Decentralization, happiness and the perception of institutions

This paper analyses whether the different powers and resources at the disposal of local and regional governments across Europe deliver greater satisfaction with political institutions and lead to greater personal happiness. The analysis uses microdata from the four available waves of the European social survey (2002, 2004, 2006 and 2008), including more than 160,000 observations of individuals living in 29 European countries. Our results reveal that political and fiscal decentralization have a positive and significant effect on individuals’ overall happiness. Fiscal decentralization also exerts a significant effect on the level of satisfaction with political and economic institutions and with the education and health systems, whereas the effect of political decentralization on these variables is more limited. The results show that citizens seem to be happier with the actual capacity of their local governments to deliver than with the general principle that they can have a say on their daily politics and policies. Keywords: Happiness, well-being, satisfaction, fiscal and political decentralization, Europe. JEL codes: H11, H77

The role of institutions in the contractual process

Human beings increase their productivity by specializingtheir resources and exchanging their products. Theorganization of exchange is costly, however, becausespecialized activities need coordination and incentiveshave to be aligned. This work first describes how theseexchanges are organized in an institutional environment.It then focuses on the dual effect of this environment-as with any other specialized resource, institutions maybe used for expropriation purposes. They enjoyspecialization advantages in safeguarding exchange butthey also make possible new forms of opportunism,causing new costs of exchange. Three perverse tendenciesare identified:In the legal field, there is a surplus ofmandatory rules and, at the same time, a deficit in default rules. Second, courts activity is biased againstthe quasi-judicial role of the parties and the market. Third, Market enforcement is based on reputationalassets that are badly exposed to opportunism.

Technology Catching-up and the Role of Institutions

The aim of the paper is to investigate the role played by differences in Institutional Quality on the process of technology catch-up across countries. Empirical evidence shows how countries endowed with better institutions are those experiencing higher TFP growth rates, faster rates of technology adoption and hence being those more rapidly closing the gap with the frontier. Conversely, countries lacking some minimum institutional level are shown to diverge in the long run and not to catch-up. Some institutions, however, play an ambiguous role in the creation and adoption of technology. We find that the tightening of Intellectual Property Rights reduces the ability of followers to freely imitate technology slowing down their catchup rate. This negative effect is stronger the farther the countriesare found from the frontier. Other institutional categories such as openness to trade, instead, benefit both leaders and followers.

Political institutions and the development of telecommunications

It has traditionally been argued that the development of telecommunications infrastructure is dependent on the quality of countries' political institutions. We estimate the effect of political institutions on the diffusion of three telecommunications services and find it to be much smaller in cellular telephony than in the others. By evaluating the importance of institutions for technologies rather than for industries, we reveal important growth opportunities for developing countries and offer policy implications for alleviating differences between countries in international telecommunications development. Keywords: Political constraints, telecommunications, GMM, economic development. JEL codes: O1, O3.

Political institutions and the development of telecomunications

It has traditionally been argued that the development of telecommunications infrastructure is dependent on the quality of countries’ political institutions. We estimate the effect of political institutions on the diffusion of three telecommunications services and find it to be much smaller in cellular telephony than in the others. By evaluating the importance of institutions for technologies rather than for industries, we reveal important growth opportunities for developing countries and offer policy implications for alleviating differences between countries in international telecommunications development.

The Role of social institutions in inter-generational mobility

In this study we examine the role of institutions in shaping inter-generational mobility behavior. Research has traditionally emphasized the role of educational systems but cummulative evidence suggests that variations in their design offer only a very limited explanation for observed mobility differences. We examine the impact of welfare states and, in particular, how early childhood and family policies may influence the impact of economic and cultural characteristics of origin families on child outcomes.

The influence of the quality of government institutions on entrepreneurial motivation: exploring the variance across countries

Despite the increasing understanding of the relationships between institutions and entrepreneurship, the influence of the quality of government institutions on entrepreneurship is less addressed. This paper focuses on this critical determinant of entrepreneurship in developing and developed countries. Drawing from institutional theory we hypothesize and empirically assess the role of the quality of institutions in entrepreneurial activity. We examine how the quality of government institutions influences the rate of necessity-based entrepreneurial activity across countries and over time by using a cross-sectional time-series approach on data from the Global Entrepreneurship Monitor (GEM) database covering the years 2001–2011. Our results suggest that higher economic development associated with better quality of institutions reduces the prevalence of necessity-based entrepreneurship. Our findings imply that developing countries must rationally organize their functions, and seek to remove unnecessary barriers, decrease political instability, and controls that hamper entrepreneurial activity

Relative clauses in Iraqi Arabic and the status of resumptive pronouns

Not much has been said about the grammar of Iraqi Arabic. This research is an attempt to shed light on the nature of IA relative clauses. The research focuses on the behavior of the resumptive strategy as opposed to the gap strategy. We consider islandhood, Weak and Strong CrossOver, reconstruction and scope binding, in order to further understand the behavior of resumption. The final conclusion reached is that in Iraqi Arabic the resumptive strategy is actually related to the gap strategy in several respects; and in those where it differs we propose that gaps (traces) are replaced by trace+pronoun complex

Medicine and Science in a New Medical-surgical Context: The Royal College of Surgery of Barcelona (1760–1843)

Taking the Royal College of Barcelona (1760 -1843) as a case study this paper shows the development of modern surgery in Spain initiated by Bourbon Monarchy founding new kinds of institutions through their academic activities of spreading scientific knowledge. Antoni Gimbernat was the most famousinternationally recognised Spanish surgeon. He was trained as a surgeon at the Royal College of Surgery in Cadiz and was later appointed as professor of theAnatomy in the College of Barcelona. He then became Royal Surgeon of King Carlos IV and with that esteemed position in Madrid he worked resiliently to improve the quality of the Royal colleges in Spain. Learning human bodystructure by performing hands-on dissections in the anatomical theatre has become a fundamental element of modern medical education. Gimbernat favoured the study of natural sciences, the new chemistry of Lavoisier and experimental physics in the academic programs of surgery. According to the study of a very relevant set of documents preserved in the library, the so-called “juntas literarias”, among the main subjects debated in the clinical sessions was the concept of human beings and diseases in relation to the development of the new experimental sciences. These documents showed that chemistry andexperimental physics were considered crucial tools to understand the unexplained processes that occurred in the diseased and healthy human bodyand in a medico-surgical context. It is important to stress that through these manuscripts we can examine the role and the reception of the new sciences applied to healing arts.

The dynamics of research networks in Brite-Euram

Network formation within the BRITE--EURAM program is investigated.Wedescribe the role of the hub of the network, which is defined as the setofmain contractors that account for most of the participations. We studytheeffects that the conflict of objectives within European research fundingbetween pre-competitive research vs. European cohesion has on theformationof networks and on the relationship between different partnersof the network. \\A panel data set is constructed including the second and third frameworkof theBrite--Euram program. A model of joint production of research results isusedto test for changes in the behavior of partners within the twoframeworks. \\The main findings are that participations are very concentrated, that isasmall group of institutions account for most of the participations, butgoingfrom the second to the third framework the presence of subcontractorsand singleparticipants increases substantially. This result is reinforced by the factthat main contractors receive smaller spill-ins within networks, butspill-insincrease from the second to the third framework.

Does direct democracy reduce the size of government? New evidence from historical data, 1890-2000

Using historical data for all Swiss cantons from 1890 to 2000, we estimate the causal effect of direct democracy on government spending. The main innovation in this paper is that we use fixed effects to control for unobserved heterogeneity and instrumental variables to address the potential endogeneity of institutions. We find that the budget referendum and lower costs to launch a voter initiative are effective tools in reducing canton level spending. However, we find no evidence that the budget referendum results in more decentralized government or a larger local government. Our instrumental variable estimates suggest that a mandatory budget referendum reduces the size of canton spending between 13 and 19 percent. A 1 percent lower signature requirement for the initiative reduces canton spending by up to 2 percent.

Rethinking the effects of financial liberalization

During the last few decades, many emerging markets have lifted restrictions on cross-borderfinancial transactions. The conventional view was that this would allow these countries to: (i)receive capital inflows from advanced countries that would finance higher investment and growth;(ii) insure against aggregate shocks and reduce consumption volatility; and (iii) accelerate thedevelopment of domestic financial markets and achieve a more efficient domestic allocationof capital and better sharing of individual risks. However, the evidence suggests that thisconventional view was wrong.In this paper, we present a simple model that can account for the observed effects of financialliberalization. The model emphasizes the role of imperfect enforcement of domestic debts and theinteractions between domestic and international financial transactions. In the model, financialliberalization might lead to different outcomes: (i) domestic capital flight and ambiguous effectson net capital flows, investment, and growth; (ii) large capital inflows and higher investmentand growth; or (iii) volatile capital flows and unstable domestic financial markets. The modelshows how these outcomes depend on the level of development, the depth of domestic financialmarkets, and the quality of institutions.

The colonial origins of Civil War

The dominant hypothesis in the literature that studies conflict is that poverty is the main cause of civil wars. We instead analyze the effect of institutions on civil war, controlling for income per capita. In our set up, institutions are endogenous and colonial origins affect civil wars through their legacy on institutions. Our results indicate that institutions, proxied by the protection of property rights, rule of law and the efficiency of the legal system, are a fundamental cause of civil war. In particular, an improvement in institutions from the median value in the sample to the 75th percentile is associated with a 38 percentage points reduction in the incidence of civil wars. Moreover, once institutions are included as explaining civil wars, income does not have any effect on civil war, either directly or indirectly.

A comparison of the processes of institutionalisation of political economy in Spain and Italy (1860-1900)

[spa] El estudio de los procesos a través de los cuales la economía política se ha transformado en una disciplina académica es un área de creciente interés en la historia del pensamiento económico. Dicho estudio se ha abordado a través del análisis de la importancia de la economía política en un conjunto de instituciones, consideradas clave en la expansión de la economía en las sociedades occidentales en la segunda mitad del siglo XIX y primeras décadas del XX: universidades, sociedades económicas, publicaciones periódicas de contenido económico y los parlamentos nacionales. Este papel presenta una comparación entre los desarrollos del proceso de institutionalización de la economía política en España e Italia, a través del estudio de la presencia de esta disciplina en las instituciones mencionadas para el periodo 1860-1900. El objetivo es medir la posible existencia de una vía común en la institucionalización de la economía política en ambos países, como un primer paso hacia la elaboración de un modelo supranacional de institucionalización de la economía en este periodo.

A comparison of the processes of institutionalisation of political economy in Spain and Italy (1860-1900)

[spa] El estudio de los procesos a través de los cuales la economía política se ha transformado en una disciplina académica es un área de creciente interés en la historia del pensamiento económico. Dicho estudio se ha abordado a través del análisis de la importancia de la economía política en un conjunto de instituciones, consideradas clave en la expansión de la economía en las sociedades occidentales en la segunda mitad del siglo XIX y primeras décadas del XX: universidades, sociedades económicas, publicaciones periódicas de contenido económico y los parlamentos nacionales. Este papel presenta una comparación entre los desarrollos del proceso de institutionalización de la economía política en España e Italia, a través del estudio de la presencia de esta disciplina en las instituciones mencionadas para el periodo 1860-1900. El objetivo es medir la posible existencia de una vía común en la institucionalización de la economía política en ambos países, como un primer paso hacia la elaboración de un modelo supranacional de institucionalización de la economía en este periodo.