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58672. Electoral Institutions, Cabinet Negotiations, and Budget Deficits within the European Union
- Author:
- Mark Hallenberg and Jürgen. von Hagen
- Publication Date:
- 02-1997
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies (IES), UC Berkeley
- Abstract:
- Large government budget deficits are a concern in most industrialized countries. Two literatures in political economy argue that differences in political institutions explain much of the variation in the success of counties in their efforts to run small deficits. One group of authors considers how differences among electoral systems affect the size of budget deficits, while the second group concentrates on the governmental institutions which structure the formation of the yearly budget. Among the "electoral institutionalists", a consensus is beginning to emerge which treats proportional representation systems as a cause of high levels of public debt. In contrast, "fiscal institutionalists" argue that the presence of certain institutions in the decision-making process at the cabinet level, such as a strong finance minister or negotiated spending targets, lead to smaller deficits than in cases where such institutions are missing. We indicate that these two literatures complement one another. Electoral institutions matter because they restrict the type of budgetary institution at the governmental phase which a state has at its disposal. A strong finance minister is feasible in states where one-party governments are the norm, and such states usually have plurality electoral systems, while negotiated targets provide an alternative in multi-party governments. In multi-party governments, which are common in states with proportional representation, the coalition members are not willing to delegate to one actor the ability to monitor and punish the others for "defections" on the budget. The empirical section of the paper indicates a strong relationship between one-party governments and strong finance minister solutions within the European Union states on the one hand and multi-party or minority governments and targets on the other. Pooled time series regression results also support our contention that it is the presence or absence of one of these budgetary institutions, rather than the plurality/proportional representation dishotomy, which has the greatest impact on debt levels.
- Topic:
- International Organization and International Political Economy
- Political Geography:
- Europe
58673. A Strategy for Launching the Euro
- Author:
- Maurice Obstfeld
- Publication Date:
- 02-1997
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies (IES), UC Berkeley
- Abstract:
- This paper studies the constraints placed by the Maastricht Treaty on the rates at which member currencies will exchange against the Euro at the start of stage 3 of economic and monetary union (EMU). The paper shows that the stage 3 bilateral conversion factors for EMU member currencies must correspond to closing market exchange rates as of December 31, 1998; furthermore, currency conversion rates into the Euro cannot be determined until that date. Moreover, official announcements about intended conversion factors will carry no credibility with markets, as market rates must be chosen over any prennounced rates according to the Treaty. Unless there is heavy official intervention in the runup to stage 3, EMU members' bilateral market rates will exhibit excessive volatility and may induce beggar-thy-neighbor policy behavior. On the other, hand, exchange-rate targeting may open the door to speculative currency crises. The only feasible solution appears a widely-publicized institutional reform to subjugate national central banks' policies entirely to the goal of intra-EMU exchange stability in the final months of stage 2.
- Topic:
- International Political Economy and International Trade and Finance
- Political Geography:
- Europe
58674. European Integration and the Question of National Sovereignty
- Author:
- Lars Tragardh
- Publication Date:
- 01-1997
- Content Type:
- Working Paper
- Institution:
- Institute of European Studies (IES), UC Berkeley
- Abstract:
- According to Ole Wæver, a leading student of the travails of the "New Europe," Western Europe is probably the part of the world that currently exhibits "the most advanced case of border fluidity and transgression of sovereignty." So dramatic are the processes underway that they have led otherwise prudent political scientists to turn to the trendy idiom of "postmodernity," meaning in the context of IR theory first and foremost "post-sovereignty." Thus John Ruggie has argued that what he sees as "the unbundling of territoriality" - i.e. the incipient decoupling of sovereignty and (nation)state - constitutes "nothing less than the emergence of the first truly postmodern international form." Similarly, Saskia Sassen notes that in the process of globalization the notion of a "national economy" has come to be replaced with that of a "global economy." As a consequence, she argues that while sovereignty and territory very much "remain key features of the international system," they have been "reconstituted and partly displaced onto other institutional areas outside the state." Thus, she concludes, "sovereignty has been decentered and territory partly de-nationalized."
- Topic:
- International Cooperation and Sovereignty
- Political Geography:
- Europe
58675. Balancing Positive and Negative Integration: The Regulatory Options for Europe
- Author:
- Fritz W. Scharpf
- Publication Date:
- 11-1997
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- During the golden years from the 1950s to the mid-1970s, the industrial nations of Western Europe had the chance to develop specifically national versions of the capitalist welfare state - and their choices were in fact remarkably different (Esping-Andersen 1990). In spite of the considerable differences between the "Social-Democratic", "Corporatist" or "Liberal" versions, however, all were remarkably successful in maintaining full employment and promoting economic growth, while also controlling, in different ways and to different degrees, the destructive tendencies of unfettered capitalism in the interest of specific social, cultural, and/or ecological values (Scharpf 1991a; Merkel 1993). It was not fully realized at the time, however, how much the success of market-correcting policies did in fact depend on the capacity of the territorial state to control its economic boundaries. Once this capacity is lost, countries are forced into a competition for locational advantage which has all the characteristics of a Prisoner's Dilemma game (Sinn 1994). It reduces the freedom of national governments and unions to raise the regulatory and wage costs of national firms above the level prevailing in competing locations. Moreover, and if nothing else changes, the "competition of regulatory systems" that is generally welcomed by neoliberal economists (Streit/Mussler 1995) and politicians may well turn into a downward spiral of competitive deregulation and tax cuts in which all competing countries will find themselves reduced to a level of protection that is in fact lower than that preferred by any of them.
- Topic:
- Economics, Government, International Organization, and International Political Economy
- Political Geography:
- Europe
58676. Employment and the Welfare State: A Continental Dilemma
- Author:
- Fritz W. Scharpf
- Publication Date:
- 07-1997
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- Estimates of the comparative health of the North American and Western European economies and societies have had their fashion cycles - from Servain-Schreiber's warnings that Europe was falling behind, rather than catching up with, American technological leadership in the 1960s, to European exasperation over American trade and budget deficits in the 1970s, to anxieties over Eurosclerosis in the early 1980s and over the American loss of international competitiveness in the late 1980s. Presently, by all accounts, the sick man is again Europe, with higher unemployment and much lower rates of job creation over the last two decades or so. The main problem is a rising level of long-term unemployment that mainly affects unskilled workers and, in most countries, young job seekers with low levels of schooling.
- Topic:
- International Cooperation and Political Economy
- Political Geography:
- America, Europe, North America, and Western Europe
58677. Democracy and Globalization
- Author:
- David Held
- Publication Date:
- 05-1997
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- One of the most conspicuous features of politics at the turn of the millennium is the emergence of issues which transcend national frontiers. Processes of economic internationalization, the problem of the environment and the emergence of regional and global networks of communication are increasingly matters of concern for the international community as a whole. The nature and limits of national democracies have to be reconsidered in relation to processes of social and economic globalization; that is, in relation to shifts in the transcontinental or interregional scale of human social organization and of the exercise of social power. This paper seeks to explore these changing circumstances and to examine, albeit tentatively, their implications for democratic theory.
- Topic:
- Democratization, Globalization, and Politics
58678. Regulatory Competition and International Cooperation
- Author:
- Philipp Genschel and Thomas Plumper
- Publication Date:
- 04-1997
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- Recent research has shown that regulatory competition does not necessarily lead to downward pressures on regulation, but may at times also push the level of regulation upwards. Extending David Vogel's "California effect" argument, this paper shows that such upward pressure may not only result directly from the dynamics of the competitive process but also from international cooperation. Evidence from two case studies on international capital market regulation is used to identify the conditions under which cooperation in the shadow of regulatory competition is likely to succeed or fail. The successful multilateral standardisation of banking capital requirements in the BIS is compared to failed attempts to harmonise interest taxation across EC member states.
- Topic:
- Government, International Cooperation, and International Political Economy
- Political Geography:
- California
58679. Electricity: Liberal Futures
- Author:
- Walt Patterson
- Publication Date:
- 11-1997
- Content Type:
- Working Paper
- Institution:
- Chatham House
- Abstract:
- Like the international dimension of electricity discussed in Working Paper 1, the liberal dimension of electricity has emerged only recently, at least as a recognized concept. However, whereas the international dimension is genuinely new, the dimension now characterized as 'liberal' needs closer examination. The language of policy discourse is not always consistent. Until the 1990s, policy analysts habitually referred to the electricity industry as 'conservative', in the sense that it was resistant to change and deeply wary of risk. However, those who first acted to 'liberalize' electricity were themselves 'conservative', in conventional political terms, notably the governments of Chile and the UK in the 1980s. That apparent irony in itself suggests that 'liberalizing' electricity is a more subtle and complex process than the term itself might indicate.
- Topic:
- Energy Policy, Environment, Government, Industrial Policy, International Trade and Finance, and Science and Technology
- Political Geography:
- United Kingdom and Chile
58680. Talking about "Tribe": Moving from Stereotypes to Analysis
- Author:
- William Minter, Chris Lowe, Tunde Brimah, Pearl-Alice Marsh, and Monde Muyangwa
- Publication Date:
- 11-1997
- Content Type:
- Working Paper
- Institution:
- Africa Policy Information Center
- Abstract:
- For most people in Western countries, Africa immediately calls up the word "tribe." The idea of tribe is ingrained, powerful, and expected. Few readers question a news story describing an African individual as a tribesman or tribeswoman, or the depiction of an African's motives as tribal. Many Africans themselves use the word "tribe" when speaking or writing in English about community, ethnicity or identity in African states.
- Topic:
- Ethnic Conflict and Nationalism
- Political Geography:
- Africa