746 research outputs found
When do special interests run rampant ? disentangling the role in banking crises of elections, incomplete information, and checks and balances
No full textThe author investigates the political determinants of government decisions that benefit special interest groups - especially government decisions to deal with banking crises. He finds that the better informed the voters, the more proximate elections, and the larger the number of political veto players ( conditional on the costs to voters of relevant policy decision), the smaller the government's fiscal transfer are to the financial sector and the less likely the government is to exercise forbearance in dealing with insolvent financial institutions. The results suggest that policies thatmight be appropriate for mitigating banking crises in the United States might be less effective in settings where voters are less informed, where elections are less competitive, and where there are fewer veto players, because in these settings checks and balances are missing. These policies include: a) Disseminating information about the costs of inefficient government decisions. b) Improving the structure of legislative regulatory oversight. c) Intervening early in insolvent banks. The author concludes that the more veto players there are, the less likely policies are to favor special interest groups (contrary to previous views). Moreover, the closer the elections, the less likely policies are to favor special interest groups.
Replication data and do file for Media's Influence on Citizen Demand for Public Goods
No full textDatabase and do file for the paper "Media’s Influence on Citizen Demand for Public Goods Economic Development and Cultural Change
A review of the political economy of governance : from property rights to voice
No full textKeefer reviews progress made in understanding the effects of different dimensions of governance on economic development, and the sources of good governance. The term governance has been used to embrace concepts that are heterogeneous both with respect to their effects on economic development and their genesis. Future progress in developing policy responses to bad governance will depend on separately examining these heterogeneous elements-the security of property rights, the quality of bureaucratic performance, corruption, voice, and accountability. Future progress will also depend on explicitly linking problems of governance to the overarching political environment and the incentives of governments to correct those problems.Environmental Economics&Policies,Labor Policies,Banks&Banking Reform,Decentralization,Economic Theory&Research,Governance Indicators,NationalGovernance,Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform
Democratization and clientelism: why are young democracies badly governed?
No full textThis paper identifies systematic performance differences between younger and older democracies: younger democracies are more corrupt; exhibit less rule of law, lower levels of bureaucratic quality, and lower secondary school enrollments; and spend more on public investment and government workers. Only one theory explains the effects of democratic age on the wide range of policy outcomes examined here-the inability of political competitors in younger democracies to make credible promises to citizens. This explanation, first advanced in Keefer and Vlaicu (2004), offers a concrete interpretation of what political institutionalization might mean, and why it is that young democracies frequently fail to become older and well-performing democracies. A variety of tests support this explanation against alternatives. The effect of democratic age remains large even after controlling for the possibilities that voters are less well-informed in young democracies, that young democracies have systematically different political and electoral institutions, or that young democracies exhibit more polarized societies.National Governance,Parliamentary Government,Politics and Government,Environmental Economics&Policies,Economic Theory&Research
Boondoogles and expropriation : rent-sseking and policy distortion when property rights are insecure
No full textMost analyses of property rights and economic development point to the negative influence of insecure property rights on private investment. The authors focus instead on the largely unexamined effects of insecure property rights on government policy choices. They identify one significant anomaly-dramatically higher public investment in countries with insecure property rights-and use it to make the following broad claims about insecure property rights; 1) They increase rent-seeking. 2) They may reduce the incentives of governments to use tax revenues for productive purposes, such as public investment. 3) They do so whether one regards the principal problem of insecure property rights as the maintenance of law and order, which government spending can potentially remedy, or as the threat of expropriation by government itself, and therefore not remediable by government spending. The authors present substantial empirical evidence to support these claims.Environmental Economics&Policies,International Terrorism&Counterterrorism,Labor Policies,Economic Theory&Research,Payment Systems&Infrastructure,Environmental Economics&Policies,Economic Theory&Research,National Governance,Public Sector Economics&Finance,Land and Real Estate Development
Beyond legal origin and checks and balances : political credibility, citizen information, and financial sector development
No full textThe existing literature emphasizes and contrasts the role of political checks and balances and legal origin in determining the pace of financial sector development. This paper expands substantially on one aspect of this debate: the fact that government actions that promote financial sector development, whether prudent financial regulation or secure property and contract rights, are public goods and sensitive to political incentives to provide public goods. Tests of hypotheses emanating from this argument yield four new conclusions. First, two key determinants of those incentives-the credibility of pre-electoral political promises and citizen information about politician decisions-systematically promote financial sector development. Second, these political factors, along with political checks and balances, operate in part through their influence on the security of property rights, an argument asserted but not previously tested. Third, contrary to findings elsewhere in the literature, the political determinants of financial sector development are significant even in the presence of controls for legal origin. Finally, and again in contrast to the literature, the evidence here suggests that legal origin primarily proxies for political phenomena. Legal origin is a largely insignificant determinant of financial sector development whenthose phenomena are fully taken into account.Economic Theory&Research,Privatization,Political Economy,Inequality,Legal Products
Insurgency and credible commitment in autocracies and democracies
No full textThis paper suggests a new factor that makes civil war more likely: the inability of political actors to make credible promises to broad segments of society. Lacking this ability, both elected and unelected governments pursue public policies that leave citizens less well-off and more prone to revolt. At the same time, these actors have a reduced ability to build an anti-insurgency capacity in the first place, since they are less able to prevent anti-insurgents from themselves mounting coups. But while reducing the risk of conflict overall, increasing credibility can, over some range, worsen the effects of natural resources and ethnic fragmentation on civil war. Empirical tests using various measures of political credibility support these conclusions.Population Policies,Parliamentary Government,Economic Theory&Research,Social Conflict and Violence,Politics and Government
Collective action, political parties and pro-development public policy
No full textBroad consensus exists that the ability of political actors to make credible commitments is key to development. An important and little-explored determinant of the credibility of political commitments is the existence of organizations that facilitate citizen collective action to sanction political actors who renege. This paper focuses on one essential organization, the political party. Three measures of political parties are used to assess cross-country differences in the degree to which politicians facilitate the ability of citizens to act in their collective interest. Each of these measures is associated with superior development outcomes, above and beyond the effects of competitive elections. These results have implications for understanding the extraordinary economic success of some East Asian countries and notable lags among others: East Asian non-democracies exhibit more institutionalized ruling parties than other non-democracies, while East Asian democracies exhibit equally or less institutionalized parties. The evidence suggests that greater research and policy emphasis be placed on the organizational characteristics of countries that allow citizens to hold leaders accountable.Parliamentary Government,Political Systems and Analysis,Politics and Government,Corporate Law,E-Government
The Policy Usefulness of Institutional and Political Analyses of Development
No full textTwo arguments are important: that the rule of law and the security of property rights are important for growth and that they are the product of political institutions. Professor Dixit argues that identification and other concerns undermine the second argument and inhibit the formulation of policy recommendations. Avinash Dixit reviews many of the recent contributions to the literature that examine the "big" questions in economic development, particularly those concerning the fundamental differences between countries that manage to sustain rapid economic growth and those that do not. Practitioners can nevertheless learn from the generalizations that academic research yields, but they should examine the plausibility of those generalizations, taking into account the many idiosyncrasies The Author 2007. These are based on particular historical and geographic features of countries that researchers theorize should determine the security of property rights but that should not directly affect growth. Just as important, compared with such determinants of political behavior as history and regime type, theses sources of variation in political incentives have at least somewhat more tractable policy implications for what donors and governments should and should not do. Incremental approaches that fail to take the conditions of political decision-making into account in a systematic way are no more likely to succeed than "maximalist" approaches. Less targeted programs, in which targeting is crude but easy to communicate and simple to implement, may offer a greater contribution to development by building political credibility, even at the cost of economic inefficiency. From the first Public Expenditure Tracking Philip Keefer 163 Survey in Uganda, which led to a 90 percent reduction in the diversion of capitation grants to schools, to report cards on public services, pioneered in Bangalore, India, but expanding to China and elsewhere, a variety of tactics are emerging to close the information gap between citizens and politicians. Despite this--despite the fact that such analyses are concerned with big ideas--this line of research shows considerable promise in informing both the content and the design of the reform agenda in countryspecific contexts
The ethnicity distraction ? political credibility and partisan preferences in Africa
No full textMuch of the research on ethnicity, development and conflict implicitly assumes that ethnic groups act collectively in pursuit of their interests. Collective political action is typically facilitated by political parties able to make credible commitments to pursue group interests. Other work, however, emphasizes the lack of political credibility as a source of adverse development outcomes. Evidence presented here uses partisan preferences across 16 Sub-Saharan African countries to distinguish these positions. The evidence is inconsistent with the credibility of party commitments to pursue collective ethnic interests: ethnic clustering of political support is less widespread than expected; members of clustered ethnic groups exhibit high rates of partisan disinterest and are only slightly more likely to express a partisan preference; and partisan preferences are more affected by factors, such as gift-giving, often associated with low political credibility. These findings emphasize the importance of looking beyond ethnicity in analyses of economic development.Parliamentary Government,Educational Sciences,Social Inclusion&Institutions,Population Policies,Education and Society
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