Politics and economics

Yuriy Gorodnichenko, Gérard Roland, 14 May 2015

Social science studies usually explain democratisation of countries with the increase in incomes. In contrast, this column argues that culture is a neglected but important determinant of democracy. The findings show that countries with individualist culture democratise earlier than collectivist cultures that may remain stuck for a long time with relatively efficient autocracies.

Donato Masciandaro, Davide Romelli, 26 April 2015

In the aftermath of the Global Crisis, many countries increased their central banks’ involvement in financial supervision. This column uses a novel dataset to argue that financial crises episodes significantly increase the probability of reforms in the financial structure. More interestingly, the authors find evidence of a ‘bandwagon effect’ by showing that politicians are more likely to undertake reforms when their peers do so. 

Thorvaldur Gylfason, 16 April 2015

Whereas some argue there is no need to revise the US constitution, others believe that its inherent flaws are in the core of the US’ decreasing power. This column reviews four alleged flaws of the US constitution. There is a striking similarity in method and substance between current proposals for constitutional reform in the US and the post-crash constitutional reform process in Iceland presently held captive by parliament..

Michael Bordo, Harold James, 06 April 2015

The classic exchange-rate trilemma analysis argues that capital mobility, monetary autonomy and fixed exchange rates are incompatible. This column shows how policy trilemma analysis can be extended to other domains, specifically financial stability, political economy, and international relations. It argues that analysing these trade-offs can help to identify policy options that balance macroeconomic objectives and political realities in the face of globalisation.

Alberto Alesina, Traviss Cassidy, Ugo Troiano, 22 March 2015

Different characteristics of a politician could affect policy. Whereas existing studies analyse gender and education, this column discusses the effect of a politician’s age on governance and re-election. Younger mayors are more likely to strategically increase expenditures and attract more transfers from the higher levels of government right before the election. These fiscal cycles are positively correlated with re-election and, hence, potentially explain why younger mayors are more likely to be re-elected. 

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