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Essays on the Political Economy of Crisis and Reform
Get PDFThe severe political and economic repercussions of the "euro crisis" during the last decade have revealed the necessity for an improved understanding of both the determinants of sovereign debt crises and the political economy of structural reforms. This dissertation, which consists of three self-contained papers, contributes to these research areas.
In the first paper, we investigate the interaction of fiscal federalism and sovereign default risk. Numerous countries with chronic external debt problems are characterized by inefficient federal fiscal structures. However, the impact of a country's federal design on sovereign default risk has barely been studied in previous work. This paper aims to address this gap. We develop a stylized model of a federation in which regions borrow individually from international lenders while the central government decides whether to default on aggregate sovereign debt. We show that decentralized borrowing leads to higher debt levels, at higher bond yields, an increased default probability and lower welfare compared to a benchmark scenario of centralized borrowing. Moreover, differing regional default costs further increase aggregate welfare losses through distorted regional borrowing incentives. Case studies of Argentina and the euro area illustrate the channels described in the model.
The second paper analyzes how domestic distributional incentives influence sovereign default on debt held by foreign creditors. In a simple political economy model, we show that external default can serve as a redistributive policy similar to distortionary income taxation. The channel we derive builds on recent evidence which suggests that the output costs of default are mainly incurred by high-income households, whereas relatively poor ones benefit due to smaller public spending cuts. Although the potentially important role of income heterogeneity among domestic agents has attracted comparatively little attention in previous work, historical evidence is in line with our argument.
In the third paper (with Johannes Brumm), we argue that an important determinant of voters' support for economic reform is the strength of family ties. While the "crisis hypothesis" predicts that crises facilitate reform, we show in a political economy model that this relation can break down, and even reverse, when agents take into account the effect of reform on their family members. Applied to southern European countries with strong family ties, the model rationalizes why the extremely high (youth) unemployment following the Great Recession has not led to more substantial labor market reforms. In such countries austerity might block rather than foster additional structural reforms
Innovation und Wissenstransfer in der empirischen Sozial- und Verhaltensforschung
No full textGert G. Wagner ist als Sozial- und Wirtschaftsforscher über disziplinäre Grenzen gegangen. Als engagierter Politikberater und innovativer Wissenschaftsmanager hat er immer wieder sozial- und wissenschaftspolitische Debatten angestoßen und begleitet. Kollegen und Weggefährten liefern mit ihren Beiträgen zu diesem Band eine Bestandsaufnahme der empirisch- quantitativen Forschung, die Gert G. Wagner seit Anfang der 1980er-Jahre wesentlich geprägt hat
The Diffusion of Inclusion: An Open-Polity Model of Ethnic Powersharing
No full textWhile there is a growing consensus that ethnic inclusion produces peace, less is known about what causes transitions to power sharing between ethnic groups in central governments in multiethnic states. The few studies that have addressed this question have proposed explanations stressing exclusively domestic factors. Yet, power sharing is spatially clustered, which suggests that diffusion may be at play. Inspired by studies of democratic diffusion, we study the spread of inclusive policies with an “open-polity model” that explicitly traces diffusion from inclusion in other states. Our findings indicate that the relevant diffusion processes operate primarily at the level of world regions rather than globally or between territorial neighbors. Thus, the more inclusive the region, the more likely a shift to power sharing becomes. Shifts away from inclusion to dominance are less common since World War II, but they are more likely in regional settings characterized by ethnic exclusion
Explaining variation in institutional integration in the European Union: why firms may prefer European solutions
No full textWe offer a theoretical framework that sheds light on firm preferences for more co-operative structures at the European level. We argue that the magnitude of external threat to the industry, combined with the level of the industry's transaction costs, plays a crucial role in determining firms' preferences for greater integration at the European level. Firms in industries where both the level of threat from abroad and transaction costs are high are likely to favor more binding institutions at the European level. To illustrate our argument we examine the institutional choices of EU-based firms in three different industrial sectors: aerospace, pharmaceuticals, and automobiles
Wachstum in der Nische. Mit dualen Studiengängen entstehen Hybride von Berufs- und Hochschulbildung
No full textDurch Europäisierung zu mehr Durchlässigkeit? Wandel im Verhältnis von Berufsbildungs- und Hochschulsystemen in Deutschland, Frankreich und Österreich
No full text[en] Die europäischen Bildungsminister beschlossen 1999 einen einheitlichen europäischen Hochschulraum zu schaffen; der so genannte Bologna Prozess wurde in Gang gesetzt. Mit der Unterzeichnung der Kopenhagener Erklärung nur drei Jahre später entschlossen sich die Nationalstaaten, auch im Bereich der beruflichen Bildung stärker zusammenzuarbeiten. Vor allem soll die nationale wie internationale Vergleichbarkeit von Bildungsabschlüssen verbessert werden. Beide Prozesse zielen darauf ab, Durchlässigkeit zwischen den organisatorischen Feldern berufliche Bildung und Hochschulbildung zu erhöhen, und zwar mit Hilfe von gemeinsam entwi- ckelten Standards wie dem Europäischen und Nationalen Qualifikationsrahmen, einem System zur Validierung und Anerkennung unterschiedlicher Lernformen, der Ermöglichung flexibler Bildungswege und der Einführung von Kreditpunkte- systemen (Powell/Solga 2008, 2010, 2011).
Heute, nach einem Jahrzehnt seit Beginn dieser Prozesse stellt sich die Frage, wie diese in den europäischen Nationalstaaten bisher schon gewirkt und wie sie das Verhältnis von Hochschul- und Berufsbildung verändert haben – Veränderungen, die mit vielfältigen Implikationen für die Bildungs- und soziale Mobilität einherge- hen können (Bernhard/Powell/Graf 2010): Die Frage nach Durchlässigkeit zwi- schen beruflicher und Hochschulbildung ist dabei insbesondere deswegen wichtig, da stratifizierte (Aus-)Bildungssysteme ohne Brücken zwischen einzelnen Bildungs- sektoren den möglichst gleichen Zugang zu Bildungs- und Beschäftigungsopportu- nitäten behindern
Essays on economic growth: institutions and policies
Get PDFThis dissertation is on general principles of growth, comprising of three chapters and a short introduction. Chapter 1 analyses the macroeconomic adjustment experienced in IMF/EU-programme countries during the Eurozone crisis by creating counterfactuals based on comparable historical or contemporaneous episodes worldwide. It therefore shows
how crisis management and the institutional framework in which it operates have important implications for the depth of the recession. In particular, an incomplete Eurozone institutional setup contributed to aggravate the crisis through higher uncertainty. The first general principle that can be drawn is that sustained growth rests not only in preventing booms but also in designing institutions that well-manage busts. When growth slows down, calls for deep structural reforms multiply. However, estimations of the short- and medium-term impact of these reforms on GDP growth remain methodologically problematic and still highly controversial. As such, Chapter 2 estimates the impact of 23 wide-reaching
structural reform packages (including both real and financial sector measures) rolled out in 22 countries between 1961 and 2000. It therefore illustrates how large reform packages tend to have on average a positive medium-term impact on growth, but these effects were highly heterogeneous across countries. The second general principle that can be drawn is
that deep economic reforms are no growth silver bullet per se, and rather require careful design, tailored to local conditions.
Finally, Chapter 3 explores factors behind the largest growth acceleration episodes that took place worldwide between 1962 and 2002 and identifies general principles that should underlie a successful growth strategy. In particular, it shows how accelerationstend to be preceded by a deep recession and major economic policy changes. Once this information
is combined with a set of counterfactual analyses, it finds that acceleration strategies should not contain off-the-shelf approaches or necessarily all-encompassing ‘shock therapy’solutions. Despite standard growth determinants doing a fairly
good job at characterising successful accelerations, the quest for take-offs remains elusive, as they seemextremely hard to engineer with a high degree of certainty
Introduction: Meeting in the Middle
No full textCompromise is routinely evoked in everyday language and in scholarly debates across the social sciences. Yet, it has been subjected to relatively little systematic study. The introduction to this inter-disciplinary volume addresses the research gap in three steps. First, we offer three reasons for the study of compromise: its empirical omnipresence in politics, its theoretical potential to bridge the rationalist-constructivist divide, and its normative promise to recognize the plurality of society. Second, we introduce different approaches to the coherence, legitimacy and limits of compromise found in the existing explanatory and normative literatures. We discuss why these literatures need to speak to one another, and identify possible applications in empirical research. Third, we conceptualize compromise as one possible solution to a conflict. Distinct from both dissensus and consensus, all compromises share three characteristics: concessions, non-coercion and continued controversy. However, different types of compromise can be distinguished by how mutual, costly and painful concessions are; by whether all forms of coercion are absent; and by the degree to which the relevant parties’ grounds for conflict are transformed. We conclude by discussing the challenge and appeal of ‘politics as compromise’ in plural and complex societies
Are social democratic parties insider parties? Electoral strategies of social democratic parties in Western Europe in the age of dualization
No full textThe article analyses the electoral strategies of social democratic parties in the context of increased and new inequalities among its electorate. The literature on the politics of dualization argues that social democratic parties are essentially insider parties. By contrast, I argue that they also target outsiders by promoting policies that facilitate the integration of outsiders into the labour market and enhance their social protection. There are two reasons that make outsiders electorally attractive for social democratic parties: first, the share of outsiders has been growing strongly, while the share of insiders has been decreasing. As a consequence, social democratic parties cannot hope to win elections solely on the basis of their insider constituency. Second, outsiders are not as politically inactive as the original insider–outsider literature suggests which makes them electorally more attractive to social democratic parties. To analyse the electoral strategies of social democratic parties, I rely on original data on party statements as reported in newspapers during election campaigns between 2007 and 2010 in four continental European countries (Spain, France, Germany and the Netherlands). The evidence clearly suggests that social democratic parties are no insider parties but propose policies in the interests of outsiders
Inequalities between Ethnic Groups, Conflict, and Political Organizations
No full textWe highlight that ethnic conflicts are typically about ‘nationality problems’ of self-rule, and thus best understood as ethno-nationalist conflicts that are driven by political and economic inequalities between groups. Recent, large-scale data collection and analysis find systematic evidence for such a link, but what is needed is a firmer understanding of the precise causal mechanisms, including ethnic mobilization processes through political organizations. We articulate a research project along these lines