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Public mask use has emerged as a key tool in response to COVID-19. We develop a classification of statewide mask mandates that reveals variation in their scope and timing. Some US states quickly mandated wearing of face coverings in most public spaces, whereas others issued narrow mandates or no mandate at all. We consider how differences in COVID-19 epidemiological indicators and partisan politics affect when states adopted broad mask mandates, starting with the earliest mandates in April 2020 and continuing through the end of 2020. The most important predictor is the presence of a Republican governor, delaying statewide indoor mask mandates an estimated 98.0 days on average. COVID-19 indicators such as confirmed case or death rates are much less important predictors. This finding highlights a key challenge to public efforts to increase mask wearing, one of the most effective tools for preventing the spread of SARS-CoV-2 while restoring economic activity.
We explore the US states’ evolving policy responses to the COVID-19 pandemic by examining governors’ decisions to begin easing five types of social distancing policies after the initial case surge in March–April 2020. Applying event history models to original data on state COVID-19 policies, we test the relative influence of health, economic, and political considerations on their decisions. We find no evidence that differences in state economic conditions influenced when governors began easing. Governors of states with larger recent declines in COVID-19 deaths per capita and improving trends in new confirmed cases and test positivity were quicker to ease. However, politics played as powerful a role as epidemiological conditions, driven primarily by governors’ party affiliation. Republican governors made the policy U-turn from imposing social distancing measures toward easing those measures a week earlier than Democratic governors, all else equal. Most troubling of all, we find that states with larger Black populations eased their social distancing policies more quickly, despite Black Americans’ higher exposure to infection from SARS-CoV-2 and subsequent death from COVID-19.
Because the American states operate under balanced budget requirements, increases in spending in one area typically entail equal and opposite budget cuts in other programs. The literature analysing the correlates of government spending by policy area has mostly ignored these trade-offs inherent to policymaking, failing to address one of the most politically interesting and important dimensions of fiscal policy. Borrowing from the statistical literature on compositional data, we present more appropriate and efficient methods that explicitly incorporate the budget constraint into models of spending by budget category. We apply these methods to eight categories of spending from the American states over the years 1984–2009 to reveal winners and losers in the scramble for government spending. Our findings show that partisan governments finance their distinct priorities by raiding spending items that the opposition prefers, while different political institutions, economic conditions and state demographics impose different trade-offs across the budget.
Since Herron and Shotts (2003a; hereinafter HS), Adolph and King (2003; hereinafter AK), and Herron and Shotts (2003b; hereinafter HS2), the four of us have iterated many more times, learned a great deal, and arrived at a consensus on this issue. This paper describes our joint recommendations for how to run second-stage ecological regressions, and provides detailed analyses to back up our claims.
We take this opportunity to comment on Herron and Shotts (2003; hereinafter HS) because of its interesting and productive ideas and because of the potential to affect the way a considerable body of practical research is conducted. This article, and the literature referenced therein, is based on the suggestions in three paragraphs in King (1997, pp. 289–290). Because these paragraphs were not summarized in HS, we thought they might be a useful place to start.
WHEN THE ECONOMY begins to stall, central bankers must decide when to turn from inflation fighting to demand management. Recent global downturns have lasted longer than those of the mid-twentieth century, suggesting central banks have been too conservative, prioritizing phantom inflation fears in the face of global recession or even deflation. The dilemma of inflation-prevention versus recession-fighting raises questions not only about the balance between central bank's independence and their accountability to the public, but also about the beliefs and interests of people working within them. Which kinds of central bankers are conservative, and which are not?
Unfortunately, the political economy literature remains ill-positioned to address this question because scholars normally conflate central bank conservatism and central bank independence. This confusion of preferences and institutions arises from the unsupported assumptions that independent central bankers are naturally conservative and that government meddling is the only source of loose monetary policy. Rather than ground a large and influential literature in untested assumptions, we should disentangle our understanding of monetary preferences and institutions. To succeed, we need a theory and measure of central bank conservatism to complement existing work on central bank independence.
Understanding central bankers' monetary policy preferences begins with central bankers' career paths and career concerns. A central banker's career background may influence his personal beliefs about the ideal tradeoff between in flation and output stability, while at the same time providing the basis for an exchange: future careers for the central banker; policy influence for the shadow principal providing the central banker's next job.
POLITICAL ECONOMISTS' EXPLANATIONS of 1908s economic performance often focused on labor market arrangements or elections and partisan governments. Starting in the 1990s, political economists turned to central bank institutions. Literatures based around each of these explanations developed in isolation, grew in popularity, then faded, for the most part, into the background. More recently, comparative political economists revisited these ideas in the context of richer, interactive models of economic performance. These new models focused on the interplay of labor markets and central banks. Yet there has been little effort to update earlier interactive models of parties and unions, and no tests for three-way interactions among parties, unions, and monetary authorities. This chapter fills these gaps to better understand how political actors and institutions affect the real economy. As in Chapter 6, I test these interactive models using direct measures of central bank conservatism, so that our results do not rest on weak proxies or dubious assumptions.
The focus of this chapter is the unemployment rate, which results from the interaction of wage bargaining centralization and monetary accommodation. Introducing partisan governments to the framework, I develop a model of unemployment in which partisan governments and unions reach bargains exchanging wage restraint for social policy, with both sides anticipating the central bank may respond to excessive wage demands with restrictive monetary policy. According to the theory developed here, union–government bargains will be most effective to the extent that (1) labor markets are moderately centralized, (2) central banks are inflation hawks, and (3) governments are willing to spend significant sums to reduce unemployment.
The Treaty does not define price stability, it only says that the ECB should ensure that price stability prevails, but it has not defined what is to be understood by price stability. We did that ourselves you might say.
WIM DUISENBERG, ECB president, to the European Parliment
SO FAR, I have focused on the link between elite policy makers, the institutions they inhabit, and economic performance. But there is another side to policy making: democratic representation and the transmission of public preferences through elections into public policy. Because there seems to be a tension between democratic control of monetary policy and effciency, modern central banking is a sore point for democratic theory. Delegation to a relatively conservative, independent central bank lowers inflation but yet sacrifices democratic responsiveness. If there were a one-size-fits-all monetary regime that produced Pareto optimal inflation and unemployment, central banking would be a purely technical issue, but inflation reduction comes at a price – sharper short-run swings in unemployment. The optimal degree of central banker conservatism therefore depends on the people's preferences (Stiglitz, 1998). Where elected governments lose the ability to set even the degree of conservatism of the central bank, the basic chain of democratic responsiveness is broken, and from a democratic perspective, the wrong monetary policy may be adopted.
Because it isn't maybe as simple as bribery, campaign contributions, and that kind of thing. I think that we've had twenty-five years of the Goldman Sachses of the world ruling the world, and the people like Tim Geithner, when they leave office, the way they make their living … is to go to work for a financial institution for huge sums of money; that people have trouble with getting their minds around the world where that's not the way the world works, and there is maybe a slight quickness to believe the world can't function without Goldman Sachs.
MICHAEL LEWIS
THE OVERLOOKED EVIDENCE that central banker conservatism affects monetary policy demonstrates that a narrow-minded focus on institutional guarantees of autonomy has crowded out attention to other facets of monetary politics. When distinct or even potentially opposing concepts are gathered under the umbrella of central bank independence, we end up with confused explanations and misguided policy. In this chapter, we turn from central bank independence and central bankers' conservatism to consider two other concepts, central banker turnover and central bank accountability, which have too often been blended with independence. As with conservatism and independence, a sharper distinction between turnover and accountability reveals that politics play a larger than expected role in monetary policy.
The IMF reports to the ministers of finance and the governors of the central banks, and one of the important items on its agenda is to make these central banks more independent – and less democratically accountable … it always puts far more weight on inflation than on jobs. The problem with having the rules of the game dictated by the IMF – and thus by the financial community – is not just a question of values (though that is important) but also a question of ideology. The financial community's view of the world predominates – even when there is little evidence in its support.
JOSEPH STIGLITZ, former chief economist of the Work Bank
IN DEVELOPED COUNTRIES, central bankers' past careers shape their preferences over monetary policy. This happens directly, through socialization, and indirectly, by giving central bankers incentives to select the monetary policy preferred by likely future employers. Put another way, central bankers can use monetary policy to grease a revolving door connecting the central bank and private finance and the state. These career effects lead former financiers to be monetary policy hawks and make doves of former bureaucrats.
In this chapter, I turn to the developing world. Past scholarship on developing country central banks finds little traction for concepts such as central bank independence that seem important to monetary policy making elsewhere. Some conclude that developing economies have weak institutions and give up hope of deciphering the implications of developing countries' laws.
Perhaps we have misunderstood the motivations of developing world central bankers from the start. I explore the career socialization and career ambitions of central bankers in less developed countries.