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The purpose of this paper is to examine how policy instability is priced in interest rates. Policy instability refers to the likelihood that the current policy will be changed in the future in the absence of political power shifts.

Chinese government’s experimental policy-making approach provides an ideal set of frequent policy flip-flops which allows us to identify the effect of policy changes.

Conditional on the bureaucratic quality of policymaking, a good-quality policy reversal is related to reductions in interest rate term spread and volatility; a bad-quality policy reversal is related to increases in the spread and volatility. The bureaucratic quality is multi-dimensional and the moderating effect is stronger on interest rates when it is measured more precisely.

First, we can use the interest rate dynamics to infer the policy risk premium, which is a more objective market indicator of the bureaucratic quality of the policy change. Second, the study is among the first that documents the pricing of policy instability can be moderated by the bureaucratic quality. The results indicate that it is important for a government to be responsive and consistent in liberalizing the financial market. It will lead to reduced cost of capital and volatility for investors and firms in the economy. Third, given that the bureaucratic quality is multi-dimensional and produces stronger impact jointly, a country shall continue to improve on different aspects of the bureaucratic quality. Although the study is based on the empirical evidence from Chinese policy environment, the results can be broadly applied to any developing economies that intend to liberalize the market to spur economic growth.

The purpose of this paper is to reveal the economic impact of policy reversals related to market liberalization reforms in China.

To perform the analysis, the authors hand-collect 59 financial market liberalization policy reversals from 1999 to 2017. These reversals are related to the liberalization of the stock market, bond market, derivatives market, forex market, lending market, and real estate market etc. The authors employ a stylized equilibrium interest rate model from Li et al. (2013) to deduce the impact of policy reversals on economic growth and the associated volatility after the announcement of each policy reversal.

First, the authors discover that about half of reversals are related to some tradeoff between the economic growth and the volatility associated with growth. Second, the authors also find that about a quarter of the reversals are detrimental to both the growth and the stability. These reversals, if known to policymakers, should be entirely avoided or corrected. Third, using a simple diagnostic test, the authors can identify detrimental reversals at the intra-day frequency by computing the change of the term spread and the volatility before and after the reversals.

The findings are useful for identifying effective policymaking in developing countries where mature democratic and rigorous policymaking processes are often lacking and formulating economic policies is challenging. The findings suggest that policy reversals serve China well by improving the quality of the policy made without posing destructive consequences to the existing economic infrastructure. This empirical evidence is important for a better understanding of the benefits of policy reversals on economic growth.

The empirical procedure provides a timely and objective evaluation of policy shifts, allowing for the general public to discern the rationale behind the policy decisions. Consequently, stakeholders’ trust and confidence in policymakers is enhanced so that the probability of the successful implementation of structural reforms may increase in these developing countries.

First, the results reveal some successful examples of Chinese policymaking in the path of liberalizing financial market. The authors find that the Chinese liberalization policy flip-flops have resulted in a more balanced growth on some occasions with reduced growth rate and volatility. Second, the proposed methodology provides an objective evaluation of policy shifts, allowing for the public to infer the general direction of the impact generated by policy shifts. Subsequently, stakeholders’ trust and confidence in policymakers can be enhanced and/or restored if the process of finding a successful path of structural reforms is unambiguous. Finally, the interest rate model also provides a timely method to evaluate the impact of policy shifts at an intra-day frequency, whereas most macroeconomic indicators are available at longer frequencies such as monthly or quarterly. The timeliness in understanding the economic consequences of policy reversals can be critical to prevent the destructive consequences of bad ones.

This paper aims to examine why a legislature would repeal an interest group deal. Design/methodology/approach–This paper provides a case study of the House of Representatives’ roll call reversal on the Brady Bill. The House voted against the Brady Bill in 1988 giving a victory to pro‐gun interest groups. It then reversed itself and voted for the Brady Bill in 1993.

This paper finds that changes in the democratic party leadership may be responsible for the House's policy reversal on gun control.

These findings suggest that in a principal–agent relationship, the agent has some discretion. In this case, the principal (elected members of a party in the US House) hires an agent (its leadership) to organize their teamwork to produce legislative output. The leadership has some discretion in making interest group deals.

The paper shows how changes in leadership reduce the durability of interest group deals.

This chapter investigates the predictability of the European monetary policy through the eyes of the professional forecasters from a large investment bank. The analysis is based on forward-looking Actual and Perceived Taylor Rules for the European Central Bank which are estimated in real-time using a newly constructed database for the period April 2000–November 2009. The former policy rule is based on the actual refi rate set by the Governing Council, while the latter is estimated for the bank’s economists using their main point forecast for the upcoming refi rate decision as a dependent variable. The empirical evidence shows that the pattern of the refi rate is broadly well predicted by the professional forecasters even though the latter have foreseen more accurately the increases rather than the policy rate cuts. Second, the results point to an increasing responsiveness of the ECB to macroeconomic fundamentals along the forecast horizon. Third, the rolling window regressions suggest that the estimated coefficients have changed after the bankruptcy of Lehman Brothers in October 2008; the ECB has responded less strongly to macroeconomic fundamentals and the degree of policy inertia has decreased. A sensitivity analysis shows that the baseline results are robust to applying a recursive window methodology and some of the findings are qualitatively unaltered from using Consensus Economics forecasts in the regressions.

There is a large body of literature on the link between trade liberalisation, growth and poverty. However, less attention has been paid to the relationship between trade and regional disparities. The purpose of this paper is to identify and quantify the regional impacts of trade liberalisation, particularly in the war-affected regions and to understand to what extent trade reforms can contribute to the post-war recovery process and long-term economic and political stability in Sri Lanka.

The authors developed a single country multi-regional computable general equilibrium (CGE) model for the Sri Lankan economy to meet the need for a detailed country study as emphasised in the recent literature.

Both short-run and long-run results suggest that all regions including war-affected regions in the country gain from trade liberalisation, although gains are uneven across regions. Furthermore, the results suggest that war-affected regions gain more relative to some other regions in the long run.

According to the best of the authors’ knowledge within country regional impact of trade liberalisation using a multi-regional CGE model has never been attempted for Sri Lanka. The results of this study, even though based on Sri Lankan data, will be relevant to other developing countries engulfed in internal conflicts with regional economic disparities.

Despite the rhetoric of new public sector management, criminal justice agencies in England and Wales are still driven by a political agenda. Initiatives, such as the setting of targets and increased efficiency objectives, can be over‐ridden not only by reversals of government policy but by clashing agency policies. The absence of a clear management strategy for all criminal justice agencies renders them liable to sudden change in a sensitive political climate. Analyses case examples discussing cautioning of offenders and the granting of bail to demonstrate the “knock‐on” effects of policy change in one area for a whole series of agencies further along the line. Concludes that moral panics and political pressure are greater predictors of managerial change than sound business sense.

This work was originally commissioned during 1982, the year that was designated Information Technology Year; the year that the personal computer replaced the space invader machine as a focus for teenage obsession; the year of the library symbol, the Hunt Report on cable TV; the year the US Post Office issued two stamps celebrating American libraries, and the British Post Office issued a stamp for IT year suggesting that libraries were a thing of the past. The work was intended to look at “the background to the IT revolution, the benefits of applying technology to library services and the reasons for its relatively slow progress”. It was envisaged at the time that what would have been effectively a state‐of‐the‐art report on the technology available to libraries, and who was doing what with it, would be a useful tool for library managers introducing or extending library technical services. It might usefully have complemented the LA publication, The impact of new technology on libraries and information centres (LA, 1982). However, for a variety of reasons it was not possible to produce the publication in 1983 as intended; the person commissioned to write it was unable to do so; and eventually, in 1984, it was realised that the speed of development and availability of technology was such that any such work would be useless as a practical guide within months of publication. The growth, during the period, of journals on the subject of library applications of IT of all kinds; the appearance of regular updates in the generalist professional press; the formation of, for example, the Library Association IT Group: all these developments clearly offered better opportunities of current awareness to the library manager than could be achieved by a single monograph.