Michael Wohlgemuth: Europa vor ungelegten Weichenstellungen – welche Union?

Was macht einen Kleinstaat aus? Welche Wege sind für einen Kleinstaat wie die Schweiz tatsächlich umsetzbar? Wie viel Eigenständigkeit ist sinnvoll und möglich? Was bedeutet es für die Schweiz, wenn Europa politisch kippt? In diesem Buch setzt sich eine interdisziplinäre Autorenschaft mit dem Phänomen Kleinstaat auseinander, skizziert Denkanstösse und Lösungsalternativen. Read more…

Thomas Apolte: Youth Bulges, Insurrections, and Politico-Economic Institutions

We develop a model of insurrection markets and integrate the youth bulge as measured by the relative youth cohort size. As youth-specific characteristics we define the young person’s attitude toward revolutionary groups and the government, the degree of risk aversion and the relative productivity of young people on the insurrection market as compared to the official labor market.

Tushyanthan Baskaran/Lars P. Feld/Jan Schnellenbach: Fiscal Federalism, Decentralization and Economic Growth: A Meta-Analysis

The theoretical literature on fiscal federalism has identified several channels through which government decentralization could affect economic growth. Much of the literature focuses on the efficiency aspects of a decentralized provision of public services, but decentralization may also increase growth by raising the ability of the political system to innovate and carry out reforms. In contrast, some authors argue that decentralization increases corruption and government inefficiency, and thus may diminish growth. Given this theoretical ambiguity, several studies have attempted to identify the effect of decentralization on economic growth empirically over the last two decades. We review and conduct a meta-analysis of this empirical literature. Based on our analysis, we point out open questions and discuss possible ways to answer them.

Heiko T. Burret/Lars P. Feld: Vertical Effects of Fiscal Rules – The Swiss Experience

Formal fiscal rules have been introduced in many countries throughout the world. While most studies focus on the intra-jurisdictional effects of fiscal rules, vertical effects on the finances of other levels of government have yet to be explored thoroughly. This paper investigates the influence of Swiss cantonal debt brakes on municipal finances during the years 1980‐2011 by examining aggregated and disaggregated local data. A Difference‐in‐Differences estimation (two‐way fixed effects) provides little evidence that budget constraints at the cantonal level affect average municipal finances and fiscal decentralization.

Gerhard Wegner: Capitalist transformation without political participation

The paper analyzes the political economy of capitalist transformation in nineteenth century Germany. The emergence of capitalism after 1806 gives an example that economic freedom can precede political freedom, leaving the political power of the “dominant coalition” intact. The paper argues that the German capitalist transformation was instigated by competition among the European states. Primarily it was conducive to the monopolization of the coercive power of the state. As a result competition among the states drove a wedge between the interests of the monarch and his supporting dominant coalition (landed gentry). The increasingly independent public administration in Prussia which was influenced by Adam Smith’s liberal ideas organized a political bargain which established economic freedom in various sectors but took the economic interests of the landed gentry into account. In various aspects the sweeping institutional change was Pareto-superior for groups, which made capitalism also acceptable for the elite group.

Joachim Zweynert: The concept of Ordnungspolitik through the lens of the theory of limited and open access orders

The paper argues that there are certain parallels between the ideas of ordoliberalism and the framework of limited and open access order (LAO/OAO) as developed by North, Wallis, Webb and Weingast (NWWW): Both approaches focus on the “interdependence of orders”, and both share an emphasis on state capacity in processes of social transition. I also argue that the ideas of the ordoliberals might give impulses for the further development of the LAO/OAO research agenda. Firstly, whereas NWWW mainly deal with the transition process from LAO to OAO, the members of the Freiburg school intensely dealt with the danger that an OAO might revert into an LAO. Accordingly, they spent much effort on developing policy proposals that aimed at preventing such a ‘re-feudalisation’ (Franz Böhm) of society. Secondly, especially when it came to the issue of accomplishing reforms, they also considered the role of informal institutions and beliefs, a topic somewhat neglected in the LAO/OAO-framework in its present form.