Short- and long-term relation between economic development and government spending: the role of quality of institutions

ABSTRACT

This paper tests the Wagner’s assumption of the one-sided directional flow moving from economic growth to public spending considering an international database over the 1996–2012 period. By using indicators on the level of country control of corruption, government effectiveness, political stability, rule of law, regulatory quality and voice and accountability, the paper analyses the economic performance-public spending nexus controlling for the quality of the institutions. The empirical evidence supports the existence of the Wagner’s law, showing that, in the short-run, public spending positively reacts to a positive shock in national income, with a lower magnitude for democratic countries. In the long run, the error-correction model shows the convergence between public spending and national output occurring less quickly for non-democratic, low-income and to a smaller extent for non-OECD countries. Institutional quality, such as effort in controlling corruption and the presence of regulations that permit and promote private sector development, may help reducing the amount of per capita public spending and making it more productive. Higher expenses in compositional amenities such as public services for the elderly may explain why public spending per capita will increase the most in economies with a higher share of the population that need healthcare facilities.     

Democratic Accountability,Regulation and Inward Investment Policy

We examine the effect of domestic political accountability on leaders' strategies for attracting foreign direct investment to less developed countries. We consider two policy areas: the tax burden imposed on firms and the regulatory environment in which they operate. We find that democratic governments are more likely to offer relatively lower tax rates to foreign investors, whereas autocratic governments are more likely to offer relatively lax regulation. This result is driven by the greater elasticity of the political survival function to environmental and labor regulations in more democratic countries. Analyses of firm‐level survey data confirm our main theoretical conclusions.     

The Myth of Market Neutrality: A Comparative Study of the European Central Bank’s and the Swiss National Bank’s Corporate Security Purchases

ABSTRACT

Monetary policy operations in corporate security markets confront central banks with choices that are traditionally perceived to be the prerogative of governments. This article investigates how central bankers legitimise corporate security purchases through a comparative study of the European Central Bank (ECB) and the Swiss National Bank (SNB). As we show, central bankers downplay the novelty of corporate security purchases by relying on familiar pre-crisis justifications of Central Bank Independence. Citing an ideal of ‘market neutrality’, central banks present corporate security purchases as pursuing a narrow objective of price stability and obfuscate their distributive consequences. In this way, central bankers depoliticise corporate security purchases: they reduce the potential for choice, collective agency, and deliberation concerning both the pursuit of corporate security purchases and the choices made in implementing these policies. We also describe the undesirable democratic, social and environmental dimensions of these practices, which we propose to address through enhanced democratic accountability.     

Independent courts and administrative agencies: an empirical analysis of the states

This article explores the hypothesis that state administrativeagencies spend more time and effort attempting to protect theiractions from judicial review in states with more independentappointed courts (as opposed to less independent elected courts).This is because more independent courts are (by definition)less influenced by the political/electoral forces that underlieagency - policymaking - as rational actors, agencies may thereforebe expected to recognize the degree of judicial independenceand respond to it. Three state agencies subject to substantialjudicial review in the 1970s are examined: utility commissions,insurance commissions, and the public education bureaucracy.Controlling for relevant political factors, each is found tohave significantly larger staffing for a given regulatory workloadin states with more independent appointed courts, consistentwith the hypothesis.     

Accountability and legitimacy in earth system governance: A research framework

Along with concerns over the effectiveness of earth system governance, ways of enhancing its accountability and legitimacy are increasingly coming to the fore in both scholarly debate and political practice. Concerns over accountability and legitimacy pertain to all levels of governance, from the local to the global, and cover the spectrum of public and private governance arrangements. This conceptual article elaborates on the sources, mechanisms and reform options relating to more accountable, legitimate and democratic earth system governance. We proceed in four steps. First, we conceptualize accountability and legitimacy in earth system governance. Second, we place questions of accountability and legitimacy within the larger context of earth system transformation, which, we argue, poses special challenges to the pursuit of accountability and legitimacy. Third, drawing on the contributions to this special section, we analyze different sources and mechanisms of accountability and legitimacy and their effects on the democratic potential and effectiveness of governance. Fourth, in concluding, we outline reform options that may help alleviate persisting deficits in the democratic potential of earth system governance.     

社会资本、民主发展与政府治理——对69个国家的比较研究

社会资本被认为是社会的润滑剂和善治的社会基础。很多文献认为,高水平的社会资本能够提高政府的治理绩效。但是目前国内外的研究均忽略了社会资本发挥作用的制度环境。本文通过对全球69个国家的实证数据进行比较分析后发现,社会资本能否对政府治理产生影响,依赖于一定的制度环境。在民主制度建设不完善、民主发展水平较低的情况下,社会资本对政府治理并不能产生显著的影响;只有在民主发展水平比较高、民主制度比较健全的情况下,社会资本才能显著地促进政府治理绩效的提高。而且,民主制度建设得越完善、越充分,社会资本对治理的正面促进作用就越大。     

The time-varying independence of Italian peak judicial institutions

The paper investigates the stability of the degree of independence of the judiciary vis à vis both the classical political branches and other independent institutions, such as regulatory agencies, using evidence about the Italian Constitutional Court and the Council of State. Both peak judicial courts feature time varying factors of independence that affect their jurisprudence, especially in the case of the legitimacy review by the Constitutional Court. The less conclusive evidence found in the Council of State related to decisions of independent regulatory authorities might be due to the more complex set of interactions in which the Council operates.     

Diversity and pluralism in earth system governance: Contemplating the role for global administrative law

This article aims to explore whether procedural rights and administrative law mechanisms - such as, for example, the right to a hearing, the duties to provide a reasoned decision and to disclose relevant information - can enhance the accountability and democratic legitimacy of earth system governance.The democracy-enhancing potential of such mechanisms and rights - which in the national context have proved to be beneficial in strengthening citizens' participation and the acceptance of decisions - can be limited in the global arena, by a number of factors. One of these factors is “legal imperialism”, understood as the grafting onto the global level rules and institutions that impose the hegemony of western values.In fact, administrative law mechanisms, being a construct of a certain type of western, liberal model of the state (and its capitalist model of development), could be perceived, in developing countries as an instrument to reproduce the dominant position of advanced industrialized countries and their economic actors.The analysis suggests that in order to realize their democracy-enhancing potential, these mechanisms should draw, as far as possible, on cross-cultural principles, and be supported by financial and technical instruments enabling “developing countries” and marginalized groups to engage in dialog with the most powerful actors.     

South African fiscal relations

The democratic political system emerging in the new South Africa is not a sufficient condition to secure a stable society. The structure and composition of intergovernmental fiscal relations will become a very important dimension of public sector reform for the future South Africa. Historically, the South African government has been highly centralized. 1994 will record the beginning of the devolution and sharing of important responsibilities to subnational governments and the planning and implementation of new decentralized arrangements. Whether the new dispensation will adhere to the general economic principles of fiscal decentralization will in the first instance depend on the principles enshrined in the new constitution. The aim of this paper is to differentiate several key drivers which reflect upon the ability of the Government of National Unity to break away from the deeply ingrained institutions of apartheid. The paper starts with some constitutional issues relative to intergovernmental fiscal relations and economic performance. Second, I provide an overview of the theory of intergovernmental fiscal relations and examine the implications for the design of an intergovernmental financial system. Third, the current structure of intergovernmental fiscal relations in South Africa is sketched. Fourth, I review the current output of the constitutionally established Fiscal and Finance Commission which serves as an advisory body to parliament to ensure greater transparency, efficiency, consistency, and predictability of fiscal policy. Finally, the paper concludes with some challenges ahead.     

耦合视角下科研项目问责与绩效评价关系研究:多证据的探索性分析

分析了科研问责与科研绩效评价的耦合关系,以不同层级科研管理机构为研究对象,采用耦合协调度模型对耦合关系进行了实证验证。结果表明,当前我国科研项目问责与绩效评价耦合协调度总体处于濒临衰退阶段;与省(市)和副省级城市相比,国家层面的科研项目问责与绩效评价耦合协调度更高;省(市)层面与副省级城市层面的科研项目问责与绩效评价耦合协调度没有明显差异;总体来看,科研问责与绩效评价对科研项目绩效提升的贡献度不高。     

国家审计结果公告制度研究——基于信号博弈

在我国大力推进民主法制建设的大背景下,公告审计结果已经成为政府的必然选择.审计结果公告制度作为一种信息披露制度,一方面可以解除政府及审计机关的公共受托责任,另一方面为公众监督政府提供了有效途径.但就我国目前的审计结果公告现状来看,不公告审计结果依然是常态,显然,这种状况与我国民主法制建设的发展要求相悖,无法发挥国家审计联系政府和公众的“信息纽带”作用,无法推动社会民主进程的进一步发展.本文通过构建政府与公众的信号博弈模型并求解其均衡路径,以揭示全面实施国家审计结果公告制度的关键条件,据此从建立审计质量评价体系、形成有效的审计人员监督培训机制、提高公众的监督能力和加大处理处罚力度四个方面提出保证我国国家审计结果公告制度有效运行的政策建议.     

How large is the local fiscal multiplier? Evidence from Chinese counties

The paper estimates local fiscal multipliers using annual data for 1800 China counties. The identification exploits a peculiar feature of the allocation mechanism of China's intergovernmental transfers that triggers exogenous variations on local public spending. When aggregate central-local transfers go up at the national level, National Poor Counties can receive a disproportionate amount of transfers. We therefore construct an instrument that captures this heterogeneity in the response of local public spending to national central-local transfers. The analysis points to local fiscal multipliers of approximately 0.6, which is much lower than the estimates in most previous studies. The effects of local public spending are concentrated on non-tradable industries. Finally, we find local public spending has striking effects on stimulating in-county investment, but has negligible effects on stimulating in-county consumption.     

Government accountability and fiscal discipline: A panel analysis using Swiss data

Government accountability through electoral engagement, involvement and participation in the political debate can affect government performance. Using data for the full sample of Swiss cantons over the 1981–2001 period, this paper provides empirical evidence that government accountability is crucial for fiscal discipline. Specifically, in cantons with high levels of government accountability, the level of indebtedness is significantly lower, indicating that accountability supports fiscal discipline. To obtain a useful approximation for government accountability between citizens and their representatives, we use information from direct voter participation in political decisions (initiatives and public referenda) in Swiss state (cantonal) governments. Electoral support of government proposals reveals an important aspect of accountability in a real world setting.     

Industrial Policy and Corporate Power

A central piece of regulatory policies governing genetically modified organisms (GMOs) has been the creation of expert bodies aiming at evaluating the risks of releasing these organisms into the environment. Taking into account an institutionalist approach based on the legal-economic nexus, the aim of this paper is to present the Brazilian experience in the regulation of GMOs. This experience is revealed as a biased process by which democratic principles, such as transparency and public participation, are obliterated by a technocratic model of regulation aiming at guaranteeing legitimacy for a decision-making process aligned with interests of technology providers.     

Bound by Gravity or Living in a ‘Post Geography Trading World’?* Expert Knowledge and Affective Spatial Imaginaries in the Construction of the UK’s Post-Brexit Trade Policy

A key battle has been fought within the UK cabinet on the direction of post-Brexit trade policy. The opposing sides have favoured either continued alignment or a ‘hard’ break with the European Union’s (EU’s) regulatory and customs regime, in the latter case to allow the UK to pursue an independent and ambitious trade policy agenda. Contrary to much commentary on ‘post-truth’ politics, both sides have relied on rival forms of expertise to support their claims. I argue for the need to not only re-emphasise the malleability and political nature of expert knowledge, but also appreciate its emotional bases. The Treasury has led the charge in favour of a softer Brexit by drawing on econometric (‘gravity’) models that emphasise the economic costs of looser association with the EU. In contrast to this attempt at technocratic legitimation, the specific legal expertise drawn upon by cabinet advocates of ‘hard’ Brexit has appealed to an emotive political economy of bringing the UK, and its (in this imaginary) overly regulated economy, closer to its ‘kith and kin’ in the Anglosphere, deepening the UK ‘national business model’. I conclude by calling for more explicitly emotive and values-based argumentation in the public debate on the UK’s future trade policy to improve the quality of democratic deliberation.     

民主制度的责任视角:一个基本模型

竞争性民主是现代民主制度的主要实现方式。政治竞争的一些内在特征,包括选民"选择"行为特点、信息不对称以及候选人事前承诺不可置信等问题常常导致无效竞争。保证民主选举中竞争有效运行的关键在于存在保证竞选人在当选后的任期中会努力实现自己承诺的责任机制,从而提高事前承诺的可置信程度。文章通过一个简单的正式模型展示了这一点,进而尝试从选举机制、评价机制与声誉机制等方面初步探讨构建审责机制的可能路径。     

民主党派成员是大学生思想政治工作的重要力量

高校民主党派成员近年发展较快,这支队伍知识层次较高,参政议政能力较强,且社会联系广,敏感性较强,是一股重要的政治力量。民主党派成员在大学生思想政治工作中具有独特优势,我们要发挥他们的这种优势,加强民主党派成员自身道德建设,让他们在大学生思想政治工作中发挥重要作用。     

Independent agencies: more than a cheap copy of independent central banks?

The rise of independent regulatory agencies (IRAs) confronts governments with new challenges. More specifically, it raises the twin issue of (democratic) legitimacy of both the IRAs and of the delegating government once a large number of key areas of policymaking are moved outside its direct control. So, the effectiveness of IRAs depends on their interactions with the other branches of government and on governance arrangements that provide the right incentives to all stakeholders involved. To identify such models, this paper first reiterates the history of independent central banks, the prototype IRA. The main lesson from is that the independent central bank model is characterized by an independence-bias and that there is a growing realization that more attention needs to go to the entire governance model, as opposed to simply independence. Based on this lesson, the paper proposes a governance model for IRAs based on independence, accountability, transparency and integrity to provide the right incentives to all stakeholders. The last part of the paper empirically illustrates how policymakers are currently dealing with two of these four pillars—independence and accountability—when redesigning financial sector supervisors. More specifically we show that the virtuous interaction between independence and accountability is not (yet) always well understood.     

Public interest versus regulatory capture in the Swedish electricity market

This article tests the public interest and regulatory capture hypotheses, in the context of the Swedish electricity market, by studying the factors influencing the Swedish Energy Agency’s decision to replace decision-makers it employs to hear customer complaints against utilities. The study covers the period from the beginning of 1996, when a series of regulatory reforms were introduced to improve consumer protection, until the end of 2008. The study concludes that decision-makers who find in favor of customers have had a statistically lower probability of being removed, consistent with public interest theory. A transitory effect of favoring utilities can be observed for the period from 2 to 6 years following the reforms. In this period, government and public scrutiny of the regulator, which had been high in the immediate aftermath of the reforms, had waned and there were few precedents decided by the courts that the regulator was required to follow. This vacuum created an opportunity for the utilities to increase their influence over the regulator. Once the courts started establishing precedents in relatively large numbers, the supervisory role of the courts ensured that the actions of the regulator were scrutinized. This development has served a similar function to government and public scrutiny in the years immediately following the reforms in promoting the public interest.