Institutions and Society Models - Findings
ESOP has several important papers that focus on everything from the specific social democratic institutional arrangements in Sweden and Norway, to the role of democracy as such in a broader international setting.
Oil and democracy | Governance and development | Institutions and politics | New approaches to bargaining
One paper that we would like to emphasize is Silje Aslaksen (2010) “Oil and Democracy – More than a Cross-Country Correlation?“ forthcoming in Journal of Peace Research. This interdisciplinary research revisits the empirical relationship between oil resources and democratic rule. Contrary to existing studies the paper shows that levels of oil systematically predict both levels and changes in democracy, in a sample of up to 156 countries for the years 1972 to 2002. There is a negative relationship between oil and democracy. This result holds for alternative measures of democracy and alternative measures of oil abundance. The result is also robust when including additional covariates and when removing major oil producers.
Another core part of ESOP’s research relates to how the rules and regulations of a country interact by enforcing each other in productive and destructive patterns. One example of this research is carried out by Jean-Marie Balland, Karl Ove Moene and James Robinson. They discuss how “governance” explains variations in development experiences. Governance is best thought of as a sub-set of institutions, but it is a quite vague category which it is difficult to unbundle. With this starting point Balland, Moene and Robinson emphasize two basic lessons which are discussed theoretically and illustrated by case studies covering a range of countries from Sierra Leone to Scandinavia.
The first lesson: Governance is the outcome of a political process and as such closely related to the political economy of development. The second lesson: Improving governance necessitates understanding the nature of the entire political equilibrium. Scandinavian countries experienced economic growth and rising living standards with rather untraditional labour market institutions and welfare policies promoting a radically egalitarian distribution of income. The reforms in the 1930s changed the political equilibrium and initiated the egalitarian path. In contrast, Sierra Leone is not intrinsically poor. The country has diamonds and great agricultural potential, and it is close to European markets. Better governance may not have led Sierra Leone to become rich like South Korea or Taiwan, but at worst it would have become like Botswana. This development path has so far been blocked by a system of parsimonious relationships.
Several other works strive to understand the finer details of the political equilibrium. In several works, by Espen Moen and Christian Riis, by Ragnar Torvik and James A. Robinson and by Bjørn Høyland, Indraneel Sircar and Simon Hix, the authors study various aspects of how the political institutions affect the politics implemented. Jon Fiva and Gisle James Natvik do empirical studies of how the various dimensions of the political decisions play in Norwegian elections. Bård Harstad analyzes the issue of delegation. Should a delegate be "conservative" (status quo biased) or instead "progressive" relative to his electorate. Harstad shows that a larger majority requirement leads to conservative delegation. The results could be interpreted as normative recommendations for the EU’s future constitution.
Tapas Kundu discusses several aspects of the political process. In one work he examines the role of political institutions in facilitating efficient transition. A democracy may fail to implement the optimal policy if the electorate does not take into account the increased benefit from transition in later periods. If there is incomplete information about the population’s preferences, a democratic system’s ability to aggregate private information increases when the economy is in transition, while a dictatorship is constrained by its ineffectiveness in aggregating private information.
Inspired by Leif Johansen, Karl Ove Moene discusses and criticizes the so called “Bargaining Society” (forthcoming, Nordic Journal of Political Economy). Norway is a typical example. Decisions are taken out of both the market sphere and the sphere of political decisions and moved into bargaining like decisions. The trend does not only include more of well structured and formalized negotiations between well defined parties. It also includes more of informal haggling, rent seeking, influence competition, and routine consultation between the government and the interest organizations. This raises new methodological issues. How can one utilize a noncooperative approach to understand cooperation and coalition formation? Is bargaining like decisions best with postponements and inefficiencies?