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on Positive Political Economics |
| By: | Guido Tabellini |
| Abstract: | Does culture have a causal effect on economic development? The data on European regions suggest that it does. Culture is measured by indicators of individual values and beliefs, such as trust and respect for others, and confidence in individual selfdetermination. To isolate the exogenous variation in culture, I rely on two historical variables used as instruments: the literacy rate at the end of the XIXth century, and the political institutions in place over the past several centuries. The political and social history of Europe provides a rich source of variation in these two variables at a regional level. The exogenous component of culture due to history is strongly correlated with current regional economic development, after controlling for contemporaneous education, urbanization rates around 1850 and national effects. Moreover, the data do not reject the over-identifying assumption that the two historical variables used as instruments only influence regional development through culture. The indicators of culture used in this paper are also strongly correlated with economic development and with available measures of institutions in a cross-country setting. |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:292&r=pol |
| By: | Linda Gonçalves Veiga (Universidade do Minho - NIPE); Maria Manuel Pinho (Universidade do Porto) |
| Abstract: | We use a large and unexplored dataset covering all mainland Portuguese municipalities from 1979 to 2002 to evaluate the impact of political forces in the allocation of grants from the central government to local authorities. Empirical results clearly show that, besides variables that proxi local population needs and the macroeconomic situation of the country, political variables condition the granting system: (1) grants increase in municipal and legislative election years, (2) the larger the number of years a mayor has been in office, the larger the amount of funds transferred to his/her municipality. These effects are particularly strong for grants that are not formula-determined. |
| Keywords: | political economy, intergovernmental relations, grants, Portugal. |
| JEL: | H77 H59 D72 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:8/2005&r=pol |
| By: | A. SCHOLLAERT; D. VAN DE GAER |
| Abstract: | In a game of imperfect information, the paper analyzes whether different types of intervention by third parties can ensure that political (ethnic, religious, social, . . . ) groups within a country will pursue a cooperative strategy and how easy it is to predict their effects. We conclude that a strong boycott is the most effective instrument, then comes a weak boycott, followed by power politics. Finally, apart from requiring very detailed information on the relevant parameters of the economy, the use of confidence building measures has a serious flaw: it is incapable of averting civil war. |
| Keywords: | Non Cooperative Games; Third-party Intervention; Conflict Prevention |
| JEL: | C72 D74 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:05/308&r=pol |