Politics versus Bureaucracy

1. Politics versus Bureaucracy • Let’s analyze further: • (Pol & Bur) Institutions QoG (Corruption, Rule of Law) Economic Growth • 2) Politics (How decisions are taken) is what matters: • Veto players theory: new comparative political theory • Tsebelis 1995: theoretical discussion • Andrew & Montinola 2004: apply veto players theory  corruption • 3) Bureaucracy (How policies are implemented) is what matters: • Organization of public administrations is key (e.g. staff policy) • Evans & Rauch 1999: Bureaucracy  Economic growth • (Rauch & Evans 2000: Bureaucracy  Corruption)

2. Good press for ”political institutions”… • Quality of Government = Democratic decision-making • Democracy is necessary/sufficient condition for QoG • Key mechanism: the ”voice of the (representatives of the) people” is taken into account in decision-making • For both scholars and policy-makers (economists 1990s, C. Rice 2000s) • Some variations within democracies improve the ”good” starting point: • Separation of powers • Veto players • Checks and balances

3. Bad press for “bureaucracy”… • Quality of Government # bureaucracy: • Obsolescent, undesirable, and non-viable form of administration • Market forces/flexibility > Bureaucratic inertia/rigidity • W. Niskanen: bureaucrats = budget-maximizers, so size of state may be up to two times the ”social optimum” • New Public Management > Bureaucracy • States = ”steering” > Private actors = ”rowing” • Osborne & Gaebler 1992: Reinventing Government

4. Bad press for “bureaucracy”… • Effects of New Public Management reforms? • Non-OECD countries: • Olsen 2006 Maybe it is time to rediscover bureaucracy • C. Ramio: evaluating reforms in Latin America • OECD countries: • Privatization of railway, prisons in the UK • US: Al Gore ”reinventing government” in the 1990s... Blackwater in Iraq • Public education: Milton Friedmans’ and T.Moe’s ”dream”: school vouchers • Which is the country with more contracting out in the private sector? • Erlingsson, Bergh & Sjölin 2008

5. So, maybe it is time to rediscover bureaucracy • Bureaucracy # the “organizational dinosaur helplessly involved in its death struggle” we have been told for years • The dinosaur is back…

6. Let’s come back to political institutions • New typology of political systems: Tsebelis’ Veto Player Theory (1995, 2002) • Traditional typologies in comparative politics: • Democracy/ Dictatorship • Presidential/ Parliamentary • Electoral systems: Majoritarian/ Proportional • E.g. Persson and Tabellini’s highly influential papers

7. Sartori 1984: definition of political systems • Presidentialism: • Head of State directly elected for a fixed time span • Government not appointed by the Parliament, but by the President • Parliamentarism: • Government is appointed by the Parliament • One-party or multiple-party coalition governments • Stereotypical examples of both? • Which one is separation-of-powers system and which one power-sharing systems?

8. Tsebelis’ Veto Players Theory • “Veto players”= individual or collective actors whose agreement is necessary for a change of the status quo of policies • Prediction 1: the More Veto Players a country has, the More Policy Stability • Other predictions: • spatial distance among veto players • internal cohesion of the veto player (e.g. position of the individuals within the veto player)

9. Tsebelis’ Veto Players Theory • Instead of comparing political systems according to their “formal” classification as Presidential or Parliamentary, we should look at their number of veto players: • Italy (where two or three parties must agree for legislation to pass) = the US, where the agreement between several institutions is needed to pass a law • UK (all power in hands of one party) = a presidential regime where the President and the Legislature are in hands of the same party

10. Tsebelis’ Veto Players Theory • Increasing datasets: cross-country & within-country (US, Sweden) • Extensively applied to understand which particular policy proposals tend to succeed • Unidimensional and multidimensional policy space

11. Andrews and Montinola 2004 • Prediction: More Veto Players  More Rule of Law • Theoretical inspiration:Madison (The Federalist Papers) • Institutions must be divided and arranged so that each may be a check on the other • The more checks (e.g. veto players)  the less incumbents may misuse their power

12. A&M’s game-theory model • Canonical Prisoners’ Dilemma payoff structure:

13. Empirical test • How would you test this theory? • What should be shown in an empirical test of this theoretical model?

14. Interesting empirical test • Faithful codification of the number of veto players in every country following Tsebelis’ theory • Very good control variables: among others, Economic Development! (distrust those who don’t…) • Each vp +  0.16 increase in the 1-6 index of rule of law • They test which classification of political systems works better: the traditional Presidential/Parliamentary regimes or the new Veto Players one • Presidential regimes worse than Parliamentary. Why?

15. Problems with the test? • 35 “emerging” democracies in around 20 years = 354 observations? • Other variables? • Legal origin? Maybe your legal system (Common Law vs. Civil law) matters more • Or maybe veto players are only necessary to “reveal” corruption in some legal tradition (interactions matter!) • Religion? • Time of democracy?

16. More Veto Players  Better QoG?

17. SQ FOX PRI PRD Low revenues High revenues Expected outcome under VP model Actual outcome More Veto Players  Better QoG?

18. Median Legislator SQ Cardoso Less reform More reform Expected outcome under VP model Actual outcome More Veto Players  Better QoG?

19. Party institutionalization in ten Latin American democracies.

20. The bureaucratic dinosaurChronology of a come back • 1980s: case studies on the importance of the State  Development in East Asia • Wade, Haggard, Evans • 1985: T Skocpol Bringing the State Back In • Debate Alesina vs. Skocpol on the origins of the Welfare State (e.g. Rothstein, Teorell & Samani 2009) • 1990s: International institutions start to take state apparatus seriously (FA) • World Bank 1997 The State in a Changing World

21. The bureaucratic dinosaurChronology of a come back • 2000s: rising theoretical + empirical studies on “Weberian bureaucracy” • The “culturalist Weber” is increasingly abandoned, but the “institutionalist Weber” is rediscovered • Evans & Rauch (1999, 2000) • Nistotskaya (2009) • Challenges ahead: tackle scientifically a concept as broad as bureaucracy / the organization of state apparatuses • Difficult to identify key elements: staff policy, administrative procedures (McNollGast) • Difficult to measure: “merit”? “# of appointees”? • Difficult to travel (Congressional Budget Office)

22. Evans and Rauch 1999 • What makes QoG are not the characteristics of the political system (Pres, Parl, VPs), but features of the Public Administration • Move the focus from the Executive and Legislature to the State Administration

23. Evans & Rauch 1999: a double advance • Theoretically: show the mechanisms that connect the State Administration with Economic Growth • Empirically: an original dataset on bureaucracies • 35 developing countries • Methodology: experts survey

24. + “Weberian” Administration  + Economic Growth • “Weberian” Bureaucracy: • Max Weber: Patrimonial Administrations vs. Bureaucratic (Weberian) ones • Bureaucracy = meritocratic recruitment + predictable long-term career rewards • Why is it good?

25. Mechanisms through which WB affect economic growth • More Efficient (“better types”, more competent) • OK, but why Microsoft does not use them? • Longer time horizons (Rauch 1995: US cities) • ”Signal” to the private sector (= impartiality)

26. Empirical analysis • 35 “semi-industrialized” countries • High correlation between Weberianess Scale and GDP/cap: 0.67 !! • Regression: WS trumps out or reduces the effect of traditional variables explaining economic growth (human capital, domestic investment)