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Well over a trillion dollars worth of state-owned firms have been privatized by governments all around the world since 1980. Economists argue that privatization increases efficiency by placing decisions in the hands of markets rather than public officials. The IMF is sufficiently enamored of privatization that it has included for more than a decade stipulations about the sale of state-owned assets as condition for the receipt of its loans. The evidence that privatization directly increases efficiency, however, is not nearly so clear as most economists would have us believe.

Der Artikel entwickelt ein spieltheoretisches Modell von den Bedingungen, unter denen vom Europäischen Gerichtshof (EGH) ein für Mitgliedsländer ungünstiges Urteil gefällt wird, an das sich die Regierungen dann auch halten. Ausgegangen wird von drei Hypothesen, die unterschiedliche Voraussetzungen für bestimmte Reationsmuster der Regierungen auf Urteile des BGH formulieren. Diese Hypothesen werden im Hinblick auf drei typische Fallgruppen überprüft: Die Einschränkung von Agrarimporten, Verstöße gegen die berufliche Gleichstellung und Verletzung des EU-Rechts durch Regierungen. (SWP-Clv)

We develop a game theoretic model of the conditions under which the European Court of Justice can be expected to take "adverse judgments" against European Union member governments and when the governments are likely to abide by these decisions. The model generates three hypotheses. First, the greater the clarity of EU case law precedent, the lesser the likelihood that the Court will tailor its decisions to the anticipated reactions of member governments. Second, the greater the domestic costs of an ECJ ruling to a litigant government, the lesser the likelihood that the litigant government will abide by it (and hence the lesser the likelihood that the Court will make such a ruling). Third, the greater the activism of the ECJ and the larger the number of member governments adversely affected by it, the greater the likelihood that responses by litigant governments will move from individual noncompliance to coordinated retaliation through new legislation or treaty revisions. These hypotheses are tested against three broad lines of case law central to ECJ jurisprudence: bans on agricultural imports, application of principles of equal treatment of the sexes to occupational pensions, and state liability for violation of EU law. The empirical analysis supports our view that though influenced by legal precedent, the ECJ also takes into account the anticipated reactions of member governments.

R. J. Johnston produces two striking and counter-intuitive results on bargaining power in a European Union Council of Ministers expanded by the addition of the four states applying for entry in 1994. One is that the 'big four' member states, including the United Kingdom, have more power if the minority with power to block a proposal is set at 27 rather than 23. UK Prime Minister John Major damaged himself politically by first insisting that he would veto a proposal to increase the blocking threshold from 23 to 27 and then being forced to climb down from this position. As Johnston notes, this episode 'led to several calls for his resignation from among his own party's MPs, including one in the House itself'. If British interests, as seen by the Euro-sceptics whom Mr Major was vainly trying to appease, were actually better served by a threshold of 27 than of 23, his actions appear doubly futile. This is apparent by reading across Johnston's Table 1, using either of the indices he proposes.

Governments of the Left and Right have distinct partisan economic policies and objectives that they would prefer to pursue. Their propensity to do so, however, is constrained by their desire for reelection. We argue that the ability of governments to further their partisan interests and preside over reelectable macroeconomic outcomes simultaneously is dependent on the organization of the domestic economy, particularly the labor movement. We hypothesize that there are two different paths to desirable macroeconomic performance. In countries with densely and centrally organized labor movements, leftist governments can promote economic growth and reduce inflation and unemployment. Conversely, in countries with weak labor movements, rightist governments can pursue their partisan-preferred macroeconomic strategies and achieve similarly beneficial macroeconomic outcomes. Performance will be poorer in other cases. These hypotheses are supported by analysis of pooled annual time series data for 16 advanced industrial democracies between 1967 and 1984.

Alvarez, Garrett and Lange (1991) used cross-national panel data on the Organization for Economic Coordination and Development nations to show that countries with left governments and encompassing labor movements enjoyed superior economic performance. Here we show that the standard errors reported in that article are incorrect. Reestimation of the model using ordinary least squares and robust standard errors upholds the major finding of Alvarez, Garrett and Lange, regarding the political and institutional causes of economic growth but leaves the findings for unemployment and inflation open to question. We show that the model used by Alvarez, Garrett and Lange, feasible generalized least squares, cannot produce standard errors when the number of countries analyzed exceeds the length of the time period under analysis. Also, we argue that ordinary least squares with robust standard errors is superior to feasible generalized least squares for typical cross-national panel studies.