Dennis P. Quinn

The Correlates of Change in International Financial Regulation

With which political and economic variables is change in international financial regulation robustly associated? I undertook multivariate regression analysis of this question using a quantitative measure of the regulation of international financial transactions. The measure was created by coding the laws of 64 nations. The associations between change in international financial regulation and measures of long-run economic growth, corporate taxation, government expenditures, and income inequality are estimated, using the models, methods, and data of Batro (1991), Deininger and Squire (1996a), Leamer (1983, 1985), and Levine and Renelt (1992). The findings point to a new agenda for research on international financial regulation.

The Origins of Financial Openness: A Study of Current and Capital Account Liberalization

Theory: We assess the determinants of the national regulation of international finance, or the comparative degree of national financial openness or closure. Hypotheses: Partisanship interacts with a nations factor endowments to account in part for different international financial policies by governments of the same partisan hue. Methods: We offer a quantitative measure of international financial openness, or current and capital account regulation, for 21 member countries of the Organization for Economic Cooperation and Development for 1950-88. We use regression analysis employing Panel Corrected Standard Errors to discover the determinants of financial openness. Results: Our main finding is that political partisanship substantially explains openness, but does so in complex ways. Differences in both political institutional arrangements and types of political economy also account for part of the differences in international financial regulation.

Democracy and National Economic Performance: The Preference for Stability

appear to arise because democracies ameliorate the effects of social cleavages, another mechanism that might explain democratic stability. When growth and volatility are jointly examined, democracies reveal highly favorable economic results. oes democracy affect national economic performance and, if so, how? No question is more central to the study of political economics. Almost all previous work on democracy and economic performance has focused exclusively on growth rates, with contradictory and confusing results. In this article, we argue that, to reveal the impact of democratic institutions on economic performance, scholars must consider two dimensions of economic performance-growth rate and volatility. We begin with a novel hypothesis: economic policy in democracy is risk avoiding relative to policy in nondemocracies. 1 Because voters are riskaverse, they penalize incumbent governments for economic volatility, and democratic governments respond accordingly. In nondemocracies, we posit that elites are more likely to seek risk that voters would reject. Consequently, autocracies produce systematically more economic volatility than

Business Political Power: The Case of Taxation

We examine contending views about the forms and mechanisms of business power in U.S. politics by estimating time series models explaining taxation and redistribution. Taxation and redistribution constitute strong cases for theories about business and class power, since all firms have an interest in reducing taxation. We find that changes in corporate taxation and in redistribution between capital gains income and earned income and between corporate taxation and individual taxation are strongly influenced by political partisanship, with Democratic administrations increasing the tax burden on firms and their owners. How far corporations engage in electoral financing - measured through the establishment of corporate political action committees - is also influential. The models show some evidence consistent with the understanding of class power conceptualized by Bowles, Gordon, and Weisskopf and the presence of election cycle effects but inconsistent with implications arising from the structural dependence of the state on capital and asset concentration in the largest corporations as a mechanism of class power

The Economic Origins of Democracy Reconsidered

The effects of inequality and financial globalization on democratization are central issues in political science. The relationships among economic inequality, capital mobility, and democracy differ in the late twentieth century for financially integrated autocracies vs. closed autocracies. Financial integration enables native elites to create diversified international asset portfolios. Asset diversification decreases both elite stakes in and collective action capacity for opposing democracy. Financial integration also changes the character of capital assets—including land—by altering the uses of capital assets and the nationality of owners. It follows that financially integrated autocracies, especially those with high levels of inequality, are more likely to democratize than unequal financially closed autocracies. We test our argument for a panel of countries in the post–World War II period. We find a quadratic hump relationship between inequality and democracy for financially closed autocracies, but an upward sloping relationship between inequality and democratization for financially integrated autocracies.

Falls from Grace and the Hazards of High Status The 2009 British MP Expense Scandal and Its Impact on Parliamentary Elites

Although the benefits of high status are well documented, in this research we explore the potential hazards associated with high status that have increasingly been implicated in recent studies. Organizational research suggests two such hazards: (1) opportunistic behaviors by elites that eventually lead to sanctions and (2) the targeting of elites by various audiences such that they are held more accountable than their lower-status counterparts for similar offenses. Our objective was to disentangle these two explanations in the context of an organizational scandal involving the Members of the British Parliament (MPs) whose annual expense claims were unexpectedly exposed in a well-known 2009 scandal. We find that high-status MPs were not more likely to abuse the expense system than were lower-status MPs, but they were more likely to be targeted by the press and voters for their inappropriate expense claims. As a consequence, high-status MPs were significantly more likely than non-elite MPs to exit Parliament when they had high levels of inappropriate expense claims. Elite MPs who were not implicated in the scandal, however, were far more likely to remain in Parliament than their lower-status counterparts. Our results also suggest that media coverage of the expense incident by British newspapers played a significant role in shaping social reactions to the scandal.

Free trade, fair trade, strategic trade, and protectionism in the U.S. Congress, 1987–88

What conditions led the One Hundredth Congress of the United States to enact fair trade and strategic trade policies into law during 1987-88? Political partisanship is an important force, with Democrats supporting and Republicans opposing all types of trade intervention. Otherwise, the coalitions of support for and opposition to the various trade policies differ, particularly in the Senate. In that body, international business is associated with support for fair trade policies and with opposition to classical protectionism, while domestic U.S. business is associated with support for classical protectionism. Liberalism is strongly associated with support for fair and strategic trade policies but is not associated with classical protectionism. In the House of Representatives, the long-standing protectionist coalition remains an influence. Few forces in support of free trade remain in U.S. politics. Changing international market conditions rapidly affect the making of U.S. trade policy.

Economic Growth Strategies: The Effects of Ideological Partisanship on Interest Rates and Business Taxation in the United States

We reformulate the partisanship thesis in light of four claims leveled against it. The reformulated version, ideological partisanship, is based upon the theory that similar rates of economic growth may follow from the different use of policy instruments. Owing to their role as determinants of investment and growth, interest rates, business taxation rates, and the redistribution of the tax burden between capital gains and earned income are examined. We advance models that take into account other views of politics beside the partisan one, and test for political influences. The United States is characterized by very pronounced partisan differences in national economic policy with Democratic administrations seeking to promote growth through a consumption driven, while Republican administrations promote an investment-driven strategy. Democratic administrations also seek to shift the tax burden toward corporations and owners of capital. These findings are examined in light of the comparative political economy literature. We conclude that the forms and institutional foundations of left partisan policies differ among democratic capitalist countries.

The Influence of Firm Global Supply Chains and Foreign Currency Undervaluations on US Trade Disputes

We apply insights from “new, new†trade theory to explain a puzzling decline in US firm antidumping (AD) filings in an era of persistent foreign currency undervaluations and increasing import competition. Firms exhibit heterogeneity both within and across industries regarding foreign direct investment (FDI). We propose that firms making vertical or resource-seeking investments abroad will be less likely to file AD petitions, and firms are likely to undertake vertical FDI in the context of currency undervaluation. Hence, we argue, the increasing vertical FDI of US firms makes trade disputes far less likely. We use firm-level data to examine the universe of US manufacturing firms and find that AD filers generally conduct no intrafirm trade with filed-against countries. We also find that persistent currency undervaluation is associated over time with increased vertical FDI and intrafirm trade by US multinational corporations (MNCs) in the undervaluing country. Among larger US MNCs, the likelihood of an AD filing is negatively associated with increases in intrafirm trade. In the context of currency undervaluation, we confirm the existing finding that undervaluation is associated with more AD filings. We also find, however, that high levels of intrafirm imports from countries with undervalued currencies significantly decrease the likelihood of AD filings. Our study highlights the centrality of firm heterogeneity in international trade and investment in understanding political mobilization over international economic policy.

Does Economic Globalization Influence the US Policy Mood?: A Study of US Public Sentiment, 1956–2011

Does increasing economic globalization influence aggregate policy mood toward the role and size of government in the United States? Drawing on insights from international political economy scholarship, this article suggests that the impact of trade on aggregate preferences will depend on citizens’ exposure to trade. It hypothesizes that employees of import-competing, export-oriented and multinational firms will adopt a ‘compensatory’ model in which higher levels of imports (exports) lead to a liberal (conservative) shift in policy preferences for more (less) government. It distinguishes between intrafirm and non-intrafirm trade flows. It measures policy mood using Stimsons ‘Mood’, and estimates Error Correction and Instrumental Variable models. Trade flows strongly influence Mood in a manner consistent with hypotheses drawn from international political economy and heterogeneous firms (or ‘new new’) trade theory.