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The question of whether and how federalism influences a country's welfare state has been a longstanding concern of political scientists. However, no agreement exists on exactly how, and under what conditions, federal structures impact the welfare state. This article examines this controversy. It concludes theoretically that the specific constellation of federal structures and distribution of powers need to be considered when theorising the effects of federalism on the welfare state. Using the case of Belgium and applying the synthetic control method, it is shown in the article that without the federalism reform of 1993, the country would have had further decreases in social spending rather than a consolidation of this spending in the years after 1993. In the case of Belgium, the combination of increased subnational spending autonomy in a still national financing system provided ideal conditions for a positive federalism effect on social spending to occur.
In recent years, many efforts have been made to bring quantitative and qualitative methods into dialogue. This article also moves in that direction. However, in contrast to most works, the present attempt does not concern the large-N/small-N issue but focuses instead on the sole single case study framework. Within this framework, two counterfactual methods, the historical counterfactual method, the qualitative one, and the synthetic control method, the quantitative one, have gained great importance without however meeting. This paper aims to advance mixed-methods research by bridging the gap between these two approaches. More precisely, it has assessed whether these two methods can be used together to understand what would have happened in a single case Z in the absence of an event X. The case study of the impact of Thatcher’s election on the UK pension system is then presented as an example of the joint use of the two methods.
What was the effect of war outcomes on key indicators of state formation in a post-war phase? In this chapter I demonstrate that victors and losers of war were set into different state capacity trajectories after war outcomes were revealed. I do this using a set of cutting-edge causal inference techniques to analyse the gap in state capacity that was generated between winners and losers in the time-period of most stringent warfare (1865-1913). After substantiating that the outcomes of these wars were determined by exogenous or fortuitous events, I provide a short description of my treatment—i.e., defeat—and outcomes—i.e., total revenues and railroad mileage as key indicators of state infrastructural capacity. My estimator, a difference-in-differences model, shows defeat had a negative long-term impact on state capacity which remains remarkably robust even after relaxing key assumptions. Finally, I use the synthetic control method to estimate how state capacity in Paraguay and Peru would have evolved in a counterfactual world where these countries were spared the most severe defeats in late nineteenth-century Latin America.
Spain increased its minimum wage (MW) by 22% in 2019. Given the intense debate in the economic literature on the impact of MW increases on the labour market, we conduct an impact assessment of this policy. The synthetic control method will be used to replicate the Spanish labour market by means of a pool of European countries that, in the absence of other reliable measures, simulates the evolution of Spanish employment. This will allow us to identify the causal effect from the increase in the MW. After applying the technique, the increase in the MW is found to have no effect on employment. The results have been subjected to robustness tests such as leave one out or segmentation by gender or age.
This study investigates the effects of genetic improvement policies on dairy production, with a particular emphasis on Artificial Insemination projects. Furthermore, we evaluate the major barriers and challenges of Artificial Insemination projects including water scarcity. Using the data-driven synthetic control method, we found evidence that the Artificial Insemination projects caused milk production to increase by 59 thousand tons on average from 2008 to 2018. This could be correlated with food security (i.e., synergies), but increased dairy production may also place strain on Senegal’s water resources (i.e. trade-offs). To achieve a more efficient outcome, Senegalese dairy policies should consider the negative externalities of these projects on water resources.
Despite theoretical arguments suggesting the strong effects of presidential term limits and re-election on democracy, there is surprisingly little empirical evidence to evaluate them. We test both the effect on democracy of the existence of a consecutive re-election rule and of reforms introducing it for incumbent presidents. Using evidence from Latin American countries between 1945 and 2018, we test their relationship to both vertical and horizontal accountability. A synthetic control method is employed to account for the effect of term-limit reforms, and time-series cross-section models for modelling the association with the re-election rule. Both vertical and horizontal accountability as well as the quality of democracy are eroded by term-limit evasion reforms in most countries and strengthened in none between 1990 and 2018. Allowing presidents to run for re-election – relative to term-limited ones – is consistently associated with weak democratic outcomes.
In Korean society, regionalism has deep historical roots and has had a great influence on elections. A historic event occurred in 2014 when a conservative party candidate, Lee Jung-hyun, was elected as a member of the National Assembly in Suncheon-si, Jeollanam-do, where liberal parties have been in the midst of powerful political influence. This was possible because voters responded to the candidate's appeal to vote based on benefits to the local economy, that is, securing greater funding from the central government. Exploiting the synthetic control method, this article identifies how this different choice has affected the budget of the local district. The results show that the community budget has increased dramatically, and a battery of robustness checks also supports these basic results. On the basis of the empirical evidence, the study suggests the possibility of overcoming a long-standing parochial regionalism in Korean politics through economic voting and its practical benefits.
Edited by
Nauro F. Campos, University College London,Paul De Grauwe, London School of Economics and Political Science,Yuemei Ji, University College London
It has long been argued that structural reforms constitute a remedy for getting countries out of the low-growth environment that Europe has experienced in the last decade. Many recent studies show long-term benefits of such reforms in cross-country settings, but ignore the heterogeneity across different country experiences. To address this gap in the context of the European Union, we focus on the largest early reforms that its four members (Denmark, France, Greece and Portugal) adopted in financial and labour markets. By using a Synthetic Control Method, we find that many of these early reform episodes do not seem to have been as fruitful as their advocates claimed at the time. Our results indicate a rather mixed relationship between reforms and several macro measures, including economic growth and inequality. Reforms, especially when introduced all at once as a big-bang, do not seem to always produce the intended results.
Edited by
Nauro F. Campos, University College London,Paul De Grauwe, London School of Economics and Political Science,Yuemei Ji, University College London
Structural reforms are often presented as a growth panacea. We review this concept through two separate analyses. First, we quantify the impact of wide-reaching reform packages implemented in twenty-three countries worldwide. Second, we look at the role that reforms had in contributing to spark 135 growth accelerations, i.e., positive up-breaks in growth patterns. All in all, our results point to the fact that deep economic reforms can have an important impact on a country’s growth rate but, often, they fail to deliver their benefits and, in some instances, they can even be detrimental. In achieving economic growth, there are no silver bullets. Rather, economic reforms should be framed as an opportunity that, if appropriately tailored to country-specific needs and well implemented, could yield important benefits.
I estimate the impact of Nebraska's 1937 switch from a bicameral to a unicameral legislature on state-level government expenditures. Using the synthetic control method I create a counterfactual Nebraska from a weighted average of other potential control states and compare spending in this “synthetic Nebraska” to spending in the real Nebraska. Relative to the synthetic control, Nebraska experiences a sharp decrease in expenditures per capita immediately following the switch to a unicameral legislature; however, the difference appears to diminish over time. Placebo tests show that if the change in Nebraska's legislative structure were randomly assigned among the sample of states, and legislative structure had no real impact on spending, the likelihood of obtaining a treatment-effect estimate as large as Nebraska's would be 0.0213. While the initial drop in expenditures per capita lends support to the theory that bicameralism, by requiring more veto players, is associated with higher levels of government spending, the fact that the difference between Nebraska and synthetic Nebraska diminishes suggests that legislators are able to circumvent this constraint.
Radical parties have been found to succeed under conditions of mass polarization. It is argued that their message resonates better with voters at the extremes of an ideological spectrum. This paper investigates if the reverse also holds, meaning that radical parties may contribute to the polarization of the public. I test this claim in the Netherlands, a country that has experienced the rise of populist radical right parties since 2002, using a synthetic control model built with a pool of comparable countries and Eurobarometer survey data. Results show that, after the rise of Pim Fortuyn and Geert Wilders, the level of polarization among the Dutch public increased more than it otherwise would have. These findings contribute to understanding the connection between elite- and mass-level polarization, and the consequences of populist radical right parties’ emergence in Western Europe.
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