"Redistributive Efficiency in 28 Developed Economies" (with Leonel Muinelo and Oriol Roca), Journal of European Social Policy.
This article analyses the redistributive efficiency of social transfers and direct taxation in a panel of 28 developed economies during the period 1995-2010. In order to explore how redistribution is achieved through these fiscal policies, a two-stage approach is applied. First, we evaluate their redistributive efficiency–the degree of redistribution attained for a given level of transfers and taxes–by using Data Envelopment Analysis (DEA). We find lower redistributive efficiency in Southern Europe and the United States and higher efficiency levels in the Nordic and Central European countries and Australia. Second, we use panel regression analysis to identify the determinants of efficiency differences and reveal the crucial role of government quality as well as factors affecting the redistributive profile of fiscal policies.
"Uruguay" (with Leonel Muinelo and Oriol Roca), in Muñoz, Andrés; Pineda, Emilio; Radics, Axel (eds), Descentralización Fiscal y Disparidades Regionales en América Latina El Potencial de las Transferencias de Igualación, Washington D.C: Banco Interamericano de Desarollo, chapter 11, pp. 225-249, (2017).
En el presente capítulo se analizan la estructura y evolución de las disparidades fiscales regionales en Uruguay durante el período que se extiende de 2006 a 2013. A su vez, se considera el rol de la implementación de un nuevo sistema de transferencias ecualizadoras con el objeto de lograr y consolidar un territorio con un mayor nivel de homogeneidad o cohesión fiscal de los diferentes gobiernos departamentales de Uruguay.
“Regional Inequalities, Fiscal Decentralization and Government Quality” (with Leonel Muinelo and Oriol Roca), Regional Studies 51(6): 945-957 (2017). DOI: 10.1080/00343404.2016.1150992.
There are theoretical arguments supporting the view that regional income inequalities, the degree of fiscal decentralization and the quality of government are simultaneously determined. This article argues that existing empirical work has failed to adequately deal with this possibility. In light of this, it applies a simultaneous equation model which accounts for the joint determination of these three variables, to a panel of 23 OECD countries. The empirical evidence that emerges from the analysis suggests that a process of fiscal decentralization, accompanied by measures to improve the quality of government, would be an effective strategy for reducing regional inequalities.
"Institutional Checks and Corruption: The Effect of Formal Agenda Access on Governance" (with William B. Heller and Oriol Roca), European Journal of Political Research 55(4): 681-701 (2016). DOI: 10.1111/1475-6765.12155.
Legislative checks give whoever wields them influence over policy making. We argue that this influence implies the ability not only to affect legislative content but also to direct public resources toward private ends. Rational politicians should use access to checks to make themselves better off, e.g., by biasing policy toward private interests or creating opportunities to draw directly from the public till. Disincentives exist only to the extent that those able to observe or block corruption do not themselves benefit from it. Political opponents thus can use checks to stymie each other, but legislative checks controlled by political allies create conditions for collusion and corruption. We find, testing our claim against data from a sample of 84 countries, strong support for our hypothesized relationship between institutional checks and corruption.
“The Impact of Structural and Cohesion Funds on Eurozone Convergence (1990-2010)” (with Laia Maynou, Marc Saez and Jordi Bacaria), Regional Studies 50(7): 1127-1139 (2016). DOI: http: 10.1080/00343404.2014.965137.
Ever since the launch of the European integration process, and in particular in the context of Economic and Monetary Union, the European Union has endeavoured to facilitate economic convergence across Europe by providing funds to its poorer regions and countries. The main objective of this paper is to analyse whether the Structural and Cohesion Funds have contributed towards convergence between the Eurozone countries during the past two decades, 1990–2010. The results of the spatio-temporal econometric model specified in this paper illustrate that these funds have positively contributed to the gross domestic product per inhabitant (GDPPC) growth of receiving regions, thus allowing them to reach (conditional) convergence.
While an individualist society prizes personal control, autonomy and individual accomplishments, a collectivist one puts a premium on loyalty and cohesion and imposes mutual obligations in the context of in-groups. It has been argued that, in contrast to collectivism, individualism will promote economic development directly by sharpening individual incentives to invest, innovate and accumulate wealth. In this article, I argue that the individualist-collectivist dimension can also affect development through its impact on the quality of government. The in-group favoritism inherent to collectivist societies is likely to engender corruption, nepotism and clientelism in the public sphere. In individualist societies, the relative weakness of in-group pressures and an emphasis on personal achievement and worth will contribute towards a more meritocratic and efficient public sector to the benefit of long-run growth. Empirical evidence is provided suggesting that insofar as individualism affects economic development it does so because it promotes good governance.
“Irrationality”, in Ritzer, George (ed.), Wiley Blackwell Encyclopedia of Sociology, 2nd Edition (2016). DOI: 10.1002/9781405165518.wbeos0603.
At the individual level irrationality emerges when people fail to maximize a well ordered preference set or insofar as they entertain systematically biased beliefs about choice alternatives. Assuming that individuals have unbiased estimates of the price of irrationality, they will tend to behave more rationally as the private cost of irrational behavior increases. At the aggregate level, irrational outcomes may be less likely in market settings but more likely in large number public or collective choice ones. From a Weberian perspective, a rational society characterized by efficiency, calculability, predictability and control may yield irrationalities in the guise of inefficiencies, homogenization, alienation, dehumanization and disenchantment.
"Introduction", in Redesigning European Monetary Union Governance in Light of the Eurozone Crisis, Barcelona: Barcelona Institute of International Affairs - CIDOB (2015).
When political leaders met at Maastricht in December 1992 and took the historic decision to create the EMU, they were responding to several challenges. First, the gradual liberalisation of capital movements that was necessary to complete Europe’s single market made it increasingly difficult to stabilise exchange rate fluctuations in the context of the European Monetary System (EMS). Second, the weight of the German economy and the credibility of the German central bank meant that the functioning of the EMS was increasingly dominated by German monetary policy. Related to this, significant stress was placed on the EMS by German reunification, which both increased the relative size of the German economy and made the adoption of a contractionary policy by the Bundesbank necessary. In light of this, the creation of a European central bank was seen by some as a way to dilute German monetary dominance. Finally, just as European integration was envisaged as a necessary complement to a stronger Germany in the context of the Cold War, German reunification increased the need to move on with the process of economic and political integration across Europe...
"Construction Corrupts: Empirical Evidence from a Panel of 42 Countries" (with Leonel Muinelo and Oriol Roca), Public Choice 165(1): 123-145 (2015). DOI: 10.1007/s11127-015-0297-0.
The construction sector, whether privately or publically financed, is characterized by potentially large rents and government intervention. Not surprisingly then, both case-study and survey evidence has been provided highlighting the problem of corruption in this sector. In this article, we test the proposition that a bigger construction sector is likely to be inimical to clean government based on a panel of 42 countries over the period 1995 to 2011. We control for a range of potentially counfounding variables and the expectation that corrupt public officials may favor the development of this sector because it increases the volume of rents available to them. Our empirical evidence shows that a larger construction sector will tend to increase perceptions of the extent to which public power is exercised for private gain.
“An Examination of the Long-term Determinants of Constitutional Endurance: Geography, Diversity and Historical Legacies” (with Francisco José López), Journal of Institutional and Theoretical Economics 171(3): 432-455 (2015). DOI: 10.1628/093245615X14285667557432.
Elkins et al. (2009) have empirically examined how constitutional design and contemporaneous environmental factors can affect the survival of constitutions. However, little is known about the extent to which long-term factors may affect constitutional endurance. This work extends the epidemiological model developed by these authors to study whether geography, ethnolinguistic or genetic diversity within countries and historical legacies, may have influenced the endurance of constitutions in the period 1879 to 2005. Our findings reveal that, beyond the impact of design and environmental factors, the risk of constitutional failure depends on natural endowments, diversity and history.
“Secessionism and the Quality of Government: Evidence from a Sample of OECD Countries” (with Noemí Morral), Territory, Politics, Governance 3(2): 187-204 (2015). DOI: 10.1080/21622671.2014.978883.
In this article we test the hypothesis that secessionism reduces government quality because secessionist threats elicit a response from central governments concerned with the territorial integrity of the state and this, in turn, channels attention and resources away from necessary governance reforms. We consider the link between secessionism and government quality based on an original data set that reflects the electoral success of secessionist parties in national elections. Our empirical results, drawn from a sample of 22 OECD countries over the period from 1980 to 2007, support the expectation that secessionism will tend to reduce the quality of government even after controlling for the influence of potentially confounding variables and the possibility that government quality may itself affect the electoral fate of secessionist parties.
“Fiscal Decentralization and Regional Disparities: The Importance of Good Governance” (with Leonel Muinelo and Oriol Roca), Papers in Regional Science 94(1): 89-107 (2015). DOI: 10.1111/pirs.12061. Awarded the Martin Beckmann prize for best paper published in Papers in Regional Science in 2015.
In this paper we consider how government quality mediates the relationship between fiscal decentralization and regional disparities. Previous work has argued that fiscal decentralization has the potential to reduce income differences across regions but that this potential may not be realized because of governance problems associated with sub-national authorities. Our empirical evidence based on a sample of 24 OECD countries over the period 1984 to 2006 lends a measure of support to this idea. We find that fiscal decentralization promotes regional convergence in high government quality settings but, worryingly, it leads to wider regional disparities in countries with poor governance.
“Inequality and Culture in a Cross-Section of Countries” (with Francisco José López), Journal of Institutional Economics 11(1): 141-166 (2015). DOI: 10.1017/S1744137414000186.
A growing literature in the fields of economics and political science has identified the importance of culture for both economic development and good governance. In this article, we argue that a fundamental factor driving cultural traits conducive towards development and governance is inter-personal income inequality. Our empirical evidence from a cross-section of countries and based on measures of culture extracted from the World Values Survey, provides strong support for our argument even after controlling for the effect of an extensive range of potentially confounding variables and the possibility that our estimates may suffer from both measurement error and reverse causality.
“Regional Inequalities and the Electoral Success of Regional Parties: Evidence from the OECD” (with Noemí Morral), Publius: The Journal of Federalism 45(1): 3-23 (2015). (lead article). DOI: 10.1093/publius/pju007.
Income inequalities across regions will tend to engender redistributive conflicts about the territorial distribution of resources. The salience of territorial redistribution in the context of regional inequalities is likely to mobilize support for regional parties in national elections since territorial redistribution is decided at the national level. Thus, regional inequalities will favor the electoral success of regional parties in national-level elections. In this article we report evidence consistent with this argument based on an original data set that captures the electoral fate of regional parties in national contests across twenty-two OECD countries. Our results are robust to the use of different estimation methods as well as the consideration of the confounding influence of other factors which may affect the electoral fortunes of regional parties.
“Government Quality”, in Backhaus, Jürgen (ed.) Encyclopedia of Law and Economics, Springer (2014). DOI: 10.1007/978-1-4614-7883-646-1.
A growing body of work in economics has pointed towards the crucial importance of government quality for economic development. A major issue emerging in related empirical work has been the need to account for the confounding influence of other factors as well as the presence of reverse causality or the likelihood that development itself may facilitate governance. The potentially key role of government quality in explaining international differences in economic development has led many scholars to try and identify those factors that determine it. This research effort has brought forth the role of numerous variables including social heterogeneity, cultural heritage, and constitutional design. The lion’s share of empirical work has employed measures of government quality based on perceptions. A debate exists about the convenience of conflating government quality with institutional quality. To measure institutional quality, it may be more advisable to generate measures or indicators which capture the extent to which institutions actually constrain governments.
“Regional Disparities and Government Quality: Redistributive Conflict Crowds Out Good Government”, (with Oriol Roca), Spatial Economic Analysis 9(2): 183-201 (2014). DOI: 10.1080/17421772.2014.891158.
In this paper, we argue and provide empirical evidence to support the claim that higher income differences across regions increase the salience of interregional redistribution and, as a result, crowd out policies aiming towards improvements in government quality or efficiency. In the presence of greater regional disparities, the balance of politics may tilt towards redistributive concerns and away from government efficiency considerations, especially since the latter can be opposed by organized public sector interest groups. Our empirical analysis, based on a sample of 22 Organization for Economic Cooperation and Development (OECD) countries over the period from the mid-1990s to 2005, supports our basic intuition that regional disparities may lead to territorially based redistributive conflict to the detriment of government quality.
“Ethnic Group Inequalities and Governance: Evidence from Developing Countries”, Kyklos 66(1): 78-101 (2013). DOI: 10.1111/kykl.12012.
Institutional quality has been increasingly identified as crucial for economic development. In line with previous work which has explored the determinants of good institutions, this paper examines the impact of economic and social inequalities between ethnic groups on government quality. I hypothesize that greater inequalities between groups will tend to undermine institutions both because they tend to legitimize corruption in the eyes of disadvantaged groups and because of the efforts of better-off groups to maintain their privileges. Based on a panel of 29 developing countries, I find that socio-economic ethnic group inequalities reduce government quality, something which suggests the convenience of policies that can level the playing field in ethnically heterogeneous societies.
“Ethnic Segregation and the Quality of Government: The Importance of Regional Diversity”, Constitutional Political Economy 23(2): 166-180 (2012). DOI: 10.1007/s10602-012-9118-3.
It has recently been argued that the regional segregation of ethnic or linguistic groups leads to lower government quality and that this is partly due to the negative effect of segregation on inter-group trust. In this paper I show that the relationship between ethnic segregation, trust and government quality is mediated by another dimension of regional diversity namely, regional income disparities. Accounting for regional disparities reduces the estimated impact of segregation and trust on the quality of government and reduces the statistical robustness of ethnic segregation. The analysis highlights the usefulness of identifying other factors which may be driving regional diversity, beyond ethno-linguistic characteristics.
“The Impact of EU Structural Funds on Regional Disparities within Member States”, (with Oriol Roca), Environment and Planning C (Government and Policy) 30(2): 267-281 (2012). DOI: 10.1068/c11140r.
We examine the impact of structural and cohesion funds on regional disparities within EU countries over the period 1995-2006. We find that structural funds have reduced regional disparities over this period. Our empirical estimates also suggest that the effect of structural funds on regional disparities is potentially reversed above some level of transfer intensity (approximately 1.6% of country gross domestic product). This has implications for the desirable allocation of the funds across countries especially since, in the current programming period (2007-13), all the new member states of the Union except for Cyprus and Malta have a transfer intensity which exceeds this threshold.
We show that part of the international variation in employment laws is due to different beliefs about the impact of hard work as opposed to luck and connections on success. In societies where a greater proportion of people relate their life prospects to chance and connections, stronger employment protection is in place. The prevalence of such beliefs is likely to hamper labor market reforms.
“Rational Irrationality and Group Size: The Effect of Biased Beliefs on Individual Contributions towards Collective Goods”, American Journal of Economics and Sociology 70(1): 109-130 (2011). DOI: 10.1111/j.1536-7150.2010.00765.x.
The price of irrationality or belief manipulation varies as we move from small to large group settings. Individual members of large groups can more cheaply bias downwards their beliefs as to the immorality of their free-riding thereby circumventing internal moral constraints. The relative anonymity inherent to large number settings moreover reduces social pressures against free-riding stemming from some common ethical or moral norms. Both selfish individuals facing an internal moral constraint to behave altruistically and those with altruistic preferences have an incentive to bias upward their belief of the decisiveness of their contribution in large number settings. In addition, the impact of symmetry and the illusion of control can introduce biases regarding the expected reactions of others to one’s own decisions. The loosening of moral constraints will tend to increase free-rider behavior while biased beliefs about the decisiveness of one’s contribution or the reaction of others to one’s actions will tend to decrease such behavior.
“Fiscal Decentralization and Government Quality in the OECD” (with Oriol Roca), Economics Letters 111(3): 191-193 (2011). DOI: 10.1016/j.econlet.2011.02.019.
Using indicators of fiscal decentralization which control for intergovernmental transfers and grants, it is shown that decentralization has a positive impact on government quality but that this positive effect is mitigated in the presence of regional elections and multi-level government.
“Fiscal and Political Decentralization and Government Quality” (with Oriol Roca), Environment and Planning C (Government and Policy) 29(2): 204-223 (2011). (lead article). DOI: 10.1068/c1016r.
In this paper we apply both cross-section and panel analysis to the relationship between fiscal and political decentralization and government quality. We find that fiscal decentralization improves government quality but not if it is accompanied by political decentralization. The negative impact of political decentralization on the relationship between fiscal decentralization and government quality persists when controlling for the degree of democratic maturity across countries.
Review of George Akerlof and Rachel Kranton, Identity Economics: How Our Identities Shape Our Work, Wages, and Well-being. Princeton and Oxford: Princeton University Press, Public Choice 145(1):325-328 (2010). DOI: 10.1007/s11127-010-9658-x.
Identity Economics provides an economic theory which places tastes or preferences within a social context characterized by social norms or rules about appropriate behavior. Akerlof and Kranton (A&K) envisage an enhanced utility function with both pecuniary and identity concerns, the latter reflecting social norms specific to the social category being analyzed. In doing so they explicitly follow previous theoretical work which, since Gary Becker (1957) has incorporated nonmonetary motivations for people’s actions, including morality, fairness and status concerns ...
“Intrinsic Motivation and the Logic of Collective Action: The Impact of Selective Incentives”, American Journal of Economics and Sociology 69(2): 823-839 (2010). DOI: 10.1111/j.1536-7150.2010.00722.x.
I integrate the notion of intrinsic motivation, applied to economics most notably by Frey (1997), into the logic of individual contributions toward collective goods as analyzed since Olson ( 1971). This illuminates the many and various ways through which the intrinsic motivation to contribute toward such goods can be crowded out by the application of selective incentives. I suggest that the crowding-out effect increases the cost to society of organizing the provision of collective goods and argue in favor of designing selective incentives that mitigate this effect.
“Property Rights and the Cyprus Problem: Insights from Economics and Social Psychology”, The Cyprus Review 21(1): 193-198 (2009).
The issue of property rights goes to the heart of the Cyprus problem and for this reason it has been a highly contentious one. For Greek Cypriots, respect for property is an extension of the wider demand that any solution respect basic and inviolable human rights while Turkish Cypriots see property rights strictly within the confines of “bizonality” which is interpreted to mean a restricted right of restitution of Greek Cypriot property in the north (Gürel and Özersay, 2006). In this essay I will suggest that the way property rights are eventually handled in a settlement of the Cyprus issue is likely to have a direct impact on the viability of the post-solution state of affairs for specific reasons related to perceptions of fairness...
“Fiscal Decentralization and the Quality of Government: Evidence from Panel Data” (with Oriol Roca), Hacienda Pública Española/Review of Public Economics 189(2): 131-156 (2009).
In this paper we focus on the relationship between fiscal decentralization and government quality. In a sample of 29 developing and developed countries over the period 1984-1997, fiscal decentralization has a positive effect on institutional quality but this effect diminishes as countries become wealthier. Moreover, the positive effect of fiscal decentralization on government quality is reduced by electoral and decision-making decentralization in poor and medium income countries whereas these forms of decentralization seem to improve the impact of fiscal decentralization on government quality in rich countries.
“Decision Rules, Membership and Political Centralization in the European Union”, European Journal of Law and Economics 27(2): 143-158 (2009). DOI:10.1007/s10657-008-9086-2.
The decision to enter the European Union is based on a comparison of the costs of staying out and going it alone, and the costs of membership. The latter depend on the degree of preference heterogeneity between prospective members and the Union as well as the decision rules employed for ‘‘constitutional’’ decisions. The same calculus guides the decision, by member states, to shift policies up to the Union level, only now the decision rules refer to centrally assigned policies. Preference heterogeneity makes more inclusive rules optimal in either case while at the same time reducing the attractiveness of membership or the centralization of policies to the EU level, respectively. The analysis complements and extends both traditional fiscal federalism literature as well as the more recent political economics literature on federalism.
“Functional, Overlapping and Competing Jurisdictions and Ethnic Conflict Management”, Kyklos 59(1): 63-83 (2006). DOI: 10.1111/j.1467-6435.2006.00320.x.
By allowing ethnic groups to organize areas important to them regardless of their geographic distribution, functional, overlapping and competing jurisdictions (FOCJ) have an important role to play in the management of ethnic conflict in plural societies. The functional devolution of powers which is intrinsic to FOCJ may be preferable to territorial devolution when minority groups are spatially dispersed or, when they are geographically concentrated but are in a numerical minority in their region. Even when minority groups are in a majority in their region functional rather than territorial devolution may dampen secessionist fears among members of the majority. A case can also be made for a degree of functional devolution to complement territorial devolutionwhen territorial devolution to protect one minority leaves other ethnic groups in a minority situation. The application of FOCJ to the area of ethnic conflict management calls for institutional structures which take into account the possible efficiency of the monopoly supply of some public goods, the need to maintain ‘competitive equality’ among jurisdictions and the danger that the functional devolution which is inherent to FOCJ may harden group boundaries over time.
“Rationality, Ethnicity and Institutions: A Survey of Issues and Results”, Journal of Economic Surveys 19(1): 23-42 (2005). DOI: 10.1111/j.0950-0804.2005.00237.x.
This paper focuses on the relationship between institutions and ethnocentrism as discussed in the rational choice literature. The institutional environment can influence both the formation and the expression of ethnic tastes by rational individuals. Ethnocentrism is likely to be mitigated by, on the one hand, a private sector characterized by a wide and competitive market with effective property right and antitrust law enforcement provided by non-ethnic institutions and, on the other hand, a public sector which is characterized by institutional restrictions on the differential fiscal or regulatory treatment on the basis of ethnicity, a redistributive system based on non-ethnic criteria and finally, the possibility for decentralized collective decision making. These insights may be of particular utility when designing the institutions of potentially divided multiethnic states.
“Economic Integration, Legitimacy and European Union Enlargement”, Journal of Public Finance and Public Choice 23(3): 183-195 (2004).
The enlargement of the European Union generates socio-economic costs and benefits for the citizens of new members and as such it is bound to affect their perceived legitimacy of the whole enterprise. The legitimacy of EU accession is likely to be enhanced by the inclusion of compensatory transfers and transition periods in the terms of accession, by the perception that EU membership represents the most favorable terms of exchange available and by the linking of accession to a sustained period of economic growth, a favorable movement in prices, improving relative incomes and the consolidation of a level playing field across new members.
“A Theory of Menu Federalism: Decentralisation by Political Agreement”, (with Roger Congleton and Jordi Bacaria), Constitutional Political Economy 14(3): 167-190 (2003). (lead article). DOI: 10.1023/A:1024750712089.
Article reprinted a Ehtisham, A. i Broscio, G. (Eds.) Effective Federalism and Local Finance. The International Library of Critical Writings in Economics Series. Edward Elgar (2011, Ch. 19).
This paper analyzes agreements between governments that determine the division of policy-making power between central and regional governments. Our analysis demonstrates that initial circumstances and political risks affect the degree of centralization that will be adopted, and that asymmetric forms of federalism are often consequences of ongoing negotiations between regional and central governments over the assignment of policy-making authority. We analyze three settings where gains from ‘‘constitutional exchange’’ may exist: (i) the under-centralized state, (ii) the over-centralized state, and (iii) the constitutional convention. In each case, an asymmetric form of federalism is the predicted outcome, although the degree of asymmetry differs according to starting point. Modern and historical examples are used to illustrate the relevance of our analysis.
A Viable Solution to the Cyprus Problem: Lessons from Political Economy, Nicosia: Intercollege Press (2003).
The search for a viable solution to the Cyprus Problem is the declared objective of those parties which have dealt with the conflict over the years, including the government of the Republic of Cyprus, foreign governments and international organizations. This book discusses what a viable solution to the conflict may consist of and does so through a political economy perspective. The approach is economic in that it employs the tools of analysis of that discipline and it is political in that the object of analysis are those constitutions-institutions or arrangements proposed for the peaceful coexistence of the citizens of a reunified island. The book discusses all the main aspects of the dispute and does so in the context both of the latest UN proposals for its resolution and the island’s forthcoming accession to the European Union.
“This is a highly reliable review and dissertation of the Cypriot problem. Andreas Kyriacou is a talented and perceptive writer whose account of the negotiations conducted over many years resembles a dialogue with the interlocutors themselves, and whose analysis of the various issues involved, and of the proposals for a final settlement, is incisive, motivating and forward-looking. Covering such a wide range of subjects in a single book was a tall order, but Dr. Kyriacou has done it with exacting rigour and excellence.”
Special Adviser to the UN Secretary-General
(formerly UN Secretary General's special adviser for Cyprus 1997-1999, UN Under-Secretary-General for Political Affairs 1981-1988)
“Enlargement and the European Central Bank” (with Jordi Bacaria and Georgios Chortareas), in Steunenberg, B. (ed.)
Widening the European Union: The Politics of Institutional Change and
Reform, London: Routledge (2002).
Since 1 January 1999, the monetary policy of those countries which have been admitted into the European Monetary Union (EMU) has been delegated to the European System of Central Banks (ESCBs), made up of the European Central Bank (ECB) and the National Central Banks (NCBs) of the participating countries. The primary objective of the ECB is ‘price stability’ and towards this aim the ECB and participating National Central Banks are prohibited from granting credit facilities to, or purchasing debt from, Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law or public undertakings of Member States. Both the ECB and participating National Central Banks are moreover prohibited from taking instructions from these institutions.
“On the Viability of Potentially Divided Multi-Ethnic States”, Journal of Public Finance and Public Choice 19(1): 39-53 (2001).
This paper examines the viability of inter-ethnic co-operation from the perspective afforded by the economic approach to institutional analysis. Four factors are seen to affect viability namely, the relative strength of each ethnic group in the non co-operative setting, the perceived fairness of the terms of co-operation, the continuing influence of informal rules which may be inimical to co-operation and finally, the judicial enforcement and legislative maintenance of the terms of co-operation. The discussion generates a number of insights into the desirable nature of the institutions of potentially divided multi-ethnic states.
“A ‘Just and Viable’ Solution to the Cyprus Problem: In Search of Institutional Viability”, Mediterranean Politics 5(3): 54-75 (2000). DOI: 10.1080/13629390008414736.
This paper examines the possible nature of a ‘just and lasting solution’ to the Cyprus Problem. Four factors are seen to affect the viability of a solution namely, the relative capacity of the Greek and Turkish Cypriot sides to impose costs in the event of either breaking off from inter-ethnic co-operation, the extent to which each party perceives the solution to be fair, the continuous influence of informal rules which may promote ethnic identification and finally, the judicial enforcement and legislative maintenance of the agreed solution. The discussion generates a number of insights into several aspects of the dispute including, security guarantees, territorial adjustments, the freedom of movement and establishment and the right of property, a federal versus a confederal solution and finally, the desirable nature of the constitution of a multi-ethnic Cyprus.
“An Ethnically Based Federal and Bicameral System: The Case of Cyprus”, International Review of Law and Economics 20(2): 251-268 (2000). DOI: 10.1016/S0144-8188(00)00027-2.
Central to the constitutional provisions that make up the most recent framework agreement put forward by the United Nations for the resolution of the Cyprus Problem, is an ethnically based federal and bicameral system. This paper examines the proposed system’s ability to enhance the viability of any solution to the Cyprus Problem (measured by its capacity to reduce the emergence of permanent tyrannical majorities or minorities), as well as its ability to promote legislative stability (measured by its capacity to mitigate the incidence of majority cycling). It is argued that a better institutional set-up would be a federation based on Functional-Overlapping-Competing-Jurisdictions (FOCJ) coupled with a jurisdiction-dependent and constitutionally enshrined generalization rule.
“A Viable Solution to the Cyprus Problem in the Context of European Union Accession”, The Cyprus Review 12(1): 35-59 (2000).
Through its pre-accession policy for Cyprus, the European Union is seeking to contribute towards a solution to the Cyprus Problem by emphasizing the security and economic benefits that would be enjoyed by all Cypriots from EU membership and by attempting to wring concessions from both the Greek and Turkish Cypriot sides. After identifying this strategy, this paper discusses several factors that may directly affect the viability of a final solution to the Cyprus conflict namely, the perceived fairness of a solution, the presence of effective security guarantees, the effects of a wider and more competitive market, the likelihood of majority tyranny of the minority and finally, the effects of an alternative source of identity. The first and second of these factors have important implications for the EU’s pre-accession strategy while the remaining three suggest that eventual membership of the EU is likely to increase the viability of a reunified Cyprus.
“A Comment on Müller’s ‘Unveiling of the Veil of Uncertainty’”, Constitutional Political Economy 9(4): 335-338 (1998). DOI: 10.1023/A:1009095404644.
This comment replies to the assertion by Müller (1998) that a rational and self-interested individual faced with a thick veil of uncertainty may not, as a result, vote for a fair rule. It is argued that if such an individual is reasonably assumed to behave as if he/she were risk averse then he/she is more likely to vote for such a rule.