Offering a unifying theoretical perspective not readily available in any other text, this innovative guide to econometrics uses simple geometrical arguments to develop students' intuitive understanding of basic and advanced topics, emphasizing throughout the practical applications of modern theory and nonlinear techniques of estimation. One theme of the text is the use of artificial regressions for estimation, reference, and specification testing of nonlinear models, including diagnostic tests for parameter constancy, serial correlation, heteroscedasticity, and other types of mis-specification. Explaining how estimates can be obtained and tests can be carried out, the authors go beyond a mere algebraic description to one that can be easily translated into the commands of a standard econometric software package. Covering an unprecedented range of problems with a consistent emphasis on those that arise in applied work, this accessible and coherent guide to the most vital topics in econometrics today is indispensable for advanced students of econometrics and students of statistics interested in regression and related topics. It will also suit practising econometricians who want to update their skills. Flexibly designed to accommodate a variety of course levels, it offers both complete coverage of the basic material and separate chapters on areas of specialized interest.

Estimation and Inference in Econometrics

The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The Economic Institutions of Capitalism

The four Visegrad states — Poland, the Czech Republic, Slovakia (until 1993 Czechoslovakia) and Hungary — form a compact area between Germany and Austria in the west and the states of the former USSR in the east. They are bounded by the Baltic in the north and the Danube river in the south. They are cut by the Sudeten and Carpathian mountain ranges, which divide Poland off from the other states. Poland is an extension of the North European plain and like the latter is drained by rivers that flow from south to north west — the Oder, the Vlatava and the Elbe, the Vistula and the Bug. The Danube is the great exception, flowing from its source eastward, turning through two 90-degree turns to end up in the Black Sea, forming the barrier and often the political frontier between central Europe and the Balkans. Hungary to the east of the Danube is also an open plain. The region is historically and culturally part of western Europe, but its eastern Marches now represents a vital strategic zone between Germany and the core of the European Union to the west and the Russian zone to the east.

Economy and Society

Corruption and Growth

The Psychology of Religion and Coping: Theory, Research, Practice

Charron N., Dijkstra L. and Lapuente V. Regional governance matters: quality of government within European Union member states, Regional Studies. This study presents novel data (European QoG Index – EQI) on the ‘quality of government’ (QoG) – understood as low corruption, impartial public services and rule of law – for national and sub-national levels in twenty-seven European Union countries. The EQI shows notable within-country variations: while high-performing regions in Italy and Spain (for example, Bolzano, Pais Vasco) rank amongst the best European Union regions, others perform well below the European Union average. The index is highly correlated with sub-national levels of socio-economic development and levels of social trust, yet political decentralization is uncorrelated with greater within-country, or higher levels of overall, QoG.

Regional Governance Matters: Quality of Government within European Union Member States

Do aspects of quality of government, broadly defined, such as corruption, impartiality, and quality of public services, vary below the country level? The concept of quality of government (QoG) and various measures to assess it have become more ubiquitous in several social science disciplines. QoG is related with economic and social development, better environmental conditions, and better quality of life. Yet while governance indicators have proliferated in recent years, their focus remains almost universally on analysis at the country level. Moreover, the majority of indices rely on expert assessments, as opposed to the assessments of citizens, who are the on-the-ground consumers of public services. Building on a preliminary round of data collected in 2010, this study, for which data were collected in 2013, presents a novel and comprehensive index that captures the quality of governance for 206 regions in 24 European countries. The ‘European Quality of Government Index’, which will be published free for scholarly use, is built on the largest survey to date focusing on governance at the regional level; over 85,000 citizens were surveyed. The instrument proposed here builds on both perceptions and experiences of citizens in public service areas such as health care, education, and law enforcement. The paper presents final results of the survey, as well as a sensitivity analysis and checks for external and internal validity.

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Erratum to: Mapping the Regional Divide in Europe: A Measure for Assessing Quality of Government in 206 European Regions

This article analyses the effects of political regimes over state capacity or the quality of government (QoG): Do democratic states perform better than authoritarian ones? Previous studies point to a nonlinear relationship between democracy and government quality. It is argued here that QoG is a function of both forces of supply (leaders who have the power to make reforms) and demand (citizens' desire for mid- to long-term investments over short-term needs), the latter of which is a function of economic development. In democratic states, leaders have stronger incentives to improve QoG after a certain degree of wealth is reached, while in poorer countries they have little incentive for long-term bureaucratic investments. Thus it is predicted that the relationship between democracy and QoG is conditional, based on economic development. With over 125 countries in the sample, this hypothesis is tested using time-series panel data and spatial models, and strong empirical support is found.

/pdf/does-democracy-produce-quality-of-government-2kjvtlwcnt.pdf

Does democracy produce quality of government

While most of the quantitative literature on quality of government has focused on national differences, subnational variation has been neglected, mainly due to the lack of data. This study explores subnational divergences in quality of government (understood as control of corruption, impartial treatment of citizens, and government effectiveness) using newly created subnational data including over 70 European regions. It addresses the institutional puzzle of why regions which share so many formal institutions (e.g., Northern and Southern Italy) do diverge so much in quality of government. Similar to recent political economy scholarship, our theory points to historical path dependencies. The study argues that a major factor explaining regional path dependencies is the consolidation of clientelistic networks in those regions where rulers have historically (seventeenth to nineteenth centuries) less constraints to their decisions.

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Why Do Some Regions in Europe Have a Higher Quality of Government

How well do corruption perception measures reflect actual levels of public sector corruption? Leading cross-national corruption perception measures have come under much theoretical and empirical scrutiny in recent years, with serious implications for the validity and reliability of the data in this ever growing sub-field. Critics argue that perceptions – in particular those of outside experts – do not reflect actual corruption in that they are far too ‘noisy’ or simply biased by external factors such as economic performance. Moreover, a number of recent empirical studies, focused on developing areas, have put forth evidence that outside expert assessments of corruption correspond little, if at all, with the experiences and views of actual citizens, and that such a lack of correspondence demonstrates pessimism for existing perception measures. This study offers a systematic analysis of the empirical strength of corruption perception measures in a previously unexplored area in this debate – Europe. Using new survey data collected by the author based on 85,000 European respondents in 24 countries, this issue is analyzed directly, addressing several contemporary critiques of the data. First, perceptions of citizens with, and without, personal corruption experience are compared at both the national and sub-national level in Europe. Second, external factors are checked, which might bias the extent to which citizens perceive corruption relative to how much actual corruption exists in countries and regions. Finally, expert perception indicators and citizen perceptions and experiences are compared. In summary, strong counter-evidence is found to the prevailing pessimistic claims in the literature – the consistency between actual reported corruption, as well as citizen and expert perceptions of corruption, is remarkably high and such perceptions are swayed little by ‘outside noise’. I conclude that, although existing corruption measures certainly have their share of problems, concerns regarding the validity and bias of perceptions have, perhaps, been overstated.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S1755773914000447

Do corruption measures have a perception problem? Assessing the relationship between experiences and perceptions of corruption among citizens and experts

Nicholas Charron

Papers

Regional Governance Matters: Quality of Government within European Union Member States

Erratum to: Mapping the Regional Divide in Europe: A Measure for Assessing Quality of Government in 206 European Regions

Does democracy produce quality of government

Why Do Some Regions in Europe Have a Higher Quality of Government

Do corruption measures have a perception problem? Assessing the relationship between experiences and perceptions of corruption among citizens and experts