Economics of Governance最新文献

This study provides a microeconomic foundation for the bipolar stability hypothesis in international politics. It extends the well-designed conflict model of Esteban and Ray (Am Econ Rev 101(4):1345–1374, 2011) to include monetary compensation arrangements between the winning and losing groups, presenting a new conflict-related indicator called the balance of power index. The main finding of this study is that societal polarization serves to alleviate rather than exacerbate conflict intensity, which is elucidated by the balance of power index. This new characteristic of polarization is associated with the founding of the bipolar stability hypothesis by Waltz (J Int Affairs 21(2):215–231, 1967), Waltz (Theory of international politics. Addison-Wesley Publishing Company, Reading, 1979) under the economic behavioral model.

Marginal rates of contribution (MRC), i.e., the rates at which additional revenues are skimmed via larger contributions or lower transfer receipts, quantify the incentives of a fiscal equalization scheme. This paper is the first to calculate marginal rates of contribution for the Laender (states) in the German fiscal equalization scheme for each of the 51 years since its establishment in 1970 and over five major reforms, taking into account all relevant revenues. Our results show that MRC have been at a consistently high level. Until 2019 the scheme induced an almost full skimming of additional tax revenues of recipient states. With the system’s latest reform in 2020, MRC increased further. Recipient states now face an over-skimming of additional tax revenues and, thus, massive fiscal disincentives to maintain their own tax base. While these findings have been widely expected, comprehensive evidence has been missing so far.

This paper explores the empirical relationship between local economic conditions, social capital, and individual characteristics on the one hand and satisfaction with democracy on the other hand, using detailed information from the German Socio-Economic Panel. In contrast to previous literature, we focus on economic conditions at the state level instead of the national one. We find that local economic conditions, proxies of social capital, and individual characteristics (e.g., risk attitude, reciprocity, past unemployment experience) are important correlates of satisfaction with democracy and that some heterogeneity between genders, West and East Germany, and people with and without college degree exists in the data.

Beneficial influence of female representation in implementing environment-friendly policies have been documented in recent studies. However, presence of factors such as corruption and bureaucratic red tapes, known to hinder development initiatives, raises question about whether women legislators can achieve the desired level of success with environmental policies. Based on our empirical analysis using cross-sectional data for 83 countries, we find evidence that the positive impact of women in parliament on climate change policy outcomes is significant and most effective for countries with low levels of corruption. Depending on the model specification used, ranging from instrumental variable regressions to inclusion of controls to mitigate omitted variable bias, and matching models, we do find that the beneficial impact of women in parliament becomes insignificant and eventually might become negative with rising corruption. Thus, while women might be able to successfully propose a bill for and turn-into-law, environment-friendly policies in countries with low levels of corruption, the effort is nullified and might be reversed in case of countries with high corruption. We illustrate that the results are sensitive to model selection, and choice of controls.

In a 2003 article, Karl Moene (University of Oslo) and Michael Wallerstein (Yale University) demonstrated that wealthier citizens tend to support higher spending in social policies directed at the unemployed, while preferring lower spending in policies aimed at the employed. This paper reveals that these findings hinge on two key assumptions: that citizens have a coefficient of relative risk aversion (CRRA) greater than one, and that all citizens face an equal probability of job loss—a presumption which is not necessarily realistic. By incorporating the observation that job security tends to correlate positively with income, we demonstrate that affluent individuals may still advocate for reduced spending in unemployment policies, even when their CRRA exceeds one. Moreover, a significant shift in the distribution of job security—such as during an abrupt economic crisis—might engender greater societal support for these policies, contrary to their previous research. Finally, empirical data from recent Brazilian history provide analytical support for the theoretical assertions presented herein.

By increasing trust in institutions, public efficiency could be a further key determinant of tax morale. Public efficiency is closely related to the concept of productive public spending, while total public spending also depends on government ideology. In a society where public efficiency and tax morale are high, a virtuous “tax circle” can be triggered since government can increase both tax revenues and productive public spending. Using the Latinobarometer wave (which includes 20,204 interviewees from 18 Latin American countries), the empirical analysis finds that public efficiency would have to increase significantly before its marginal effect on tax morale becomes positive. Hence, the virtuous “tax circle” can trigger in the long term. However, the cross-sectional analysis cannot highlight the potentially significant role of ideological motives, so robustness checks are performed to show that our results are neither driven by such motives nor by the multilevel structure of the dataset or by the sample distribution.

State-owned enterprises (SOEs) are present in key sectors of economies around the world. While they can provide an important public service, there is widespread concern that their activities and financial performance are hindered by corruption. In the meantime, cross-country analysis on the cost of corruption for SOEs remains scarce. We present new cross-country evidence on how corruption affects SOE performance using firm level data. We find that SOEs perform as well as private firms in core sectors when corruption is low but are significantly less efficient when corruption is high. We also show that, in turn, improvements in fiscal transparency and specific SOE governance reforms have the potential to improve SOE performance.

This study examines the relationship between ambiguity and the ideological positioning of political parties across the political spectrum. We identify a strong non-monotonic (inverted U-shaped) relationship between party ideology and ambiguity within a sample of 202 European political parties. This pattern is observed across all ideological dimensions covered in the data. To explain this pattern, we argue that centrist parties are perceived as less risky by voters compared to extremist parties, giving them an advantage in employing ambiguity to attract more voters at a lower cost. We support our explanation with additional evidence from electoral outcomes and economic indicators in the respective party countries.

This study utilizes panel data from 125 countries spanning 2005–2015 to empirically examine the impact of government debt on country-level subjective well-being. The fixed effect model results show that an increase in the government debt-to-GDP ratio significantly reduces subjective well-being in countries with low governance quality. However, this negative effect of government debt on happiness is substantially offset in countries exhibiting governance quality above the median value. The main result is robust to controlling for various sources of government debt. Moreover, we find that under certain conditions, such as high levels of government effectiveness, rule of law, or strong control of corruption, an increase in government debt is positively associated with people’s subjective well-being. In addition, the positive effect of government debt on country-level happiness is also observed in high-income countries with high governance quality. Our results suggest that it is not government debt itself that influences citizens' happiness levels, but rather how this debt is managed and the degree of trust citizens place in their government.

I show that a state representative’s political party determines transportation expenditure in the area she represents. Previous studies of this topic consider party changes through election outcomes, which may be correlated with unobservable determinants of expenditure. To overcome this issue, I identify my estimates using Ohio’s 2012 state legislative redistricting, which moved many geographic areas into districts with opposite party incumbents. The Republican party controlled the state legislature and governorship over the period I study. I find that areas moving from governing party Republican to minority party Democratic districts received $3.4M (0.18 standard deviations) less annual highway construction funding than areas remaining in Republican districts. Areas moving from a Democratic to a Republican district, on the other hand, experienced no increase in expenditure—the negative effect of moving to a different representative’s district appears to outweigh the positive effect of a majority party representative. Descriptive evidence suggests that changing representative’s party through redistricting had a different effect on construction funding than changing through an election, underlining the importance of my identification strategy.