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Vastly increased transnational business activity in recent decades has been accompanied by controversy over how to cope with its social and environmental impacts. The most prominent policy response thus far consists of international guidelines. We investigate to what extent and why citizens in a high-income country are willing to restrain companies to improve environmental and social conditions in other countries. Exploiting a real-world referendum in Switzerland, we use choice and vignette experiments with a representative sample of voters (N = 3,010) to study public demand for such regulation. Our results show that citizens prefer strict and unilateral rules (with a substantial variation of preferences by general social and environmental concern) while correctly assessing their consequences. Moreover, exposure to international norms increases demand for regulation. These findings highlight that democratic accountability can be a mechanism that motivates states to contribute to collective goods even if not in their economic interest and that awareness of relevant international norms among citizens can enhance this mechanism.
Policy processes are affected by how policymakers assess public support for a policy. But is public support for a given policy itself affected by characteristics of the policy process, such as cooperation or confrontation amongst policy actors? Specifically, if different branches of government hold conflicting positions on a given policy, do clashes affect public support for the policy? To address this question, we exploit an unexpected clash amongst the executive and judiciary in New Delhi, between survey waves, over exemptions for women in the context of the odd–even rule, a policy intervention to reduce air pollution from transportation. We find that public support for the contested policy was not undermined by the executive–judiciary clash. However, the clash polarised public opinion by gender, based upon the policy exemptions. Our findings shed new light on the broader question of how conflicts amongst different parts of government influence mass public policy preferences.
Normative theories of democracy agree that public demand should be the main guide in policymaking. But positive theories and related empirical research disagree about the extent to which this holds true in reality. We address this debate with an empirical focus on climate change policy. Specifically, we are interested in whether observable variation in public demand for climate change mitigation can help explain variation in adopted national climate policies. Using our own data to approximate public demand, we estimate the responsiveness of policymakers to changes in public demand in six OECD countries from 1995 to 2010. We find that policymakers are responsive and react in predicted ways to variation in our opinion component of measured public demand, rather than to the mere salience of the climate issue. The effect of issue salience is strongest in combination with our opinion measure as this creates a scope for action. The results underscore the importance and usefulness of our concept and empirical measures for public demand, as well as of our disaggregated analysis of climate policy outputs in this area.
Public support is usually a precondition for the adoption and successful implementation of costly policies. We argue that such support is easier to achieve with policy-packages that incorporate primary and ancillary measures. We specifically distinguish command-and-control and market-based measures as primary measures and argue that the former will usually garner more public support than the latter given the low-visibility tendency of costs associated with command-and-control measures. Nevertheless, if included in a policy-package, ancillary measures are likely to increase public support by reducing negative effects of primary measures. Based on a choice experiment with a representative sample of 2,034 Swiss citizens, we assessed these arguments with respect to political efforts to reduce vehicle emissions. The empirical analysis supported the argument that policy-packaging affects public support positively, particularly generating more support when ancillary measures are added. Lastly, we ultimately observe that command-and-control measures obtain more public support than market-based instruments.
Restrictive policies aimed at reducing the likelihood of bank failure during recessions tend to increase the probability of a credit crunch. In this paper we infer governments' policy responses to this dilemma by studying the cyclical behavior of bank capital in 1369 banks from 28 OECD countries during the period 1992–98. We find significant differences across countries. In the US and Japan, bank capital is counter-cyclical, that is, the typical bank strengthens its capital base during periods of weak economic activity. In the other countries, there is no relationship between the level of macroeconomic activity and bank capital. From these findings we infer that severe banking crises in the US and Japan may have made policymakers there more vigilant towards “unhealthy” banks, even when this implies an increase in the risk of a credit crunch. In countries without such crisis experience, policymakers seem to be less concerned about future banking crises. Our results suggest that the strong push by the US for the 1988 Basle Accord may have been a reflection of this increased sensitivity. They also suggest that, to the extent business cycles do not develop in synchronicity across countries and policymakers respond differently to the banking crisis-credit crunch dilemma, current reforms of the Basle Accord, which are designed to tighten regulatory requirements, may encounter difficulties.
Explanatory models accounting for variation in policy choices by democratic governments usually include a demand (by the public) and a supply (by the government) component, whereas the latter component is usually better developed from a measurement viewpoint. The main reason is that public opinion surveys, the standard approach to measuring public demand, are expensive, difficult to implement simultaneously for different countries for purposes of crossnational comparison and impossible to implement ex post for purposes of longitudinal analysis if survey data for past time periods are lacking. We therefore propose a new approach to measuring public demand, focussing on political claims made by nongovernmental actors and expressed in the news. To demonstrate the feasibility and usefulness of our measure of published opinion, we focus on climate policy in the time period between 1995 and 2010. When comparing the new measure of published opinion with the best available public opinion survey and internet search data, it turns out that our data can serve as a meaningful proxy for public demand.
Conventional wisdom suggests that environmental non-governmental organizations (ENGOs) play a major role in pushing states towards more ambitious environmental policies. However, demonstrating that this presumption is in fact true is rather difficult, because the same system structures of democracies that may create more opportunities for ENGO activities are also, on their own, conducive to better environmental policies. This leaves open the possibility that the additional (marginal) impact of ENGOs on policy making is smaller than presumed. In trying to disentangle these effects, this paper examines the influence of ENGOs contingent on key structural characteristics of democratic systems. We develop the argument that presidential systems with a plurality electoral rule per se tend to provide more environmental public goods, which induces a smaller marginal impact of ENGOs. Conversely, parliamentary systems with a proportional representation electoral rule are likely to provide fewer environmental public goods, which allows for a larger marginal impact of ENGOs. We find robust empirical support for these hypotheses in analyses that focus on the ratification behavior of 75 democracies vis-à-vis 250 international environmental agreements in 1973–2002.
Whereas some researchers emphasize how World Trade Organization (WTO) dispute settlement reduces complexity and clarifies legislation, others argue that dispute rulings promote co-operation by providing an enforcement mechanism. This article identifies empirical implications from these distinct arguments and tests them on WTO disputes from 1995 to 2006. The study's analytical approach combines a three-step coding of dispute escalation with a strategic bargaining model and statistical backwards induction to account for governments’ forward-looking behavior. It finds strong support for the argument that WTO dispute settlement primarily serves as an enforcement device. It finds much less support for the argument that dispute settlement reduces complexity and clarifies trade law. These results suggest that the role of WTO dispute settlement in generating information on acceptable trade policy standards is less relevant than proponents of the complexity argument tend to assume.
Existing empirical models of international co-operation emphasize domestic determinants, although virtually all theories of international relations focus on interdependencies between countries. This article examines how much states’ linkages with the international system, relative to domestic factors, such as income and democracy, influence the dynamics of global governance efforts. To this end, we study the ratification behaviour of 180 countries vis-à-vis 255 global environmental treaties. Except for integration into the world economy, which affects co-operative behaviour negatively, our results show that international factors have a stronger and more positive impact on cooperative behaviour than domestic factors. This implies that Galton’s advice not to examine the effects of internal and external variables in isolation is also useful in the study of international politics.
This article examines whether democracies contribute more to the provision of global public goods. It thus contributes to the debate on the effects of domestic institutions on international cooperation. The focus is on human-induced climate change, in Stern's words “the biggest market failure the world has ever seen.”1 Using new data on climate change cooperation we study a cross-section of 185 countries in 1990–2004. The results show that the effect of democracy on levels of political commitment to climate change mitigation (policy output) is positive. In contrast, the effect on policy outcomes, measured in terms of emission levels and trends, is ambiguous. These results demonstrate that up until now the democracy effect has not been able to override countervailing forces that emanate from the free-rider problem, discounting of future benefits of climate change mitigation, and other factors that cut against efforts to reduce emissions. Even though democracies have had a slow start in moving from political and legal commitments (policy output) to emission reductions (policy outcomes), particularly in the transportation sector, we observe some encouraging signs. The main implication of our findings for research on international politics is that greater efforts should be made to study policy output and outcome side by side. This will help in identifying whether more democratic countries experience larger “words-deeds” gaps also in other policy areas, and whether there are systematic differences of this kind between domestic and international commitments and across different policy areas.
Capital requirements are an important regulatory device for the management of systemic risk in the banking industry. A puzzling fact is the existence of widespread over-compliance of banks regarding national and international regulatory capital requirements. Some light is shed on this pattern by studying bank capitalization decisions using 1,267 banks from twenty-nine OECD countries. The effect of market pressure (competition) on bank capitalization is found to be positive, whereas the direct effect of regulation is ambiguous. Three points can be made. First, the effectiveness of regulation must be evaluated taking into account the – often overlooked – indirect effects. Secondly, the impact of regulation can be amplified by competitive forces when there are synergies between regulatory and market pressures. Such synergies seem to have played a key role in the widespread adoption and effectiveness of international regulatory capital requirements (the Basle Accord). And thirdly, the prospects for international regulatory convergence in any area are influenced by the interconnectedness (synergies vs. rivalries) between regulatory and market processes.
One school of thought in the literature on regulatory competition in environmental and consumer policy argues that inter-jurisdictional competition promotes regulatory laxity. The other highlights rent-seeking as a major driving force, implying that regulatory laxity is rare because rent-seeking is omnipresent. We observe that in most areas of environmental and consumer policy in advanced industrialized countries regulation has become much stricter since the 1970s. What then has been driving environmental and consumer risk regulation up? A popular explanation holds that large green jurisdictions have been forcing their trading partners to trade or ratchet up their regulation. In addition, political economists have developed bottom up explanations focusing on interest group politics and corporate behaviour. This article adds to the latter line by endogenising public perceptions and by exploring the effects of corporate environmental performance strategies on environmental and consumer risk policy. The empirical relevance of propositions is illustrated with case studies on growth hormones, electronic waste, and food safety.
Restrictive policies aimed at reducing the likelihood of bank failures during recessions tend to increase the probability of a credit crunch. We examine whether this policy-dilemma is empirically observable, and whether policy-makers concentrate more on preventing bank failures or avoiding a credit crunch. We find that although capital-asset ratios in the total population of US banks in the 1990s are pro-cyclical, the most vulnerable banks (substantially undercapitalized ones) tend to increase their capital-asset ratios during recessions. These findings suggest that policy-makers are indeed experiencing a dilemma, and that they try to balance the relative probabilities of the two evils: they force the weakest banks to improve their capital-asset ratios while mitigating the risk of a credit crunch by accepting a reduction in the capital-asset ratios of less vulnerable banks.
Analysts of international politics can measure and explain the effect of international environmental institutions on the behavior of states and other actors and on the natural environment in three steps. First, we measure the outcome to be explained in terms of goal attainment, defined as the difference, over time or across cases, between actor behavior or the state of the natural environment on dimensions identified by institutional goals and certain end points determined by institutional goals. Second, we assess the effect of an institution in terms of the extent to which the existence or operation of the institution contributes, ceteris paribus, to variation in goal attainment. We transform these two variables into a score of institutional effectiveness to indicate the degree to which institutions contribute to the resolution of the environmental problems that motivate their establishment. Third, we analyze the relationship between institutional effectiveness and specific dimensions of institutional design—such as decision-making rules, membership and access conditions, and the compliance system.
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