TY - GEN A1 - Schwuchow, Soeren C. T1 - Extractive politics, redistribution, and war : on the rationality of kleptocratic mismanagement T2 - Defence and peace economics N2 - We study a model on the impact of vertical inequality on autocrats’ exploitation of societal wealth and their intended risk of war. Using a general equilibrium model, we demonstrate that autocrats are willing to use the military for redistribution when it increases their share of the rents. They are also willing to harm the economy to deter external threats and are most powerful for extreme un-/equal distributions. These findings offer interesting interpretations. Firstly, even in the absence of external military threats, some autocrats maintain large armies for redistribution, depending on the level of inequality. Secondly, not too low inequality can benefit ordinary citizens. Thirdly, kleptocratic mismanagement is not necessarily an unintended side effect of shameless self-enrichment, but rather a rationally chosen governance to deter too large military threats. This policy could prevent hostilities, but ruins the economy, destroying a society’s wealth. The latter causes ordinary citizens to favor war since the autocrat would then lose their grip at home. These results help to explain why some autocrats maintain excessively large armies, while others stifle their economies, and yet others are drawn into wars. KW - Kleptokracy KW - Economic development KW - Vertical inequality KW - Military expenditures KW - War KW - Corruption Y1 - 2025 UR - https://www.tandfonline.com/doi/full/10.1080/10242694.2024.2385389 U6 - https://doi.org/10.1080/10242694.2024.2385389 SN - 1024-2694 VL - 36 IS - 5 SP - 683 EP - 705 PB - Routledge, Taylor & Francis Group CY - London ; Abingdon ER - TY - CHAP A1 - Schnellenbach, Jan ED - Henrekson, Magnus ED - Sandström, Christian ED - Stenkula, Mikael T1 - A Behavioral Economics Perspective on the Entrepreneurial State and Mission-Oriented Innovation Policy T2 - Moonshots and the New Industrial Policy: Questioning the Mission Economy N2 - It is argued that the concepts of mission-oriented innovation policy and also of the entrepreneurial state will lead to the implementation of policies that are highly vulnerable to behavioral biases and the inefficient use of heuristics. In political practice, we can therefore not expect efficient mission-oriented policies. In particular, I argue that missions as a political commitment mechanism intended to devote massive resources to a specific cause will often only work if biases like the availability bias and loss aversion are deliberately used in order to secure voter consent. Furthermore, I also argue that the argument used by Mazzucato (Mission Economy: A Moonshot Guide to Changing Capitalism. London: Penguin UK, 2021) herself also contains several behavioral biases. Y1 - 2024 SN - 9783031491955 U6 - https://doi.org/10.1007/978-3-031-49196-2_4 SN - 1572-1922 SP - 61 EP - 76 PB - Springer Nature Switzerland CY - Cham ER - TY - CHAP A1 - Schnellenbach, Jan ED - Dopfer, Kurt ED - Nelson, Richard R. ED - Potts, Jason ED - Pyka, Andreas T1 - Public entrepreneurship in economic evolution T2 - Routledge handbook of evolutionary economics Y1 - 2024 SN - 9780367025687 SN - 9781032533391 SP - 402 EP - 410 PB - Routledge CY - New York ER - TY - GEN A1 - Schnellenbach, Jan T1 - On the reform of fiscal rules in the European Union : what has been achieved, and how did we get here? T2 - Economist’s voice N2 - In April 2024, the European Union has reformed its set of fiscal rules, aimed at securing sustainable public finances in its member countries. In this paper, we discuss the pathway towards reform and highlight the main characteristics of the reformed set of rules. It is argued that, relative to the original proposals by the Commission, the rules have improved. However, the numerical safeguards may be circumvented to some extent. In sum, there remains plenty of discretionary leeway for a conflict-averse Commission to appease non-compliant member countries. Y1 - 2024 U6 - https://doi.org/10.1515/ev-2024-0060 SN - 1553-3832 PB - De Gruyter CY - Berlin ; Boston, Massachusetts ER - TY - GEN A1 - Schnellenbach, Jan T1 - The Concept of Ordnungspolitik: Rule-Based Economic Policy-Making from the Perspective of the Freiburg School T2 - Public Choice Y1 - 2023 U6 - https://doi.org/10.1007/s11127-021-00903-z SN - 1573-7101 VL - 195 SP - 283 EP - 300 ER - TY - GEN A1 - Schwuchow, Sören C. T1 - Organized crime as a link between inequality and corruption T2 - European Journal of Law and Economics N2 - We study a model that establishes a novel theoretical rationale for the empirically well-documented relation between inequality and corruption. According to our model, inequality can nurture corruption by empowering organized crime because collusion between local police forces and criminal organizations is more likely in societies characterized by high inequality or weak security forces. Law enforcement and organized crime have a strong incentive to collude due to efficiency gains from specialization. However, their agreement breaks down when the mobsters can no longer credibly commit to joint rent maximization and thus start to compete with law enforcement for citizens’ wealth. The mobsters then non-violently monopolize the market for extortion by undercutting the police forces, similar to a strategy of predatory pricing. Criminal collusion is thus not very different from its corporate equivalent; hence, similar policy measures should be promising. In addition, our model also suggests that the criminal organization’s higher efficiency in extracting rents has a greater impact when the relative power between law enforcement and organized crime is rather balanced. Accordingly, when violent conflict becomes less predictable, non-violent elements of relative power become more relevant. Our model also allows for the interpretation that in the absence of strong social norms against corruption, organized crime is more difficult to challenge. KW - Inequality KW - Corruption KW - Organized crime KW - Public security Y1 - 2023 U6 - https://doi.org/10.1007/s10657-023-09764-x SN - 0929-1261 VL - 55 IS - 3 SP - 469 EP - 509 ER - TY - GEN A1 - Schwuchow, Sören C. A1 - Tridimas, George T1 - The political economy of Solon’s law against neutrality in civil wars T2 - Public Choice N2 - In 594 BCE, the Athenian lawgiver Solon, called upon to resolve a deepening social crisis, introduced a new constitution and mandated that in civil conflicts, no citizen is to remain apathetic and must take sides. Because the law seemed to support strife, it presents a puzzle. The paper offers a political economy rationale for Solon’s law against neutrality, modeling social conflict as a rent-seeking competition. We divide society into three groups, a hereditary aristocracy, which monopolized power before the Solonian constitution, a rival wealth-based commercial elite, called the new Solonian elite, and the poor, who are enfranchised only partly. We then identify the conditions under which the third group is better off by allying with one of the other groups, protecting the Solonian constitution. In our framework, Solon’s ban on neutrality is an attempt to change the payoffs from violent redistributions of rents, so that conflict is avoided. Accordingly, the ban should not only impede excessive rent seeking, but also prevent the exclusion of any social group. KW - Ancient Athens KW - Solon KW - Political non-neutrality KW - Rent seeking KW - Intra-elite competition KW - Political apathy KW - Civil war KW - Inclusive institutions Y1 - 2022 UR - https://link.springer.com/article/10.1007/s11127-022-00980-8 U6 - https://doi.org/10.1007/s11127-022-00980-8 SN - 1573-7101 VL - 192 IS - 3-4 SP - 249 EP - 272 ER - TY - GEN A1 - Groß, Steffen T1 - On the Regulation of the International Exchange of Cultural Property T2 - ORDO : Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft N2 - With its foundation in 1945, UNESCO declared as its main purpose the promotion of international cultural exchange1. A number of legal instruments (Conventions, Recommendations and Declarations) should duly help to substantiate that general purpose and make it work in practice. In this process, the regulation of the international exchange of cultural property plays a key role. However, the proper regulation of cultural property exchange has been a highly controversial issue. This paper focus on UNESCO's guiding ideas and conceptions of cultural property, international exchange and regulation. The central question is: Are the regulations codified in UNESCO’s Conventions and Recommendations helpful in encouraging international cultural exchange or are we faced, due to the neglect of private agents and the roles they play in cultural exchange, with some sort of one-sided regulation running counter to that aim? The author argues that UNESCO's legal instruments are driven by and express a strong anti-private and anti-market bias, which produce problematic economic incentives in the art and antiquities world to the disadvantage of the international exchange of cultural property. Y1 - 2020 UR - https://www.degruyter.com/view/journals/ordo/70/1/article-p166.xml?tab_body=pdf-69320 SN - 0048-2129 VL - 70 IS - 1 SP - 166 EP - 187 ER - TY - GEN A1 - Schnellenbach, Jan A1 - Schubert, Christian T1 - A note on the behavioral political economy of innovation policy T2 - Journal of Evolutionary Economics Y1 - 2019 U6 - https://doi.org/10.1007/s00191-019-00625-y SN - 1432-1386 SN - 0936-9937 VL - 29 IS - 5 SP - 1399 EP - 1414 ER - TY - GEN A1 - Schnellenbach, Jan T1 - Revisiting the tension between classical liberalism and the welfare state T2 - Journal of Contextual Economics Y1 - 2019 U6 - https://doi.org/10.3790/schm.139.2-4.365 SN - 2568-7603 SN - 2568-762X VL - 139 IS - 2-4 SP - 365 EP - 384 ER -