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Article

Most people in human history have lived under some kind of nondemocratic rule. Political scientists, on the other hand, have focused most efforts on democracies. The borders demarcating ideal types of democracies from nondemocracies are fuzzy, but beyond finding those borders is another, arguably greater, inferential challenge: understanding politics under authoritarianism. For instance, many prior studies ignored transitions between different authoritarian regimes and saw democratization as the prime threat to dictators. However, recent scholarship has shown this to be an error, as more dictators are replaced by other dictators than by democracy. A burgeoning field of authoritarianism scholarship has made considerable headway in the endeavor to comprehend dictatorial politics over the past two decades. Rather than attempting to summarize this literature in its entirety, three areas of research are worth reviewing, related to change inside of the realm of authoritarian politics. The two more mature sets of research have made critical contributions, the first in isolating different kinds of authoritarian turnover and the second in separating the plethora of authoritarian regimes into more coherent categories using various typologies. How do we understand authoritarian turnover? Authoritarian regimes undergo distinct, dramatic, and observable changes at three separate levels—in leaders, regimes, and authoritarianism itself. Drawing distinctions between these changes improves our understanding of the ultimate fates of dictators and authoritarian regimes. How do we understand the diversity of authoritarian regimes? Scholarship has focused on providing competing accounts of authoritarian types, along with analyses of institutional setup of regimes as well as their organization of military forces. Authoritarian typologies, generally coding regimes by the identities of their leaders and elite allies, show common tendencies, and survival patterns tend to vary across types. The third research area, still developing, goes further into assessing changes inside authoritarian regimes by estimating the degree of personalized power across regimes, the causes and consequences of major policy changes—or reforms—and rhetorical or ideological shifts.

Article

Lucia Quaglia

The banking union is considered to be one of the main steps in economic integration in the European Union. Given the rather recent establishment of this policy, academic research on the banking union does not have a long lineage, yet it is an area of bourgeoning academic enquiry. There are three main “waves” of research on the banking union in political science, which have mostly proceeded in a chronological order. The first wave of scholarly work focused on the “road” to banking union, from the breaking out of the sovereign debt crisis in the euro area in 2010 to the agreement on the blueprint for the banking union in 2012, explaining why it was set up. The second wave of literature explained how the banking union was set up and took an “asymmetric” shape, whereby banking supervision was transferred to the European Central Bank (ECB); however, banking resolution partly remained at the national level, whereas other components of the banking union, namely, a common deposit guarantee scheme and a common fiscal backstop, were not set up. The third wave of research discussed the functioning of the banking union, its effects and defects. The banking union has slowly brought about significant changes in the banking systems of the member states of the euro area and in government–business relations in the banking sector, even though these effects have varied considerably across countries.

Article

Capitalist peace theory (CPT) has gained considerable attention in international relations theory and the conflict literature. Its proponents maintain that a capitalist organization of an economy pacifies states internally and externally. They portray CPT either as a complement or as a substitute to other liberal explanations such as the democratic peace thesis. They, however, disagree about the facet of capitalism that is supposed to reduce the risk of political violence. Key contributions have identified three main drivers of the capitalist peace phenomenon: the fiscal constraints that a laissez-faire regimen puts on potentially aggressive governments, the mollifying norms that a capitalist organization creates; and the increased ability of capitalist governments to signal their intentions effectively in a confrontation with an adversary. Defining capitalism narrowly through the freedom entrepreneurs enjoy domestically, this article evaluates the key causal mechanisms and empirical evidence that have been advanced in support of these competing claims. The article argues that CPT needs to be based on a narrow definition of capitalism and that it should scrutinize motives and constraints of the main actors more deeply. Future contributions to the CPT literature should also pay close attention to classic theories of capitalism, which all considered individual risk taking and the dramatic changes between booms and busts to be key constitutive features of this form of economic governance. Finally, empirical tests of the proposed causal mechanism should rely on data sets in which capitalists appear as actors and not as “structures.” If the literature takes these objections seriously, CPT could establish itself as central theory of peace and war in two respects. First, it could serve as an antidote to the theory of imperialism and other “critical” approaches that see in capitalism a source of conflict rather than of peace. Second, it could become an important complement to commercial liberalism that stresses the external openness rather than the internal freedoms as an economic cause of peace and that particularly sees trade and foreign direct investment as pacifying forces.

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

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

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.

Article

The labor market of the 21st century is evolving at a rapid pace, making traditional manufacturing and agricultural jobs increasingly precarious and generating significant pressure for turnover, retraining, and adaptation by workers. Latin America’s labor regulation, adopted in the middle of the 20th century to foster industrial development and incorporate urban workers, has been slow to adapt to these conditions. Its restrictive and costly hiring and firing rules offer stronger protections than in many other parts of the world, but they often apply to a diminishing minority of laborers. Despite a few exceptions, once-strong unions have been hollowed out in the region, and workers have become increasingly atomized in their job seeking. The region’s educational systems are plagued by underinvestment, and they struggle to provide the needed technical skills that could galvanize investment that would provide higher-wage employment. Large segments of the workforce—a majority in most countries—find themselves in the informal sector, in jobs that are not registered with the state and that do not make contributions to pensions and social security systems. Why has Latin America—a region endowed with a variety of natural resources and a resilient entrepreneurial spirit—exhibited these patterns in its labor market regulation? The answer lies in an overlapping nexus of economic and political influences in the region. In this complex mix, one strand of scholarship has documented the lasting and recurrent alliance between organized labor and political parties on the left. Another strand has highlighted the concentrated power of business interests—both local and transnational—that have had the power to shape policies. And a third body of research concentrates on the electoral dynamics that have given rise to a growing set of politically motivated policies that seek to support informal sector workers, but may incentivize their remaining in that status. Finally, considerable attention has been given to the under-resourced state agencies that are not adequately monitoring labor regulations, allowing for widespread evasion of required payroll taxes. A change-resistant cycle has predominated in the region, in which protected insiders in the unionized sectors seek to preserve a set of protections that apply to a shrinking few, while politicians court support among outsiders with direct benefits that address immediate needs but have not yet achieved long-term or intergenerational change. Business interests have largely benefited from the status quo of labor law evasion and social security avoidance, so they have been slow to invest in upgrading the workforce or changing technology that would inspire additional investment in education. Addressing this situation will require efforts at both the political and economic levels, perhaps loosening the partisan ties that lock in preferential policies, as well as increasing the skill levels that would attract higher-tech industries and higher-paying jobs.

Article

In the era following the decolonization of Africa, the economic performance of countries on the continent can be traced across three periods. The early postindependence years reflected moderate growth and policy variation, with occasional distress in some countries. From the 1980s through the late 1990s, the region was gripped by a sweeping crisis of growth and solvency shaped by a steep economic downturn and a slow, stuttering recovery. This was also a period of convergence and restrictions on policy space. By the early 2000s, accelerated growth buoyed most economies in Africa, although commodity price shocks and the global economic slump of 2008–2009 created episodic problems. Different approaches to policy and strategy once again marked the landscape. A number of influences help to explain variations in the occurrence of economic crisis across Africa, and the different responses to economic distress. In addition to structural factors, such as geography, resource wealth, and colonial legacies, middle-range political conditions contributed to these downturns. Key institutions, core constituencies, and fiscal pressures were domestic causes and external factors include donor convergence, access to finance, and policy learning. One framework of analysis centers on three factors: ruling coalitions, the fiscal imperative, and policy space. The ruling coalition refers to the nature of the political regime and core support groups. The fiscal imperative refers to the nature of state finance and access to external resources. And the policy space comprises the range of strategic alternatives and the latitude for governments to make choices among broad policy options. Applying the framework to Africa’s economic performance, the first period was marked by distributional imperatives, a flexible fiscal regime, and considerable space for policy experimentation. During the long crisis, regimes came under pressure from external and domestic influences, and shifted toward a focus on macroeconomic stabilization. This occurred under a tight fiscal imperative and a contraction of policy space under the supervision of multilateral financial institutions. In the 2000s, governments reflected a greater balance between distributional and developmental goals, fiscal constraints were somewhat relaxed, and policy variation reappeared across the region. While the early 21st century has displayed signs of intermittent distress, Africa is not mired in a crisis comparable to those of earlier periods. Developmental imperatives and electoral accountability are increasingly influential in shaping economic strategy across the continent.

Article

Cyril Alias, Bernd Kleinheyer, and Carla Fieber-Alias

In an integrated European Union, transport would be expected to be a major enabler of economic development and consumer services. This role, however, was not acknowledged, though laid down in initial treaties, until 30 years into the EU’s existence. A verdict of the European Court of Justice condemning the longstanding inactivity of the European Council and subsequent efforts toward a dedicated policymaking have changed the significance. The regular definition and monitoring of goals and objectives in European transport policy by means of White Papers and trans-European transport networks guide public attention to the policy area. From an initial stage, when transport was considered as a functional enabler for cooperation after World War II, transport has evolved toward a Community task, featuring a long phase of stagnation and a sudden change to actionism after the court verdict. From the 1990s onward, goals like liberalization, cohesion, environmental protection, modal shift, competitiveness, globalization, and resource efficiency characterize European transport policy. Despite the output failure in European transport policy over many years, the Single European Market propelled transport onto the center stage of European policies and later made it a key object of sustainability policies. This change in focus has also attracted citizens’ attention with the effect that the EU needs and manages to portray itself as an interactive and accountable legislator dialoguing with its population. This new openness is a mere necessity if the EU wants to pursue its goal of a Single European Transport Area that is both supported by its business and citizens. At the same time, European transport policy is subject to numerous external influences—both by other European and national policies and different stakeholder interest groups. The ordinary legislative procedure is preceded by the initial agenda setting over the proposal planning and issuing and ranges from the proposal to three readings before being passed by European Parliament and Council of Ministers. The stakeholders accompany the whole process and influence it at different stages. Several examples from the history of European transport policymaking are proof of this.