THE MATCHING OF HETEROGENEOUS FIRMS AND POLITICIANS

We use a Chinese firm‐director panel dataset to examine the matching of heterogeneous firms and politicians. On the basis of 36,308 detailed biographies, we identify individuals who previously held bureaucratic positions and classify the rank of each position in the Chinese political hierarchy. Using this direct measure of political capital, we examine how firms with heterogeneous productivity match politicians with different political strength. Our results indicate a positive assortative matching in the political capital market. More productive firms are paired with more powerful politicians. Furthermore, the preference for political capital relative to conventional human capital increases in firms' dependence on external financing and the inefficiency of local governments. Conditional on the endogenous matching, new hires with political capital receive more compensation than their co‐workers in the same cohort. The marginal effect of a one‐step rise on the political ladder significantly exceeds the marginal effect of raising education attainment from, for example, high school to college. (JEL D21, D73, J24, J31, O12)     

DYNASTIC POLITICAL PRIVILEGE AND ELECTORAL ACCOUNTABILITY: THE CASE OF U.S. GOVERNORS, 1950–2005

This paper examines the impact of dynastic political privilege on the behavior of incumbents. Incumbents have opportunities to serve themselves at the expense of voters, but society can design political institutions to mitigate these principal‐agent problems. Dynastic political privilege may be one such mechanism. We argue that the possibility that opportunistic behavior in office may damage family members' political prospects disciplines incumbents. We test this hypothesis using data for 1950–2005 on U.S. governors, including a new data set on the family relationships of politicians, and find that dynastic political privilege increases incumbent accountability. (JEL H71, H10)     

Ethnic Community and Ethnic Boundaries in a “Sauce‐Scented Neighborhood”1

This article investigates the problem of ethnic boundary making in a changing context. Our case is Boston’s North End, a historically Italian neighborhood undergoing changes to its social and physical environment, making the ethnic definition of neighborhood identity and belonging more difficult though not less salient. Consequently, participants in the workings of the neighborhood—residents, business owners, politicians—face challenges of both boundary placement (who is Italian and who is not?), as well as cultural content (what does it mean to be “Italian”?). Rather than viewing Italian ethnicity as simply weakening over time, we argue that the North End shows ethnicity is in a stage of category divergence, where the still‐dominant ethnic identity is juxtaposed not against another ethnic out‐group, but at various times against boundaries of class and race, commercial and community values, even city political boundaries. Drawing on ethnographic research and in‐depth interviews, we describe three group identity frames that illustrate these processes and reveal how Italian ethnicity continues to animate discourse and action in the neighborhood.     

Association between femininity and women voters political trust in Pakistan

Political trust has been researched extensively since long in the sociology of politics. However, feminine attributes are rarely tested against political trust, especially in developing countries such as Pakistan. The present research explores the association of feminine attributes possessed by rural women with different attributes of political trust in politicians. A total of 414 registered women voters were recruited through a multistage sampling technique from selected tehsils of Punjab Province, Pakistan. The data were collected through an interview schedule, processed through SPSS (21.0), and presented in a tabular format. Pearson R correlation was applied to find out the association between hypothesized variables. The findings suggest that emotionality is significantly correlated with performance, ability, and the conduct of politicians (r = .302, r = .267, r = ?.216, p < .01). Feminine purity is significantly correlated with performance and the ability of politicians (r = .309, r = .202, p < .01). Feminine stereotypical image is significantly correlated with performance and the ability of politicians (r = .174, r = .196, p < .01). Traditional gender relations in the society need to be looked at carefully to realize the true potential of women in terms of their political participation.     

NONLINEARITIES AND THE SUSTAINABILITY OF THE GOVERNMENT'S INTERTEMPORAL BUDGET CONSTRAINT

We analyze the sustainability of the government's intertemporal budget constraint and the corresponding fiscal reaction function within a nonlinear error‐correction framework. Our empirical analysis, based on Italy, provides some evidence that the Italian government is meeting its intertemporal budget constraint. Nevertheless, we show that the burden of correcting budgetary disequilibria is entirely carried out by changes in the average tax rate, with a weakly exogenous government spending, possibly determined by the political process. We also document some rigidities of the tax instrument, in terms of downward inflexibility of the average tax rate with respect to its long‐run level. Finally, we provide some evidence in favor of a nonlinear adjustment toward a sustainable long‐run equilibrium, as the average tax rate adjusts faster the further away it gets from the equilibrium. By considering the behavior of taxes across the economic cycle, we also provide some evidence of inflexibility of the tax instrument during bad times. (JEL C32, C51, C52, H20, H50)     

From democratic participation to civic resistance: the loss of institutional trust as an outcome of activism in the refugee solidarity movement

Adding to the literature on non‐institutional political action and trust, this article argues that the loss of institutional trust is not only a cause but also an outcome of political activism. Studying the Danish refugee solidarity movement in a mixed‐methods research design including survey and qualitative interview data, the article shows that three kinds of activism – political activism, humanitarian activity, and civil disobedience – relate differently to the loss of trust in the institutions of the Parliament, the legal system, and the police. Political activism primarily affects a loss of trust in the Parliament due to low external efficacy and a closed political opportunity structure. Civil disobedience affects a loss of trust in the legal system and the police due to a perceived lack of procedural justice. Humanitarian activity does not affect a loss of institutional trust because it does not imply interaction with the institutions to the same extent as the other kinds of activism. The consequence of losing trust in the political institutions is not an abandonment of democratic values, nor political apathy, but rather a change in civic engagement from a mode of democratically legitimizing participation in the institutions to a mode of contending and questioning the legitimacy of the political institutions. This finding indicates that in turn loss of institutional trust may cause an increase in extra‐institutional political action which is consistent with the commonly assumed causality in the literature. This leads to a final integrating argument for conceptualizing activism and loss of institutional trust as reinforcing factors in a process where, in line with the main finding of this study, activism may cause a loss of institutional trust which, in turn, may cause additional activism, as argued in the existing literature.     

INDEPENDENT AGENCIES,POLITICAL INTERFERENCE,AND FIRM INVESTMENT: EVIDENCE FROM THE EUROPEAN UNION

Investment in network infrastructure is crucial for economic growth. This article studies the impact of the presence of independent regulatory agencies (IRAs) on the investment of European regulated firms. We account for measurement error in formal independence of IRAs by exploiting cross‐country heterogeneity in the quality of political institutions. Results show that regulatory independence increases firms' investment rate by around 1.2%–3.3%. The positive effect survives when we control for social capital accumulation, investor protection, and market liberalization. However, the effect of IRAs is not immune to politics, as we find that political interference in regulatory functions persists in the European Union and is detrimental to firm investment. (JEL D78, L50, D92, H1)     

The feminine style,the male influence,and the paradox of gendered political blogspace

This article explores gender differences in political communication among blogging politicians. The article sets out to explore two baseline questions: (1) Are distinct gendered ‘blogstyles’ to be found among political representatives? and (2) How do gender and gendered blogstyles interplay and affect the impact of political blogs? The empirical study draws on a survey targeting blogging politicians in Sweden (N?=?523). The analysis identifies substantial differences in how female and male politicians communicate in the blogosphere as well as the outcomes in terms of feedback and impact. Female politicians, to a greater degree than their male counterparts, utilize blogging for the purpose of fostering a stronger connection with their readers as well as to enquire about ideas and policy perspectives. This strategy seems to be successful for fostering qualitative feedback from readers; yet, female bloggers have far less impact than their male colleges. We discuss two potential understandings of these results: relating to gender stereotypes and the network power structure of the blogosphere.     

DEBT BAILOUTS AND CONSTITUTIONS

A demand‐based theory of subnational debt bailouts is presented. It is shown that demand for bailouts among politicians with regional constituencies is affected by revenue sharing arrangements as a bailout implies a shift of taxation toward the federal tier. Automatic revenue sharing may lead to the formation of pro‐bailout coalitions formed by indebted states and states that are net recipients of the revenue sharing arrangement. The model shows that the state debt bailouts approved by the Brazilian Senate prior to the enactment of the Fiscal Responsibility Act were consistent with politicians who maximize the proceeds accruing to their constituencies. (JEL H70, D70)     

CULTURAL CONSTRAINTS ON INNOVATION‐BASED GROWTH

To what extent does the cultural composition of a society impose a constraint on its long‐run growth potential? We study this question in the context of an innovation‐based model of growth where cultural attitudes are endogenously transmitted from one generation to the next. Focusing on attitudes regarding patience, we analyze the two‐way interaction between economic growth and the intergenerational transmission of patience. Exploiting this interaction, we compare the long‐run growth performance of a culturally heterogeneous society where patience is initially underrepresented in the population with a culturally homogeneous society where all agents are perfectly patient. Our main result is that in the absence of any intrinsic preferences of patient parents to transmit their attitudes to their children, the development paths of the two societies are bound to diverge, with the culturally heterogeneous society experiencing lower growth rates. Yet, if patient parents ceteris paribus prefer their children to be patient like them, we show that the two societies can in the long run grow at the same rate.(JEL D91, E24, O30, O40, Z10)     

MINIMUM WAGES,IMPORT STATUS,AND FIRMS' INNOVATION: THEORY AND EVIDENCE FROM CHINA

This study explores the heterogeneous effects of minimum wage on innovation of different types of firms. We develop an open‐economy R&D‐based growth model and obtain the following result: raising the minimum wage reduces innovation of firms that use domestic inputs but increases innovation of firms that import foreign inputs. We test this result using city‐level data on minimum wages and firm‐level patent data in China. In accordance with our theory, we find that raising the minimum wage is associated with more innovation by importing firms and less by non‐importing firms. This result survives a battery of robustness checks. (JEL E24, F43, O31)     

Democratizing Rural Economy: Institutional Friction,Sustainable Struggle and the Cooperative Movement*

Abstract Sustainable development demands institutions manage the conflicts and struggles that inevitably arise over material and ideal interests. While current cooperative theory privileges the economic element, a political economy of cooperation emphasizes cooperatives' tentative bridging of economic and political spheres with a democratic ethos. The cooperatives' democratic political structure exists in tension with a capitalist economic structure and other sites of friction. These contradictions are: in the realm of social relations, between production and consumption; in the realm of spatial relations, between the local and the global; and in the realm of collective action, between cooperatives as both traditional as well as new social movements. Where neo‐classical economic models seek to eliminate or reduce these tensions, political economy views these tensions as functional to sustainability by creating an “institutional friction” that facilitates innovation, flexibility and long‐term adaptability. This political economy of cooperation is intended as a step toward the development of a multidimensional sociology of cooperation.     

Global Distribution of Transnational Human Rights NGOs: The Effects of Domestic Resources and Institutions

This article examines domestic sources of the uneven distribution of human rights transnational NGOs (TNGOs) across countries. I compile an original dataset covering 787 human rights TNGOs during the 2005–2010 period from the Yearbook of International Organizations (supplemented by the directories produced by Human Rights Internet and the Encyclopedia of Associations). I employ the zero‐inflated negative binomial model to explore domestic conditions influencing the location of TNGO headquarters. The analysis distinguishes two processes. First, population size and political institutions are particularly important for the likelihood of hosting any human rights TNGOs. Human rights TNGOs are likely to exist only in strong democratic countries with relatively large populations. Second, domestic resources (economic and human) and institutions (political and regulatory) affect the count of human rights TNGOs in a country. A high level of economic development, a large and well‐educated population, strong democratic institutions, and a less regulatory environment provide favorable conditions for the establishment of more human rights TNGOs. Although human rights TNGOs are transnationally oriented, their establishment is still greatly influenced by domestic factors.     

THE POLITICAL ECONOMY OF INTERGENERATIONAL INCOME MOBILITY

The intergenerational elasticity of income is considered one of the best measures of the degree to which a society gives equal opportunity to its members. While much research has been devoted to measuring this reduced‐form parameter, less is known about its underlying structural determinants. Using a model with exogenous talent endowments, endogenous parental investment in children, and endogenous redistributive institutions, we identify the structural parameters that govern the intergenerational elasticity of income. The model clarifies how the interaction between private and collective decisions determines the equilibrium level of social mobility. Two societies with similar economic and biological fundamentals may have vastly different degrees of intergenerational mobility depending on their political institutions. We offer empirical evidence in line with the predictions of the model. We conclude that international comparisons of intergenerational elasticity of income are not particularly informative about fairness without taking into account differences in politico‐economic institutions. (JEL E24, J62, J68, P16)     

Spill‐Up and Spill‐Over of Trust: An Extended Test of Cultural and Institutional Theories of Trust in South Korea1

In comparison to the heated debate over the origins of trust in political institutions, few studies have empirically examined the linkage between trust in political and nonpolitical institutions at the individual level. In this study, we utilize a two‐step methodology to investigate attitudes toward the government in the broader context of attitudes toward related nonpolitical institutions in South Korea. Results from latent class analysis reveal that political trust is an integrated part of a more general set of attitudes toward social and economic institutions. In addition, results from multinomial logistic regression analysis corroborate past studies that found a positive relationship between perceptions of institutional performance and trust in institutions while partially supporting theories advocating the importance of interpersonal trust for institutional trust. This study points to the possibility of interpersonal trust “spilling up” to trust in institutions and the likelihood that trust in one institution “spills over” to trust in other related institutions.     

Sending States’ Transnational Interventions in Politics,Culture, and Economics: The Historical Example of Italy1

This article uses archival evidence to study in depth the historical policies of Italy as a classic sending state. Most of the mass migrations of a century ago came from multinational empires, but Italy was a recently formed independent state. Ambitious to benefit from emigration while assisting and protecting emigrants, Italy reached out to “Italians abroad” in several ways. For example, the state opened a low‐cost channel for remittances through a nonprofit bank; promoted Italian language education among Italian families abroad; supported Italian Chambers of Commerce abroad; and subsidized religious missionary work among emigrants. Italy's historical example of political innovation and diplomatic negotiation provides context, comparisons, and possibilities for rapidly changing sending‐state policies in the twenty‐first century.     

Embedding and disembedding of political elites: a filter system approach

This article looks at the issue of political disengagement in mature democracies and the growing tendency towards disconnect between citizens and their political representatives. It locates itself in relation to ‘demand‐side’ (external to politics) and critical ‘supply‐side’ (focused on the political centre) explanations of disengagement. It concentrates on the latter and, accordingly, builds on critical, post‐Marxist and elite‐oriented work. As such it follows on from earlier calls in the journal for a return to elite‐based research (Savage and Williams, 2008). Drawing on general concepts in economic sociology (Polanyi, Granovetter) the article presents an alternative embedding‐disembedding paradigm for explaining and evaluating this tendency towards political elite disengagement. The propensity for politicians to disembed from wider society is explained by way of a series of eight ‘filters’. Such filters work, alone or cumulatively, both to socially embed political elites within the institutions and networks of formal politics and also to disembed them from wider society and the populace they represent. The interpretive framework outlined here draws on a combination of secondary literature and ongoing interview‐based research with some 150 political actors (politicians, journalists, officials) working at Westminster. As such, the filters and embedding‐disembedding paradigm focuses primarily on the UK case. However, the framework is easily adaptable to other nations and systems.     

Affective virtuosity: Challenges for governance feminism in the context of the economic crisis

This article explores the possibilities and constraints for feminist knowledge production and diffusion, and its influence over policy making and public debate in the context of austerity and neoliberal governance. By analysing the process in which a group of Finnish academic feminists used their expert position to influence government policy in 2015–2017, the article illustrates the strategies they adopted to engage in political debates and how they negotiated the new political landscape. The research material was derived from two years of action research and participant observation and is considered through the theoretical lens of governance feminism. The article makes a distinctive contribution to extant theories of governance feminism, by drawing upon theories of affects and ambivalence as a complement to governance feminism's focus on discourses and co‐optation. We coin the term affective virtuosity to highlight the importance of affect in feminist knowledge production and diffusion, and in shaping the various perspectives available to feminist scholars in encounters with politicians and policymakers.     

ASSET PRICE BUBBLES AND TECHNOLOGICAL INNOVATION

We introduce borrowing constraints into a two‐sector Schumpeterian growth model and examine the impact of asset price bubbles on innovation. In this environment, rational bubbles arise when the intermediate good producing R&D sector is faced with adverse productivity shocks. Importantly, these bubbles help alleviate credit constraints and facilitate innovation in the stagnant economy. On the policy front, we make a case for debt financed credit to the R&D sector. Further, we establish that a constant credit growth rule (akin to the Friedman rule) outperforms the often prescribed counter‐cyclical “lean against the wind” credit policy. (JEL E32, E44, O40)     

STOCK OWNERSHIP AND CONGRESSIONAL ELECTIONS: THE POLITICAL ECONOMY OF THE MUTUAL FUND REVOLUTION

We find that higher stock ownership rates are linked to an upward shift in the Republican share of the House popular vote since the late 1980s, consistent with theories that property interests affect voting. To proxy for discontinuous stock ownership rates, we use equity mutual fund costs, which have fallen, are negatively correlated with stock ownership rates and the Republican vote share in the long run, and help explain short‐run changes along with midterm elections, economic conditions, and presidential popularity. Findings suggest that the major parties’ shares of the House popular vote will fluctuate around 50% until other factors trigger a political realignment. (JEL D72, G11)