Political Power and Economic Policy: Theory, Analysis, and Empirical Applications
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1 Political Power and Economic Policy: Theory, Analysis, and Empirical Applications by Gordon C. Rausser, Johan F.M. Swinnen, and Pinhas Zusman TABLE OF CONTENTS Part 1. Political Power and Economic Analysis 1. Public Policy: The Lens of Political Economy 1.1. Introduction 1.2. The Lens of Political Economy 1.3. Literature Review 1.4. Structure and Major Themes of the Book 2. The Nash Solution to the Bargaining Problem 2.1. Introduction 2.2. The Nash Solution to the Bargaining Problem with Fixed Disagreement Payoffs 2.3. The Pivotal Axiom and Alternative Approaches 2.4. Conclusion 3. The Harsanyi Solution to the Bargaining Problem 3.1. Introduction 3.2. Endogenous Disagreement Payoffs 3.3. The n-person Bargaining Game 3.4. Reciprocal Power Relations 3.5. Conclusion 4. Political-Economic Analysis 4.1. Introduction 4.2. Organization of the Political System 4.3. The Political-Economic Structure 4.4. Conflict Resolution and the Equilibrium Relations 4.5. Conclusion 5. Normative Political-Economic Analysis 5.1. Introduction 5.2. Evaluation Criteria of Social Benefits and Costs 5.3. Political-Economic Efficiency Conditions 5.4. Evaluation of Structural Policies 5.5. Conclusion 6. Dynamic Political-Economic Analysis 6.1. Introduction
2 RSZ TOC The General Structure of a Political Economy as a Dynamic System 6.3. The Dynamics of Political Power 6.4. Political Traps and Policy Reforms 6.5. Conclusion Part 2. Ideology, Prescription, and Political Power Coefficients 7. Political Power, Ideology, and Political Organizational Structures 7.1. Introduction 7.2. The Nature of Ideology 7.3. Ideological Commitment and Policy Formation 7.4. Implications for Empirical Analysis 7.5. The Organization of Interest Groups and Policy Formation 7.6. Interest Groups and the Organization for Collective Action 7.7. Political Enterpreneurs, Internal Group Organization and Within-Group Equilibrium 7.8. Group Political Preferences and Political Power 7.9. Implications of the Organization of Interest Groups Government Structure Political Parties Conclusion 8. Political Power, Influence, and Lobbying 8.1. Introduction 8.2. General Formulation of the Framework 8.3. Costs of Organization 8.4. Lobbying as a Common-Agency Problem 8.5. Lobbying under Assymetric Information 8.6. Expanding the Framework: PERTs and PESTs 8.7. Conclusion 9. Constitutional Prescription and Political Power Coefficients 9.1. Introduction 9.2. Constitutional Rules and Policy-making Centers 9.3. Evaluation of Alternative Constitutional Rules 9.4. Constitutional Space Prescription 9.5. Conclusion Part 3. Analysis of Specific Structures 10. The Political Economy of Commodity Market Intervention Introduction The Political Structure Policy Formation: The Political-Economic Equilibrium Welfare Implications Conclusion 11. The Political Economy of Public Research and Development
3 RSZ TOC Introduction Market Relations and the Demand for Public R&D Management and Organization of Public R&D The Political Structure The Political-Economic Equilibrium Policy Efficiency of the Political-Economic Equilibrium Public Research Policy Conclusion 12. Political-Economic Analysis of Redistributive Policy and Public Good Investments Introduction The Government s Policy Decisions Price Subsidies and Research Expenditures: Are they Complements or Substitutes? Conclusion 13. Interest Groups, Coalition Breaking, and Productive Policies Introduction Interest Group Structure Targeting Payments under Heterogeneous Adoption Noncoincidental Consumer and Taxpayer Interests and Output Constraints Other Transfer Schemes Conclusion 13.A.1. Derivation of (13.23) 13.A.2. Derivation of (13.25) 13.A.3. Derivation of (13.26) 14. Policy Reform and Compensation Introduction The Model Compensation, Ownership, and Mobility Conclusions 14.A Appendix to Chapter Political-Economic Analysis of Land Reform Introduction The Economic Structure The Political Structure The Political-Economic Equilibrium Evaluating the Economic Efficiency of Land Reform Conclusion 16. Political-Economic Analysis of Water Resource Systems Introduction The Structure of a Water Resource Political Economy The Physical Water Resource Subsystem The Economic Structure The Political Power Structure The Hydrological-Political-Economic Equilibrium
4 RSZ TOC Conjunctive Water Use with Short Water Supply Conclusion 16.A. The Effects of Districts Narrow Rationality on Water Prices and the Stationary Groundwater Level (Ample Water Supply at the Northern Source) 16.B. The Effects of Districts Narrow Rationality on Groundwater Level when Groundwater Pumping is Rationed (Short Water Supply) 17. The Political Economic Lens on Quality and Public Standard Regulations Introduction Interest Group Configuration The Political Economy of Public Standards Trade and Economic Development A Dynamic and Strategic Political Economy Theory of Quality Regulation Conclusion 18. Political-Economic Analysis in Transition Economies Introduction The Model Restructuring the Intertemporal Tradeoff Open and Closed Economies Vicious and Virtuous Circles Structural Conditions, Communist Organization and the Intertemporal Tradeoff Conclusion 18.A. The Monotonicity Property 19. The Power of Bureaucracies: The European Commission and EU Policy Reforms 16.1 Introduction 16.2 The Decision-Making Process 16.3 Status Quo Bias: The Importance of External Changes for Policy Reform 16.4 The Power of the Commission 16.5 Conclusion Part 4. Empirical Applications of Political Power Estimation 20. Political Econometrics Introduction Formulation Estimation and Testing Policy Instruments and the Negotiation Framework Conclusion 21. The Political Econometrics of the Israeli Dairy Industry Introduction The Israeli Dairy Program The Economic Structure of the Israeli Dairy Market The Political Structure of the Israeli Dairy Industry
5 RSZ TOC The Political-Economic Equilibrium in the Israeli Dairy Market The Internal Structure of the Political Conflict Conclusion 22. Flexible Policy Instruments Given a Political Power Distribution Introduction Specification and Estimation of the Constraint Structure Estimation of the Policy Governance Function Estimation of the Automatic Adjustment Rules Validation and Assessment of the Automatic Adjustment Rules Toward a Simpler Set of Automatic Adjustment Rules Conclusion 22.A. Estimated Constraint Structure Equations 22.A.1. Supply Side Equations 22.A.2. Demand Side Equations 22.A.3. Behavioral Equations 23. Estimating Statistical Properties of Power Weight Parameters and their Temporal Shifts Introduction Empirical Formulation Bootstrapped Standard Errors for Power Weight Parameters An Empirical Application to Japanese Policy Conclusion 24. Role of Institutions in the Joint Determination of PERTs and PESTs Introduction PERTs and PESTs in Developing and Developed Countries The Impact of Development: A Conceptual Model The Impact of Institutions Econometric Analysis Regression Results Conclusions and Implications
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