How market access shapes human capital accumulation in a peripheral country: the case of Spain

Human capital endowment is one of the main factors influencing the level of development of a region. This article analyses whether remoteness from economic activity has a negative effect on human capital accumulation and, consequently, on economic development. Making use of microdata, this research proves that remoteness from economic activity can explain the differences in the level of education observed across Spanish provinces over the last 50 years. The effect is significant even when controlling for the improvement of education supply. Nonetheless, the accessibility effect has been petering out since the 1960s due to decreasing barriers to mobility.     

Growth volatility and the interaction between economic and political development

Research on the effect of democracy on economic growth has not reached a definitive conclusion. Yet, research on the effect of democracy on economic growth volatility has consistently found that higher levels of democracy reduce volatility. Similarly, research has found that higher levels of economic development retard volatility. Using a novel empirical approach, this article presents evidence of an interactive effect between higher levels of democratization and economic development on growth volatility. Specifically, the marginal effect of political development on volatility is negative until countries reach per capita income levels of about $2,700, depending on the conditioning set. The marginal effect is insignificant for countries with higher levels of income. This implies that at a minimum, nearly 50% of the countries in our sample could enjoy less volatile economies with greater political development.     

Modelling and analysing voting behaviour: the case of the Spanish general elections

The permanent high-level public and private debt, high unsustainable youth unemployment rates, combined with the constant disclosure of establishment parties’ corruption scandals, are features of the present Spanish scenario. Lack of confidence in the government’s labour is driving a large proportion of the electoral register to support new emergent political parties. This article models and analyses Spanish citizens’ electoral behaviour in what were the last Spanish General Elections (2015). The proposed compartmental model is based on a system of six different equations. Transition coefficients are quantified according to economic, demographic, psychological and sociological factors. After obtaining the initial data from previous general elections and by sampling new voters’ intentions, the expected electoral support was computed and analysed. Our results predict the end of the two-party system in Spain and a change to a main four-party system.     

Public Finance in Spain in the early twentieth century

Abstract

Spanish political economy experienced a profound decadence during the second half of the nineteenth century. Such period of isolation came to an end during the early twentieth century. The most outstanding economists of that period such as Flores de Lemus, Bernis or Torres were persuaded that Spanish economic development was strongly linked to a tax system reform. At the same time, numerous writings on public finance were published by secondary authors and a wide range of foreign handbooks were translated into Spanish. Consequently, public finance became an outstanding channel for the introduction of marginal theory and German Historicism into Spain.     

国际贸易与全要素生产率——基于中国省际面板数据的门槛回归分析

利用中国30个省际区域1998年至2012年的数据,采用门槛回归分析方法检验国际贸易对全要素生产率影响的门槛效应,结果发现正门槛效应的存在,即对于经济不发达地区,国际贸易与全要素生产率是显著负相关,随着经济发展水平的提高,这种关系由负转为无影响,然后由无影响转为正影响,正影响又会随着经济发展水平越过一个更高的门槛由小变大。     

Fiber deployment in Spain

Next generation access networks will be critical for future economic growth and access to these infrastructures will have major consequences for territorial and social cohesion. This paper examines the economic and competition determinants that serve as incentives for operators to invest in fiber-to-the-home technology. We draw on a dataset comprising 6603 Spanish municipalities with access to broadband services to examine the incumbent’s (Telefónica) deployment of fiber in the period 2010–2013. We show that local loop unbundling competition had a strong positive impact on Telefónica’s fiber deployment, while bitstream competition had a negative effect. Moreover, the incumbent was more likely to invest in municipalities with a large presence of cable operators. We also consider how the municipalities’ sociodemographic characteristics affected the operator’s deployment decision. While market size and population density had a positive effect on investment, the level of unemployment and the percentage of elderly population had a negative impact.     

Environmental (De-) Regulation, Competition, and Policy Rules

This article analyzes some problems regarding our knowledge of environmental policy. Sustainable development as the prospective enlargement of the political agenda has been identified as a long-term challenge for economic policy which could get trapped in a new form of interventionism. The evolutionary market approach that is presented here focuses on development risks of environmental policy that are mostly neglected in standard theory. A transfer of the Hayekian concept of negative rules to the realm of environmental policy is critically discussed. A straight-forward transfer of Hayek's theory stressing the importance of negative rules cannot be recommended, since even the negative rules carry some development risks in the realm of environmental policy. Some preliminary political consequences are drawn which are appropriate to limit the extension of environmental targets in the future.     

Network infrastructure spillover in private productive sectors: evidence from Spanish high capacity roads

Interest in public infrastructure research has been a subject of increasing concern to economists and policy-makers. This article aims at analysing the locational impact of the high capacity roads (HCR) on the Spanish private economic activity from 1970 through 1998, given that this is one of main infrastructure-based development strategy undertaken in Spain in this period. In a stochastic frontier production-function framework, we allow for modelling of provincial heterogeneity through the existence of different efficiency levels in the territorial units. Results show HCR spillovers between geographically close provinces and between provinces displaying similar socio-demographic characteristics and government size. To the extent that the magnitude and sign of these impacts differ across sectors a reasonable explanation of the limited impact of HCR on aggregate private production could be made. The presence of a negative spillover effect in the industrial and business service sector suggests that Spanish provinces may have used HCR capital as a competitive tool for attracting factors of production leading to a rearrangement in these economic activities.     

Political capitalism: The interaction between income inequality,economic freedom and democracy

We study the relationship between income inequality and economic freedom for a panel of 100 countries for the 1971–2010 period. Using a panel Granger non-causality approach, we reject the null hypothesis of Granger non-causality running from income inequality to economic freedom, but not vice versa. From a series of dynamic panel estimations we show that the effect of income inequality on economic freedom is negative and robust to the inclusion of additional controls. In particular, inequality is negatively associated with those components of economic freedom related to international trade, domestic market regulation as well as the rule of law and property rights protection. We argue that the negative effect of inequality on economic freedom is due to the economic elite converting its economic power into de facto political power to defend its economic interests; these interests run counter to economic freedom, discouraging innovation and competition as well as protecting the elite's rents. Finally, we show that economic freedom decreases with income inequality even in democratic countries, suggesting that democratic institutions do not prevent economic freedom from eroding. We argue that the latter finding corresponds to a system of political capitalism or captured democracy, where a powerful economic elite can nevertheless exercise de facto political power by cooperating with politicians and other decision-makers for their mutual benefit.     

转型期中国县级政府的客观治理绩效与政治信任——从“经济增长合法性”到“公共产品合法性”

善治是中国政府的执政要务,政治信任反映着公民对政府治理的认可和支持。文章利用2008年中国公民意识调查及政府统计数据,实证分析了政府治理绩效的主观和客观维度对政治信任的影响。研究发现,公民对政府在经济增长、民生福利、纯公共产品领域治理绩效的回顾性和前瞻性积极评价都正相关于政治信任;纯公共产品提供的主观评价对政治信任的影响大于经济增长和民生福利。县级政府的客观治理绩效对政治信任有重要影响,在高人均福利支出、低基尼系数和低失业率的县级单位,政治信任更高,而人均GDP反而微弱地负作用于政治信任。因此,尽管经济增长仍然是政治信任的重要来源,但民生福利和纯公共产品正赶上并超越经济增长,成为公民提供政治信任的新源泉。     

新兴经济体FDI流入的决定因素及中国的应对策略

吸引FDI流入是新兴经济体促进经济发展的重要手段,但FDI活动深受东道国区位因素的广泛影响。利用1995-2009年的面板数据,对新兴经济体吸引FDI流入的决定因素进行实证分析,结果表明:FDI与东道国聚集效应、市场规模、基础设施、资源禀赋、经济开放度显著正相关,但与东道国人力资本和政治风险负相关。因此,中国应该强化FDI的区域聚集效应、行业聚集效应和特定投资来源地聚集效应,保持经济稳定、持续的增长,加大对落后地区的基础设施建设的投入,构建全方位的对外开放体系和引资战略,实现经济持续快速发展。     

Institutional transformation and the origins of world income distribution

This paper presents an attempt to quantify institutional changes and examine the respective effects of de jure and de facto political institutions on the path of long-run economic growth and development for a large panel of countries in the period 1810–2000. Using factor analysis, latent indices of de jure and de facto political institutions are constructed by exploiting several existing institutional datasets. The empirical evidence consistently suggests that societies with more extractive political institutions in Latin America, South Asia, Middle East and Eastern Europe have achieved systematically slower long-run economic growth and failed to catch-up with the West. The evidence confirms the primacy of de facto institutional differences over de jure institutions in causing differential growth and development outcomes over time. It also explains why highly concentrated political power and extractive political regimes inhibited the path of economic growth by setting persistent barriers to the engagement in collective action. In the long run, institutional differences account for up to two thirds of within-country development path and up to 83% of between-country development gaps.     

Level of economic development and political democracy revisited

This article reassesses a democracy-economic development linkage for the period 1972 to 1990. The results show that economic development has a significant effect on democratic performance in the semiperiphery and periphery, yet in an opposite direction. For the core, there is no linkage from economic development to political performance. Moreover, the finding also suggests that democracy enhances economic development only in the core and semiperiphery. This finding thus contradicts Barro's [1996] contention that more democracy enhances economic growth at low levels of political freedom, but it depresses economic growth when a moderate level of freedom has already been attained.     

When does more aid imply less democracy? An empirical examination

Foreign aid flows have increased considerably during the last decades, targeting, apart from development objectives, goals related to democracy. In this paper we investigate whether aid has affected the political regime of recipient countries. To this end, we use annual data on Net Official Development Assistance covering 64 aid-recipients. Because of data limitations, we cover the 1967-2002 period. We find that aid flows decreased the likelihood of observing a democratic regime in a recipient country. This effect is sensitive to economic and social conditions. The negative relation between aid and democracy is moderated when aid flows are preceded by economic liberalization. Aid from the U.S. has a non-significant effect on the political regime of recipients.     

Demographic change and economic growth: The role of natural resources in the MENA region

This paper analyses the conditional effect of demographic change on economic development in the MENA region. We employ fixed-effects panel analysis on data from 19 countries in the region and demonstrate a negative impact of natural rents on the relationship between the working-age population and economic growth. Once the critical level of approximately 16% of resource rents (as share in total GDP) is reached, a one-unit increase in working-age population appears to harm economic growth. Further tests show that this finding is mainly driven by the negative effects of resource rents on female labor force participation. However, other drivers are a large public sector, low private sector development and inefficient labor market policies and issues such as the “Dutch disease”. The main finding remains after robustness checks in the form of controlling for competing hypotheses. Policy makers are advised to encourage economic diversification, female employment and private sector development.     

ISO 14001 Environmental Certification: A Sign Valued by the Market?

The main purpose of this work is to analyse whether ISO 14001 certification is interpreted by the capital market as a sign of environmental responsibility, modifying long-term efficiency expectations and the profitability of firms. Under competing assumptions that ISO 14001 certification is adopted by firms either proactively or reactively, we test competing hypotheses about how this certification affects the market value of firms. The analysis is based on a sample of 80 environmental certifications of the plant systems or processes of large Spanish firms which traded on the continuous market of the Madrid Stock Exchange from 1996 to 2002. Using event study methodology, we found that ISO 14001 certification has a negative effect on the market value of certain firms. Specifically, the results obtained seem to show that the market negatively views the allocation of resources to ISO 14001 certification in the case of less polluting and less internationalised firms. On the other hand, the results obtained do not suggest clear evidence that the economic impact of ISO 14001 certification is negative for more polluting and more internationalised firms.     

Income,inequality, and the stability of democracy — Another look at the Lipset hypothesis

This paper studies the endogenous emergence of political regimes, in particular democracy, oligarchy and mass dictatorship, in societies in which productive resources are distributed unequally and institutions do not ensure political commitments. The political regime is shown to depend not only on income levels, but also, in particular, on resource inequality. The main results imply that under any economic environment a distribution of resources exists such that democracy is the political outcome. This distribution is independent of the particular income level if the income share generated by the poor is sufficiently large. On the other hand, there are distributions of resources for which democracy is infeasible in equilibrium regardless of the level of economic development. The model also delivers results on the stability of democracy. Variations in inequality across several dimensions due to unbalanced technological change, immigration or changes in the demographic structure affect the scope for democracy or may even lead to its breakdown. Among other historical examples, the results are consistent with the different political regimes that emerged in Germany after its unification in 1871.     

Should we care about the uncertainty around measures of political-economic development?

Several proxies of political–economic development, such as the Worldwide Governance Indicators, come in the form of an estimate along with a standard error reflecting the uncertainty of this estimate. Existing empirical work discards the information provided by the standard errors. We argue that the appropriate practice should be to take into account this additional information through the use of multiple imputation. We investigate the importance of our proposed approach in several applications. We find that accounting for the uncertainty around the values of various measures of political–economic development tends to have a large influence on the magnitude and statistical significance of the estimated effects of these variables.     

The Role of Income Effects in Early Retirement

We provide a long‐term perspective on the individual retirement behavior and on the future of retirement by emphasizing the role of (negative) income effects. We consider a political economic theoretical framework, with actuarially “fair” and “unfair” early retirement schemes, and derive a political equilibrium with positive social security contribution rates and early retirement. A reduction in the wages in youth, consistent with the recent labor market trends since the massive introduction of temporary jobs, induces workers to postpone retirement, and—in the “unfair” system—leads to lower contribution rates. A reduction in the growth rate of the economy has opposite effects on the retirement decisions, leading—in the “unfair” system—to more early retirement. Aging induces a negative income effect, but has also an opposite political effect on social security contributions and retirement decisions. For an actuarially “fair” social security system, we provide conditions for the political effect to dominate; in an “unfair” scheme, numerical simulations confirm a slight predominance of the political effect, as contribution rates increase. These results may shed some light on the future of early retirement in aging societies.     

Political stability and growth: An application of dynamic GMM and quantile regression

This paper studies the effect of political stability on economic growth by taking 120 developing countries over the period of 1996–2014. We apply relatively advanced dynamic two step system-GMM and quantile regression. Political stability is found to be a key determinant of economic growth. More importantly, political instability (or risk) is found to be higher in the OIC countries and is a deterrent to economic growth. Also, for the lower and middle income OIC countries, political instability appears to affect economic growth more severely perhaps due to the absence of strong economic and political institutions. Moreover, political instability is also found to be significantly higher in the oil-dependent OIC countries. Notably, political instability is likely to affect growth through the channels of investment and human capital accumulation in the developing countries. Finally, the impact of political stability and political instability on growth is found to be equally distributed across the OIC countries with higher or lower growth level. Therefore, the development of political and economic institutions along with human capital development is recommended for all the developing countries in general and the OIC countries in particular.