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1061. Negotiating Economic Transitions in Liberizing Polities

Author:
Frances Hagopian
Publication Date:
05-1998
Content Type:
Working Paper
Institution:
Weatherhead Center for International Affairs, Harvard University
Abstract:
How do governments struggling to consolidate new democracies enact effective stabilization and adjustment policies, reform the public sector, and deregulate markets? And what has been the impact of economic liberalization on political institutions and systems of political representation? Treating economic and political transitions as mutually interdependent, this paper couples these questions to suggest a reformulation of the conventional wisdom about how economic liberalization proceeds and how political interests are determined. It challenges the assumption that neoliberal reform is most readily achieved in liberalizing polities when visionary political leaders surrounded by coherent economic teams with comprehensive programs in place act with a wide margin of autonomy from society. It also questions the contention that structures of political representation are the outgrowth of either economic organization or the product of state engineering. The paper makes two arguments. Its central argument is that economic reform is accomplished most readily when government reformers, acting through available clientelistic, corporatist, and party-based networks of mediation, negotiate the compliance of public and private sector representatives of social actors for the introduction of market-oriented reforms. They trade public resources or legislation favoring the representational status of political or social actors in the present for the agreement of those actors to accept diminished state resources for their organizations or constituents in the future. The use of specific networks of negotiation, moreover, influences the design of liberalization policies and helps to account for national differences in the pace and sequence of economic reform measures. The paper's second argument is that those systems of political representation that are strengthened as a result of the temporary advantages that accrue to them during the process of state retreat will endure even when they are incompatible with economic liberalism. This is so because the politicians and group leaders who manage these networks have the opportunity to design institutions that will allow them to accommodate themselves and adapt their power bases to economies in which the market plays a larger role.
Topic:
Economics and Political Economy
Political Geography:
South America, Latin America, Central America, and North America

1062. Spaces of Contention

Author:
Charles Tilly
Publication Date:
06-1998
Content Type:
Working Paper
Institution:
Institute for Social and Economic Research and Policy at Columbia University
Abstract:
November 1830 brought London to one of its greatest nineteenth-century peaks of visible, vigorous, and often violent popular contention. When King William IV rode in state through Westminster from St. James to the opening of Parliament on 2 November, people who gathered along the streets cheered the king but jeered prime minister Wellington. Onlookers roared “Down with the New Police! No martial law!” (MC [ Morning Chronicle] 3 November 1830). Near Parliament, two people waved tricolor flags, ten or a dozen men wore tricolor cockades, and members of the crowd cried out “No police” or “Vote by ballot” (LT [ Timesof London], 3 November 1830).
Topic:
Security, Democratization, and Political Economy
Political Geography:
United Kingdom, Europe, and London

1063. Stabilization and Its Discontents: Argentina's Economic Restructuring in the 1990s

Author:
Manuel Pastor and Carol Wise
Publication Date:
05-1998
Content Type:
Working Paper
Institution:
The North-South Center, University of Miami
Abstract:
Even as multilateral officials adamantly oppose the implementation of currency boards as a way of stabilizing exchange rates and inflation in the wake of the recent Asian financial crisis, Argentina remains committed to such an arrangement. This paper explores the political and economic conditions that prompted Argentine policymakers to adopt an economic management model in 1991 that is generally considered to be less flexible than other approaches now prevailing in Latin America. Short-term outcomes as well as longer-term patterns of economic restructuring now underway in Argentina are analyzed. The authors argue that, despite considerable success on the macro-stabilization front, policymakers still have their work cut out in terms of designing a set of second-phase measures to facilitate smoother adjustment at the microeconomic level.
Topic:
Economics and Political Economy
Political Geography:
Latin America

1064. Mixed Signals

Author:
Peter A. Hall and Robert J. Franzese Jr.
Publication Date:
09-1997
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Plans for European Monetary Union are based on the conventional postulate that increasing the independence of the central bank can reduce inflation without any real economic effects. However, the theoretical and empirical bases for this claim rest on models of the economy that make unrealistic information assumptions and omit institutional variables other than the central bank. When the signaling problems between the central bank or other actors in the political economy are considered, we find that the character of wage bargaining conditions the impact of central bank independence by rendering the signals between the bank and the bargainers more or less effective. Greater independence can reduce inflation without major employment effects where bargaining is coordinated, but it brings higher levels of unemployment where bargaining is uncoordinated. Thus, currency unions like the EMU may require higher levels of unemployment to control inflation than their proponents envisage; they will have costs as well as benefits, costs which will be distributed unevenly among and within the member nations based on the changes induced in the status of the bank and of wage coordination.
Topic:
Economics, Government, International Trade and Finance, and Political Economy
Political Geography:
Europe

1065. Employment and the Welfare State: A Continental Dilemma

Author:
Fritz W. Scharpf
Publication Date:
07-1997
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
Estimates of the comparative health of the North American and Western European economies and societies have had their fashion cycles - from Servain-Schreiber's warnings that Europe was falling behind, rather than catching up with, American technological leadership in the 1960s, to European exasperation over American trade and budget deficits in the 1970s, to anxieties over Eurosclerosis in the early 1980s and over the American loss of international competitiveness in the late 1980s. Presently, by all accounts, the sick man is again Europe, with higher unemployment and much lower rates of job creation over the last two decades or so. The main problem is a rising level of long-term unemployment that mainly affects unskilled workers and, in most countries, young job seekers with low levels of schooling.
Topic:
International Cooperation and Political Economy
Political Geography:
America, Europe, North America, and Western Europe

1066. Sankin Kotai: Institutionalized Trust as the Foundation for Economic Development in the Tokugawa Era

Author:
Jennifer Amyx
Publication Date:
06-1997
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
This article focuses on the sankin kotai, or alternate attendance, system instituted in Japan during the Tokugawa period. Most traditional accounts of the sankin kotai system–which included an important hostage element–portray it as a product of Tokugawa statecraft devised primarily for the coercion and exploitation of daimyo, or territorial lords, and control over a feudal order. In addition, these accounts tend to take the distinctive stability of this era for granted. Given the chaos and bloodshed of the "warring states" period which preceded it, however, the phenomenon of 267 years of peace deserves a stronger explanation.
Topic:
Development, Economics, and Political Economy
Political Geography:
Japan, Israel, and East Asia

1067. Political Economy in Security Studies After the Cold War

Author:
Jonathan Kirshner
Publication Date:
04-1997
Content Type:
Working Paper
Institution:
The Judith Reppy Institute for Peace and Conflict Studies
Abstract:
In contemporary International Relations theory, there exists a sharp distinction between international political economy and security studies. This is largely a false distinction, however, a product of peculiar circumstances associated with the cold war, and one which is becoming increasingly anachronistic in the post-cold war era. In order to understand international relations in this era, a re-integration of the discipline is necessary.
Topic:
Security, Cold War, Globalization, and Political Economy

1068. Privatization and Regulation: Lessons from Argentina and Chile

Author:
Luigi Manzetti
Publication Date:
04-1997
Content Type:
Working Paper
Institution:
The North-South Center, University of Miami
Abstract:
Some economists have argued that before governments privatize state-owned monopolies in public utilities, they should first try to promote competition. If this is not done, privatization does not produce gains in economic efficiency; instead, it fosters rent-seeking behavior by the new private ownership. Few empirical analyses of rent-seeking behavior for Latin America in post-privatization environments have been done — those that exist concentrate on economic issues and neglect important political motivations. The purpose of this paper is to fill that gap and address key issues of public policy by examining the cases of Chile and Argentina and providing a political explanation for why the Chilean and Argentine governments allowed rent-seeking behavior in important public utility markets. Based upon an analysis of these experiences, the paper then discusses the types of institutions most likely to avoid such negative consequences.
Topic:
Economics, Government, and Political Economy

1069. The Political Economy of Distributional Equity in Comparative Perspective

Author:
Kwan S. Kim
Publication Date:
03-1996
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
Growing income inequality within a country is caused by socioeconomic factors and inadequate government policies and ultimately leads to social and political instabilities. The ideology of supply-side economics in the United States and the United Kingdom during the 1980s, for instance, induced policies of inequality which were then perceived as a way to stimulate economic growth. The demise of East European socialism since the late 1980s also led many developing countries to pursue market reforms as a way to resuscitate their moribund economies. There is evidence, however, to indicate that the distribution of income in these countries is becoming more unequal with attendant and frequently grave social and political consequences.
Topic:
Development, Political Economy, Poverty, Inequality, and Economic Growth
Political Geography:
United Kingdom, Global Focus, and United States of America

1070. The Political Economy of Regional Development and Cooperation in the Pacific Basin, with Special Reference to APEC-A Rapporteurs' Report

Author:
Joseph Stevano and William Barnes
Publication Date:
04-1996
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
The papers and discussion summarized here were presented at the workshop “The Political Economy of Regional Development and Cooperation in the Pacific Basin, with Special Reference to APEC,” which was held at the Kellogg Institute, 12–14 October 1995. Some of the papers presented, including those by Yoji Akashi, Brian Job, and Clark Reynolds, will also be published in their entirety as part of the Kellogg Institute Working Paper Series. The United States, Canada, Japan, Korea, Indonesia, the Philippines, and many other East Asian countries all belong to the Asia-Pacific Economic Cooperation (APEC), and a distinctive feature of the workshop was that it consisted of experts from both sides of the Pacific. The result is a comprehensive look at the issues of trade and development in this region. Yorizumi Watanabe pointed out some tensions between regional and multilateral trade agreements. Satoshi Hanai’s paper analyzed the current Japanese recession; the papers by Akashi, Tsutomu Kikuchi, and Job focused on APEC, the former two from an Asian perspective, the latter from a North American—which provided a provocative contrast between different explanations and interpretations of the exact same events. Shozo Inouye analyzed Japan’s contribution to human resource development throughout the Asia-Pacific, while Michael Plummer and Reynolds analyzed the economic impact of economic integration in this region.
Topic:
Development, Political Economy, Regional Cooperation, and Economic Growth
Political Geography:
Asia