Fabio Masini

Pigouvian versus Marshallian tax: market failure, public intervention and the problem of externalities

Abstract In The Economics of Welfare, Pigou develops the idea of what will be widely known as ‘Pigouvian tax’. Together with the concept of externality, they constituted two of the most important founding elements of modern welfare economics. Many have suggested that, on the way he treated externalities, Pigou might have drawn from his master, Alfred Marshall (see the proposal for a ‘fresh air rate’). The aim of this paper is to inquire into the features of the original proposals made both by Marshall and Pigou, underline the differences between the two and challenge the hypothesis of ‘continuity’.

A History of the Theories on Optimum Currency Areas

Abstract The historical reconstructions of the theories of Optimum Currency Areas (OCA) are usually biased by the underlying theoretical and policy orientation of their authors, they often provide a sort of internalist explanation of advancement in economic theory (assuming that economic theory evolves for internal reasons defined by theorists in the discipline) and sometimes neglect the influence of particular events and policy debates on the theoretical discussions. The impression is that some important links between facts, economic theorising and public policies are not yet clearly identified. The paper aims at investigating such relationships in a historical perspective, with a special reference to the evolving role of endogenous and exogenous criteria to the study of OCA.

Luigi Einaudi and the Making of the Neoliberal Project

The first 1947 meeting of the Mont Pelerin Society is considered the date of birth of neoliberalism. But the neoliberal thought after WWII is the result of fervent intellectual efforts in the previous decades. The paper aims at highlighting the role of Luigi Einaudi to the making of the neoliberal project, enquiring into the intellectual foundations of his thought on the institutions of international liberalism.

Trading-Off National and Supranational Collective Goods: The Birth and Death of Neoliberal Pluralism

Abstract The division of power among different layers of government and the designing of international institutions are crucial for the neoliberal project. Nevertheless, this can be approached in two very different ways. The first is to limit the power of national bodies to provide collective goods, the core of the welfare state, through supranational rules and agencies, oriented to provide only a market-preserving framework. The second is to assign powers to different layers of government following issues of efficacy and effectiveness of public intervention. The former is the approach to supranational federalism that proved successful in the last few decades. We explore its evolution and show that the neoliberal thought collective, in its origins, had a much more heterogeneous and pluralistic attitude toward the trade-off between national and supranational public goods.

Facts, Theories, and Policies in the History of Economics. An Introductory Note

Facts, theories, and policies can be considered as the vertices of a triangle. While many contributions explore along the edges of such triangle, between couples of poles, we claim that the history of economics thought is fundamentally interested in looking within the whole area of the triangle. The relationship among theories, public choices, and events is complex, often twodirectional, with some unforeseeable short circuits. In order to tackle such complexity, it is necessary to use an interpretative model that assumes a high degree of interdependence between such variables and focuses on the evolution of their mutual interactions over time. The paper aims to show that this is the approach that the works presented in this issue of the journal try to address and illustrates some of their key features, in particular country-specificity and ideological bias.

Alternative Routes to Monetary Integration in the British Economic and Political Debate (1989-91)

Nel 1989 il processo di integrazione europea subisce una rapida accelerazione. Il Consiglio Europeo approva Il Rapporto Delors che stabilisce una precisa strategia per il raggiungimento dell’Unione economica e monetaria. Il Governo Britannico cerca di ostacolare l’ipotesi di una moneta unica mettendo sul piatto delle negoziazioni e insinuando nel dibattito scientifico ipotesi alternative: prima a favore di un sistema di concorrenza monetaria e poi di una moneta parallela (l’hard-ecu). Scopo del lavoro e ricostruire il contesto teorico in cui quel dibattito ebbe luogo, sia a livello scientifico sia sulla scena politica

The Limits to Growth: Alfred Marshall and the British Economic Tradition

This unique and original work contends that, despite the differences between Marshallian and Schumpeterian thinking, they both present formidable challenges to a broad type of social science beyond economics, particularly under the influence of the German historical school. In a departure from the received view on the nature of the works of Marshall and Schumpeter, the contributors explore their themes in terms of an evolutionary vision and method of evolution; social science and evolution; conceptions of evolution; and evolution and capitalism.

Balance of Payment, Wage Indexation and Growth: the Role of CESPE in Italian Policy-Making in the 1970s

Italian policy-making changed dramatically during the Seventies. Exogenous events (like the end of the Bretton Woods system and the oil shocks) and endogenous transformations of the major economic (wage indexation, planning system, instrument of governmental intervention in industries, tax system, relationship between monetary authority and Treasury) and political institutions (workers statute, public health insurance, role of regions, school system) deeply changed the Italian society. Such changes were accompanied and often guided by experts, who exerted a major influence on policymaking. This influence mainly operated through some influential think tanks, which set the table for fundamental public policies. Among them, one of the most relevant was CESPE, the research centre of the Italian Communist Party, to which most leading Italian economists of the time gave their contribution, and that organized several workshops and published research and policy papers. The aim of the paper is to highlight the contribution CESPE gave to the transformation of Italian policy-making in the Seventies.

Monetary and Fiscal Arrangements for the Eurozone: Some Unconventional Proposals

Abstract Contributions in this special issue argue make a number of points with regard to the urgent need to change the economic governance of the Eurozone, pointing at some tools to increase its spending capacity. The process of potential fragmentation ignited by the recent vote on Brexit make such changes even more urgent, signalling the need to provide concrete responses to citizens, in order to show that the euro area, and the EU at large, are able to satisfy some of their crucial needs. The papers which make up this special issue were presented in Florence, at a meeting held in the framework of a Jean Monnet + Project called MoreEU. The first section deals with the reform of the budget; the second with a further use of quantitative easing and the role of the ECB.

Asian Monetary Integration in Recent Economic Debates

Recently, after the financial and currency crises that hit Asian economies at the end of last millennium and the foundation in Europe of the single currency, a renewed interest towards integration processes in Asia has grown (Whyplosz 2001). In the last four years a vivid scientific debate on such topic has taken place on the main international economic journals. Such debates are relevant to the theory of federalism for at least two reasons. First, in the theory and history of federalisation processes, monetary integration plays an important role as money is often considered a public good which has to be provided and safeguarded by a public institution representing a collective sovereignty and legitimated through democratic citizenship. Federalism is based on the struggle against the absoluteness and exclusiveness of national sovereignty and monetary integration provides an institutional economic tool to overcome exclusive national sovereignty and foster political integration. The second reason is that from a strategic point of view, active political federalism has always advocated the creation of continental groups of countries in order to better and more realistically struggle for greater democratic legitimacy in the world. Asian monetary integration may therefore represent a further step towards this scenario of a multi-polar geography of power worldwide. But the institutional approach, where the process is guided by political institutions to provide a collective public good is not the only approach to monetary integration. Integration has been (Vaubel 1984a; b) - and still is (Buchanan 2004) - considered also as a (more or less) spontaneous process whereby markets attempt to gain greater efficiency, through the decrease of transaction costs and policy costs associated with different currencies. In this case the institutional content of the integration process can be minimized (in some cases to zero, in others to a very broad constitutional arrangement). Three main questions have historically emerged in this field and are dealt in this work: a) how to cut the world in order to create optimum currency areas and, in the specific case we are examining, which countries to “invite” into a monetary integration process in Asia; b) what model of integration is most suitable for the selected countries and what institutions are required; c) how to manage the transition towards the target.