John Freeman Working Papers
Political Accountability and the Room to Maneuver: A Search for a Causal Chain (with Thomas Sattler and Patrick T. Brandt). Forthcoming in Comparative Political Studies, September 2008.
ABSTRACT:
Many studies of the Room to Maneuver make no provision for popular evaluation of policy. They assert rather than demonstrate popular satisfaction with policy choices and macroeconomic outcomes. We present a framework that explicitly models channels for popular preferences to influence monetary policies and macroeconomic outcomes. Our results for monetary policymaking in Britain do not support the Room to Maneuver thesis. In our sample (1981-1997) the British government was responsive to changes in political evaluations, and its policy choices effectively fed back into popular evaluations of government policy. However, this accountability mechanism worked outside the real economy. Shifts in popular evaluations induced changes in monetary policy but had no impact on inflation and economic growth. Government capacity to shape macroeconomic outcomes was limited and popular influence over monetary policy was ineffectual. This form of accountability probably existed because British citizens had difficulty gauging the real impacts of their government's policies.
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Economic Policy, Political Accountability and the Room to Maneuver (with Thomas Sattler and Patrick T. Brandt).
ABSTRACT:
Most political scientists agree that governments retain substantial room to maneuver despite economic globalization. But theses researchers assert rather than demonstrate that citizens are satisfied with economic policies and outcomes. We use a Bayesian multi-equation time-series framework to analyze the dynamic relationship between popular evaluations of policymakers' performance, government policy choices and macroeconmic outcomes in Britain from 1984 to 2006. Our results do not support the room to maneuver thesis. British governments were responsive to changes in political evaluations and citizens rewarded their government's policies with higher political support. However, the impacts of government policy adjustments on inflation and economic growth were negligible; governments' capacities to shape macroeconimc outcomes thus were limited. Our results also show that before the central Bank of England was granted independence in 1997, the government used both monetary and fiscal policy to respond to changes in popular evaluations. After 1997, the political influence over monetary policy decreased significantly and fiscal policy became the government's main economic policy instrument. But, again, in neither period did policy innovations have significant effects on Britain's open economy.
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The American Public and the Room to Maneuver: Responsibility Attributions and Policy Efficacy in an Era of Globalization (with Timothy Hellwig and Eve Ringsmuth).
ABSTRACT:
Despite the increasing integration of world markets, most political scientists contend that governments retain much policy "room to maneuver." Moreover, citizens presumably agree to further econimic integration because they believe their governments can cushion the impacts of market forces. In this sense, globalization is compatible with democracy. Rarely, however, are data provided that demonstrate citizens' appreciation for the room to maneuver, let alone their positive evaluation of it. Who do citizens identify as most responsible for the performance of the U.S. economy, elected officials or national and international market forces? What are the consequences of judgments about the room to maneuver for attitudes towards democracy?
This paper reports the results of an original experiment designed to answer these questions. We find that a good number of Americans believe that their government retains the room to maneuver. However, there exisists a substantial minority that does not. This minority is defined primarily by their partisanshiop and level of education. Republican partisans and more educated citizens believe their is less room to maneuver more than Democratic partisans and less educated citizens. Also, while priming subjects to think about economic globalization does not affect their responsibility attributions, the choice set matters: When provided the option, a significant number of respondents assign responsibility to market forces rather than elected officials.
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Reciprocity, Accountability and Credibility In International Relations (with Patrick T. Brandt and Michael Colaresi)
ABSTRACT:
Do public opinion dynamics play an important role in understanding conflict trajectories between democratic governments and other rival groups? The majority of previous research has assumed either that public opinion is irrelevant to conflict processes or that the relationships are one-way causal chains. In this paper, we argue that neither of these assumptions are theoretically or empirically necessary. Instead, we interpret several theories of opinion dynamics and government behavior as particular causal links in models of reciprocity, accountability and credibility relationships. Theoretical expectations about the character of these linkages are translated into four distinct Bayesian structural time series models. These models allow us to include novel domestic public information where available, as well as relax the strict recursive structure that previous time series models have assumed. The models are fit to events data from the Israeli-Palestinian conflict with provisions for U.S. intervention and public support for peace. We find that a credibility model, which allows domestic public opinion to influence, U.S., Palestinian and Israeli behavior within a given month, fits the data best. This credibility model supports research that predicts asymmetric reciprocity between democratic and non-democratic belligerents. For the credibility model there is evidence that more pacific Israeli opinion leads to more immediate hostility by the Palestinians toward the Israelis. The direction of this response suggests a negative feedback mechanism where low level conflict is maintained and momentum toward either all out war or dramatic peace is slowed.
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Modeling Macro Political Dynamics. with Patrick T. Brandt
ABSTRACT:
Analyzing macro-political processes is complicated by four interrelated problems: model scale, endogeneity, persistence, and specification uncertainty. These problems are endemic in the study of political economy, public opinion, international relations, and other kinds of macro-political research. We show how a Bayesian structural time series approach addresses them. Our illustration is a structurally identified, nine equation model of the U.S. politicaleconomic system. It combines key features of Erikson, MacKuen and Stimson's model of the American macropolity (2002) with those of a leading macroeconomic model of U.S. (Sims and Zha 1998 and Leeper, Sims, and Zha 1996). This structural model, with a loose informed prior, yields the best performance in terms of model fit and new insights into the dynamics of the American political economy. The model 1) captures the conventional wisdom about the countercyclical nature of monetary policy (Williams 1990) 2) reveals informational sources of approval dynamics: innovations in information variables affect consumer sentiment and approval and the impacts on consumer sentiment feed-forward into subsequent approval changes, 3) finds that the real economy does not have any major impacts on key macropolity variables and 4) concludes that macropartisanship does not depend on the evolution of the real economy in the short or medium term and only very weakly on informational variables in the long term.
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"Advances in Bayesian Time Series Modeling and the Study of Politics: Theory Testing, Forecasting, and Policy Analysis" with Patrick Brandt Political Analysis vol 14, no. 1, 2006.
ABSTRACT:
Bayesian approaches to the study of politics are increasingly popular. But Bayesian approaches to modeling multiple time series have not been critically evaluated. This is in spite of the potential value of these models in international relations, political economy, and other fields of our discipline.
We review recent developments in Bayesian multi-equation time series modeling in theory testing, forecasting, and policy analysis. Methods for constructing Bayesian measures of uncertainty of impulse responses (Bayesian shape error bands) are explained. A reference prior for these models that has proven useful in short and medium term forecasting in macroeconomics is described. Once modified to incorporate our experience analyzing political data and our theories, this prior can enhance our ability to forecast over the short and medium terms complex political dynamics like those exhibited by certain international conflicts. In addition, we explain how contingent Bayesian forecasts can be constructed, contingent Bayesian forecasts that embody policy counterfactuals. The value of these new Bayesian methods is illustrated in a reanalysis of the Israeli-Palestinian conflict of the 1980s.
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"Democracy and Markets in the Twenty-First Century: An Agenda"
To appear in Democracy and Markets in the Twenty-First Century volume 1. Peter Nardulli Editor
ABSTRACT:
The direction of economic change in the early twenty-first century is clear. Thousands of state-owned firms are being privatized. Existing markets are being liberalized. Scores of financial and other kinds of markets are being created across the world. These new markets increasingly are connected in space and time with existing markets. At the same time, political authority is "migrating." But the direction of this migration is unclear. More important, the impact of authority migration on democracy is uncertain. There is evidence that, in the minds of citizens in some first wave democracies, political migration is having a negative impact on democracy.
The compatibility of economic globalization and democracy hinges on the answers to five related questions. Political economists purport to answer two of them. Unfortunately, the research designs they use for these purposes are seriously flawed. Political economists paper over or ignore the other three questions.
The first part of this paper critiques the existing literature. In so doing, it illuminates the key questions about economic globalization and democracy. The second part calls for six interrelated research projects. More generally, part two explains that, to determine if globalization and democracy are compatible, we need to establish an idea expert democracy applied to monetary technocracy both at the levels of national and supranational government, and show that citizens not only have a conception of government capacity vis-a-vis global market constraints but also that citizens are content with the consequences of adhering to these constraints.
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Preface to the Spanish Edition of Democracy and Markets: The Politics of Mixed Economies
Editorial Almuzara plans to publish a Spanish language version of Democracy and Markets. This new Preface was written for this Spanish language version.
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"The Electoral Information Hypothesis Revisited," with Jude Hayes and Helmut Stix.
ABSTRACT:
The connection between political and bond market equilibration is studied. The conventional wisdom on the subject, the Electoral Information Hypothesis (EIH; Cohen 1993, Alesina, Roubini and Cohen 1997), is criticized on theoretical and empirical grounds. Using a framework proposed by Garrett and Lange (1995) and data from three of the most developed bond markets in the world a revised hypothesis is constructed and tested. The revised hypothesis recognizes the way formal political and bureaucratic institutions mitigate the effects of democratic politics on bond markets as well as the "fat tailed" distributions and volatility clustering commonly found in financial time series. The results show that empirical support for the revised EIH extends beyond the American case, but this support is not universal. More specifically, where democracy is of the majoritarian type and central banks are weak (the U.K. until recently) the revised EIH holds. Once placed on sounder statistical footings, the U.S. case-one of mixed majoritarian and consensual democracy and a moderately strong central bank-also supports the revised EIH. However, the revised EIH does not receive support in Germany, which has a consensual form of democracy and a strong central bank. The empirical power of the revised EIH thus is shown to vary by institutional context.
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