scholarly journals The Political Economy of Debt Bondage

2010 ◽  
Vol 2 (3) ◽  
pp. 44-84 ◽  
Author(s):  
Ulf von Lilienfeld-Toal ◽  
Dilip Mookherjee
Keyword(s):  
Political Economy ◽  
The Political ◽  
Principal Agent ◽  
Debt Contracts ◽  
Debt Bondage ◽  
Pecuniary Externality ◽  
Ex Ante ◽  
Bonded Labor ◽  
Financial Obligations

What are the effects of restricting bonded labor clauses in tenancy or debt contracts? While such restrictions reduce agents' ability to credibly commit ex ante to repay principals in states where they default on their financial obligations, they also generate a pecuniary externality on other principal-agent pairs by reducing the equilibrium profit earned by principals. This turns out to imply that on both political and normative grounds, restrictions on bonded labor become more attractive when borrowers become wealthier or the range of collateral instruments widens. (JEL D82, D86, J82, K12)

Stacking the Deck: Bureaucratic Missions and Policy Design

1987 ◽  
Vol 81 (3) ◽  
pp. 873-896 ◽  
Author(s):  
Jonathan Bendor ◽  
Serge Taylor ◽  
Roland Van Gaalen
Keyword(s):  
Policy Design ◽  
Empirical Studies ◽  
Political Control ◽  
The Political ◽  
Principal Agent ◽  
Incentive Scheme ◽  
Ex Ante ◽  
Search Bias ◽  
Agenda Manipulation

Empirical studies suggest that mission-oriented bureaucrats bias their design of program alternatives to increase the odds that a superior will choose the kind of program the officials want. However, political executives may anticipate this manipulation and try to reassert control. These struggles are examined in three models. In Model 1 a senior bureaucrat is interested only in missions; the bureaucrat's political superior controls him or her by rejecting inferior proposals and entertaining new options from other policy specialists. Model 2 is a principal-agent analysis. Here the official is interested only in budgets; the official's superior reduces search bias by creating an ex ante incentive scheme. In Model 3 the bureaucrat cares about both budgets and programs; the superior uses both his or her final review authority and ex ante incentives to reduce agenda manipulation. The models' contrasting implications for the political control of bureaucracy are examined.

scholarly journals Why did Countries Adopt the Gold Standard? Lessons from Japan

2010 ◽  
Vol 70 (1) ◽  
pp. 27-56 ◽  
Author(s):  
Kris James Mitchener ◽  
Masato Shizume ◽  
Marc D. Weidenmier
Keyword(s):  
Political Economy ◽  
Interest Rates ◽  
Gold Standard ◽  
The Political ◽  
Global Trade ◽  
Transactions Costs ◽  
Domestic Investment ◽  
Ex Ante ◽  
Investment Boom ◽  
Legislative Decision

Why did policymakers adopt the gold standard? We first examine the political economy of Japan's adoption of the gold standard in 1897 by exploring the ex ante motives of policymakers as well as how the legislative decision to adopt gold won approval. We then show that joining the gold standard did not reduce Japanese interest rates or lead to a domestic investment boom. However, we find that membership in the gold standard increased Japan's exports by lowering transactions costs. Joining gold allowed Japan to tap into its growing share of global trade that was centered on the gold standard.

Sounding the Alarm: The Political Economy of Whistleblowing in the US Security State

2018 ◽  
Vol 25 (1) ◽  
Author(s):  
Christopher J. Coyne ◽  
Nathan Goodman ◽  
Abigail R. Hall
Keyword(s):  
Political Economy ◽  
National Security ◽  
Political Institutions ◽  
Democratic Politics ◽  
The Political ◽  
Principal Agent ◽  
The Us ◽  
National Security State

AbstractWhat role do whistleblowers play in democratic politics? This paper answers this question by analyzing the political economy of whistleblowing within democratic political institutions. Democratic politics is characterized by numerous principal-agent problems creating significant space for opportunism. Whistleblowers help to resolve these principal-agent problems through the revelation of information regarding abuses of power. These revelations can take place internally, by taking advantage of channels to report abuse, or externally, by publicly revealing information. The latter is especially important where internal mechanisms for reporting opportunism are lacking. Whistleblowing in the US national security state is presented to illustrate this logic.

scholarly journals Political Economy of Fiscal Institutions

2009 ◽  
Author(s):  
Jürgen von Hagen
Keyword(s):  
Political Economy ◽  
Budget Process ◽  
Principal Agent ◽  
Electoral Institutions ◽  
Public Funds ◽  
Fiscal Institutions ◽  
Common Pool ◽  
Ex Ante ◽  
The Common ◽  
Principal Agent Relationship

This article discusses and reviews research on fiscal institutions. It deals with ex ante rules and discusses the roles of electoral institutions. One section in this article also considers the budget process. The research that is reviewed in this article uses the principal-agent relationship between the voter and the politicians and the common-pool property of public funds as its starting points.

scholarly journals Making exit costly but efficient: the political economy of exit clauses and secession

2019 ◽  
Vol 31 (1) ◽  
pp. 89-110
Author(s):  
Martijn Huysmans ◽  
Christophe Crombez
Keyword(s):  
Political Economy ◽  
Economic Analysis ◽  
Social Welfare ◽  
Empirical Evidence ◽  
The Other ◽  
The Political ◽  
Formal Models ◽  
Ex Ante ◽  
Political Economic ◽  
The Eu

AbstractThis article presents a political economic analysis of exit from federations. After the federation has formed, members’ benefits from it may be different than expected. If a member ends up not benefitting, it may wish to secede i.e. exit the federation. Based on formal models, we show how state-contingent exit penalties can induce socially efficient exit decisions: they force the secessionist member to take into account the lost benefits of the federation for the other. Even if ex-ante specified exit penalties cannot be made state-contingent, they may still enhance social welfare by preventing forceful exit. Empirical evidence concerning Montenegro, Saint Kitts and Nevis, and the EU is compatible with these claims. In spite of the simplifications inherent to any modeling exercise, we hope that our results stimulate more research into exit clauses as a means to mitigate the problem of violent secessionism.

The Political Economy of Fiscal Deficit Reductions

2020 ◽  
pp. 83-91
Author(s):  
Vito Tanzi
Keyword(s):  
Political Economy ◽  
Public Debt ◽  
Real Life ◽  
Policy Instruments ◽  
The Political ◽  
Principal Agent ◽  
Fiscal Deficit ◽  
Fiscal Deficits ◽  
The Past

Do policymakers learn from the past mistakes of previous governments or from mistakes made by other countries? Probably not. They mostly learn from their own mistakes. Governments often end up with fiscal deficits and a public debt that are too large. They regularly make pronouncements that they find difficult to satisfy, thus losing credibility. The loss of that credibility makes it difficult for them to introduce the necessary policies. The chapter provides some real life examples. Governments’ control over policymaking is often limited, as is their control over policy instruments. This is an area where principal–agent problems frequently exist.

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