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1241. Moral Hazard and the U.S. Stock Market: Analyzing the “Greenspan Put”?

Author:
Marcus Miller, Paul Weller, and Lei Zhang
Publication Date:
01-2002
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
When the risk premium in the US stock market fell far below its historic level, Shiller (2000) attributed this to a bubble driven by psychological factors. As an alternative explanation, we point out that the observed risk premium may be reduced by one-sided intervention policy on the part of the Federal Reserve, which leads investors into the erroneous belief that they are insured against downside risk. By allowing for partial credibility and state dependent risk aversion, we show that this 'insurance'—referred to as the Greenspan put—is consistent with the observation that implied volatility rises as the market falls. Our bubble, like Shiller's, involves market psychology, but what we describe is not so much 'irrational exuberance' as exaggerated faith in the stabilizing power of Mr. Greenspan.
Topic:
Economics, Government, International Trade and Finance, and Political Economy
Political Geography:
United States

1242. Europeanization and the Retreat of the State

Author:
Volker Schneider and Frank M. Häge
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Is the state on the retreat? We examine this question through an analysis of changing patterns of government involvement in infrastructure provision, which is generally considered to be one of the primary functions of the modern state. Based on an analysis of the extent of privatization of infrastructure companies between 1970 and 2000 across twenty-six OECD countries, we find that there is indeed a general trend towards less public infrastructure provision visible in all of the countries and that the main factors associated with the extent of privatizations are EU membership and government ideology. We argue that the trend of privatizing infrastructure companies was triggered by a change of the prominent economic discourse in the 1970s and that a rightist party ideology and EU membership fostered the adoption and implementation of these ideas in domestic settings.
Topic:
Development, Economics, and Government
Political Geography:
Europe

1243. Reconsidering Economic Relations and Political Citizenship in the New Iberia of the New Europe: Some Lessons from the Fifteenth Anniversary of the Accession of Portugal and Spain to the European Union

Author:
Paul Christoper Manual and Sebastián Royo
Publication Date:
11-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The purpose of this paper is to use the fifteenth anniversary of the accession of Portugal and Spain to the European Union as an opportunity to reflect on what has happened to both countries since 1986. It examines the integration process and how it has affected political, economic and social developments in Portugal and in Spain over the last fifteen years. In our view, and on balance, Spain and Portugal have benefited from accession. Since the last century, the obsession of Spanish and Portuguese reformists has been to make up the lost ground with modernized Europe. EU membership has been a critical step in this direction. The record of the past fifteen years is that this dream is becoming an economic reality. Despite impressive achievements, however, namely, since 1986, Portugal's average per capita income has grown from 56 percent of the EU average to about 74 percent, whereas Spain's has grown to 83 percent—both Iberian countries still have a long way to go to reach the EU average wealth. In addition, the question of Iberian and/or European citizenship, and its impact on the Portuguese and Spanish, remains open.
Topic:
Government, International Trade and Finance, and Political Economy
Political Geography:
Europe and Spain

1244. Does the European Union Strengthen the State? Democracy, Executive Power and International Cooperation

Author:
William Phelan
Publication Date:
11-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Many observers have suggested that the strengthening of executives vis-à-vis other political actors, in particular national parliaments, has been one of the principal effects of European integration (and perhaps international cooperation more generally) on national democracies, with democracy being “perverted” and parliaments becoming “rubber stamps” Moravcsik (1994) has argued that there were four theoretical ways in which international cooperation could “strengthen the state,” by redistributing institutional power, initiative (agenda-setting), information and ideas in favor of the executive in Europe. However, consideration of domestic politics in Europe shows that elites are already – for exogenous reasons – dominant in institutions, initiative and information. In Europe, therefore, the “strong” executive is not a product of European integration, and the reverse may even be true: that the dominance of the executive in national political systems has been a prerequisite for the success of European integration – that European openness has been built on national political closure. More generally, assessments of the impact of international cooperation on democracy should measure the effect of international cooperation at the margin on the existing characteristics of particular national democratic systems.
Topic:
Government and Political Economy
Political Geography:
Europe

1245. Structure as Process:The Regularized Intergovernmentalism of Franco-German Bilateralism

Author:
Ulrich Krotz
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This article systematically scrutinizes the intergovernmental and administrative aspects of Franco-German relations with the 1963 Elysée Treaty at their core. This treaty, together with its various additions and extensions, has defined the basic processes of bilateral interaction between the French and German states. Recurrent tension in Franco-German relations notwithstanding, many observers and participants have viewed France and Germany to be connected particularly closely since the 1960s. This article explores key elements of what it is that links France and Germany. Thereby it clarifies the concept of regularized inter governmentalism, suggests viewing this specific set of international practices from a social-structural perspective, and evaluates the effects and limits of such regularized procedures. Its findings suggest that bilateral structures have complemented and undergirded a broadly multilateral post-World War II world and are likely to continue to do so.
Topic:
International Relations, Government, and Treaties and Agreements
Political Geography:
Europe and Germany

1246. Germany, Multilateralism,and the Eastern Enlargement of the EU

Author:
Claus Hofhansel
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Since World War II, the most distinctive characteristic of German foreign policy has been its commitment to multilateralism. This commitment has served German material interests, but it has a normative basis as well. This paper analyzes German domestic support for multilateralist policies, defined in terms of the principles of indivisibility, generalized principles of conduct, and diffuse reciprocity, in the context of negotiations on the EU's eastern enlargement. Empirically, the paper focuses on the policy areas of freedom of movement for workers and agriculture. The main theoretical argument is that domestic support for multilateralist policies depends on the distributional consequences of such policies and the ability of political institutions to manage distributional conflicts. Distributional conflict undermines support for multilateralist policies. In the case of Germany, distributional conflicts among different sectors and regions of the German economy have become more severe partly, but not exclusively, due to German unification. Furthermore, German political institutions are less able to resolve such conflicts than in the past. The evidence presented here shows more intense domestic distributional conflicts on the free movement of labor issue than over agriculture, and, as expected, we see more explicitly bilateral and less multilateralist demands by unions and employers.
Topic:
Foreign Policy and Government
Political Geography:
Europe, Eastern Europe, and Germany

1247. Redesigning the Spanish and Portuguese Welfare States: The Impact of Accession into the European Union

Author:
Ana Guillen, Santiago Alvarez, and Pedro Adlao e Silva
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Despite the fact that the norms issued by the European Union regarding the regulation of social protection policies are scant, becoming a member of such a supranational institution can be expected to have influenced the redesign of welfare states. The present paper assesses the extent to which the enlargement of the EU towards the South has impacted the reform of social policies. In particular, it focuses on the cases of Spain and Portugal. The paper includes both a quantitative and a qualitative analysis. From the quantitative point of view, it assesses the evolution of financing and expenditure trends. From the qualitative point of view, it analyses direct and indirect effects of EU membership on social policy, and considers the development of social policy in the domestic sphere in relation to the European Social Model. The concluding section discusses the influence of both external and internal interests and challenges in the redesign of the Spanish and Portuguese welfare states.
Topic:
Government and Human Welfare
Political Geography:
Europe

1248. Building the Dual Earner/Dual Carer Society: Policy Developments in Europe

Author:
Marcia Meyers and Janet Gornick
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
A new model of work and family life is emerging out of contemporary debates on social citizenship and the characteristics of the “woman-friendly” welfare state. The dual-earner/ dual-carer model refers to a social and economic arrangement in which men and women engage symmetrically in both paid work in the labor market and in unpaid work in the home. Parents' ability to balance family and market responsibilities, and to allocate employment and childcare-giving equally between mothers and fathers, could be facilitated by a package of state policies. Three areas of supportive policy – all invarious states of development across Europe – include: (1) family leave schemes that provide job protections and wage replacement for parents of young children; (2) affordable, high quality early childhood education and care, to a limited extent for very young children and to a much larger extent for children aged three to school-age; and (3) labor market regulations aimed at shortening the standard work week and strengthening re-muneration for reduced-hour employment. In this paper, we review European policy provisions, and then turn our attention to the United States case. We suggest that embracing the vision of the dual-earner/ dual-carer society may help to draw diverse but unified support for family policy development in the United States.
Topic:
Economics, Government, and Human Welfare
Political Geography:
United States and Europe

1249. On Democracy and the “Public Interest”: in the European Union

Author:
Andrew Moravcsik and Andrea Sangiovanni
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Perhaps the most fundamental question in contemporary European Union politics is whether the existing division and sharing of competences between national and supranational levels is pragmatically and normatively justifiable. In his classic book, Governing in Europe (1999), Fritz Scharpf argues that the current policy mix is sub-optimal and, therefore, democratically illegitimate, because the multi-level European polity lacks the 'problem-solving capacity' necessary to permit citizens and their representatives to bargain to optimal outcomes. Instead it is likely to trigger a vicious circle of downward adaptations in social policy and public services that are likely to sap the EU's support. Scharpf recommends granting domestic social welfare policies constitutional status in EU jurisprudence, and permitting 'differentiated integration' or 'flexibility' for high-standard countries to legislate as an EU sub-group. In this challenge by Scharpf to the 'output legitimacy' of the EU, we argue, a number of important issues remain unresolved. First, his argument rests on an implicit and insufficiently elaborated conception of the public interest in maintaining or expanding current patterns of social welfare protection. Second, any effort to specify this 'public interest' must address three fundamental problems of democratic theory, namely the status of uninformed or inexpert citizens, underlying biases in democratic representation, and proper scope of majoritarian decision-making. Third, and fully in the spirit of the concerns raised in Governing in Europe, we suggest two possible strategies for addressing these concerns and some tools for rethinking output legitimacy and its relation both to the 'public interest' and to participatory procedures. The research agenda on democratic legitimacy in Europe launched by Scharpf is likely to be a lively one for some time to come.
Topic:
Democratization and Government
Political Geography:
Europe

1250. Defining a People: How Do International Rights Influence the Identity Formation of Minority Groups?

Author:
Reetta Toivanen
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This paper looks at the macroeconomic performance of EMU since it started in 1999. It argues that Euroland has benefited from a benign environment, appropriate monetary policy and structural reforms. However, there is no institution clearly in charge of formulating coherent economic policies in Euroland and this is reflected in the euro's external value.
Topic:
Government, Human Rights, Human Welfare, and International Law
Political Geography:
Europe

1251. Social Content of the International Sphere: Symbols and Meaning in Franco-German Relations

Author:
Ulrich Krotz
Publication Date:
08-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
“The Franco-German friendship is rich in memories and gestures that are at once important and symbolic, and that characterize the exceptional nature of the relationship between our two countries,” reflects former French economics minister and European Commission President Jacques Delors. Such symbolic acts and joint memories are not primarily about cooperation in specific instances. Rather, more generally, they denote what it means to act together. They lend significance to a relationship; they signify what is “at stake,” or what it is “all about.” They are about a deeper and more general social purpose underlying specific instances of cooperation. They are about the value and intrinsic importance that social relations incorporate. Symbols contribute to the institutionalization of social meaning and social purpose in dealing with one another. In this paper I clarify the concept of “predominantly symbolic acts and practices among states,” systematically explore such acts for the bilateral Franco-German relationship between the late 1950s and the mid-1990s, and scrutinize the specific meaning and effects that these practices have helped to generate and perpetuate.
Topic:
International Relations, Government, and Treaties and Agreements
Political Geography:
Europe and Germany

1252. Economic Policy Coordination in EMU: Institutional and Political Requirements

Author:
Stefan Collignon
Publication Date:
05-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
This paper looks at the macroeconomic performance of EMU since it started in 1999. It argues that Euroland has benefited from a benign environment, appropriate monetary policy and structural reforms. However, there is no institution clearly in charge of formulating coherent economic policies in Euroland and this is reflected in the euro's external value. The paper then evaluates the need for policy coordination, distinguishing between weak and strong forms of coordination failure. It shows that intergovernmental coordination may be an answer to the latter, pareto-improving multiple equilibria. However, overcoming weak coordination failure requires further policy delegation to the EU-level, particularly for the definition of an aggregate fiscal policy stance. Yet, this is only possible if the democratic deficit resulting from intergovernmental cooperation is closed by a European-wide policy consensus. To achieve this should be the objective of a European constitution.
Topic:
Economics, Government, and International Cooperation
Political Geography:
Europe

1253. The Spanish Experiment: A Social Democratic Party-Union Relationship in a Competitive Union Context

Author:
Javier Astudillo Ruiz
Publication Date:
05-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
A close relationship with a Social Democratic party has traditionally been regarded as one of the best strategies unions have to defend workers' interests. This conclusion still seems valid today, since the changes in the economic and social structure in the advanced capitalist societies alter the traditional content of their relationship, not the reason for cooperation. However, this belief assumes among a unitary labor movement. The experience of Southern Europe shows, on the contrary, that, when the union movement is divided according to different partisan preferences, union leaders are forced to choose between their relationship with their parties, or cooperating among themselves and being effective in the labor market. In addition, the divorce between the Spanish Socialist party and the Socialist Union reveals that, no matter how strong these organizations are, and despite their history of close ties, inter-union competition and a growing economy make their relationship even more damaging for the union's interests.
Topic:
Government, Human Welfare, and Industrial Policy
Political Geography:
Europe

1254. Continuity as the Path to Change: Institutional Innovation in the 1976 British Race Relations Act

Author:
Erik Bleich
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Institutional innovation can, paradoxically, be a product of institutional continuity. New institutions often emerge in a bifurcated manner in which formal institutions (such as laws and written rules) are accompanied by informal institutions (such as ideas that motivate and help determine the precise nature of specific policies). When informal institutions include ideas that track policy developments in other spheres or other countries, they can influence innovations in formal institutions. The development of the 1976 British Race Relations Act illustrates this dynamic. When British race institutions were established in the 1960s, they reflected the prevailing idea that British policies should incorporate lessons learned from North America. When Britain revisited its anti-racism provisions in 1976, policy experts looked again to North America and found that much had changed there in the interim. They subsequently altered Britain's formal institutions to include U.S.-inspired “race-conscious” measures.
Topic:
Government and Human Rights
Political Geography:
United States, United Kingdom, Europe, and North America

1255. Continental welfare states in Europe confronted with the end-of-career inactivity trap: A major challenge to social protection in an aging society

Author:
Anne Marie Guillemard
Publication Date:
03-2002
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
The paper is an attempt to assess continental welfare state reforms that use the window of the end-of-career inactivity trap. The question addressed is: what is the most effective way to break up the vicious circle of early exit from the labor market, which is a specific pathology of continental welfare states. The cases of the Netherlands and Finland, two countries that have succeeded in reversing the early exit trend in recent years, prove that only a radical change in paradigms that govern social protection may turn the vicious circle of welfare without work for aging workers into a virtuous circle of active aging. In states in which reforms have focused on changing the rules and regulations that govern retirement systems, or on restricting early exit pathways, as is the case in France, they have failed to break up with the end-of-career inactivity trap.
Topic:
Government
Political Geography:
Europe and France

1256. Access To Information: A Key To Democracy

Author:
Laura Newman
Publication Date:
11-2002
Content Type:
Working Paper
Institution:
The Carter Center
Abstract:
Citizens and their leaders around the world have long recognized the risk of corruption. Corruption diverts scarce resources from necessary public services, and instead puts it in the pockets of politicians, middlemen and illicit contractors, while ensuring that the poor do not receive the benefits of this "system". The consequences of corruption globally have been clear: unequal access to public services and justice, reduced investor confidence, continued poverty, and even violence and overthrow of governments. A high level of corruption is a singularly pernicious societal problem that also undermines the rule of law and citizen confidence in democratic institutions.
Topic:
Civil Society, Democratization, Government, Human Rights, and Politics
Political Geography:
South America, Latin America, Central America, Caribbean, and North America

1257. Third Development Cooperation Forum: Human Security and the Future of Development Cooperation

Author:
Jimmy Carter and Robert Rubin
Publication Date:
02-2002
Content Type:
Working Paper
Institution:
The Carter Center
Abstract:
In 1992, The Carter Center hosted a conference for Global Development Cooperation. The purpose of the conference was to identify specific and practical ways to improve development cooperation on a global scale. President Carter and United Nations Secretary-General Boutros Boutros-Ghali co-chaired the event, which convened world leaders, development experts, and representatives from donor institutions, developing nations, international organizations, nongovernmental organizations, private foundations, and the private sector. In the ensuing decade, the need for improved development cooperation was central to the formulation of strategies designed to reduce human suffering and narrow disparities.
Topic:
Security, Democratization, Government, Non-Governmental Organization, and Politics
Political Geography:
United Nations

1258. CERI: Politics Behind The Mask: Studying Contemporary Carnivals in Political Perspective, Theoretical and Methodological Suggestions

Author:
Denis-Constant Martin
Publication Date:
11-2001
Content Type:
Working Paper
Institution:
Centre d'Etudes et de Recherches Internationales
Abstract:
Carnivals are a type of rite of renewal where mask and laughter spur the invention of highly symbolic modes of expression. They offer opportunities for the study of social representations and, since they are both recurring and changing, they constitute a ground where not only social change can be assessed, but where the meanings of social change can be best understood. The first part of this paper reviews and discusses theories of carnival, in particular those related to its relationship to power and social hierarchies. The second part proposes a few methodological suggestions for the study of carnival from a political perspective, emphasizing semiotic analysis and surveys using non-directive methods.
Topic:
Civil Society, Development, Government, and Politics
Political Geography:
Global Focus

1259. The Russian Press in the Post-Soviet Era: A Case Study of Izvestia

Author:
Adam Jones
Publication Date:
07-2001
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
The progress of the Russian press in the late Soviet and post-Soviet eras can be described (with apologies to Vladimir Lenin) as "two steps forward, on step back." The flowering of glasnost (openness) under Mikhail Gorbachev le to a "golden age" of Soviet journalism, including an explosion of new publications and a lifting of nearly all state restrictions on journalists' professional activities. However, the collapse of the USSR and the onset of material crisis in 1991-92 quickly produced a winnowing of the press and a retrenchment on the part of surviving publications. At the same time, powerful new forces - especially oligarchs and regional and leaders - arose to vie with the state for influence over post-Soviet media. This paper explores the trajectory of one of the leading newspapers of the Soviet and post-Soviet period, Izvestia, in the light of those broader trends. While Izvestia emerged from the ashes of Soviet communism with formal control over its material plant and journalistic collective, it was soon subjected to a tug-of-war between powerful actors determined to control its destiny - first the Communist-dominated Duma (parliament), and then large corporations and business oligarchs. The struggle led, in 1997, to the dismissal of the paper's editor. Oleg Golembiovsky, and the departure of many staff to form Novye Izvestia (New Izvestia) - though this publication too, was also unwilling or unable to avoid the temptations of a close alliance with one of the leading oligarchs, Boris Berezovsky. The findings are place in the broader comparative context of the press in transition, based on the author's research into process of media liberalization and transition worldwide.
Topic:
Cold War, Development, and Government
Political Geography:
Russia, Europe, and Asia

1260. Sobre Contagios y Remedios: La Heterodoxia Económica del New Deal, La Políca Exterior de Roosevelt y su Impacto sobre la Administracón Cerdenista

Author:
Joge Schiavon
Publication Date:
01-2001
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
The article explores the Mexico-United States bilateral relation during the administrations of Franklin D. Roosevelt and Lazaro Cardenas, in order to better understand how U.S. domestic and foreign policies influence the management of its relation with Mexico, which in turn can facilitate or not the implementation of public policies in the Mexican system. The principal hypothesis is that the New Deal modified the American liberal conception of state intervention in economic and social issues inside the United States, and that this permitted Cardenas' economic heterodoxy, both in political and ideological terms. Evidence is provided to support two points. First, the changes in U.S. foreign policy that resulted from the enactment of the Good Neighbor Policy invested the Cardenas administration with greater autonomy in economics issues. Second, the new economic ideas derived from the New Deal facilitated and justified increased state intervention of Cardenas' government in the economy, using fiscal policy and direct sate participation in economic areas defined as strategic. In sum, this article demonstrates that Roosevelt's domestic and foreign policies generated a permissive environment for the enactment of the most important public policies during the administration of Cardenas, supporting the idea that U.S. internal and international actions directly affect the possibilities of policy implementation in Mexico.
Topic:
International Relations, Foreign Policy, and Government
Political Geography:
United States, America, and Mexico