Dissertations submitted to the Hertie School
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07/2018
Linkages between politics and banks are prevalent in developing and advanced countries and take various shapes. Among the more overt forms of political interference is direct political control over individual banks. Yet, the channels through which politicians exert control over banks and how they benefit from ties to banks is not entirely clear. This dissertation uses granular panel data from politically influenced and publicly owned banks in Germany and Spain and conducts a systematic, quantitatively rigorous analysis of the mechanisms and political consequences of political control over banks.
The cumulative dissertation addresses three related questions: chapter 2 asks whether appointments to banks are politically motivated and considers its potential implications for bank managers’ career incentives. It looks at appointment patterns of bank managers in formally independent Spanish savings banks and finds that banks’ managers face an increased turnover risk shortly after elections and under new governments.
Coalition partners and banks’ institutional architecture, however, constrain politicians’ ability to replace bank managers. The findings reveal political patronage in independent banks and show that politicians wield considerable influence even in banks that are not publicly owned.
In chapter 3, the dissertation examines how politics within banks’ boards influences banks’ loan provision before elections and focuses on the role of politicians in boards of German savings banks. Using detailed information about political representation in bank boards and loan data, I show that election-induced lending is pronounced (i) when the chairperson of the bank holds a political office, (ii) when the board consists of many politicians, and (iii) when political board members come from the same party. The effect is driven by savings banks with political chairpersons from counties and from the conservative party.
Finally, chapter 4 is concerned with the electoral consequences of politics-bank linkages and asks whether politicians benefit from those ties. I consider the case of German savings banks to assess whether board seats in banks give local politicians a leg up in elections. I find that mayors with a savings bank seat have higher odds of winning reelection than mayors without a seat and show that, in particular, conservative mayors benefit from bank connections.
The dissertation, hence, presents empirical evidence about the politics of politically influenced banking unveiling the channels through which politicians control banks and how they benefit electorally from it.
05/2018
This dissertation is on general principles of growth, comprising of three chapters and a short introduction. Chapter 1 analyses the macroeconomic adjustment experienced in IMF/EU-programme countries during the Eurozone crisis by creating counterfactuals based on comparable historical or contemporaneous episodes worldwide. It therefore shows
how crisis management and the institutional framework in which it operates have important implications for the depth of the recession. In particular, an incomplete Eurozone institutional setup contributed to aggravate the crisis through higher uncertainty. The first general principle that can be drawn is that sustained growth rests not only in preventing booms but also in designing institutions that well-manage busts. When growth slows down, calls for deep structural reforms multiply. However, estimations of the short- and medium-term impact of these reforms on GDP growth remain methodologically problematic and still highly controversial. As such, Chapter 2 estimates the impact of 23 wide-reaching
structural reform packages (including both real and financial sector measures) rolled out in 22 countries between 1961 and 2000. It therefore illustrates how large reform packages tend to have on average a positive medium-term impact on growth, but these effects were highly heterogeneous across countries. The second general principle that can be drawn is
that deep economic reforms are no growth silver bullet per se, and rather require careful design, tailored to local conditions.
Finally, Chapter 3 explores factors behind the largest growth acceleration episodes that took place worldwide between 1962 and 2002 and identifies general principles that should underlie a successful growth strategy. In particular, it shows how accelerationstend to be preceded by a deep recession and major economic policy changes. Once this information
is combined with a set of counterfactual analyses, it finds that acceleration strategies should not contain off-the-shelf approaches or necessarily all-encompassing ‘shock therapy’solutions. Despite standard growth determinants doing a fairly
good job at characterising successful accelerations, the quest for take-offs remains elusive, as they seemextremely hard to engineer with a high degree of certainty.
04/2018
This dissertation project investigates philanthropic foundations as organizational form in the social welfare field with a special focus on its institutional embedding in different European welfare systems. To do so, it draws on literature from political economy that provides different regime type classifications: Three especially fruitful approaches can be found in the »Varieties of Capitalism« (VoC) approach based on Hall and Soskice (7889), the »Three Worlds of Welfare Capitalism« by Esping-Andersen (9::8), and – specifically with regard to the third sector – the »Social Origins Theory« as originally described by Salamon and Anheier (9::<). The existing welfare regime literature clusters countries according to certain main drivers and identifies differences in welfare state systems. This dissertation asks, can we learn something on the organizational level about the embedding of philanthropic foundations in the field of social welfare?
Foundation literature is dominated by an anglophile perspective which mainly focuses on grant-making foundations. However, these represent only one type of foundation; other varieties exist alongside them. Operating foundations are widely neglected in social science research but play an important role, especially in the history of social welfare provision in European countries. In particular, one type of operating foundation, the carrier foundation, mainly functions as a service provider in the field and thus plays a significant role in any understanding of the foundation landscape in the social welfare field. This investigation is based on the comparative insights from three country cases of Germany, Sweden and the UK (England). Guided by propositions from the theoretical research, comparative explorative case studies based on interview data and secondary sources give insights into the field and the embedding of philanthropic social welfare foundations in the three different welfare state systems.
Investigating the range of foundations in social welfare permits a differentiated view of the different types of foundations. Each has different levels of independence from external constraints and are embedded to different degrees according to the propositions from welfare regime theory. These differences hold further implications for the investigation of foundations as a special organizational form.
03/2018
Summary
This dissertation investigates whether population ageing is associated with a distribution-based intergenerational conflict. While comparing two pioneers of ageing, Germany and Japan, the analysis attempts to show tendencies that are relevant for a wider set of countries amid their own demographic developmental paths.
Studying intergenerational relations on both the societal and the family level, this analysis is more nuanced than previous studies. A two-dimensional typology is proposed to define four ideal scenarios of intergenerational relations, of which intergenerational conflict is one case (consisting of weak solidarity on both the societal and the family level).
Narrowing down the scope of analysis from the aggregate to the family and individual level, intergenerational solidarity is first presented based on National Transfer Accounts data. This discussion shows how public and private (financial) transfers secure the lives of individuals over the life cycle with elderly persons being net receivers of public transfers and net donors of private transfers. Onwards, the evolution of intergenerational solidarity is discussed in the context of political, economic and institutional factors, such as family.
On the societal level, this study draws on the literature of labour market dualisation, Rueda’s insideroutsider model, and Mannheim’s concept of political generations. Based on data from the International Social Survey Programme, spanning over 20 years (1996-2016), policy preferences regarding government expenditure on old-age are found to differ with regard to age, cohort and employment status. Results show that intergenerational societal solidarity has remained strong in Germany but has vanished in Japan. On the family level, intergenerational relations are studied based on theories of saving and transfer
giving, together with the concepts of social care and de-familialisation policies. Using data from the Survey of Health, Ageing and Retirement in Europe and the Japanese Study of Aging and Retirement, covering 11 (2004-2015) and 6 years (2007-2013) respectively, financial and non-financial transfer giving between generations is scrutinised. Results show strong solidarity within families for both countries.
In comparison, Germany appears to find itself in a more favourable position to sustain its unwritten contract of intergenerational sharing consisting of the public and private sector. In Japan, signs of a political generation are emerging, whose interests differ significantly from those of older generations regarding the role of the welfare state. Developments in Japan may have repercussions for the design of the welfare state in years to come. [...]
01/2018
Via an agenda of “deep trade”, global trade governance has increasingly intruded into domestic regulatory space. This is all the more relevant in federally-organised polities in which competencies now subjected to international rule-setting are constituent units’ prerogatives. In many federations, the field of public procurement is a case in point. At the same time, sub-federal executives’ resistance to international procurement liberalisation has varied vastly across federations. While EU member states’ resistance has remained low, US states’ resistance has persisted and increased in recent years. The Canadian provinces, in turn, have only recently begun to open their procurement markets to foreign suppliers. In an attempt to explain this puzzling variance in sub-federal resistance, this Dissertation argues that federations’ domestic institutional and procedural foundations bear an influence on policy outcomes in trade liberalisation. Relying on the concepts of “exit” and “voice” (Hirschman 1970), it posits that sub-federal executives’ voice is inversely related to their reliance on exit. The more voice sub-federal executives are equipped with, the less they dispose of an incentive to exit from a system-wide policy or international commitment. Voice hinges, firstly, on a federation’s institutional configuration. Council federalism, providing constituent units with a direct representation in federation-wide policy-making, endows sub-federal executives with more voice than senate federalism which relies on indirect forms of territorial representation. It depends, secondly, on the nature of vertical relations between both orders of government. Constituent units enjoy more voice when their relations with the federal level are collaborative, marked by formalised patterns of joint policy-making, rather than competitive, pursuing a delineation of federal and subfederal spheres of competence. In case studies of the United States, Canada and the European Union, the Dissertation finds that the posited inverse relationship between sub-federal voice and exit holds and that resistance among sub-federal executives has indeed evolved systematically. In the US senate federation, effective means of joint policy-making have not evolved in the noncoercive field of procurement. In the Canadian case, increasing vertical collaboration has compensated provinces for senate federalism’s low voice. In comparison, the EU case proves peculiar for constituent units’ decisive role in its second chamber federalism and the dense regime of trusting vertical collaboration it accommodates. Member states’ low resistance is a manifestation of the EU trade regime’s comparatively effective workings. Eventually, the dissertation’s findings hint at an appropriate institutional and procedural design for international rule-setting in multi-level settings. If federal executives seek to subject sub-federal prerogatives to international constraints, they should allow for constituent units’ continuous, systematic and collaborative inclusion.
09/2017
The dissertation focuses on the strategizing activities of new-style social enterprises in the highly institutionalized German social service provision sector. More specifically, it focuses on understanding and highlighting the characteristics of highly institutionalized environments taking the case of Germany, and then examines how smaller new entrants strategize in these environments in order to achieve their goals. This is important because there is more limited understanding of how small new entrants operate in highly institutionalized contexts, which is likely to differ from other types of contexts.
The study is built upon a qualitative research design with three in-depth case studies of social enterprises at its core, which were investigated through semi-structured interviews, organizational observation, and secondary data analysis.
The inductive analytical process resulted in the following findings. Firstly, a highly institutionalized field is characterized by stability and density of institutional conditions that manifest through four characteristics: a high regulatory degree, strongly embedded established social service providers, strong and stable financial resource flows and high stability of cognitive schemes regarding social service provision.
Secondly, the strategizing activities of smaller new entrants highlight the important balance between compliance to, and divergence from, institutional prescriptions and expectations that organizations experience. In order to achieve their organizational goals
in this environment, social enterprises develop four strategizing areas in order to manage divergence: problem specification, interaction with established providers, mobilizing financial resources and mobilizing symbolic resources.
The findings contribute to previous research in three ways. Firstly, they contribute to a better specification of highly institutionalized fields based on the perceptions of organizations operating in these environments. Secondly, the findings contribute to the understanding of simultaneous compliant and divergent organizational behavior and its connection to concrete institutions. Thirdly, the findings provide a more fine-grained understanding of the strategizing areas available to and used by new entrants in highly institutional fields in order to cope with the institutional forces that they encounter. This sheds light on the importance of differentiating between types of organizations and types of fields in order to understand the dynamics and the interplay between institutions and the capacity for action of organizations.