Regulatory reform in telecommunications in Central and Eastern Europe

In this paper we discuss public policy towards the telecommunications sector in Central and Eastern Europe (CEE), focusing primarily on the need to ensure adequate capital investment. The analysis falls into two main parts: the regulation of monopoly, and policy on liberalization. Concerning regulation, we discuss how policy credibility is likely to be a problem in the region, and how reputational considerations, the design of regulatory institutions, and methods of price control can help to ameliorate this problem. Concerning liberalization, we consider the effects of potential competition on investment incentives, and construct a simple model to analyse the different effects of liberalization and regulatory risk on investment. Some preliminary policy conclusions are drawn, and we argue that in the CEE region – in contrast to more well developed countries – a reasonable case can be made for allowing a temporary period of monopoly for basic services.     

Public support for creating a market economy in Eastern Europe

Employing two large databases, we analyze the determinants of public support for the creation of a market economy in Eastern Europe. From a macroeconomic perspective inflation, unemployment, privatization, and enterprise restructuring reduce this support; alternatively, democratization, the creation of working financial markets, and foreign aid per capita increase support for the market. Across countries, higher inequality undermines market support. From a microeconomic perspective, labor market status, both the objective and the subjective economic situations of a person, political orientation, and the socio-demographic background of the respondent affect support for the market economy. For example, unemployed, relatively poor, older, female, and less-educated respondents living in rural areas are less inclined to favor the creation of a market economy. Journal of Comparative Economics 32 (4) (2004) 720–744.     

The political economy of housing in England

Problems of housing affordability have been afflicting parts of the UK, especially the South East of England, for a number of years. The problem is closely related to shortages in housing supply, which are, in turn, largely associated with constraints imposed by the English land planning system. A leading theory for explaining these constraints posits that they reflect political economy forces that convey the interests of current homeowners to planning decisions in disproportionate and excessively influential ways. We test this theory by examining survey data on public attitudes to house building in local communities; and by investigating whether these attitudes are related to local planning decisions. We find that there is a tendency for owner-occupiers to express greater opposition to local house building and that, in the decade to 2011, the housing stock grew significantly less in local authorities with higher proportions of owner-occupiers among local households. The results suggest the risk that planning decisions might have been distorted in favour of current homeowners is real and economically significant. We discuss a range of historical, socio-economic and policy trends that help explain why successive governments of various stripes have been reluctant to address head-on problems in housing supply and put a curb on house prices.     

Constitutional moments in Eastern Europe and subjectivist political economy

This article provides epistemic foundations for traditional rational-choice political science, to explain when and how ideas matter. Operational codes, epistemic communities and the structural patterns of ideas demonstrates the constitutional moments that occur during crises, and how ideas can underpin and direct the formation of interest groups. The implications for policy reform are discussed, along with an application to the Constitutional Moments during the transition of Central and Eastern Europe.

An exercise in political economy of tax reform

If the tax rate is endogenously determined by majority voting, then a fully effective and costless reform resulting in full tax compliance may not be supported by a majority even when the evaders (or, avoiders) are only a minority.     

The self and its interests in classical political economy

Because economic affairs involve individual action, they must be understood on the basis of a theory which is both subjective, depending on a conception of individual decision-making and especially private interest, and objective, demonstrating how the objective forces of a system of interaction including a system of production and reproduction shape outcomes of individual action. Economic theory, then, requires a conception of the individual agent or subject of economic activity. In this essay, I explore this conception as it develops in the classical theory exemplified by the work of Adam Smith and Karl Marx.     

Diminished-dimensional political economy

Economists base policy advice on models of responses by a variety of economic entities to policy adoptions. There is compelling evidence that these entities do not optimize as mainstream economics assumes. Rather, they limit decision-making to solving problems of much smaller dimensionality. We consider how political economy goes awry when ignoring diminished dimensionality, and some research avenues opened up by this realization.     

Economic reform of the electricity industries of Central and Eastern Europe

The purpose of the paper is the following: firstly, to chart how much economic reform of CEE electricity industries has taken place to date; secondly, to discuss why progress has been so limited; and thirdly, to consider the prospects over the next few years. In charting economic progress to date, we will consider and discuss progress in electricity price unbundling and rebalancing; in utility commercialization, in industry and market restructuring and liberalization; and in privatization, as well as the development of economic regulation. For the reasons outlined above, we will explore the pricing issues in some detail as they are essential for understanding the difficulties in making progress in the other aspects of economic reform. The analysis concentrates on the ten countries with which the EU has and Association Agreement and who are stated candidates for EU membership (the EU 10).     

Restructuring outcomes and the evolution of ownership patterns in Central and Eastern Europe

This paper begins from the proposition that ‘deep restructuring’ requires both finance and managerial expertise. It addresses the question of how this second stage of enterprise restructuring will come about in the majority of state-owned or former state-owned firms that are not owned by foreigners. In particular, it seeks to identify how the initial post-privatization ownership and control structure impinges on the likelihood that deep restructuring takes place. Conclusions for the design of privatization policy are drawn. The initial post-privatization ownership structures in the Visegrad countries and Russia are surveyed along with evidence of the transfer of ownership from insiders to outsiders.     

Classical political economy: the subsistence wage,and job guarantee concerns

Abstract:

In the theoretical framework of classical political economy, including the revisions of Marx and the more recent work of Piero Sraffa and others, the concept of the subsistence wage figures prominently. Here, following a recounting of this concept and demonstrating its significance not only for classical theory but also for larger social concerns, I argue that the “base wage” (as it is sometimes termed) as articulated within a “Job Guarantee” program, is (or should be) comparable to the subsistence wage but requires modification to make it (roughly) equivalent. It will be demonstrated that adherents of the classical approach did not rest their wage theory on a quasi-neoclassical supply–demand approach (with some primitive marginal productivity notion lying behind a supposed demand for labor schedule), but understood wages as socially determined where institutional and historic forces established a normative standard around which market wages gravitated. Such an approach was shared by, among others, Thorstein Veblen and John Maynard Keynes.     

The political economy of entry barriers

We study a political economy model of entry barriers. Each period the policymaker determines whether to impose a high barrier to entry, and the special interest groups try to influence the policymaker's decision. Entry is accompanied by creative destruction—when many new firms enter, old firms are more likely to be driven out of the market. Therefore the current incumbents (industry leaders) tend to lobby for a higher entry barrier and potential entrants (industry followers) are likely to lobby for a freer environment for entry. We analyze both static and dynamic versions of the model to examine what kind of environment supports a policy that blocks entry. In the dynamic model, the economy can exhibit various different dynamics. In particular, multiple steady states may arise in equilibrium.     

Banking in Central and Eastern Europe

MOCT-MOST: Economic Policy in Transitional Economies -     

The political economy of the impossible trinity

This paper reconsiders the policy trilemma in an open economy by incorporating political economy concerns. We argue that the impact of government ideology on monetary independence, exchange rate stability, and capital flow restrictions should be analyzed in the broader context of restrictions imposed by the impossible trinity instead of the usual single-dimensional constraints. Employing a de facto measurement of these restrictions for a sample of 111 countries from 1980 to 2010, we show that the impact of government ideology on a country's position in this trilemma is highly context dependent: we find that its impact on exchange rate stability and monetary independence varies between developed and developing countries. We also show that the impact of government ideology on these two trilemma components is contingent on the stance of the respective economy's business cycle. Left-leaning governments seem to favor exchange rate stability over monetary independence in case of a negative output gap; suggesting a reversal of their commonly assumed partisan preferences in economically tight times.     

Privatization Effects in Central and Eastern Europe

MOCT-MOST: Economic Policy in Transitional Economies -     

经济改革与经济学转型

我国的经济改革是在传统计划体制背景下启动的,也是在一定的改革意识引领下发生的,但在传统政治经济学框架内形成的改革理论具有一定的局限性。改革开放以来,经济学者运用现代经济学方法对中国经济进行分析,获得了有价值的成果。但是,我国经济学理论的转型还没有完成。为了深化市场经济的改革,如何科学地认识市场经济,怎样在经济学理论研究中体现现代精神,都需要在范式转型的前提下继续进行探索。     

中东欧国家法治建设进程:以合同实施为例

文章以合同法的执行为例，从六个方面概述了1990年代以来中东欧国家的法治建设进程．认为虽然各国的法治建设都取得了不同程度的进展，但是各国的法治发展水平很不平衡，而且法治的不同方面在各国的进展也存在着差异。     

The political economy of green taxes: The Belgian experience

This article deals with the main problems encountered with the implementation of the ecotax law in Belgium. Ecotaxes are product taxes on drink containers, throw-away products, packaging of certain industrial goods, pesticides and fytopharmaceutical products, paper and batteries. The implementation of these taxes is supervised by a special commission of experts. It proves to be a complex tax, where fiscal, political and institutional problems are serious barriers that have to be overcome.