Economic governance in an enlarged euro area

Ten years on from its launch, it is clear that EMU, which has to be regarded as a more profound regime change than is often acknowledged, has had a pronounced effect on economic governance. As a framework for the conduct of macroeconomic policy, EMU has had undoubted successes in assuring price stability and in instilling greater fiscal discipline, yet it is open to the criticism that it has not (yet?) delivered improved performance in the real economy. Moreover, some of the compromises made at the outset and over the twenty years since the roadmap for EMU was first set out, notably to reconcile divergent French and German preferences, have left certain elements of the policy architecture unresolved. In the coming years, several more Member States are expected to become full participants in EMU, so that fresh thinking on the governance arrangements is warranted, not least to accommodate the rather different economic characteristics of the candidate countries.Begg, euro area enlargement, governance, economic policy co-ordination, EMU

Legislatures, democratic control and budgeting: A comparative institutional analysis.

There is a growing literature by political scientists and increasingly economists on the institutional determinants of public policy, in particular broad constitutional parameters such as presidential versus parliamentary regimes and different electoral systems. However, given the fact that resource allocation is at the heart of the political process, surprisingly little work supports a theoretically rigorous assessment of the cross-national distribution of parliamentary power over budget policy. This thesis presents an explicitly comparative analytical framework for assessing legislative budgeting and applies this framework to a sample of contemporary democracies. The focus is on how institutional arrangements determine both the extent of legislative control as well as budget outcomes. The thesis uses a unique dataset on legislative budget institutions in 36 industrialised, developing and transition countries, along with case study evidence. The historical evolution of legislative budgeting underscores the importance of institutions in achieving democratic control. One way of enabling rigorous cross-national comparison is to focus on a set of essential institutional prerequisites for legislative control of public finance. These variables are operationalised in the form of an index of legislative budget institutions, which demonstrates substantial variation in the budgetary role of legislatures across liberal democracies. Former UK colonies have particularly poorly developed legislative capacity for financial control, whereas the opposite typically holds for countries with protracted periods of minority government. While a number of institutional arrangements determine the extent of legislative control, the empirical evidence supports the theoretical prediction that few variables unambiguously affect fiscal outcomes, notably the nature of legislative powers to amend the budget tabled by the executive. Legislatures that self-impose constraints to support fiscally prudent choices, such as the Swedish Parliament, can nonetheless remain powerful budgetary actors, as long as they retain control over the design of the process itself. In taking the institutionalist agenda in political science further, this thesis demonstrates the benefits of complementing research on broad constitutional differences with more nuanced studies of the institutional setting in particular policy areas

Models of Political Economy

Models of Political Economy will introduce students to the basic methodology of political economics. It covers all core theories as well as new developments including: decision theory game theory mechanism design games of asymmetric information. Hannu Nurmi's text will prove to be invaluable to all students who wish to understand this increasingly technical field

Computational aspects of voting: a literature survey

Preference aggregation is a topic of study in different fields such as philosophy, mathematics, economics and political science. Recently, computational aspects of preference aggregation have gained especial attention and “computational politics” has emerged as a marked line of research in computer science with a clear concentration on voting protocols. The field of voting systems, rooted in social choice theory, has expanded notably in both depth and breadth in the last few decades. A significant amount of this growth comes from studies concerning the computational aspects of voting systems. This thesis comprehensively reviews the work on voting systems (from a computing perspective) by listing, classifying and comparing the results obtained by different researchers in the field. This survey covers a wide range of new and historical results yet provides a profound commentary on related work as individual studies and in relation to other related work and to the field in general. The deliverables serve as an overview where students and novice researchers in the field can start and also as a depository that can be referred to when searching for specific results. A comprehensive literature survey of the computational aspects of voting is a task that has not been undertaken yet and is initially realized here. Part of this research was dedicated to creating a web-depository that contains material and references related to the topic based on the survey. The purpose was to create a dynamic version of the survey that can be updated with latest findings and as an online practical reference

Analyzing the onset and resolution of nonstate conflict in the Middle East & North Africa

By applying structural-functionalist theories of deviance and opposition, this thesis deconstructs nonstate mobilization in the Middle East, North Africa, Afghanistan, and Pakistan. Using data from the Armed Conflict Location and Event Dataset, the quantitative analysis interpreted both group and leader behavior in conflict situations to determine factors that influenced conflict onset and resolution. The quasipoisson regression analysis of group behavior suggested that polity and state capacity were both significant predictors of violent and nonviolent mobilization. The negative binomial regression of regime behavior suggested that civilian casualties were the most significant predictor of a government response to nonstate mobilization. Ultimately, the results suggested that the influence of regime repression on human rights was one of the most salient catalysts for nonstate mobilization in the region

The role of fiscal rules and institutions in shaping budgetary outcomes

The Workshop "The role of fiscal rules and institutions in shaping budgetary outcomes" organized by the Directorate-General for Economic and Financial affairs of the European Commission on 24 November 2006 in Brussels aimed at enriching the debate on the fiscal arrangements and improving the understanding of their functioning. This Economic Paper contains all the paper presented in this event that was organised in four sessions. A first set of papers mainly focus on the impact of numerical fiscal rules on budgetary outturns. Other paper deal primarily with the appropriate design of fiscal rules and institutions. An additional group of papers addresses the relationship between the fiscal governance approach adopted by the EU Member States and their institutional and political frameworks. Finally the remaining presentations relate more directly to policy experiences. fiscal rules, budget, institutions.fiscal rules, budget, institutions, Ayuso-i-Casals, Deroose, Flores, Moulin

Essays on financial cycles and banks' risk

This thesis consists of a compilation of three separate and self-contained articles: A. Measuring Financial Cycles: Empirical Evidence for Germany, United Kingdom and United States of America This study contributes to the literature by identifying the most appropriate factor to detect and measure Financial Cycles, similar to Gross Domestic Product (GDP) for Business Cycles. Four financial variables were included in the study: Credit, House Prices, Share Prices and Interest Rates. The filter used to estimate and extract the cycles from the original time series was the Christiano and Fitzgerald (2003)'s one. Then, three methods, namely the Concordance Index, the Granger Causality Test and the AUROC Test, were used to identify which of the four variables is the most accurate proxy to measure and estimate financial cycles. In all of them, the results pointed to the same variable: Share Prices. A comparison between Share Prices and GDP shows a higher capacity of the financial variable to predict financial and economic crises, which justifies the recent increasing interest of macroprudential policymakers on Financial Cycles. Our conclusions are robust to different time periods and alternative filtering procedures. B. Banking regulation and banks' risk-taking behavior: The role of political institutions This paper examines whether the influence of banking regulation on banks' risk is channeled through the quality of political institutions, using panel data from a sample of 535 banks from OECD countries, for the 2004 - 2016 period. As banking regulatory factors, we consider activity restrictions, capital stringency and supervisory power. We find that the overall effect of banking regulation on banks' risk is conditional on the quality of political institutions. Activity restrictions and capital stringency have a statistically significant positive effect on banks' risk and this effect is mitigated by better political institutions. On the contrary, stringent supervisory power tends to reduce banks' risk and better political institutions reinforce this effect. The results are robust across different measures of political institutions, banks' risk and estimation methods. C. Banking regulation and banks' risk-taking behavior: The role of investors’ protection This paper examines whether the influence of banking regulation on banks' risk is channeled through the level of investors' protection, using panel data from a sample of 535 banks from OECD countries, for the 2004 - 2016 period. As banking regulatory factors, we consider activity restrictions, capital stringency and supervisory power. We find that the overall effect of banking regulation on banks' risk is conditional on the level of investors' protection, with investor protection playing the role of reinforcing each of these individual effects. Investor protection reinforces the positive effect of activity restrictions and capital stringency on banks' risk and reinforces the negative effect of supervisory power on this risk. These results are robust to a different estimation method and a different proxy for banks' risk. Additional robustness tests reveal that some of the banking regulation effects are contingent on banks' size and the systemic banking crisis period.Esta tese consiste na compilação de três artigos distintos: A. Medir ciclos financeiros: evidência empírica para a Alemanha, Reino Unido e Estados Unidos da América Este estudo contribui para a literatura ao identificar a medida mais apropriada para detetar e medir Ciclos Financeiros, à semelhança do Produto Interno Bruto (PIB) para os Ciclos Económicos. Quatro variáveis financeiras são incluídas no estudo: Crédito, Preço das Casas, Preço das Ações e Taxas de Juro. O filtro usado para estimar e extrair os ciclos das suas séries temporais originais foi o do Christiano e Fitzgerald (2003). De seguida, três métodos, nomeadamente o Concordance Index, o Granger Causality Test e o AUROC Test, foram usados para identificar qual das quatro variáveis é a proxy mais precisa e adequada para medir e estimar ciclos financeiros. Em todos os métodos, os resultados apontam para a mesma variável: Preço das Ações. Uma análise comparativa entre o Preço das Ações e o PIB mostra uma capacidade superior da variável financeira para prever crises financeiras e económicas, o que justifica o crescente interesse nos ciclos financeiros por parte dos supervisores e decisores macro-prudenciais. Estas conclusões são robustas para diferentes períodos temporais e processos de filtragem alternativos. B. Regulação bancária e o comportamento de tomada de risco dos bancos: o papel das instituições políticas Este artigo investiga se a influência da regulação bancária no risco dos bancos é canalizada através da qualidade das instituições políticas num determinado país, usando dados de painel de 535 bancos de países da OCDE, para o período 2004-2016. Como fatores de regulação bancária consideramos as restrições à atividade, as exigências de capital e o poder de supervisão. Concluímos que o efeito global da regulação bancária no risco dos bancos é condicionado pela qualidade das instituições políticas. Por um lado, restrições à atividade e exigências de capital têm um efeito positivo e estatisticamente significativo no risco dos bancos, sendo este efeito mitigado por melhores instituições políticas. Por outro lado, um maior nível de poder de supervisão tende a reduzir o risco dos bancos, sendo este efeito intensificado na presença de melhores instituições políticas. Os resultados são robustos a diferentes métodos de estimação e diferentes proxies para o risco dos bancos e para a qualidade das instituições políticas. C. Regulação bancária e o comportamento de tomada de risco dos bancos: o papel da proteção dos investidores Este artigo investiga se a influência da regulação bancária no risco dos bancos é canaliada através do nível de proteção dos investidores num determinado país, usando dados de painel de 535 bancos de países da OCDE, para o período 2004-2016. Como fatores de regulação bancária consideramos as restrições à atividade, as exigências de capital e o poder de supervisão. Concluímos que o efeito global da regulação bancária no risco dos bancos é condicionado pelo nível de proteção dos investidores, designadamente verificamos que um maior nível de proteção dos investidores intensifica o efeito individual de cada fator de regulação bancária no risco dos bancos. O nível de proteção dos investidores intensifica o efeito positivo das restrições à atividade e das exigências de capital e o efeito negativo do poder de supervisão no risco dos bancos. Estes resultados são robustos a um método alternativo de estimação e para uma proxy alternativa do risco dos bancos. Outros testes de robustez revelam que alguns efeitos da regulação bancária variam conforme a dimensão dos bancos e a existência ou inexistência de um período de crise sistémica bancária