The political cost of reforms

This paper formalizes in a fully-rational model the popular idea that politiciansperceive an electoral cost in adopting costly reforms with future benefits and reconciles it with the evidence that reformist governments are not punished by voters.To do so, it proposes a model of elections where political ability is ex-ante unknownand investment in reforms is unobservable. On the one hand, elections improve accountability and allow to keep well-performing incumbents. On the other, politiciansmake too little reforms in an attempt to signal high ability and increase their reappointment probability. Although in a rational expectation equilibrium voters cannotbe fooled and hence reelection does not depend on reforms, the strategy of underinvesting in reforms is nonetheless sustained by out-of-equilibrium beliefs. Contrary tothe conventional wisdom, uncertainty makes reforms more politically viable and may,under some conditions, increase social welfare. The model is then used to study howpolitical rewards can be set so as to maximize social welfare and the desirability of imposing a one-term limit to governments. The predictions of this theory are consistentwith a number of empirical regularities on the determinants of reforms and reelection.They are also consistent with a new stylized fact documented in this paper: economicuncertainty is associated to more reforms in a panel of 20 OECD countries.

The implicit theory of historical change in the work of Alan S. Milward

Alan S. Milward was an economic historian who developed an implicit theory ofhistorical change. His interpretation which was neither liberal nor Marxist positedthat social, political, and economic change, for it to be sustainable, had to be agradual process rather than one resulting from a sudden, cataclysmicrevolutionary event occurring in one sector of the economy or society. Benignchange depended much less on natural resource endowment or technologicaldevelopments than on the ability of state institutions to respond to changingpolitical demands from within each society. State bureaucracies were fundamentalto formulating those political demands and advising politicians of ways to meetthem. Since each society was different there was no single model of developmentto be adopted or which could be imposed successfully by one nation-state onothers, either through force or through foreign aid programs. Nor coulddevelopment be promoted simply by copying the model of a more successfuleconomy. Each nation-state had to find its own response to the political demandsarising from within its society. Integration occurred when a number of nation states shared similar political objectives which they could not meet individuallybut could meet collectively. It was not simply the result of their increasinginterdependence. It was how and whether nation-states responded to thesedomestic demands which determined the nature of historical change.

Social security in theory and practice (II): Efficiency theories, narrative theories and implications for reform

166 countries have some kind of public old age pension. What economic forcescreate and sustain old age Social Security as a public program? Mulligan and Sala-i-Martin (1999b) document several of the internationally and historically common features of social security programs, and explore "political" theories of Social Security. This paper discusses the "efficiency theories", which view creation of the SS program as a full of partial solution to some market failure. Efficiency explanations of social security include the "SS as welfare for the elderly" the "retirement increases productivity to optimally manage human capital externalities", "optimal retirement insurance", the "prodigal father problem", the "misguided Keynesian", the "optimal longevity insurance", the "governmenteconomizing transaction costs", and the "return on human capital investment". We also analyze four "narrative" theories of social security: the "chain letter theory", the "lump of labor theory", the "monopoly capitalism theory", and the "Sub-but-Nearly-Optimal policy response to private pensions theory".The political and efficiency explanations are compared with the international and historical facts and used to derive implications for replacing the typical pay-as-you-go system with a forced savings plan. Most of the explanations suggest that forced savings does not increase welfare, and may decrease it.

A theory of international conflict management and sanctioning

In this paper we analyze sanctioning policies in international law. We develop a model of international military conflict where the conflicting countries can be a target of international sanctions. These sanctions constitute an equilibrium outcome of an international political market for sanctions, where different countries trade political influence. We show that the level of sanctions in equilibrium is strictly positive but limited, in the sense that higher sanctions would exacerbate the military conflict, not reduce it. We then propose an alternative interpretation to the perceived lack of effectiveness of international sanctions, by showing that the problem might not be one of undersanctioning but of oversanctioning.

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.

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.

Contexts and typologies in the analysis of welfare state legitimacy : a social psychological approach to political opinion formation

This dissertation analyses public opinion towards the welfare state across 29 European countries. Based on an interdisciplinary approach combining social psychological, sociological, and public opinion approaches to political opinion formation, it investigates how social position and shared beliefs shape perceived legitimacy of welfare institutions, and how social contexts impact on the processes of opinion formation. Drawing on social representations theory, as well as socialization and self-interest approaches, the dissertation analyses the role of social position in lay support for institutional solidarity. Normative beliefs-defined as preferred views regarding the organisation of social relations-mediate the effect of social position on welfare support. In addition, drawing on public opinion literature, the dissertation analyses opinion formation as a function of country-level structural (e.g., level of social spending, unemployment) and ideological factors (e.g., level of meritocracy). The dissertation comprises two theoretical and four empirical chapters. Three of the empirical chapters use data from the European Social Survey 2008. Using multilevel and typological approaches, the dissertation contributes to welfare attitude literature by showing that normative beliefs, such as distrust or egalitarianism, function as underlying mechanisms that link social position to policy attitudes (Chapter 3), and that characteristics of the national contexts influence the processes of political opinion formation (Chapters 3 and 4). Chapter 5 proposes and predicts a typology of the relationship between attitudes towards solidarity and attitudes towards control, reflecting the two central domains of government intervention. Finally, Chapter 6 examines welfare support in the realm of action and social protest, using data from a survey on Spanish Indigados activists. The findings of this dissertation inform contemporary debates about welfare state legitimacy and retrenchment. - Cette thèse avait pour but d'analyser l'opinion publique envers l'Etat social dans 29 pays européens. Basée sur une approche interdisciplinaire qui combine des perspectives psycho-sociales, sociologiques et d'opinion publique sur la formation d'opinion politique, la thèse étudie comment la position sociale et les croyances partagées façonnent la légitimité perçue des institutions de l'Etat social, et comment les contextes sociaux influencent les processus de formation d'opinion. Basée sur la théorie des représentations sociales, ainsi qu'une approche de socialisation et d'intérêt propre, cette thèse analyse le rôle des positions sociales dans le soutien envers la solidarité institutionnelle. Les croyances normatives-définies comme les visions préférées de l'organisation des rapports sociaux-médiatisent l'effet de la position sociale sur le soutien pour l'Etat social. De plus, s'inspirant de la littérature sur l'opinion publique, la thèse analyse la formation d'opinion en fonction des facteurs structurels (ex. le taux de dépenses sociales, le chômage) et idéologiques (ex. le degré de méritocratie). Cette thèse est composée de deux chapitres théoriques et quatre chapitres empiriques. Trois chapitres empiriques utilisent des données provenant de l'enquête European Social Survey 2008. Appliquant des approches multi-niveux et typoloqiques, la thèse contribue à la littérature sur les attitudes envers l'Etat social en montrant que les croyances normatives, telles que la méfiance ou l'égalitarisme, fonctionnent comme des mécanismes sous-jacents qui relient la position sociale aux attitudes politiques (Chapitre 3), et que les caractéristiques des contextes nationaux influencent les processus de formation d'opinion politique (Chapitres 3 et 4). Le chapitre 5 propose et prédit une typologie sur le rapport entre les attitudes envers la solidarité et celles envers le contrôle, renvoyant à deux domaines centraux de régulation étatique. Enfin, le chapitre 6 examine le soutien à l'Etat social dans le domaine de l'action protestataire, utilisant des données d'une enquête menée auprès des militants espagnols du mouvement des Indignés. Les résultats de cette thèse apportent des éléments qui éclairent les débats contemporains sur la légitimité de l'Etat social et son démantèlement.

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.

Embodying feminist research: learning from action research, political practices, diffractions and collective knowledge.

In the past three decades, feminists and critical theorists have discussed and argued the importance of deconstructing and problematizing social science research methodology in order to question normalized hierarchies concerning the production of knowledge and the status of truth claims. Nevertheless, often, these ideas have basically remained theoretical propositions not embodied in research practices. In fact there is very little published discussion about the difficulties and limits of their practical application. In this paper we introduce some interconnected reflections starting from two different but related experiences of embodying 'feminist activist research'. Our aim is to emphasise the importance of attending to process, making mistakes and learning during fieldwork, as well as experimenting with personalized forms of analysis, such as the construction of narratives and the story-telling process.

Embodying feminist research: learning from action research, political practices, diffractions and collective knowledge.

In the past three decades, feminists and critical theorists have discussed and argued the importance of deconstructing and problematizing social science research methodology in order to question normalized hierarchies concerning the production of knowledge and the status of truth claims. Nevertheless, often, these ideas have basically remained theoretical propositions not embodied in research practices. In fact there is very little published discussion about the difficulties and limits of their practical application. In this paper we introduce some interconnected reflections starting from two different but related experiences of embodying 'feminist activist research'. Our aim is to emphasise the importance of attending to process, making mistakes and learning during fieldwork, as well as experimenting with personalized forms of analysis, such as the construction of narratives and the story-telling process.

The social disembedding of business theory and practice. A (neo-)institutional analysis of the homo economicus and corporate social responsibility, and the inherent responsibility of business scholars

Aim Structure of the Thesis In the first article, I focus on the context in which the Homo Economicus was constructed - i.e., the conception of economic actors as fully rational, informed, egocentric, and profit-maximizing. I argue that the Homo Economicus theory was developed in a specific societal context with specific (partly tacit) values and norms. These norms have implicitly influenced the behavior of economic actors and have framed the interpretation of the Homo Economicus. Different factors however have weakened this implicit influence of the broader societal values and norms on economic actors. The result is an unbridled interpretation and application of the values and norms of the Homo Economicus in the business environment, and perhaps also in the broader society. In the second article, I show that the morality of many economic actors relies on isomorphism, i.e., the attempt to fit into the group by adopting the moral norms surrounding them. In consequence, if the norms prevailing in a specific group or context (such as a specific region or a specific industry) change, it can be expected that actors with an 'isomorphism morality' will also adapt their ethical thinking and their behavior -for the 'better' or for the 'worse'. The article further describes the process through which corporations could emancipate from the ethical norms prevailing in the broader society, and therefore develop an institution with specific norms and values. These norms mainly rely on mainstream business theories praising the economic actor's self-interest and neglecting moral reasoning. Moreover, because of isomorphism morality, many economic actors have changed their perception of ethics, and have abandoned the values prevailing in the broader society in order to adopt those of the economic theory. Finally, isomorphism morality also implies that these economic actors will change their morality again if the institutional context changes. The third article highlights the role and responsibility of business scholars in promoting a systematic reflection and self-critique of the business system and develops alternative models to fill the moral void of the business institution and its inherent legitimacy crisis. Indeed, the current business institution relies on assumptions such as scientific neutrality and specialization, which seem at least partly challenged by two factors. First, self-fulfilling prophecy provides scholars with an important (even if sometimes undesired) normative influence over practical life. Second, the increasing complexity of today's (socio-political) world and interactions between the different elements constituting our society question the strong specialization of science. For instance, economic theories are not unrelated to psychology or sociology, and economic actors influence socio-political structures and processes, e.g., through lobbying (Dobbs, 2006; Rondinelli, 2002), or through marketing which changes not only the way we consume, but more generally tries to instill a specific lifestyle (Cova, 2004; M. K. Hogg & Michell, 1996; McCracken, 1988; Muniz & O'Guinn, 2001). In consequence, business scholars are key actors in shaping both tomorrow's economic world and its broader context. A greater awareness of this influence might be a first step toward an increased feeling of civic responsibility and accountability for the models and theories developed or taught in business schools.

Uncertainty, electoral incentives and political myopia

We study the determinants of political myopia in a rational model of electoral accountability where the key elements are informational frictions and uncertainty. We build aframework where political ability is ex-ante unknown and policy choices are not perfectlyobservable. On the one hand, elections improve accountability and allow to keep well-performing incumbents. On the other, politicians invest too little in costly policies withfuture returns in an attempt to signal high ability and increase their reelection probability.Contrary to the conventional wisdom, uncertainty reduces political myopia and may, undersome conditions, increase social welfare. We use the model to study how political rewardscan be set so as to maximise social welfare and the desirability of imposing a one-term limitto governments. The predictions of our theory are consistent with a number of stylised factsand with a new empirical observation documented in this paper: aggregate uncertainty, measured by economic volatility, is associated to better fiscal discipline in a panel of 20 OECDcountries.

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.

The political role of the State in Cambridge theories of growth and distribution

In this paper we extend Kaldor’s Neo-Pasinetti theorem to the scope of budgetary interventions based on political orientations. First, we take into account a system of taxes and expenditures. Second, we introduce different reaction functions for public spending showing the political role of the State in Cambridge theory of distribution. It turns out that the validity of Kaldorian results depends on the political orientation adopted by government, which diminishes the range of application of the Neo-Pasinetti theorem.

Political Legitimacy and Ethnocultural Justice. Essays on Public Reason, Democratic Citizenship, and the Rights of Cultural Minorities

In this thesis, I argue that there are public cultural reasons that can underpin public justifications of minority rights of indigenous and national minorities in a constitutionaldemocracy. I do so by tackling diverse issues facing a liberal theory of multiculturalism. In the first essay, I criticize Will Kymlicka’s comprehensive liberal theory of minority rights and propose a political liberal alternative. The main problem of Will Kymlicka’s theory is that it builds on the contestable liberal value of individual autonomy and thus fails to take diversity seriously. In the second essay, I elaborate on the Rawlsian political liberalism assumed here by criticizing Chandran Kukathas’s version of political liberalism as overly accommodating to diversity. In the third essay, I discuss questions of method that arise for a political liberal approach to the moral-political foundations of multiculturalism, and propose a certain understanding of the political liberal enterprise and its crucial standard of reasonableness. In the fourth essay, I dwell on the political liberal ethic of citizenship and propose a strongly inclusionist interpretation of the duty of civility. In the fifth and last essay, I introduce a certain understanding of ethnocultural justice and propose a view on certain cultural reasons as public cultural reasons. Cultural reasons are public when they are based on necessarily established cultural marks of a democratic polity, as specified by the cultural establishment view; and when they are crucial for the societal cultural bases of self-respect of citizens. The arguments in this thesis support, and help to spell out, moral-political rights of indigenous and national minorities as formulated in international legal documents, such as the Declaration on the Rights of Indigenous Peoples (United Nations 2007) or the International Covenant on Economic, Social and Cultural Rights (United Nations 1966).