Institutions matter: essays on the determinants and consequences of socio-political institutions

ONLY AVAILABLE FOR CONSULTATION AT ASTON UNIVERSITY LIBRARY WITH PRIOR ARRANGEMENT This thesis seeks to contribute to the socio-political literature. It comprises of three individual chapters examining the determinants and consequences of different social-political institutional factors. Specifically, the first study combines game theoretical and empirical techniques to examine how bureaucrats favour other agents within their social group and the effects this will have on the level of corruption in the economy. To this end, I develop a simple model of allocation of time between economic activities and leisure (time spent building social network ties), to illustrate the underlying causal mechanism between social network and corruption. It shows that large social networks and low levels of economic activities provides the condition for high levels of corruption. However, the ability of the government to punish corruption through well-established laws and property rights enforcement acts as a deterrent to corruption. he second work also combines game theoretical and empirical techniques. It aims to clarify the relationship between the degree of competition and political influence of firms, paying particular attention to the level of government regulations that exist in the countries in which the firms operates. The interplay between economic and political institutions is vital to any analysis on understanding the workings of political influence. The third study is purely empirical. It examines the role of two types of business network, namely, political connections and business group affiliations on a firm’s performance. Evidence was provided on Chinese firms’ performance during the 2008 financial crisis.

Az európai gazdasági kormányzás előtt álló kihívások. A hármas tagadás lehetetlensége (Challenges of European economic governance. The impossible trinity of denial.)

Az európai gazdasági integráció folyamata olyan kényszerhelyzetekben formálódott a múltban, amelyek a közgazdaságtudományban jól ismert lehetetlen háromság alapján is leírhatók. Az Európai Monetáris Rendszer a rögzített árfolyam-mechanizmusra és önálló jegybanki politikára épített, korlátozva a tőkemozgásokat. A Gazdasági és Monetáris Unió ugyanakkor a tőke szabad áramlásával és az árfolyamok visszavonhatatlan rögzítésével felszámolta a tagállami szintű jegybanki autonómiát. Az euróövezet működése egyszersmind arra a háromszoros tagadásra épül(t), hogy 1. nem lehetséges az euróövezetből való kilépés, 2. nem engedélyezett a kimentés és 3. nem kerülhet sor államcsődre. A 2008-ban Európát is elérő pénzügyi és gazdasági válság azonban elemi erővel mutatott rá e hármas tiltás tarthatatlanságára. A gazdasági kormányzás körül kibontakozott viták így jól közelíthetők a három tiltó szabály egyidejű érvényesülése lehetetlenségének bemutatásával, számba véve az egyes opciók költségeit és lehetséges hasznait. / === / The process of economic integration in the EU has been shaped by the well-known theorem of the impossible trinity. Accordingly, the European Monetary System was built upon a mix of a fixed exchange-rate regime and an autonomous monetary policy, thereby constraining capital mobility. In launching the EMU project, the EU countries decided to fix national currencies irrevocably and maintain full capital mobility, in exchange for delegating their monetary policy upwards to a supranational level. The introduction of the Euro zone, however, has simultaneously meant denial of the following three elements: (1) exit, (2) bail-out, and (3) default. Nevertheless, the 2008–9 financial and economic crisis has demonstrated mercilessly that these three pillars are incompatible with each other. So the current debates on reshaping economic governance in the EU can be modelled by introducing the “impossible trinity of denial”, concentrating on the benefits and the costs of each option.

A gazdasági válság hatása a vállalati stratégiákra – Magyar és szlovák tapasztalatok (Influence of the economic crisis on corporate strategy – Experiences in Hungary and Slovakia)

A tanulmány a jelenlegi gazdasági válság jellemzőit a vállalatok szintjén elemzi, továbbá vizsgálja annak következményeit a válság utáni lehetséges növekedésre. A tanulmány támaszkodik a nemzetközi szakirodalomban tárgyalt tapasztalatokra a válságokból való kilábalás példái alapján, amelyek a korábbi – 1980 és 2002 közötti – válságok során jelentkeztek. Magyarországi és szlovákiai empirikus vizsgálati tapasztalatok ismertetésére kerül sor arra vonatkozóan, hogy miként reagáltak a vállalatok a jelenlegi gazdasági recesszióra. A tanulmány elemzi a magyar és a szlovák vállalatok által a válság alatt követett stratégiák hatását a kereslet megélénkülése esetén adódó növekedési lehetőségek kihasználása szempontjából. A tanulmány illusztrációként bemutatja egy innovatív szlovákiai internetszolgáltató vállalat példáját. _______ The paper analyses the characteristics of the economic crisis at the level of companies, and the consequences for possibilities of growth after the crisis. The authors build on the experiences discussed in international literature concerning recovery after the previous crises between 1980 and 2002. The paper summarizes the empirical research findings on enterprise level reactions to the present economic recession. The focus of analysis is connected to the question of inluence of strategies on capabilities for realizing the growth options after the crisis. The paper – as an illustrative example – describes the strategic behaviour of an innovativ internet service company in Slovakia.

Chaos Theory and Socio-Economic Renewal in Hungary

We utilised methods of chaos theory that were originally used in a 1990’s study to analyse the behaviour of various Hungarian socio-economic macro indicators, both historically and their expected behaviour in the future. In this study, we present the method adapted to PC and the behaviour of the selected macro indicators. We characterize the pathways our society and economy has experienced and where they are heading to into the future by the means of these indicators. Comparing the present results of analysis with the results twenty years ago (when today’s present was the future) we came to the conclusion that most of the indicators became less chaotic, thus the socio-economic courses were getting more stable over the past two decades. We conclude that the opportunity to change them is slowly diminishing, it will be more and more difficult to renew the Hungarian socio-economic indicators, and to turn the processes to more desirable courses. Recommendations for change interventions are then provided.

Essays on openness, economic integration, and *growth

This dissertation examines the relationship between the degree of openness to international trade and the level of growth experienced by a country. More precisely, it explores how trade liberalization and economic integration can lead to specialization in production, affect national levels of welfare, productivity, and competition and at the same time reinforce deflationary efforts. A large part of this investigation is carried out using industry-level data from Spain. ^

A relationship between the Florida Comprehensive Assessment Test 2.0 mathematics scores and racial and ethnic concentration when considering socio-economic status, ESOL student population, and school climate

From the moment children are born, they begin a lifetime journey of learning about themselves and their surroundings. With the establishment of the No Child Left Behind Act of 2001, it mandates that all children receive a high-quality education in a positive school climate. Regardless of the school the child attends or the neighborhood in which the child lives, proper and quality education and resources must be provided and made available in order for the child to be academically successful. The purpose of this ex post facto study was to investigate the relationship between the FCAT 2.0 mathematics scores of public middle school students in Miami-Dade County, Florida and the concentrations of a school's racial and ethnic make-up (Whites, Blacks, and Hispanics), English for Speakers of other Languages (ESOL) population, socio-economic status (SES), and school climate. The research question of this study was: Is there a significant relationship between the FCAT 2.0 Mathematics scores and racial and ethnic concentration of public middle school students in Miami-Dade County when controlling SES, ESOL student population, and school climate for the 2010-2011 school year? The instruments used to collect the data were the FCAT 2.0 and Miami-Dade County Public Schools (M-DCPS) School Climate Survey. The study found that Economically Disadvantaged (SES) students socio-economic status had the strongest correlation with the FCAT 2.0 mathematics scores (r = -.830). The next strongest correlation was with the number of students who agreed that their school climate was positive and helped them learn (r = .741) and the third strongest correlation was a school percentage of White students (r = .668). The study concluded that the FCAT 2.0 mathematics scores of M-DCPS middle school students have a significant relationship with socio-economic status, school climate, and racial concentration.

The effects of trained teachers' integration of dialogic reading discourse on Hispanic English Language Learners' literacy skills in kindergarten

This quasi-experimental Analysis of Covariance (ANCOVA) study explored whether the vocabulary and reading comprehension mean scores of Hispanic Kindergarten ELs whose teachers were trained to utilize Dialogic Reading (DR) discourse were higher than the mean scores of Hispanic ELs in kindergarten whose teachers were not trained to utilize DR discourse strategies. Sixty-three self-identified Hispanic, English Language Kindergarten students and four teachers participated in the study. The teachers were randomly assigned to either the experimental group (DR trained) or control group by drawing names from a hat. Student assignment to experimental versus comparison group was based on the teacher's assignment to either the experimental or comparison group. Thirty-one were assigned to the control group and 32 to the experimental group. The teachers were instructed to read the story to a group of six students (maximum) at a time, utilizing the DR discourse strategies they had been trained to implement. Subjects were read a story each week during the 8-week duration of the study. Teachers in the experimental group collaboratively selected 10 words each week from the Read Together Talk Together (RTTT) instructional stories that were utilized for vocabulary instruction. A test of homogeneity was conducted to evaluate whether the variance among the dependent variables was the same across the groups. An Analyses of Covariance (ANCOVA) was applied to analyze students' vocabulary and comprehension mean scores in the experimental group and the comparison group. The results of the study demonstrated a significant increase in the vocabulary and reading comprehension mean scores for the students whose teachers had been trained in DR discourse strategies. When comparing the two groups, the results revealed a statistically significant difference (p < 0.05). In conclusion, this study was conducted to explore how DR discourse may be an effective technique to teach literacy skills. The findings of this study showed that vocabulary knowledge and reading comprehension of Hispanic ELs were positively affected by the teachers' inclusion of dialogue during storybook reading. Its outcomes accentuated the need for teachers to provide assistance to ELs as they develop vocabulary knowledge and reading comprehension skills.

International tourism and socio-economic development in the Caribbean : are they compatible?

Plagued with poverty, the countries of the Caribbean have grappled for years with numerous development models. As in many Third World countries, tourism has been used as an economic development strategy. Criticisms of the tourism industry have frequently been severe. So much that during the formation of the Caribbean Basin Initiative, the tourism industry was intentionally avoided and other industries favored. One of the most critical questions asked of tourism is whether or not the economic gains of the industry are worth the detrimental social, political and environmental effects on the host country. It is the objective of this thesis to examine the relationship between international tourism and socio-economic development in the Caribbean, and to determine whether or not the deficiencies of the industry prevent it from being a beneficial development tool.

False Economy : Financialization, Crises and Socio-Economic Polarisation

Peer reviewed

False Economy : Financialization, Crises and Socio-Economic Polarisation

Peer reviewed

Measured parental weight status and familial socio-economic status correlates with childhood overweight and obesity at age 9

Background: Parental obesity is a predominant risk factor for childhood obesity. Family factors including socio-economic status (SES) play a role in determining parent weight. It is essential to unpick how shared family factors impact on child weight. This study aims to investigate the association between measured parent weight status, familial socio-economic factors and the risk of childhood obesity at age 9. Methodology/Principal Findings: Cross sectional analysis of the first wave (2008) of the Growing Up in Ireland (GUI) study. GUI is a nationally representative study of 9-year-old children (N = 8,568). Schools were selected from the national total (response rate 82%) and age eligible children (response rate 57%) were invited to participate. Children and their parents had height and weight measurements taken using standard methods. Data were reweighted to account for the sampling design. Childhood overweight and obesity prevalence were calculated using International Obesity Taskforce definitions. Multinomial logistic regression examined the association between parent weight status, indicators of SES and child weight. Overall, 25% of children were either overweight (19.3%) or obese (6.6%). Parental obesity was a significant predictor of child obesity. Of children with normal weight parents, 14.4% were overweight or obese whereas 46.2% of children with obese parents were overweight or obese. Maternal education and household class were more consistently associated with a child being in a higher body mass index category than household income. Adjusted regression indicated that female gender, one parent family type, lower maternal education, lower household class and a heavier parent weight status significantly increased the odds of childhood obesity. Conclusions/Significance: Parental weight appears to be the most influential factor driving the childhood obesity epidemic in Ireland and is an independent predictor of child obesity across SES groups. Due to the high prevalence of obesity in parents and children, population based interventions are required.

A Study of How Economic Attitudes Are Shaped by Environmental Shocks and Life Experiences

Social attitudes, attitudes toward financial risk and attitudes toward deferred gratification are thought to influence many important economic decisions over the life-course. In economic theory, these attitudes are key components in diverse models of behavior, including collective action, saving and investment decisions and occupational choice. The relevance of these attitudes have been confirmed empirically. Yet, the factors that influence them are not well understood. This research evaluates how these attitudes are affected by large disruptive events, namely, a natural disaster and a civil conflict, and also by an individual-specific life event, namely, having children.

By implementing rigorous empirical strategies drawing on rich longitudinal datasets, this research project advances our understanding of how life experiences shape these attitudes. Moreover, compelling evidence is provided that the observed changes in attitudes are likely to reflect changes in preferences given that they are not driven just by changes in financial circumstances. Therefore the findings of this research project also contribute to the discussion of whether preferences are really fixed, a usual assumption in economics.

In the first chapter, I study how altruistic and trusting attitudes are affected by exposure to the 2004 Indian Ocean tsunami as long as ten years after the disaster occurred. Establishing a causal relationship between natural disasters and attitudes presents several challenges as endogenous exposure and sample selection can confound the analysis. I take on these challenges by exploiting plausibly exogenous variation in exposure to the tsunami and by relying on a longitudinal dataset representative of the pre-tsunami population in two districts of Aceh, Indonesia. The sample is drawn from the Study of the Tsunami Aftermath and Recovery (STAR), a survey with data collected both before and after the disaster and especially designed to identify the impact of the tsunami. The altruistic and trusting attitudes of the respondents are measured by their behavior in the dictator and trust games. I find that witnessing closely the damage caused by the tsunami but without suffering severe economic damage oneself increases altruistic and trusting behavior, particularly towards individuals from tsunami affected communities. Having suffered severe economic damage has no impact on altruistic behavior but may have increased trusting behavior. These effects do not seem to be caused by the consequences of the tsunami on people’s financial situation. Instead they are consistent with how experiences of loss and solidarity may have shaped social attitudes by affecting empathy and perceptions of who is deserving of aid and trust.

In the second chapter, co-authored with Ryan Brown, Duncan Thomas and Andrea Velasquez, we investigate how attitudes toward financial risk are affected by elevated levels of insecurity and uncertainty brought on by the Mexican Drug War. To conduct our analysis, we pair the Mexican Family Life Survey (MxFLS), a rich longitudinal dataset ideally suited for our purposes, with a dataset on homicide rates at the month and municipality-level. The homicide rates capture well the overall crime environment created by the drug war. The MxFLS elicits risk attitudes by asking respondents to choose between hypothetical gambles with different payoffs. Our strategy to identify a causal effect has two key components. First, we implement an individual fixed effects strategy which allows us to control for all time-invariant heterogeneity. The remaining time variant heterogeneity is unlikely to be correlated with changes in the local crime environment given the well-documented political origins of the Mexican Drug War. We also show supporting evidence in this regard. The second component of our identification strategy is to use an intent-to-treat approach to shield our estimates from endogenous migration. Our findings indicate that exposure to greater local-area violent crime results in increased risk aversion. This effect is not driven by changes in financial circumstances, but may be explained instead by heightened fear of victimization. Nonetheless, we find that having greater economic resources mitigate the impact. This may be due to individuals with greater economic resources being able to avoid crime by affording better transportation or security at work.

The third chapter, co-authored with Duncan Thomas, evaluates whether attitudes toward deferred gratification change after having children. For this study we also exploit the MxFLS, which elicits attitudes toward deferred gratification (commonly known as time discounting) by asking individuals to choose between hypothetical payments at different points in time. We implement a difference-in-difference estimator to control for all time-invariant heterogeneity and show that our results are robust to the inclusion of time varying characteristics likely correlated with child birth. We find that becoming a mother increases time discounting especially in the first two years after childbirth and in particular for those women without a spouse at home. Having additional children does not have an effect and the effect for men seems to go in the opposite direction. These heterogeneous effects suggest that child rearing may affect time discounting due to generated stress or not fully anticipated spending needs.

State of play: review of environmental policy integration literature. Research series paper no. 7

A report for the National Economic and Social Council (NESC), prepared by the Cleaner Production Promotion Unit, UCC offering an up-to-date review of the Environmental Policy Integration literature in both academic and policy debates. The report provides an overview of the theory and conceptual development; methodologies outlined and presents examples of current applications in policy across Europe and internationally.

EU South African Trade, Development and Cooperation Agreement: Bane or boon for socio-economic rights under the South African Constitution?

How does the EU–South African Trade Development and Cooperation Agreement serve as a tool to ensure that basic services recognised under the South African Constitution are secured and reinforced so that the most vulnerable are protected? Benefits under the agreement will be hardly maximised by South Africans if political institutions and those who serve in them fail to duly channel the benefits of the agreement to the people while at the same time minimising potential deleterious effects of the liberalisation fallout engendered by the agreement.

Ecuadorian migration and family strategies of social mobility: dialectic relation between emotional and financial capital

This text deals with transnational strategies of social mobility in Ecuadorian migrant households in Spain. We apply the capital accumulation model (Moser, 2009) for this purpose. The main target of this article is, beyond thinking in terms of capital stock and accumulation, the analysis in depth of the dynamics of the different types of capital, that is to say, how they interact with each other in the framework of the social mobility strategies of the migrants and their families. We are bringing into light the way some households adopt investing decisions in capitals that don't translate into any addition or earnings in all cases, on the contrary, concentrating all their efforts on the accumulation of a certain asset they may, in some cases, lead to a loss of another. We will concentrate our analysis primarily on the dynamics between the physical and financial capital and the social and emotional capital, showing the tensions produced between these two types of assets. At the same time, we will highlight how migrants negotiate their family strategies of social mobility in the transnational area. Our study is based in empirical material obtained from qualitative fieldwork (in-depth interviews) with families of migrants in the urban district of Turubamba Bajo -(south of Quito) and in Madrid. A series of households were selected where interviews were carried out in the country of origin as well as in the context of immigration, with different family members, analysing the transnational social and economic strategies of families of migrant members. Family members of migrants established in Spain were interviewed in Quito, as well as key informants in the district (school teachers, nursery members of the staff, etc.). The research was framed within the projects "Impact of migration on the development: gender and transnationalism", Ministry of Science and Innovation (SEJ2007/63179) (Laura Oso, dir. 2007-2010),"Gender, transnationalism and intergenerational strategies of social mobility", Ministry of Economy and Competitiveness (FEM2011/26210) (Laura Oso, dir. 201-1-2015) and “Gender, Crossed Mobilities and Transnational Dynamics”, Ministry of Economy and Competitiveness (FEM2015-67164).