FG VWL, insbesondere Mikroökonomik
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The theoretical literature on the economics of fiscal federalism has identified several potential effects of government decentralization on economic growth. Much of the traditional literature focuses on the efficiency aspects of a decentralized provision of public services. However, decentralization may also increase growth by raising the ability of the political system to innovate and carry out reforms. On the contrary, some authors argue that decentralization increases corruption and government inefficiency. After a discussion of the theoretical arguments, we provide both a traditional survey and a meta-analysis of the empirical literature on decentralization and economic growth. Based on our survey, we identify open questions and discuss possible ways of answering them.
In this paper, we offer both a broad survey of the literature on fiscal federalism and long-run economic performance, and a detailed report of some of our own recent studies in this field. We look at the difference between study types (cross-country versus single-country studies), and at the relevance of the broader institutional framework into which fiscal decentralization is embedded. We also look into structural change and intergovernmental transfers as a detailed mechanism through which federalism may have an impact on aggregate economic performance.It turns out that fiscal decentralization has no robust effect on growth, but the evidence hints at a positive effect on overall productivity, conditional on the broader institutional framework.
We argue that perceived fairness of the income generation process affects the association between income inequality and subjective well-being, and that there are systematic differences in this regard between countries that are characterized by a high or, respectively, low level of actual fairness. Using a simple model of individual labor market participation under uncertainty, we predict that high levels of perceived fairness cause higher levels of individual welfare, and lower support for income redistribution. Income inequality is predicted to have a more favorable impact on subjective well-being for individuals with high fairness perceptions. This relationship is predicted to be stronger in societies that are characterized by low actual fairness. Using data on subjective well-being and a broad set of fairness measures from a pseudo micro-panel from the WVS over the 1990–2008 period, we find strong support for the negative (positive) association between fairness perceptions and the demand for more equal incomes (subjective well-being). We also find strong empirical support for the predicted differences in individual tolerance for income inequality, and the predicted influence of actual fairness.
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.
In den letzten Jahren hat sich ein breiter Literatur
strang etabliert, der
neue Formen paternalistischer Interventionen vorschl
ägt, um individuelle Entscheidungen zu
verbessern, die nicht vollständig rational sind. Di
e Motivation hierfür liegt in zahlreichen
Verhaltensanomalien und anderen Abweichungen vom Mo
dell vollständiger Rationalität, die
von der empirischen Verhaltensökonomik identifizier
t wurden. Der neue Paternalismus
zeichnet sich nach seinen Befürwortern dadurch aus,
dass er ‘libertär’ ist, da die betroffenen
Individuen in die als effizient erachtete Richtung
geschubst, aber nicht gezwungen werden.
Die Möglichkeit zu abweichendem Verhalten soll grun
dsätzlich erhalten bleiben. In diesem
Papier wird der neue Paternalismus aus einer ordnung
sökonomischen Perspektive untersucht.
Es wird gezeigt, dass wichtige Varianten des neuen
Paternalismus mit den
ordnungsökonomischen Steuerungsidealen der Konsumen
tensouveränität und der
Bürgersouveränität kollidieren.
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.
This paper discusses soft (or libertarian) paternalism, as proposed among others by Thaler and Sunstein (2008). It is argued that soft paternalism should not be understood as an efficiency-enhancing, but as a redistributive concept. The relationship between soft paternalism and social norms is discussed in detail. In particular, it is argued that soft paternalism increases the stability of given social norms, which in turn need not be efficient, nor in the material self-interest of a majority of individuals. Soft paternalism is argued to be an essentially conservative concept of policy-making in the sense that it tends to increase the longevity of status quo social norms.
Several authors have argued that a centralization of fiscal powers in a federation is less likely to occur if citizens have to approve a change in the assignments of responsibilities by a popular referendum. This outcome may be due to the fact that logrolling is more difficult under direct than under representative democracy. It may also be caused by citizens’ fear that a centralization of fiscal authority facilitates the extraction of rents by the government or the legislature. In this paper, we test the hypothesis that centralization is less likely under referendum decision-making in the unique institutional setting of Switzerland. Using a panel of Swiss cantons from 1980 to 1998, the empirical analysis provides evidence that referendums induce less centralization of fiscal activities.
The peer review system in academic publishing performs two important functions by screening a manuscript for its quality, and by helping to further improve an author's work. However, it often fails to perform these functions in a satisfactory manner. We argue that property rights theory can be fruitfully applied to understand these shortcomings, and to develop reform proposals. The present paper discusses the incentive-problems in journal peer review from an institutional economics perspective, arguing that the incentives of both authors and reviewers to fully exploit a manuscript's potential depend on their property rights. Based on this theory of peer review, we argue that the recent proposal of an “as is” review policy combined with increased accountability of referees can be expected to result in a higher efficiency of peer review.
We discuss the effect of formal political institutions (electoral systems, fiscal decentralization, presidential and parliamentary regimes) on the extent and direction of income (re-)distribution. Empirical evidence is presented for a large sample of 70 economies and a panel of 13 OECD countries between 1981 and 1998. The evidence indicates that presidential regimes are associated with a less equal distribution of disposable incomes, while electoral systems have no significant effects. Fiscal competition is associated with less income redistribution and a less equal distribution of disposable incomes, but also with a more equal primary income distribution. Our evidence also is in line with earlier empirical contributions that find a positive relationship between trade openness and equality in primary and disposable incomes, as well as the overall redistributive effort.
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.
Rational Ignorance Is Not Bliss: When Do Lazy Voters Learn from Decentralised Political Experiments?
(2008)
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.
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.
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.
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.