much less achieve, a radical break from the neoliberal policies of previous administrations. FMLN leaders opted to continue a number of pro-capitalist policies while pursuing reforms to ameliorate the worst symptoms of the system, not overthrow it. The FMLN’s shift away from revolutionary socialism is attributable to several factors: a political and media terrain that still heavily favors the right, the continued influence of the United States government, and private investors’ control over the economy. These constraints were vitally important during the tenures of FMLN presidents Mauricio Funes (2009–2014) and Salvador Sánchez Cerén (2014–2019). El Salvador’s political trajectory since 1992, and especially during the FMLN’s decade in the presidency, offers insights into the constraints facing various left-of-center governments elected across Latin America in the early 21st century.

Article

The European Central Bank (ECB) has been in existence for almost 20 years and more if one considers its immediate predecessor the European Monetary Institute (1994–1997). During these two decades the ECB has become an established institution. It secures price stability and further increased its reputation as a lender of last resort during the financial crisis and its aftermath. In the 2010s, in response to the global financial crisis and the sovereign debt crisis, the ECB has also taken on the role of supervisor of the financial system and monitors developments in the Euro Area financial sector. Political science literature on the ECB can be subdivided into different strands. One strand looks at the ECB as just another central bank and hence examines its role as a central bank with the usual instruments. Another strand of literature examines the role of the ECB as an institution that is insufficiently embedded into democratic checks and balances. This perennial criticism of the ECB was born when the European System of Central Banks (ESCB) was created to be independent from political influence. A third strand of the literature is newer and examines the unorthodox steps that the ECB (and other central banks) took, and have taken, to offset the financial crisis and the ensuing economic crisis. An analysis of European integration and the political economy of the Euro Area can contribute to a better understanding of why the ECB has taken a proactive role. The political science research of the ECB is discussed here as well as the various dimensions of research conducted on the ECB.

Article

Expected utility theory is widely used to formally model decisions in situations where outcomes are uncertain. As uncertainty is arguably commonplace in political decisions, being able to take that uncertainty into account is of great importance when building useful models and interpreting empirical results. Expected utility theory has provided possible explanations for a host of phenomena, from the failure of the median voter theorem to the making of vague campaign promises and the delegation of policymaking. A good expected utility model may provide alternative explanations for empirical phenomena and can structure reasoning about the effect of political actors’ goals, circumstances, and beliefs on their behavior. For example, expected utility theory shows that whether the median voter theorem can be expected to hold or not depends on candidates’ goals (office, policy, or vote seeking), and the nature of their uncertainty about voters. In this way expected utility theory can help empirical researchers derive hypotheses and guide them towards the data required to exclude alternative explanations. Expected utility has been especially successful in spatial voting models, but the range of topics to which it can be applied is far broader. Applications to pivotal voting or politicians’ redistribution decisions show this wider value. However, there is also a range of promising topics that have received ample attention from empirical researchers, but that have so far been largely ignored by theorists applying expected utility theory. Although expected utility theory has its limitations, more modern theories that build on the expected utility framework, such as prospect theory, can help overcome these limitations. Notably these extensions rely on the same modeling techniques as expected utility theory and can similarly elucidate the mechanisms that may explain empirical phenomena. This structured way of thinking about behavior under uncertainty is the main benefit provided by both expected utility theory and its extensions.

Article

Despite theoretical assumptions about the potential for financial liberalization in Latin America to foster economic growth, empirical developments revealed a different story. With financial liberalization came greater macroeconomic instability, exposing countries to financial crises even when domestic economic fundamentals were mostly in order. At the policy front, capital account liberalization posed crucial challenges to macroeconomic governance. Indeed, international political economy literature on financial globalization has highlighted that developing countries’ governments who chose to implement policies that contradicted financial markets’ expectations could be “disciplined” or “punished” by the threat of capital outflows. Yet, capital flows to emerging economies are not determined solely by domestic (push) factors. Even in the most extreme case of noncompliance with investors’ (creditors’) preferences—i.e., sovereign default—evidence shows that market re-access and the cost of new debt are a function of credit cycles rather than solely determined by investors’ decisions to “punish” defaulters. In addition, to the extent that the “market” can indeed be considered as a single analytical category, industry-specific incentives shape portfolio investors’ bets. Caveats also apply to how market reforms differed in nature and degree, even in Latin American countries subjected to similar external pressures. The same is true for policy responses to the 2008 financial crisis. These dynamics add necessary nuance to broad depictions of financial liberalization as a deterministic process unequivocally constraining domestic policy autonomy in predictable ways.

Article

Mark Hallerberg

The topic of fiscal politics includes taxation and spending, budget balances and debt levels, and crises and the politics of austerity. The discussion often focuses on how some variable—such as the international environment, or political institutions—constrains “politics” in this realm. Almost omnipresent concerns about endogeneity run through this research. While this is a “big” policy area that deserves study, tracing causation is difficult.

Article

Flooding remains one of the globe’s most devastating natural hazards and a leading driver of natural disaster losses across many countries, including the United States. As such, a rich and growing literature aims to better understand, model, and assess flood losses. Several major theoretical and empirical themes emerge from the literature. Fundamental to the flood damage assessment literature are definitions of flood damage, including a typology of flood damage, such as direct and indirect losses. In addition, the literature theoretically and empirically assesses major determinants of flood damage including hydrological factors, measurement of the physical features in harm’s way, as well as understanding and modeling protective activities, such as flood risk mitigation and adaptation, that all co-determine the overall flood losses. From there, common methods to quantify flood damage take these factors as inputs, modeling hydrological risk, exposure, and vulnerability into quantifiable flood loss estimates through a flood damage function, and include both ex ante expected loss assessments and ex post event-specific analyses. To do so, high-quality data are key across all model steps and can be found across a variety of sources. Early 21st-century advancements in spatial data and remote sensing push the literature forward. While topics and themes apply more generally to flood damage across the globe, examples from the United States illustrate key topics. Understanding main themes and insights in this important research area is critical for researchers, policy-makers, and practitioners to better understand, utilize, and extend existing flood damage assessment literatures in order to lessen or even prevent future tragedy.

Article

The open economic policies Latin American countries adopted in the wake of the debt crisis of the early 1980s were expected to bring a variety of benefits. Trade liberalization and privatization make domestic firms more competitive, and deregulation helps to create an efficient business climate. Notably, such policies are also likely to spur foreign investment seeking new opportunities, and Latin American countries did indeed begin to see large inflows in the 1990s. Foreign direct investment (FDI) is thought to be particularly complementary to economic development. Compared to portfolio investment in stocks and bonds, FDI consists of the construction or purchasing of physical assets including manufacturing facilities, retail outlets, hotels, and mines. FDI should spur local economic activity and bring with it jobs and technology transfers. Furthermore, because divestment takes planning and time, direct investment is relatively long-term, so investors are expected to display greater commitments to the economic and political futures of their hosts. As a result of these substantial potential benefits, a body of scholarship has emerged to try to understand the political dynamics of FDI. Is investment more likely to flow to democratic or authoritarian regimes? Are direct investors seeking countries with few labor protections and weak environmental regulations or are they attracted to public investments in human capital? Do they eschew governments with poor human rights records or do they see abusers as potential partners in managing a compliant workforce? What are the effects of FDI flows on the political contexts of their hosts? Among others, these questions have received significant scholarly attention, and while we have learned a great deal about the behavior and effects of FDI, considerable potential remains. Having received massive inflows averaging more than $100 billion between 2000 and 2017 and consisting of countries with broadly similar development trajectories, Latin America offers a rich landscape for such analysis. In particular, finer-grained examinations of FDI to Latin American countries can help us understand how it might affect political systems and which types of investment best complement national development projects. In so doing, studies of FDI flows to Latin America are poised to make major contributions to the fields of international political economy, development studies, and comparative politics.

Article

Anna M. Meyerrose, Thomas Edward Flores, and Irfan Nooruddin

The end of the Cold War, heralded as the ideological triumph of (Western) liberal democracy, was accompanied by an electoral boom and historically high levels of economic development. More recently, however, democratic progress has stalled, populism has been on the rise, and a number of democracies around the world are either backsliding or failing entirely. What explains this contemporary crisis of democracy despite conditions theorized to promote democratic success? Research on democratization and democracy promotion tends to focus predominantly on elections. Although necessary for democracy, free and fair elections are more effective at promoting democratic progress when they are held in states with strong institutions, such as those that can guarantee the rule of law and constraints on executive power. However, increased globalization and international economic integration have stunted the development of these institutions by limiting states’ economic policy options, and, as a result, their fiscal policy space. When a state’s fiscal policy space—or, its ability to collect and spend revenue—is limited, governments are less able to provide public goods to citizens, politicians rely on populist rather than ideological appeals to win votes, and elections lose their democratizing potential. Additional research from a political–economic framework that incorporates insights from studies on state building and institutions with recent approaches to democratization and democracy promotion, which focus predominantly on elections, is needed. Such a framework provides avenues for additional research on the institutional aspects of ongoing democratization and democratic backsliding.

Article

Globalization, or increased interconnectedness between world regions, is a dialectical and recursive phenomenon that consequently tends to deepen through time as one set of flows sets off other related or counterflows. This is evident in the history of the phenomenon in Africa, where transcontinental trade, and later investment, were initially small but have grown through different rounds including slavery, colonialism, neocolonialism, and the early 21st-century era of globalization. However, globalization on the continent, as in other places, is not unilinear and has generated a variety of “regional responses” in terms of the construction of organizations such as the African Union and other more popularly based associations. The phenomenon of globalization on the continent is deepening through the information technology “revolution,” which also creates new possibilities for regional forms of association.