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Political economy in Western democracies
JOURNAL OF COMPARATIVE
ECONOMICS 11, 157- 159 ( 1987)
NORMAN J. VIG AND STEVENE. SCHIER,eds., Political Economy in Western Democracies. New York: Holmes & Meier, 1985. xii + 329 pp., no index, $37.50. The reader edited by Norman Vig and Steven Schier, Political Economy in Western Democracies, is basically designedas a text for an undergraduate course exploring the relationship between politics and economics. Unlike comparable volumes devoted to examining politicoeconomic linkages of specific policies (e.g., social welfare expenditures, labor market regulation) or problems (e.g.,inflation, international debt), the theme of the Vig and Schier’s volume is so broad and diffuse that one really needs to know the design of the course meant to accompany it to figure out exactly why this particular collection of essayswas selectedto constitute a book. The book is divided into four sections: “Theories of State and Economy”, “the Crisis of the Welfare State”, “Comparative Macroeconomic Policies,” and “Economic Conditions and Political Behavior.” Although individual essaysvary in quality, eachis reasonablyinteresting in its own right. Nevertheless, one is hard pressedto understand the relationship of each essayto the others or to understand why the editors felt that these works, as opposed to others, were particularly representativeor especially outstanding samplesof the areas under consideration. For example, although one would expect neo-Marxist work to figure prominently in a section entitled “Theories of State and Economy,” nothing of this genre is included. Nor is a selection from the public choice literature, despite the fact that the approach has had a major and pervasive influence on work in the political economy field. As for the essaysincluded in the section, they tend to stand independently of each other rather than speak to a common problem or join each other in debate. Thus, Catherine Zuckert’s “On the Theory of Political Economy: Is Liberalism Really Dead?’discusses whether or not the liberal welfare state is morally justifiable on democratic grounds; Gary Marx’s “State-Economy Linkages in Advanced Industrial Societies” presentsus with a typology of interest group-government interaction; and the very fine piece by Adam Przeworski and Michael Wallerstein cogently analyzesthe problem of savings in contemporary capitalist systems and elegantly arguesfor combining high taxes on profits with equally strong incentives for reinvestingprofits as a way of restoring economic growth. Yet what Zuckert, Marx, and Przeworski-Wallerstein have to say to each other remains unclear. 157
0147-5967187 $3.00 Copyright 0 1987 by Academic Press,Inc. All rights of reproduction in any form reserved.
158
BOOK REVIEWS
To the degreea common problematique characterizesthe rest of the volume, it is basically that of the relationship between electoral fortunes and economic policy. On the one hand, the essaysdealing with the welfare state and macroeconomic policy attempt in various ways to gauge the degree to which policy choices are related to the programmatic and electoral commitments of the party or coalition in power as opposed to institutional factors (e.g., the degree of centralization of government), the organization of interests, exogenous economic events, and other variables. For example, the analysis by Donald Swank and Alexander Hicks attempts to show that although the electoral and ideological goals of policymakers had a major impact on the scope and direction of welfare policy between 1960 and 1973, declining resource pools, fears of inflation, and elite and mass resistance to tax increasesplayed a much more important role in determining social welfare expenses after 1973. The problem with posing the question in this way is that there is little reason to believe that partisan politics, state structures, class alliances, or the size of the “resource pool” itself operatesindependently enough of one another to enable one to conclude that a given policy decision is “more” influenced by one factor than another or that one can simply add up a long list of variables to arrive at a policy outcome. For example, the fact that the growth of income transfers after 1973 in Western economies may be due to the role of “automatic” stabilizers in a recessionary period is hardly evidence that increased transfer payments were not consistent with the electoral and ideological goals of ruling parties as well. Moreover, in the third section, the largely descriptive accounts of macroeconomic policymaking in the United States, Britain, France, and Germany suggestthat partisanship, interacting with other variables,continued to play an important role in the way statesmanagedausterity and international recession as well. On the other hand, the essaysdealingwith economic conditions and political behavior attempt to analyze the impact economic performance has on voting behavior. Here, all of the studies come to the not very surprising conclusion that the perceived state of the economy is a powerful influence on voting behavior. Nevertheless, noneconomic factors-from party loyalty to foreign policy events-can override economic performance as a determinant of voting, as Schier and Vig’s analysis of Margaret Thatcher’s 1983 electoral victory indicates. Again, this is hardly a startling finding. The problem, as Rod Kiewit points out in his article, is ascertaining exactly how economic issuesinfluence voters’decisions.But here, even Kiewit’s own study is ultimately disappointing, at least to those of us who like synthetic theories. Kiewit reviews and tests the four main hypotheses relating economic issues to voting behavior, and finds evidence to support all of them: voters respond to adversity by punishing incumbents and to economic improvement by rewarding them; voters concerned with unemployment tend to support Democrats and those worried about inflation look to Republicans; individual judgments as to the state of
BOOK REVIEWS
159
the economy are basedboth on voters’personal experiences(the “pocketbook” theory) and their general evaluations of the economy as a whole. On the whole, individual selections from Political Economy in Western Democraciesmay well be useful for assignment in undergraduate courses, although one must add that for each topic covered, work of higher quality is often available. Ironically, the less theoretical and more descriptive pieces may well prove to be the most widely read, at least by political scientists. Schier and Vig’s comparisons of the United States under Reagan and Britain under Thatcher are particularly good in this respect. Meanwhile, one suspects that the only essay that discusses the political factors at work in economic policymaking in a way that economists would find interesting and provocative is the Przeworski-Wallerstein piece. In short, while individual articles in the reader are useful, as a coherent volume, Political Economy in WesternDemocraciesleavessomething to be desired,especiallyin view of the large number of very excellent readers available that focus on particular issues,approaches, and policies. ELLENCOMISSO University of California, San Diego San Diego, California 92103
ECONOMICS 11, 157- 159 ( 1987)
NORMAN J. VIG AND STEVENE. SCHIER,eds., Political Economy in Western Democracies. New York: Holmes & Meier, 1985. xii + 329 pp., no index, $37.50. The reader edited by Norman Vig and Steven Schier, Political Economy in Western Democracies, is basically designedas a text for an undergraduate course exploring the relationship between politics and economics. Unlike comparable volumes devoted to examining politicoeconomic linkages of specific policies (e.g., social welfare expenditures, labor market regulation) or problems (e.g.,inflation, international debt), the theme of the Vig and Schier’s volume is so broad and diffuse that one really needs to know the design of the course meant to accompany it to figure out exactly why this particular collection of essayswas selectedto constitute a book. The book is divided into four sections: “Theories of State and Economy”, “the Crisis of the Welfare State”, “Comparative Macroeconomic Policies,” and “Economic Conditions and Political Behavior.” Although individual essaysvary in quality, eachis reasonablyinteresting in its own right. Nevertheless, one is hard pressedto understand the relationship of each essayto the others or to understand why the editors felt that these works, as opposed to others, were particularly representativeor especially outstanding samplesof the areas under consideration. For example, although one would expect neo-Marxist work to figure prominently in a section entitled “Theories of State and Economy,” nothing of this genre is included. Nor is a selection from the public choice literature, despite the fact that the approach has had a major and pervasive influence on work in the political economy field. As for the essaysincluded in the section, they tend to stand independently of each other rather than speak to a common problem or join each other in debate. Thus, Catherine Zuckert’s “On the Theory of Political Economy: Is Liberalism Really Dead?’discusses whether or not the liberal welfare state is morally justifiable on democratic grounds; Gary Marx’s “State-Economy Linkages in Advanced Industrial Societies” presentsus with a typology of interest group-government interaction; and the very fine piece by Adam Przeworski and Michael Wallerstein cogently analyzesthe problem of savings in contemporary capitalist systems and elegantly arguesfor combining high taxes on profits with equally strong incentives for reinvestingprofits as a way of restoring economic growth. Yet what Zuckert, Marx, and Przeworski-Wallerstein have to say to each other remains unclear. 157
0147-5967187 $3.00 Copyright 0 1987 by Academic Press,Inc. All rights of reproduction in any form reserved.
158
BOOK REVIEWS
To the degreea common problematique characterizesthe rest of the volume, it is basically that of the relationship between electoral fortunes and economic policy. On the one hand, the essaysdealing with the welfare state and macroeconomic policy attempt in various ways to gauge the degree to which policy choices are related to the programmatic and electoral commitments of the party or coalition in power as opposed to institutional factors (e.g., the degree of centralization of government), the organization of interests, exogenous economic events, and other variables. For example, the analysis by Donald Swank and Alexander Hicks attempts to show that although the electoral and ideological goals of policymakers had a major impact on the scope and direction of welfare policy between 1960 and 1973, declining resource pools, fears of inflation, and elite and mass resistance to tax increasesplayed a much more important role in determining social welfare expenses after 1973. The problem with posing the question in this way is that there is little reason to believe that partisan politics, state structures, class alliances, or the size of the “resource pool” itself operatesindependently enough of one another to enable one to conclude that a given policy decision is “more” influenced by one factor than another or that one can simply add up a long list of variables to arrive at a policy outcome. For example, the fact that the growth of income transfers after 1973 in Western economies may be due to the role of “automatic” stabilizers in a recessionary period is hardly evidence that increased transfer payments were not consistent with the electoral and ideological goals of ruling parties as well. Moreover, in the third section, the largely descriptive accounts of macroeconomic policymaking in the United States, Britain, France, and Germany suggestthat partisanship, interacting with other variables,continued to play an important role in the way statesmanagedausterity and international recession as well. On the other hand, the essaysdealingwith economic conditions and political behavior attempt to analyze the impact economic performance has on voting behavior. Here, all of the studies come to the not very surprising conclusion that the perceived state of the economy is a powerful influence on voting behavior. Nevertheless, noneconomic factors-from party loyalty to foreign policy events-can override economic performance as a determinant of voting, as Schier and Vig’s analysis of Margaret Thatcher’s 1983 electoral victory indicates. Again, this is hardly a startling finding. The problem, as Rod Kiewit points out in his article, is ascertaining exactly how economic issuesinfluence voters’decisions.But here, even Kiewit’s own study is ultimately disappointing, at least to those of us who like synthetic theories. Kiewit reviews and tests the four main hypotheses relating economic issues to voting behavior, and finds evidence to support all of them: voters respond to adversity by punishing incumbents and to economic improvement by rewarding them; voters concerned with unemployment tend to support Democrats and those worried about inflation look to Republicans; individual judgments as to the state of
BOOK REVIEWS
159
the economy are basedboth on voters’personal experiences(the “pocketbook” theory) and their general evaluations of the economy as a whole. On the whole, individual selections from Political Economy in Western Democraciesmay well be useful for assignment in undergraduate courses, although one must add that for each topic covered, work of higher quality is often available. Ironically, the less theoretical and more descriptive pieces may well prove to be the most widely read, at least by political scientists. Schier and Vig’s comparisons of the United States under Reagan and Britain under Thatcher are particularly good in this respect. Meanwhile, one suspects that the only essay that discusses the political factors at work in economic policymaking in a way that economists would find interesting and provocative is the Przeworski-Wallerstein piece. In short, while individual articles in the reader are useful, as a coherent volume, Political Economy in WesternDemocraciesleavessomething to be desired,especiallyin view of the large number of very excellent readers available that focus on particular issues,approaches, and policies. ELLENCOMISSO University of California, San Diego San Diego, California 92103