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Structural models' inflation forecasts are often inferior to those of naïve devices. This chapter theoretically and empirically assesses this for UK annual and quarterly inflation, using the theoretical framework in Clements and Hendry (1998, 1999). Forecasts from equilibrium-correction mechanisms, built by automatic model selection, are compared to various robust devices. Forecast-error taxonomies for aggregated and time-disaggregated information reveal that the impacts of structural breaks are identical between these, helping to interpret the empirical findings. Forecast failures in structural models are driven by their deterministic terms, confirming location shifts as a pernicious cause thereof, and explaining the success of robust devices.

This paper explores the interface between institutional theory and Austrian theory. We examine mainstream institutionalism as exemplified by D. C. North in his work with Wallis and Weingast on the elite compact theory of social order and of transitions to impersonal rights, and propose instead an Austrian process-oriented perspective. We argue that mainstream institutionalism does not fully account for the efficiency of impersonal rules. Their efficiency can be better explained by a market for rules, which in turn requires a stable plurality of governance providers. Since an equilibrium of plural providers requires stable power polycentricity, the implication goes against consolidating organized means for violence as a doorstep condition to successful transitions. The paper demonstrates how to employ Ostroms’ Bloomington School Institutionalism to shift, convert, and recalibrate mainstream institutionalism's themes into an Austrian process-oriented theory.

This chapter argues that in countries with well-functioning democracies most individuals should be “content” with the underlying income distribution. The authors derive this result from James Buchanan’s notion of a “fiscal constitution.” The authors test this hypothesis using data from the World Values Survey where respondents are asked whether “incomes should be more equal …, or do we need larger differences in income as incentives?” The authors’ empirical results indicate that the concentration of re-distributional preferences around the median response is positively related to the presence of a democratic voice.

Recent academic studies, as well as media reporting, have devoted substantial attention to the ongoing “crisis of democracy.” Democratic “backsliding” of Central and Eastern Europe – sometimes referred to as an effort to establish a new system of “illiberal democracy” – is one of the most visible symptoms of this crisis. This narrative is supported by the quantitative metrics of democratic quality, reflecting professional community views on the appropriate criteria to define and assess democracy. However, once general public views expressed in the survey item of “satisfaction with democracy” are taken into account, the picture changes markedly. This chapter analyzes quantitative metrics reflecting expert community consensus and the general public assessment of the quality of democracy in the 27 EU members over the period 2010–2019. It documents substantial divergence between the perspectives of the experts and the general public – while expert-based indexes portray Central and Eastern European backsliding as the most significant trend in the EU democratic landscape, public opinion identifies a very different set of democracy's successes and failures. As experts and the general public fail to arrive at mutually accepted criteria of democratic performance evaluation, public debate has become futile. Meaningful discussion and systemic corrections have become unlikely, creating conditions easily exploitable by the populists, eager to frame it as an example of “elite” detachment from the “ordinary people”.

This paper examines the political budget cycles in emerging and developing countries using a sample of 91 countries from 1992 to 2019.

This paper employs a pooled ordinary least squares (OLS) model with clustered standard errors at the country level. To address endogeneity issues, the authors also employ a two-step system generalized methods of moments model.

The authors find clear evidence of political budget cycles in emerging and developing countries. The authors consistently find that incumbents increase total government spending, particularly in economic affairs, public services and social welfare, in the year before an election and the election year. In contrast, they contract spending in the year after an election.

Policymakers should be aware of the political budget cycles during election years. Promoting control of corruption and democracy helps to alleviate the effects of the political budget cycles in emerging and developing countries.

The authors are among the first to explore the political budget cycles in emerging and developing countries by focusing on the total government spending and its main compositions, including expenditures on economic affairs, public services and social welfare. Besides, the authors also explore the conditioning effects of control of corruption, political ideology and democracy.

Faced with contradictory outcomes in empirical studies on the relation between democracy and income inequality, this paper attempts to provide empirical relations between democracy and income inequality. In particular, the authors seek to find if any curvilinear relation exists as in the Kuznets hypothesis.

Given elusiveness in empirical relations, the authors will consider several specifications using different estimation methods such as ordinary least squares (OLS), panel data estimation and performing statistical tests to determine the best specification for the relation between income inequality and democracy. Once the authors choose the specification, then the authors will apply this specification to the different groups of data to find any meaningful implications.

Using the unbalanced panel of 136 countries spanning from 1980 to 2018, the authors found an inverse U-shaped relation, called a political Kuznets curve – income inequality increases first and then decreases later as more democracy is achieved. By quantifying the curve, the authors find that the direct impact of democracy on income inequality is small and that the incremental impact of democracy on income inequality is smaller in a semi-democracy while relatively larger in a full democracy and autocracy.

From the study’s findings, the following policy implications can be considered. First, any change in income inequality caused by democratization should not be concerning as the impact of democracy on income inequality is measured to be very small. Second, the largest factor reducing income inequality is real GDP per capita. Third, the authors find that an impact of government expenditure on income inequality is also inversely U-shaped.

The purpose of this paper is to assess whether a difference or mismatch between individual political ideology and predominant political views in society is a significant determinant of the intention to migrate in Latin American countries.

The authors use data from the 2018 Latinobarómetro Survey and conduct logit regressions using intention to migrate as the dependent variable and political ideology mismatch as the independent variable. The authors control for a large set of demographic, economic, and social variables. The authors also conduct Propensity Score Matching to control for potential endogenous effects produced by observable characteristics as well as a commonly used sensitivity analysis known as Rosenbaum's bounding approach.

The authors find that political ideology mismatch is a significant determinant of the intention to migrate in Latin American countries but not symmetrically. The authors find that positioning to the right of predominant views in society is associated with voicing an intention to migrate, but positioning to the left of those views is not.

Not much has been said about the role of individual political ideology as a push migrating factor. The paper contributes to fill that gap. The paper also contributes to the discussion about the political ideology of Latin American immigrants and how that ideology may have an effect on internal politics in the host countries.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-01-2022-0028.

This research note compares voter opinions regarding small business entrepreneurial activity to opinions of small business owners and links any divergence in perceptions to realized suboptimal entrepreneurial growth policy.

Primary data collection via best–worst scaling and estimation of linear regression models.

Results suggest that small business owners are less concerned about issues such as foreign competition, estate/death taxes, oil prices and labor union demands but are more concerned with domestic competition, income taxes, regulatory burdens and availability of credit from lenders.

The authors find major discrepancies in opinions about trade policy and business financing, which may lead to policy design that hinders entrepreneurship given evidence that politicians do respond to voters' opinions (Autor et al., 2016).

It represents the first empirical assessment of differences between voter and small business owner perspectives on entrepreneurial policy. An immediate policy implication includes the need to provide additional avenues of communication of entrepreneurs' concerns.

The purpose of this paper is to investigate how different types of social capital contribute to the satisfaction with democracy (SWD) in Greece. Understanding the relationship between different variants of social capital and SWD allows one to situate the Greek democracy in the continuum of democracy types, from primary to modern.

The study uses microdata extracted from the European Values Surveys of 2002-2010 and multivariate regression analysis.

The results are compatible with a conception of the Greek political organization as a civil virtue democracy. A change in the nature of the relationship is observed after the recent economic crisis in the country.

The study contributes to the empirical knowledge regarding the relationship between different variants of social capital and SWD.

Using a typology approach, the micro-relationship between democracy and social capital is analyzed as embedded in a continuum of different democracy types. In addition, this is the first study that uses microdata to analyze the effect of social capital upon SWD in Greece. The results of the study provide valuable understanding of the social and institutional arrangements that might sustain Greece’s efforts to meet its overall developmental challenges.

The purpose of this paper is to use a unique, hand-collected data set of Food and Drug Administration (FDA)-approved products to understand the effect of lobbying on the product market. The authors gather total 86,462 FDA labels including drug patents, drugs, pre-market approvals and medical devices and test the relationship between lobbying and future firms’ product submissions.

Using a sample of 86,462 FDA labels including drug patents, drugs, pre-market approvals and medical devices, the authors test the effect of lobbying on a firm’s future product submissions using survival analysis, logit, difference-in-differences and propensity score matching techniques.

The authors find lobbying firms experience an increase in the number of medical products approved. However, increased number of FDA labeling comes at the cost of product failure. The authors document that lobbying increases product recalls when responsible firms are associated with higher market withdrawals.

This study contributes to both the management literature on corporate lobbying and product recalls. Additionally, the study reveals the connection between pharmaceutical lobbying and firm value.