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  3. Political Economy of Institutions and Decisions

The Political Economy of Institutions and Decisions series focuses on two central questions: How do institutions evolve in response to individual incentives, strategies, and choices, and how do institutions affect the performance of political and economic systems? The series concentrates on answers to these questions based in methodological individualism. Its scope is comparative and historical rather than international or specifically American. Its focus is positive rather than normative, but many of the studies in the series offer analyses of informal institutional factors, such as social norms and culture, based on a rational-choice approach.

  • General Editors: Jeffry Frieden, Harvard University, Massachusetts, John Patty, University of Chicago, Elizabeth Maggie Penn, University of Chicago
  • Founding Editors: James E. Alt, Harvard University, Massachusetts, Douglass C. North, Washington University, St Louis

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83 results in Political Economy of Institutions and Decisions

Page 1 of 5

Dominance Through Division
  • Group-Based Clientelism in Japan
  • Amy Catalinac
  • Published online:
    01 March 2025
    Print publication:
    06 March 2025
  • The governance of Japan presents a puzzle: it is a democracy yet is dominated by a single party that wins almost all elections. Stanger still, the Liberal Democratic Party (LDP) and its policies are not particularly popular with voters. How has this situation arisen, and how is it sustained? Amy Catalinac argues that when politicians compete in electoral districts with discernible voter groups, they can make allocations of central government resources contingent on how those groups vote. Using a wealth of quantitative and qualitative data spanning 1980-2014, Catalinac shows that LDP politicians have been doing just that, leveraging their dominance to make groups compete for resources. Dominance Through Division sheds new light on why the LDP has remained in power for so long, why opposition parties are weak, and why policy preferences do not always align with vote choice. It also explains why Japan's 1994 electoral reform has had limited impact.

Hearings on the Hill
  • The Politics of Informing Congress
  • Pamela Ban, Ju Yeon Park, Hye Young You
  • Published online:
    21 November 2024
    Print publication:
    28 November 2024
  • Good public policy in a democracy relies on efficient and accurate information flows between individuals with firsthand, substantive expertise and elected legislators. While legislators are tasked with the job of making and passing policy, they are politicians and not substantive experts. To make well-informed policy, they must rely on the expertise of others. Hearings on the Hill argues that partisanship and close competition for control of government shape the information that legislators collect, providing opportunities for party leaders and interest groups to control information flows and influence policy. It reveals how legislators strategically use committees, a central institution of Congress, and their hearings for information acquisition and dissemination, ultimately impacting policy development in American democracy. Marshaling extensive new data on hearings and witnesses from 1960 to 2018, this book offers the first comprehensive analysis of how partisan incentives determine how and from whom members of Congress seek information.

Agents of Empire
  • English Imperial Governance and the Making of American Political Institutions
  • Sean Gailmard
  • Published online:
    25 April 2024
    Print publication:
    02 May 2024
  • To understand the foundations of American political institutions, it's necessary to understand the rationale for British colonial institutions that survived the empire. Political institutions in England's American colonies were neither direct imports from England, nor home-grown creations of autonomous colonists. Instead, they emerged from efforts of the English Crown to assert control over their colonies amid limited English state and military capacity. Agents of Empire explores the strategic dilemmas facing a constrained crown in its attempts to assert control. The study argues that colonial institutions emerged from the crown's management of authority delegated to agents-first companies and proprietors establishing colonies; then imperial officials governing the polities they created. The institutions remaining from these strategic dynamics form the building blocks of federalism, legislative power, separation of powers, judicial review, and other institutions that comprise the American polity today.

Economic Analysis of Property Rights
  • 3rd edition
  • Yoram Barzel, Douglas W. Allen
  • Published online:
    17 August 2023
    Print publication:
    31 August 2023
  • The standard neoclassical model of economics is incapable of explaining why one form of organization arises over another. It is a model where transaction costs are implicitly assumed to not exist; however, transaction costs are here defined as the costs of strengthening a given distribution of economic property rights, and they always exist. Economic Analysis of Property Rights is a study of how individuals organise resources to maximise the value of their economic rights over these resources. It offers a unified theoretical structure to deal with exchange, rights formation, and organisation that traditional economic theory often ignores. It explains how transaction costs can be reduced through reorganization and, in the end, how the distribution of property rights that exists is the one that maximizes wealth net of these transaction costs. This necessary hypothesis explains much of the puzzling organizations and institutions that exist now and have existed in the past.

Propaganda in Autocracies
  • Institutions, Information, and the Politics of Belief
  • Erin Baggott Carter, Brett L. Carter
  • Published online:
    18 July 2023
    Print publication:
    14 September 2023
  • A dictator's power is secure, the authors begin in this muscular, impressive study, only as long as citizens believe in it. When citizens suddenly believe otherwise, a dictator's power is anything but, as the Soviet Union's collapse revealed. This conviction – that power rests ultimately on citizens' beliefs – compels the world's autocrats to invest in sophisticated propaganda. This study draws on the first global data set of autocratic propaganda, encompassing nearly eight million newspaper articles from fifty-nine countries in six languages. The authors document dramatic variation in propaganda across autocracies: in coverage of the regime and its opponents, in narratives about domestic and international life, in the threats of violence issued to citizens, and in the domestic events that shape it. The book explains why Russian President Vladimir uses Donald Trump as a propaganda tool and why Chinese state propaganda is more effusive than any point since the Cultural Revolution.

Shocking Contrasts
  • Political Responses to Exogenous Supply Shocks
  • Ronald L. Rogowski
  • Published online:
    09 June 2023
    Print publication:
    17 August 2023
  • In the fourteenth century, the Black Death killed as much as two thirds of Europe's population; in the fifteenth, the introduction of moveable-type printing rapidly expanded Europe's supply of human capital; between 1850 and 1914, Russia's population almost tripled; and in World War I, the British blockade starved some 800,000 Germans. Each of these, Shocking Contrasts argues, amounted to an unanticipated shock, positive or negative, to the supply of a crucial factor of production; and elicited one of four main responses: factor substitution; factor movement to a different sector or region; technological innovation; or political action, sometimes extending to coercion at home or conquest abroad. This book examines parsimonious models of factor returns, relative costs, and technological innovation. It offers a framework for understanding the role of supply shocks in major political conflicts and argues that its implications extend far beyond these specific cases to any period of human history.

Conquests and Rents
  • A Political Economy of Dictatorship and Violence in Muslim Societies
  • Faisal Z. Ahmed
  • Published online:
    01 June 2023
    Print publication:
    15 June 2023
  • Tragically, dictatorship and civil strife have led to less developed, less democratic, and more conflict-prone contemporary Muslim-majority societies. Ahmed argues, however, neither Islam nor aspects of Muslim culture are the cause. Grounded in a positive political economy approach, Conquests and Rents investigates why these societies are predisposed to political violence and low levels of development. Focusing on the role of political institutions and economic rents, Ahmed argues that territories where Islam spread via military conquest developed institutions and practices impervious to democracy and more prone to civil war, while societies in non-conquered territories developed governance structures more susceptible to democracy when rents decline. Conquests and Rents introduces a novel theoretical argument, with corroborative qualitative and statistical analysis, to examine the interplay of the historical legacy of institutions from the premodern period and contemporary rent streams in Muslim-majority societies.

Opening Up by Cracking Down
  • Labor Repression and Trade Liberalization in Democratic Developing Countries
  • Adam Dean
  • Published online:
    19 October 2022
    Print publication:
    06 October 2022
  • How did democratic developing countries open their economies during the late-twentieth century? Since labor unions opposed free trade, democratic governments often used labor repression to ease the process of trade liberalization. Some democracies brazenly jailed union leaders and used police brutality to break the strikes that unions launched against such reforms. Others weakened labor union opposition through subtler tactics, such as banning strikes and retaliating against striking workers. Either way, this book argues that democratic developing countries were more likely to open their economies if they violated labor rights. Opening Up By Cracking Down draws on fieldwork interviews and archival research on Argentina, Mexico, Bolivia, Turkey, and India, as well as quantitative analysis of data from over one hundred developing countries to places labor unions and labor repression at the heart of the debate over democracy and trade liberalization in developing countries.

Frustrated Majorities
  • How Issue Intensity Enables Smaller Groups of Voters to Get What They Want
  • Seth J. Hill
  • Published online:
    15 September 2022
    Print publication:
    22 September 2022
  • Democratic elections do not always deliver what majorities want. Many conclude from frustrated majorities a failure of democracy. This book argues the opposite may be true – that politicians who represent their constituents sometimes frustrate majorities. A theory of issue intensity explains how the intensity with which different voters care about political issues drives key features of elections, political participation, representation, and public policy. Because candidates for office are more certain of winning the votes of those who care intensely, they sometimes side with an intense minority over a less intense majority. Voters who care intensely communicate their intensity by taking political action: volunteering, contributing, and speaking out. From questions like whose voices should matter in a democracy to whose voices actually matter, this rigorous book blends ideas from democratic theory and formal political economy with new empirical evidence to tackle a topic of central importance to American politics.

After Authoritarianism
  • Transitional Justice and Democratic Stability
  • Monika Nalepa
  • Published online:
    15 September 2022
    Print publication:
    22 September 2022
  • Transitional justice – the act of reckoning with a former authoritarian regime after it has ceased to exist – has direct implications for democratic processes. Mechanisms of transitional justice have the power to influence who decides to go into politics, can shape politicians' behavior while in office, and can affect how politicians delegate policy decisions. However, these mechanisms are not all alike: some, known as transparency mechanisms, uncover authoritarian collaborators who did their work in secret while others, known as purges, fire open collaborators of the old regime. After Authoritarianism analyzes this distinction in order to uncover the contrasting effects these mechanisms have on sustaining and shaping the qualities of democratic processes. Using a highly disaggregated global transitional justice dataset, the book shows that mechanisms of transitional justice are far from being the epilogue of an outgoing authoritarian regime, and instead represent the crucial first chapter in a country's democratic story.

The Judicial Tug of War
  • How Lawyers, Politicians, and Ideological Incentives Shape the American Judiciary
  • Adam Bonica, Maya Sen
  • Published online:
    09 December 2020
    Print publication:
    17 December 2020
  • Why have conservatives decried 'activist judges'? And why have liberals - and America's powerful legal establishment - emphasized qualifications and experience over ideology? This transformative text tackles these questions with a new framework for thinking about the nation's courts, 'the judicial tug of war', which not only explains current political clashes over America's courts, but also powerfully predicts the composition of courts moving forward. As the text demonstrates through novel quantitative analyses, a greater ideological rift between politicians and legal elites leads politicians to adopt measures that put ideology and politics front and center - for example, judicial elections. On the other hand, ideological closeness between politicians and the legal establishment leads legal elites to have significant influence on the selection of judges. Ultimately, the judicial tug of war makes one point clear: for good or bad, politics are critical to how judges are selected and whose interests they ultimately represent.

Constraining Dictatorship
  • From Personalized Rule to Institutionalized Regimes
  • Anne Meng
  • Published online:
    18 September 2020
    Print publication:
    20 August 2020
  • How do some dictatorships become institutionalized ruled-based systems, while others remain heavily personalist? Once implemented, do executive constraints actually play an effective role in promoting autocratic stability? To understand patterns of regime institutionalization, this book studies the emergence of constitutional term limits and succession procedures, as well as elite power-sharing within presidential cabinets. Anne Meng argues that institutions credibly constrain leaders only when they change the underlying distribution of power between leaders and elites by providing elites with access to the state. She also shows that initially weak leaders who institutionalize are less likely to face coup attempts and are able to remain in office for longer periods than weak leaders who do not. Drawing on an original time-series dataset of 46 countries in Sub-Saharan Africa from 1960 to 2010, formal theory, and case studies, this book ultimately illustrates how some dictatorships evolve from personalist strongman rule to institutionalized regimes.

Banks on the Brink
  • Global Capital, Securities Markets, and the Political Roots of Financial Crises
  • Mark Copelovitch, David A. Singer
  • Published online:
    10 February 2020
    Print publication:
    20 February 2020
  • This innovative analysis investigates a complex issue of tremendous economic and political importance: what makes some countries vulnerable to banking crises, while others emerge unscathed? Banks on the Brink explains why some countries are more vulnerable to banking crises than others. Copelovitch and Singer highlight the effects of two variables in combination: foreign capital inflows and the relative prominence of securities markets in the domestic financial system. Foreign capital is the fuel for banks' potentially dangerous behavior, and banks are more likely to take on excessive risks when operating in a financial system with large securities markets. The book analyzes over thirty years of data and provides historical case studies of two key countries, Canada and Germany, each of which explores how political decisions in the 19th and early-20th centuries continue to affect financial stability today. The analyses in this book have crucial policy implications, identifying potential regulations and policies that can work to protect banking systems against future crises.

The Supreme Court
  • An Analytic History of Constitutional Decision Making
  • Tom S. Clark
  • Published online:
    22 February 2019
    Print publication:
    14 March 2019
  • This book presents a quantitative history of constitutional law in the United States and brings together humanistic and social-scientific approaches to studying law. Using theoretical models of adjudication, Tom S. Clark presents a statistical model of law and uses the model to document the historical development of constitutional law. Using sophisticated statistical methods and historical analysis of court decisions, the author documents how social and political forces shape the path of law. Spanning the history of constitutional law since Reconstruction, this book illustrates the way in which the law evolves with American life and argues that a social-scientific approach to the history of law illuminates connections across disparate areas of the law, connected by the social context in which the Constitution has been interpreted.

Rule by Multiple Majorities
  • A New Theory of Popular Control
  • Sean Ingham
  • Published online:
    28 December 2018
    Print publication:
    07 February 2019
  • What does it mean to say that citizens have control over their leaders? In a democracy, citizens should have some control over how they are governed. If they do not participate directly in making policy, they ought to maintain control over the public officials who design policy on their behalf. Rule by Multiple Majorities develops a novel theory of popular control: an account of what it is, why democracy's promise of popular control is compatible with what we know about actual democracies, and why it matters. While social choice theory suggests there is no such thing as a 'popular will' in societies with at least minimal diversity of opinion, Ingham argues that multiple, overlapping majorities can nonetheless have control, at the same time. After resolving this conceptual puzzle, the author explains why popular control is a realistic and compelling ideal for democracies, notwithstanding voters' low levels of information and other shortcomings.

Spending to Win
  • Political Institutions, Economic Geography, and Government Subsidies
  • Stephanie J. Rickard
  • Published online:
    12 April 2018
    Print publication:
    19 April 2018
  • Governments in some democracies target economic policies, like industrial subsidies, to small groups at the expense of many. Why do some governments redistribute more narrowly than others? Their willingness to selectively target economic benefits, like subsidies to businesses, depends on the way politicians are elected and the geographic distribution of economic activities. Based on interviews with government ministers and bureaucrats, as well as parliamentary records, industry publications, local media coverage, and new quantitative data, Spending to Win: Political Institutions, Economic Geography, and Government Subsidies demonstrates that government policy-making can be explained by the combination of electoral institutions and economic geography. Specifically, it shows how institutions interact with economic geography to influence countries' economic policies and international economic relations. Identical institutions have wide-ranging effects depending on the context in which they operate. No single institution is a panacea for issues, such as income inequality, international economic conflict, or minority representation.

From Warfare to Wealth
  • The Military Origins of Urban Prosperity in Europe
  • Mark Dincecco, Massimiliano Gaetano Onorato
  • Published online:
    28 December 2017
    Print publication:
    14 December 2017
  • The economic rise of Europe over the past millennium represents a major human breakthrough. To explain this phenomenon, this book highlights a counterintuitive yet central feature of Europe's historical landscape: warfare. Historical warfare inflicted numerous costs on rural populations. Security was a traditional function of the city. To mitigate the high costs of conflict in the countryside, rural populations migrated to urban centers. Over time, the city's historical role as a safe harbor translated into local economic development through several channels, including urban political freedoms and human capital accumulation. To make this argument, the book performs a wide-ranging analysis of a novel quantitative database that spans more than one thousand years, from the fall of the Carolingian Empire to today. The book's study of urban Europe's historical path from warfare to wealth provides a new way to think about the process of long-run economic and political development.

From Conflict to Coalition
  • Profit-Sharing Institutions and the Political Economy of Trade
  • Adam Dean
  • Published online:
    05 September 2016
    Print publication:
    08 September 2016
  • International trade often inspires intense conflict between workers and their employers. In this book, Adam Dean studies the conditions under which labor and capital collaborate in support of the same trade policies. Dean argues that capital-labor agreement on trade policy depends on the presence of 'profit-sharing institutions'. He tests this theory through case studies from the United States, Britain, and Argentina in the late-nineteenth and early-twentieth centuries; they offer a revisionist history placing class conflict at the center of the political economy of trade. Analysis of data from more than one hundred countries from 1986 to 2002 demonstrates that the field's conventional wisdom systematically exaggerates the benefits that workers receive from trade policy reforms. From Conflict to Coalition boldly explains why labor is neither an automatic beneficiary nor an automatic ally of capital when it comes to trade policy and distributional conflict.

Above Politics
  • Bureaucratic Discretion and Credible Commitment
  • Gary J. Miller, Andrew B. Whitford
  • Published online:
    05 May 2016
    Print publication:
    23 May 2016
  • Economic development requires secure contract enforcement and stable property rights. Normal majority-rule politics, such as bargaining over distributive and monetary policies, generate instability and frequently undermine economic development. Above Politics argues that bureaucracies can contribute to stability and economic development, but only if they are insulated from unstable politics. A separation-of-powers stalemate creates the conditions for bureaucratic autonomy. But what keeps delegated bureaucrats from being more abusive as they become more autonomous? One answer is the negotiation of long-term, cooperative relationships - that (when successful) typically bind subordinates to provide more effort in exchange for autonomy. Even more compelling is professionalism, which embeds its professional practitioners in professional norms and culture, and incidentally mitigates corruption. Financial examples are provided throughout the book, which ends with an analysis of the role played by professionalized bureaucracies during the Great Recession.

Marketing Sovereign Promises
  • Monopoly Brokerage and the Growth of the English State
  • Gary W. Cox
  • Published online:
    05 May 2016
    Print publication:
    28 April 2016
  • How did England, once a minor regional power, become a global hegemon between 1689 and 1815? Why, over the same period, did she become the world's first industrial nation? Gary W. Cox addresses these questions in Marketing Sovereign Promises. The book examines two central issues: the origins of the great taxing power of the modern state and how that power is made compatible with economic growth. Part I considers England's rise after the revolution of 1689, highlighting the establishment of annual budgets with shutdown reversions. This core reform effected a great increase in per capita tax extraction. Part II investigates the regional and global spread of British budgeting ideas. Cox argues that states grew only if they addressed a central credibility problem afflicting the Ancien Régime - that rulers were legally entitled to spend public revenue however they deemed fit.

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