THE FEDERAL RESERVE SYSTEM WAS ESTABLISHED IN 1913 TO PROVIDE THE PUBLIC GOOD OF DOMESTIC FINANCIAL SYSTEM STABILITY. ITS MAIN PURPOSE WAS TO SAFEGUARD THE NATION FROM BANKING PANICS AND OTHER ECONOMICALLY COSTLY FINANCIAL DISTURBANCES. THE AUTHOR EXPLAINS THE COLLECTIVE ACTION BEHIND THE FEDERAL RESERVE ACT BY WAY OF THE JOINT PRODUCTS (SELECTIVE INCENTIVES) MODEL. THE SELECTIVE INDUCEMENT THAT MOTIVATED LOBBYING FOR THE FEDERAL RESERVE WAS THE DESIRE TO INTERNATIONALIZE USAGE OF THE U.S. DOLLAR, A BENEFIT RESTRICTED PRIMARILY TO MONEY-CENTER BANKERS. BANKERS INTERNALIZED THE COSTS OF PRODUCING THE FEDERAL RESERVE BECAUSE THE PRODUCTION OF DOMESTIC FINANCIAL STABILITY. THE ARTICLE PROVIDES A ROAD MAP OF THE JOINT PRODUCTS MODEL AND DEMONSTRATES EMPIRICALLY THE SUPPLY TECHNOLOGY THAT BOUND TOGETHER THE PUBLIC AND PRIVATE GOODS OF THE FEDERAL RESERVE ACT.
Peasant upheavals are studied from the perspective offered by the selective incentives solution to Olson's collective action problem. This article presents much evidence from three different forms of peasant struggles—everyday forms of peasant resistance, unorganized rural movements, and organized peasant rebellions—that demonstrates the widespread existence of selective incentives. Questions about the causes and consequences of selective incentives are then examined. First, what are the conditions under which peasant struggles emphasize material selective incentives rather than nonmaterial altruistic appeals? The level of selective incentives in any peasant upheaval is a function of demand and supply considerations. Peasants demand selective incentives. The suppliers include one or more dissident peasant organizations, the authorities, and the allies of both. A political struggle ensues as the suppliers compete and attempt to monopolize the market. Second, what are the conditions under which the pursuit of material self-interest hurts rather than helps the peasantry's collective cause? Selective incentives supplemented by ideology can be effective; selective incentives alone are counterproductive.These questions and answers lead to the conclusion that the selective incentives solution reveals much more about peasant upheavals than simply that peasants will often be concerned with their own material self-interest. It is therefore important to study the following three aspects of peasant collective action: thedilemmapeasants face, or how peasant resistance is in the interest of all peasants but in the self-interest of none; theparadoxpeasants face, or that rational peasants do solve their dilemma (for example, with selective incentives) and participate in collective action; and theironypeasants face, or that self-interest is both at the root of their dilemma and at the foundation of a solution to their paradox.
The Federal Reserve System was established in 1913 to provide the public good of domestic financial system stability. Its main purpose was to safeguard the nation from banking panics and other economically costly financial disturbances. In this article, I explain the collective action behind the Federal Reserve Act by way of the joint products (selective incentives) model. The selective inducement that motivated lobbying for the Federal Reserve was the desire to internationalize usage of the U.S. dollar, a benefit restricted primarily to money-center bankers. Bankers internalized the costs of producing the Federal Reserve because the private gains associated with internationalizing the currency could not be disassociated from production of domestic financial stability. The article provides a road map of the joint products model and demonstrates empirically the supply technology that bound together the public and private goods of the Federal Reserve Act.
In: International political science review: the journal of the International Political Science Association (IPSA) = Revue internationale de science politique, Band 35, Heft 3, S. 275-290
The party system in Malawi has been characterised by instability and fragmentation since the reintroduction of multiparty democracy in 1993. In part this instability is rooted in the legal framework regulating political parties as organisations and the functions that parties perform in a democracy. The article outlines the constitutional and legal framework of political parties. But more important is how regulation of functions such as candidate nomination, campaigning and representation in parliament interacts with the structure of the political system, leading to party system instability. Moreover, the effect of regulation of political parties and their activities is strongly influenced by 'selective' application of the formal regulations and weak party organisations. Formal rules meant to strengthen political parties have therefore not functioned as intended. [Reprinted by permission of Sage Publications Ltd., copyright, the International Political Science Association.]
In: International political science review: the journal of the International Political Science Association (IPSA) = Revue internationale de science politique, Band 35, Heft 3, S. 275-290
The party system in Malawi has been characterised by instability and fragmentation since the reintroduction of multiparty democracy in 1993. In part this instability is rooted in the legal framework regulating political parties as organisations and the functions that parties perform in a democracy. The article outlines the constitutional and legal framework of political parties. But more important is how regulation of functions such as candidate nomination, campaigning and representation in parliament interacts with the structure of the political system, leading to party system instability. Moreover, the effect of regulation of political parties and their activities is strongly influenced by 'selective' application of the formal regulations and weak party organisations. Formal rules meant to strengthen political parties have therefore not functioned as intended.
Expanding mandatory selective service registration in the United States to include women would seem to be good public policy that increases national security and reduces gender bias. Despite the recent recommendation of a congressionally-mandated commission, recent efforts to implement this important reform have repeatedly stalled. Why? In this article, we explain the failure of selective service reform through the lens of American political institutions. Neither the composition of the Supreme Court, nor the institutional incentives facing legislators, are conducive to movement on this issue. Building on the legislative entrepreneurship literature, we argue that recent trends in congressional representation and the adoption of new issue framings are the most likely factors that will increase the probability of selective service reform. The absence of selective service reform in the United States reveals important facts about agenda-setting in defense policy and how political institutions shape the relationship between the public and the military.
As of 2016, 20 employment incentives are in operation in Korea under four ministries with a budget of 2.8 trillion won. However, instead of creating new jobs, these projects mainly aim to maintain and improve existing jobs, unlike most OECD countries. Moreover, the scope of target groups is too broad and conflicts with the core principle of providing selective support to vulnerable job seekers. Therefore, efforts must be made to enhance policy efficiency by placing stronger emphasis on new job creation and support for the vulnerable. - As of 2016, 20 employment incentives are currently in operation under four ministries with a budget of 2.8 trillion won. - This paper discusses the effects and limitations of Korea's employment incentives and intends to suggest a direction for improvement. - Employment incentives are government- subsidized budgetary projects that aim to increase employment throughout the economy. - According to the OECD, employment incentives are classified into three types: recruitment incentives, employment maintenance incentives and job rotation and sharing. - Under normal conditions, recruitment incentives are effective, but at a time of crisis, maintenance incentives and job rotation and sharing projects could serve as effective policy measures. - The abuse of employment incentives would lead to several side effects, and thus should be used selectively for the vulnerable who are in desperate need of government support. - Korea's budget for employment incentives relative to GDP is lower than the OECD average but higher than advanced economies in the West, such as the US, the UK, Germany and France. - OECD countries have operate employment incentives to complement new hiring, whereas Korea focuses on maintaining and improving existing jobs. - According to a multiple choice survey conducted on operators of employment incentives regarding the main beneficiaries, 'no particular target' was the most common answer. - Analysing the target selection process used in major employment incentives reveals a lack of selective support for the vulnerable. - The final goal of employment incentives, must be clarified further, and more support should be given to new jobs. - One suggestion for selective support is to grant a subsidy to only for those who have engaged in job seeking activities via employment support programs for a certain period of time but have failed to find employment.
This paper shows that the increased policy-selectivity of aid allocations observed in recent years provides recipient countries an incentive to improve policies. The paper estimates that a change in the World Banks Country Policy and Institutional Assessment policy index from 1.5 to 2 for a recipient is associated with an increase of about 13 percent in aid. The analysis also finds a modest but statistically significant positive relationship between the share of policy-selective aid in the global aid budget and policy, suggesting that policy-selective aid improves policies. This effect is properly identified, as the share of policy-selective aid in the global aid budget is exogenous to recipient country policy choices. Furthermore, the paper provides a game theoretic model that establishes the link between the policy-selectivity of the global budget and better recipient country policies in equilibrium.
We develop a dynamic network model of collective action that explains how collective action can arise in the absence of selective incentives or disincentives from the voluntary action of can arise in the absence of selective incentives or disincentives from the voluntary action of among interdependent actors can yield a cascade of activism and result in a successful social movement.
Domestic political use of force is a strategy for political leaders to divert the public's attention away from economic instability and rebuild political capital. But, diversionary incentives are not the only motivation; the targeted vulnerable minority's capabilities are important. We analyze how the combination of diversionary incentive and out-group mobilization capabilities influences leaders' decision-calculus. Embattled leaders make strategic decisions about both the target and the adequate severity of force to accomplish diversion without risking conflict escalation. We empirically test the resulting hypotheses using the Minorities at Risk dataset from 1998 to 2003 and find support for our expectations. Incentive alone does not determine domestic political use of force; the same incentive produces variance in the severity of force dependent on the targeted out-group's mobilization capability. Governments match the severity of domestic force to political survival goals and the costs and risks of political use of force.
Domestic political use of force is a strategy for political leaders to divert the public's attention away from economic instability and rebuild political capital. But, diversionary incentives are not the only motivation; the targeted vulnerable minority's capabilities are important. We analyze how the combination of diversionary incentive and out-group mobilization capabilities influences leaders' decision-calculus. Embattled leaders make strategic decisions about both the target and the adequate severity of force to accomplish diversion without risking conflict escalation. We empirically test the resulting hypotheses using the Minorities at Risk dataset from 1998 to 2003 and find support for our expectations. Incentive alone does not determine domestic political use of force; the same incentive produces variance in the severity of force dependent on the targeted out-group's mobilization capability. Governments match the severity of domestic force to political survival goals and the costs and risks of political use of force.