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Dysfunctional institutions? Toward a New Agenda in Governance Studies

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There is a wide-spread perception among academics and commentators that institutional dysfunction has become increasingly common in important social, political, and economics arenas. Opinion polls show a decline in trust and confidence in major actors and institutions, including inter-governmental organizations, governments, firms, NGOs, and religious organizations. For some, the core of the problem is that the hitherto well-functioning states have become less effective in aggregating and acting upon citizens' preferences. Many policy initiatives of the 1990s - deregulation, privatization, new public management, private regulation, regional integration, civil society, and so on - seemed to have failed to meet expectations. This symposium seeks to identify important theoretical and empirical questions about institutional failure, such as why do institutions fail, why are they not self-correcting, what might be a clear evaluative yardstick and analytic approach by which to measure performance, and to what extent contemporary theories of institutional evolution and design are useful in examining institutional restructuring and institutional renewal? Symposium essays by leading social science scholars offer important insights to inform future work on institutional performance and outline an agenda for institutional renewal and change.

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... Why are some institutions without any policy capacity and output? Today there is a widespread perception that institutions are underperforming, and there is growing skepticism about multilateral initiatives (Finnemore 2014;Prakash and Potoski 2016). Major permanent institutions such as ASEAN do not seem to do anything, and governments make no efforts to reform them (Jetschke 2009). ...
... They find the causes of institutional mutation in the internal bureaucratic culture of organizations. Structured comparative studies attribute underperformance to several groups of factors: design failure due to imperfect rules, inadequate incentives for compliance, and lack of information (Ostrom 1990); institutional obsolescence and failure to adapt to evolving circumstances; and capture by special interest groups (Prakash and Potoski 2016). A recent special issue of the journal Regulation and Governance focused on dysfunctional institutions and also asked the question "Do institutions always work as intended?" ...
... A recent special issue of the journal Regulation and Governance focused on dysfunctional institutions and also asked the question "Do institutions always work as intended?" (Prakash and Potoski 2016). The volume examined institutions as diverse as the US Congress and international humanitarian organizations and identified problems with information processing and misallocation of property rights as some of the reasons for dysfunctionality. ...
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Abstract Why are some institutions without any policy powers or output? This study documents the efforts by governments to create empty international institutions whose mandates deprive them of any capacity for policy formulation or implementation. Examples include the United Nations Forum on Forests, the Copenhagen Accord on Climate Change, and the UN Commission on Sustainable Development. Research is based on participation in twenty-one rounds of negotiations over ten years and interviews with diplomats, policymakers and observers. The article introduces the concept of empty institutions, provides evidence from three empirical cases, theorizes their political functions, and discusses theoretical implications and policy ramifications. Empty institutions are deliberately designed not to deliver and serve two purposes. First, they are political tools for hiding failure at negotiations, by creating a public impression of policy progress. Second, empty institutions are “decoys” that distract public scrutiny and legitimize collective inaction, by filling the institutional space in a given issue area and by neutralizing pressures for genuine policy. Contrary to conventional academic wisdom, institutions can be raised as obstacles that pre-empt governance rather than facilitate it.
... A agencificação implica a redução do protagonismo das autoridades políticas (SMITH, 1997;MAJONE, 1998), colidindo com a tendência de resistência das instituições às mudanças (MARCH; OLSEN, 1989;OSTROM, 1990;NORTH;1991). Essa perspectiva analítica é sintetizada nas três premissas que orientam este estudo: i) as reformas regulatórias foram imprescindíveis para lidar com a crise fiscal do Estado, que afetou a capacidade de prestação dos serviços públicos (ABRANCHES, 1999;BRESSER-PEREIRA, 2001;FARIAS;RIBEIRO, 2002); ii) a credibilidade é indispensável para que os atores privados substituam o Estado, especialmente quando da necessidade de investimentos com longo prazo de maturação e custos irrecuperáveis (SMITH, 1997;MAJONE, 1998;GILARDI, 2002;TRILLAS;MONTOYA, 2013;PRAKASH;POTOSKI, 2016); e, iii) novos desenhos institucionais são subordinados às dotações institucionais de cada setor e de cada país (LEVY; SPILLER, 1994;PEREIRA, 2002;LEVI-FAUR, 2003;TOMMASI, 2003). Diversos estudos inclusive no Brasil, investigaram os novos desenhos institucionais a partir da perspectiva dos níveis de independência de facto das agências reguladoras (LEVI-FAUR, 2003;CORREA et al., 2006CORREA et al., , 2017PÓ, 2009;BATISTA, 2010BATISTA, , 2011DE BONIS, 2016;FERNÁNDEZ-I-MARÍN;BIANCULLI, 2016;MEDIANO, 2018). ...
... A agencificação implica a redução do protagonismo das autoridades políticas (SMITH, 1997;MAJONE, 1998), colidindo com a tendência de resistência das instituições às mudanças (MARCH; OLSEN, 1989;OSTROM, 1990;NORTH;1991). Essa perspectiva analítica é sintetizada nas três premissas que orientam este estudo: i) as reformas regulatórias foram imprescindíveis para lidar com a crise fiscal do Estado, que afetou a capacidade de prestação dos serviços públicos (ABRANCHES, 1999;BRESSER-PEREIRA, 2001;FARIAS;RIBEIRO, 2002); ii) a credibilidade é indispensável para que os atores privados substituam o Estado, especialmente quando da necessidade de investimentos com longo prazo de maturação e custos irrecuperáveis (SMITH, 1997;MAJONE, 1998;GILARDI, 2002;TRILLAS;MONTOYA, 2013;PRAKASH;POTOSKI, 2016); e, iii) novos desenhos institucionais são subordinados às dotações institucionais de cada setor e de cada país (LEVY; SPILLER, 1994;PEREIRA, 2002;LEVI-FAUR, 2003;TOMMASI, 2003). Diversos estudos inclusive no Brasil, investigaram os novos desenhos institucionais a partir da perspectiva dos níveis de independência de facto das agências reguladoras (LEVI-FAUR, 2003;CORREA et al., 2006CORREA et al., , 2017PÓ, 2009;BATISTA, 2010BATISTA, , 2011DE BONIS, 2016;FERNÁNDEZ-I-MARÍN;BIANCULLI, 2016;MEDIANO, 2018). ...
... Essa hierarquização é sustentada por duas premissas: as privatizações cumprem o duplo papel de reduzir os custos de entrada para os novos empreendedores e o risco de interferência das autoridades políticas no mercado (JOSKOW, 2007;NUNES et al., 2015;PRAKASH;POTOSKI, 2016;VINING;WEIMAR, 2016); e, os contratos de concessão protegem os entrantes contra ações arbitrárias dos incumbentes e das autoridades políticas (GILARDI, 2002;TRILLAS;MONTOYA, 2013;VINING;WEIMAR, 2016). ...
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Este artigo contribui para a compreensão de fatores que podem afetar a efetividade de reformas administrativas baseadas na quebra do monopólio estatal na prestação de serviços públicos. O foco é o alcance das medidas para fomentar a entrada de novos empreendedores. O estudo compara os setores de eletricidade (segmento de geração de energia), telecomunicações (serviços públicos) e petróleo (segmentos de produção e de refino), precursores das reformas regulatórias no Brasil. Trata-se de uma pesquisa descritiva, que compreendeu as pesquisas bibliográfica e documental e a análise de conteúdo dos documentos orientadores, normativos e principais medidas voltadas para estimular a entrada de novos empreendedores. As análises foram orientadas pela premissa da perda de capacidade de investimento estatal. Os resultados demonstram que o aumento da oferta de produtos e serviços está diretamente associado à segurança jurídica oferecida para o investimento privado. Essa segurança jurídica é considerada maior quando há a privatização das estatais e a celebração de contratos de concessão com os novos prestadores.
... The results also suggest that IMF practice did little to change prevailing norms with a view to delegitimize corruption. To the contrary, the Fund long pushed for privatization even when existing institutions were weak, and despite such reforms requiring regulatory constraints to be successful (Dubash and Morgan 2012;Prakash and Potoski 2016;Stiglitz 2003). ...
... In developing countries, however, powerful IFIs have successfully pushed for deregulation because states lacked the capacity to resist such pressures and re-regulate markets (Babb and Kentikelenis 2018;Reinsberg et al. 2018). What is more, IFIs often transplanted 'regulatory innovations' from the developed world into developing countries, with insufficient embedding in local contexts (Dubash and Morgan 2012;Dunning 2004;Prakash and Potoski 2016). Confirming these arguments, our results caution against an overly optimistic view on the role of international organizations as facilitators of 'responsive regulators' (Abbott and Snidal 2013)-arguably because IFIs are not well-equipped to perform the role of orchestrators. ...
... Policy responses are institutional responses made by policy actors under their respective institutions -either independently or collectively via interaction and compromise with other institutions (Burns, 2004;North, 1991;Prakash & Potoski, 2015). Instead of examining the content and effectiveness of each individual policy response separately, this study takes a macro-governance perspective to ask the more fundamental question of what pillars or institutions of governance can mobilize, formulate and deliver the appropriate and necessary policy responses to fight a major crisis as severe as More specifically, this article examines the importance of bureaucrats and civil society in the fight against the COVID-19 crisis in cases of state failure by analysing the policy responses of Hong Kong under the combined framework of Political Nexus Triads (PNT) (Moon & Ingraham, 1998) and policy capacity (Wu et al., 2015). ...
... Hong Kong is one exception to this ideal model. Around the globe, similar cases that include one or more failed governance institutions are common (Prakash & Potoski, 2015). The integration of the theories of policy capacity and PNT opens up possibilities for analysing how politicians, bureaucrats and civil society interact under multiple configurations of state-society relations, within which they express different levels of strength and various types of interrelationships -conflictual or synergic, cooperative or confrontational. ...
Article
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This article examines the importance of an autonomous bureaucracy and a strong civil society in the combat against COVID-19 by analysing the policy responses of Hong Kong under the combined framework of policy capacity and Political Nexus Triads (PNT). The case of Hong Kong underlines the importance of state–society interactions in constituting policy responses under a weak or failed state. From the perspective of collaborative governance, it is crucial for citizens to be engaged as partners in public policies, thus highlighting a certain degree of complementarity between state and non-state actors in the co-production of public policies.
... From a problem-solving perspective, proper understanding of processes and causes of failure-i.e. the negative and undesirable aspects of failure-may be necessary in order to avoid it in the future. Therefore, scholars have studied how failure erodes trust and confidence in major social actors and institutions, including governments and intergovernmental organisations (Prakash and Potoski 2016), how established political systems may degenerate (e.g. Farazmand 2012) and with them, their problem-solving and governance capacities (Alink et al. 2001). ...
... Discussions of governance failure, finally, focus strongly on procedural sources of failure, considering the failure of parties to coordinate and cooperate on an personal, organisational, and systemic level as an important source of meso-level failure (Jessop 1998;Peters 2015). Where institutions are insufficiently flexible to deal with new challenges or changing circumstances, they will be susceptible to rejection or replacement (Prakash and Potoski 2016;Mol 2009). ...
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Recognised as an integral part of the political process, the topic of institutional failure has recently received increased attention in the literature, particularly with respect to policy failure. Nevertheless, the difference between various types and aspects of failure is unclear conceptually, hampering the development of cumulative theory building into its causes and consequences. Furthermore, while ample attention has been paid to negative consequences, insights into the possibly ‘productive functions’ of failure are scattered and largely remain on the fringes of existing research. The present paper offers a systematic review of the failure literature, particularly its definitions, causes and consequences, setting existing research in the different scholarly fields in relation to each other. Special emphasis is placed on the ways failure may serve to advance the effectiveness and efficacy of public policy and the wider political system, opening ‘windows of opportunity’ as leverage points for institutional change. In doing so, we identify a number of factors which may facilitate or hinder the activation of this productive potential on an individual, institutional, and societal level.
... Why are some institutions without any policy capacity and output? Today there is a widespread perception that institutions are underperforming, and there is growing skepticism about multilateral initiatives (Finnemore 2014;Prakash and Potoski 2016). Major permanent institutions such as ASEAN do not seem to do anything, and governments make no efforts to reform them (Jetschke 2009). ...
... A recent special issue of the journal Regulation and Governance focused on dysfunctional institutions and also asked the question "Do institutions always work as intended?" (Prakash and Potoski 2016). The volume examined institutions as diverse as the US Congress and international humanitarian organizations and identified problems with information processing and misallocation of property rights as some of the reasons for dysfunctionality. ...
... Findings from emerging markets can shed light, under certain conditions, on happenings in developed markets. In mature economies, public trust in governments declined in recent decades (Prakash and Potoski, 2016). This decline in trust raises the interesting idea that studies about political relationships in emerging markets might even foreshadow some future trends in North America and Europe. ...
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Non-profit organizations in emerging markets frequently have to manage relations with governments and for-profit firms. We advance a multi-stakeholder perspective and develop propositions about how the political ties of charities influence their success in raising funds from corporate donors. Evidence from 2,054 Chinese charities during 2005-2012 shows that organizational political ties, established through formal affiliation with the government, aid fundraising from corporate donors, whereas personal political ties, formed through personal political services of senior leaders of charities, have no such effect. The positive effect of government affiliation is relevant for both foreign and domestic donors, but stronger for domestic ones. These results highlight the differential impact and contingent value of political embeddedness for charities’ ability to acquire resources from for-profit business, contributing to both stakeholder theory and the political embeddedness perspective.
... И чем выше уровень сложности экономики и общества, тем больше число институциональных аномалий и тем многообразнее их конкретные формы. Именно поэтому так называемые «дисфункциональные» и «патологические» институты сейчас становятся типичным явлением в экономике, политике и других сферах (Richards et al., 2014;Prakash, Potoski, 2016). Конечно, нормоцентризм не следует путать с вульгарным функционализмом, утверждающим, что все институты существуют в силу потребности в них, а в долгосрочной перспективе «выживают» только полезные обществу институты. ...
Article
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В статье рассматривается внутренний дуализм институциональной экономики на современном этапе ее развития, связанный с разделением ортодоксального течения (мейнстримного институционализма, аксиоматика и догматика которого представлена Стандартной моделью) и его оппозиции, позиционирующейся как постинституционализм. Предлагается повестка дня перспективных постинституциональных исследований, затрагивающая широкий круг дискуссионных вопросов за рамками Стандартной модели – от перехода к интегративным трактовкам институтов до внедрения эво-дево-парадигмы анализа институциональной эволюции. Раскрыты ключевые для постинституционализма концепции институциональных ассамбляжей (полилогичных институциональных систем), бриколажа (процесса массовых ресурсно-ограниченных изменений институтов), клуджей (паллиативных институциональных решений сложных текущих проблем) и конфигураций (коэволюционирующих институтов, сообществ их акторов и конструируемых ими сред). Предложена переориентация трансакционного анализа институтов с минимизации трансакционных издержек на максимизацию генерируемой ими трансакционной ценности. Обсуждается нормоцентричная парадигма институциональных исследований, рассматривающая любые формы и траектории развития институтов вне оценочных критериев, отказываясь от традиции негативного маркирования институциональных аномалий. Показано, что в фокусе постинституционализма находится институциональная сложность, изучение которой требует преодоления редукционистских методологических подходов институционального мейнстрима. Ключевые слова: институциональная сложность, институты, институциональные системы, ассамбляжи, бриколаж, трансакционные издержки, трансакционная ценность, институциональная эволюция, постинституционализм.
... И чем выше уровень сложности экономики и общества, тем больше число институциональных аномалий и тем многообразнее их конкретные формы. Именно поэтому так называемые «дисфункциональные» и «патологические» институты сейчас становятся типичным явлением в экономике, политике и других сферах (Richards et al., 2014;Prakash, Potoski, 2016). Конечно, нормоцентризм не следует путать с вульгарным функционализмом, утверждающим, что все институты существуют в силу потребности в них, а в долгосрочной перспективе «выживают» только полезные обществу институты. ...
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The article discusses the internal dualism of modern institutional economics, manifested in division of orthodox or mainstream institutionalism (its axiomatics and dogmatics are represented by the Standard Model) and its opposition post-institutionalism. An agenda for promising post-institutional studies is proposed, covering a wide range of discussion issues beyond the Standard Model — from the transition to integrative interpretations of institutions to the introduction of the Evo-Devo-paradigm of analysis of institutional evolution. A reorientation of the transactional analysis from minimizing transaction costs to maximizing the transaction value generated by institutions is proposed. The normocentric paradigm of institutional theory is discussed, considering any forms and trajectories of institutional evolution outside of the evaluation criteria, abandoning the tradition of negative labeling of institutional anomalies. The article demonstrates that in the focus of post-institutionalism there is institutional complexity, which can only be comprehended by overcoming reductionist methodological approaches of the institutional mainstream.
... This paper offers a theoretical synthesis of the literature on NGO failure and not methodological strategy to measure it. We recognize that measuring organizational dysfunction poses conceptual and empirical challenges (Prakash & Potoski, 2016). Failure is a continuum, not a binary concept. ...
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An extensive literature identifies conditions under which markets and states work efficiently and effectively towards their stated missions. When these conditions are violated, these institutions are deemed to show some level of failure. In contrast to the study of market and government failures, scholars have tended to focus on non-governmental organizations’ (NGOs) successes instead of failures. This is probably because they view NGOs as virtuous actors, guided by principled beliefs rather than instrumental concerns, not susceptible to agency conflicts, accountable to the communities they serve, and working cooperatively with each other. A growing literature questions this “virtue narrative.” When virtue conditions are violated, NGOs could exhibit different levels of failure. In synthesizing this literature, we offer an analytic typology of NGO failures: agency failure, NGOization failure, representation failure, and cooperation failure. Finally, given NGOs’ important role in public policy, we outline institutional innovations to address these failures.
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In exploring the leadership practices of chief executives of intergovernmental organizations (IGOs), this article finds that IGO leaders recognize themselves as agents and as brokers. This article produces findings from a multiple-case study of the executive leadership of NATO from 1995 to 1999 and of the EU Common Foreign and Security Policy from 1999 to 2009. The relationship between member states and the IGO leader can be conceived as a principal–agent relationship where the agent plays a central role in framing a common vision and strategies, facilitating member states' involvement in the strategizing process, and mobilizing external and internal support. I depart from a restrictive princi-pal–agent conceptualization of the relationship because I do not envision it as conflictive, but rather as collaborative.
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What are state agencies required to do with respect to performance measurement and performance budgeting? This article addresses the trend toward improving performance in government. Past research on performance-based budgeting (PBB) in the states concentrates on anecdotal information and case analyses, usually including fewer than 10 states. This article provides national coverage of requirements for performance-based budgeting in the states. We survey the 50 states concerning existing or planned legislation related to performance-based budgeting as well as administrative requirements. We review legislation and budget guidelines to determine their scope and focus. Results show that all but three states have performance-based budgeting requirements, and most have established these requirements within the last few years. Thirty-one states have legislated performance-based budgeting to be conducted, while sixteen states have initiated this reform through budget guidelines or instructions. This research analyzes the foundations for conducting performance-based budgeting in the states. It serves as a stepping stone to determining effective methods to create and sustain this budget system in the states.
Article
How might domestic regulatory institutions influence the adoption of global private regimes? We focus on the ISO 9001 and 14001 certification standards, which obligate firms to establish quality and environmental management systems. Previous research highlights the roles of international commercial audiences and national regulatory pressures as unconditional drivers of adoption. However, we argue that domestic regulatory institutions condition their effects—in opposite directions. Where regulatory institutions function well, firms facing high levels of regulatory pressure are more likely to seek ISO certification, but firms facing pressures from international audiences are less likely to do so. In contrast, weak regulatory institutions make export-oriented and foreign-owned firms more likely to seek ISO certification, but render firms facing high levels of regulatory pressure less likely to do so. We find support for our claims using firm-level data from 10,000 firms in 30 countries in Eastern Europe and Central Asia.
Book
Why do institutions emerge, operate, evolve and persist? 'Institutional Choice and Global Commerce' elaborates a theory of boundedly rational institutional choice that explains when states USE available institutions, SELECT among alternative forums, CHANGE existing rules, or CREATE new arrangements (USCC). The authors reveal the striking staying power of the institutional status quo and test their innovative theory against evidence on institutional choice in global commerce from the nineteenth through the twenty-first centuries. Cases range from the establishment in 1876 of the first truly international system of commercial dispute resolution, the Mixed Courts of Egypt, to the founding and operation of the General Agreement on Tariffs and Trade, the World Trade Organization, and the International Accounting Standards Board. Analysts of institutional choice henceforth must take seriously not only the distinct demands of specific cooperation dilemmas, but also the wide array of available institutional choices.
Article
How do public regulations shape the composition and behavior of non-governmental organizations (NGOs)? Because many NGOs advocate for liberal causes such as human rights, democracy, and gender equality, they upset the political status quo. At the same time, a large number of NGOs operating in the Global South rely on international funding. This sometimes disconnects from local publics and leads to the proliferation of sham or “briefcase” NGOs. Seeking to rein in the politically inconvenient NGO sector, governments exploit the role of international funding and make the case for restricting the influence of NGOs which serve as foreign agents. To pursue this objective, states worldwide are enacting laws to restrict NGOs’ access to foreign funding. We examine this regulatory offensive through an Ethiopian case study, where recent legislation prohibits foreign-funded NGOs from working on politically sensitive issues. We find that most briefcase NGOs and local human rights groups in Ethiopia have disappeared, while survivors have either “rebranded” or switched their work from proscribed areas. This research note highlights how government can and do shape the population ecology of the non-governmental sector. Because NGOs seek legitimacy via their claims of grassroots support, a reliance of external funding makes them politically vulnerable. Any study of the NGO sector must include governments as the key component of NGOs’ institutional environment.
Article
There has been much talk in recent years of a "crisis of confidence in charities" in the United States. This article presents a conceptual framework for analyzing the issue and reviews attitudinal and behavioral data relevant to public confidence in the nonprofit sector generally and major nonprofit subsectors. The article concludes that the "crisis of confidence" hypothesis is not supported by the evidence.
Article
Examines the role that institutions, defined as the humanly devised constraints that shape human interaction, play in economic performance and how those institutions change and how a model of dynamic institutions explains the differential performance of economies through time. Institutions are separate from organizations, which are assemblages of people directed to strategically operating within institutional constraints. Institutions affect the economy by influencing, together with technology, transaction and production costs. They do this by reducing uncertainty in human interaction, albeit not always efficiently. Entrepreneurs accomplish incremental changes in institutions by perceiving opportunities to do better through altering the institutional framework of political and economic organizations. Importantly, the ability to perceive these opportunities depends on both the completeness of information and the mental constructs used to process that information. Thus, institutions and entrepreneurs stand in a symbiotic relationship where each gives feedback to the other. Neoclassical economics suggests that inefficient institutions ought to be rapidly replaced. This symbiotic relationship helps explain why this theoretical consequence is often not observed: while this relationship allows growth, it also allows inefficient institutions to persist. The author identifies changes in relative prices and prevailing ideas as the source of institutional alterations. Transaction costs, however, may keep relative price changes from being fully exploited. Transaction costs are influenced by institutions and institutional development is accordingly path-dependent. (CAR)
Article
Scholars have often remarked that Congress neglects its oversight responsibility. We argue that Congress does no such thing: what appears to be a neglect of oversight really is the rational preference for one form of oversight--which we call fire-alarm oversight--over another form--police-patrol oversight. Our analysis supports a somewhat neglected way of looking at the strategies by which legislators seek to achieve their goals.
Article
Much recent research has found that states generally comply with the treaties they sign. The implications of this finding, however, are unclear: do states comply because the legal commitment compels them to do so, or because of the conditions that led them to sign? Drawing from previous research in this Review on Article VIII of the IMF Treaty (Simmons 2000a), I examine the problem of selection bias in the study of treaty compliance. To understand how and whether international legal commitments affect state behavior, one must control for all sources of selection into the treaty—including those that are not directly observable. I develop a statistical method that controls for such sources of selection and find considerable evidence that the unobservable conditions that lead states to make the legal commitment to Article VIII have a notable impact on their propensity to engage in compliant behavior. The results suggest that the international legal commitment has little constraining power independent of the factors that lead states to sign.
Article
Debates about the efficacy of private environmental regimes have been fueled by disparate research findings, such as when the same regime that has been effective in one setting is found to be ineffective in another. In this article, we show that the efficacy of ISO 14001, the most widely adopted voluntary environmental regime in the world, is conditioned by the stringency of countries' domestic regulations. In doing so, we outline a model of strategic corporate environmentalism wherein firms strategically focus their International Organization for Standardization (ISO) certification to reduce emissions of visible air pollutants as opposed to less visible water pollutants. Our analyses of pollution levels for a panel of 159 countries (73 for water pollution) from 1991 to 2005 indicate that ISO 14001 certifications reduce air (SO2) emissions in countries with less stringent environmental regulations but have no effect on air emissions in countries with stringent environmental regulations. We also find that ISO membership levels are not associated with reductions in water pollution levels (Biochemical Oxygen Demand BOD), irrespective of stringency of domestic law. Our article suggests that the efficacy of global private environmental regimes is likely to be conditioned by the domestic regulatory context in which firms function, and given firm's strategic considerations, this efficacy could vary across pollution types.
Chapter
Evolution of the Market PatternThe Self-Regulating Market and the Fictitious Commodities: Labor, Land, and Money
Book
Can businesses voluntarily adopt progressive environmental policies? Most environmental regulations are based on the assumption that the pursuit of profit leads firms to pollute the environment, and therefore governments must impose mandatory regulations. However, new instruments such as voluntary programs are increasingly important. Drawing on the economic theory of club goods, this book offers a theoretical account of voluntary environmental programs by identifying the institutional features that influence conditions under which programs can be effective. By linking program efficacy to club design, it focuses attention on collective action challenges faced by green clubs. Several analytic techniques are used to investigate the adoption and efficacy of ISO 14001, the most widely recognized voluntary environmental program in the world. These analyses show that, while the value of ISO 14001's brand reputation varies across policy and economic contexts, on average ISO 14001 members pollute less and comply better with governmental regulations.
Article
Amid calls for NGOs to become more accountable, this work examines discrepancies between what NGOs say and do. Using a unique dataset of NGOs in Uganda it investigates the inaccuracies in reported financial transparency and community participation. We find that the threat of being caught reduces the likelihood of financial misrepresentation, while a desire to maintain a good reputation leads to misrepresentation of community consultation. Analysis provides indications that: NGOs with antagonistic relations with government may be more likely to hide information; and that unrealistic donor demands may be an obstacle to transparency. Findings caution against an overly naïve view of NGOs and a reliance on self-reported information.
Article
Why do majority congressional parties seem unable to act as an effective policy-making force? They routinely delegate their power to others—internally to standing committees and subcommittees within each chamber, externally to the president and to the bureaucracy. Conventional wisdom in political science insists that such delegation leads inevitably to abdication—usually by degrees, sometimes precipitously, but always completely. In The Logic of Delegation, however, D. Roderick Kiewiet and Mathew D. McCubbins persuasively argue that political scientists have paid far too much attention to what congressional parties can't do. The authors draw on economic and management theory to demonstrate that the effectiveness of delegation is determined not by how much authority is delegated but rather by how well it is delegated. In the context of the appropriations process, the authors show how congressional parties employ committees, subcommittees, and executive agencies to accomplish policy goals. This innovative study will force a complete rethinking of classic issues in American politics: the "autonomy" of congressional committees; the reality of runaway federal bureaucracy; and the supposed dominance of the presidency in legislative-executive relations.
Article
En esta obra, Douglass C. North, premio Nobel de Economía de 1993, expone un marco analítico para explicar las formas en que las instituciones y los cambios internos en ellas afectan a la economía.
Article
The paper develops an agency-theoretic approach to interest-group politics and shows the following: (1) the organizational response to the possibility of regulatory agency politics is to reduce the stakes interest groups have in regulation. (2) The threat of producer protection leads to low-powered incentive schemes for regulated firms. (3) Consumer politics may induce uniform pricing by a multiproduct firm. (4) An interest group has more power when its interest lies in inefficient rather than efficient regulation, where inefficiency is measured by the degree of informational asymmetry between the regulated industry and the political principal (Congress).
Article
This article reviews both the theoretical and empirical literatures on regulatory capture. The scope is broad, but utility regulation is emphasized. I begin by describing the Stigler--Peltzman approach to the economics of regulation. I then open the black box of influence and regulatory discretion using a three-tier hierarchical agency model under asymmetric information (in the spirit of Laffont and Tirole, 1993). I discuss alternative modelling approaches with a view to a richer set of positive predictions, including models of common agency, revolving doors, informational lobbying, coercive pressure, and influence over committees. I discuss empirical work involving capture and regulatory outcomes. I also review evidence on the revolving-door phenomenon and on the impact that different methods for selecting regulators appear to have on regulatory outcomes. The last section contains open questions for future research. Copyright 2006, Oxford University Press.
Article
This note uses information on a sample of sixteen OECD countries to assess the relationship between central bank independence and macroeconomic performance. As previous work suggests, politically controlled central banks are more likely to pursue policies that lead to high and variable inflation. However, the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth, unemployment, or the ex ante real interest rate. Copyright 1993 by Ohio State University Press.
Article
This paper examines the volatility of capital flows following the liberalization of financial markets. Utilizing a panel data set of overlapping data, the paper focuses on the response of foreign direct investment, portfolio flows, and other debt flows to financial liberalization. The financial liberalization variable comes from the chronology and index developed by Kaminsky and Schmukler [Kaminsky, G.L. and Schmukler, S.L., 2003, Short-run pain, long-run gain: The effects of financial liberalization, IMF Working Paper WP/03/34.]. Different types of capital flows are found to respond differently to financial liberalization. Surprisingly, portfolio flows appear to show little response to capital liberalization while foreign direct investment flows show significant increases in volatility, particularly for the emerging markets considered.
Article
International institutions are central features of moderninternational relations. This is true of trade, international debt andnancial restructuring, and even national security, once the exclusiverealm of pure state action. It was certainly true of the two majormilitary engagements of the 1990s, the wars in Kosovo and the PersianGulf. As international institutions have gained prominence in thepolitical landscape, they have increasingly become prominent topics forstudy. The sharpest debate among researchers has been theoretical: Dointernational institutions really matter? Missing from this debate is asustained inquiry into how these institutions actually work. We shiftthe focus by posing researchable questions about how they operate andhow they relate to the problems states face.
The Institutional Structure of Production. Nobel Prize Lecture to the memory of Alfred Nobel Measuring the Independence of Central Banks and its Effect on Policy Outcomes
  • R Coase
Coase R (1991) The Institutional Structure of Production. Nobel Prize Lecture to the memory of Alfred Nobel, 9 December 1991. [Last accessed 22 November 2015.] Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates/1991/coase-lecture.html Cukierman A, Web SB, Neyapti B (1992) Measuring the Independence of Central Banks and its Effect on Policy Outcomes. The World Bank Economic Review 6, 353–398.
Rediscovering Institutions
  • J G March
  • J P Olsen
March JG, Olsen JP (2010) Rediscovering Institutions. Simon and Schuster, New York.
Public Confidence in Charitable Nonprofits
  • O Neill
O'Neill M (2009) Public Confidence in Charitable Nonprofits. Nonprofit and Voluntary Sector Quarterly 38, 237-269.
The Institutional Structure of Production Nobel Prize Lecture to the memory of Alfred Nobel Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates Measuring the Independence of Central Banks and its Effect on Policy Outcomes
  • R Coase
Coase R (1991) The Institutional Structure of Production. Nobel Prize Lecture to the memory of Alfred Nobel, 9 December 1991. [Last accessed 22 November 2015.] Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates/1991/coase-lecture.html Cukierman A, Web SB, Neyapti B (1992) Measuring the Independence of Central Banks and its Effect on Policy Outcomes. The World Bank Economic Review 6, 353-398.
Nobel Prize Lecture to the memory of Alfred Nobel
  • R Coase
Coase R (1991) The Institutional Structure of Production. Nobel Prize Lecture to the memory of Alfred Nobel, 9 December 1991. [Last accessed 22 November 2015.] Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates/1991/coase-lecture.html
Institutions, Institutional Change and Economic Performance. CUP, New York. North DC (1993) Economic Performance through Time. Nobel Prize Lecture to the memory of Alfred Nobel
  • D C North
North DC (1990) Institutions, Institutional Change and Economic Performance. CUP, New York. North DC (1993) Economic Performance through Time. Nobel Prize Lecture to the memory of Alfred Nobel, 9 December 1993 [Last accessed 22 November 2015.] Available from URL: http://www.nobelprize.org/ nobel_prizes/economic-sciences/laureates/1993/north-lecture.html
Who survived? Ethiopia's Regulatory Crackdown on Foreign-funded NGOs
  • Dupuy