Elections related cycles in publicly supplied goods in Albania

The phenomena of manipulation of the economy by the incumbent for electoral purpose are called Political Business Cycles (PBC), introduced by Nordhaus (1975). Using policy control economic instruments, as fiscal and monetary instruments, government may manipulate the economy to gain electoral advantage by producing growth and decreasing unemployment before elections. In addition to increased public expenditures, also the production/supply of certain publicly provided goods may score improvements. In Albania, production and supply of electricity (for the time span of our analyzes) was controlled by KESH (Korporata Energjitike Shqiptare - Albanian Energy Corporation) which is a quasi- monopoly in the supply of electricity in Albania, and it is publicly run. Throughout the transition, supply of electricity, due to various technical and economic reasons, has not been stable, and characterized by systematic interruption for households and businesses users, affecting their well-being and performance (electricity is a main source of energy for households, including heating and cooking). Therefore, it seems so that there is an incentive and rationale for the incumbent to use also the provision of electricity to impress the voters before elections, beside of the classical instruments of expenditures. In this paper we analyze consumption, production and import of electricity in Albania. Our hypothesis is that before elections, electricity consumption may increase above usual levels, followed by a contraction after elections. In our analysis we use modern standard econometric approach, used widely for research related to PBC. By ARMA modelling it is possible to prove if elections can explain changes in electricity production, in addition to the past history of the variable and the random error term. --Political Business Cycle,Electricity,Albania

A new view into political business cycles: Household expenditures in Albania

Over the last decades, there has been plenty of research and articles on Political Business Cycles (PBC), aiming at analyzing and explaining the use of fiscal and monetary instruments to stimulate economic growth before elections, to impress the voters. Following other researches for PBC in Albania, in which there was found clear evidence of fiscal expansion before elections, but no significant changes in inflation and GDP, as theory predicts, we analyze the peoples' expectations related to elections outcomes, and the way these expectations influence their decisions to spend, and consequently the macroeconomic variables. --Political Business Cycle,Household Behaviour,Albanian

It is not just about power, but about the type of power - relational governance in the context of a transiton economy

The paper analyses how intermediary’s bargaining power affects relational governance in the context of a transition economy, namely the case of Kosovo. There has been limited research and understanding about bargaining power and relational governance in developing and transition economies. Multinomial logistic regression is employed to investigate the factors affecting relational governance, which is operationalized as categorical variable: 1) Spot market transaction, 2) verbal contract and 3) written contract. The results of the study point out that intermediaries’ exercised power over farmers affects the farmers’ contracting decisions in different ways. When they exercise power over farmers’ margin, it reduces the likelihood of farmers’ participation in either verbal or written contracts, while power over product quality related activities increases the likelihood of farmers engagement in written contracts. Another key finding is that for products that require a specific standard and quality, written contracts are more likely than verbal ones

Political cycles in income from privatization: The case of Albania

The phenomenon of manipulation of the economy by the incumbent for electoral purpose is called Political Business Cycles (PBC). Using policy control economic instruments, such as fiscal and monetary instruments, governments may manipulate the economy to gain electoral advantage by producing growth and decreasing unemployment before elections. Earlier research on PBC in Albania found clear evidence of fiscal expansion before elections. In addition to increased income from taxes and borrowing, another source of financing the increased fiscal expansion in transition countries may be income from privatization, which is also the object of the analysis of this paper. In our analysis we apply standard econometric approach, used widely for research related to PBC. We test if income from privatization increases before elections. We find statistically significant increase of income from privatization before general (parliamentary) elections, which may lead us to conclude that one of the reasons may be to finance increased expenditures before elections. Another motivation, behind this behavior of the incumbent, may be rent - seeking. These results are of particular interest, as it is for the first time that income from privatization is analyzed in conjunction with PBC. --Albania,Political Business Cycle,Privatization

Searching for political business cycle in Albania

In our search for Political Business Cycles in Albania, we found clear evidence of the attempts made by the incumbent to manipulate the economy. There is a statistically significant increase of public expenditures before elections aiming at reducing unemployment and increasing output, in order to please the voters. Regarding the macroeconomic outputs, we have found, evidence of PBC in GDP and unemployment but not in inflation. The fiscal expansionary policy before elections, leads to higher GDP and lower unemployment before/during elections. However, the inflation does not significantly increase as expected. That might be attributed to the mature monetary policy conducted by the Central Bank which enjoys a relatively high level of independence

Determinants of Sustainable Relationships in the Albanian Apple Production Sector

This paper analyses the behaviour of Albanian apple growers and their relations with buyers based on a structured survey. We develop a model of relational governance that highlights the importance of sustainable (lasting) relationships and draws upon different theoretical frameworks such as transaction cost economics and social network theory and focuses on determinants of relational exchange. The findings support the social network argument that the presence of verbal agreements between business partners strongly and positively affects exchange relationships. Asset specificity and competition among buyers also affects such relationships. The results and their implications at the management and policy-making level are discussed in detai

Relational governance – an examination of the apple sector in Albania

This study provides an in-depth analysis of the value chain governance in the fruit sector in Albania. Particular attention was paid to the nature of relations between agricultural producers and marketing channel chosen by them, distinguishing between big wholesalers, local collectors and exporters, longer-term relations, commitment and trust, and contracting along the value chain. Given the absence of, or weak, contract enforcement and the clear evidence of embeddedness in dyadic relationships in this chain, we focused our analysis on sustained relationships, contracting and personal bonds as a determinant factor to improve business relationship quality. This paper is based on a structured survey targeting 182 orchard farmers in two leading fruit production regions in Albania, namely Korca and Peshkopia. The survey showed a weak prevalence of verbal contracts in embedded relationships. The percentage of contracts between farmers and local collectors is slightly higher compared to wholesalers. This evidence is much stronger when we investigate the incidence of contracts in stable relationships (i.e. selling to the same buyer). We also find that mature relationships generate higher sustainability - a result which does not come as a surprise, although the coordination between farmers and other actors downstream is only at early stages. The main implications which arise from our analysis are relevant for agribusinesses, farmers and policy makers

Politics of Corruption in Albanian Higher Education

This paper examines the persistent issue of corruption in Albania, which continues to plague crucial areas of higher education such as learning assessment. Emphasising the significant impact of political influence on student evaluations, the article draws on survey results to address the issue. It suggests that this influence stems from historical factors and current political dynamics. In addition, the paper analyzes the exploitation of anti-corruption rhetoric in higher education as a tool for political control, and discusses the considerable challenges which anti-corruption campaigns face due to political interference and institutional resistance. In conclusion, the paper argues that a holistic approach, considering historical, institutional, and political contexts, is essential for effectively observing corruption in higher education

To Contract or not Contract: Implications for Farmer–Buyer Trading Relation Performance

The paper analyses the value chain coordination of greenhouse vegetables in Albania, which has a strong export orientation. Based on a structured farm survey, the study constributes to the value chain literature of the vertical coordination of agricultural products by addressing the question of how chain governance modes differ in terms of exercised power and farmers’ satisfaction (an indicator of performance) with the trading relationship. The results point out that farmers operating with agreements show higher levels of satisfaction with the trading relationship than do farmers selling on the spot market. On the other hand, those operating with agreements are under higher levels of exercised power over product quality