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Inside Activism: Political Agency and Institutional Change  

Jan Olsson and Erik Hysing

The theoretical concept of inside activism brings fresh light on institutional change by upgrading the importance of political agency within public organizations. Inside activism captures a specific empirical phenomenon, namely, public officials being committed to the agendas of civil society networks and organizations, and acting from inside public organizations to induce policy and institutional change. Inside activism upgrades political aspects of public organizations, recognizing the importance of authority, power, and combative action. Public organizations are institutionally shaped by continuous processes of consolidation and fragmentation. This means opportunities for inside activists to act politically, preferably in secret and subversive ways, and to further strengthen the fragmented nature of public organizations. Strategically, inside activists can work for institutional change by expanding their agency through the development of collective power and networking, using combative subversive strategy, working for cumulative effects and combinative solutions as well as to bend and break constraints on their actions (the 5C model). To induce change, they further exploit institutional ambiguities like “weak spots” of institutions and discrepancies between institutional rules and practices on the ground. The neglect of inside activism within institutional theory likely means that the possibility of institutional change has been underestimated and there is thus a need for a comprehensive research agenda on inside activism, political agency, and institutional change, which in this article is termed “new political institutionalism.”


Colonial Rule and Its Political Legacies in Africa  

Amanda Lea Robinson

European colonialism in Africa was brief, lasting less than a century for most of the continent. Nevertheless, scholars have enumerated myriad long-term political effects of this brief period of colonial rule. First, Europeans determined the number, size, and shape of African states through their partition of the continent, with contemporary implications for state viability, strength, and legitimacy. Second, colonial rule influenced the nature of ethnic boundaries and their salience for politics through the use of indirect rule, language and labor policies, and the location of internal administrative boundaries. Third, colonial rule significantly shaped the nature of postcolonial state-society relations by divorcing the state from civil society during the colonial era and by engendering deep mistrust of the state as a benevolent actor. Fourth, many colonial institutions were preserved at independence, including the marriage of state institutions and customary rule, with deleterious effects. Fifth, differential colonial investments across communities and regions generated significant inequality, with continued political implications in the 21st century. The identification of these long-term effects has largely resulted from empirical comparisons across different forms of colonial rule, especially comparing territories administered by different colonial powers. Future research should move beyond this blunt approach, instead pursuing more disaggregated and nuanced measures of both colonial rule and its political legacies, as well as more scholarship on the long-term interaction between colonial and indigenous political institutions.


Political Agenda Setting and the Mass Media  

Stefaan Walgrave and Peter Van Aelst

Recently, the number of studies examining whether media coverage has an effect on the political agenda has been growing strongly. Most studies found that preceding media coverage does exert an effect on the subsequent attention for issues by political actors. These effects are contingent, though, they depend on the type of issue and the type of political actor one is dealing with. Most extant work has drawn on aggregate time-series designs, and the field is as good as fully non-comparative. To further develop our knowledge about how and why the mass media exert influence on the political agenda, three ways forward are suggested. First, we need better theory about why political actors would adopt media issues and start devoting attention to them. The core of such a theory should be the notion of the applicability of information encapsulated in the media coverage to the goals and the task at hand of the political actors. Media information has a number of features that make it very attractive for political actors to use—it is often negative, for instance. Second, we plead for a disaggregation of the level of analysis from the institutional level (e.g., parliament) or the collective actor level (e.g., party) to the individual level (e.g., members of parliament). Since individuals process media information, and since the goals and tasks of individuals that trigger the applicability mechanism are diverse, the best way to move forward is to tackle the agenda setting puzzle at the individual level. This implies surveying individual elites or, even better, implementing experimental designs to individual elite actors. Third, the field is in dire need of comparative work comparing how political actors respond to media coverage across countries or political systems.


Avoiding Blame in Policy Crises in Different Institutional Settings  

Minou De Ruiter and Sanneke Kuipers

Policy crises often lead to “framing contests,” in which officeholders, opponents, media, and the public at large aim to interpret the crisis in question, explain its cause, attribute responsibility, and agree on ways to address harm caused. More often than not, these contests turn into blame games for the incumbent officeholder. Formal and informal institutional factors can shape blame avoidance options of officeholders, and influence the outcomes of these crisis-induced blame games in terms of blame escalation, policy responses, and political sanctions. First, formal institutions shape officeholders’ incentives for arguing that they are not responsible for the crisis or should not be punished for its occurrence. Studies in the field of welfare state retrenchment and ministerial resignations have analyzed the blame avoidance options of governments and the survival rates of officeholders in various institutional settings. These studies have provided evidence that institutional complexity and policy-making authority help explaining pathways of blame management. In single-party governments, the accountability chain is more clear and prime ministers have a stronger electoral incentive to sack failing and unpopular ministers. However, a more restrictive interpretation of formal ministerial responsibility for administrative or implementation failures, along with the delegation of policy execution to agencies at arm’s length, can work as a protective shield in blame games for the officeholders and reinforce policy inertia. Consociational systems with multiparty coalitions often show an opposite effect. Second, institutionalized norms, also known as “the way we do things around here,” affect blame avoidance behavior available to officeholders. Studies which have taken “cultural-institutional” approaches to accountability studies have shown that informal accountability actors, fora, and norms about appropriate behavior shape blame processes. Actors in consociational systems with multiparty coalitions often consider consensus-oriented and nonconfrontational behavior, such as attempts to appease the opposition with policy reparations, as more appropriate responses to blame than those in systems with more elite polarization. In addition, officeholders are increasingly held to account by actors who solely have an informal role in blame games, such as the media and interest groups. Therefore, the extent of mediatization and increased polarization plays a major role in how different political contexts “process” blame. Third, other relevant noninstitutional factors for blame avoidance behavior are important, such as the nature and timing of the crisis and involvement of other actors in the blame game. Issue salience and proximity affect the potential for blame escalations and the options for blame management by both office holders and their opponents. Prior reputation of incumbent politicians helps them to draw on leadership capital to deflect blame. If the timing of a blame game coincides with upcoming elections, blame is more likely to escalate and lead to political sanctions. To further understanding of the role of institutional factors in crisis-induced blames games, future research should focus on blame games where institutions themselves are questioned, contested, or in-flux.


Theoretical Perspectives on LGBT Representation and Party Politics  

Paul Snell

LGBT people have gone from being a “politics” to a “people” from the end of the 20th century to the beginning of the 21st. They were mostly excluded from public life, and reduced to their sexuality. And when they weren’t reduced, they were restricted. Legislatures, not only failed to protect LGBT people from discrimination, but created new barriers for them under the guise of “protecting” the presumed heterosexual and cisgender basis of society. In America, the Defense of Marriage Act, (DOMA) and Don’t Ask Don’t Tell (DADT) are the most consequential examples of legislative action that treats LGBT people as morality issues rather than citizens. As LGBT people have gone from the margins to the center of public life, however, their political status changed. LGBT people are no longer a sexuality—but a constituency. There is an undisputed electoral connection. Legislators act on behalf of LGBT constituents in symbolic and substantive ways ranging from membership in LGBT caucuses in their chambers, to voting for bills that clearly help LGBT citizens in specific ways. They also exert pressure on representatives for whom they share no electoral connection, and who are not themselves LGBT. These allies act for LGBT citizens because they it aligns with ideological beliefs in justice and equity. This growth in activity has not only been limited to the US Congress, but has also occurred in US state legislatures and around the world. Activity has not always been synonymous with success, as the US Congress’s long struggle to pass an Employment Non-Discrimination Act (ENDA) that is inclusive of all aspects of the “LGBT” umbrella demonstrates. Nevertheless, LGBT voters are no longer “an issue”, but a part of the polity. Now that “LGBT” is an established political group there are serious questions that need to be addressed about what is being represented—and why it matters.


Understanding and Deploying the Political Settlement Framework in Africa  

Hazel Gray

Research using variants of political settlement analysis have gained prominence in scholarship on Africa. Political settlement research provides an analytical lens that takes the researcher beyond a narrow focus on formal institutions to examine how distributions of power among groups affect the way that institutions work. A political settlement can be defined as a combination of power and institutions that is mutually compatible and also sustainable in terms of economic and political viability. The main theoretical building blocks of the framework are institutions, power, and rents. Despite its burgeoning influence as an analytical approach, existing literature contains considerable differences in the core concepts and causal mechanisms described as constituting a political settlement framework. There are key differences within the literature between research that conceptualizes political settlement as action and political settlement conceptualized as process. In understanding political settlement as process, a political settlement is conceptualized as a stable political order that has not necessarily been planned or consciously willed by different social groups. The outcomes intended from the adoption of any particular set of institutions cannot be taken for granted. Groups that may appear powerful in terms of their formal political and economic positions in society may not be able to actually enforce compliance with formal and informal institutions they desire, leading to a much more complex relationship between institutions and paths of political and economic change. Approaches that understand political settlement as action emphasize the role of agreements made by powerful groups or elites. Forging a viable and inclusive political settlement is treated as a desirable policy outcome where institutions that generate inclusion, stop war, or reduce violent conflict can be purposefully established and enforced by elites. The two versions of the framework have been deployed to explore a range of different phenomena including economic change and industrialization, corruption, social policy, conflict, and state-building in a number of African countries. A key insight of the political settlement framework is that it provides many new insights into the variation between political economies on the continent. However, it is crucial that those seeking either to deploy or to critique the framework recognize the diverse way in which concepts and underlying causal processes have been defined. Such tensions within the framework can be important for driving research and thinking forward.


Domestic Constraints on Foreign Policy in Authoritarian Systems  

Jessica L. P. Weeks and Cody Crunkilton

The question of how domestic institutions influence foreign policy decisions has a long history in the study of international relations. However, until recently most of this research has compared the foreign policies of democracies and autocracies, with little attention to the differences within autocracies. In recent years, a small but growing body of literature has examined constraints within autocracies, taking issue with the widespread image of authoritarian leaders as unconstrained and unaccountable. Although existing research on this topic is limited, it focuses on two general sources of constraint on authoritarian leaders: constraints imposed by regime insiders and constraints at the hands of the public. In regimes with a powerful domestic audience, insiders often have both the will and the means to punish their leader for foreign policy failures. Consequently, such regimes sometimes behave quite similarly to democracies. In general, regimes with powerful selectorates or domestic audiences appear more likely to pursue peaceful security policies, to win the military conflicts they do enter, to lose office in the aftermath of defeat in war, to sign trade agreements, to adopt floating exchange rates, and to cooperate internationally, compared to regimes lacking such elite constraints. Scholars remain divided, however, about the extent to which the backgrounds of members of the domestic audience (e.g., whether they stem from a military or civilian ranks) matter. Less research studies whether the public can constrain authoritarian leaders. However, research indicates that the public can sometimes exert constraints through elections or the threat of revolt, if to a lesser extent than regime insiders. For example, the threat of revolution can make leaders who fear violent removal less likely to make concessions to end a conflict. Furthermore, antiforeign protest can tie a regime’s hands, with both peaceful and violent consequences. In the economic realm, some research suggests that the threat of inequality-driven revolutions spurs autocrats to pursue free-trade agreements. Overall, the study of domestic constraints on foreign policy in authoritarian regimes is an emerging area of research, with numerous areas for future study.


Traditional Institutions of Governance in Africa  

Kidane Mengisteab

Most African countries are characterized by parallel institutions, one representing the formal laws of the state and the other representing the traditional institutions that are adhered to more commonly in rural areas. The parallel institutional systems often complement each other in the continent’s contemporary governance. Oftentimes, however, they contradict each other, creating problems associated with institutional incoherence. Why the traditional systems endure, how the institutional dichotomy impacts the process of building democratic governance, and how the problems of institutional incoherence might be mitigated are issues that have not yet received adequate attention in African studies. The evidence suggests that traditional institutions have continued to metamorphose under the postcolonial state, as Africa’s socioeconomic systems continue to evolve. Despite such changes, these institutions are referred to as traditional not because they continue to exist in an unadulterated form as they did in Africa’s precolonial past but because they are largely born of the precolonial political systems and are adhered to principally, although not exclusively, by the population in the traditional (subsistent) sectors of the economy. Subsequent to the colonial experience, traditional institutions may be considered to be informal institutions in the sense that they are often not sanctioned by the state. However, they are not merely customs and norms; rather they are systems of governance, which were formal in precolonial times and continue to exist in a semiformal manner in some countries and in an informal manner in others. Another issue that needs some clarification is the neglect by the literature of the traditional institutions of the political systems without centralized authority structures. In general, decentralized political systems, which are often elder-based with group leadership, have received little attention, even though these systems are widespread and have the institutions of judicial systems and mechanisms of conflict resolution and allocation of resources, like the institutions of the centralized systems. Careful analysis suggests that African traditional institutions lie in a continuum between the highly decentralized to the centralized systems and they all have resource allocation practices, conflict resolution, judicial systems, and decision-making practices, which are distinct from those of the state.


The Rise of the African Legislature?  

Ken Opalo

What explains contemporary variation in legislative strength and institutionalization in Africa? Contrary to the widespread belief that African legislatures are uniformly weak, there is significant variation in both the institutional forms and powers of these institutions. Colonial institutional development and the nature of postcolonial single-party autocratic rule partially explain the variation in legislative strength and institutionalization in Africa. Legislative development (or lack thereof) under colonialism bequeathed postcolonial states with both institutional memory and intra-elite conceptions of executive–legislative relations (how legislatures work). The nature of postcolonial autocratic rule determined the upper bounds of legislative development. Relatively secure presidents tolerated legislative organizational development. Their weaker counterparts did not. These differences became apparent following the end of single-party rule in much of Africa the early 1990s. Legislatures in the former group exploited their newfound freedom to rebalance executive–legislative relations. Those in the latter group remained weak and subservient to presidents. In short, strong autocratic legislatures begat strong democratic legislatures.


Labor and Trade Protection in Comparative Perspective  

Erica Owen and Rena Sung

Research on the domestic politics of trade typically begins with a theory about who benefits from trade and who is harmed by it. The actors—for instance, firms, workers, or industries—who benefit from trade are expected to support liberalization while those who are harmed are expected to oppose liberalization. For individuals, exposure to globalization through the labor market—including the type of job, firm, or industry—is likely to be an important determinant of individuals’ preferences over policies governing the global economy. To understand the domestic politics of trade with respect to labor, therefore, it is important to ask two key questions. First, what explains the preferences of workers? Broadly, scholars can be divided between those that argue different economic factors (i.e., labor market consequences) explain attitudes toward free trade and those who argue that noneconomic factors (e.g., values, information) are the main drivers of attitudes. Empirical tests of these theories rely on survey data. Second, how do trade pressures influence elections and when do workers’ interests influence policy outcomes? Research on mass politics shows that workers’ interests with respect to trade shape not only support for incumbents in elections but also whether elected officials support free trade. Domestic institutions also play an important role in this process, with research suggesting that democracies and left-leaning governments implement trade policies that are more favorable to workers. Yet trade in the 21st century looks very different from trade 30 years ago. It no longer involves only (or even primarily) the exchange of final goods but also trade in intermediate goods and services. Trade is also closely linked to the production strategies of multinational firms, including offshoring. These fundamental changes in the nature of global economic activity have important implications for the how the interests of workers relate to those of their employers, and by extension the politics of trade. As a result, scholars are increasingly incorporating new models of trade into analysis of politics at the individual and aggregate levels.


The Political Economy of Monetary Policy  

Cristina Bodea

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.


Institutional Amnesia and Crisis Management Analysis  

Alastair Stark

Institutional amnesia can be defined in simple terms as an organization’s inability to recall and use historical knowledge for present-day purposes. However, the concept requires to be defined more expansively so that its causes and effects can be fully understood in relation to crises and crisis management. This means conceptualizing institutional amnesia in broader terms as something that influences individual crisis managers, the formal institutional aspects of crisis management agencies, the cultural dimensions of those agencies, and the wider systemic location within which both actors and agencies reside. The analysis of the effects of amnesia in each of these areas reveals the profound effects that it can have on various aspects of crisis management. Institutional amnesia can affect the performance of crisis management policies and the politics of crises more generally. In particular, memory loss can be seen to influence crisis decision-making that relies upon historical analogy, crisis learning which demands that learned lessons are formally institutionalized across time, and meaning-making efforts, which draw upon recollections of the past to justify political projects in the present. The effects that institutional amnesia has on these three important areas illuminate its relevance to crisis analysis. Yet amnesia, and to some extent memory, continue to be concepts that are neglected, or referred to tangentially, by mainstream crisis scholars.


Fiscal Politics  

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.


Public Opinion and Public Policy  

Christopher Wlezien and Stuart N. Soroka

The link between public opinion and public policy is of special importance in representative democracies, as we expect elected officials to care about what voters think. Not surprisingly, a large body of literature tests whether policy is a function of public preferences. Some literature also considers the mechanisms by which preferences are converted to policy. Yet other work explores whether and how the magnitude of opinion representation varies systematically across issues and political institutions. In all this research, public opinion is an independent variable—an important driver of public policy change—but it is also a dependent variable, one that is a consequence of policy itself. Indeed, the ongoing existence of both policy representation and public responsiveness is critical to the functioning of representative democracy.


Party Organizational Structure in Latin America  

Ana Petrova

Partisan organizations are the set of structured patterns of interaction among political cadres and members alike that are prescribed either by formal rules of procedure or by traditions and unwritten rules. Scholars of Latin America have generally described local partisan organizations as weak but have also devoted significant attention to the study of informal party structures, whose robustness and complexity have tended to contrast with the general fragility of their formal counterparts. Although important data-related challenges have precluded more systematic and generalizable analyses of the causes and consequences of party organizations, meticulous theoretical works and case studies have explored the questions of what organizations look like, how they operate, how they were built, and what outcomes they result in. This literature has identified ideational and tangible resources as the primary predictors of organizational strength. Strong and easily identifiable party brands provide both politicians and partisans with incentives to join and remain in a political party even in times of bad electoral performance and limited selective benefits. Material resources are shaped by countries’ institutional frameworks and structure politicians’ priorities in terms of their career ambitions and their relationships to voters and partisans. In turn, robust organizations have been associated with longer party survival and a narrower margin of action of the party leaderships. The presence of an extended network of party members and sympathizers make parties more resilient to short-term challenges, which is no small feat in a region marked by relatively high electoral volatility and many institutions of fleeting existence. The recent release of several important data sets and the proliferation of knowledge of how parties work create exciting avenues for future research.


Party Systems in Africa  

Matthias Basedau

Political party systems are an important element of political systems in Africa and elsewhere. They form the central intermediate institution between the general population and the government. Party systems represent and aggregate diverse political views and group interests, and they form coalitions that then form governments with potentially important consequences of democracy and political stability. Unlike the case in the period directly after independence, African party systems have been overwhelmingly multiparty since the 1990s. As a result, the literature has grown significantly, although most works focus on political parties rather than party systems. Many efforts have been devoted to classification, referring to the legal context as well as, more specifically, the number of relevant parties, the levels of institutionalization, and, less often, the degree of ideological or other polarization. While levels of institutionalization and ideological differences are generally not pronounced, more than half of African party systems have been one-party dominant, of which most are authoritarian. In contrast, two-party and pluralist-party systems, which make up approximately one half of all multiparty systems, are generally more democratic. Besides determining classifications, most analytical work focuses on the determinants of African party systems using quantitative and qualitative as well as macro- and micro-level methodologies. Three determinants are debated: first, ethnicity, which has been cited as the main social cleavage behind African party systems; however, while ethnicity matters, its effects vary and are limited; second, political institutions, especially electoral systems for legislative elections, which only partly explain fragmentation or other features; third, the performance of political parties and rationalist approaches. Scholars largely agree that all of these elements need to be taken into account. While certain functions of party systems may facilitate democratization and political stability or other outcomes, little empirical work exists on the consequences of party systems. Some evidence suggests that highly institutionalized, moderately fragmented, and polarized systems promote democracy. Future research faces many challenges, in particular the development of integrated theory and more fine-grained data, as well as an increased focus on the consequences of party systems.


Leadership in the European Union  

Lisbeth Aggestam and Markus Johansson

Leadership in the European Union is an empirical phenomenon that has increasingly come to attract scholarly attention. While a call for leadership in the EU is often heard, not least in times of crisis, it is also accompanied with a general reluctance to centralize powers. This leadership paradox has historical roots and has resulted in a dispersed type of leadership governance at the EU level. Scholarly work varies from mainly descriptive accounts of leadership by particular individuals to more theory-testing approaches to leadership. The academic field of EU leadership studies contains variation along three primary dimensions: (1) how leadership is defined, (2) by which theories it is explained, and (3) through which empirical cases and approaches it is studied. First, there is a wide differentiation in the literature of how leadership is defined and approached as an object of study. Four leadership approaches can be distinguished in the literature, focusing on the role of individuals, an actor’s position, the process of leadership enactment, and the outcomes produced by leadership. Second, leadership in the EU has been theorized and explained in a variety of ways. Explaining leadership in the EU requires an understanding of what power resources different actors draw on, ranging from material to institutional and ideational powers. These sources often also translate into different types of leadership strategies. A substantial amount of research has departed from rational choice institutionalism, which highlights the importance of a formal position to exercise leadership. Sociological approaches have more recently attracted attention to conceptualize leadership as a social role based on the interaction between leaders and followers. Third, the empirical study of leadership in the EU encompasses a range of different approaches in terms of the type of actors studied, the issues covered, and the data and methods used. EU leadership studies include different types of leadership actors ranging from individuals to institutions, member states, and the EU itself as a global leadership actor. The empirical policy domains vary from issues relating to treaty amending processes, environment and climate policies, eurozone governance and crisis management, to foreign and security policy. Although comparative studies of leadership in the EU exist, the focus has predominantly been on single actors during particular policy processes. An increasing use of explicit comparative designs in the study of EU leadership could have the potential to further advance theory building in the scholarship of EU leadership.


Trade Union Politics in Latin America  

Graciela Bensusán

The links between unions and political parties have been present throughout much of the 20th century and early 21st century in most Latin American countries. Since these links were historically one of the most important resources of union power, by compensating the structural weakness of wage-workers in the labor market, their weakening in the framework of economic transformations and ideological turns generates a greater concern on the future of trade unions. In this context, there has been an increased urgency to reconsider old political identities and construct other resources for power, such as alliances with social movements and international solidarity. The new bonds forged under democratic regimes or during the transition processes were more flexible, informal and with greater autonomy between partnerships than the old ones that resulted from the initial incorporation of workers in the political arena under authoritarian regimes. Consequently, in those cases greater opportunities can be opened to democratize and revitalize unions through the construction of new sources of power.


The Politics of Domestic Taxation  

Lucy Barnes

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.


The Political Economy of Financial Markets  

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.