While confidence in the business sector is crucial for well-functioning markets, there is surprisingly little empirical work
on its sources. Available research recognizes generalized social trust and macroeconomic performance (especially unemployment
and economic growth) as major forces explaining confidence in institutions and organizations in general. By assuming that
confidence in companies hinges on rules, formal procedures, and practices that shape how organizations function, economic
regulation is frequently advocated to foster confidence in companies, not least as it is supposed to reduce the scope for
opportunistic behavior. Based on individual-level data from World Values Survey/European Values studies and economic regulation
data from the Economic Freedom of the World project we investigate statistical associations of confidence in major companies
with generalized social trust and macroeconomic performance as well as the intensity and quality of business regulation. From
an economic policy perspective our findings suggest that confidence in the business sector can be facilitated by an implicit
guarantee from governments of fair and impartial treatment.
Österreichs Föderalismus ist durch eine komplexe und oft wenig transparente Verflechtung von Aufgaben-, Ausgaben- und Finanzierungsverantwortlichkeiten
zwischen den gebietskörperschaftlichen Ebenen gekennzeichnet, welche die gesamtstaatliche Steuerung beträchtlich erschwert.
Um Effizienz- und Steuerungsdefizite zu mildern, wird in Wissenschaft und finanzpolitischer Praxis schon geraume Zeit diskutiert,
den Finanzausgleich stärker "aufgabenorientiert" zu gestalten. Der vorliegende Beitrag diskutiert, ob und wieweit eine verstärkte
Aufgabenorientierung mit Konstruktionsprinzipien des Föderalismus und der institutionellen Kongruenz kompatibel ist.
Popular and scientific contributions often call for increased regional decision-making power to manage secessionist conflict,
assuming that fiscally federalised countries are less prone to disintegrate politically. From a theoretical standpoint this
is not clear though, as federalism creates an institutional paradox where autonomous legislative and bureaucratic structures
can potentially be used to make secessionism a viable strategy in the first place. In particular, the role of asymmetric territorial
arrangements in this association is crucially underexplored at present. Using electoral data on separatist political movements
from a large variety of European regions since the mid-1990s, our findings indicate that regions with comparatively higher
fiscal and institutional autonomy are more prone to vote for secessionist parties. Accounting for possible endogeneity, asymmetric
territorial self-governance seems to cause much stronger incentives to vote for secessionist platforms, while the association
with fiscally more symmetric arrangements is surprisingly small.
Trust is expected to improve economic efficiency because private contracts and cooperative behaviour are facilitated through
lower costs of information, negotiation, control and enforcement. Following this economic argument, the efficiency of research
investments should be higher, the higher the trust relationship between funder and the receiver of the money is as costs for
information, negotiation, control and enforcement decrease. However, lower levels of trust will increase the likelihood for
demanding the regulation of activities to compensate for a lack of information, misconduct or fraud, increasing the costs
for control and enforcement in turn. In low-trust societies the expected harm of scientific activities is potentially high
and citizens demand more comprehensive regulation.
According to the fiscal federalism literature, subcentral budget constraints become softer when local governments are more
dependent on revenues over which they have no discretion. As a consequence of "transfer dependency", subcentral governments
can expect to be bailed out by the central government and therefore tend to accumulate higher levels of debt. We test this
conjecture with data from Austrian municipalities. In fiscal terms, Austria is a highly centralised federation in which tax
autonomy at the municipal level is rather weak. Our identification strategy is based on a discontinuity caused by the unique
regulation of population weights in the tax-sharing agreement between central government and the municipalities. Our results
indicate that, in line with theoretical expectations, municipalities with higher revenue dependency are responsible for higher
net borrowing per capita. The size of the additional borrowing effect equals to about 5 percent of average municipal debt.
We also find that almost one half of the observed discontinuity works through an investment channel.
A popular explanation for economic development is that "individualistic values" provide a mind-set that is favourable to the
creation of growth-promoting institutions. The present paper investigates the relationship between individualistic values
and personal attitudes toward government intervention. We consider two key components of an individualistic culture to be
particularly relevant for attitude formation: self-direction ("social" individualism) and self-determination ("economic" individualism).
Results indicate that both are negatively associated with interventionist attitudes. Effects of self-direction are much weaker
though, than self-determination. Moreover, the effects of self-direction are mitigated through higher trust in the state and
lower confidence in companies, while that is not the case for self-determination values. We conclude that especially economic
individualism supports attitudes conducive to the formation of formal market-friendly institutions.
The need to balance austerity with growth policies has put government efficiency high on the economic policy agenda in Europe.
Administrative reforms that boost the internal efficiency of bureaucracy can alleviate the trade-off between consolidation
and public service provision. Against such a backdrop, this paper constructs (and makes available) a novel reform indicator
to explore the determinants of public administration reforms for a panel of EU countries. The findings support political-economic
reasoning: An economic and fiscal crisis is a potent catalyst for reforms, but a powerful bureaucracy constrains the opportunities
of a crisis to promote reform. Furthermore, there is some suggestive evidence for horizontal learning from other EU countries,
and for vertical learning associated with a particular type of EU cohesion spending.