Three Essays on the Formation and Impact of Economic Policy

Introduction In my thesis I argue that economic policy is all about economics and politics. Consequently, analysing and understanding economic policy ideally has at least two parts. The economics part, which is centered around the expected impact of a specific policy on the real economy both in terms of efficiency and equity. The insights of this part point into which direction the fine-tuning of economic policies should go. However, fine-tuning of economic policies will be most likely subject to political constraints. That is why, in the politics part, a much better understanding can be gained by taking into account how the incentives of politicians and special interest groups as well as the role played by different institutional features affect the formation of economic policies. The first part and chapter of my thesis concentrates on the efficiency-related impact of economic policies: how does corporate income taxation in general, and corporate income tax progressivity in specific, affect the creation of new firms? Reduced progressivity and flat-rate taxes are in vogue. By 2009, 22 countries are operating flat-rate income tax systems, as do 7 US states and 14 Swiss cantons (for corporate income only). Tax reform proposals in the spirit of the "flat tax" model typically aim to reduce three parameters: the average tax burden, the progressivity of the tax schedule, and the complexity of the tax code. In joint work, Marius Brülhart and I explore the implications of changes in these three parameters on entrepreneurial activity, measured by counts of firm births in a panel of Swiss municipalities. Our results show that lower average tax rates and reduced complexity of the tax code promote firm births. Controlling for these effects, reduced progressivity inhibits firm births. Our reading of these results is that tax progressivity has an insurance effect that facilitates entrepreneurial risk taking. The positive effects of lower tax levels and reduced complexity are estimated to be significantly stronger than the negative effect of reduced progressivity. To the extent that firm births reflect desirable entrepreneurial dynamism, it is not the flattening of tax schedules that is key to successful tax reforms, but the lowering of average tax burdens and the simplification of tax codes. Flatness per se is of secondary importance and even appears to be detrimental to firm births. The second part of my thesis, which corresponds to the second and third chapter, concentrates on how economic policies are formed. By the nature of the analysis, these two chapters draw on a broader literature than the first chapter. Both economists and political scientists have done extensive research on how economic policies are formed. Thereby, researchers in both disciplines have recognised the importance of special interest groups trying to influence policy-making through various channels. In general, economists base their analysis on a formal and microeconomically founded approach, while abstracting from institutional details. In contrast, political scientists' frameworks are generally richer in terms of institutional features but lack the theoretical rigour of economists' approaches. I start from the economist's point of view. However, I try to borrow as much as possible from the findings of political science to gain a better understanding of how economic policies are formed in reality. In the second chapter, I take a theoretical approach and focus on the institutional policy framework to explore how interactions between different political institutions affect the outcome of trade policy in presence of special interest groups' lobbying. Standard political economy theory treats the government as a single institutional actor which sets tariffs by trading off social welfare against contributions from special interest groups seeking industry-specific protection from imports. However, these models lack important (institutional) features of reality. That is why, in my model, I split up the government into a legislative and executive branch which can both be lobbied by special interest groups. Furthermore, the legislative has the option to delegate its trade policy authority to the executive. I allow the executive to compensate the legislative in exchange for delegation. Despite ample anecdotal evidence, bargaining over delegation of trade policy authority has not yet been formally modelled in the literature. I show that delegation has an impact on policy formation in that it leads to lower equilibrium tariffs compared to a standard model without delegation. I also show that delegation will only take place if the lobby is not strong enough to prevent it. Furthermore, the option to delegate increases the bargaining power of the legislative at the expense of the lobbies. Therefore, the findings of this model can shed a light on why the U.S. Congress often practices delegation to the executive. In the final chapter of my thesis, my coauthor, Antonio Fidalgo, and I take a narrower approach and focus on the individual politician level of policy-making to explore how connections to private firms and networks within parliament affect individual politicians' decision-making. Theories in the spirit of the model of the second chapter show how campaign contributions from lobbies to politicians can influence economic policies. There exists an abundant empirical literature that analyses ties between firms and politicians based on campaign contributions. However, the evidence on the impact of campaign contributions is mixed, at best. In our paper, we analyse an alternative channel of influence in the shape of personal connections between politicians and firms through board membership. We identify a direct effect of board membership on individual politicians' voting behaviour and an indirect leverage effect when politicians with board connections influence non-connected peers. We assess the importance of these two effects using a vote in the Swiss parliament on a government bailout of the national airline, Swissair, in 2001, which serves as a natural experiment. We find that both the direct effect of connections to firms and the indirect leverage effect had a strong and positive impact on the probability that a politician supported the government bailout.

The de facto independence of regulatory agencies and its consequences for policy making and regulatory outcomes

This dissertation focuses on the practice of regulatory governance, throughout the study of the functioning of formally independent regulatory agencies (IRAs), with special attention to their de facto independence. The research goals are grounded on a "neo-positivist" (or "reconstructed positivist") position (Hawkesworth 1992; Radaelli 2000b; Sabatier 2000). This perspective starts from the ontological assumption that even if subjective perceptions are constitutive elements of political phenomena, a real world exists beyond any social construction and can, however imperfectly, become the object of scientific inquiry. Epistemologically, it follows that hypothetical-deductive theories with explanatory aims can be tested by employing a proper methodology and set of analytical techniques. It is thus possible to make scientific inferences and general conclusions to a certain extent, according to a Bayesian conception of knowledge, in order to update the prior scientific beliefs in the truth of the related hypotheses (Howson 1998), while acknowledging the fact that the conditions of truth are at least partially subjective and historically determined (Foucault 1988; Kuhn 1970). At the same time, a sceptical position is adopted towards the supposed disjunction between facts and values and the possibility of discovering abstract universal laws in social science. It has been observed that the current version of capitalism corresponds to the golden age of regulation, and that since the 1980s no government activity in OECD countries has grown faster than regulatory functions (Jacobs 1999). Following an apparent paradox, the ongoing dynamics of liberalisation, privatisation, decartelisation, internationalisation, and regional integration hardly led to the crumbling of the state, but instead promoted a wave of regulatory growth in the face of new risks and new opportunities (Vogel 1996). Accordingly, a new order of regulatory capitalism is rising, implying a new division of labour between state and society and entailing the expansion and intensification of regulation (Levi-Faur 2005). The previous order, relying on public ownership and public intervention and/or on sectoral self-regulation by private actors, is being replaced by a more formalised, expert-based, open, and independently regulated model of governance. Independent regulation agencies (IRAs), that is, formally independent administrative agencies with regulatory powers that benefit from public authority delegated from political decision makers, represent the main institutional feature of regulatory governance (Gilardi 2008). IRAs constitute a relatively new technology of regulation in western Europe, at least for certain domains, but they are increasingly widespread across countries and sectors. For instance, independent regulators have been set up for regulating very diverse issues, such as general competition, banking and finance, telecommunications, civil aviation, railway services, food safety, the pharmaceutical industry, electricity, environmental protection, and personal data privacy. Two attributes of IRAs deserve a special mention. On the one hand, they are formally separated from democratic institutions and elected politicians, thus raising normative and empirical concerns about their accountability and legitimacy. On the other hand, some hard questions about their role as political actors are still unaddressed, though, together with regulatory competencies, IRAs often accumulate executive, (quasi-)legislative, and adjudicatory functions, as well as about their performance.

Fourth Annual Report of the Independent Monitoring Group for A Vision for Change - the Report of the Expert Group on Mental Health Policy - June 2010

  Click here to download PDF 222KB Please scroll down for related documents   Related Documents: HSE National and Regional Progress Reports HSE – Key Deliverables 2009 – Report PDF 55KB HSE – National Report PDF 363KB HSE – Regional Report – Dublin Mid Leinster PDF 82KB HSE – Regional Report – Dublin North East PDF 89KB HSE – Regional Report – West PDF 91KB HSE – Regional Report -South PDF 152KB HSE Local Area Progress Reports HSE – Tipperay South PDF 395KB HSE – Tipperary North PDF 367KB HSE Sligo/Leitrim and West Cavan PDF 359KB HSE – Roscommon PDF 352KB HSE – Mayo PDF 338KB HSE – Louth/Meath PDF 525KB HSE – Limerick PDF 395KB HSE – Laois/Offaly PDF 366KB HSE – Kildare/West Wicklow PDF 317KB HSE – Galway West PDF 297KB HSE – Galway/Mayo and Roscommon Child and Adolescent PDF 59KB HSE – Galway East PDF 400KB HSE – Dun Laoghaire PDF 262KB HSE – Dublin West South West PDF 346KB HSE – Dublin South City PDF 361KB HSE – Dublin North PDF 371KB HSE – Dublin North West PDF 432KB HSE – Dublin North – Dublin Central & part of NW Dublin – Child and Adolescent PDF 53KB HSE – Dublin North Central PDF 341KB HSE – Donegal PDF 485KB HSE – Cork West PDF 424KB HSE – Cork South Lee PDF 469KB HSE – Cork North PDF 423KB HSE – Cavan/Monaghan PDF 371KB HSE – Carlow/Kilkenny PDF 451KB Progress Reports from Government Departments Department of Community Rural and Gaeltacht Affairs PDF 20KB Department of Education and Science PDF 121KB Department of Enterprise Trade and Employment PDF 25KB Department of Environment Heritage and Local Government PDF 47KB Department of Health and Children PDF 50KB Department of Justice Equality and Law Reform PDF 19KB Department of Social and Family Affairs PDF 27KB Submissions Received by the IMG Amnesty International Ireland submission PDF 87KB Association of Occupational Therapists submission PDF 81KB College of Psychiatry of Ireland submission PDF 21KB Disability Federation of Ireland submission PDF 81KB Health Research Board submission PDF 24KB Inclusion Ireland submission PDF 18KB Independent Mental Health Sevice Providers submission PDF 82KB Irish Association of Consultants in Psychiatry of Old Age submission PDF 37KB Irish College of General Practitioners submission PDF 25KB Irish Hospital Consultancts Association submission PDF 155KB Irish Medical Organisation submission PDF 63KB Irish Mental Health Coalition submission PDF 90KB Mental Health Commission submission PDF 64KB Mental Health Nurse Managers submission PDF 206KB National Council for the Professional Development of Nursing and Midwifery submission PDF 67KB National Disability Authority submission PDF 49KB National Service Users Executive submission PDF 28KB Neurobehaviour Clinic – National Rehabilitation Hospital submission PDF 24KB Neurological Alliance of Ireland submission PDF 20KB

Social inequalities in health. New evidence and policy implications

Health inequalities according to people's social standing are persisting, or even growing, in modern societies. Recent decades have revealed evidence of strong variations in life expectancy, both between countries and within them. This widening of social inequalities has developed despite considerable progress in medical science and an increase in health care spending. The reasons behind this are complex, and the implications considerable.   This book provides a summary of the major achievements of a five-year European Science Foundation (ESF) Programme on 'Social Variations in Health Expectancy in Europe'. The contributors are major figures in their subjects, and combine state of the art reviews with the latest results from interdisciplinary research in epidemiology, sociology, psychology and biomedicine.   Three conceptual frameworks of life course influences, health effects of stressful environments, and macro social determinants of health, are unified, while each chapter addresses the policy implications and recommendations derived from currently available evidence. The major topics covered include the role of family in early life, social integration and health, work stress and job security, successful ways of facing adversity, and the impact of the larger environment on health. Epidemiologists, public health research and policy makers, and students of related public health and sociology courses wlll find the results of this research fascinating.This resource was contributed by The National Documentation Centre on Drug Use.

Development of a National English Language Policy and Framework for Legally Resident Adult Immigrants - Horwath Report

The Office of the Minister for Integration (OMI), in conjunction with the Department of Education and Science (DES), commissioned an independent review to assist in the development of a national English Language policy and framework for legally-resident adult immigrants. Horwath Consulting Ireland, in association with Rambll Management and Matrix Knowledge Group, were awarded the contract to undertake this assignment. The terms of reference for the assignment state that: “proposed future developments will be governed by a clear strategy which reflects the importance of English language tuition in overall integration objectives and which addresses key coordination, technical, funding and service-delivery issues."

Fructose toxicity: is the science ready for public health actions?

PURPOSE OF REVIEW: The assumption that fructose may be toxic and involved in the pathogenesis of noncommunicable diseases such as obesity, diabetes mellitus, dyslipidemia, and even cancer has resulted in the call for public health action, such as introducing taxes on sweetened beverages. This review evaluates the scientific basis for such action. RECENT FINDINGS: Although some studies hint towards some potential adverse effects of excessive fructose consumption especially when combined with excess energy intake, the results from clinical trials do not support a significant detrimental effect of fructose on metabolic health when consumed as part of a weight-maintaining diet in amounts consistent with the average-estimated fructose consumption in Western countries. However, definitive studies are missing. SUMMARY: Public health policies to eliminate or limit fructose in the diet should be considered premature. Instead, efforts should be made to promote a healthy lifestyle that includes physical activity and nutritious foods while avoiding intake of excess calories until solid evidence to support action against fructose is available. Public health is almost certainly to benefit more from policies that are aimed at promoting what is known to be good than from policies that are prohibiting what is not (yet) known to be bad.

Social Policy Preferences and Party Choice in the 2011 Swiss Elections

To what extent do social policy preferences explain party choice? This question has received little attention over the past years, because the bulk of the literature has argued that electoral choice is increasingly shaped by identity-based attitudes, rather than by preferences for economic-distributive social policies. We argue that in the wake of this debate, the significance of social policy preferences for electoral choice has been underestimated, because most contributions neglect social policy debates that are specific to post-industrial societies. In particular, they merely focus on income redistribution, while neglecting distributive conflicts around social investment. The Selects 2011 data allows investigating this crucial distinction for Switzerland. Our empirical analyses confirm that it is pivotal to take the pluridimensionality of distributive conflicts seriously: when looking at preferences for social investment rather than income redistribution, we find that social policy preferences are significant explanatory factors for the choice of the five major Swiss political parties.