Showing papers in "Journal of Public Policy in 2004"

What role for learning?: the diffusion of privatisation in OECD and Latin American countries

Abstract: In this paper, I enquire whether 37 governments in industrial and in Latin American countries privatised as a result of learning from experience. Using a rational updating model, I examine whether the decision in the 1980s and 1990s to streamline the public sector was the outcome of a revision of beliefs about the effectiveness of privatisation or whether, alternatively, it was triggered by international pressures or mimicry. The results suggest that rational learning and especially emulation were two important factors in the decision to privatise. International pressures, here proxied by the presence or absence of an agreement with the International Monetary Fund and by European Union membership, are irrelevant to explanations of the decision to privatise. Finally, domestic political conditions appear relevant to the decision to launch privatisation but only when the analysis is carried out for each of the regional sub-samples. In the OECD countries, centre-left governments were more likely to privatise whereas in Latin American more repressive regimes were more willing to divest.

In Whose Interest? Pressure Group Politics, Economic Competition and Environmental Regulation

Abstract: One school of thought in the literature on regulatory competition in environmental and consumer policy argues that inter-jurisdictional competition promotes regulatory laxity. The other highlights rent-seeking as a major driving force, implying that regulatory laxity is rare because rent-seeking is omnipresent. We observe that in most areas of environmental and consumer policy in advanced industrialized countries regulation has become much stricter since the 1970s. What then has been driving environmental and consumer risk regulation up? A popular explanation holds that large green jurisdictions have been forcing their trading partners to trade or ratchet up their regulation. In addition, political economists have developed bottom up explanations focusing on interest group politics and corporate behaviour. This article adds to the latter line by endogenising public perceptions and by exploring the effects of corporate environmental performance strategies on environmental and consumer risk policy. The empirical relevance of propositions is illustrated with case studies on growth hormones, electronic waste, and food safety.

The Puzzle of Regulatory Competition

Abstract: Our understanding of international competition in regulatory policies has not progressed much because conventional theories lead to a bewildering range of conclusions. Empirical evidence has shown the limitations of simplistic models. Fresh work should overcome the obsession with ‘races’ and ‘final outcomes’ of conventional theoretical approaches and start modelling real-world mechanisms of regulatory competition. The first part of the article shows the limitations of conventional theories. The second introduces eight problems that explanations of international regulatory competition should address. It also discusses how the articles presented here contribute to the solution to problematic aspects of the puzzle. The conclusion reports results achieved in terms of key concepts of regulatory competition, sequences of cooperation and competition, the role of non-unitary actors in networked regulatory action, and why regulatory competition is still limited, both in the EU and in transatlantic relations.

New Policy Ideas and Old Policy Networks: Implementing Green Taxation in Scandinavia'

Abstract: In the past, green taxation has become a widespread tool in pollution control in Europe. This new type of state intervention is based on an idea developed by environmental economists and diffused internationally through various channels of information exchange. We argue that the idea itself does not inform us about the way in which green taxation is designed because sectoral policy networks influence power relations, which in turn influence the actual design of green tax schemes. Thus, policy networks are the intervening variable explaining why an internationally diffused policy idea is implemented differently in various national settings. This argument is supported by a comparison of pesticide taxation and CO2 taxation in Denmark, Norway and Sweden. The role of ideas in public policy-making has been the focus of many studies. Some focus on the ideas themselves as the factor determining the contents of public policy, while others aim at explaining why an idea influences policy contents differently across countries. Our paper uses the latter approach. During the recent two decades, the idea of using green taxation has gained force in industrialized countries. Environmental policy-makers have introduced various types of green taxes to reduce emissions. Earlier environmental policy was based largely on the command-and-control approach, which regulates by the use of standards and which tends 'to force all businesses to adopt the same measures and practices of pollution control and thus accept identical shares of the pollution control burden regardless of their relative impacts' (Andersen I994: 2I). The basic idea of using taxes in pollution control is to put a price on negative externalities to internalize them in production decisions. Although green tax schemes adopted are based on the same basic idea, their specific design varies significantly for pesticide and CO2 (carbon

Convergence Within National Diversity: The Regulatory State in Finance'

Abstract: The international political economy literature often expects that states end up in regulatory races to the bottom while competing for the most mobile segments of capital. While multilateralism argues that states are able to overcome prisoner dilemma situations by converging on international standards of regulation, comparative historical institutionalists assume ongoing diversity of regulatory frameworks. The paper shows that reforms of banking regulation in the U.S., Britain and Germany exemplify a pattern of 'convergence within national diversity'. It is argued that a combination of comparative institutionalism with a multilateral perspective captures the causes and patterns of regulatory reform in finance. While convergence on a certain 'hegemonic regulatory model' is due to intergovernmental coordination on the regime level, national diversity with respect to timing and the extent of regulatory change depends to a large extent on the existence or absence of institutional veto points in the domestic political system.

Economic Growth as Environmental Policy? Reconsidering the Environmental Kuznets Curve

Abstract: Some research has posited that while initially damaging to the environment, continued economic growth eventually leads to superior environmental quality. This relationship is often described as an ‘Environmental Kuznets Curve’ (EKC), after a similar hypothesis regarding income inequality made by economist Simon Kuznets. Following such findings, the EKC is sometimes offered as a rationale for encouraging economic growth as the best environmental policy option. This paper reconsiders the policy-relevance of the EKC idea, drawing on a wide range of international data collected in the Environmental Sustainability Index (ESI) project. Specifically, it tests the theoretical arguments advanced by Arrow and others (1995) that EKC relationships are unlikely to hold for environmental problems that are intergenerational in time or spread across national boundaries. The results of this research substantially confirm those arguments, providing more evidence that the EKC idea is an inadequate guide for environmental policy makers around the globe.

Competition and Cooperation in Environmental Policy: Individual and Interaction Effects'

Abstract: The theory of regulatory competition suggests a race to the bottom of environmental standards. This theory, however, has not found much empirical support. Several attempts to account for this theoretical failure have been made in the literature, which mainly refer to the underlying assumptions of the theory. In this article, we present an alternative explanation. We argue that in reality regulatory competition is overlapped by other mechanisms affecting the adjustment of national policies. Most important are the effects emerging from regulatory cooperation at the level of the European Union (EU). To arrive at more precise theoretical predictions, we therefore not only analyze the individual effects of competition and cooperation on national policies, but also the impact of their interaction.

Varieties of capitalist democracy: what difference does East-Central Europe make?

Abstract: The establishment of capitalist democracies in East-Central Europe raises the question of whether existing accounts of varieties of capitalist democracy need to be revised. This article provides a systematic quantitative comparison of varieties of capitalist democracy in the Czech Republic, Hungary and Poland with 19 other OECD countries. It finds that the East-Central European cases constitute a distinctive cluster; that they have much in common with Greece, Iberia and Ireland and that they are closer to the continental European than the liberal variety of capitalist democracy. These results have important implications for the internal politics of the European Union, prospects of an East-Central European repeat of the relative success of Ireland and the Mediterranean in the European Union, and debates about the influence of neo-liberalism on public policy.

Trading Up in the Transatlantic Relationship

Abstract: This article analyses the conditions under which a race to the top or California effect is likely to take place. To that end, it examines two cases in which the EU restricted or threatened to restrict imports from the United States and Canada because of differences in regulatory standards. In one case, the European data protection directive, a California effect occurred. In the other case, the EU ban on hormone-treated beef, no California effect occurred. An analysis of these two cases leads to two additions to existing explanations of the California effect. The analysis also has a number of implications for the debate on the race to the bottom thesis.

Is Equality Good Medicine? Determinants of Life Expectancy in Industrialized Democracies

Abstract: The association between income inequality which creates psycho-social stress and longevity is of a curvilinear, concave nature. Low levels of income inequality are connected with shorter life expectancy. As inequality increases so does life expectancy until a point is reached where further increases in inequality lead to decreases in life expectancy. This finding is consistent with general theories of the effects of stress on performance as found in the fields of social psychology and sports medicine. In addition, we found that the life expectancy of populations is driven by factors such as perceived political control, the generosity of the welfare state, life-styles, GDP per capita and the poverty rate. Independently of which measure of income inequality was used or which statistical method was applied, these findings remained robust even when a number of alternative explanations were controlled for.

Is the Euro Working? The Euro and European Labour Markets

Abstract: Now that time has passed since the introduction of the euro as a commercial currency, it is possible to assess many arguments made in the abstract during the I99OS about European monetary union. This article shows that the euro zone still falls short as an optimal currency area in most respects. In particular, it undertakes an empirical analysis of the labour market and finds no progress toward flexibility or integration. These results challenge assertions of 'endogenous currency area' proponents that the euro area would become optimal 'after the fact', and that labour markets would serve as the principal avenue of adjustment. Instead, a 'rigidity trap' has developed in the euro area, consisting of relatively tight monetary policy, forced fiscal consolidation, and a risk of deflation in some economies. These conditions have compounded the difficulties of structural adjustment in European labour markets.

European Markets and National Regulation: Conflict and Cooperation in British Competition Policy

Abstract: The aim of this article is to examine the politics of competition policy in the United Kingdom by taking into account regulatory cooperation at the European Union level. Adopting a multiple streams approach, the article follows a bottom-up approach placing domestic politics at the heart of the puzzle. The analysis leads to four conclusions. First, pace-setters, such as the UK, may not be interested in playing one dimension of the regulatory competition game, that is, trying to influence the development of EU policy. Second, incongruence between domestic and EU regimes does not necessarily produce change at the domestic level. Convergence is not a top-down process. Third, the activating stimulus for change may be external (the EU), but the process is basially of domestic politics. Fourth, to the extent that the removal of political discretion characterizes a more transparent and strictly enforced regime, British competition policy provides empirical support for the hypothesis that the interaction of regulatory competition prior to regulatory cooperation leads to convergence to the top.

Valuing Agriculture: Balancing Competing Objectives in the Policy Process

Abstract: In an era of increasing emphasis on free trade and market deregulation, agricultural policy in advanced industrialized countries remains an anomaly, with many countries continuing to intervene in markets for farm produce. Since the Uruguay Round of multilateral trade negotiations the scrutiny of these interventions has made clear that governments have a range of objectives for their agricultural policies, some unrelated to economic factors. Concern about the future of rural communities, preservation of the countryside, the environment, food safety and animal welfare goals feature to varying degrees in agricultural policy settings. This paper explores the values influencing the formulation of agricultural policy and proposes a policy map of the combination of values reflected in particular policy settings. The map can give a better understanding of why particular policy approaches emerge in some polities and not others.

Taking Legal Rules into Consideration: EU Asylum Policy and Regulatory Competition

Abstract: This article applies regulatory competition theory to an unexplored case of competition among legal norms: asylum. The asylum case study allows for a discussion of two main assumptions of regulatory competition theory: the spontaneous emergence of competition among rules and the mechanical response of regulators to market forces. The article explains to what extent the current legal framework impacts on the emergence and development of the competitive process. This framework determines the existence of a market of legal norms, it impacts on the arbiters' mobility and on States' decision to compete. The article then addresses the mechanical vision of competition. It shows that law frames the response given by regulators to market forces. It discusses the hypothesis that competing legal rules evolve in a linear way and converge. Finally, the asylum case shows the limits of competition theory's ability to explain the evolution of law.