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Book ChapterDOI

The Political Economy of Crisis Management: Surprise, Urgency, and Mistakes in Political Decision Making

TLDR
A crisis typically has three characteristics as discussed by the authors : it is unexpected, a complete surprise, and a crisis is normally unpleasant in that current plans are found to work less well than had been anticipated.
Abstract
A crisis typically has three characteristics. First, a crisis is unexpected, a complete surprise. Second, a crisis is normally unpleasant in that current plans are found to work less well than had been anticipated. Third, a crisis requires an urgent response of some kind. That is to say, an immediate change of plans is expected to reduce or avoid the worst consequences associated with the unpleasant surprise. These characteristics imply that not every public policy problem is a crisis, because many public policy problems are anticipated or long-standing. The present social security problem faced by most Organization of Economic Cooperation and Development (OECD) nations is not a crisis, although it is a serious problem. Other policy problems are clearly worsened rather than improved when current policies are abandoned. This may be said of constitutional law, in cases in which minor unexpected problems arise from longstanding political procedures. Other policy problems lack immediacy, even when they are unanticipated. This might be argued, for example, of global warming, which was unanticipated prior to 1990 yet is anticipated to take decades to emerge. Not every serious problem is a crisis.1

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Posted Content

Relying on the Information of Interested Parties

TL;DR: In this paper, the authors investigate the conventional wisdom that competition among interested parties attempting to influence a decision maker by providing verifiable information brings out all the relevant information, and they find that if the decision maker is strategically sophisticated and well informed about the relevant variables and about the preferences of the interested party or parties, competition may be unnecessary; while if the decide maker is unsophisticated or not well informed, competition is not generally sufficient.
Posted Content

On the Political Economy of the Financial Crisis and Bailout of 2008

TL;DR: In this paper, the authors provide an overview of the political and economic decisions that helped to create the financial crisis of 2008 and discuss the relevance of public choice, constitutional political economy, and the theory of regulation for explaining the crisis management undertaken.
Journal ArticleDOI

Financial and world economic crisis: What did economists contribute?

TL;DR: In this paper, the authors deal with two questions: (1) what are the origins of the current financial crisis, and (2) what did economists contribute, or why did economists fail to pro- vide a convincing answer for the origins, and possible solutions to overcome it.
Journal ArticleDOI

On the political economy of the financial crisis and bailout of 2008–2009

TL;DR: The political response to the financial crisis has been rapid and large as discussed by the authors, and differ- ences in the effectiveness of government policies show the advantage of standing institutions at crisis management relative to innovative legislation.
Journal ArticleDOI

Energy shocks, crises and the policy process: A review of theory and application

TL;DR: In this paper, a review essay surveys theories of crisis policymaking from the social science literature and considers their application to changes in energy policy, focusing on two cases from the U.S. and Germany.
References
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Book ChapterDOI

The use of knowledge in society

TL;DR: In this paper, it was pointed out that many of the current disputes with regard to both economic theory and economic policy have their common origin, it seems to me, in a misconception about the nature of the economic problem of society.
Book

Political Economics: Explaining Economic Policy

TL;DR: The authors combine the best of macroeconomic policy, public choice, and rational choice in political science, and propose a unified approach to the field of political economics, and identify the main outstanding problems.
Book ChapterDOI

The Economics of Information

TL;DR: In this paper, the identification of sellers and the discovery of their prices is described as an example of the role of the search for information in economic life, and the identification and discovery of prices of goods and services is discussed.
Book

The Entropy Law and the Economic Process

TL;DR: In this paper, the Entropy Law and the economic process are discussed. But their focus is on the distribution of the entropy in the system, and not on the process itself, as we do.