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AbstractThis essay reviews US trade flows and trade policy from the perspective of consumers. Trade policy shapes the prices and the availability of products sold in the US to, ultimately, voters. Understanding the role of consumers in explaining US trade policy may therefore offer lessons for our understanding of politics beyond trade. International trade has created substantial gains for consumers, both by lowering domestic prices and by increasing access to a wider variety of products. Yet, US trade policy does not appear to reflect consumer interests: tariffs are higher for products with higher consumption shares. This finding is inconsistent with the narrative that open trade is a response to consumer interests, and it is not explained by standard collective action arguments either. Instead, the political influence of pro-trade firms emerges as a driving force of US trade openness. The essay discusses the implications for our understanding of the political and institutional sources of trade openness. If special interest politics explains the opening of trade, it reverses the traditional interpretation of trade openness as an indication of the absence of special interest politics.

AbstractExisting arguments across political science posit that parties in government use domestic and international institutions to lock in their own policy preferences by tying the hands of successors. I demonstrate that these arguments contrast with the assumption of office-seeking parties and therefore portray an incomplete picture of the incentives of governments. The paper emphasizes the trade-off between implementing policy preferences, on the one hand, and exploiting partisan differences for electoral success, on the other hand: locking in a policy takes an issue off the table, but it also undermines a party's ability to leverage differences to the opposition in elections. Because office-seeking parties need to take into account these electoral consequences, they have a disincentive to tie their successors' hands. I advance this argument in the context of the establishment of independent central banks, provide empirical evidence, and suggest implications for the literature on international institutions.

Two common problems in applications of two-stage least squares (2SLS) are nonrandom measurement error in the endogenous variable and weak instruments. In the presence of nonrandom measurement error, 2SLS yields inconsistent estimates. In the presence of weak instruments, confidence intervals andp-values can be severely misleading. This article introduces a rank-based estimator, grounded in randomization inference, which addresses both problems within a unified framework. Monte Carlo studies illustrate the deficiencies of 2SLS and the virtues of the rank-based estimator in terms of bias and efficiency. A replication of a study of the effect of economic shocks on democratic transitions demonstrates the practical implications of accounting for nonrandom measurement error and weak instruments.

Auf dem Hintergrund sinkender Stimmenanteile bei den beiden großen deutschen Volksparteien geht es in dem Beitrag um die Frage nach deren Zukunft. Zunächst wird eine Klärung der Begriffsgeschichte der Volkspartei versucht, um dann die These zu wagen, dass sich mit der Lösung der Konflikte auch die Wahlergebnisse der Parteien wieder verbessern werden. Zur Stützung dieser These wird anhand eines überblickartigen Vergleichs gezeigt, unter welchen Bedingungen kleinere Parteien in das Gefüge zweier großer Parteien eindringen und sich dort etablieren können. Anschließend wird gezeigt, dass diese Bedingungen momentan auch in Deutschland gelten, was insbesondere darauf zurück zu führen ist, dass die Volksparteien ihre Funktionen nicht mehr ausreichend wahrnehmen. Im weiteren Verlauf werden internationale und historische Vergleiche angeführt und deren Übertragbarkeit auf Deutschland diskutiert. In Anlehnung an die Systemtheorie Parsons' werden danach drei notwendige Funktionen für den Selbsterhalt der Parteien erörtert: Integration, Zielfindung und Adaption. Zusammenfassend wird betont, dass die Volksparteien ihre Probleme haben, weil sie keine Volksparteien mehr sind, sondern am Einzelnen und nicht am großen Ganzen orientierte Berufspolitikerparteien. (ICH)

AbstractThe ability to borrow is important for government survival. Governments routinely resort to policies that privilege their own debt on financial markets, exploiting their dual role as borrowers and regulators. We label such policies as borrowing privileges. These borrowing privileges nudge investors to hold the government's own debt. They share similarities with prudential regulation, but skew the market in favor of the government's debt; and they share similarities with financial repression, but are less severe and thus consistent with the growth of financial markets. Introducing the first systematic dataset documenting the use of such policies across countries and over time, we demonstrate that governments implement borrowing privileges when their interactions with the global economy heighten fiscal needs: when borrowing costs indicate tightened access to credit, when trade liberalization undercuts revenue, and where fixed exchange rates increase the value of fiscal space. Despite the mobility of financial assets and constraints from global markets, governments retain latitude in regulating domestic markets to their own fiscal benefit.

Political connections provide substantial benefits to firms. We emphasize the ownership of firms as an important channel through which political connections operate and identify a resulting link between political turnover and turnover in the ownership of firms: Political turnover prompts newly politically connected individuals to take, and newly disconnected individuals to cede, ownership of firms. This pattern should be more pronounced in countries with weaker property rights, among firms with publicly recorded owners, and among firms with more immobile assets. Moreover, firms that experience changes to ownership during periods of political turnover should have elevated political connections and therefore pay less taxes and earn higher profits. Analyses of the ownership structure of firms in 87 countries are consistent with the theory. Because politically connected owners allow firms to compensate for other vulnerabilities, the theory also explains mixed findings in prior work on the consequences of asset immobility.

AbstractHow do firms protect themselves against infringements of their property rights by their own government? The authors develop a theory based on international law and joint asset ownership with foreign firms. Investment agreements protect the assets of foreign firms but are not available to domestic firms. This segmentation of the property rights environment creates a rationale for international financial relationships between firms. By forming financial relationships with foreign firms, domestic firms gain indirect coverage from the property rights available to foreign firms under investment agreements. If a government is less likely to violate the property rights of covered foreign firms, it is also less likely to violate property rights for assets held jointly by domestic and foreign firms. This article presents systematic evidence from data on the activities of firms in countries that have investment agreements with the United States. International financial relationships between firms, through mergers and acquisitions as well as through bond and equity issues, are more common where property rights are weak. The theory suggests a political logic to the fragmentation of firm-ownership stakes across jurisdictions, offers an institutional explanation of international financial flows, and identifies new distributional consequences of international law.