Essays on Illegal Activities, Institutions and Economic Growth

In public economics, two extremist views on the functions of a government compete: one emphasizes government working for the public interest to provide value for the citizens, while another regards government mainly as a workhorse for private interests. Moreover, as the sole legitimate authority, the government has the right to define the rules and laws as well as to enforce them. With respect to regulation, two extremes arise: from too little regulation to too much of it. If the government does not function or ceases to exist, the state falls into anarchy or chaos (Somalia). If it regulates too much, it will completely suffocate private activities, which might be considered extralegal (the former Soviet Union). In this thesis I scrutinize the government s interventionist policies and evaluate the question of how to best promote economic well-being. The first two essays assume that the government s policies promote illegal activity. The first paper evaluates the interaction between the government and the mafia, and pays attention to the law enforcement of underground production. We show that the revenue-maximizing government will always monitor the shadow economy, as monitoring contributes to the government s revenue. In general, both legal and illegal firms are hurt by the entry of the mafia. It is, however, plausible that legal firms might benefit by the entry of the mafia if it competes with the government. The second paper tackles the issue of the measurement of the size of the shadow economy. To formulate policies it is essential to know what drives illegal economic activity; is it the tax burden, excess regulation, corruption or a weak legal environment? In this paper we propose an additional explanation for tax evasion and shadow production, namely cultural factors as manifested by religion as determinants of tax morality. According to our findings, Catholic and Protestant countries do not differ in their tax morale. The third paper contributes to the literature discussing the role of the government in promoting economic and productivity growth. Our main result is that, given the complex relationship between economic growth and economic freedom, marketization has not necessarily been beneficial in terms of growth. The last paper builds on traditional growth literature and revisits the debate on convergence clubs arising from demographic transition. We provide new evidence against the idea that countries within a club would converge over time. Instead, we propose that since the demographic transition is a dynamic process, one can expect countries to enter the last regime of stable, modern growth in stages.

Betydelser i barnfamiljsbroschyrer : Systemisk-funktionell analys av den tänkta läsaren och institutionen

This thesis concerns Swedish and Finland-Swedish brochures to families with children, presenting family allowances from the social insurance institutions in the two countries. The aim of the study is to analyse what meanings are conveyed with reference to the conceivable reader and the institution in the brochures. The material consists of information brochures in Swedish from Kela, the social insurance institution of Finland, and Försäkringskassan, the Swedish social insurance agency, issued during 2003–2006. The general theoretical framework is systemic-functional linguistics (SFL) as presented by Halliday & Matthiessen (2004) and Holmberg & Karlsson (2006). The study consists of a quantitative study of the lexical choices of the social insurance brochures. Furthermore, a qualitative process and participant analysis is annotated with the UAM Corpus tool and the results are quantified. Speech functions and modal auxiliaries are analysed qualitatively. The analysis shows that material and relational processes are most common. The relational and verbal processes are used more in the Sweden-Swedish brochures, while the material processes are more common in the Finland-Swedish brochures. The participants in the brochures are the institution, mentioned by its name, and the conceivable reader, directly addressed with “you” (du). In addition, the referent “child” is often mentioned. The participants assigned for the reader are Actor, Receiver, Carrier and Speaker. In the Finland-Swedish texts, the reader is often an Actor, while the reader in the Sweden-Swedish texts is a Carrier. Thus, the conceivable reader is an active participant who takes care of his or her own matters using the internet, communicates actively to the institution and has legal rights and obligations. The institution is visible in the texts but does not have an active role as the name of the institution is mostly used in circumstances. The institution is not often a participant, but when it is, it is Actor, Receiver, Listener and Carrier, expecting the clients to address it. Speech functions are performed in different ways. For instance, questions structure the reading process and commands are realised by modal auxiliaries, not by imperatives. The most common modal auxiliary is kan (can, may), and another common auxiliary is ska (shall, must). Statements are surrounded by subordinate clauses and adverbs that describe situations and criteria. The results of the study suggest that the brochures in the two countries are similar, in particular when produced in similar ways, that is, when the Finland-Swedish texts are not translated. Existing differences reflect the differences in the institutions, the social insurance systems and the cultural contexts. KEYWORDS: Finland-Swedish, Swedish, comparative analysis, SFL, discourse analysis, administrative language, institutional discourse, institutional communication

Lagöversättning som process och produkt : Revideringar och institutioner vid lagöversättning till svenska i Finland

The thesis studies the translation process for the laws of Finland as they are translated from Finnish into Swedish. The focus is on revision practices, norms and workplace procedures. The translation process studied covers three institutions and four revisions. In three separate studies the translation process is analyzed from the perspective of the translations, the institutions and the actors. The general theoretical framework is Descriptive Translation Studies. For the analysis of revisions made in versions of the Swedish translation of Finnish laws, a model is developed covering five grammatical categories (textual revisions, syntactic revisions, lexical revisions, morphological revisions and content revisions) and four norms (legal adequacy, correct translation, correct language and readability). A separate questionnaire-based study was carried out with translators and revisers at the three institutions. The results show that the number of revisions does not decrease during the translation process, and no division of labour can be seen at the different stages. This is somewhat surprising if the revision process is regarded as one of quality control. Instead, all revisers make revisions on every level of the text. Further, the revisions do not necessarily imply errors in the translations but are often the result of revisers following different norms for legal translation. The informal structure of the institutions and its impact on communication, visibility and workplace practices was studied from the perspective of organization theory. The results show weaknesses in the communicative situation, which affect the co-operation both between institutions and individuals. Individual attitudes towards norms and their relative authority also vary, in the sense that revisers largely prioritize legal adequacy whereas translators give linguistic norms a higher value. Further, multi-professional teamwork in the institutions studied shows a kind of teamwork based on individuals and institutions doing specific tasks with only little contact with others. This shows that the established definitions of teamwork, with people co-working in close contact with each other, cannot directly be applied to the workplace procedures in the translation process studied. Three new concepts are introduced: flerstegsrevidering (multi-stage revision), revideringskedja (revision chain) and normsyn (norm attitude). The study seeks to make a contribution to our knowledge of legal translation, translation processes, institutional translation, revision practices and translation norms for legal translation. Keywords: legal translation, translation of laws, institutional translation, revision, revision practices, norms, teamwork, organizational informal structure, translation process, translation sociology, multilingual.

Funktionaalinen Transitioteoria : Hallinto, Instituutiot ja Oikeusjärjestys Venäjällä

Functional transition theory: administration, legal order and institutions in Russia This dissertation examines some of the salient characteristics of Russia that are deemed to have impeded the growth of its economy and investments in particular. These characteristics are the volatility of the administrative and legal systems, corruption, and the perceived irrationality and difference in the operating environment in comparison with European conditions. The dissertation is one of the first studies on Russia that approaches the subject from the perspective of comprehensive social scientific theories. The study is based on the structural functionalistic theory, which is widely used in the social sciences. Adopting a sufficiently ambitious theoretical examination will provide a systematic and logical explanation of the characteristics of Russian institutions and ways of operations, such as corruption, that are commonly perceived as inexplicable. The approach adopted in the dissertation sheds light on the history of Russia's development and provides a comparative view of other societies in transition. Furthermore, it suggests recommendations as to how the structures of Russian society could be comprehensively strengthened.

Global and EU governance for sustainable forest management with special reference to capacity building in Ethiopia and Southern Sudan

The purpose of this study was to produce information on and practical recommendations for informed decision-making on and capacity building for sustainable forest management (SFM) and good forest governance. This was done within the overall global framework for sustainable development with special emphasis on the EU and African frameworks and on Southern Sudan and Ethiopia in particular. The case studies on Southern Sudan and Ethiopia focused on local, national and regional issues. Moreover, this study attempted to provide both theoretical and practical new insight. The aim was to build an overall theoretical framework and to study its key contents and main implications for SFM and good forest governance at all administration levels, for providing new tools for capacity building in natural resources management. The theoretical framework and research approach were based on the original research problem and the general and specific aims of the study. The key elements of the framework encompass sustainable development, global and EU governance, sustainable forest management (SFM), good forest governance, as well as international and EU law. The selected research approach comprised matrix-based assessment of international, regional (EU and Africa) and national (Southern Sudan and Ethiopia) policy and legal documents. The specific case study on Southern Sudan also involved interviews and group discussions with local community members and government officials. As a whole, this study attempted to link the global, regional, national and local levels in forest-sector development and especially to analyse how the international policy development in environmental and forestry issues is reflected in field-level progress towards SFM and good forest governance, for the specific cases of Southern Sudan and Ethiopia. The results on Southern Sudan focused on the existing situation and perceived needs in capacity building for SFM and good forest governance at all administration levels. Specifically, the results of the case study on Southern Sudan presented the current situation in selected villages in the northern parts of Renk County in Upper Nile State, and the implications of Multilateral Environmental Agreements (MEAs) and of the new forest policy framework for capacity building actions. The results on Ethiopia focused on training, extension, research, education and new curriculum development within higher education institutions and particularly at the Wondo Genet College of Forestry and Natural Resources (WGCF-NR), which administratively lies under Hawassa University. The results suggest that, for both cases studies, informed decision-making on and capacity building for SFM and good forest governance require comprehensive, long-term, cross-sectoral, coherent and consistent approaches within the dynamic and evolving overall global framework, including its multiple inter-linked levels. The specific priority development and focus areas comprised the establishment of SFM and good forest governance in accordance with the overall sustainable development priorities and with more focus on the international trade in forest products that are derived from sustainable and legal sources with an emphasis on effective forest law enforcement and governance at all levels. In Upper Nile State in Southern Sudan there were positive development signals such as the will of the local people to plant more multipurpose trees on farmlands and range lands as well as the recognition of the importance of forests and trees for sustainable rural development where food security is a key element. In addition, it was evident that the local communities studied in Southern Sudan also wanted to establish good governance systems through partnerships with all actors and through increased local responsibilities. The results also suggest that the implementation of MEAs at the local level in Southern Sudan requires mutually supportive and coherent approaches within the agreements as well as significantly more resources and financial and technical assistance for capacity building, training and extension. Finally, the findings confirm the importance of full utilization of the existing local governance and management systems and their traditional and customary knowledge and practices, and of new development partnerships with full participation of all stakeholders. The planned new forest law for Southern Sudan, based on an already existing new forest policy, is expected to recognize the roles of local-level actors, and it would thus obviously facilitate the achieving of sustainable forest management.

Beyond Words : The European Court of Justice and Legal Certainty in Multilingual EU Law

This study addresses the issue of multilingualism in EU law. More specifically, it explores the implications of multilingualism for conceptualising legal certainty, a central principle of law both in domestic and EU legal systems. The main question addressed is how multilingualism and legal certainty may be reconciled in the EU legal system. The study begins with a discussion on the role of translation in drafting EU legislation and its implications for interpreting EU law at the European Court of Justice (ECJ). Uncertainty regarding the meaning of multilingual EU law and the interrelationship between multilingualism and ECJ methods of interpretation are explored. This analysis leads to questioning the importance of linguistic-semantic methods of interpretation, especially the role of comparing language versions for clarifying meaning and the ordinary meaning thesis, and to placing emphasis on other, especially the teleological, purpose-oriented method of interpretation. As regards the principle of legal certainty, the starting-point is a two-dimensional concept consisting of both formal and substantive elements; of predictability and acceptability. Formal legal certainty implies that laws and adjudication, in particular, must be predictable. Substantive legal certainty is related to rational acceptability of judicial decision-making placing emphasis on its acceptability to the legal community in question. Contrary to predictability that one might intuitively relate to linguistic-semantic methods of interpretation, the study suggests a new conception of legal certainty where purpose, telos, and other dynamic methods of interpretation are of particular significance for meaning construction in multilingual EU law. Accordingly, the importance of purposive, teleological interpretation as the standard doctrine of interpretation in a multilingual legal system is highlighted. The focus on rational, substantive acceptability results in emphasising discourse among legal actors among the EU legal community and stressing the need to give reasons in favour of proposed meaning in accordance with dynamic methods of interpretation including considerations related to purposes, aims, objectives and consequences. In this context, the role of ideal discourse situations and communicative action taking the form of interaction among the EU legal community in an ongoing dialogue especially in the preliminary ruling procedure is brought into focus. In order for this dialogue to function, it requires that the ECJ gives persuasive, convincing and acceptable reasons in justifying its decisions. This necessitates transparency, sincerity, and dialogue with the relevant audience.

Somali State Failure: Players, Incentives and Institutions

In Somalia the central government collapsed in 1991 and since then state failure became a widespread phenomenon and one of the greatest political and humanitarian problems facing the world in this century. Thus, the main objective of this research is to answer the following question: What went wrong? Most of the existing literature on the political economy of conflict starts from the assumption that state in Africa is predatory by nature. Unlike these studies, the present research, although it uses predation theory, starts from the social contract approach of state definition. Therefore, rather than contemplating actions and policies of the rulers alone, this approach allows us to deliberately bring the role of the society – as citizens – and other players into the analyses. In Chapter 1, after introducing the study, a simple principal-agent model will be developed to check the logical consistence of the argument and to make the identification of causal mechanism easier. I also identify three main actors in the process of state failure in Somalia: the Somali state, Somali society and the superpowers. In Chapter 2, so as to understand the incentives, preferences and constraints of each player in the state failure game, I in some depth analyse the evolution and structure of three central informal institutions: identity based patronage system of leadership, political tribalism, and the Cold War. These three institutions are considered as the rules of the game in the Somali state failure. Chapter 3 summarises the successive civilian governments’ achievements and failures (1960-69) concerning the main national goals, national unification and socio-economic development. Chapter 4 shows that the military regime, although it assumed power through extralegal means, served to some extent the developmental interest of the citizens in the first five years of its rule. Chapter 5 shows the process, and the factors involved, of the military regime’s self-transformation from being an agent for the developmental interests of the society to a predatory state that not only undermines the interests of the society but that also destroys the state itself. Chapter 6 addresses the process of disintegration of the post-colonial state of Somalia. The chapter shows how the regime’s merciless reactions to political ventures by power-seeking opposition leaders shattered the entire country and wrecked the state institutions. Chapter 7 concludes the study by summarising the main findings: due to the incentive structures generated by the informal institutions, the formal state institutions fell apart.

The Impact of New Capital Requirements on the Portfolio Decisions of Finnish Pension Institutions

This paper examines the potential impact of new capital requirements on asset allocations of Finnish pension institutions. We describe the new requirements and consider portfolio construction to minimize regulatory capital, given the investor’s preferred level of expected return. Results identify portfolio transactions that enhance expected return without increasing capital needs. Regulation calls for portfolio diversification and prudence in management, but this paper shows that market participants can exploit inconsistencies in regulation. Possible future consequences include capital outflows from the pension system and an unintended decrease in pre-funding of old-age pensions.

Keskeytyksiä elämässä : Naisten toimijuudet aborttikertomuksissa

The present study focuses on the question of agency in the narratives of women who have experienced an abortion. The study scrutinizes agency by analyzing narratives and their context, that is, how narratives are entwined with cultural discourses and societal practices. The study thus addresses also the wider framework within which experiences and actions can be constructed in abortion narratives in the contemporary Finnish society. The women who wrote their stories or were interviewed were of different ages and had different social and religious backgrounds. Many variations of agency were found when abortion experiences were analyzed through the women s embodied and historically specific accounts. Independent and rational choices are entwined with emotions and choices made together with other people. Intimate relationships with family and friends have an important role in the choices regarding abortion. These relationships do not, however, simply belong in the private sphere but reflect the wider socio-cultural meanings of social bonds and family ties. Women s agency with regard to abortion is also constructed in encounters with the medical profession and within the wider framework of abortion legislation. The Finnish legislation grants women an abortion within certain parameters but not solely on the basis of a woman s wish to have an abortion. The data consists primarily of written narratives and interviews. All together 39 women shared their experiences with the researcher. The analysis focuses on decision-making regarding abortion, depictions of freedom and responsibility, emotions around abortion and expressions of values and religious views. The links between the women's experiences and the wider socio-cultural norms and institutions are analyzed through materials consisting of public debate on abortion in the media, ethical statements as well as literature and legislation on abortion. The analysis sheds light on the tensions apparent in the women's narratives between the legal status of abortion and more traditional views on abortion. The study demonstrates that the freedom linked to abortion is not solely to do with the right to have an abortion but also how abortion can be experienced, understood and where one can talk about the experience afterwards. The analysis reveals that Christian values shape women's experiences but that there are also new religious ways to deal with the ethical considerations brought about by abortion. Annually over 10 000 Finnish women experience an abortion, which is a situation involving ethical considerations. The study provides a nuanced account of the ways in which one can think and act when going through an abortion.

World parliament – fact or fiction? On the feasibility of world parliamentary models

Cosmopolitan ideals have been on the philosophical agenda for several millennia but the end of the Cold War started a new discussion on state sovereignty, global democracy, the role of international law and global institutions. The Westphalian state system in practice since the 17th century is transforming and the democracy deficit needs new solutions. An impetus has been the fact that in the present world, an international body representing global citizens does not exist. In this Master’s thesis, the possibility of establishing a world parliament is examined. In a case analysis, 17 models on world parliament from two journals, a volume of essays and two other publications are discussed. Based on general observations, the models are divided into four thematic groups. The models are analyzed with an emphasis on feasible and probable elements. Further, a new scenario with a time frame of thirty years is proposed based on the methodology of normative futures studies, taking special interest in causal relationships and actions leading to change. The scenario presents three gradual steps that each need to be realized before a sustainable world parliament is established. The theoretical framework is based on social constructivism, and changes in international and multi-level governance are examined with the concepts of globalization, democracy and sovereignty. A feasible, desirable and credible world parliament is constituted gradually by implying electoral, democratic and legal measures for members initially from exclusively democratic states, parliamentarians, non-governmental organizations and other groups. The parliament should be located outside the United Nations context, since a new body avoids the problem of inefficiency currently prevailing in the UN. The main objectives of the world parliament are to safeguard peace and international law and to offer legal advice in cases when international law has been violated. A feasible world parliament is advisory in the beginning but it is granted legislative powers in the future. The number of members in the world parliament could also be extended following the example of the EU enlargement process.

Appropriate Institutions and Economic Growth - one size fits no-one

Modern-day economics is increasingly biased towards believing that institutions matter for growth, an argument that has been further enforced by the recent economic crisis. There is also a wide consensus on what these growth-promoting institutions should look like, and countries are periodically ranked depending on how their institutional structure compares with the best-practice institutions, mostly in place in the developing world. In this paper, it is argued that ”non-desirable” or “second-best” institutions can be beneficial for fostering investment and thus providing a starting point for sustained growth, and that what matters is the appropriateness of institutions to the economy’s distance to the frontier or current phase of development. Anecdotal evidence from Japan and South-Korea is used as a motivation for studying the subject and a model is presented to describe this phenomenon. In the model, the rigidity or non-rigidity of the institutions is described by entrepreneurial selection. It is assumed that entrepreneurs are the ones taking part in the imitation and innovation of technologies, and that decisions on whether or not their projects are refinanced comes from capitalists. The capitalists in turn have no entrepreneurial skills and act merely as financers of projects. The model has two periods, and two kinds of entrepreneurs: those with high skills and those with low skills. The society’s choice of whether an imitation or innovation – based strategy is chosen is modeled as the trade-off between refinancing a low-skill entrepreneur or investing in the selection of the entrepreneurs resulting in a larger fraction of high-skill entrepreneurs with the ability to innovate but less total investment. Finally, a real-world example from India is presented as an initial attempt to test the theory. The data from the example is not included in this paper. It is noted that the model may be lacking explanatory power due to difficulties in testing the predictions, but that this should not be seen as a reason to disregard the theory – the solution might lie in developing better tools, not better just better theories. The conclusion presented is that institutions do matter. There is no one-size-fits-all-solution when it comes to institutional arrangements in different countries, and developing countries should be given space to develop their own institutional structures that cater to their specific needs.

Despairing Justice and the Ethics of Legal Interpretation

This study discusses legal interpretation. The question is how legal texts, for instance laws, statutes and regulations, can and do have meaning. Language makes interpretation difficult as it holds no definite meanings. When the theoretical connection between semantics and legal meaning is loosened and we realise that language cannot be a means of justifying legal decisions, the responsibility inherent in legal interpretation can be seen in full. We are thus compelled to search for ways to analyse this responsibility. The main argument of the book is that the responsibility of legal interpretation contains a responsibility towards the text that is interpreted (and through the mediation of the text also towards the legal system), but not only this. It is not simply a responsibility to read and read well, but it transcends on a broader scale. It includes responsibility for the effects of the interpretation in a particular situation and with regard to the people whose case is decided. Ultimately, it is a responsibility to do justice. These two aspects of responsibility are conceptualised here as the two dimensions of the ethics of legal interpretation: the textual and the situational. The basic conception of language presented here is provided by Ludwig Wittgenstein s later philosophy, but the argument is not committed to only one philosophical tradition. Wittgenstein can be counterpointed in interesting ways by Jacques Derrida s ideas on language and meaning. Derrida s work also functions as a contrast to hermeneutic theories. It is argued that the seed to an answer to the question of meaning lies in the inter-personal and situated activity of interpretation and communication, an idea that can be discerned in different ways in the works of Wittgenstein, Derrida and Hans-Georg Gadamer. This way the question of meaning naturally leads us to think about ethics, which is approached here through the philosophy of Emmanuel Levinas. His thinking, focusing on topics such as otherness, friendship and hospitality, provides possibilities for answering some of the questions posed in this book. However, at the same time we move inside a normativity where ethics and politics come together in many ways. The responsibility of legal interpretation is connected to the political and this has to be acknowledged lest we forget that law always implies force. But it is argued here that the political can be explored in positive terms as it does not have to mean only power or violence.