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Is a monopolized banking sector a threat to democracy? Increasing bank monopolization and its growing share of the economy have brought renewed interest to this historical concern. Oskar Lange and Abba Lerner held that banking monopolization would undermine democracy through the concentration of political power among banking elites. This led them to exclude the banking sector from their more general support for private ownership of the means of production. We examine whether banking monopolization is associated with concentrated political power and the undermining of democracy using the Lerner Index (based on Lerner’s measure of banking concentration), Polity scores, Varieties of Democracy’s (V-Dem’s) Political Civil Liberty Index, and V-Dem’s Power Distributed by Socioeconomic Position Index, comprising data for 101 countries from 1996 to 2014 in our full specification. We find no relationship between civil liberties and the banking sector in Organisation for Economic Co-operation and Development (OECD) countries but a negative and statistically significant relationship in non-OECD countries. We find no relationship between the Lerner Index and the concentration of power by socioeconomic status. Our results support only one variant of the Lange–Lerner Hypothesis and only among non-OECD countries. We argue that, most likely, this is because long-established democracies are more resilient.
Since the publication of Braverman’s seminal Labor and Monopoly Capital (1974), labour process theory (LPT) has become a successful theory-building project driven by empirical expansion and conceptual innovation, operating as the equivalent of a normal science, with a distinctive scope and specific empirical focus on workplace regimes in the context of capitalist political economy. It’s toolkit or conceptual architecture combines underpinning and ordering principles with contingent and flexible operational categories concerning labour power and control. Though LPT has built stronger conceptual connections between workplace and accumulation regimes, changes in the global order have brought new theoretical and empirical challenges that are requiring it to adjust some of its core concepts and boundaries to consider development such as new sources of labour power, migration, and mobility.
Entangled political economy views societal phenomena as featuring substantial interaction between economic and political entities, but questions have been raised about the conceptual properties of entanglement. The political economist Randall Holcombe has raised questions concerning the economic influences affecting uneven patterns of entanglement between entities. Drawing upon his own transaction costs-based framework of political stratification, Holcombe suggests that political elites incur relatively low transaction costs associated with bargaining over policies, whereas non-elites incur relatively high costs. This suggests that elites actively participate in policy design and implementation and can outmaneuver the non-elite public to externalize the costs of political decisions, yielding noticeable clustering effects within entangled network structures. This article seeks to build upon Holcombe’s insights, as well as the transaction cost politics of Charlotte Twight, illustrating how groups engaging in political processes attempt to manipulate transaction costs to secure favorable outcomes. Transaction cost manipulation by elites to secure advantages is commonly studied, but less so is how non-elitists succeed in adjusting the transaction costs of political exchanges to help prevent fiscal exploitation by elitists. The public finance case of Colorado’s Taxpayer’s Bill of Rights is used to illustrate how dynamic entanglements between elites and non-elites delivered institutional change better aligning with non-elite fiscal preferences.
The aim of this article is to study empirically the relationship between political governance and public debt by testing a number of hypotheses. We examine the effects of the dispersion of power on public debt with an econometric study carried out on a sample of 13 developed countries using macroeconomic and political data covering the period 1996–2012. It is found that the lack of consensus between political parties in a government coalition and the dispersion of power within the government are factors explaining the increase in public debt.
In his recent book Fiscal Policy under Low Interest Rates, Olivier Blanchard argues that when interest rates are low, policymakers can use public debt finance to increase the welfare of a nation. I argue that Blanchard’s model suffers from the “organismic theory of the State” and, as such, reaches dubious conclusions. At its core, an organismic model presumes that politicians can and do make transfers that maximize the welfare of all individuals. While this is, of course, plausible, an individualistic view states that whether government transfers increase welfare for all individuals depends on the political decision-making process of time and place. While some political processes redistribute funds equally, others redistribute unequally—that is, they increase welfare for some but decrease the welfare of others. Blanchard’s organismic model takes this fact for granted. I use the individualistic view to argue that even if interest rates are low, if a political process is one that redistributes unequally, transfers under public debt financing can result in or exacerbate income inequality. To illustrate this point, I show that in the US, increases in public debt financing have increased welfare for some individuals—the low- and upper-income quintiles—but have decreased it for others—the middle-income quintiles.
We extend the standard optimal linear income taxation model to allow for differences in social and individual work preferences while still maintaining the assumption that individuals are rational. The theoretical and simulation analyses show that when the government places a higher social weight on work than do individuals, the optimal marginal income tax rate (MIT) becomes lower. This implies lower revenue, income guarantee, and overall progressivity. The case for lower MIT is reinforced when the government places a relatively higher weight on work for low earners. Combining our analysis with that of An and Coady (2022), we, on the one hand, agree with previous studies that the optimal nonlinear income tax schedule would be close to the optimal linear one but, on the other, show that the degree of closeness would depend on preference differences. Our work contributes to the burgeoning field of non-welfarist economics.
The purpose of this study is to investigate transformation processes in the field of public administration in Ukraine and the possibility of implementing change management. This article uses a case-study methodology, with both primary source statistics and archival materials, to evaluate the extent of decentralisation reforms in Ukraine. We demonstrate that reforms have been partial, which we attribute to an inefficient and opaque system that frustrates reform efforts. The main gaps of the Ukrainian authorities are observed in the inability to effectively influence the distribution of resources, in particular, to ensure the functioning of newly created territorial units. The article provides evidence that the existing problems that are the result of inefficient public administration in Ukraine, regarding poverty, inflation, the growing gap between rural and urban population, and the growth of unemployment, can be solved by implementing change management. The decentralisation reforms initiated in Ukraine have often been extolled in various quarters for their potential to enhance administrative and governance efficiency. Nevertheless, a comprehensive and empirical assessment detailing the full extent and depth of these reforms remains conspicuously absent. Such a gap in the literature underscores the need for a rigorous examination to ascertain the real magnitude of changes and their tangible impacts on the ground. The novelty of the study consists in the focus on the approach of the three-dimensional design of public administration proposed by Ukrainian researchers in the context of ‘management–administration–management’.
The October Revolution in Russia is better understood in light of Gordon Tullock’s by-product theory of revolution. This approach entails a focus on private costs and benefits rather than on public goods. It is shown that in terms of economic development, fiscal stability, and income distribution, that is, public goods, conditions in late-tsarist Russia were improving, not deteriorating, as the revolution approached. We reinterpret the impact of the many political concessions that followed the earlier Russian Revolution of 1905 and conclude that they had ultimately increased, rather than decreased, the probability of revolution. Finally, we show that various forms of foreign intervention (financial, military, and philosophical) made the unlikely Lenin the ultimate victor in the outcome of the Russian Revolution.
Households seeking childcare often turn to labour market intermediaries such as placement agencies and digital platforms to facilitate their search. This article draws on a qualitative research project to examine the respective roles played by agencies and platforms, comparing the structural power dynamics they engender between workers, clients, and intermediaries. First, it argues that digital platforms stand in an ambiguous position in relation to the formalisation of childcare. While they have contributed to reducing transaction costs and standardising processes, this has often been through the creation of more flexible and insecure forms of work compared with agencies. Second, in contrast with literature emphasising the disciplinary effects of platforms, we claim that they institute new forms of ‘constrained flexibility’, which have increased workers’ access to jobs, control over their schedule and communication with clients, while simultaneously subjecting them to increased market pressures and requiring higher levels of digital and entrepreneurial skills.
