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Exists also as CEPR Discussion Paper n°17310; We study the characteristics and behavior of small campaign donors and compare them to large donors by building a dataset including all the 340 million individual contributions reported to the U.S. Federal Election Commission between 2005 and 2020. Thanks to the reporting requirements of online fundraising platforms first used by Democrats (ActBlue) and now Republicans (WinRed), we observe contribution-level information on the vast majority of small donations. We first show that the number of small donors (donors who do not give more than $200 to any committee during a two-year electoral cycle) and their total contributions have been growing rapidly. Second, small donors include more women and more ethnic minorities than large donors, but their geographical distribution does not differ much. Third, using a saturated fixed effects model, we find that race closeness, candidate ideological extremeness, whether candidates and donors live in the same district or state, and whether they have the same ethnicity increase contributions, with lower effects for small donors. Finally, we show that campaign TV ads affect the number and size of contributions to congressional candidates, particularly for small donors, indicating that pull factors are relevant to explain their behavior.

This article assesses the impact of a two-year long project-based learning program conducted by the National Opera of Paris in a large number of junior high-schools located in underprivileged areas, aiming at preventing school dropout and tackling educational inequalities by providing disadvantaged students with the opportunity to discover the world of opera. Taking a counterfactual approach (propensity score matching), we measure the impact of participation in the program on final exam and continuous assessment grades. The analysis displays mixed results: a significant and positive impact for the students who participate in the program for its whole duration (two years), at least for continuousassessment scores, but a negative impact for those who leave the program after only one year. The contrast between the effects of full and partial participation in the program suggests that these may be primarily due to a selection effect in favor of the most culturally and socially compliant students, in line with Bourdieu’s and Passeron’s reproduction theory (1997 [1970]) rather than a mobility effect (DiMaggio, 1982) resulting from the transfer of cultural capital to disadvantaged students.

International audience; We examine how corporate real estate market participants adjust to the take-off of teleworking. We develop an indicator of the exposure of counties to teleworking in France by combining teleworking capacity with incentives and frictions to its deployment. We study how this indicator relates to prices and quantities in the corporate real estate market. We find that for offices in counties more exposed, the Covid-19 crisis has led to (1) higher vacancy rates, (2) less construction, (3) lower prices. Our findings reveal that teleworking has already an impact on the office market. Furthermore, forward-looking indicators suggest that market participants are anticipating the shift to teleworking to be durable.

This study presents the results of a randomized controlled trial assessing the impact of a shared-book reading (SBR) intervention that targeted children aged 4 living in socially mixed neighborhoods of the city of Paris. We selected a large, random sample of families and provided parents with free books, information on the benefits of SBR and tips for effective reading practices. We measured SBR frequency and children's vocabulary before and after this intervention, among treated and control children. The intervention had a large effect on SBR frequency. At the pre-test, SBR on a daily basis involved 41.2% of the families, and the treatment fostered this practice by 8 percentage points. SBR on a weekly basis was fostered by 14 percentage points. The intervention fostered SBR frequency only in low-educated households. This equalizing impact is an important finding against the background of previous research reporting that disadvantaged families tend to benefit less from SBR programs. The intervention also significantly enhanced children's language skills measured with standardized tests of receptive vocabulary. The effect size for the main treatment effect ranges from 0.12 at the post-test to 0.16 at the follow-up. Treatment effects are persistent six months after the end of the intervention. Children from low-educated and immigrant families improved their vocabulary as much as those from high-educated, native families. Moreover, the persisting positive impacts on vocabulary growth detected at the follow-up also involve children from disadvantaged families. Furthermore, these children more often attend schools with lower educational resources. It is therefore encouraging that the intervention has strong impacts in schools with initially low involvement in reading-related activities and with low educational resources.

[For it to be legitimate, this study must be carefully circumscribed. The problem it purports to address is not that of the legitimacy of the structures or organs of the European Union but that of the integration of EU law into the legal systems of its Member States[1]. By what title can EU law impose its norms on national legal systems, and so much so that the conditions in which rule-making is organized within those orders are affected to the point of turmoil? On what conditions can EU law be integrated? What consequences does such normative integration hold for the way in which relations among legal systems are described? Our discussion addresses not so much the actual dynamics of legal integration but rather the discourses of justification it produces and on which it rests.]

International audience; Covid-19 has shocked governance systems worldwide. Legislatures, in particular, have been shut down or limited due to the pandemic, yet with divergence from one country to another. In this article, we report results from a cross-sectional quantitative analysis of legislative activity during the initial reaction to this shock and identify the factors accounting for such variation. Exploring legislatures across 159 countries, we find no relation between the severity of Covid-19 and limitations on legislatures' operation, thus suggesting that legislatures are at risk of being shut down or limited due to policy "overreaction" and that a health risk may serve as an excuse for silencing them. However, we find that legislatures in democratic countries are relatively immune to this risk, while those in frail democracies are more exposed. In partially free countries, the use of technology can mitigate this risk. We also find that the coalitional features of the government may lead to legislatures' closing.

Do workers gain from lower business taxes, and why? We estimate how a large French corporate income tax credit is passed on to wages and explore the firm- and employee-level underlying mechanisms. The amount of tax credit firms get depends on their payroll share of workers paid less than a wage threshold. Exposure to the policy thus varies both across workers depending on their wage and across firms depending on their wage structure. Using exhaustive employer-employee data, we find that half of the surplus generated by the reform falls onto workers. Wage gains load on incumbents in high-skill occupations. The wage earnings of low-skill workers -- nearly all individually eligible -- do not change. This heterogeneous wage incidence is unlikely to be driven by scale effects or skill complementarities. We find that the groups of workers benefiting from wage gains are also more likely to continue working for the same firm. Further, we show that firms do not change their wage-setting behavior in response to the individual eligibility status of workers as there is no bunching in the distribution of entrants' wages. Overall, our results suggest that the wage incidence of firm taxation operates collectively through rent-sharing and benefits workers most costly to replace.

This paper aims to investigate the economic and institutional determinants of Foreign Direct Investment in the world post-2000. To this end, I analyze the inwards stocks of FDIs using unilateral and bilateral data. Based on the UNCTAD database, I also study the impact of Bilateral Investment Treaties on the inflow of FDIs. Main results provide evidence supporting the idea that treaties increase the inflows of FDIs in the years following their signature. However, regulations aimed at increasing the protection of property rights have a larger effect on the attractiveness for investors. This paper does not find robust evidence demonstrating that political stability and corruption level have significant effects. More, I demonstrate that an increase of tariffs in the host country results in an increase of FDIs, supposedly due to relocation processes.

We build a simple dynamic model to study the effects of technological learning, market selection and international competition in the determination of export flows and market shares. The model features two countries populated by firms with heterogeneous productivity levels and sales. Market selection in each country is driven by a finite pairwise Pólya urn process. We show that market selection leads either to a national or to an international monopoly in presence of a static distribution of firm productivity levels. We then incorporate firm learning and entry-exit in the model and we show that the market structure does not converge to a monopoly. In addition, we show that the extended model is able to jointly reproduce a wide ensemble of stylized facts concerning intra-industry trade, industry and firm dynamics.

This essay argues that the common competition framework is not to be applied to the financial sector. If traditionally competition brings efficiency and diversity in a market, financial regulators must also ensure the stability of the financial market. Henceforth, some limits and entry barriers have to exist. This is particularly true for FinTech companies. If the potential of those new actors is not to be contested, the risk they can bring is also quite obvious. If regulators want the market to be disrupted and to see consumers benefiting from the power of innovation of technology-based companies, they need to adapt their regulatory framework. Only under this condition will the benefits outweigh the potential risks.

This essay investigates the relationship between corruption and development. By a study of the determinants of the phenomenon as well as its implications on growth, this paper address the corruption challenge faced by governments and policymakers. Based on the theoretical framework of the political economy of development, I argue that even though the causality is not entirely clear, it is however without debate to say that development is necessarily linked with anti-corruption initiatives. If some counterexamples still exist, it is remarkable to see that the vast majority of developed countries did fight corruption at some point. Still, the path to fight corruption is blurry. It is unlikely for a developing country to get rid of the phenomenon on its own, without external help. Finally, according to the classical studies on the quality of institutions, this paper concludes that a strong rule of law and government effectiveness are among the key factors able to fight a corrupt system.

We empirically investigate the relationship between corruption and growth using a firm-level data set that is unique in scale, covering almost 88,000 firms across 141 economies in 2006-2020, with wide-ranging corruption experiences. The scale and detail of our data allow us to explore the corruption-growth relationship at a very local level, within industries in a relatively narrow geography. We report three empirical regularities. First, firms that make zero informal payments tend to grow slower than bribers. Second, this result is driven by non-bribers in high-corruption countries. Third, among bribers growth is decreasing in the amount of informal payments in both high- and low-corruption countries. We suggest that this set of results may be reconciled with a simple model in which endogenously determined higher bribe rates lead to lower growth, while non-bribers are often excluded entirely from growth opportunities in high-corruption settings.

Cahier Scientifique CIRANO 2020s-27; The policy initiatives announced on both sides of the Atlantic to complement competition rules focus on two key dimensions: the contestability of markets on the one hand and fairness in their functioning on the other. The underlying idea is that the market positions of Big Tech would be inexpugnable - insofar as high barriers to entry protect them from self-regulating competition and insofar as they would have regulatory power over their respective ecosystems. Competition for the market would no longer be free, and competition in the market would be distorted. Our purpose in this working paper is to discuss these two dimensions. Are digital markets still contestable, and is the competition in them still competition on the merits? Finally, we discuss the remedies proposed to address these two alleged phenomena.

Evidence suggests that firms in poor countries stagnate because they cannot access growth-conducive markets. We hypothesize that overlooked heterogeneity in marketing ability distorts market access. To investigate, we gave a random subset of Liberian firms vouchers for a week-long program that teaches how to sell to corporations, governments, and other large buyers. Firms that participate win about three times as many contracts, but only firms with access to the Internet benefit. We use a simple model and variation in online and offline demand to show evidence that this is because ICT dampens traditional information frictions, but not marketing barriers.

Public schooling systems are an essential feature of modern states. These systems often developed at the expense of religious schools, which undertook the bulk of education historically and still cater to large student populations worldwide. This paper examines how Indonesia’s longstanding Islamic school system responded to the construction of 61,000 public elementary schools in the mid-1970s. The policy was designed in part to foster nation building and to curb religious influence in society. We are the first to study the market response to these ideological objectives. Using novel data on Islamic school construction and curriculum, we identify both short-run effects on exposed cohorts as well as dynamic, long-run effects on education markets. While primary enrollment shifted towards state schools, religious education increased on net as Islamic secondary schools absorbed the increased demand for continued education. The Islamic sector not only entered new markets to compete with the state but also increased religious curriculum at newly created schools. Our results suggest that the Islamic sector response increased religiosity at the expense of a secular national identity. Overall, this ideological competition in education undermined the nation-building impacts of mass schooling.

This working-paper describes the main impact evaluation methods, both experimental and quasi-experimental, and the statistical model underlying them. Some of the most important methodological advances to have recently been put forward in this field of research are presented. We focus not only on the need to pay particular attention to the accuracy of the estimated effects, but also on the requirement to replicate assessments, carried out by experimentation or quasi-experimentation, in order to distinguish false positives from proven effects

We study spatial variation in criminal sentencing. We show the existence of local sentencing practices varying widely even across geographically proximate areas. Using compulsory rotation of judges in North Carolina, we find that judges arriving in a new court gradually converge toward local sentencing practices. We provide evidence that convergence in sentencing corresponds to a process of learning about local practices, which is accelerated by the presence of senior judges in the district, and that these sentencing practices are correlated with local norms of behavior. Finally, we discuss the theoretical implications of these results for the optimal design of judicial systems.

This paper investigates how the transmission of monetary policy to the real economy depends on the distribution of household debt. Using an original loan-level dataset covering the universe of UK mortgages, we assess the effect of monetary shocks on aggregate consumption by exploiting time variation in a measure of the proportion of households close to their borrowing constraint. We find that monetary policy is most potent when there is a large share of constrained households. In contrast, we find no evidence that the average level of borrowing relative-to-income of the household sector affects the transmission of monetary policy.

This paper shows that the reforms which expanded short-time work in France after the great 2008-2009 recession were largely to the benefit of large firms which are recurrent short-time work users. We argue that this expansion of short-time work is an inefficient way to provide insurance to workers, as it entails cross-subsidies which reduce aggregate production. An efficient policy should provide unemployment insurance benefits funded by experience rated employers’ contributions instead of short-time work benefits. We find that short-time work entails significant production losses compared to an unemployment insurance scheme with experience rating.

In this paper, we investigate the effect of real estate prices on productive investment. We build a simple theoretical framework of firms’ investment with credit rationing and real estate collateral. We show that real estate prices affect firms’ borrowing capacities through two channels. An increase in real estate prices raises the value of the firms’ pledgeable assets and mitigates the agency problem characterizing the creditor-entrepreneur relationship. It simultaneously cuts the expected profit due to the increase in the cost of inputs. While the literature only focuses on the first channel, the identification of the second channel allows for heterogeneous effects of real estate prices on investment across firms. We test our theoretical predictions using a large French database. We do find heterogeneous effects of real estate prices on productive investment depending on the position of the firms in the sectoral distributions of real estate holdings. Our preferred estimates indicate that a 10% increase in real estate prices causes a 1% decrease in the investment rate of firms in the first decile of the distribution but a 6% increase in the investment rate of firms belonging to the last decile.

This paper explores the nature and the key empirical regularities of green employment in US local labor markets between 2006 and 2014. We construct a new measure of green employment based on the task content of occupations. Descriptive analysis reveals the following: 1. the share of green employment oscillates between 2 and 3 percent, and its trend is strongly pro-cyclical; 2. green jobs yield a 4 percent wage premium; 3. despite moderate catching-up across areas, green jobs remain more geographically concentrated than similar non-green jobs; and 4. the top green areas are mostly high-tech. As regards the drivers, changes in environmental regulation are a secondary force compared to the local endowment of green knowledge and resilience in the face of the great recession. To assess the impact of moving to greener activities, we estimate that one additional green job is associated with 4.2 (2.4 in the crisis period) new jobs in non-tradable activities in the local economies.

While some economists argued for macro-prudential regulation pre-crisis, the macro-prudential approach and its emphasis on endogenously created systemic risk have only gained prominence post-crisis. Employing discourse and network analysis on samples of the most cited scholarly works on banking regulation as well as on systemic risk (60 sources each) from 1985 to 2014, we analyze the shift from micro to macro-prudential thinking in the shift to the post crisis period. Our analysis demonstrates that the predominance of formalism, particularly, partial equilibrium analysis along with the exclusion of historical and practitioners’ styles of reasoning from banking regulatory studies impeded economists from engaging seriously with the endogenous sources of systemic risk prior to the crisis. Post-crisis, these topics became important in this discourse, but the epistemological failures of banking regulatory studies pre-crisis were not sufficiently recognized. Recent attempts to conceptualize and price systemic risk as a negative externality point to the persistence of formalism and equilibrium thinking, with its attending dangers of incremental innovation due to epistemological barriers constrains theoretical progress, by excluding observed phenomena, which cannot yet be accommodated in mathematical models.

This article presents a unique historical experiment to explore the dynamics of institutional change in the Middle Ages. We have assembled a novel data set, where information on political institutions for northern central Italian cities between 1000 and 1300 is matched with detailed information on the earthquakes that occurred in the area and period of interest. Exploiting the panel structure of the data, we document that the occurrence of an earthquake retarded institutional transition from autocratic regimes to self-government (the commune) in cities where the political and the religious leaders were the same person (episcopal see cities), but not in cities where political and religious powers were distinct (non–episcopal see cities). Such differential effect holds for destructive seismic episodes and for events that were felt by the population but did not cause any material damage to persons or objects. Ancillary results show that seismic events provoked a positive and statistically significant differential effect on the construction and further ornamentation of religious buildings between episcopal and non–episcopal see cities. Our findings are consistent with the idea that earthquakes, interpreted in the Middle Ages as manifestation of the will and outrage of God, represented a shock to people’s religious beliefs and, as a consequence, enhanced the ability of political-religious leaders to restore social order after a crisis relative to the emerging communal institutions. This interpretation is supported by historical evidence.

Using results from convex analysis, we investigate a novel approach to identification and estimation of discrete choice models which we call the “Mass Transport Approach” (MTA). We show that the conditional choice probabilities and the choice specific payoffs in these models are related in the sense of conjugate duality, and that the identification problem is a mass transport problem. Based on this, we propose a new two-step estimator for these models; interestingly, the first step of our estimator involves solving a linear program which is identical to the classic assignment (two-sided matching) game of Shapley and Shubik (1971). The application of convex-analytic tools to dynamic discrete choice models, and the connection with two-sided matching models, is new in the literature.

International audience; We study the response of real wages to the business cycle in eight major Eurozone countries before and during the Great Recession. Average real wages are found to be acyclical, but this reflects, in large part, the effect of changes in the composition of the labour force related to unemployment variations over the cycle. Using longitudinal micro data from the ECHP and SILC panels to control for composition effects, we estimate the elasticities of real wage growth to unemployment increases between −0.6 and −1 over the period 1994–2011. Composition effects have been particularly large since 2008, and they explain most of the stagnation or increase in the average wage observed in some countries from 2008 to 2011. In contrast, at a constant labour force composition in terms of education and experience, the figures indicate a significant decrease in average wages during the downturn, particularly in countries most affected by the crisis. Overall, there is no evidence of downward nominal wage rigidity during the Great Recession in most countries in our sample.

In the context of the Beckerian theory of marriage, when men and women match on a single-dimensional index that is the weighted sum of their respective multivariate attributes, many papers in the literature have used linear canonical correlation, and related techniques, in order to estimate these weights. We argue that this estimation technique is inconsistent and suggest some solutions., 11 pages

International audience; We explore the relationship between drought and civil war. We show that the link between rainfall, temperature and civil war found in the literature may be driven by aggregate shocks (such as global climate) that were not accounted for. A standard differences-in-differences specification relying only on within country variation reveals a much weaker and insignificant link between weather variables and civil war. To increase statistical power, we propose a country-specific measure of drought that describes social exposure to water stress in a more efficient way than rainfall and temperature. We use the Palmer Drought Severity Index (PDSI) which combines rainfall, temperature (and soil texture) and takes important aspects that were missing from previous studies into account: nonlinearities - the effect of contemporaneous rainfall and temperatures depends on the climate history -, interaction effects - e.g. low rainfall is more important in hot years -, and threshold effects due to the limited capacity of the soil - e.g. rainfall water will run off when the soil layers are full. We continue to find a weak positive link between drought and civil war.

Unemployment may depend on equilibrium in other markets than the labor markets. This paper adresses this old idea by introducing search frictions on several markets: in a model of credit and labor market imperfections as in Wasmer and Weil (2004), I further introduce search on the goods market. The model can be solved by blocks: on two of the three markets, the relevant "market tightness" is a constant of parameters. In particular, goods market tightness, expressed as the ratio of unmatched consumers to unmatched firms, is equal to 1 which corresponds to a stochastic Say’s law: demand and supply are stochastically in equilibrium. Financial market tightness is also a function of three parameters related to financial frictions. Job creation and employment depend on the equilibrium in the other markets. Reciprocally, higher job destruction implies more volatility of income of individual consumers and higher destruction of consumption matches. This lowers profits and further reduces job creation. Finally, there are complementarities between frictions in each market: in particular, the marginal effect of financial frictions on equilibrium unemployment is amplified by goods market frictions and vice versa.

L'integration des partis nationalistes hindous dans le processus democratique ne les a pas amenes a davantage de moderation de facon lineaire. Depuis 1947, ces partis ont oscille entre une strategie sectaire de mobilisation religieuse et une autre, plus moderee impliquant le respect des normes secularistes de la Constitution. Le choix de l'une ou l'autre de ces strategies a dependu jusqu'a present de la relation du parti vis-a-vis de l'organisation dont il procede, le RSS, de la perception dominante des Musulmans a un moment donne, de l'attitude des autres partis vis-a-vis du secularisme et - en liaison avec ces variables - de la meilleure tactique electorale. The inclusion of Hindu nationalist parties in India's democratic process has not resulted in their moderation in a linear way. Since 1947, the parties have oscillated between a sectarian strategy of religious mobilization and a more moderate one respecting the secular norms of the Constitution. Whether the Hindu nationalist parties opted for the path of radicalization or that of moderation has chiefly depended on their relation with their mother organization, the RSS, the perception of the Muslims that prevails at a given time in India, of the attitude of the other parties regarding secularism and - in correlation with the variables mentioned above - of the most effective electoral tactic.

This article proposes a generalized notion of extreme multivariate dependence between two random vectors which relies on the extremality of the cross-covariance matrix between these two vectors. Using a partial ordering on the cross-covariance matrices, we also generalize the notion of positive upper dependence. We then proposes a means to quantify the strength of the dependence between two given multivariate series and to increase this strength while preserving the marginal distributions. This allows for the design of stress-tests of the dependence between two sets of financial variables, that can be useful in portfolio management or derivatives pricing., 20 pages, 8 figures

Wage determination under asymmetric information generates inefficiencies due to excess turnover. Severance pay and layoff taxes can improve efficiency. We show that inefficient separations can even be fully removed with fixed separation taxes in the case where the relevant private information is exponentially distributed.

Author(s): Rupert, Peter; Stancanelli, Elena G F; Wasmer, Etienne | Abstract: A search model of the labor market is augmented to include commuting time to work. The theory posits that wages are positively related to commute distance, by a factor itself depending negatively on the bargaining power of workers. Since not all combinations of distance and wages are accepted, there is non-random selection of accepted job offers. We build on these ingredients to explore in the data the relationship between wages and commute time. We find that neglecting to account for this selection will bias downward the wage impact of commuting, and marginally affect the coefficients on education, age and gender. The correlation between the residuals of the selectivity equation and the distance equation is -0.70, showing the large impact of commute time on job acceptance decisions. We also use the theory to calculate the bargaining power of workers which largely varies depending on demographic groups: it appears to be much larger for men than that for women and that the bargaining power of women with young children is essentially zero.

The Mortensen-Pissarides model with unemployment benefits and taxes has been able to account for the variation in unemployment rates across countries but does not explain why geographical mobility is very low in some countries (on average, three times lower in Europe than in the U.S.). We build a model in which both unemployment and mobility rates are endogenous. Our findings indicate that an increase in unemployment benefits and in taxes does not generate a strong decline in mobility and accounts for only half to two-thirds of the difference in unemployment from the U.S. to Europe. We find that with higher commuting costs the effect of housing frictions plays a large role and can generate a substantial decline in mobility. We show that such frictions can account for the differences in unemployment and mobility between the U.S. and Europe.

Naturalization is usually regarded as an important sign of civic and political integrationamongst immigrants, but it can also be seen as a factor of their economic integration. Theaim of this study is to analyze the naturalization phenomenon in France and examine its linkwith the immigrants' labor force status. We use longitudinal data from the “EchantillonDémographique Permanent” (EDP) sample. The EDP is a panel dataset by which we canfollow almost 1% of the French population from 1968 to 1999 through information containedin the 1968, 1975, 1982, 1990 and 1999 French census. The sample we use (N = 36,685) islimited to immigrants who declared themselves non-naturalized at the time they firstappeared in the panel. This makes it possible for us to observe possible changes ofnationality between two census dates and their potential consequences on the employmentprobability at the second date. In our study, the probability of naturalization between twocensus dates not only depends on observable individual characteristics of immigrants(country of birth, age, marital situation, occupation, human capital, etc.), but also on anumber of contextual variables related to the role of the community in the assimilationprocess (size of the community and number of foreigners in the region of residence). Wecompare the differential rates of naturalization between the various ethnic groups and try toanswer the following question: are there differences between the naturalized immigrantpopulation and the immigrant population as a whole? In the second stage, we analyze theeffect of naturalization on the individual employment probability by estimating a univariateprobit model. To control for the potential endogeneity of the naturalization process, we alsoestimate a bivariate probit model. With both models, we find that naturalization has asignificant positive effect on immigrants' employability and that this effect is particularly highfor groups of immigrants who have a low probability of employment in the host country.

This paper describes recent trends on the efficiency of stabilisers in the European Union. Using both macro evidence on the cyclical sensitivity of budget deficit to economic activity, and micro evidence on the tax and expenditure profiles, we conclude, in agreement with the recent literature, that the importance of automatic stabilisation has decreased. After remarking that this trend is contradictory with the current economic institutions of Europe relying exclusively on automatic stabilisation for the conduct of fiscal policy, we argue that increasing flexibility, one alternative way to reduce cyclical fluctuations, does not seem a viable path. The paper concludes defending the appropriateness of discretionary fiscal policy. We argue by means of a simple model that the theoretical arguments against its use are not conclusive, and we describe a recent stream of literature, based on structural VAR models, that concludes rather robustly for the effectiveness of discretionary fiscal policy in the short and long run.

This paper addresses the issue of whether and by how much public investment or public capital can increase GDP. In comparison with the literature on the subject, we apply many different methodologies to answer these questions. A vector autoregressive (VAR) model (for France, Italy, Germany, the UK and the USA), a panel composed of 6 European countries (Austria, Belgium, France, Germany, Italy and the Netherlands) and a regional panel (French regions) are estimated. Public investment is shown to be a significant determinant of output; this is also true for public capital but to a lesser extent than public investment with a VAR methodology. The size of the estimated coefficient is also more realistic than those obtained in the literature. This empirical result confirms that the focus of some economists on safeguarding the level of public investment is not misplaced. The debate on the introduction of a ‘golden rule of public finance’ in the European Monetary Union is legitimate in this respect.

The essential question "what has really changed for South Africans since 1990?" cannot be answered by describing physical and visible changes as these may only touch the surface of society. For a more comprehensive picture which looks at the complexities of change, one has to try and understand how South Africans perceive these changes and on which images of a transforming society do they base their appreciation or not of the current evolutions, and consequently their strategies to adjust such transformations.

The paper investigates the empirical relevance of the negative financial spillovers hypothesis according to which fiscal imbalances in one EMU member country bid up the interest rate faced by all other participants in the currency union. This idea questions the ability of financial markets to correctly price various types of risk now that the elimination of exchange rate fluctuations and the rapid integration of national government bond markets have made securities issued by different European governments closer substitutes. The paper takes an eclectic approach and tackles the issue from different angles, reviewing historical episodes, testing the Ricardian equivalence hypothesis in Europe as a whole and finally analyzing the impact of domestic and foreign fiscal variables on European bond yields. Despite the strong comovements displayed by European interest rates, empirical evidence does not support the idea that fiscal variables are a key determinant of these interrelations.

Nation is state-oriented, whereas nationalism is an ideology which may simply promote one's own identity against Others. Therefore, theories of nation-building do not explain nationalism. Other theories adopting a materialist approach do, like Gellner's model in which nationalism appears as resulting from socio-ethnic conflicts, but they ignore the inner mechanism of this ideology. Theories looking at nationalism as an export product from the West also miss this point too. In contrast, a convincing body of theories anchor nationalism in socio-cultural reform. The intelligentsia which undertakes it in order to resist the threat posed by some dominant Other - often from the West, that fascinates them -, eventually develops a nationalist attitude, because it is not willing to imitate the West but strive to restore its culture by incorporating into it prestigious features of the West through the invention of a convenient Golden Age, the cornerstone of nationalism. This approach finds a parallel in the theories of ethnicity which do not apply the primordialist paradigm but focus on the making of group boundaries. Barth highlights the decisive role of the relationship to the Other and the little importance of cultural contents - compared to the maintenance of group boundaries - in the making of ethnic identities, in such a way that there are more affinities between his theory of ethnicity and theories of nationalism than between the latter and theories of the nation. However, one can construct an integrated model of nationalism by organising different theories in a sequence. While the ideology-based approach comes first, the creation of a nationalist movement implies the rise of socio-economic conflicts and the massification of nationalism, a process of nation-building.; La nation regarde vers l'Etat tandis que le nationalisme est une idéologie qui se contente parfois de promouvoir l'identité d'un groupe en relation avec d'autres. Les théories du nation-building n'expliquent donc pas le nationalisme. D'autres théories matérialistes y parviennent néanmoins, comme celle de Gellner où le nationalisme est le résultat de conflits socio-ethniques, mais où les ressorts internes de l'idéologie restent dans l'ombre. Les théories présentant le nationalisme comme un produit d'exportation d'origine occidentale ne font pas mieux, à la différence de celles qui l'ancrent dans un processus de réforme socio-culturelle. L'intelligentsia, qui a engagé ce processus pour résister à un Occident qui la fascine mais qu'elle perçoit comme une menace, développe finalement une attitude nationaliste car il n'a jamais été question pour elle d'imiter l'Occident mais de réhabiliter sa culture en y incorporant des traits prestigieux de l'Occident à travers l'invention d'un Age d'Or, la pierre de touche du nationalisme. Cette approche trouve un parfait équivalent dans les théories de l'ethnicité, non pas celles qui appliquent le paradigme primordialiste, mais celles qui se concentrent sur la création des frontières entre groupes. Barth souligne à cet égard le rôle décisif de la relation à l'autre et le peu d'importance des contenus culturels - par rapport aux frontières des groupes - dans la formation des identités ethniques, à telle enseigne que sa théorie de l'ethnicité présente plus d'affinité avec certaines théories du nationalisme que celle-ci et les théories de la nation. Toutefois, on peut construire un modèle intégré du nationalisme en organisant les différentes théories en séquence. Si les théories fondées sur le rôle de l'idéologie viennent ici en premier, la création d'un mouvement nationaliste implique l'exacerbation de conflits socio-ethniques et la massification du nationalisme, un processus de nation-building.

This paper reviews the arguments in favour and against the "Stability and Growth Pact" signed by the countries of the Euro area. We find the theoretical debate to be inconclusive, as both externality and credibility arguments can be reversed to yield opposite, and equally plausible conclusions. We therefore suggest the view that the stability pact is a social norm, and that adherence to that norm responds in fact to the need to preserve reputation in front of the other members of the European Union. Using this extreme but not implausible hypothesis, we build a simple model similar in spirit to Akerlof's (1980) seminal paper on social norms, and we show that reputational issues may cause the emergence of a stable and inferior equilibrium. We further show that, when with the enlargement a number of countries anxious to prove their 'soundness' will join the Union, the problems posed by the pact/social norm are likely to increase.

This paper argues that the process of economic globalisation is to remain partial, because of its continued reliance upon the national institutions in charge of the definition and enforcement of private property rights. Emerging economies often face critical enforcement problems, but the experience of the European Single Market also suggests that, in this respect, institutional convergence remains extremely slow. Second, the globalisation process since 1990 has seen a sharp growth in private inter-temporal contracts, exemplified by private financial transactions and by contracting on intellectual property rights; both are much more vulnerable to local institutional failures than trade in tangible goods and sovereign credits, which were the hallmark of previous phases of international liberalisation. Thus the 'frontier' of globalisation now makes markets more exposed to the underlying fragmentation of national property institution than before. This suggests that multilateral negotiation, as an instrument for the coordination of State institutions, will remain the backbone of international economic integration.