Governance in contemporary Germany:the semisovereign State revisited

Throughout the 1970s and 1980s, West Germany was considered to be one of the world’s most successful economic and political systems. In his seminal 1987 analysis of West Germany’s ‘semisovereign’ system of governance, Peter Katzenstein attributed this success to a combination of a fragmented polity, consensus politics and incremental policy changes. However, unification in 1990 has both changed Germany’s institutional configuration and created economic and social challenges on a huge scale. This volume therefore asks whether semisovereignty still exists in contemporary Germany and, crucially, whether it remains an asset in terms of addressing these challenges. By shadowing and building on the original study, an eminent team of British, German and American scholars analyses institutional changes and the resulting policy developments in key sectors, with Peter Katzenstein himself providing the conclusion. Together, the chapters provide a landmark assessment of the outcomes produced by one of the world’s most important countries. Contents: 1. Introduction: semisovereignty challenged Simon Green and William E. Paterson; 2. Institutional transfer: can semisovereignty be transferred? The political economy of Eastern Germany Wade Jacoby; 3. Political parties Thomas Saalfeld; 4. Federalism: the new territorialism Charlie Jeffery; 5. Shock-absorbers under stress. Parapublic institutions and the double challenges of German unification and European integration Andreas Busch; 6. Economic policy management: catastrophic equilibrium, tipping points and crisis interventions Kenneth Dyson; 7. Industrial relations: from state weakness as strength to state weakness as weakness. Welfare corporatism and the private use of the public interest Wolfgang Streeck; 8. Social policy: crisis and transformation Roland Czada; 9. Immigration and integration policy: between incrementalism and non-decisions Simon Green; 10. Environmental policy: the law of diminishing returns? Charles Lees; 11. Administrative reform Kluas H. Goetz; 12. European policy-making: between associated sovereignty and semisovereignty William E. Paterson; 13. Conclusion: semisovereignty in United Germany Peter J. Katzenstein.

Foreign direct investment and corruption

In the last few decades, the world has witnessed an enormous growth in the volume of foreign direct investment (FDI). The global stock of FDI reached US$ 7.5 trillion in 2003 and accounted for 11% of world Gross Domestic Product, up from 7% in 1990. The sales of multinational enterprises at around US$ 19 trillion were more than double the level of world exports. Substantial FDI inflows went into transition countries. Inflows into one of the region's largest recipient, the Russian Federation, almost doubled, enabling Russia to become one of the five top FDI destinations in 2005-2006. FDI inflows in Russia have increased almost threefold from 13.6% in 2003 to 35% in 2007. In 2003, these flows were twice greater than those into China; whilst in 2007 they were six times larger. Russia's FDI inflows were also about 2.5 times greater than those of Brazil. Efficient government institutions are argued by many economists to foster FDI and growth as a result. However, the magnitude of this effect has yet to be measured. This thesis takes a Political Economy approach to explore, empirically, the potential impact of malfunctioning governmental institutions, proxied by three indices of perceived corruption, on FDI stocks accumulation/distribution within Russia over the period of 2002-2004. Using a regional data-set it concentrates on three areas relating to FDI. Firstly, it considers the significance, the size and the sign of the impact of perceived corruption on accumulation of FDI stocks within Russia. Secondly, it quantifies the impact of perceived corruption on the volume of FDI stocks simultaneously estimating the impact of the investment in public capital such as telecommunications and transportation networks on FDI in the presence of corruption. In particular, it addresses the question whether more corrupt regions in Russia are also those that could have accumulated more of FDI stocks, and investigates whether those 'more corrupt' regions would have had lower level of public capital investment. Finally, it examines whether decentralisation increases or decreases corruption and whether a larger extent of decentralisation has a positive or negative impact on FDI (stocks). The results of three studies are as follows. Firstly, along with market potential, corruption is found to be one of the key factors in explaining FDI distribution within Russia between 2002 and 2004. Secondly, corruption on average is found to be related to FDI positively suggesting that it may act as speed money: to save their time foreign direct investors might be willing to bribe the regional authorities so to move in front of the bureaucratic lines. Thirdly, although when corruption is controlled for, the impact of the latter on unobservable FDI is found to be on average positive, no association between FDI and public investment is observed with the only exception of transportation infrastructure (i.e., railway). The results might suggest therefore that it is possible that not only regions with high levels of perceived corruption attract more FDI but also that expansions in public capital investments are not accompanied by an increase of the volume of FDI (stocks) in regions with high levels of corruption. This casts some doubt on the productivity of the investment in public capital in these regions as it might be that bureaucrats may prefer to use these infrastructural projects for rent extraction. Finally, we find decentralisation to have a significant and positive impact on both FDI stock accumulation and corruption, suggesting that local governments may spend more on public goods to make the area more attractive to foreign investors but at the same time they may be interested into extracting rents from foreign investors. These results support the idea that the regulation of FDI is associated with and facilitated by a larger public sector, which distorts competition and introduces opportunities for rent-seeking by particular economic and political factors.

Nations and organizations:a comparative study of English and Indian work-related attitudes and values in matched manufacturing firms

This thesis reports a cross-national study carried out in England and India in an attempt to clarify the association of certain cultural and non-cultural characteristics with people's work-related attitudes and values, and with the structure of their work organizations. Three perspectives are considered to be relevant to the objectives of the study. The contingency perspective suggests that a 'fit' between an organization's context and its structural arrangements will be fundamentally necessary for achieving success and survival. The political economy perspective argues for the determining role of the social and economic structures within which the organization operates. The culturalist perspective looks to cultural attitudes and values of organizational members for an explanation for their organization's structure. The empirical investigation was carried out in three stages in each of the two countries involved by means of surveys of cultural attitudes, work-related attitudes and organizational structures and systems. The cultural surveys suggested that Indian and English people were different from one another with regard to fear of, and respect and obedience to, their seniors, ability to cope with ambiguity, honesty, independence, expression of emotions, fatalism, reserve, and care for others; they were similar with regard to tolerance, friendliness, attitude to change, attitude to law, self-control and self-confidence, and attitude to social differentiation. The second stage of the study, involving the employees of fourteen organizations, found that the English ones perceived themselves to have more power at work, expressed more tolerance for ambiguity, and had different expectations from their job than did the Indian equivalents. The two samples were similar with respect to commitment to their company and trust in their colleagues. The findings also suggested that employees' occupations, education and age had some influences on their work-related attitudes. The final stage of the research was a study of structures, control systems, and reward and punishment policies of the same fourteen organizations which were matched almost completely on their contextual factors across the two countries. English and Indian organizations were found to be similar in terms of centralization, specialization, chief executive's span of control, height and management control strategies. English organizations, however, were far more formalized, spent more time on consultation and their managers delegated authority lower down the hierarchy than Indian organizations. The major finding of the study was the multiple association that cultural, national and contingency factors had with the structural characteristics of the organizations and with the work-related attitudes of their members. On the basis of this finding, a multi-perspective model for understanding organizational structures and systems is proposed in which the contributions made by contingency, political economy and cultural perspectives are recognized and incorporated.

Regionalism, globalisation and international order:Europe and Southeast Asia

New regionalism and globalization have been prominent themes in academic and political debates since the beginning of the 1990s. Despite the considerable amount of scholarly attention that the new regionalism has received in recent years, its full empirical and theoretical potential has yet to be fully investigated. This illuminating study provides an overview of new avenues in theorizing regionalism and proposes a consolidated framework for analysis and comparison. Offering a comparative historical perspective of European and Southeast Asian regionalism, it presents new and imaginative insights into the theory and practice of regionalism and the links between regional developments, globalization and international order. Contents: Introduction; Regionalism and integration theory the first wave: traditional approaches; New regionalism the second wave: towards a framework for comparative regionalism; Regionalism in the EU and ASEAN during the Cold War: the first wave; Second-wave regionalism: the post-Cold War period; Identifying regions: emerging regional identities in Europe and East Asia; Conclusion; Appendix; Bibliography; Index.

The British higher education funding debate: the perils of 'talking economics'

This article examines current debates surrounding British higher education funding from a political economy perspective, drawing on ‘positive’ and ‘institutionalist’ political economy. Adopting the lens of political economy enables a critical assessment of the use of terms drawn from economics by many higher education decision-makers. Current discussions embody particular assumptions about the nature of producers and consumers in higher education, the relationship between supply and demand, and the role of information in the higher education ‘market’. They also frequently fail to acknowledge the active rather than passive role of higher education institutions in shaping policy discussions surrounding higher education funding.

'Worlds of justification’ in the politics and practices of urban regeneration

A considerable body of research has developed on processes of neoliberal urban regeneration and gentrifi cation. On the one hand, there are many political economy accounts emphasising the role of economic capital in processes of urban change and gentrifi cation. On the other hand, there is a wealth of governmentality studies on the art of government that fail to explain how ungovernable subjects develop. Similarly, within gentrifi cation studies there are many accounts on the role of changing consumer lifestyles and defi ning gentrifi cation, but less concern with the governance processes between actors in urban regeneration and gentrifi cation. Yet such issues are of considerable importance given the role of the state in urban regeneration and dependence on private capital. This paper utilises the French Pragmatist approach of Boltanski and Thévenot to examine a case study state-led gentrifi cation project. Boltanski and Thévenot argue that social coordination occurs by way of actors working through broader value-laden ‘worlds of justifi cation’ that underpin processes of argumentation and coordination. The examined case study is a deprived area within an English city where a major state-led gentrification programme has been introduced. The rationale for the programme is based on the assumption that reducing deprivation relies upon substantially increasing the number of higher income earners. The paper concludes that market values have overridden broader civic values in the negotiation process, with this intensifying as the state internalised market crisis tendencies within the project. More broadly, there is a need for French Pragmatism to be more sensitive to the spatial processes of social coordination, which can be achieved through critical engagement with recent concepts of ‘assemblages’.

Did the World Bank drive tariff reforms in Eastern Africa?

This paper explores tariff reform in Ethiopia, Kenya, Tanzania and Uganda between the early 1990s and early 2000s. Tariffs were reformed in an across the board manner consistent with implementing World Bank programs: the average tariff was reduced and the dispersion of tariffs was compressed, with the highest tariffs being eliminated. There is limited evidence of political economy influences on the cross sector pattern of tariffs and reforms, except for a tendency to offer greater protection to larger manufacturing sectors in all countries except Uganda. The technocratic reforms have diluted relative protection and political economy influences in all the four countries.

Forecasting the UK/US exchange rate with divisia monetary models and neural networks

This paper compares the UK/US exchange rate forecasting performance of linear and nonlinear models based on monetary fundamentals, to a random walk (RW) model. Structural breaks are identified and taken into account. The exchange rate forecasting framework is also used for assessing the relative merits of the official Simple Sum and the weighted Divisia measures of money. Overall, there are four main findings. First, the majority of the models with fundamentals are able to beat the RW model in forecasting the UK/US exchange rate. Second, the most accurate forecasts of the UK/US exchange rate are obtained with a nonlinear model. Third, taking into account structural breaks reveals that the Divisia aggregate performs better than its Simple Sum counterpart. Finally, Divisia-based models provide more accurate forecasts than Simple Sum-based models provided they are constructed within a nonlinear framework.

The effect of corruption on FDI:a parametric and non-parametric analysis

This paper analyses the effect of corruption on Multinational Enterprises' (MNEs) incentives to undertake FDI in a particular country. We contribute to the existing literature by modelling the relationship between corruption and FDI using both parametric and non-parametric methods. We report that the impact of corruption on FDI stock is different for the different quantiles of the FDI stock distribution. This is a characteristic that could not be captured in previous studies which used only parametric methods. After controlling for the location selection process of MNEs and other host country characteristics, the result from both parametric and non-parametric analyses offer some support for the ‘helping-hand’ role of corruption.

Ethnic conflict and economic disparity:Serbians and Albanians in Kosovo

Using the Living Standards Measurement Study (LSMS) household survey from post-conflict Kosovo, we investigate the comparative economic well-being of Serbs and Albanians. An Oaxaca decomposition shows Serb households are both better endowed with income generating characteristics, such as education, and receive higher returns to these characteristics than Albanian households. Despite these advantages, Serb households have lower living standards, on average, than Albanian households. Most of the difference in living standards between Serb and Albanian households is due to unobserved non-economic factors. This result has serious implications for the political economy of policymaking in post-conflict Kosovo.

Privatisation in Poland:ten years after

The purpose of this article is to compare economic discussion on privatisation, expected privatisation outcomes and actual results in Poland. First it discusses the privatisation of state enterprises in the broader context of the economic transformation programme designed and introduced at the end of 1989 and the beginning of 1990. It examines the choice of privatisation methods, the political economy of privatisation and the three major policy issues: pace of privatisation, sequence of privatisation and the authority to initiate and carry out privatisation. The final section compares privatisation blueprints and actual results. The appendix presents a detailed technical guide to the privatisation methods in Poland and a basic set of figures illustrating the outcome.

Germany at a crossroads:the gathering crisis sharpens

In our book, The Gathering Crisis: The 2005 Federal Election and the Grand Coalition (Miskimmon et al, 2009), we argued that the German political and economic systems faced a number of serious challenges. The resource crunch in public finances has been particularly problematic in a country used to consensus politics- money had previously been used to oil the wheels of German federalism (and European integration). In the light of recent events- the global financial crisis, the Eurozone crisis, the 2009 federal election- we claim that the crisis in the German political economy has sharpened. The task of Angela Merkel and subsequent chancellors will be to navigate the new era, ensuring that Germany remains a leading political and economic power in the European Union and beyond. © 2010 Macmillan Publishers Ltd.

Learning from a deceptively spacious policy discourse

Networked Learning, e-Learning and Technology Enhanced Learning have each been defined in different ways, as people's understanding about technology in education has developed. Yet each could also be considered as a terminology competing for a contested conceptual space. Theoretically this can be a ‘fertile trans-disciplinary ground for represented disciplines to affect and potentially be re-orientated by others’ (Parchoma and Keefer, 2012), as differing perspectives on terminology and subject disciplines yield new understandings. Yet when used in government policy texts to describe connections between humans, learning and technology, terms tend to become fixed in less fertile positions linguistically. A deceptively spacious policy discourse that suggests people are free to make choices conceals an economically-based assumption that implementing new technologies, in themselves, determines learning. Yet it actually narrows choices open to people as one route is repeatedly in the foreground and humans are not visibly involved in it. An impression that the effective use of technology for endless improvement is inevitable cuts off critical social interactions and new knowledge for multiple understandings of technology in people's lives. This paper explores some findings from a corpus-based Critical Discourse Analysis of UK policy for educational technology during the last 15 years, to help to illuminate the choices made. This is important when through political economy, hierarchical or dominant neoliberal logic promotes a single ‘universal model’ of technology in education, without reference to a wider social context (Rustin, 2013). Discourse matters, because it can ‘mould identities’ (Massey, 2013) in narrow, objective economically-based terms which 'colonise discourses of democracy and student-centredness' (Greener and Perriton, 2005:67). This undermines subjective social, political, material and relational (Jones, 2012: 3) contexts for those learning when humans are omitted. Critically confronting these structures is not considered a negative activity. Whilst deterministic discourse for educational technology may leave people unconsciously restricted, I argue that, through a close analysis, it offers a deceptively spacious theoretical tool for debate about the wider social and economic context of educational technology. Methodologically it provides insights about ways technology, language and learning intersect across disciplinary borders (Giroux, 1992), as powerful, mutually constitutive elements, ever-present in networked learning situations. In sharing a replicable approach for linguistic analysis of policy discourse I hope to contribute to visions others have for a broader theoretical underpinning for educational technology, as a developing field of networked knowledge and research (Conole and Oliver, 2002; Andrews, 2011).

Good and bad institutions:is the debate over? Cross-country firm-level evidence from the textile industry

Using firm-level data from nine developing countries, we demonstrate that certain institutions, like restrictive labour market regulations, that are considered bad for economic growth might be beneficial for production efficiency, whereas good business environment, which is considered beneficial for economic growth, might have an adverse impact on production efficiency. We argue that our results suggest that there might be significant difference in the macro- and micro-impacts of institutional quality, such that the classification of institutions into 'good' and 'bad might be premature. © The Author 2013. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.