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  • Author: Mark Hallenberg, Jürgen. von Hagen
  • Publication Date: 02-1997
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: Large government budget deficits are a concern in most industrialized countries. Two literatures in political economy argue that differences in political institutions explain much of the variation in the success of counties in their efforts to run small deficits. One group of authors considers how differences among electoral systems affect the size of budget deficits, while the second group concentrates on the governmental institutions which structure the formation of the yearly budget. Among the "electoral institutionalists", a consensus is beginning to emerge which treats proportional representation systems as a cause of high levels of public debt. In contrast, "fiscal institutionalists" argue that the presence of certain institutions in the decision-making process at the cabinet level, such as a strong finance minister or negotiated spending targets, lead to smaller deficits than in cases where such institutions are missing. We indicate that these two literatures complement one another. Electoral institutions matter because they restrict the type of budgetary institution at the governmental phase which a state has at its disposal. A strong finance minister is feasible in states where one-party governments are the norm, and such states usually have plurality electoral systems, while negotiated targets provide an alternative in multi-party governments. In multi-party governments, which are common in states with proportional representation, the coalition members are not willing to delegate to one actor the ability to monitor and punish the others for "defections" on the budget. The empirical section of the paper indicates a strong relationship between one-party governments and strong finance minister solutions within the European Union states on the one hand and multi-party or minority governments and targets on the other. Pooled time series regression results also support our contention that it is the presence or absence of one of these budgetary institutions, rather than the plurality/proportional representation dishotomy, which has the greatest impact on debt levels.
  • Topic: International Organization, International Political Economy
  • Political Geography: Europe
  • Author: Maurice Obstfeld
  • Publication Date: 02-1997
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: This paper studies the constraints placed by the Maastricht Treaty on the rates at which member currencies will exchange against the Euro at the start of stage 3 of economic and monetary union (EMU). The paper shows that the stage 3 bilateral conversion factors for EMU member currencies must correspond to closing market exchange rates as of December 31, 1998; furthermore, currency conversion rates into the Euro cannot be determined until that date. Moreover, official announcements about intended conversion factors will carry no credibility with markets, as market rates must be chosen over any prennounced rates according to the Treaty. Unless there is heavy official intervention in the runup to stage 3, EMU members' bilateral market rates will exhibit excessive volatility and may induce beggar-thy-neighbor policy behavior. On the other, hand, exchange-rate targeting may open the door to speculative currency crises. The only feasible solution appears a widely-publicized institutional reform to subjugate national central banks' policies entirely to the goal of intra-EMU exchange stability in the final months of stage 2.
  • Topic: International Political Economy, International Trade and Finance
  • Political Geography: Europe
  • Author: Lars Tragardh
  • Publication Date: 01-1997
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: According to Ole Wæver, a leading student of the travails of the "New Europe," Western Europe is probably the part of the world that currently exhibits "the most advanced case of border fluidity and transgression of sovereignty." So dramatic are the processes underway that they have led otherwise prudent political scientists to turn to the trendy idiom of "postmodernity," meaning in the context of IR theory first and foremost "post-sovereignty." Thus John Ruggie has argued that what he sees as "the unbundling of territoriality" - i.e. the incipient decoupling of sovereignty and (nation)state - constitutes "nothing less than the emergence of the first truly postmodern international form." Similarly, Saskia Sassen notes that in the process of globalization the notion of a "national economy" has come to be replaced with that of a "global economy." As a consequence, she argues that while sovereignty and territory very much "remain key features of the international system," they have been "reconstituted and partly displaced onto other institutional areas outside the state." Thus, she concludes, "sovereignty has been decentered and territory partly de-nationalized."
  • Topic: International Cooperation, Sovereignty
  • Political Geography: Europe
  • Author: Monique Borrel, Stephen Bornstein, Pierre-Eric Tixier, Chris Benner, Julia E. Kopich, W. Norton Grubb
  • Publication Date: 02-1996
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: From the beginning of the industrial era to the present time, French social history has been characterized by recurrent strikes of great magnitude. Contrary to most postwar industrialized countries where large strikes ceased to play a key role in sociopolitical changes, the French case presents an important anomaly. This research demonstrates that strikes have been instrumental in reshaping French society since the early 1950s. First, strike waves and generalized disputes supported the rapid expansion of the Welfare State throughout the postwar period. They also prompted leftist parties and unions to achieve coordination in their strategies and to orchestrate national demonstration strikes, which resulted in the emergence of a leftist electoral majority. Besides, the 1968 strike waves and the leftist strategy to achieve political power supported the upward trend in unionization in the 1970s. Beginning in the early 1980s, this French pattern of strikes has resulted in a number of perverse effects that account for the crisis of the mid1990s. In that respect, the French experience supports the idea that advanced industrial societies cannot afford recurrent general strikes without damaging the very fabric of democracy and without jeopardizing their economic future.
  • Topic: Education, Industrial Policy
  • Political Geography: America, Europe, France
  • Author: Wolfgang Seibel, Christopher S. Allen, Hans-Georg Betz, Henry Kreikenbaum, John Leslie, Andrei S. Markovitz, Ann L. Phillips, Michaela W. Richter
  • Publication Date: 03-1996
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: According to West German standards, there is only a weak nonprofit sector in East Germany today. The East German quasi-nonprofit sector nonetheless is an indispensable institutional ingredient of political integration. It is characterized by an amazing degree of structural and ideological continuity. Much of its organizational setting dates back to the pre-1989 era. Both funding and managerial attitudes are shaped by state-centeredness. Nonprofit institutions are heavily engaged in mitigating the social costs of economic transformation. Many of them, especially at the local level, are controlled by members of the former-communist PDS (Party of Democratic Socialism). Thus, the East German quasinonprofit sector presumably integrates two important societal groups more effectively than the regular polity: those alienated from the new democracy due to economic disappointment or deprivation and those alienated from the new democracy due to ideological reasons (former communists in particular). This indicates a remarkable institutional elasticity whose main function is to "synchronize" the dramatically accelerated pace of political change and the much slower pace of societal change.
  • Topic: Cold War, Democratization
  • Political Geography: Europe
  • Author: Daniel N. Nelson, Andrei S. Markovits, Thomas Banchoff, Patricia A. Davis, Christian Deubner, Lily Gardner Feldman, JoEllyn Murillo Fountain, Stefan Immerfall, Michael Kreile, Carl Lankowski, Barbara Lippert, Susanne Peters, Elke Thiel, Wolfgang Wessels
  • Publication Date: 04-1996
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: This paper seeks to explain the continuity in German policy in Europe across the 1990 divide. Although the collapse of the Soviet bloc and reunification transformed the context of German foreign policy, its fundamental direction remained unchanged. The new Germany, like the old, made solidarity with the western allies the cornerstone of its policy in Europe. Chancellor Helmut Kohl did address new policy challenges in the East. But he made stronger western institutions, and a deeper European Union in particular, his top priorities. Neorealism and neoliberalism, this paper argues, cannot adequately explain the strong western orientation of the Federal Republic in the early 1990s. The constellation of power and institutions at the international level left German leaders with different ways to combine association with the West and engagement in the East. In order to explain the priority accorded solidarity with the West, it is necessary to bring in the foreign policy priorities espoused by Kohl and the views of history and its lessons that informed them.
  • Topic: Security, Foreign Policy, Diplomacy
  • Political Geography: Europe, Germany
  • Author: Neil Fligstein, Jason McNichol
  • Publication Date: 11-1996
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: One of the central issues in making sense of the European Union is the question of the degree to which it functions as an autonomous state. One pole of this debate conceives of the EU as a supranational entity while the other argues that it remains an intergovernmental bargain. Here, we propose to analyze the EU in terms of the structuring of its policy domains. 12 of 17 domains appear organized by nongovernmental organizations. We conclude that while the governments retain direct control over important parts of the EU, they have allowed most policy domains at the EU level to become autonomous.
  • Topic: International Relations, International Organization
  • Political Geography: Europe
  • Author: Paul Pierson
  • Publication Date: 11-1996
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: Many European and American observers of the EC have criticized "intergovernmentalist" accounts for exaggerating the extent of member state control over the process of European integration. This essay seeks to ground these criticisms in a historical institutionalist" account that stresses the need to study European integration as a political process which unfolds over time. Such a perspective highlights the limits of member state control over long-term institutional development. Losses of control result from member state preoccupation with short-term concerns, the ubiquity of unintended consequences, and processes that "lock in" past decisions and make reassertions of member state authority difficult. Brief examination of the evolution of EC social policy suggests the limitations of treating the EC as an institutional "instrument" facilitating collective action among sovereign states. It is more useful to view integration as a path-dependent process that has produced a fragmented but still discernible multi-tiered European polity.
  • Topic: International Organization, Politics, Sovereignty
  • Political Geography: America, Europe
  • Author: Jeffrey A. Frankel, Andrew K. Rose
  • Publication Date: 08-1996
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: Everyone studing EMU cites the theory of Optimum Currency Areas: whether a country like Sweden should join the currency union depends on such parameters as the extent of Swedish trade with other EU members and the correlation of Sweden's income with that of other members. Few economists have focused on what we consider one of the most interesting aspects of this issue. Trade patterns and income correlation are endogenous. Sweden could fail the OCA criterion for membership today, and yet, if it goes ahead and joins anyway, could, as the result of joining, pass the Optimum Currency Area (OCA) criterion in the future. (Further, even if Sweden does not enter EMU quickly, it will be more likely to satisfy the OCA criteria in the future as a result of its recent accession to the EU.) The few economists who have identified the importance of the endogeneity of trade patterns and income correlation are divided on the nature of the relationship between the two. This is an important empirical question, which may hold the key to the answer regarding whether it is in Sweden's income interest to join EMU. We review the OCA theory, highlighting the role of trade links and income links. Then we discuss and analyze the endogeneity of these parameters. We present econometric evidence suggesting strongly that if trade links between Sweden and the rest of Europe strengthen in the future, then Sweden's income will become more highly correlated with European income in the future (not less correlated, as some have claimed). This has important implications for the OCA criterion. It means that a naïve examination of historical data gives a biased picture of the effects of EMU entry on Sweden. It also means that EMU membership is more likely to make sense for Sweden in the future than it does today.
  • Topic: International Political Economy, International Trade and Finance
  • Political Geography: Europe, Sweden
  • Author: Susanne K. Schmidt
  • Publication Date: 08-1996
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: European competition law allocates far-reaching competences to the European Commission. The paper asks for the conditions under which the Commission may use these rights against the member states, focusing on the most powerful provision - the right of the Commission under Article 90 to issue directives by itself in those cases where member-state governments have allocated specific rights to undertakings that conflict with the Treaty's rules. In addition the Commission may pursue Treaty violations on a case-by-case basis. In European telecommunications policy the Commission has used its powers rather successfully, with all liberalization decisions being based on Article 90. But for European electricity policy the Commission has shrunk away from using these powers in favor of initiating council legislation. The paper analyzes the conditions of the Commission's ability to act under European competition law in a multi-level framework, drawing among others on a principal-agent approach.
  • Topic: Energy Policy, Government, International Law, International Political Economy, Science and Technology
  • Political Geography: Europe
  • Author: Frank Schimmelfennig
  • Publication Date: 08-1996
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: Two seemingly contradictory trends dominate the European debate over legitimate rule. On the one hand, there appears to be no ideologically viable alternative to liberal democracy following the collapse of the Eastern Bloc. On the other, the rapid progress of European integration has triggered an intense public debate over the European Union's "legitimacy deficit" and active popular opposition in many Western European countries. This paper asks whether these two seemingly contradictory developments can be reconciled. It argues that they can once it is recognized that the modern inter-state system is undergoing profound change. State sovereignty is being undermined by the trans-nationalization of foreign policy and the inter-nationalization of governance. In particular, the European Union has crossed the border from horizontal (or anarchical) interstate cooperation to vertical (or hierarchical) policy making in a multi-level political system in which states are but one level of the policy.
  • Topic: Foreign Policy, Economics, Government, International Organization, Sovereignty
  • Political Geography: Europe
  • Author: Gregg O. Kvistad, Andrei S. Markovits, Thomas Banchoff, Wolfgang Krieger, Patricia Davis, Jost Halfmann, Peter H. Merkl, Donald P. KOmmers, Ernst B. Haas, Peter Kruger, Ludger Lindlar, Christhard Hoffman, Charles Maier, Michaela Richter
  • Publication Date: 11-1995
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: The founding of the Federal Republic of Germany as a democracy had two primary negative referents: the institutional weakness of the Weimar Republic that made it susceptible to the Nazi seizure of power and the authoritarian statist tradition of the nineteenth century. This essay argues that the institutionalization of the professional civil service in the early Federal Republic drew selectively on these negative examples, somewhat ambiguously exchanging the location of political parties and the professional civil service, but retaining substantial elements of subsequent redefinition of the role of the German citizen. Throughout the 1970s and the 1980s, German statism was rendered "inappropriate" not only for German society, but also for the institutional identity of Germany's venerated professional civil service.
  • Topic: Cold War, Nationalism
  • Political Geography: Europe, Germany
  • Author: John Leslie, Paul M. Lubeck, Georgi Derlugian, Elaine Thomas, Maria Todorova, Philip G. Roeder, Andrew Bell-Flailkoff, Nirvikar Singh, Daniel Chirot, Beverly Crawford, Ronnie Lipschutz
  • Publication Date: 03-1995
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: This paper looks at the relationship between the rise of Islamic radicalism and changes in the global political and economic order. The author suggests that the major independent variable explaining whether Islamic radicalism can take power in a given state is the degree to which the state is able to articulate and then successfully pursue a national agenda. The success of such an agenda is in turn dependent upon the position of the state in the context of the global order. Thus, the author makes the claim that the creation of an integrated, global market exacerbates rather than suppresses Islamic radicalism because it interferes with the ability of any given state to pursue its own agenda. Economic liberalization weakens state authority, exposes its citizens to global competition and creates social and economic dislocation, providing an opportunity for Islamic radicals to position themselves as an alternative to further global integration.
  • Topic: Security, Ethnic Conflict, Islam, Nationalism, Sovereignty
  • Author: Joseph M. Grieco
  • Publication Date: 04-1990
  • Content Type: Working Paper
  • Institution: Center for German and European Studies, University of California, Berkeley
  • Abstract: Germany's foreign economic policy places enormous weight on formal European institutions. In contrast, Japan has not had an institutionalist orientation in regard to its East Asian neighbors. This paper addresses the question of why Germany and Japan differ so greatly on this issue of regional economi. institutions. It suggests that the differences observed in German and Japanese interests in regard to such arrangements constitute a puzzle if they are examined from the perspective of liberal ideas about the functional bases of international collaboration, or from the viewpoint of realist propositions about hegemony and cooperation and about the impact of polarity on state preferences. The paper also puts forward a realist-inspired analysis (focusing on American power in the post-Cold War era as well as American national strategy in the early years of that conflict) that might help account for the strong German bias in favor of regional economic institutions and the equally pronounced Japanese aversion to date for such arrangements.
  • Topic: Foreign Policy, Cold War, International Organization
  • Political Geography: United States, Japan, America, Europe, Israel, East Asia, Asia, Germany