PERESTROIKA AND ARMS CONTROL

Mikhail Gorbachev's perestroika has had its most conspicuous success in restructuring US.-Soviet relations. The INF treaty with the United States and the talks now under way on a prospective START agreement are major developments in international arms control. But Soviet START proposals are a threat to nuclear deterrence. START reductions in strategic nuclear weapons will decrease U.S. security dangerously unless they are implemented under the vrotective umbrella of a U.S. missile defense system.     

Chernobyl Effects on Domestic and Inbound Tourism in Sweden -- A Time Series Analysis

This paper estimates the impact of the Chernobyl nuclear accident on domestic and international tourism in Sweden. From ARIMA time series forecasts, outlier search, and intervention analysis based on regional monthly accommodation data from 1978–1989, no effect on domestic tourism is found. However, there is an enduring deterrence effect on incoming tourism. The loss of gross revenue from incoming tourism because of the Chernobyl accident, is estimated to 2.5 billion SEK.     

The Ukraine conflict,economic–military power balances and economic sanctions

The evolution and outcomes of conflicts in Europe, including the current one in Ukraine, have been influenced by the dynamics of economic, technological and military balances, which in turn are affected by the economic warfare and sanctions that have been used to alter them. This article reviews defence economic concepts of relevance to the Ukraine conflict and then draws out lessons for the present concerning power balances, military capabilities, conventional deterrence, economic warfare and counter-measures against sanctions from experiences in Europe in the twentieth century. An evaluation is made of the impacts of economic sanctions on Russia and Ukraine in 2014–2016.     

The Political Economy of Monetary Institutions in Brazil: The Limits of the Inflation-targeting Strategy, 1999–2005

Abstract

This paper suggests that the time-inconsistency approach is inadequate to analyze the political economy of monetary policy in Brazil. The paper develops an alternative theory that emphasizes distributive conflict, and argues that building credibility with a fixed exchange rate and through inflation-targeting was not central for stabilization. A contested-terrain analysis of the Brazilian case suggests that the current monetary regime benefits financial or rentier interests while the manufacturing sector and workers bear the costs of this policy.     

War and peace: Third-party intervention in conflict

This paper develops a simple sequential-move game to characterize the endogeneity of third-party intervention in conflict. We show how a third party's “intervention technology” interacts with the canonical “conflict technologies” of two rival parties in affecting the sub-game perfect Nash equilibrium outcome. From the perspective of deterrence strategy, we find that it is more costly for a third party to support an ally to deter a challenger from attacking (i.e., to maintain peace or acquiescence), as compared to the alternative case when the third party supports the ally to gain a disputed territory by attacking (i.e., to create war), ceteris paribus. However, an optimally intervening third party can be either “peace-making”, “peace-breaking”, or neither depending on the characteristics of the conflict and the stakes the third party holds with each of the rival parties.     

The role of mediation in peacemaking and peacekeeping negotiations

We develop a model of bargaining that provides a rationale for the difference in the method of negotiation, depending on the nature of the conflict. We distinguish those negotiations that take place previous to a potential conflict (peacekeeping), and negotiations inside the conflict (peacemaking). In these contexts, we study the role of a mediator who tries to achieve a certain balance between the efficiency of the agreement and the equality of the final sharing. We show that the credibility of the mediator comes from her willingness to impose delays in the negotiation, even if that implies costs. We also find how the player with a “weak” bargaining position in a conflict can strategically profit from the mediator's quest for equality. Finally, we show how the capacity of the mediator to induce a higher equality in the sharing is always higher in a peacemaking situation than in a peacekeeping one.     

The Role of the Judiciary in the Public Decision‐Making Process

Empirical work on the relationship between political corruption and the design of public institutions suggests that the structure of judiciaries is an important determinant of corruption. This study develops a simple political economic model to investigate the role of judicial oversight in the policy‐making process for corruption deterrence, focusing on two dimensions of quality of the judiciary, namely efficiency and integrity. Our analysis explicitly accounts for the possibility that, while being independent of the political authority, the judiciary itself may be vulnerable to pressure from special interests. We study endogenous policy‐making under complete information and provide general conditions for the existence of deterrence (zero‐bribe) equilibria. In particular we show that preserving the independence of judiciaries in corrupt societies proves crucial to the existence of corruption‐deterrence effects.     

Stability by deterrence in cooperative non-sidepayment n-person games

This paper reports several experimental tests of the deterrence set, a solution concept for n-person games proposed by Laffond and Moulin (1977, 1981). This solution concept is distinctive because it specifies equilibria attained through the use of threats, where threats are conceptualized as costly not only to the target but also to the user. The laboratory tests were conducted in the context of 3- and 4-person cooperative non-sidepayment matrix games. In the first experimental test, the deterrence set was juxtaposed against the imputation set. Results indicate that the deterrence set has greater predictive accuracy than the imputation set. In a series of further tests, the deterrence set was juxtaposed against both the imputation set and the von Neumann-Morgenstern stable set solution. Results again show that the deterrence set is more accurate than the imputation set, but neither the deterrence set nor the stable set is reliably more accurate than the other. Overall, these results indicate that deterrence is a viable basis for stability in cooperative non-sidepayment games.     

The short-term and long-term deterrence effects of INS border and interior enforcement on undocumented immigration

This paper analyzes the short-term and long-term deterrence effects of INS border and interior enforcement. Utilizing FY1983–FY1997 border and interior apprehensions and patrol hours data from the INS, we estimate a four-variable VAR model and find that Border Patrol enforcement has significant short-term deterrence effects. These effects are short-lived as undocumented migrants seemingly adjust to new information. Moreover, the non-existent long-term effects are apparently the consequence of basic economic fundamentals: our analysis employing microdata from both Mexico and the US suggests that the wage gap between Mexico and the US is sufficiently large to maintain the illegal migratory flow.     

“3．11”东日本大地震一周年之后日本社会的思想状况

“3．11东日本大地震”让我们反思的不仅仅是日本政府而是全世界对于核电以及核武器应该采取的态度,因为简单地将“3．11”和“8．15”联系在一起考虑蕴含着认识论上的危险。我们需要认真考虑大江健三郎所提到的“日本事实上的再度军备化”以及日本国民“对于美国核威慑力有效性的没有来由的信赖”,重新思考“日美安全保障条约体制”以及“日关原子力协定体制”。在此基础上,我们需要警惕“由政官产学媒组成的五角形构筑的关于安全神话的童话”。“3．11”之后日本民主党政权越发趋于保守,而正是因为处在这样一个时期。构筑真正意义上东亚长期的可持续的生活和安全的知识分子之间的交流实践是不可或缺且意义重大的。     

邻避冲突的地方政府决策诱因探析

近年来，随着城市化进程的快速推进，邻避冲突作为一类特殊的群体性事件在我国频繁发生。从地方政府决策角度而言，行政决策理念的偏误、公共决策机制的不完善、政府公信力的缺失是造成邻避冲突的重要诱因。这就要求地方政府遵循公开和预防的决策原则，完善公民参与型决策机制，并对附近居民给予适当的补偿和回馈。     

Inflation targeting credibility and reputation: The consequences for the interest rate

The measurement of credibility and reputation is fundamental for the analysis of countries which adopted inflation targeting. Under this perspective, the objective of this article is to illustrate which measures of credibility and reputation are most useful in predicting variations of interest rates. Given a specific inflation target, this relationship is valuable for central bankers as well as for private agents trying to predict the central bank's policies. Due to the fact that Brazil represents a potential laboratory experiment in which the effects of an adoption of inflation targeting after more than a half decade can be observed, an analysis through several indices and its relation with the basic interest rate is made. The findings denote that the credibility indices based on reputation represent an alternative in the cases where the series of inflation expectation are not available. Furthermore, the empirical evidence confirms the hypothesis that higher credibility implies lower variations in the interest rate for controlling inflation.     

Does clarity of central bank communication affect credibility? Evidences considering governor-specific effects

Central banks have made great efforts to increase transparency and accountability to the public. Since then, studies seek empirical evidences about the effects of monetary policy communication over agent’s expectations. The recent literature on central bank communication draws attention to the importance of clarity of central bank communication. However, researches on this theme are still scarce, and there are few empirical studies with conclusive findings. Our study seeks empirical evidences on the relation between clarity of central bank communication and credibility of monetary policy. Estimates through different methods aim to identify whether clarity of central bank communication improves credibility. The study is the first to provide empirical evidence that a clearer communication can improve credibility. We also consider the differences between the two governors who ruled the Central Bank of Brazil in the period under analysis. The results indicate that a clear communication can improve credibility, but it depends on the commitment of the central banker with the goal of inflation control. Furthermore, estimates based on quantile regression indicate that the benefit brought by the clarity to the credibility depends on the commitment of the monetary authority with the goal guiding inflation expectations.     

Fair,reasonable, and non-discriminatory terms and technology adoption: standard setting vs. incompatible technologies

The present paper shows that in the absence of fair, reasonable, and non-discriminatory (FRAND) licensing terms, the adoption of a standard depends on the degree of network effects. If the degree of network externalities is low, patent holders may opt for developing incompatible technologies in order to avoid the entry deterrence in the downstream market and the resulting decrease in the royalty income. If the degree of network externalities is sufficiently high, patent holders may prefer developing a common standard even though it has a negative impact on the market entry in the downstream market. Generated network externalities are then sufficiently high to create additional demand compensating the losses from the entry deterrence. The application of FRAND terms eliminates the entry deterrence problem and by consequence stimulates the standard adoption. The use of the FRAND commitment has beneficial effects for consumer surplus and total welfare.     

Survey on the Shadow Economy and Undeclared Earnings in OECD Countries

Abstract. In most OECD countries the policy instrument of choice to prevent people from working in the shadows has been deterrence. While deterrence is well founded from a theoretical point of view, the empirical evidence on its success is weak: tax policies and state deregulation appear to work much better. The discussion of the recent literature underlines that in addition to economic opportunities, the overall situation in the labor market and unemployment are crucial for an understanding of the dynamics of the shadow economy.     

论登记对抗主义在物权变动中形成的利益冲突

物权变动登记时抗主义试图结合公示的公信力,让物权变动昭告天下.其本质上是意思主义.这就使得对抗主义在努力兼得意思主义和公示实质主义两种模式之优点的同时,也带来了两种模式联体作用所产生的矛盾效果:有对抗力的物权与无对抗力的物权同时存在于同一物.两个物权皆系依法取得,都是适格法权,理应受同等保护,然而基于标的物的不可分割性,两个物权必然相克,损害物权的静态安全和动态安全,并实际上对恶意串通予以不当激励,形成尖锐的利益冲突.应当理顺我国物权变动制度的逻辑体系,统一采用登记生效主义.     

RESOURCE CURSE,POLITICAL ENTRY,AND DEADWEIGHT COSTS

A simple model of political entry in a two‐sector economy is developed to analyze the effects of natural resource wealth on economic policy, political development, and civil insurrection. The model emphasizes the role of political entry and deadweight costs of taxation on the joint determination of these economic and political outcomes. Contrary to popular belief, my model shows that natural resource abundance is an economic blessing even in a rent‐seeking society, although resource dependence can be negatively associated with economic performance. In a contested political market, dictators care about popular support and hence resource wealth can help reduce the deadweight cost of taxation (and hence the cost of public good provision). On the other hand, natural resource wealth can be a political curse, because it encourages political entry and hence it induces incumbent dictators to run more repressive regimes. With constant returns counterinsurgent technology, however, the equilibrium number of insurgents is independent of the size of resource wealth. The onset of civil war, therefore, depends on the counterinsurgent technology and whether the costs of entry deterrence are affected by resource wealth. This helps clarify the two seemingly contradictory hypotheses that “resource wealth enhances regime durability” and “resource wealth fuels conflict.”     

政府公信力与区域经济增长——基于新经济地理学的空间经济分析

政府公信力反映了公众对政府行为的满意程度,对区域经济发展具有重要的影响作用。政府公信力具有明显的空间差异性,是区域经济发展的重要空间向度。基于新经济地理学的空间经济建模技术,显著具有空间差异性的政府公信力完全可以纳入到空间经济增长理论模型当中,这不仅可以深入探究政府公信力在区域经济增长中的作用机制,而且通过理论分析和模型推演还可以进一步揭示出,政府公信力在区域经济增长的路径选择上具有重要的作用,是区域经济差异化的重要推进力量。     

An investigation into the credibility of currency board arrangements in Bosnia and Herzegovina and Bulgaria

Currency Boards are usually argued to increase the credibility of the monetary authority, although this effect ultimately depends on the economic, political and institutional circumstances in the specific country. Few studies have previously been able to address this issue empirically. Using a novel database, the analysis conducted in this paper finds that, other things being equal, the credibility of the monetary authority is likely to be higher in those European transition countries with currency board arrangements, namely Bosnia and Herzegovina and Bulgaria. The results also suggest that currency board arrangements are more likely to increase the credibility of the monetary authority in countries with a low level of trust in government and a weak economy. These findings imply that the maintenance of currency board arrangements in recent years in Bosnia and Herzegovina and Bulgaria may have been advantageous.     

Costs of civil war and fragile states in Africa

This paper provides an analysis of the costs of conflict for the countries that are most affected by it, namely low‐income and fragile countries in Africa. It provides an analysis of the impact of conflict on economic growth using a panel of African countries and investigates the differences between those categorized as fragile and others. It finds that there are significant differences, with fragile countries most affected by conflict. It also considers the potential spillover effects of conflict and finds that fragile states also suffer more from conflicts within neighboring states. Finally, it considers whether the results are robust to endogeneity of the conflict variable. Using instrumental variable estimation confirms the negative effect of conflict and the larger effects on fragile states and gives even larger coefficient estimates.