Gérard Roland

The Breakup of Nations: A Political Economy Analysis

A container-conveying arrangement is disclosed, having an endless guided conveyor chain with replaceable chain-guiding and container-engageable conveying caps or pads forming an articulated shingled or saw-toothed conveying surface. The basic conveyor chain and cap assembly is disclosed in several container-conveying embodiments, namely a container elevator, a container lowerator or lowering conveyor, and a horizontal container conveyor, the elevator and lowerator each having two opposed parallel conveyor chains with interfacing shingled conveying caps forming opposed articulated saw-toothed conveying surfaces, and the horizontal conveyor having a single length of endless chain with shingled caps forming an articulated saw-toothed generally horizontal conveying surface.

Comparative Politics and Public Finance

This paper presents a model of electoral accountability to compare the public finance outcomes under a presidential-congressional and a parliamentary system. In a presidential-congressional system, contrary to a parliamentary system, there are no endogenous incentives for legislative cohesion, but this allows for a clearer separation of powers. These features lead to clear differences in the public finance performance of the two systems. A parliamentary system has redistribution towards a majority, less underprovision of public goods, more waste and a higher burden of taxation, whereas a presidential-congressional system has redistribution towards a minority, more underprovision of public goods, but less waste and a smaller size of government.

Reform Without Losers: An Interpretation of China's Dual-Track Approach to Transition

This paper develops a simple model to analyze the dual‐track approach to market liberalization as a mechanism for implementing efficient Pareto‐improving economic reform, that is, reform achieving efficiency without creating losers. The approach, based on the continued enforcement of the existing plan while simultaneously liberalizing the market, can be understood as a method for making implicit lump‐sum transfers to compensate potential losers of the reform. The model highlights the critical roles of enforcement of the plan for achieving Pareto improvement and full liberalization of the market track for achieving efficiency. We examine how the dual‐track approach has worked in product and labor market liberalization in China.

Understanding institutional change: Fast-moving and slow-moving institutions

This article proposes a classification of ‘slow-moving” and “fast-moving” institutions, and discusses the potential results of their interaction. A prime example of a slow-moving institution is culture, including values, beliefs, and social norms, which tend to change gradually. Political institutions are typically fast-moving institutions; exemplifying the nature of this category, political institutions do not necessarily change often but can change very quickly—sometimes nearly overnight. The interaction between slow-moving and fast-moving institutions can shed light on institutional change (why, how, and when it occurs), and evinces both the difficulty of transplanting institutions into different cultural contexts and the advantages of diverse institutional “blueprints” for efficient growth and development.

The Political Economy of Transition

The overriding importance of political constraints in the transition process has led to developments of the theory of the political economy of reform. What are the main insights from that theory? How does it reflect the transition reality? What have we learned, and what do we still need to learn? The present article will attempt to answer those questions.

Power to the Parties: Cohesion and Competition in the European Parliament, 1979 2001

How cohesive are political parties in the European Parliament? What coalitions form and why? The answers to these questions are central for understanding the impact of the European Parliament on European Union policies. These questions are also central in the study of legislative behaviour in general. We collected the total population of roll-call votes in the European Parliament, from the first elections in 1979 to the end of 2001 (over 11,500 votes). The data show growing party cohesion despite growing internal national and ideological diversity within the European party groups. We also find that the distance between parties on the left-right dimension is the strongest predictor of coalition patterns. We conclude that increased power of the European Parliament has meant increased power for the transnational parties, via increased internal party cohesion and inter-party competition.

Electoral rules and government spending in parliamentary democracies

We present a theoretical model of a parliamentary democracy where electoral competition inside coalition governments induces higher spending than under single party governments. Policy preferences of parties are endogenous and derived from opportunistic reelection motives. The electoral rule affects government spending, but only indirectly: proportional elections induce a more fragmented party system and a larger incidence of coalition governments than do majoritarian elections. Empirical evidence from post-war parliamentary democracies strongly supports these predictions.

Economic Reform and Dynamic Political Constraints

In this paper, we examine the impact of political constraints on economic reform plans, with special reference to the transition from centrally planned to market economies. We analyse the problem of an agenda-setting reform-minded Government facing a bureaucracy or industrial sector for which allocative efficiency requires redundancies and an increase in work intensity. The Government also tries to minimize the rents conceded to its heterogeneous workforce. We examine two types of political constraints: unanimity rule and majority rule, both in a one-period and a two-period horizon. The main results are the following. First of all, we show how adverse selection and time-consistency may generate the widely-observed feature of gradualism as an ingredient of an optimal reform. Second, under a majority rule, it is shown to be possible for the Government to obtain a majority vote for a reform scheme that intertemporally hurts majority interests. Indeed, the Government can improve rent extraction through the strategic use of the threat of future proposals: the group which expects to be in the minority tomorrow may accept concessions, while its votes can be used to extract rents from another group. These results suggest that, in a dynamic context, democratic constraints should not be overestimated as an obstacle against efficiency-enhancing economic reforms. The results of this paper may throw some light on the political economy of current reforms in Eastern Europe.

Understanding the Soft Budget Constraint

We propose a clarification of the notion of a soft budget constraint, a concept widely used in the analysis of socialist, transitional, and market economies. Our interpretation is broad enough to embrace most existing approaches to soft budget constraint phenomena and provides a classification of their causes and consequences. In light of this interpretation, we then review the theoretical literature on the subject and compare it with those on other dynamic commitment problems in economics.

Transition and the Output Fall

This paper presents a model that explains why in the transition economies of Central and Eastern Europe an important output fall has been associated with price liberalization. Its key ingredients are search frictions and Williamsonian relation-specific investment implying that new investments are made only after a new long-term partner has been found. When all firms search for new partners, output may fall because of three effects: a) disruption of previous production links; b) a fall in investment; and c) capital depreciation due to the absence of replacement investment. We show that forms of gradual liberalization like the Chinese ‘dual-track’ price liberalization may avoid or reduce the transitory output fall.