PSC 564: Comparative Political Economy

M. A. Kayser, Asst. Prof.

Dept. of Political Science

University of Rochester

Fall 2003


This course offers a broad survey of recent research in comparative political economy.  More specifically, we will study how various political institutions, processes, and events affect economic policy and outcomes as well as the converse, how economic performance and interests influence the development of institutions and political outcomes.  Unlike some common definitions of political economy as 1) the application of economic tools to political problems or 2) the interaction of political and economic structures and forces regardless of method, this class defines political economy both in substance and method.  We will focus on problems at the intersection of politics and economics using formal and empirical tools.  Moreover, by focusing on domestic variation and outcomes, this class also differentiates itself from international political economy which generally emphasizes international institutions, economic relations, and the distribution of power.  The tradeoff for the breadth of this course is that few articles can be assigned on any given topic.  My purpose, however, is to introduce you to the seminal ideas within CPE and to help you identify research opportunities that you can then pursue in your own work.


Format:  Participation in class discussions is a critical component of this seminar.  Every person is expected to have read all of the required readings for each week and mentally prepared discussion questions/reactions in advance.  Moreover, the responsibility for leading off discussion with a 10-15 minute presentation on the following week’s readings will be divided among students every week.  Handouts and/or overheads are very encouraged.


Requirements: Grading will be based on participation (including performance as discussion-leader) and on one short (15-20 page) research paper.  The paper should identify and develop a promising research idea that hopefully can be extended after the class.  Brief 1-2 page proposals for the research paper are due near the middle of the semester on a date that I will announce.


Books:  Alesina, Cohen, Roubini.  1997.  Political Cycles and the Macroeconomy.  MIT Press.

            Boix. 1998.   Political Parties, Growth, and Equality.  Cambridge UP.

            Persson & Tabellini. 2003. The Economic Effects of Constitutions.  MIT Press.

            Przeworski, Alvarez, Cheibub, Limongi. 2000. Democracy and Development. Cambridge

            Rodrik.  1997.  Has Globalization Gone Too Far?  IIE.

Optional: Franzese, Rodrik, Keohane & Milner, Olson, Bates, Swank, Tufte, Garrett, Hibbs.


Office Hours:  Tuesdays 3:00-5:00, Harkness 320B.



Institutional and Partisan Effects on  Policy & Economic Outcomes (but Not Growth)


1.       Income (Re)distribution & Size of Government (Week 2)

a.       Meltzer & Richard.  1981. A Rational Theory of the Size of Government.  J. Pol. Economy 89: 914-27.

b.       Moene & Wallerstein. 2001. Inequality, Social Insurance and Redistribution.  APSR 95: 859-74.

c.       Persson & Tabellini. 2003. The Economic Effects of Constitutions. ch. 1, 2, 9.

d.       Bartels.  2003.  Partisan Politics and the U.S. Income Distribution. 


e.       Acemoglu & Robinson.  2001.  Inefficient Redistribution.  APSR 95: 649-61.

f.        Austen-Smith.  2000.  Redistributing Income under Proportional Representation.  JPE 108: 1235-1269.

g.       Birchfield & Crepaz.  1998.  The Impact of Constitutional Structures and Collective and Competitive Veto Points on Income Inequality in Industrialized Democracies.  EJPR 34: 175-

h.       Iversen and Soskice.  Electoral Systems and the Politics of Coalitions:  Why Some Democracies Redistribute More than Others.  Unpublished Ms.

i.         Bradley, Huber, Moller, Nielsen, and Stephens. 2003.  Distribution and Redistribution in Post-Industrial Democracies.  World Politics 55: 193-228.

j.         Alesina, Glaeser, and Sacerdote.  2001. Why Doesn’t the United States Have a European-Style Welfare State?  Brookings Papers on Economic Activity 2001: 187-254.

k.       McGillivray.  2003.  Redistributive Politics and Stock Price Dispersion.  BJPS 33: 367-95.

l.         Atkinson & Bourguignon, eds.  Handbook of Income Distribution.

m.     Hicks & Swank.  1992.  Politics, Institutions, and Welfare Spending in Industrialized Democracies, 1960-82.  APSR 86: 658-674.

n.       Milesi-Ferretti, Perotti, and Rostagno.  2002.  Electoral Systems and the Composition of Public Spending.  QJE: 609-

o.       Tiebout.  1956.  A Pure Theory of Local Expenditures.  JPE 64: 416-24.

p.       Grossman and Helpman.  1996. Electoral Competition and Special Interest Politics.  Review of Economic Studies 63: 256-86.



2.       Macroeconomic Management & Regulation (Week 3)

a.       Alesina, Cohen, Roubini.  1997.  Political Cycles and the Macroeconomy.  MIT. (skim) Ch.  3, 7, 9.

b.       Triesman. 2000.  Decentralization and Inflation: Commitment, Collective Action, or Continuity?  APSR 94: 837-57.

c.       Rogowski & Kayser.  2002.  Majoritarian Electoral Systems and Consumer Power: Price-level Evidence from the OECD Countries.  AJPS 46: 526-39.


d.       Swank & Stienmo.  2002.  The New Political Economy of Taxation in Advanced Capitalist Democracies.  AJPS 46: 642-55.

e.       Besley & Case.  1995.  Does Electoral Accountability Affect Economic-Policy Choices? Evidence from Gubernatorial Term Limits.  QJE 110: 769-798.

f.        Rodden & Wibbels. 2002. Beyond the Fiction: Macroeconomic Management in Multitiered Systems.  World Politics 54: 494-531.

g.       Hibbs.  1977.  Political Parties and Macroeconomic Policy.  APSR 71: 1467-87.

h.       Persson, Tabellini, and Roland.  2000.  Comparative Politics and Public Finance.  JPE 108: 1121-61

i.         Diaz-Cayeros, McElwain, Romero, and Siewierski.  2003. Fiscal Decentralization, Legislative Institutions, and Particularistic Spending.  Ms. Stanford.

j.         Lohmann.  1998.  Federalism and Central Bank Independence: The Poltics of German Monetary Policy, 1957-92.  World Politics 50.3: 401-46.



3.       Trade Openness & Protection (Week 4)

a.       Lohmann & O’Halloran. 1994.  Divided Government and U.S. Trade Policy. IO 48: 595-632.

b.       Karol.  2000.  Divided Government and US Trade Policy: Much Ado about Nothing? IO 54: 825-44.

c.       Hiscox.  2001.  Class versus Industry Cleavages: Inter-Industry Factor Mobility and the Politics of Trade.  IO.

d.       McGillivray.  1997.  Party Discipline as a Determinant of the Endogenous Formation of Tariffs.  AJPS 41: 584-607.


e.       Reinhardt & Busch. 1999. Industrial Location and Protection: The Political and Economic Geography of US Non-tariff Barriers.  AJPS 43.4: 1028-50.

f.        Rogowski.  1987.  Trade and the Variety of Democratic Institutions.   IO 41: 203-23.

g.       Rogowski.  2002.  Trade and Representation: How Diminishing Geographic Concentration Augments Protectionist Pressures in the U.S. House of Representatives.  In Shaped by War and Trade, Katznelson & Shefter, eds.  Princeton UP. 

h.       Karol.  2003.  Not the Size of the District but the Size of the Job: Explaining Inter-cameral Differences on U.S. Trade Policy.  Ms. UC Berkeley.

i.         Alt, Frieden, Gilligan, Rodrik, and Rogowski.  1996.  The Political Economy of International Trade – Enduring Puzzles and an Agenda for Enquiry.  CPS 29.6: 689-717.

j.         Scheve and Slaughter.  2001.  What Determines Individual Trade Policy Preferences?  J. of Int’l Econ. 54: 267-92.

k.       Mayda & Rodrik.  2001. Why are Some People (and Countries) More Protectionist than Others? NBER Working Paper 8641.


4.       Corruption (Week 5)

a.       Persson, Tabellini, and Trebbi.  2003.  Electoral Rules and Corruption.  Forthcoming, J. European Econ. Assoc.

b.       Chang and Golden. 2003. Electoral Systems, District Magnitude and Corruption.  Ms. UCLA.

c.       Acemoglu and Verdier.  2000.  The Choice Between Market Failures and Corruption.  AER 90: 194-211.

d.       Montinola & Jackman.  2002.  Sources of Corruption: A Cross-country Study.  BJPS 32: 147-70.


e.       Tsebelis Police Game?

f.        Alt and Lassen.  2003.  The Political Economy of Institutions and Corruption in American States.  J. of Theoretical Politics 15: 341-65.

g.       Mauro. 1995. Corruption and Growth.  QJE 110.3:681-712.

h.       Triesman. 2000.  The Causes or Corruption: A Cross-National Study.  J. of Public Economics 76: 399-457.

i.         Lederman, Loayza, Soares. 2001. Accountability and Corruption: Political Institutions Matter.  World Bank Working Paper 2708.

j.         Gerring and Thacker.  Forthcoming. Political Institutions and Corruption: The Role of Unitarism and Parliamentarism.  BJPS.

k.       Krueger. 1974.  The Political Economy of the Rent-Seeking Society. AER 64: 291-303.


Political & Institutional Effects on Economic Development & Growth

  1. Institutions, Stability and Growth (Week 6)
    1. Barro and Sala-i-Martin.  Economic Growth. Ch. 1.
    2. Przeworksi, Alvarez, Cheibub, and Limongi. 2000.  Democracy and Development. Ch. 3 & 4.
    3. Acemoglu, Johnson, & Robinson. 2002. Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution.  QJE 117.4: 1231-94.
    4. Rodrik, Subramian, & Trebbi. 2002. Institutions Rule: the Primacy of Institutions over Geography and Integration in Economic Development.  NBER Working Paper 9305.


    1. Lucas.  1990. Why Doesn’t Capital Flow from Rich to Poor Countries?  AER 80: 92-96.
    2. Pritchet, Lant. 1997. Divergence, Big Time. J. Econ. Perspectives 11: 3-17
    3. Barro.  Determinants of Economic Growth: A Cross-Country Empirical Study.  Ch. 1-2.
    4. Acemoglu, Johnson, & Robinson.  Colonial Origins of Comparative Development AER
    5. Romer. 1994.  Origins of Endogenous Growth.  J. Econ. Perspectives 8: 3-22.

j.         Feldstein &  Horioka. 1980. Domestic Savings and International Capital Flows.  Economic Journal 90: 314-329.

k.       Weingast.  1995.  The Economic Role of Political Institutions – Market-preserving Federalism and Economic Development.  J. of Law, Economics, and Organization 11.1: 1-31.

    1. Lal.  1998.  Unintended Consequences: Impact of Factor Endowments, Culture, and Politics on Long-Run Economic Performance. MIT Press.
    2. North.  1991.  Institutions.  J. Econ. Perspectives 5: 97-112.
    3. Alesina, Ozler, Roubini, & Swagel. 1996.  Political Instability and Economic Growth.  Journal of Economic Growth 1: 189-211.
    4. Collier and Gunning. 1999.  Why has Africa Grown Slowly?  J. Econ. Perspectives 13: 3-22.
    5. Engerman and Sokoloff. 2000. History Lessons: Institutions, Factor Endowments, and Paths of Development in the New World.  JEP 14.3: 217-32.
  1. Corporatism, Participation, & Timing (Week 7)
    1. Calmfors & Driffill. 1988.  Bargaining Structure, Corporatism, and Macroeconomic Performance.  Economic Policy 6: 14-61.
    2. Acemoglu and Robinson.  2000.  Political Losers as a Barrier to Economic Development.  AER 90: 126-130.
    3. Acemoglu and Robinson. 2000.  Why did the West Extend the Franchise?  Democracy, Inequality, and Growth in Historical Perspective.  QJE 115: 1167-99.
    4. Bockstette, Chanda, & Putterman. 2002. States and Markets: The Advantage of an Early Start.  Journal of Economic Growth 7: 347-369.


    1. Molina and Rhodes.  2002.  Corporatism: The Past, Present, and Future of a Concept.  Annual Review of Political Science 5: 305-31.
    2. Gerschenkron.  1962.  Economic Backwardness in Historical Perspective.  Harvard UP. 



Elections and the Economy

1.       The Political Business (Budget) Cycle (Week 8a)

a.       Alesina, Roubini, Cohen.  Chapters 2 (read), 4 (skim) & 6 (6.1, 6.2, 6.7 – 6.9).

b.       Persson & Tabellini. 2002. Do Electoral Cycles Differ across Political Systems? Ms.


c.       Rogoff.  1990.  Equilibrium Political Budget Cycles.  AER 80: 21-36.

d.       Tufte.  1979.  Political Control of the Economy.  Princeton UP.

e.       Suzuki.  1994.  Evolutionary Voter Sophistication and Poltical Business Cycles. Public Choice 81.3: 241-61.

f.        Suzuki.  1992.  Political Business Cycles in the Public Mind.  APSR 86: 989-96.

g.       Franzese.  2002.  Electoral and Partisan Cycles in Economic Policies and Outcomes.  Annual Review of Political Science 5: 369-421.

h.       Schultz.  1995.  The Politics of the Political Business Cycle.  BJPS 25: 79-99.

2.       The Timing of Elections (& Devaluations). (Week 8b)

a.       Smith.  2003.  Election Timing in Majoritarian Parliaments.  BJPS 33: 397-418.

b.       Strom and Swindle. 2002.  The Electoral Success of Strategic Parliamentary Dissolution.  APSR 96: 575-591. (skim)

c.       Frieden, Ghezzi & Stein.  2000.  Politics and Exchange Rates: A Cross-Country Approach to Latin America.  Working Paper R-421.  Inter-American Development Bank, Research Department.


d.       Ito.  1990.  The Timing of Elections and Political Business Cycles in Japan.  J. of Asian Economics 1: 135-56.

e.       Kayser.  2003.  Who Surfs, Who Manipulates? The Determinants of Opportunistic Election Timing and Electorally Motivated Economic Intervention.  Nuffield College Working Paper 2003-W3.

f.        Chowdhurry.  1993.  Political Surfing over Economic Waves: Parliamentary Election Timing in India.  AJPS 37: 1100-18.

g.       Balke.  1990.  The Rational Timing of Parliamentary Elections.  Public Choice 65: 201-216.

h.       Palmer & Whitten. 2000.  Government Competence, Economic Performance, and Endogenous Election Dates.  Electoral Studies 19: 413-26.

i.         Roper & Andrews 2003.  Impact of the Timing of Elections on the Party in Government: Canada and Britain, 1940-2000.  Ms. Southern Illinois University. Alternate (earlier?) version.

j.         Stein & Streb. 1999.  Elections and the Timing of Devaluations.  Working Paper 396.  Inter-American Development Bank, Research Department.

k.       Powell & Whitten. 1993.  A Cross-National Analysis of Economic Voting – Taking Account of the Political Context.  AJPS 37: 391-414.


Economic Effects on Political & Institutional Development

1.       Economic Origins of Institutions & the Size of Government (Week 9)

a.       Swenson.  1991.  Bringing Capital Back In, or Social Democracy Reconsidered.  World Politics 43: 513-544. (Think Belassa-Samuelson!)

b.       Iversen and Soskice.  2001. An Asset Theory of Social Policy Preferences.  APSR 95: 875-893. (or assign below?)

c.       Boix.  1999. Setting the Rules of the Game: The Choice of Electoral Systems in Advanced Democracies.  APSR 93.3: 609-24.

d.       North and Weingast. 1989.  Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth Century England.  J. of Economic History 49: 803-32.


e.       North.  1981.  Structure and Change in Economic History.  Norton.

f.        Boix.  2001.  Democracy, Development, and the Public Sector.  AJPS 45: 1-17.

g.       Ross, Michael. 1999. The Political Economy of the Natural Resource Curse.  World Politics 51.2 (Review Article).

2.       Democracy  (Week 10)

a.       Przeworski, Alvarez, Cheibub, Limongi.  2000. Democracy and Development. Ch. 2.

b.       Ross, Michael. 2001. Does Oil Hinder Democracy? World Politics 53: 325-61.

c.       Londregan and Poole. 1996.  Does High Income Promote Democracy?  World Politics 49: 1-30.

d.       Helliwell.  1994.  Empirical Linkages Between Democracy and Economic Growth.  BJPS 24: 225-248.


e.       Muller.  Economic Determinants of Democracy 966-982.

f.        Bhagwati.  Globalization, Sovereignty, and Democracy.

g.       Barro.  1999.  Determinants of Democracy.  J. Pol. Economy.

h.       Kuznets, Simon. 1955. Economic Growth and Income Inequality.  AER 45: 1-28.

i.         Atkinson, Rainwater, & Smeeding. 1995. Income Distribution in OECD Countries: Evidence from the Luxembourg Income Study. OECD.

3.       Reform (Week 11)

a.       Przeworski 1991. Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America.  Ch. 4  (J-curve?)

b.       Hellman.  1998.  Winners Take All: The Politics of Partial Reform in Postcommunist Transitions.  World Politics 50: 203-

c.       Geddes.  1991.  A Game-Theoretic Model of Reform in Latin-American Democracies.  APSR 85.2: 371-92.

d.       Triesman. 1999. Political Decentralization and Economic Reform: A Game-theoretic Analysis.  AJPS 43: 488-517.


e.       Acemoglu. 2003. Persistence of Inefficient Institutions

f.        Wibbels.  2003.  Bailouts, Budget Constraints, and Leviathans: Comparative Federalism and Lessons from the Early United States. CPS 36.5: 475-508.

g.       Bunce.  2001.  Democratization and Economic Reform.  Annual Review of Political Science 4: 43-65.


External Economic Sources of Domestic Politics

1.       Winners and Losers (Week 12)

a.       Leamer.  1996.  Wage Inequality from International Competition and Technological Change.  AER 86: 309-314.

b.       Cline. 1999.  Trade and Income Distribution: The Debate and New Evidence.  IIE Policy Brief 99-7.

c.       Rodrik.  1997. Has Globalization Gone too Far? Institute for International Economics. Ch. 2.

d.       Rogowski.  1987.  Political Cleavages and Changing Exposure to Trade. APSR 81.4: 1121-37.


e.       Krugman & Obstfeld. Ch. 4 (Resources and Trade: The Heckscher-Ohlin Model)

    1. Freeman.  1995.  Are Your Wages Set in Beijing?  Journal of Economic Perspectives 9.3: 15-32.

g.       Lindert and Williamson.  Forthcoming.  Does Globalization Make the World More Unequal?  In NBER, Globalization in Historical Perspective. 

h.       Frankel and Romer. 1999.  Does Trade Cause Growth?  AER 89: 379-99. (but see institutions argument in Rodrik, Subramian & Trebbi. 2002. Ms.)

i.         Williamson.  1998. Globalization, Labor Markets and Policy Backlash in the Past.  JEP 12.4: 51-72 (Symposium: Globalization in Perspective).

2.       The Size & Composition of Governments & Countries (Week 13)

a.       Rodrik, Dani. 1998. Why Do More Open Countries have Bigger Governments? JPE 106.5: 997-1032.

b.       Alesina & Wacziarg. 1998. Openness, Country Size and Government. Journal of Public Economics 69: 305-21.

c.       Soskice.  1991.  The Institutional Infrastructure for International Competitiveness: A Comparative Analysis of the UK and Germany.  In Economics for the New Europe.  Atkinson and Brunetta, eds.  NYU Press.

d.       Alesina, Spolaore, and Wacziarg. 2000. Economic Integration and Political Disintegration.  AER 90: 1276-96.


e.       Alesina and Spolaore.  Forthcoming.  The Size of Nations.  MIT Press.

f.        Li and Reuveny.  2003.  Economic Globalization and Democracy: An Empirical Analysis.  Ms.  Pennsylvania State University / Indiana University.

3.       Economic Constraints and Policy Convergence?  (Week 14)

    1. Garrett.  1998. Global Markets and National Politics: Collision Course or Virtuous Circle?  International Organization 52.4

b.       Rodrik. 1997.  Has Globalization Gone too Far? Ch. 3.

c.       Oatley. 1999.  How Constraining is Capital Mobility?  The Partisan Hypothesis in the Open Economy. AJPS 43.4: 1003-27.

d.       Boix. 1998.  Political Parties, Growth and Equality.  Cambridge UP.  Introduction & Ch. 1.


e.       Katzenstein.  1985.  Small States in World Markets. Cornell UP.  Ch. 2.

f.        Frieden. 1991. Invested Interests: the Politics of National Economic Policies in a World of Global Finance.  IO 45: 425-51.

g.       Hallerberg.  1996.  Tax Competition in Wilhemine Germany and Its Implications for European Union.  World Politics 48: 324-

h.       Clark & Reichert.  1998.  International and Domestic Constraints on Political Business Cycles in OECD Economies.  IO.