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Article

Carlos Meléndez and Sebastián Umpierrez de Reguero

Despite existing literature that often conflates the terms party membership and party activism, the first is a formal ascription with a given party organization, while the second entails a set of practices, whether sporadic, informal, or devoted, that (a group of) individuals perform to support a political party either during an electoral campaign or more permanently, independently of being enrolled in the party or not. Party members and activists can be analyzed from both the normative model of democracy and the inner functioning of political parties. Focusing on Latin America, party membership and party activism are related to various types of party organizations, social cleavages, and party identification. Individuals join, and/or work for, parties to gain tangible benefits, information, social advantages, and influence, as well as mental satisfaction, without which they could lose financial resources, time, and alternative opportunities. Moreover, prior contributions on party membership and activism based on Latin American countries has emphasized the functions party supporters have as connectors between the citizenry and the party organizations. In this regard, scholars conceive members’ participation not only as a mechanism for party rootedness (“vertical” function), but also as a connection between social and partisan arenas (“horizontal” function). In the region, the research area of party membership and activism portrays virtues and limitations in methodological terms both at the aggregate and the individual level. As a future research agenda, party membership and activism in Latin America should be further studied using comparative strategies, avoiding the pitfalls of public opinion research, not to mention making additional efforts to keep the two terms conceptually distinct. Also, party members and activists can be explored in transnational perspective, joining forces with the blooming literature of political party abroad.

Article

Lasse Aaskoven and David Dreyer Lassen

The political budget cycle—how elections affect government fiscal policy—is one of the most studied subjects in political economy and political science. The key theoretical question is whether incumbent governments can time or structure public finances in ways that improve their chances of reelection; the key empirical question is whether this in fact happens. The incentives of incumbents to engage in such electioneering are governed by political institutions, observability of political choices, and their consequences, as well as voter knowledge, and both theoretical and empirical studies on political budget cycles have recently focused on conditions under which such cycles are likely to obtain. Much recent research focuses on subnational settings, allowing comparisons of governments in similar institutional environments, and a consensus on the presences of cycles in public finances—and in the reporting of public finances—is beginning to emerge.

Article

Studies of Western development assistance conclude that aid is effective only when recipients have good governance, measured as pro-investment policies, democratic institutions, and political stability, or when recipients lack strategic importance to donors. Underlying the theoretical frameworks in these studies is a common mechanism: compliance with conditions on aid agreements, which, in turn, depends on recipient incentives to comply. With the exception of donors’ emphasis on the quality of governance in the early 2000s, donors generally overlook recipient incentives to comply with aid agreements and thus fail to capitalize on opportunities for aid effectiveness suggested by the academic studies. A paucity of data has limited direct analysis of compliance with conditions, but studies have relied on their own data collection or have leveraged data from the World Bank to assess determinants of compliance with conditions. Importantly, these studies of compliance support the findings from the aid-effectiveness literature, indicating that the initial incentives to comply with aid agreements are the driving force in agreement compliance and therefore aid effectiveness. Based on these findings, future research on compliance with conditions on aid is encouraged, beginning with study of the direct influence of compliance on economic development. In addition, future research should analyze whether certain types of aid influence compliance with Western aid agreements, including tied aid and aid from non-Western donors. The implication for policy is that donors should enthusiastically support recipients who face incentives to comply because compliance drives aid effectiveness. When recipients lack such incentives, donors should try to change the underlying incentive structure of recipients rather than adding conditions on aid.

Article

Finance is frequently, but incorrectly, judged a technical matter best left to experts. Equally mistaken is the exasperated conclusion encapsulated in the phrase “people, not profits,” which holds that capitalism, private investors, and markets are simply evil. Finance is necessary for economic development, but also has profound, and often unexamined, implications for social and political spheres. Channels for financial intermediation may be public or private, and national or foreign, implying tradeoffs among organizational forms. Public banks typically are superior in providing public goods and implementing national strategic plans, but private banks and capital markets normally are more efficient, assuming competitive markets. Savings may be sought within the national economy or from abroad, with domestic savings implying a smaller pool yet less subsequent international vulnerability, and foreign inflows offering potential abundance at the cost of external dependence. This framing yields four ideal-types of long-term finance (LTF): national public finance from state development banks; national private finance from domestic private banks and capital markets; foreign public finance via bilateral or multilateral aid or state investment (including from non-traditional lenders, such as China); and foreign private finance sourced from global investors seeking returns. Both national public and foreign public finance dominated long-term investment in Latin America in the early postwar decades of import-substituting industrialization. In the 1970s through the 1990s, they were succeeded by foreign private bank loans, followed by crisis and retrenchment. In the 21st century global political and market conditions brought a resurgence of foreign capital, including from both global private investors and non-Western public sources. Worries about problems arising from Chinese public finance to Latin America are likely overblown, as the quantity remains small, except in some Bolivarian Alliance countries. However, private foreign inflows, strongly promoted by Western-led multilateral actors, from the Organisation for Economic Co-operation and Development (OECD) to the World Bank, during the 2010s, may be more problematic. Excessive dependence on private securities markets funded by globally mobile capital often undercuts achievement of other valued societal goals such as reducing inequality and ensuring democratic accountability. Notwithstanding their predictable flaws, it may be time for a reemphasis on national, and possibly regional, public development banks.

Article

Federico Maria Ferrara and Thomas Sattler

The relationship between politics and financial markets is central for many, if not most, political economy arguments. The existing literature focuses on the effect of domestic and international political interests, institutions, and policy decisions on returns and volatility in stock, bond, and foreign exchange markets. This research bears implications for three major debates in political science: the distributive effects of politics, globalization and state autonomy, and the political roots of economic credibility and its tensions with democratic accountability. While the study of politics and financial markets is complicated by several theoretical and empirical challenges, recent methodological innovations in political research provide a window of opportunity for the development of the field.

Article

Annabelle Hutchinson, Elizabeth K. McGuire, Frances McCall Rosenbluth, and Hikaru Yamagishi

Compared to their male counterparts, females the world over typically achieve lower levels of pay, status, and representation. But the patterns of gender gaps in wages and power across countries and across sectors within countries point to systematic and empirically testable propositions about the supply and demand of labor and the bargaining consequences of remuneration. Time constraints on females, on account of socially mandated family work, hinder their advancement in endeavors that put a premium on availability and continuous career investment.

Article

First-generation research in International Political Economy focused considerable attention on the relationship between hegemony and global economic stability. This focus was the result of a confluence of scholarly and policy concerns about the impact that the apparent decline of U.S. hegemony would have on international trade and investment regimes. Interest in this hegemonic stability hypothesis waned, however, as deeper explorations of the theoretical logic indicated that hegemony was not a necessary condition for international economic openness, and as the collapse of the Soviet Union and the consequent “unipolar moment” suggested that American hegemony was hardly in decline. Interest in hegemony resurfaced in the wake of the 2008 financial crisis. The crisis triggered many scholars to proclaim the end of the era of American global hegemony. Scholars argued that the U.S. government’s attachment to a large budget and trade deficits and the resulting growth of foreign debt were likely to weaken foreign confidence in the dollar and encourage the shift to an alternative reserve currency such as the Euro. At the same time, China’s rapid industrialization and emergence as a large creditor nation was creating a new pole in the international economy that constituted a meaningful alternative to a global economy organized around the United States’ economy. Thus, a shift toward a Beijing hegemony was all but inevitable. The predicted decline of American hegemony has yet to materialize. The U.S. economy remains the world’s largest, and the U.S. government continues to play the leading role in system making—creating new rules to govern international economic cooperation—and in privilege taking—manipulating these rules in ways that advantage U.S. public and private sector actors. Moreover, the U.S. government plays this role in all three economic subsystems: finance, knowledge, and production. Empirical scholarship conducted over the last decade encourages one to conclude by paraphrasing Mark Twain: Recent reports of the death of American hegemony are premature.

Article

Equal treatment for members of the lesbian, gay, bisexual, and transgender (LGBT) community has improved at a rapid pace around the world since the gay rights movement first rose up to become a salient global force for change. With important regional exceptions, laws criminalizing same-sex sexual relations have not only come down in multiple countries, but same-sex couples can now also construct families in many advanced industrialized countries. Public acceptance of homosexuality, even in some non-Western countries, has increased dramatically. Yet, within those general trends hides the remarkable unevenness in the spread and adoption of policies fostering legal, social, and economic equality for LGBTQ communities around the world. Policy change toward more equal treatment for sexual minorities is concentrated in the developed world and within the cisgender gay and lesbian communities in particular. The existing literature in policy change shows the importance of transnational activists, changing international norms, and increasing levels of secularization have made this possible. But the effectiveness of these factors rests on an underlying foundation of socioeconomic factors based on economic and social development that characterizes advanced industrialized states. There is an uneven distribution of resources and interests among pro and anti-LGBT activist groups alike, and the differing levels of economic development in which they operate that explains the decidedly uneven nature of how LGBTQ human rights have advanced in the past 50 years. In addition, new political parties and activist organizations have emerged to lead the backlash against LGBTQ rights, showing progress is neither inevitable nor linear. In addition, serious gaps in what we know about LGBT politics remain because of the overwhelming scholarly focus on advanced industrialized states and policies that benefit the cisgender, gay and lesbian middle class in primarily Western societies. The study of LGBT politics in non-Western and developing countries is woefully neglected, for reasons attributed to the nature of the research community and the subject area. In the developed world, greater attention is needed to inequality within the LGBTQ community and issues beyond same-sex marriage. Finally, issues of intersectionality and how different groups within the LGBT community have enjoyed most of the benefits of the gay rights movement since its takeoff more than 50 years ago.

Article

The recent global economic crisis has renewed interest in the nature and history of monetary policy, the distributional effects of central bank policy, central bank governance, and the personalities at the helm of major central banks. In modern times, a country’s central bank formulates, or, to a minimum, implements, a country’s monetary policy, or the process of adjustment of a country’s money supply to achieve some combination of stable prices and sustainable economic growth. Monetary policy depends heavily on a country’s exchange rate system. Under fixed exchange rates, the country’s commitment to keep the level of the currency at a certain level dictates monetary policy to a great degree. As the gold standard was unraveling after World War I, many countries experienced high inflation or even hyperinflation. A similar situation faced monetary policy after the collapse of the Bretton Woods system of fixed exchange rates in the 1970s. By the 1980s, however, countries turned toward central bank independence as an institutional arrangement to control inflation. The current issues surrounding monetary policy have emerged from the historical increase in central bank independence and the 2007 economic and financial crisis. In particular, the opacity of central bank decisions, given their autonomy to pursue stable prices without political interference, has increased the demand for transparency and communication with the government, the public, and financial markets. Also, the 2007 crisis pushed central banks toward unconventional measures and macro-prudential regulation, and brought back into focus the monetary policy of the euro area.

Article

Gustavo A. Flores-Macías and Mariano Sánchez-Talanquer

When the North American Free Trade Agreement (NAFTA) came into force on January 1st, 1994, it created the largest free trade area in the world, and the one with the largest gaps in development between member countries. It has since served as a framework for trilateral commercial exchange and investment between Canada, Mexico, and the United States. NAFTA’s consequences have been mixed. On the positive side, the total value of trade in the region reached $1.1 trillion in 2016, more than three times the amount in 1994, and total foreign direct investment among member countries also grew significantly. However, the distribution of benefits has been very uneven, with exposure to international competition reducing economic opportunity and increasing insecurity for certain sectors in all three countries. Twenty-four years later, the three countries renegotiated the terms of NAFTA and renamed it the United States–Mexico–Canada Agreement (USMCA). The negotiation responded in part to the need to modernize the agreement, but mostly to President Donald Trump’s concerns about NAFTA’s effect on the U.S. economy and the fairness of its terms. Although the revised agreement incorporated rules that modernize certain aspects of the institutional framework, some new provisions also make trade and investment relations in North America more uncertain.

Article

The role of the state in economic development is broad, old, and metamorphic. Drawing on historical political economy and a critical reading of new institutional scholarship, our understanding of the developmental state is contextual and complex. Successful developmental state formation is the result of stable political-economic environments, cultural legacies of earlier state-making functioning as mental maps for new statecraft, coherent institutional and policy entrepreneurship, and sustained growth that gives positive feedback in state-making. Latin American state developmentalism has always been diverse, before and after the debt crisis. In the era of state-led industrialization, the Latin American developmental state “failed” because, with domestic and regional markets small and dependence on foreign markets and financial capital high, macroeconomic policymaking did not learn to deal with crises and cyclical external conditions. Developmental state success in the 21st century depends on undertaking less volatile political-economic pathways to facilitate organizational learning by doing. In exclusionary Latin America more than in other corners of the world, developmental state success also means reconciling economic and social goals.

Article

On a continent where the majority of people are poor, do political parties represent class cleavages? Do parties have strong linkages to ordinary voters? Do economic policies address their needs? In the initial years following democratic transitions across the African continent in the 1990s, the answers to such questions were negative. Clientelism and patronage were the principal means by which parties interacted with their constituencies; elites and elite interests determined the objectives of political parties; voters in many African countries shifted parties frequently; and neoliberal economic policies largely reflected the preferences of foreign donors and international financial institutions. As parties and voters have adjusted to the institutional arrangements and political demands associated with democracy, a more heterogeneous political landscape has materialized since 2010. Party systems demonstrate distinct patterns of variation, from the more stable, institutionalized systems in Ghana and Botswana to fluid, inchoate configurations in Benin and Malawi. These variations in the degree to which party systems have institutionalized affect economic policy choices by parties and those who benefit from them. Furthermore, democratic politics has intensified pressures on ruling parties to provide goods such as electricity and education. Here too, patterns of goods provision show substantial variation over time and across countries, calling attention to the differences in the incentives and capacities of parties to respond to distributive demands by the electorate. To explore the political and economic heterogeneity of contemporary Africa, scholars have combined well-established qualitative and comparative approaches with new analytical tools. The use of cross-national public opinion surveys, field and survey experiments, satellite imagery, and geo-coded data have enabled more systematic, fine-grained study of the economic determinants of party system competition, economic voting, the distribution of goods, and the management of private sector development by ruling parties in recent years. These empirical approaches enrich understanding of the relationship between parties and political economy in Africa and facilitate more fruitful comparisons with other regions of the world.

Article

All governments require revenue, and domestic taxes are the primary means for generating it. Yet both the size and shape of taxation vary significantly across countries and have been transformed over time. What explains variation in domestic taxation? To answer this question, recent scholarship on taxation has focused on the politics of taxation as a tool for redistribution. This has led to a wide body of research on the fiscal impact of taxation and on the introduction, evolution, and variation in direct and progressive tax regimes, particularly the income tax. Yet the focus on taxation as a redistributive tool yields a puzzle, as more progressive tax systems tend to be found where redistribution is in fact the lowest. Explanations of this paradox often center on the impossibility of high and progressive taxes on capital in the context of international economic integration. Not as well studied are taxes other than the taxation of income, and the deliberate politics of nonfiscal, regulatory, and incentive effects of different tax choices. Methodologically, problems of endogeneity are ubiquitous in the study of tax policy choices, but more sophisticated experimental work is well underway in research on individual preferences for taxation.

Article

International trade and state efforts to liberalize or restrict trade generate very contentious politics. Trade creates winners and losers at the individual level, firm level, industry level, national level, and even regional level. It also generates conflict among transnational social groups, such as environmental advocacy organizations, human rights organizations, and transnational business alliances. Because of this complexity of the politics of international trade, scholars of international political economy (IPE) can focus on different levels of analysis and a variety of stages of the political decision-making process. Scholars agree that not only societal preferences but collective action problems, domestic institutions, and international factors all affect trade politics and policy outcomes. These aspects of trade politics together form the key influences on trade policy and whether it is liberal or protectionist in nature. Societal preferences constitute the initial inputs into the trade policy-making process. Understanding how different groups of economic actors within society win or lose from trade liberalization or protection is the first step toward understanding trade politics and trade policy outcomes. Once societal trade preferences are formed, they must be aggregated into cohesive pressure groups or grass-roots movements whose purpose is to influence trade policy. This is easier for some groups of actors to achieve than others. In lobbying government actors on policy, interest groups find that domestic institutions play an important role translating societal inputs into policy outputs. Policy-making institutions vary in the degree to which they are susceptible to special-interest lobbying versus the preferences of broader societal coalitions, and electoral rules and party structures also affect policy outcomes, with certain configurations creating a bias toward more protectionism or liberalization. In addition to these domestic-level influences on trade policy, IPE scholars have extensively studied the ways that international factors also affect trade policy outcomes such as the extent of liberalization and the content of what is liberalized (e.g., manufactures versus agricultural goods versus services). International factors such as the distribution of power, the character of international institutions and trade agreements (e.g., multilateral versus bilateral), transnational civil society and diffusion processes may be thought of as inputs into the policy-making process as well. Systemic conditions may constrain the types of policies that governments can adopt, or they may open the door to a range of possible policy outcomes that are nevertheless limited by the preferences of domestic societal actors.

Article

Both trade and climate change policies affect the international competitiveness of carbon-intensive industries. This suggests that policy changes in one area may affect politics in the other. Does openness to international trade affect climate change politics? Do climate change policies affect the politics of trade? Does formally linking trade and climate policies via trade sanctions affect the prospects for cooperation in each domain? There are good theoretical reasons to believe that the answer to these questions is yes. Theoretically, each set of policies should affect the other, but these interactions could either encourage or discourage trade and climate cooperation. How trade and climate politics interact is thus an empirical question. Empirically, the overall picture is of a nascent but promising field of research. Extant studies provide indirect tests and suggestive evidence, but little in the way of firm conclusions. Only one point emerges clearly: progress in this area will require more and better data on national climate policies.

Article

Danielle Resnick

Although widely used in reference to the Americas and Europe, the concept of populism has been less frequently applied to political dynamics in sub-Saharan Africa. Populism is variously viewed as a political strategy aimed at fostering direct links between a leader and the masses, an ideational concept that relies on discourses that conjure a corrupt elite and the pure people, and a set of socio-cultural performances characterized by a leader’s charisma, theatrics, and transgression of accepted norms. A cumulative approach that combines all three perspectives allows for identifying episodes of populism in Africa. These include historical cases of populist regimes in the 1980s as well as more contemporary examples of party leaders in the region’s democracies who use populism in their electoral campaigns to mobilize subaltern groups, especially those living in urban areas. As found in other regions of the world, those African leaders who have ascended to the presidency on the back of populism typically exert anti-democratic practices once in office. This reaffirms that populism can allow for greater representation of the poor and marginalized in the electoral process, but that populists’ celebration of popular will and supposedly unmediated ties to the people become convenient justifications for bypassing established institutions and undermining the rule of law.

Article

Since roughly the turn of the millennium, there has been a growing literature discussing the potential characteristics of African Developmental States—if they exists and in that case how they should be defined and exemplified. The basis for this literature has been the experience of the trajectory for sustained economic growth in Pacific Asia. But it has expanded into a broader discussion about the role of authoritarian regimes versus democratic states, outcomes versus intentions, and overall ambitions versus concrete strategies. The most common suggestions for African counterparts have been the two growth miracles—Botswana and Mauritius, although other countries such as South Africa, Rwanda, and Ethiopia have also been on the agenda. The original Developmental State concept entails a specific type of social engineering that has so far been rare in Africa: a legitimate state leading a planned capitalist economy with a competent and autonomous bureaucracy spearheading industrialization efforts in profound collaboration with the private sector. With such a narrow definition, it is only the development pathway of Mauritius that can be said to fit the criteria while Botswana falls short due to its weak industrialization efforts, longstanding interconnectedness between the bureaucracy, political power, and cattle elite, and lack of dynamic cooperation between the state and private-sector entrepreneurial groups. Whether or not we will see more examples of African countries following the specific Developmental State trajectory or if they will create alternative development paths to economic diversification, transformation, and prosperity remains to be seen.

Article

Postcolonial theory has been embraced and critiqued by various scholars since the 1980s. Central to the field of postcolonial studies is the examination of colonial episteme and discourse, European racism, and imperial dominance. Broadly, postcolonialism analyzes the effects, and enduring legacies, of colonialism and disavows Eurocentric master-narratives. Postcolonial ideas have been significant to several academic disciplines, largely those in the humanities and social sciences, such as cultural and literary studies, anthropology, political science, history, development studies, geography, urban studies, and gender and sexuality studies. The key scholars that are connected to postcolonial theory, Edward Said, Homi Bhabha, and Gayatri Spivak, have been critiqued for grounding their work in the Western theories of postmodernism and poststructuralism. Given the predominant association of these three scholars to postcolonial theory, Africanists have argued that postcolonial theory is dismissive of African theorizing. Moreover, some scholars have noted that Africanists have hesitated to use postcolonial theory because it is too discursive and has limited applicability to material reality. As such, the relevancy of postcolonial theory to Africa has been a repetitive question for decades. Despite this line of questioning, some scholars have posited that there are African thinkers and activists who are intellectual antecedents to the postcolonial thought that emerged in the 1980s and 1990s. Additionally, other Africanist scholars have engaged with the colonial discursive construction of African subjectivities and societies as inferior. These engagements have been particularly salient in women and gender studies, urban studies and studies of identity and global belonging.

Article

Over the past decades, prosecutors have become more and more powerful within criminal justice systems. Yet, there is still relatively little empirical research on prosecutors. Most of the literature focuses on the analysis of the prosecutorial system of a single country. Cross-country analyses are close to nonexistent. From a comparative perspective, the various possible means to establish the independence of prosecutors from government and at the same time securing their accountability to the law are of paramount interest. Regarding the former, appointment procedures, possible career paths, and the degree to which prosecutors are subject to orders both from within the prosecution agency as well as from without (e.g., the ministry of justice) are of special concern. With regard to prosecutorial accountability, it is the legality principle (also known as mandatory prosecution), the issue whether prosecutors enjoy a monopoly in the prosecution of criminals, whether decisions not to prosecute a suspect are subject to judicial review, and the transparency of the behavior of prosecutors that are key. Regarding the organizational design choices of prosecution agencies that have been implemented across countries, four different clusters can be identified. The four clusters perform markedly different in terms of the rule of law levels associated with them. The consequences of institutional design choices are surprisingly small. The de facto organization of prosecutors turns out to be far more relevant for outcomes than what is prescribed de jure. Countries in which prosecutors enjoy a high degree of de facto independence suffer significantly less from corruption than countries in which this is not the case. Given that the institutional design choices of prosecutors are of limited relevance for their de facto situation, the question is: What factors determine the de facto independence and accountability of prosecutors? It turns out that some rather stable and immutable factors are decisive: Common law legal systems do better than those belonging to the civil law legal families. Generalized trust also plays an important role. If most people believe that others can be trusted, very specific rules for the behavior of prosecutors may seem unnecessary. A number of trends regarding the organization of prosecutors can be observed in many countries, among them the increased reliance on trial waiver systems, bonus payments to incentivize prosecutors, the founding of prosecutorial councils, and prosecutorial activism. It is questionable whether the first three of these trends will increase the efficiency of prosecution agencies; rather, they are likely to lead to a deterioration in the overall rule of law score of those countries relying on them.

Article

Francesco Passarelli and Alessandro Del Ponte

Prospect theory introduces several anomalies in the behavior of rational agents, including loss aversion, the reflection effect, probability weighting, and the certainty effect. Loss aversion occurs relative to the current state of the world, called reference point. Being loss averse causes people to prefer the current state of affairs above and beyond the expected utility that comes from a risky political change, engendering a status quo bias. Yet, bias is asymmetric due to the reflection effect: people are too tepid toward advantageous platforms or candidates, whereas they are not critical enough of detrimental policies or bad politicians. Both rich and poor citizens take similar stances on nonpartisan issues (such as national defense): this happens because they evaluate uncertain policy changes relative to a reference point. Citizens welcome radical political platforms with greater enthusiasm than incremental proposals. Generally, under prospect theory societal conflict is smoother than under expected utility theory. Older societies are more prone to preserving the status quo than younger ones. These properties also affect the choice of voting rules. Loss aversion induces people to prefer more prudent voting rules and preserve the status quo. Hence, agents favor higher majority thresholds or even unanimity over simple majority in constitutional choice. The status quo bias supports the persistence of policy cycles, with prolonged drifts in one direction before a trend reversal. In sum, loss aversion and other anomalies pinpointed by prospect theory offer insightful predictions with which to study political phenomena.