OLIGARCHIES AND DEVELOPMENT IN A GLOBAL ECONOMY: A TALE OF TWO ELITES

This paper studies how comparative advantage and the political elites' endowments shape long‐run performance in economies with imperfect political institutions. The trade regime interacts with industrial policy and regulations on capital mobility in governing capital accumulation. In a capital‐scarce economy, capitalist oligarchs striving for import substitution industrialization (ISI) initially shelter the economy from trade, while promoting industrial policies that promote total factor productivity growth in the manufacturing sector. This gradually shifts the comparative advantage toward manufacturing and renders the economy attractive to foreign investors. Allowing for trade and foreign capital inflows are thus complementary policies that spur growth in the capital oligarchy. By contrast, landed oligarchs in a capital‐scarce economy favor openness to trade at an early stage of development, neglect industrial policies, and block foreign capital to maximize extractable rents. The policy mix causes the economy to stagnate. Consistent with the experiences of South Korea and Argentina in the postwar era, the model predicts that the success of ISI policies depends crucially on the conditions governing the incentives for capital accumulation. (JEL F10, F20, P40, P50, O10, O24)     

A Dual‐track Strategy for Managing Mauritania's Projected Oil Rent

High rent creates contests for its capture that, unless skilfully managed, degrade political institutions and distort the economy, leading to a collapse of growth if unreformed. Mauritania's projected oil stream risks such an outcome because past rent‐driven growth has left a legacy of Dutch disease effects, rent‐seeking and dependent social capital. This article proposes a dual‐track strategy for deploying the oil rent as a politically practical means of managing social tensions and improving the economic outcome. Track one promotes a dynamic market economy in the hitherto neglected rural areas, while track two gradually reforms the rent‐driven urban sector, thus postponing confrontation with established rent‐seekers while the dynamic sector drives competitive diversification of the economy and builds a pro‐reform political constituency.     

THE DURATION OF FIRM‐DESTINATION EXPORT RELATIONSHIPS: EVIDENCE FROM SPAIN, 1997–2006

This article uses survival analysis to investigate the duration of Spanish firms' trade relationships by destination over 1997–2006. Whereas firm export status is highly persistent, firms' destination portfolio is very dynamic: a typical firm‐country exporting relationship has a median duration of 2 years. Yet, if a firm manages to export to a country beyond 2 years the risk of exiting that market sharply falls afterwards. The results indicate that not only firm heterogeneity but also destination heterogeneity are crucial to explain survival in export markets. In particular, country (political) risk heavily shapes the effect of firm, product, and other destination characteristics on the length of trade relationships. Whereas firm productivity, comparative advantage, partners' GDP, and proximity enhance duration of trade with low‐risk countries, they have no effect on trade survival with high‐risk countries. On the contrary, information spillovers are particularly relevant to enhance survival of trade relationships with high‐risk countries. (JEL C41, F10, F14)     

Commodities in action: measuring embeddedness and imposing values

Recent approaches in political economy look at the effects of technology and social values on economic action. Combining these approaches with those of economic anthropologists, this article poses that the way the economy is instituted can be understood by looking at reasons actors have for participating in actor‐networks of production, distribution and consumption. Using the author's research on American recycling, this article first shows that much of the‘making’or instituting of the economy happens outside the market, through political machinations, contracts and standards. Second, it suggests that these relationships impose value upon goods differently than do market relations. The details of the recycling‘chain’show the ways actors shape the network and demonstrate that the social values that add‘economic value’to goods are not uniform, but are highly contextual. Starting from Mark Granovetter's notion of 'social embeddedness', the article explains that the measure of social embeddedness is not as important as the values imposed upon other actors through social structure in the economy. It calls for a close observation of economic action in the locales within which production takes place to understand better the‘actions‐at‐a‐distance’where the politics of technology, social movements and power create the empirical, instituted economy.     

THE NATURE OF OUTSOURCING RELATIONSHIPS: EVIDENCE FROM OAP PRICES

This paper studies the extent and variation in production cost pass‐through for U.S. outsourcing imports. Data from 4,676 products imported through the U.S. overseas assembly program show that outsourcing imports were characterized by incomplete pass‐through of production and trade costs to import prices. Notably, pass‐through was higher for products assembled in high education countries while the response of outsourcing import prices to competing suppliers' prices was largest for products sold by firms in capital‐intense industries. The reasons for these cross‐country and cross‐industry differences, as they relate to theories of outsourcing and trade, are explored. (JEL F1, F2)     

POLITICAL BUSINESS CYCLES IN THE NEW KEYNESIAN MODEL

This paper tests various political business cycle theories in a New Keynesian model with a monetary and fiscal policy mix. All the policy coefficients, the target levels of inflation and the budget deficit, the firms' frequency of price setting, and the standard deviations of the structural shocks are allowed to depend on “political” regimes: a preelection versus postelection regime, a regime that depends on whether the president (or the Fed chairman) is a Democrat or a Republican, and a regime under which the president and the Fed chairman share party affiliation in preelection quarters or not. The results provide evidence that several coefficients are influenced by political variables. The best‐fitting specification, in fact, is one that allows coefficients to vary according to a regime that depends on whether the economy is in the few quarters before a presidential election or not. Monetary policy becomes considerably more inertial before elections and fiscal policy deviations from a simple rule are more common. There is some evidence that policies become more expansionary before elections, but this evidence disappears for monetary policy in the post‐1985 sample. (JEL C11, D72, E32, E52, E58, E63)     

Dyadic Interaction: Greater than the Sum of its Parts?

The study of dyadic interaction plays a major role in infancy research. To advance conceptually informed measurement of dyadic interaction and integration across studies, we examined factor structure of individual parents' and infants' measures and dyadic measures from face‐to‐face interactions in two samples of 6‐month‐old infants and their parents: mothers from a demographically heterogeneous sample (N = 164), and mothers and fathers (N = 156) from a Caucasian middle‐class sample. Results suggested that a) individual and dyadic measures, and parents' and infants' behaviors contribute independent information, b) measures of both valence and process are needed, c) there are context‐general and context‐specific qualities, and d) structure of dyadic interaction is more similar among mother–infant dyads from independent samples than between mother–infant and father–infant dyads within the same sample. Future research should use multiple measures incorporating valence, temporal processes, contextual influences, and behaviors of individual partners along with dyadic measures to adequately assess the quality of dyadic interaction.     

WHY DID UNIVERSITIES PRECEDE PRIMARY SCHOOLS? A POLITICAL ECONOMY MODEL OF EDUCATIONAL CHANGE

Universities were first established in Europe around the twelfth century, although primary schools did not appear until the nineteenth. This paper accounts for this phenomenon using a political economy model of educational change on who are educated (the elite or the masses) and what is taught (general or specific/vocational education). A key assumption is that general education is more effective than specific education in enhancing one's skills in a broad range of tasks, including political rent‐seeking. Its findings suggest that specific education for the masses is compatible with the elite rule, whereas mass general education is not, which refines the conventional association between education and democracy. (JEL O10, O40, P16, N10)     

BRAIN DRAIN IN GLOBALIZATION: A GENERAL EQUILIBRIUM ANALYSIS FROM THE SENDING COUNTRIES' PERSPECTIVE

According to the economic literature, high‐skilled emigration may either harm or benefit developing economies. Recent research highlighted several positive and negative channels through which the brain drain operates. This paper aims at evaluating the relative magnitudes of various brain drain channels and quantifying their global impact on migrants' sending countries. For this purpose, we develop a 10‐region general equilibrium model of the world economy characterized by overlapping‐generations dynamics. Our findings suggest that the short‐run impact of brain drain on resident human capital is extremely crucial, as it affects not only the number of high‐skilled workers available to domestic production, but also the sending economy's capacity to innovate/adopt modern technologies. This latter effect is particularly important in globalization, where capital investments are made in places with high production efficiencies. Hence, despite positive feedback effects, those countries facing prevalent high‐skilled emigration are the most candid victims to brain drain. (JEL F22, J24, O57)     

American Studies in the time of Empire

Abstract

This article argues that in terms of political economy, political/military power, and culturally, the USA is 'worlded' in two important ways. In terms both of power and self-perception, the national space of the USA is no longer contained within the boundaries indicated on political maps, but has come to encompass the globe, projecting the nation onto a global space. At the same time, intensified population flows into the USA – part of the same process – 'worlds' the USA from within, transforming American society. These contemporary developments need not be projected upon the past, but they do enable us to see the past in different ways – with colonialism integral to the US national formation both in North America and elsewhere. The article suggests on these grounds that an American-centered view of the USA, understanding the US as a sui generis formation is insufficient to understand the US past or present; such an understanding requires constant attention to the entanglement of the USA in the world and of the world in the USA.     

CARBON GEOGRAPHY: THE POLITICAL ECONOMY OF CONGRESSIONAL SUPPORT FOR LEGISLATION INTENDED TO MITIGATE GREENHOUSE GAS PRODUCTION

Over the last 5 years, the U.S. Congress has voted on several pieces of legislation intended to sharply reduce the nation's greenhouse gas emissions. Given that climate change is a world public bad, standard economic logic would predict that the United States would “free ride” and wait for other nations to reduce their emissions. Within the Congress, there are clear patterns to who votes in favor of mitigating greenhouse gas emissions. This paper presents a political economy analysis of the determinants of “pro‐green” votes on such legislation. Conservatives consistently vote against such legislation. Controlling for a representative's ideology, representatives from richer districts and districts with a lower per‐capita carbon dioxide footprint are more likely to vote in favor of climate change mitigation legislation. Representatives from districts where industrial emissions represent a larger share of greenhouse gas emissions are more likely to vote no. (JEL Q54, Q58, R50)     

Understanding 2016: China,Brexit and Trump in the history of uneven and combined development

This article uses the theory of uneven and combined development (U&CD) to produce a novel explanation of ‘Brexit and Trump’ – the two shock political events of 2016. The argument proceeds in three steps. First, we identify the global conjuncture of historical unevenness in which the votes occurred: how the neoliberal transformation of the advanced capitalist countries was synchronized with the radically different process of primitive accumulation in China. Second, we apply the theory of U&CD to this peculiar ‘simultaneity of the non‐simultaneous’: the ‘big country’ effects of China's industrialization, we find, were thrice multiplied by its combination with the advanced sectors of the world economy, which accelerated China's take‐off, brought forward its export phase, and widened its export profile at a moment of maximum openness in international trade. Finally, this produced the pattern of development that led to the events of 2016: the resultant trade shocks intensified the internal inequalities of British and American societies in ways that match the geography of the Leave and Trump votes. The analysis has a wider intellectual implication too, for the phenomena of historical unevenness and combination are intrinsic to the history of the global political economy; and the theory of U&CD therefore has a unique contribution to make to the field of International Political Economy.     

Political Economy,Ecological Modernization,and Energy Use: A Panel Analysis of State‐Level Energy Use in the United States, 1960–1990

The present study will examine energy consumption from two competing perspectives within environmental social science: political economy and ecological modernization. These frameworks will be evaluated with a fixed‐effects panel analysis of state‐level energy use between the years 1960 and 1990, based on data for 50 states plus Washington, DC, from the Energy Information Administration’s State Energy Data System. The results from the panel analysis show that the increase in total energy use between 1960 and 1990 depended on both increasing economic growth and urbanization, even after controlling for population size, industrialization, and inflation‐adjusted energy prices. The results challenge the claims of ecological modernization theory and support a political economic approach to the study of changes in energy use. In the conclusion, the study’s findings will be framed within the context of the early twenty‐first‐century economic and ecological crises. In light of efforts to reduce greenhouse gas emissions, this study can also further advance the renewable energy debate by reminding us of the social drivers of energy use.     

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.     

THE TURKISH CURRENT ACCOUNT DEFICIT

During the 2011–2015 period, Turkey's current account deficit as a percentage of gross domestic product (GDP) was one of the largest among the Organization for Economic Co‐operation and Development countries. In this paper, we examine if this deficit can be considered optimal using the Engel and Rogers's approach. In this framework, the current account of a country is determined by the expected discounted present value of its future share of world GDP relative to its current share. A country whose income is anticipated to rise relative to the rest of the world is expected to borrow now and run a current account deficit. Our findings suggest that Turkey's current account deficit in 2015 may be considered optimal if the Turkish economy's share in the world economy could continue to grow at rates similar to the past or to the predictions from professional forecasts. The same approach, however, indicates that the current account deficit in 2011, at its peak, was unlikely to be optimal. (JEL F32, F41, F43)     

Voting here and there: political integration and transnational political engagement among immigrants in Europe

In this article, I examine voting patterns in origin and receiving country national elections among immigrants in Europe. The existing scholarship on transnational political engagement offers two competing interpretations of the relationship between immigrant integration and transnational engagement, which I classify as the resocialization and complementarity perspectives. The resocialization perspective assumes that transnational political engagement gradually declines as immigrants become socialized into the new receiving society. Conversely, the complementarity perspective assumes that immigrant integration increases transnational political engagement. I test these competing perspectives with survey data collected between 2004 and 2008 for 12 different immigrant groups residing in seven European cities. The analysis examines how immigrant political and civic participation in receiving countries affect their proclivities to vote in homeland elections. I also analyse the effects of receiving and origin country contexts on immigrant voting behaviour in homeland elections. While my findings support both the resocialization and complementarity perspectives, they also highlight the ways in which a set of origin‐country contexts shape immigrant propensities to engage in transnational electoral politics. I observe a degree of complementarity among immigrants with resources who are motivated and eligible to participate in both receiving and origin‐country elections.     

THE WELFARE EFFECTS OF TEMPORARY TAX CUTS AND SUBSIDIES: THEORY,ESTIMATION, AND APPLICATIONS

This article presents a tractable and intuitive theory on the welfare effects of temporary tax cuts and subsidies, fiscal policies that I generically term “holidays.” The Kaldor–Hicks efficiency effects are theoretically ambiguous, with competing pro‐ and anti‐efficiency effects on newly incentivized versus time‐shifted purchases. To rectify this ambiguity I derive expressions for the welfare effects that are consistent with constant elasticity assumptions and depend only upon readily and reliably observed information. To demonstrate the framework's broad applicability, I analyze two different policies: the 2009 Cash for Clunkers program and states' sales tax holidays. I estimate that both policies generated substantial deadweight loss. (JEL H21, H30, D91)     

A DESIGNER'S CHOICE BETWEEN SINGLE‐PRIZE AND PARALLEL TOURNAMENTS

In this article, I theoretically and experimentally compare a designer's profits from two tournament designs. The first design is a standard winner‐take‐all tournament with a single prize. The second design features two winner‐take‐all (parallel) tournaments with different prizes where individuals choose which tournament to enter before competing. I develop a simple model that illustrates how the relative performances of these designs change as contestants' abilities differ. The theoretical model shows that the designer's profit is higher (lower) in the parallel tournament when contestants' abilities differ greatly (are similar). I complement these findings with experimental evidence. The experiments show that the parallel tournament is more profitable under high heterogeneity, whereas under low heterogeneity, the designer is better off with the single‐prize tournament. Furthermore, high‐ability agents under‐participate and low‐ability agents over‐participate in the high‐prize tournament relative to the theoretical prediction. (JEL C72, D82, J33, M51, M52)     

SECTORAL COMPOSITION OF GOVERNMENT SPENDING AND MACROECONOMIC (IN)STABILITY

This article examines the quantitative interrelations between sectoral composition of public spending and equilibrium (in)determinacy in a two‐sector real business cycle model with positive productive externalities in investment. When government purchases of consumption and investment goods are set as constant fractions of their respective sectoral output, we show that the public‐consumption share plays no role in the model's local dynamics, and that a sufficiently high public‐investment share can stabilize the economy against endogenous belief‐driven cyclical fluctuations. When each type of government spending is postulated as a constant proportion of the economy's total output, we find that there exists a trade‐off between public consumption versus investment expenditures to yield saddle‐path stability and equilibrium uniqueness. (JEL E32, E62, O41)     

Citizens with learning disabilities and the right to vote

This paper asks, in the context of recent legislative changes, what can be done to support more citizens in England and Wales with learning disabilities to vote in national elections? This issue is addressed through (i) a review of recent disability access campaigns that have reported discrimination against, and the under‐representation of, adults with disabilities in UK elections; (ii) a review of recent research undertaken in the USA into the assessment of competence to vote and research undertaken in England that conclusively documents the under‐representation of voters with learning disabilities in the 2005 general election. It is proposed that a ‘functional approach’ to developing an individual's capacity to vote could help to fulfil Article 29 of the United Nations' Convention on the rights of persons with disabilities that gives all people the same political rights.