The Political Economy of Resource Rent Distribution

I model the link between political regime and level of diversification following a windfall of natural resource revenues. The explanatory variables I make use of are the political support functions embedded within each type of regime and the disparate levels of discretion, openness, transparency, and accountability of government. I show that a democratic government seeks to maximize the long-term consumption path of the representative consumer, in order to maximize its chances of re-election, while an authoritarian government, in the absence of any electoral mechanism of accountability, seeks to buy off and entrench a group of special interests loyal to the government and potent enough to ensure its short-term survival. Essentially the contrast in the approaches towards resource rent distribution comes down to a variation in political weights on aggregate welfare and rentierist special interests endogenized by distinct political support functions.

Assessing the Political Viability of Labour Market Reform: The Case of Employment Protection

We analyze the political support for employment protection legislation. Unlike my previous work on the same topic, this paper pays a lot of attention to the role of obsolescence in the growth process. In voting in favour of employment protection, incumbent employees trade off lower living standards (because employment protection maintains workers in less productive activities) against longer job duration. The support for employment protection will then depend on the value of the latter relative to the cost of the former. We highlight two key deeterminants of this trade-off: first, the workers' bargaining power, second, the economy's growth rate-more precisely its rate of creative destruction.

Assesing the political viability of labour market reform: The case of employment protection

We analyze the political support for employment protection legislation.Unlike my previous work on the same topic, this paper pays a lot ofattention to the role of obsolescence in the growth process.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer jobduration. The support for employment protection will then depend onthe value of the latter relative to the cost of the former. Wehighlight two key deeterminants of this trade-off: first, the workers'bargaining power, second, the economy's growth rate-more preciselyits rate of creative destruction.

The political economy of employment protection

This paper develops a model of job creation and job destruction in agrowing economy with embodied technical progress, that we use toanalyze the political support for employment protection legislationssuch as the ones that are observed in most European countries.We analyze the possibility of Condorcet cycles due to the fact thatworkers about to become unemployed prefer both an increase and areduction in firing costs over the status quo. Despite this problem, we show the existence of local, and sometimes global majority winners.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer job duration. We show that the gains from, and consequently the politicalsupport for employment protection (as defined by maximunjob tenure) are larger, the lower the rate of creative destruction and the largerthe worker's bargaining power. Numerical simulations suggest a hump-shaped response of firing costs to these variables, as well as negative impact of exogeneous turnover on employment protection.

The political consequences of unemployment

We analyze the channels by which an ill-functioning labor market changes the preferences of the people for public policy and therefore the decisions that are made. We not only discuss labour market reform but other important aspects of policy making such as the size and structure of government spending. Theclass of mechanisms that we highlight can be summarized as the very existence of unemployment generating political support for "sclerosis". This may help to explain the timid pace of reform, in particular the fact that any recovery sends them at the backfront of the political agenda, and the sometimes violent opposition generated by some measures, as we have seen mostly in France.

A positive theory of geographic mobility and social insurance

This paper presents a tractable dynamic general equilibrium model thatcan explain cross-country empirical regularities in geographical mobility,unemployment and labor market institutions. Rational agents vote overunemployment insurance (UI), taking the dynamic distortionary effects ofinsurance on the performance of the labor market into consideration.Agents with higher cost of moving, i.e., more attached to their currentlocation, prefer more generous UI. The key assumption is that an agent'sattachment to a location increases the longer she has resided there. UIreduces the incentive for labor mobility and increases, therefore, thefraction of attached agents and the political support for UI. The mainresult is that this self-reinforcing mechanism can give rise to multiplesteady-states-one 'European' steady-state featuring high unemployment,low geographical mobility and high unemployment insurance, and one'American' steady-state featuring low unemployment, high mobility andlow unemployment insurance.

Does partisan alignment affect the electoral reward of intergovernmental transfers?

[spa] En este trabajo analizamos la hipótesis que las transferencias asignadas a los municipios políticamente alineados generan un mayor apoyo político que las transferencias asignada a los municipios gobernados por la oposición. Para contrastar esta hipótesis utilizamos datos de las transferencias recibidas por 617 municipios españoles procedentes de dos niveles de gobierno superiores (Regional o Autonómico y Supra-Local o Diputaciones) durante el período 1993-2003, así como datos de los votos obtenidos en las tres elecciones celebradas en los diferentes niveles de gobierno durante este período.

Does partisan alignment affect the electoral reward of intergovernmental transfers?

[spa] En este trabajo analizamos la hipótesis que las transferencias asignadas a los municipios políticamente alineados generan un mayor apoyo político que las transferencias asignada a los municipios gobernados por la oposición. Para contrastar esta hipótesis utilizamos datos de las transferencias recibidas por 617 municipios españoles procedentes de dos niveles de gobierno superiores (Regional o Autonómico y Supra-Local o Diputaciones) durante el período 1993-2003, así como datos de los votos obtenidos en las tres elecciones celebradas en los diferentes niveles de gobierno durante este período.

Lessons of peace in Aceh: administrative decentralization and political freedom as a strategy of pacification in Aceh

This working paper shows the evolution of the Aceh conflict until its peaceful resolution in 2005. The key factors in the success of this peace process have been the confluence of several factors related to the internal and external dynamics of the country, including the new political leadership, the decreasing role of the military power, the international support and the meeting of the objectives of both groups, and so on. The end of the conflict in Aceh shows that the administrative decentralization and the promotion of the political participation of the main actors involved have made possible the development of a solid alternative to the arms strategy of conflict resolution used for years in Indonesia.

An Inquiry into the use of illegal electoral practices and effects of political violence

This article investigates whether vote-buying and the instigation of violence in the disputed 2007 Kenyan elections were strategically motivated, and whether those affected by electoral violence changed their views towards ethno-politics and the use of violence. To answer these questions, a panel survey conducted before and after the elections is combined with external indicators of electoral violence. We find that political parties targeted vote-buying towards specific groups to weaken the support of their political rivals and to mobilize their own supporters. Furthermore, parties instigated violence strategically in areas where they were less likely to win. Although the victims of violence would prefer that parties are no longer allowed to organize in ethnic or religious lines, they are more likely to identify in ethnic terms, support the use of violence and avoid relying on the police to resolve disputes. The overall findings suggest an increased risk of electoral-violence reoccurring.

Recognition and political accommodation: from regionalism to secessionism. The Catalan case

Having lived through a bloody civil war in the 1930s followed by four decades of General Franco’s dictatorship, the Spanish state carried out a transition to a democratic system at the end of the 1970s. The 1978 Constitution was the legal outcome of this transition process. Among other things, it established a territorial model – the so-called “Estado de las Autonomías” (State of Autonomous Communities) – which was designed to satisfy the historical demands for recognition and self-government of, above all, the citizens and institutions of Catalonia and the Basque Country .In recent years support for independence has increased in Catalonia. Different indicators show that pro-independence demands are endorsed by a majority of its citizens, as well as by most of the political parties and organizations that represent its civil society. This is a new phenomenon. Those in favour of independence had been in the minority throughout the 20th century. Nowadays, however, demands of a pro-autonomy and pro-federalist nature, which until recently had been dominant, have gradually lost public support in favour of demands for self-determination and secession. This paper analyses the massive increase in support for secession in Catalonia during the early years of the 21st century. After describing the different theories of secession in plurinational liberal democracies (section 1), we analyse Catalonia’s political evolution over the past decade focusing on the shortcomings with regard to constitutional recognition and accommodation displayed by the Spanish political system. The latter have been exacerbated by the reform process of Catalonia’s Statute of Autonomy (2006) and the subsequent judgement of Spain’s Constitutional Court regarding the aforementioned Statute (2010) (section 2). Finally, we present our conclusions by linking the Catalan case with theories of secession applied to plurinational contexts

How political parties, rather than member-states, are building the European Union

Political party formation and coalition building in the European Parliament is being a driving force for making governance of the highly pluralistic European Union relatively effective and consensual. In spite of successive enlargements and the very high number of electoral partiesobtaining representation in the European Union institutions, the number of effective European Political Groups in the European Parliament has decreased from the first direct election in 1979 to the fifth in 1999. The formal analysis of national party¹s voting power in different Europeanparty configurations can explain the incentives for national parties to join large European Political Groups instead of forming smaller nationalistic groupings. Empirical evidence shows increasing cohesion of European Political Groups and an increasing role of the European Parliament in EU inter-institutional decision making. As a consequence of this evolution, intergovernmentalism is being replaced with federalizing relations. The analysis can support positive expectations regarding the governability of the European Union after further enlargements provided that new member states have party systems fitting the European PoliticalGroups.

Political centralization and government accountability

This paper studies fiscal federalism when regions differ in voters' ability to monitor publicofficials. We develop a model of political agency in which rent-seeking politicians providepublic goods to win support from heterogeneously informed voters. In equilibrium, voterinformation increases government accountability but displays decreasing returns. Therefore,political centralization reduces aggregate rent extraction when voter information varies acrossregions. It increases welfare as long as the central government is required to provide publicgoods uniformly across regions. The need for uniformity implies an endogenous trade off between reducing rents through centralization and matching idiosyncratic preferences throughdecentralization. We find that a federal structure with overlapping levels of government canbe optimal only if regional differences in accountability are sufficiently large. The modelpredicts that less informed regions should reap greater benefits when the central governmentsets a uniform policy. Consistent with our theory, we present empirical evidence that lessinformed states enjoyed faster declines in pollution after the 1970 Clean Air Act centralizedenvironmental policy at the federal level.