Political Economy of the Web

Slides to introduce political economy, and its relevance to the study of the Web. Brief review of methods and issues.

Human capital and growth under political uncertainty

In this paper we show how political uncertainty may impede economic growth by reducing public investment in the formation of human capital, and how this negative effect of political uncertainty can be offset by a government contract. We present a model of growth with accumulation of human capital and government investment in education. We show that in a country with an unstable political system the government is reluctant to invest in human capital. Low government spending on education negatively affects productivity and slows growth. Furthermore, a politically unstable economy may be trapped in a stagnant equilibrium. We also demonstrate the role of a government retirement contract. Public investment in education and economic growth are higher when the future retirement compensation of the government depends on the future national income, in comparison with investment under zero or fixed retirement compensation.

International terrorism, domestic political instability, and the escalation effect

What are the main causes of international terrorism? Despite the meticulous examination of various candidate explanations, existing estimates still diverge in sign, size, and significance. This article puts forward a novel explanation and supporting evidence. We argue that domestic political instability provides the learning environment needed to successfully execute international terror attacks. Using a yearly panel of 123 countries over 1973–2003, we find that the occurrence of civil wars increases fatalities and the number of international terrorist acts by 45%. These results hold for alternative indicators of political instability, estimators, subsamples, subperiods, and accounting for competing explanations.

Does political proximity to the U.S. cause terror?

We analyze the impact of political proximity to the United States on the occurrence and severity of terror. Employing panel data for 116 countries over the period 1975–2001 we find that countries voting in line with the U.S. are victims of more and deadlier attacks.

The diversity of diversity: further methodological considerations on the use of the concept in cultural economics

The implications of diversity still raise confusion in the cultural debate. We address them from both a formal and conceptual viewpoints, putting in check the validity of some arguments. We conclude that: measuring diversity demands key decisions and careful statistical procedures; ignorance on optimal diversity levels and on ways to generate them is widespread in the cultural field; there is no support for cultural diversity as something associated to fair economic and political systems; restriction to sheer economics requires the establishment of links between diversity and measurable properties – something rather incipient. Diversity, as a social choice, should be distinguished from it as an economic value.

Diretor da London School of Economics, Craig Calhoun, é recebido pela FGV/DAPP durante visita institucional

O Diretor da London School of Economics and Political Science (LSE), Craig Calhoun, foi recebido na terça-feira (29) pelo Presidente da Fundação Getulio Vargas, Carlos Ivan Simonsen Leal, durante visita institucional à FGV. Pela manhã, os presidentes das duas instituições tiveram uma reunião com a presença do Secretário-Executivo da LSE, Hugh Martin, do Diretor da DAPP, Marco Aurélio Ruediger, do Diretor da EPGE (Escola Brasileira de Economia e Finanças), Rubens Cysne, da Diretora-Executiva da Editora FGV, Marieta de Moraes Ferreira, e do Prof. Antônio Carlos Porto Gonçalves, também da EPGE. No encontro, foi discutido o maior intercâmbio de alunos entre a LSE e a FGV e em projetos de pesquisa. À tarde, Calhoun realizou uma visita à sede da DAPP, onde participou de uma reunião de apresentação dos métodos de monitoramento e análise de rede desenvolvidos pela DAPP. Participaram da reunião, além do Diretor da DAPP, os pesquisadores Roberta Novis, Amaro Grassi e Pedro Lenhard.

The determinants of IMF fiscal conditionalities: economics or politics?

Conditionalites, measures that a borrowing country should adopt to obtain loans from the IMF, are pervasive in IMF programs. This paper estimates the effects of political and economic factors on the number of conditionalities and on the fiscal adjustment requested by the IMF. As found in the literature, political proximity of the borrowing country to the Fund’s major shareholders has an important effect on the number of conditions in an agreement. However, the fiscal adjusment requested by the IMF is strongly affected by the size of a country’s fiscal deficit but not by political proximity. We also find a very small correlation between the number of conditions and the fiscal adjustment requested by the IMF

Spatial spillovers and political coordination in public health provision

We estimate the impact of the main unconditional federal grant (Fundo de Participaçãodos Municípios - FPM) to Brazilian municipalities as well as its spillover from the neighboring cities on local health outcomes. We consider data from 2002 to 2007 (Brollo et al, 2013) and explore the FPM distribution rule according to population brackets to apply a fuzzy Regression Discontinuity Design (RDD) using cities near the thresholds. In elasticity terms, we nd a reduction on infant mortality rate (-0.18) and on morbidity rate (- 0.41), except in the largest cities of our sample. We also nd an increase on the access to the main program of visiting the vulnerable families, the Family Health Program (Programa Sa ude da Família - PSF). The e ects are stronger for the smallest cities of our sample and we nd increase: (i) On the percentage of residents enrolled in the program (0.36), (ii) On the per capita number of PSF visits (1.59), and (iii) On the per capita number of PSF visits with a doctor (1.8) and nurse (2). After we control for the FPM spillover using neighboring cities near diferent thresholds, our results show that the reduction in morbidity and mortality is largely due to the spillover e ect, but there are negative spillover on preventive actions, as PSF doctors visits and vaccination. Finally, the negative spillover e ect on health resources may be due free riding or political coordination problems, as in the case of the number of hospital beds, but also due to to competition for health professionals, as in the case of number of doctors (-0.35 and -0.87, respectively), specially general practitioners and surgeons (-1.84 and -2.45).

Index of political instability in Brazil, 1889-2009

This article aims to develop an index of political instability (ins) in Brazil between 1889 and 2009, reflecting a wide-ranging set of multiple phenomena that represent conflicts between the different social groups. By presenting different definitions of what is understood by political instability in the economics literature and by using multiple historical events —coups d’état, civil conflicts, constitutional or unconstitutional overthrow and changes in the composition of 50% of the ministerial cabinet— different indicators are obtained which are then synthesized into a single index using the principal component technique, to obtain an ins for Brazil between 1889 and 2009.

Birth, Development and Progressive Institutionalization of the Ombudsman in the Russian Legal and Political System

One of the current trends in governance and legal development in Russia is aimed at establishing a modern, efficient and internationally harmonised system of safeguards of human rights and civil liberties. A fairly recent addition to this system has been the institution of ombudsman as a public authority specialised in promoting and protecting human rights and civil liberties. The introduction of this institution as well as its formalisation at the constitutional and legislative levels has been increasingly relevant and important, as it raises the dealings between the state and the individual to a new level. As an independent public institution resolving conflicts between citizens and government authorities, the ombudsman makes steps, within the scope of his jurisdiction, to restitute individual rights, and helps to enhance the reputation of government. The present work describes and assesses the birth, development and institutionalization process of the Ombudsman Office in the Russian Federation, at federal and regional levels, with a particular emphasis on the role of international references and cooperation for institution building. Ombudsmen have done a magnificent job in demonstrating value with the resolution of individual and systemic complaints; subsequent improvements to government; and economic savings by mitigating litigation costs.

A Law and Economics Analysis of Lobbying Regulation Towards an optimal structure through the Cost Indicator Index

This research primarily represents a contribution to the lobbying regulation research arena. It introduces an index which for the first time attempts to measure the direct compliance costs of lobbying regulation. The Cost Indicator Index (CII) offers a brand new platform for qualitative and quantitative assessment of adopted lobbying laws and proposals of those laws, both in the comparative and the sui generis dimension. The CII is not just the only new tool introduced in the last decade, but it is the only tool available for comparative assessments of the costs of lobbying regulations. Beside the qualitative contribution, the research introduces an additional theoretical framework for complementary qualitative analysis of the lobbying laws. The Ninefold theory allows a more structured assessment and classification of lobbying regulations, both by indication of benefits and costs. Lastly, this research introduces the Cost-Benefit Labels (CBL). These labels might improve an ex-ante lobbying regulation impact assessment procedure, primarily in the sui generis perspective. In its final part, the research focuses on four South East European countries (Slovenia, Serbia, Montenegro and Macedonia), and for the first time brings them into the discussion and calculates their CPI and CII scores. The special focus of the application was on Serbia, whose proposal on the Law on Lobbying has been extensively analysed in qualitative and quantitative terms, taking into consideration specific political and economic circumstances of the country. Although the obtained results are of an indicative nature, the CII will probably find its place within the academic and policymaking arena, and will hopefully contribute to a better understanding of lobbying regulations worldwide.

The Turkish Drawbridge: European Integration and the Cultural Economics of National Planning

This article examines the relations between the Turkish State Planning Organisation (SPO) and the Western economic system during the first two decades of national planning in Turkey (1960–1980). It traces how the SPO, established with the guidance and full endorsement of international economic institutions came to vehemently oppose Turkish participation in one of their pillars: the European Economic Community (EEC), the predecessor of the European Union. It argues that the shift in the SPO's world-view was founded upon two distinct understandings of the Turkish nation and its development, situates these understandings within the intellectual history of Turkey's past ambivalence towards the West, and, in doing so, provides a historical case-study of the ideological clash between modernisation and dependency theories of development.