Determinants of governmental support of Russian companies: lessons on industrial policy, rent-seeking and corruption Abstract The Russian government has programs to assist Russian companies with financial and organizational support. Award of procurement contracts may also serve as assistance to companies. This paper uses data from a survey of Russian companies to draw inferences about the motivation behind the choice of recipients. Possible motivations are an intent to foster economic development, successful rent-seeking by recipients or simply corruption. The evidence is mixed. There is support for both the economic development motive and rent-seeking in the analysis of financial and organizational support. A role for corruption is most evident in the procurement contract results.

Perceptions of institutional quality and justification of tax evasion Abstract According to the world values survey, citizens justification of tax evasion varies widely across individuals and countries. We explore in this paper how justification of tax evasion covaries across individuals and countries with measures of government quality and the survey respondents own perceptions of the institutional quality. We study three proxies for individuals assessment of institutional quality, namely confidence in government, in civil service and in justice. We find only weak evidence that better assessments of the quality of government institutions are associated with less justification of tax evasion.

Parliamentary and semi-presidential advantages in the sovereign credit market: democratic institutional design and sovereign credibility Abstract We propose that institutional differences in executive-legislative relations generate heterogeneity in the creditworthiness of democracies in the sovereign credit market. In particular, there is a credibility advantage for parliamentarism relative to presidentialism, because the former, with stronger parties, elongates policy-makers’ time horizons and lowers their discount rate, thereby enhancing their ability to signal the credibility of their commitment to debt repayment. Our Heckman selection analysis of democracies from 1990 to 2012 confirms the existence of parliamentary advantage in sovereign credibility, and it also reveals a semi-presidential advantage relative to presidentialism. Our study contributes to the recent stream of research that problematizes the democracy/autocracy dichotomy in the study of sovereign credibility.

The Oxford Handbook of Public Choice : a masterful compendium Abstract This is a review article of The Oxford Handbook of Public Choice, edited by Roger Congleton, Bernard Grofman, and Stefan Voigt. This two-volume collection has 90 chapters, with each chapter averaging 20.4 pages (excluding the volumes’ indexes). My subtitle conveys my judgment of this work. The articles are written for serious readers, and they give clear and concise statements of the material they cover. Someone who reads one of the articles will arrive in the vicinity of the frontier of the mainstream of public choice theorizing as this has developed since the middle of the twentieth century. Despite my position from somewhere outside the public choice mainstream, I acknowledge readily and enthusiastically the ability of the essays in this Handbook to convey the contemporary state of public choice theorizing. The editors and authors deserve congratulations for their fine work.

The classical limits to police power and the economic foundations of the Slaughterhouse dissents Abstract The essay examines the influence of classical economics on an important episode in American 19th-century jurisprudence on business regulation, the Slaughterhouse Cases of 1873. It is well known that the dissents penned by Supreme Court Justices Field and Bradley lay down the fundamental doctrines of the later Lochner era of so-called laissez faire constitutionalism. The essay argues that these dissents were inspired by Adam Smith’s system of natural liberty and, in particular, by his views about the regulation of negative externalities and the undesirability of government-granted monopolies. The Smithian influence emerges even more clearly when the briefs presented by counsel for the plaintiffs John A. Campbell are considered. Those briefs contained most of the issues raised by the dissenting Justices; hence, it is claimed that Lochner’s intellectual roots may be traced back to Campbell and, from him, to Smith.

Does the 4th estate deliver? The Political Coverage Index and its application to media capture Abstract With the upswing of populist, right-wing, and EU-skeptical parties and politicians in Europe, as well as the success of Donald Trump in the 2016 US presidential elections, the media and its role in democracies are, once again, under scrutiny. To investigate whether the media fulfill its role as the fourth estate, i.e. providing another level of control for government, or whether there is evidence of media capture, first, we introduce the Political Coverage Index (PCI), a new measure of the relative positioning of media within the political spectrum. In contrast to existing measures of political positioning (e.g., language similarities, explicit endorsements, mentions of ideological references), we utilize the tonality of articles and newscasts on political parties and politicians. Then, we apply the PCI to 35 opinion-leading media in Germany, on the basis of more than 10 million news items on political parties and politicians between 1998 and 2012. Lastly, we use the PCI to investigate whether the media fulfil its fourth estate role. Our findings show that the media outlets in our sample report more negatively on governing parties, which we interpret as suggestive evidence that media is fulfilling its role as fourth estate in democracies.

How the Republic of Venice chose its Doge: lot-based elections and supermajority rule Abstract We study a family of voting rules inspired by the peculiar protocol used for over 500 years by the Republic of Venice to elect its Doge. Lot-based indirect elections have two main features: a pool of delegates is chosen by lot out of a general assembly, and then they vote in a single winner election with qualified majority. Under the assumption that the assembly is divided into two factions, we characterise the win probability of the minority and show that these features promote a more equitable allocation of political representation, striking a balance between protecting the minority and giving proper recognition to the majority. We then consider this family of voting procedures from a constitutional perspective: we analyse how the electoral result varies with the college size and the winning threshold in order to understand how these two parameters can be tuned when drawing up electoral law. We find that minorities are better off with larger majority thresholds. The role of the college size, on the other hand, is ambiguous: a smaller college size offers more protection to sparse minorities; for more sizeable ones, it depends instead on the qualified majority required for the election.

Sheilagh Ogilvie: The European guilds: an economic analysis

Governance and the political entrepreneur

Busy doing nothing: why politicians implement inefficient policies Abstract A substantial body of literature suggests that politicians are blocked from implementing efficient reforms that solve substantial problems because of special interest groups or budget constraints. Despite the existing mechanisms that block potentially efficient reforms, real-world data show that a large number of new programs and policies are implemented every year in developed countries. These policies are often selective and considered to be fairly inefficient by ex post evaluation, and they tend to be small in size and scope. With this background, this paper studies the reasons why a rational politician would implement an inefficient public policy that is intended to obfuscate the difficulties in achieving reforms. The paper uses a simple competence signaling model that suggests that if an effective reform is impossible, engaging in strategic obfuscation through an inefficient program increases the probability of winning a re-election compared to doing nothing at all. This is because an inefficient reform does not lead voters to believe that the politician is incompetent, which a lack of action risks doing. Intentional inefficiency aiming to obfuscate the difficulty of efficient reforms can therefore complement the previous theories’ explanations of political failure.