In must of, so call developed societies, there are important economic sectors which have been heavily regulated by state agencies, must of the them are because social, economic or environmental interests. In general, social security, infrastructure (energy, telecom, water, transportation, ports, airports, etc) as well as others activities related to environmental protection or education investments (Schools and Universities). So, how those regulations and particularly, the learning trajectory under those dynamic institutions set ups, are constraining or improving economic performance of the economy. I understand democracy performance in a context where society goal is possible to be achieved under low social and transaction cost.Somehow it is very much to do with the way society solve conflicting issues regarding new expectations as for example, carbon neutrality or total renewable energy balance.
Please tell me if you have research theory, cases or ideas on how to face this relationship.
Regards
Leiner
Dear Leiner, please send me your e mail address and I'll send you the latest research in public management, which may be part of the answer to your question. My direct email is: [email protected]
Best regards
Konrad
Morning Leiner,
Free rider problem is a good starting point to understsnd how and where that state should engage. You can also refer to new institutional economy which deals with regulations and reasons for their (in-)effectiveness.
Best,
Eugene
Hi Leiner,
the first thing which comes to my mind is the recent decision of the German government to pay 4000 EUR for each car using completely electric energy. It has been a long discussion in the German society and the decision is now accepted by it. This subsidising goes on costs of tax payers, moreover, it makes certain restrictions, for examle, for producers of gazoline cars. So there should have been a discussion and the decision sould be made democratically.
The other option, which is not about energy, is the entrance to NATO. Many countries prefer to remain neutral in this question but the costs for having a completely own army are very high. Look for military budget of Switzerland and compare it to another country of a comparable size (Poland, Luthuania, or others). However, a decision to join the treaty cannot be made without a societal support. It is not only about tax payers' money, but also about political and psychological issues. Ukraine is an example where the recent conflict change the position of the society towards the NATO. The conflict in Crimea and the Eastern part of Ukraine is not the decisive issue - it is much more about societal discussion which started after the conflicts appeared. Probably, Ukraine will decide to join the Treaty.
All this issues can be analysed as from the point of view of the free rider problem, so from a view of institutional economy.
The free rider approach would say that joining the Treaty is a cost minimization since the costs for NATO-Forces support are lower then own troops support. The countries which are not threatened by agrossors are less willing to increase NATO financing whereas the ocuntries located close to the agressor, are willing to increase financing. The institutional issue would be a decision to join the Treaty whereby the tax payers will have to support it even if some of them disaggree.
The intitutional approach to, for example, electric cars support shows how a regulatory involvment resolves aproblem which cuold not have resolved using usual market mechanisms - electirc cars are less efficient and more expensive than gazoline cars. Moreover, there are more gas-stations than electirc stations. An institutional intervention forced not only people to prefer other type of energy, but also the gas stattions to think of introduction of power supply for the cars.
Anyway, you can try to test your ideas using laboratory experiment. Take a group of students, introduce a conflicting issue and then split it into two groups. The one should discuss it democratically and decide, the other will receive a solution. If we assume that both groups have to pay an equivalent of taxes (but in a hidden way), then you will see which group will pay taxes in a full amount, and which will try to avoid taxation.
You can also try to combine approaches and look for who is going to enjoy the fruits of the decision without paying taxes.
I think I proposed not the clearest example, but it should be illustrative. Would you agree?
Best,
Eugene
It sound very interesting mechanism to using experimental economics on that political aspect....Thank you
Leiner
Thanks, Leiner,
I am very interested in applying this method to the sphere of economic regulators. Please let me know if we can develop the experiment jointly.
You can always write me a message.
Best,
Eugene
http://www.cipe.org/publications/detail/how-democracy-influences-growth
https://books.google.com.tr/books?id=d_ZcvB8M1OIC&pg=PA266&lpg=PA266&dq=democracy+performance+of+a+particular+country+is+affecting+the+competitiveness+of+industries+highly+regulated+by+State&source=bl&ots=QTSlRYX2O7&sig=3649kKj0Nw7r7iKUpd-9di7LHeU&hl=tr&sa=X&ved=0ahUKEwiz2JKItYHYAhWnC5oKHQ5rBi4Q6AEIQDAD#v=onepage&q=democracy%20performance%20of%20a%20particular%20country%20is%20affecting%20the%20competitiveness%20of%20industries%20highly%20regulated%20by%20State&f=false
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