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Economic policies are better in democracies than in non-democracies.

Thesis: The relationship between economic outcomes and regime type does not only
depend on political regime but also on other factors such as resource abundance within
democracy itself.

It is not only different between democracies and non-democracies but also within
democracies themselves.

Argument 1: Elites in democracies are accountable to citizens, so they have to deliver


good growth to keep office. Therefore, economic policies are more effective in
democracies than in non-democracies
CA: even though political elites may help, the length of leader tenures also matters
(China and Singapore)
Argument 2: Non-democracies perform achieve growth because they have longer leader
tenures and don’t focus on short-term goals. No rapid changes in policy, attracts more
investment + resource curse: Resource-rich states are more likely to be non- democratic
(Ross 2001).
CA: even though the length of leader tenures also matters, there is an evidence that no
relationship could exist between regime type and economic growth
Argument 3: Przeworski et el., (2000) - no real difference between democracy and non-
democracy on growth.
Arguments 3: Despite research by Przeworski et al. (2000) proves that there is no link
between regime type and economic growth, there is some other factor, which explains the
question. This factor is natural resource. Resource curse might mediate the relationship
between regime type and economic growth.

Why do some countries have more powerful independent institutions than others?
Answer with reference to either courts or central banks.

Thesis statement: delegation of power is a complex political tool, which largely depends
on institutional, historical and cultural nuances of each country. Consequently, the extent
of power and independence of institutions can be explained by numerous reasons which
vary for each case study. For instance, the case of the court in the Netherlands studied
Steunenberg (1997) provides an analysis of how power delegation resulted in a efficient
powerful and independent institution and what conditions influenced it.
1. There are numerous reasons to delegate power and create independent institutions,
some of which depend on the peculiarities of institutional legacy or political
culture and experience in a given country.
 (Thatcher & Stone Sweet, 2002) reasons for delegation  
 delegation it is in the interests of principals, rational choice
 institutional isomorphism
 institutional legacies - other institutions’ influence
 Principal-agent framework - dominant toolkit for thinking about delegation of
power. Criticism: purely functional understanding is limited, there are other ways
to resolve problems without delegation
 (Thatcher & Stone Sweet, 2002): ‘conditioned by local histories, pre-existing
institutional arrangements, and contingent forces and events’ -> almost path
dependency
 Bernhard (1998): power delegation varies in different political and economic
systems and  cross-nationally
-> Therefore, there is no perfect and universal strategy of delegation of power.
2. There are advantages (e.g. protection of vital policies from populist short-term
decisions, use of experts in policy-making, reduction of workload) and
disadvantages of delegation of power (e.g. agents can be captured by private
interests, policy drift).
-> Therefore, it is unclear to what extent exactly institutions should be independent to be
the most efficient and appropriate for democracy.
Counterargument: there are different ways to mitigate disadvantages (e.g. limit the
budget of an agency, write a detailed legislation)
Yet: no universal approach, depends on many peculiarities of the institutional design.

3. The Dutch Supreme Court is a product of  higher law constitution system, which
allows for protection of fundamental human rights from the legislation, and
includes constitution and constitutional law that cannot be changed by a simple
legislative majority. -> The court in the Netherlands a priori is given a large
degree of independence.
- Steunenberg (1997): The court was able  to introduce and maintain a more
liberal interpretation of euthanasia (salient issue in the Netherlands), acting
as a policy advocate. This was a result of peculiar succession governing
coalitions formed in the legislation. -> this case is specific and cannot be
viewed as an incident which can create a universal practice

1. Reasons to delegate and advantages (path dependency - criticism of


principal-agent framework)
2. Why more powerful? Steunenberg
Democracies have better economic outcomes than non-democracies

Thesis: (Although there exists a correlation between the democratic regime type and the
well-being of some states), there is no evidence proving that democracies necessarily
have better economic outcomes than non-democracies. This claim can be analyzed in
respect to such measurements of economic outcomes as economic growth and public
spending.

1. Although previously it was believed that democracy increases political


accountability and, as a result, protects public interests and creates better
economic outcomes, in terms of economic growth there is no real difference
between whether a country was democratic or not. On the contrary, wealthy non-
democracies performed somewhat better than wealthy democracies, which
scholars attributed to non-democracies exploiting cheap and forced labour.
(Przeworski et al., 2000)
Counter argument: Przeworski excluded from analysis  oil-rich Middle Eastern states,
and, therefore, did not address rentier states and resource curse theory. Norway. (Ross,
2001)

2. In terms of public spending, it can be stated that past a certain wealth threshold,
democracies undertake more public expenditure than non-democracies but at the
same time richer governments undertake more public spending than poor
governments. (Boix, 2001) This, again, proves that the regime type is not the main
factor influencing public spending.
Counter argument: the problem of low public spendings and inequality within non-
democracies can be solved through repressions that while can dissolve this situation, may
lead to a possible economic downgrade

‘Decentralization is a valuable response to internal ethno-linguistic divisions while


still preserving the liberal democratic principles of a country.’ Discuss.

Thesis: Although decentralization indeed can contribute to ethno-linguistic minority


representation, sometimes it contradicts the liberal democratic principles.
1) 1. Decentralization can contribute to ethno-linguistic minority representation (UK
- unitary; Canada - federal).
Bermeo (2002): “federalism has helped to keep states unified and democratic in
the face of possible secession by territorially based minorities”
Counter-argument: secessionism (Erk & Andersen, 2009).
2. Equal representation is crucial for democracy. Counter-argument: normative
view on democracy
2) 1. Geographically concentrated groups can articulate their interests to central
government clearly as they have different preferences.
Counter-argument: too many veto players obstruct decision-making (Tsebelis, 2000)
2. To become politically equal to the center and obtain political power, minorities must
be given extra rights.
Counter-argument: malapportionment contradict the principle ‘one man, one vote’.
West Lothian question (McLean, 2010)

Certain policies should be delegated to independent authorities in a democracy.

Thesis: some policies should be delegated to agents because non-majoritarian institutions


have a multitude of benefits, however this may result in policy drift, so a trade-off
between independence and limitation of an agent should be.
Argument 1: delegation is desirable as it brings many benefits:
 Protect policies from short-term change (Bernhard, 1998)
 Establish “credible commitment” (Thatcher and Stone, 2002)
 Increase number of experts (Thatcher and Stone, 2002)
 Avoid blame (Bernhard, 1998)
 Ex.: independent banks => inflation decrease (Alesina and Summers, 1993)
CA: danger of policy drift
Argument 2: policy drift problem
 Ex.: Court in the Netherlands (Steunberg, 1997)
CA: it can be prevented
Argument 3: delegate just enough power to achieve maximum efficiency and minimum
agency loss
 Agents with close preferences to principal
 Limit agency budget
 More accountability
 Detailed legislation that limits discretion (Huber and Shipan, 2002)
 Ex.: Monetary policy committee in UK (Hoyland and Vivyan, 2010)
CA: too much prevention damages efficiency of delegation

Resource rich countries have lower levels of redistribution


Thesis: Resource rich countries are less likely to have low level of redistribution due to
resource curse, which causes low level of democratization, economic growth.

Argument 1: public spending: allocation, macroec., redistribution


Argument 2: Resource curse  dictatorship poor econ  less redistribution
Argument 3: Resource rich democracies vs resource rich autocracies

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Is federalism the best type of state structure?

Thesis: federalism cannot be considered the best type of state structure because it
depends on particular needs of the state, its population and goals.
 Democratic accountability
Argument 1: subsidiary principle
CA: negative externalities (reduction of environmental standards)
CCA: positive externalities (Massachusetts)
Argument 2: additional check on central power (Tsebelis, Lipjhart)
CA: policy gridlock
Argument 3: more representation of minorities
CA: malapportionment (Samuels and Snyder, 2001)
 Empowerment of minorities
Argument 4: concentration of minorities matters
CA: separatism
 Fiscal efficiency
Argument 5: competition between subunits increases quality of public goods (California
effects)
CA: race-to-the-bottom (Hallenberg, 1996)
Federal states are more democratic than unitary

Thesis: federalism is not federalism per se, but decentralization facilitates democracy,
while unitary states are less prone to have democratic tendencies
Argument 1: federalism combines the control over large territories and democracy+
geographic representation of minorities
CA: possibility of over-representation (US, India) => against principles of democracy of
equal representation
Argument 2: unitary states do not facilitate democracy
a. Limits of representation
b. Not constitutionally protecting regional governments
CA: states can decentralize (UK, Spain)
Argument 3: decentralization facilitates democracy
CA: though not constitutionally protected, it is hard to abolish local governments
CA: countries benefits and constrains of federal and unitary systems

Elected governments, not unelected, should make important decisions in democracy.


Discuss in relations to central banks

Thesis: unelected institutions can make important decisions which is compatible with
democracy, if the government is able to efficiently solve policy drift problem

Argument 1: benefits of delegation of power in principle-agent framework (Thatcher


and StoneSweet, 2002)
CA: policy-drift problem of democratic compatibility
Argument 2: policy drift why? (Alesina and Summers, 1993)
CA: it can be prevented (Steunenberg, 1997)
Argument 3: how to prevent policy drift?
 Appointments to CB can shift monetary policy
CA: trade-off: CB loses partly its independence (Hix et al., 2010)

Why some countries redistribute more than others?

Thesis: Redistribution depends on different factors: institutional and socio-economic


Argument 1: Democracy redistribute more than non-dem. Because in democracy the
median voter shapes governmental policies
CA: over the turnout  the less distribution expected
Argument 2: presidential systems have lower level of public spending
CA: Empires in case of USA
Argument 3: Chang, 2003; Iveson and So , 2009)
CA: voter turnout rates may influence how much redistribution is USA undertakes
Argument 4: Alesina and Glasser (2005)
CA: Case of US
Conclusion: Institutions depend upon socio-economic structure and vice versa

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