Coups,revolutions and efficient policies in autocracies

The purpose of this paper is to explore the interaction of two mechanisms that might constrain the power of dictators: the threat of a coup by the selectorate and a revolution by citizens. Our results help explain a stylized fact, namely that autocracies are far more likely to be either the best or the worst performers in terms of growth and public goods policies. To this end, we focus on accountability within dictatorships using a model where both the selectorate and the citizens are the principals and the autocrat is the agent. Our results highlight that both excessively strong and excessively weak dictators lead to poor economic performances, and that a balanced distribution of de facto political power is required to incentivize the dictator to choose efficient economic policies.     

Property and contract rights in autocracies and democracies

We present and test empirically a new theory of property and contract rights. Any incentive an autocrat has to respect such rights comes from his interest in future tax collections and national income and increases with his planning horizon. We find a compelling empirical relationship between property and contract rights and an autocrat's time in power. In lasting—but not in new—democracies, the same rule of law and individual rights that ensure continued free elections entail extensive property and contract rights. We show that the age of a democratic system is strongly correlated with property and contract rights.     

Investment without democracy: Ruling-party institutionalization and credible commitment in autocracies

What explains private investment in autocracies, where institutions that discourage expropriation in democracies are absent? We argue that institutionalized ruling parties allow autocrats to make credible commitments to investors. Such parties promote investment by solving collective-action problems among a designated group, who invest with the expectation that the autocrat will not attempt their expropriation. We derive conditions under which autocrats want to create such parties, and we predict that private investment and governance will be stronger in their presence. We illustrate the model by examining the institutionalization of the Chinese Communist Party.     

Can political entrepreneurs solve the free-rider problem?

A solution of the problem of voluntary collective action, employing an improved concept of political entrepreneurship is proposed. This solution is consistent with large numbers of actors and pure public goods (joint production of private goods and asymmetry are not assumed). The importance of information imperfections in producing suboptimality in the provision of public goods is emphasized. Political entrepreneurship is made to parallel the Knightian concept of the entrepreneur, emphasizing the role of risk-taking and information collecting.     

政工干部激励机制问题探究

企业工作需要党、政、工、团齐抓共管,而政工干部作为企业思想政治工作的基石,是对企业工作的有力促进者和极大推动力。政工干部激励机制创新是推动企业和谐快速发展的重要课题和强劲保障,是组织工作改革创新的重要内容。因此提出,要立足当前政工干部工作实际,从现实状况和理论研讨两方面着手,对政工干部激励机制存在的问题加以分析和解读,并就政工干部激励机制创新提出了对策和建议。     

The political transfer problem: How cross-border financial windfalls affect democracy and civil war

Following a rise in the price of oil in the 1970s, a number of developing countries received a significant boost in foreign transfers as oil producers could not absorb all of their new rents domestically. When those transfers ended, some recipients of these transfers eventually democratized as part of the ”Third Wave” while others languished as violent autocracies. This raises a puzzle: how can declines in external transfers foster democratization in some cases, but heighten political violence in others? We develop a formal model to reconcile this tension and demonstrate that autocratic incumbents can become more repressive with higher levels of transfers and either experience civil conflict or democratize at lower levels of transfers. We characterize these dynamics as a ”political transfer problem” and then use case studies and econometric evidence to argue that the largest windfall of the 20th century, the period from 1973–85 during which oil prices were at all-time highs, and its aftermath, produced political dynamics consistent with our model.     

A long-run cost allocation problem in the political economy of electric utility power pools

Summary and Conclusions Discussants of the electric power industry point to three principal reasons for corporately unaffiliated electric utility companies to establish formal interorganizational relations: optimal short-run dispatching of production facilities, the scale economies (more precisely, the subadditivity) of long-run costs, and the advantage of pooling the risk of equipment failure. This paper has analyzed the organizational properties of power pools established to realize the advantages of subadditive long-run costs. A formal organizational model of a power pool was presented, recognizing the economic and normative structure of a pool. The normative structure chosen was the subsidy freedom equity concept familiar in the literature on natural monopoly and in game theory. The principal result of the paper is the construction of a subsidy-free cost allocation rule for the deterministic multiple-technology long-run system planning problem.The applicability of this result depends on the organization of the power pool as an entity capable of contracting for the power needed by the members. Conspicuously in the model used here, the optimal poolwide cost is allocated but ownership of the generating plants is not.In power ppols of independently owned utilities (IOUs), capacity planning may be centralized but, with the exception of joint ventures in individual generating plants, ownership is maintained at the level of the member firms. IOU power pools allocate separately the fixed and variable costs of the system. Pool members often take turns in building new plants for the pool, thereby indirectly allocating system capacity costs. Having identifiable ownership in the generating plants, the members can allocate the energy costs of the system in a subsidy-free manner using the short-run marginal cost of energy established by central dispatching or energy brokering (Herriot 1985). But that is an approach to short-run energy charges which is very differet from the energy charge in the peaker rule studied here, and it may result in an allocation of total costs that is not subsidy-free.There are partnership among rural electric distribution cooperatives, called generation and transmission (G&T) co-ops, which do share costs without allocating ownership interests. G&T co-ops build generating plants or secure power contracts from IOUs sufficient to meet their members' requirements at an agreed level of reliability. Ownership of the plants, and liability for the contracts, is not disaggregated. Yet in most cases the G&T co-op does not sell power to non-members, so all costs must be allocated among the member firms.The ownership structure presumed here could also obtain under the scenarios for electric power deregulation envisioned by Joskow and Schmalensee (1983). If the distribution segment is disaggregated from generation and transmission, then locally franchised distribution firms mist face in common the subadditive long-run cost function discussed in the second section. The regional bulk power market would therefore have the structure of a natural monopsony, so the distribution firms would have an incentive to pool their forecast loads and collectively negotiate long-term power contracts with the independent generating firms. Ownership of generation would rest with the generation firms, but the cost of the regionally optimal portfolio of power contracts would have to be allocated among the pooled distribution firmsThe deterministic system planning model used here is somewhat simplistic, certainly as must any model to be admit a closed-form solution in a contexts where the real capacity planning problems are solved using very large scale linear programs and simulation. However, the cost allocation rule derived for this model may be useful guidepost for the development of practical cost-sharing rules in power pools. An important implication of the peaker rule (4) is the equity of not attempting to allocate separately the fixed and variable costs of a system. Though adjustments must be made to the peaker rule to account fully for the uncertainties, indivisibilities, unreliabilities, and nonhomogeneities faced by system planners, as well as for the growth of future loads and the development of new generation technologies, this cost-allocation rule appears to be helpful as a starting point in power pool rate design.     

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.     

经济全球化中的政治经济学

经济全球化进程伴随着国际规则制度的更新与变迁,发达国家主导了便于化国际规则,承担了较少的成本,获得了较多利益,发达国家内部、发达国家与发展中国家之间在为争夺新全球化规则主导权和进入权而进行斗争。以科技为中心的经济全球化进程中出出了上游产业控制下游产业,人力资源取代自然资源,超级国际垄断资本挑战民族资本等特征,使原有的富国剥削穷国的国际政治经济学的基本判断发生了变化,世界大规模战争的诱发因素被遏制,富国与穷国之间的发展差距拉大成为新的国际不稳定因素。中国应正确评价自己的国际地位,正视经济全球化现实,参与国际合作,在新国际秩序规则构建中发挥自己的影响力。     

The political reception of innovations

Why do some societies embrace innovative technologies, policies, and ideas, while others are slow to adopt, and some even resist, them? Incumbent producers are most likely to be affected by certain kinds of innovations; they also wield a disproportionate influence in the design of institutions and policies that encourage or limit their adoption. We show formally that the elite has four cardinal policy options: to appropriate the innovation for itself; to encourage its adoption; to tax, regulate, or limit the innovation; or to block it. We show that six features of an innovation determine how it is received: (i) whether it is easy to replicate; (ii) whether it complements or competes with the elite's sources of income; (iii) whether its impact is broad or narrow; (iv) whether it is location-dependent, and (v) concealable; (vi) whether it requires large fixed costs. While other works have occasionally considered one of these factors, we show where each feature comes from, and we assess them systematically and together. We provide illustrative evidence of the relevance and generality of the model to understand the fate of a variety of innovations.     

The political economy of seigniorage

While most economists agree that seigniorage is one way governments finance deficits, there is less agreement about the political, institutional and economic reasons for relying on it. This paper investigates the main political and institutional determinants of seigniorage using panel data on about 100 countries, for the period 1960–1999. Estimates show that greater political instability leads to higher seigniorage, especially in developing, less democratic and socially-polarized countries, with high inflation, low access to domestic and external debt financing and with higher turnover of central bank presidents. One important policy implication of this study is the need to develop institutions conducive to greater political stability as a means to reduce the reliance on seigniorage financing of public deficits.     

The political economy of regionalism

We examine the incentives of regions to unite and separate. Separation allows for greater influence over the nature of political decision making while unification allows regions to exploit economies of scale in the provision of government. Our paper explores the influence of size, location and the diversity within regions in shaping this trade-off. We then examine the way in which alternative political institutions aggregate regional preferences and thereby define the number of countries.     

The political economy of naturalization

This paper presents a political economy model in which self‐interested natives decide when citizenship and/or voting rights should be granted to foreign‐born workers. Native voters know that immigrants hold different ‘political’ preferences and would thus tend to postpone their enfranchisement as much as possible. They also consider, however, that a more restrictive naturalization policy may reduce the gains from immigration. We find that the optimal timing of naturalization depends on the quantity, quality (productivity), and preferences of potential immigrants, the political composition and the age structure of the native population, as well as the sensitivity of migration choices to the citizenship issue.     

The political economy of industrialisation

This paper analyses how incentives under different sets of political institutions map into policies that promote industrialisation. I set out an endogenous growth model with non-overlapping generations, where agents are heterogeneous with respect to wealth, skills and political power. The skills of the political elite play a crucial role for industrialisation to occur. It is shown that a flat wealth distribution and a skilled political elite enhance development the most in elitist regimes, while democracies perform as well as elitist regimes in terms of industrialisation. The theoretical results regarding elitist regimes are in line with evidence on the Industrial Revolution.     

The competence-loyalty tradeoff in China's political selection

This paper studies the competence-loyalty tradeoff and its evolution in China's political system characterized by hierarchical selection. From the eyes of the central controllers, the rational selection rule is to mix competence and loyalty when officials are selected to fill lower-tier positions and to select from them the more loyal to fill higher-level positions. Measuring competence by an official's contribution to local economic growth and loyalty by his work experience (connection) with central leaders, our empirical analysis finds that ability strongly matters and connection weakly matters for city officials promoted to provincial positions, but only connection matters for provincial officials promoted to central positions. Moreover, ability matters more in the early years, and connection matters more in the later years.     

住房的政治经济学:国际政治经济学的一个新视界

住房的政治经济学是欧美近年刚刚出现的研究领域,主要以比较政治经济学和国际政治经济学,特别是日常政治经济学作为理论基础,重新对住房金融制度、住房政策体系和住房市场进行审视。住房政治经济学为分析住房政策和当前的金融危机提供了不同的视角,并得出新的结论。这些视角和结论对中国发展和社会改革具有启示意义。本文按照主要议题、运行机制和理论基础对住房政治经济学研究进行了解读,并从时代背景、理论建构、逻辑关系和研究视角四个方面对住房政治经济学的发展方向和不足之处进行了剖析。最后讨论了住房政治经济学研究对当前中国的现实启示。