TY - GEN A1 - Schnellenbach, Jan T1 - Model Uncertainty and the Rationality of Economic Policy T2 - Journal of Evolutionary Economics N2 - This paper examines the process of economic policy-making under conditions of model uncertainty. A median voter model is introduced in which the electorate is uncertain of the policy measures available as well as their respective outcomes and opinion formation is a social process of communication and contagion. Learning from experience is also considered. It is shown that economic policy-making under uncertainty produces novel policy routines, but that a mechanism of efficiently utilising the generated knowledge is missing. KW - Economic policy KW - Model uncertainty KW - Collective beliefs KW - Collective learning Y1 - 2005 U6 - https://doi.org/10.1007/s00191-004-0231-y SN - 0936-9937 VL - 15 IS - 1 SP - 101 EP - 116 ER - TY - GEN A1 - Döring, Thomas A1 - Schnellenbach, Jan T1 - What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature T2 - Regional Studies N2 - Döring T. and Schnellenbach J. (2006) What do we know about geographical knowledge spillovers and regional growth?: a survey of the literature, Regional Studies 40, 375–395. Modern (endogenous) growth theory tells us that knowledge is crucial for the sustained growth of high-income economies. Against this background, the paper provides a survey of theoretical and empirical findings highlighting the question of how geographically limited knowledge diffusion can help to explain clusters of regions with persistently different levels of growth. It discusses this topic in two steps. First, the theoretical concept of knowledge spillovers is outlined by discussing the different types of knowledge, the spatial dimension of knowledge spillovers, and the geographical mechanisms and structural conditions of knowledge diffusion. Second, it analyses the empirical evidence concerning the theoretical propositions. KW - Knowledge spillovers KW - Regional growth KW - Research and development KW - Innovation KW - Diffusion of innovations Y1 - 2006 U6 - https://doi.org/10.1080/00343400600632739 SN - 0034-3404 VL - 40 IS - 3 SP - 375 EP - 395 ER - TY - GEN A1 - Schnellenbach, Jan T1 - Tax Morale and the Taming of Leviathan T2 - Constitutional Political Economy N2 - An explanation for tax morale based upon a simple model of psychological costs that depend on the perceived legitimacy of public policies is introduced. It is shown that empirically observed low levels of tax evasion can be explained even for a risk-neutral taxpayer with such a model. In a discussion of aggregate tax revenue, it is argued that tax revenue as a function of tax rates may differ fundamentally from the notorious Laffer curve. It is then necessary to look at the interaction of formal and informal institutions to predict the nominal tax rates chosen by a revenue maximizer. KW - Tax evasion KW - Tax morale KW - Cognitive dissonance KW - Informal institutions KW - H26 KW - Z13 Y1 - 2006 U6 - https://doi.org/10.1007/s10602-006-0001-y SN - 1043-4062 VL - 17 IS - 2 SP - 117 EP - 132 ER - TY - GEN A1 - Schnellenbach, Jan T1 - Appeasing Nihilists? Some Economic Thoughts on Reducing Terrorist Activity T2 - Public Choice N2 - Recent contributions to the economics of terrorism have given contradicting recommendations for campaigning against terrorism, from the proposal to deprive terrorists of their resources to the proposal of raising the opportunity costs of terrorism by increasing the wealth of the affected regions. Within a simple framework which differentiates between the decision to become an active terrorist and the decision to support terrorists and which allows for reciprocal reactions to anti-terrorism policies, it is argued here that undifferentiated deterrence may indeed backfire, but so may an increase of the opportunity costs of terrorism. A very targeted anti-terrorism policy aimed only at active terrorists would then be the most reasonable remaining approach. KW - Terrorism KW - Deterrence KW - Reciprocity KW - Anti-terrorism policies Y1 - 2006 UR - http://www.jstor.org/stable/25487598 U6 - https://doi.org/10.1007/s11127-006-9029-9 SN - 0048-5829 VL - 129 IS - 3/4 SP - 301 EP - 313 ER - TY - GEN A1 - Schnellenbach, Jan T1 - New Political Economy, Scientism and Knowledge: A Critique from a Hayekian Perspective, and a Proposal for an Extension of the Research Agenda T2 - The American Journal of Economics and Sociology N2 - New Political Economy has something very important in common with welfare economics: its focus on static, technical efficiency criteria to judge the rationality of a social, political or economic order. This often leads theorists to perceive their objects of research as well-defined problems to which clear-cut solutions can be found and prescribed as policy proposals, addressed at the policymaker or the democratic sovereign. This perspective frequently excludes important empirical phenomena from the research agenda. Although, for example, certain well-defined informational asymmetries are frequently modeled, fundamental knowledge problems such as ignorance of the true model of the economy are usually ignored. In the present paper, this approach is criticized from a Hayekian point of view, with an emphasis on the problems of "scientism" (i.e., the inappropriate transfer of methods from the natural to the social sciences) and irremediably imperfect knowledge, troubling both the agents in the theoretical model and the theorist. Furthermore, it is argued and illustrated with two examples that an extension of Public Choice's research agenda along Hayekian lines may be fruitful, because it leads to a fresh perception even of such problems that already have been extensively researched within the traditional framework. Y1 - 2002 UR - http://www.jstor.org/stable/3487744 SN - 0002-9246 SN - 1536-7150 VL - 61 IS - 1 SP - 193 EP - 214 ER - TY - GEN A1 - Schnellenbach, Jan T1 - The Evolution of a Fiscal Constitution When Individuals are Theoretically Uncertain T2 - European Journal of Law and Economics N2 - In contrast to the contractarian approach to constitutional economics, we follow Voigt (1999) in assuming that constitutional rules are closely connected to informal institutions and that their evolution is a matter of interest group activity and implicit re-interpretation. We add to this the assumption of theoretical uncertainty of individuals regarding the working properties of constitutional rules. Collective learning processes are considered as the third driving force of constitutional evolution, and at the same time as the source of path-dependencies which allow suboptimal constitutions to persist. Finally, it is argued that direct legislation offers more protection than a written fiscal constitution. KW - positive constitutional economics KW - collective learning KW - path-dependent rule-evolution Y1 - 2004 U6 - https://doi.org/10.1023/A:1026389926709 SN - 0929-1261 VL - 17 IS - 1 SP - 97 EP - 115 ER - TY - GEN A1 - Schnellenbach, Jan T1 - The Dahrendorf hypothesis and its implications for (the theory of) economic policy-making T2 - Cambridge Journal of Economics N2 - The sociologist R. Dahrendorf has recently suggested that there is no and there ought to be no convergence of economic policies towards some common ideal model. On the contrary, he states that ‘diversity is […] at the very heart of a world that has abandoned the need for closed, encompassing systems’. It is shown in this paper that the Dahrendorf hypothesis is difficult to reconcile with orthodox economic approaches to economic policy-making. A perspective on policy-making that introduces either fundamental uncertainty or endogenous policy preferences or both is, however, shown to be consistent with the Dahrendorf hypothesis. Y1 - 2005 U6 - https://doi.org/10.1093/cje/bei086 SN - 1464-3545 VL - 29 IS - 6 SP - 997 EP - 1009 ER - TY - GEN A1 - Schnellenbach, Jan T1 - Tax Morale and the Legitimacy of Economic Policy T2 - Homo Oeconomicus N2 - It is proposed that a more accurate prediction of tax evasion activity than in the standard portfolio-choice model can be derived even for risk-neutral individuals if psychological costs are considered. Contrary to earlier models integrating psychological costs they are systematically derived by assuming a relationship between psychological costs, taxpayer satisfaction with public policy and taxes evaded. A formal concept of legitimacy of public policies is introduced and it is shown that legitimacy influences evasion activity. KW - Tax evasion KW - Tax morale KW - economics and psychology KW - political legitimacy Y1 - 2007 SN - 0943-0180 VL - 24 IS - 1 SP - 21 EP - 45 ER - TY - GEN A1 - Schnellenbach, Jan T1 - Public Entrepreneurship and the Economics of Reform T2 - Journal of Institutional Economics N2 - Public entrepreneurship is commonly understood as the outcome of the activities of a Schumpeterian political innovator. However, empirical research suggests that changes to a more efficient economic policy, even if it is known and technically easy to implement, are usually delayed. This is difficult to reconcile with Schumpeterian notions of public entrepreneurship. In this paper, it is argued that the attempt to transfer a Schumpeterian approach to the public sector is fundamentally flawed. Institutional checks and balances that characterise most modern liberal democracies make the strategy of bold leadership an unlikely choice for an incumbent. If change occurs, it occurs normally as a response to the fact that the status quo has become untenable. From a normative point of view, it is argued that if public entrepreneurship nevertheless occurs, it will often be associated with unwanted consequences. A dismantling of formal institutional checks and balances is therefore not reasonable. KW - public entrepreneurship KW - political innovation KW - reform processes KW - Schumpeterian political economy Y1 - 2007 U6 - https://doi.org/10.1017/S1744137407000641 SN - 1744-1382 VL - 3 IS - 2 SP - 183 EP - 202 ER - TY - GEN A1 - Schnellenbach, Jan T1 - Rational Ignorance Is Not Bliss: When Do Lazy Voters Learn from Decentralised Political Experiments? T2 - Journal of Economics and Statistics N2 - A popular argument about economic policy under uncertainty states that decentralisation offers the possibility to learn from local or regional policy experiments. Often, an analogy between market competition as a discovery procedure and political competition is used to corroborate this argument. We argue that political learning processes are not trivial and do not occur frictionlessly: Voters have an inherent tendency to retain a given stock of policy-related knowledge which was costly to accumulate, so that yardstick competition is improbable to function well particularly for complex issues, if representatives' actions are tightly controlled by the electorate. We show that factor mobility does have the potential to endogenously disturb equilibria on regional markets for political theories, and therefore does provide for improved political learning processes compared to unitary systems. But the results we can expect are far from the ideal mechanisms of producing and utilising knowledge often described in the literature. In particular, collective learning may occur in the relatively efficient region, while the status quo may be fortified in the relatively inefficient region. KW - Policy decentralisation KW - fiscal competition KW - model uncertainty KW - collective learning Y1 - 2008 U6 - https://doi.org/10.2139/ssrn.990268 SN - 0021-4027 VL - 228 IS - 4 SP - 372 EP - 393 ER -