The Limits of Rational Choice: New Institutionalism in the Test Bed of Central Banking Politics in Australia

This paper tests the explanatory capacities of different versions of new institutionalism by examining the Australian case of a general transition in central banking practice and monetary politics: namely, the increased emphasis on low inflation and central bank independence. Standard versions of rational choice institutionalism largely dominate the literature on the politics of central banking, but this approach (here termed RC1) fails to account for Australian empirics. RC1 has a tendency to establish actor preferences exogenously to the analysis; actors' motives are also assumed a priori; actor's preferences are depicted in relatively static, ahistorical terms. And there is the tendency, even a methodological requirement, to assume relatively simple motives and preference sets among actors, in part because of the game theoretic nature of RC1 reasoning. It is possible to build a more accurate rational choice model by re-specifying and essentially updating the context, incentives and choice sets that have driven rational choice in this case. Enter RC2. However, this move subtly introduces methodological shifts and new theoretical challenges. By contrast, historical institutionalism uses an inductive methodology. Compared with deduction, it is arguably better able to deal with complexity and nuance. It also utilises a dynamic, historical approach, and specifies (dynamically) endogenous preference formation by interpretive actors. Historical institutionalism is also able to more easily incorporate a wider set of key explanatory variables and incorporate wider social aggregates. Hence, it is argued that historical institutionalism is the preferred explanatory theory and methodology in this case.

Expectations of the effects of drinking on couple relationship functioning: An assessment of women in distressed relationships who consume alcohol at harmful levels

Based on a cognitive-social learning model of alcohol use, it was hypothesised that women with both alcohol and relationship problems would endorse more positive expectations of the effects of alcohol consumption on their relationship and would report lower relational efficacy than women without relationship or alcohol problems. Measures of relationship-referent alcohol expectancies and relational efficacy were completed by 174 married women with both alcohol and relationship problems (n = 20), alcohol problems alone (it = 26), relationship problems alone (n = 30), or neither problem (n = 98). Women without either alcohol or relationship problems strongly rejected expectations of enhanced relationship functioning (e.g., enhanced intimacy, increased emotional expression) following alcohol consumption, whereas women with both alcohol and relationship problems were ambivalent about these positive expectations. Women with both problems also reported lower relational efficacy than the other groups of women. Negative expectations about the effect of alcohol consumption on relationships in women with low relational efficacy may inhibit harmful drinking. (C) 2002 Elsevier Science Ltd. All rights reserved.

Inflation expectations, interest rates and arbitrary income transfers

Unexpected inflation, disinflation or deflation cause arbitrary income transfers between an economy's borrowers and lenders. This redistribution results from distorted real interest rates that are too high when price level changes are over-predicted and too low when they are under-predicted. This article shows that in Australia's case, inflation expectations were mostly biased upwards throughout the 1990s, according to the Melbourne Institute of Applied Economic and Social Research series and to a new derived series based on bond yields, implying that real interest rates were too high over this time. In turn, this caused substantial arbitrary income transfers from debtors to creditors, estimated to have averaged up to 3 per cent of gross domestic product over the period.

Network structures: Working differently and changing expectations

There is a growing need for innovative methods of dealing with complex, social problems. New types of collaborative efforts have emerged as a result of the inability of more traditional bureaucratic hierarchical arrangements such as departmental program, to resolve these problems. Network structures are one such arrangement that Is at the forefront of this movement. Although collaboration through network structures establishes an innovative response to dealing with social issues, there remains an expectation that outcomes and processes are based on traditional ways of working. It is necessary for practitioners and policy makers alike to begin to understand the realities of what can be expected from network structures in order to maximize the benefits of these unique mechanisms.

Do rural consumers expect a prescription from their GP visit? Investigation of patients' expectations for a prescription and doctors' prescribing decisions in rural Australia

Objective: To assess patients’ expectation for receiving a prescription and GPs’ perceptions of patient expectation for a prescription. Design: Matched questionnaire study completed by patients and GPs. Setting: Seven general practices in rural Queensland, Australia. Subjects: The subjects were 481 patients consulting 17 GPs. Main outcome measures: Patients’ expectation for receiving a prescription and GPs’ perceptions of patients’ expectation. Results: Ideal expectation (hope) for a prescription was expressed by 57% (274/481) of patients. Sixty-six per cent (313/481) thought it was likely that the doctor would actually give them a prescription. Doctors accurately predicted hope or lack of hope for a prescription in 65% (314/481) of consultations, but were inaccurate in 19% (93/481). A prescription was written in 55% of consultations. No increase in patients’ expectation, doctors’ perceptions of expectation, or decision to prescribe were detected for patients living a greater distance from the doctors. Conclusions: Rural patients demonstrated similar rates of hope for a prescription to those found in previous urban studies. Rural doctors seem to be similarly ‘accurate’ and ‘inaccurate’ in determining patients’ expectations. Rates of prescribing were comparable to urban rates. Distance was not found to increase the level of patient expectation, affect the doctors’ perception or to influence the decision to prescribe.

Normative influence and rational conflict decisions: Group norms and cost-benefit analyses for intergroup behavior

The present paper articulates a model in which ingroup and outgroup norms inform 'rational' decision-making (cost-benefit analysis) for conflict behaviors. Norms influence perceptions of the consequences of the behavior, and individuals may thus strategically conform to or violate norms in order to acquire benefits and avoid costs. Two studies demonstrate these processes in the context of conflict in Quebec. In the first study, Anglophones' perceptions of Francophone and Anglophone norms for pro-English behaviors predicted evaluations of the benefits and costs of the behaviors, and these cost-benefit evaluations in turn mediated the norm-intention links for both group norms. In the second study, a manipulated focus on supportive versus hostile ingroup and outgroup norms also predicted cost-benefit evaluations, which mediated the norm-intention relationships. The studies support a model of strategic conflict choices in which group norms inform, rather than suppress, rational expectancy value processes. Implications for theories of decision-making and normative influence are discussed.