Expressive behavior in economics and politics

Expressive behavior is the self-interested quest for utility through acts and declarations that confirm a person's identity. Expressive voting is an example of expressive behavior. I introduce expressive behavior in the forms of expressive rhetoric and expressive generosity. The questions for society and for public policy are whether expressive behavior affects others, and if so whether beneficially or disadvantageously. In experiments, expressive behavior often benefits others. There are adverse social consequences when, in real-life decisions, expressive behavior results in unwanted public policies of expressive-policy traps. I consider the prospects for avoiding or exiting expressive-policy traps.     

The economics and politics of output volatility: evidence from Indian states

Employing data for 1981–2009, this paper examines the factors influencing the volatility of state output, using India as a case study. The analysis appears to suggest that high income states exhibit relatively higher output volatility. At the state-level, the proximate determinants of a decline in output volatility can be traced to financial deepening, government expenditures and institutional quality. Also, state-level political factors are also found to play an important role. In addition, at the macroeconomic level, monetary policy considerations are observed to be the most important factor impacting output volatility.     

Religion,economics and politics: The Bishops and Keynes in the post-Keynesian ERA

The present is adapted from Bruce J. Malina and Thomas O. Nitsch, “The Bishops' Pastoral Letter and the Poverty Problem: Early vs. Contemporary Concerns and Doctrines,” presented at the Fourth World Congress of Social Economics, Toronto, Canada, 15–18 August 1986, 34 pp. The author is deeply indebted to colleagues Malina, professor of theology at Creighton University, and John E. Elliott, professor of economics at the University of Southern California, for helpful critical insights and comments.     

Religion,economics and politics: The Bishops and Keynes in the post-Keynesian ERA

This paper makes a proposal for reintroducing sociological or social economics into contemporary economic science. Such a reintroduction is proposed to be substantive, by analyzing the social structuring of the economy, and formal, by including sociological/social economics in the current (JEL) classification system of economic disciplines (code A.15). Both epistemological and ontological arguments can be presented to support the proposal. Epistemological arguments invoke the presence of essential components of sociological economics in the development of economic thought, and ontological arguments stress the role of social factors in economic life. In this paper I present primarily epistemological (theoretical-methodological) arguments for sociological economics, and secondarily ontological ones. I show that the present designation, sociology of economics, is something different from sociological or social economics in that the former refers to economic epistemology (knowledge) and the latter to economic ontology (reality). I conclude that, in addition to a sociology of economic science, we need a sociology of economic life.     

Soviet subsidization of Eastern Europe: The primacy of economics over politics?

The level and distribution of Soviet subsidies to various East European countries, which Marrese and Vaňous attribute in their book Soviet Subsidization of Trade with Eastern Europe: A Soviet Perspective to political considerations, are explained here as, for the most part, the normal outcomes of the economic integration of a bloc with relative resource endowment differing from those obtaining in the rest of the world. The statistical methods used by Marrese and Various to calculate the subsidies are also criticized.     

Ecological economics in relation to democracy,ideology and politics

Two recent studies and policy documents are discussed in the present article. One is a UN report prepared by experienced politicians as input into the 2012 Rio de Janeiro Conference, the other a study about the ecological economics of biodiversity.The UN report is of interest in informing about the thinking of politicians and their recommendations for action. It is however a consensus report where more fundamental changes in perspectives are not considered but rather avoided. A number of ecological economists participated in the second study on biodiversity. They demonstrated consciousness about many of the critical arguments about Cost–Benefit Analysis but finally argued in favor of relying on the conceptual framework of neoclassical economics with its CBA. The present author is criticizing this idea of “mainstreaming” the economics of biodiversity contending that radical change in perspectives is needed.     

The impact and politics of entry regulation on intrastate telephone rates

This paper examines the effects of regulatory barriers to the entry of the interstate long-distance carriers into the intraLATA toll service market. With these barriers, the local telephone companies can charge supracompetitive rates for intraLATA toll calls and use the excess revenues to price local exchange service below cost. We use a reduced form econometric price model to see whether these entry barriers have increased intraLATA toll rates. The results indicate that intraLATA toll rates in states that enjoin all types of long distance carriers from providing intraLATA service are about 7.5 per cent higher than in states that allow some sort of competition. In contrast, only preventing the entry of the largest facilities-based carriers does not affect intraLATA rates.     

Ecological economics and the politics of knowledge: the debate between Hayek and Neurath

Hayek's epistemic arguments against planning were aimed notjust against socialism but also the tradition of ecologicaleconomics. The concern with the physical preconditions of economicactivity and defence of non-monetary measures in economic choicewere expressions of the same rationalist illusion about thescope of human knowledge that underpinned the socialist project.Neurath's commitment to physicalism, in natura calculation andplanning typified these errors. Neurath responded to these criticismsin unpublished notes and correspondence with Hayek. These highlightedthe epistemological premises his work shared with Hayek's, representinga response to Hayek from Hayek's own assumptions. This paperexamines the cogency and continuing relevance of the argumentsin this debate.     

Politics as exchange: the classical liberal economics and politics of James M. Buchanan

James Buchanan advocated the market mechanism for allocating resources because it is based on voluntary exchange. People engage in market transactions only when they believe they benefit from doing so. Buchanan depicted the political process the same way. People engage in collective activities to accomplish together ends that they would be unable to accomplish individually, or through bilateral exchange. Buchanan’s vision of politics as exchange is a normative framework for evaluating the rules within which political activity takes place. Rules that meet the criterion of agreement are desirable constitutional rules, and Buchanan recognized that not all government activity satisfies that criterion. Buchanan is the father of the subdiscipline of constitutional political economy, and his “politics as exchange” approach provides the foundation for much work in that area. Buchanan has created a foundation that is rich in ideas, but leaves behind a number of unanswered questions that point the way toward a further development of the research program in constitutional political economy.     

Reforming the local public sector: economics and politics in privatization of water and solid waste

Several empirical studies have analyzed the factors that influence local privatization. We examine the influence of transaction costs and political factors on local governments’ choices through new variables. We consider two relevant services accounting for different amounts of transaction costs: water and solid waste delivery. Our results show that privatization is less common for water, which has higher transaction costs. Furthermore, we find that municipalities with a conservative ruling party privatize more often regardless of the ideological orientation of the constituency. Finally, we find that intermunicipal cooperation may be a suitable organizational form for some municipalities.     

Campaign spending regulation in a model of redistributive politics

Summary. We consider a model in which parties that differ in perceived valence choose how to allocate electoral promises (money, pork-barrel projects) among voters. The party perceived to be less valent has a greater incentive to “sell out” to a favored minority and completely expropriate a fraction of the electorate. By reducing the difference in perceived valence, campaign-finance regulations may reduce the extent of the expropriation and achieve a more equitable political outcome. We analyze various instruments of campaign-finance regulation from this perspective.Received: 20 Februay 2003, Revised: 25 January 2005, JEL Classification Numbers: D72, H2.Nicolas Sahuguet: Correspondence toWe thank Alessandro Lizzeri, George Mailath, and Andrew Postlewaite for their comments. We also thank the editor Dan Kovenock and an anonymous referee. The second author is grateful to the National Science Foundation for financial support under grant SES-0078870.     

The domestic politics of financial regulation: Informal ratification games and the EU capital requirement negotiations

This paper contributes to our understanding of post-crisis financial regulation by reasserting the centrality of domestic politics in defining government preferences and explaining regulatory outcomes. It draws on Robert Putnam's two-level game approach and Foreign Policy Analysis to develop a model of a three-level informal ratification game. This adds value to existing approaches by capturing the contested nature of government preferences and delineating the causal mechanisms through which domestic groups shape international negotiations. The model is used to explain the UK's pivotal role in the reform of bank capital requirements in the European Union (EU). It demonstrates that governments are able to take advantage of a narrowing domestic ‘win-set’ by marginalising the influence of industry and building political momentum for regulatory reform. In particular, the paper shows how UK negotiators were able to exploit the increased domestic costs of agreement and synergistic strategies between negotiations to successfully oppose the maximum harmonisation of capital rules across the EU.     

The new institutional economics and its relevance to social economics

There has been a quiet revolution in economic theory, led by the New Institutionalists. Pioneered by Douglass C. North, this group argues that institutions are the main determinants of economic performance, yet neoclassical economics has no role for institutions. Contrary to many misconceptions, this theory of institutions can be integrated with neoclassical economics, leaving mainstream economic theory in tact, but broader and more relevant. The purpose of this article is twofold. First, the main arguments of the New Institutionalists are summarized. Second, the bridge between institutions and social economics is explored. The article concludes by arguing that the New Institutional approach is fruitful, and that the theory will gradually be integrated with neoclassical economics, until the two merge into a single body of theory.