Recent Spring 1996 Colloquia

   WORKSHOP IN POLITICAL THEORY
   AND POLICY ANALYSIS
   Recent Spring 1996 Colloquia
    http://www.indiana.edu/~workshop/colloquia/materials/spring1996_colloquia.html

Colloquia during Spring 1996:

April 26, 1996 Special IFRI Colloquium, Friday, 3:30-5:00 p.m.

Dr. Shree Shah, Agriculture and Forestry Department Associates (AFORDA), Kathmandu, Nepal, and Visiting Scientist at the Workshop in Political Theory and Policy Analysis, IFRI Program."Natural Resources in Nepal: Sustainable Development of Forests and Grasslands for the People."

April 30, 1996 Special Tuesday Colloquium Presentation

Vernon Smith, Economic Science Laboratory, University of Arizona. "Game Theory and Reciprocity in Some Extensive Form Experimental Games." This will be the last session of our Spring 1996 Series.

April 22, 1996

Professor Rick K. Wilson, Department of Political Science, Rice University. "Context, Institutional Powers and Leadership Traits: Disentangling Leadership and Followership."

April 15, 1996

Professor Hakan Myrlund, Department of Political Science, Lulea University, Lulea, Sweden. "Attitudes and Latitudes: Attitudes to the European Union among High School Students in Northern and Southern Sweden."

April 8, 1996

Professor Leonid Hurwicz, Department of Economics, University of Minnesota. "Modeling Institutions."

April 1, 1996

Dr. Thomas Apolte, Department of Economics, University of Duisburg, Germany. "American Federalism and Emerging Federal Structures in Europe: A Comparative View."

March 25, 1996

Franco Furger, the Institute of Public Policy, George Mason University. "Intermediary Organizations as Instruments of Environmental Policy: The Case of the Maritime Industry."

March 18, 1996

Professor Melvin J. Hinich, Department of Government, University of Texas-Austin. "New Issues and the Dynamics of Political Change."

March 11, 1996

Note: There will not be a Workshop Colloquium Presentation on March 11, 1996.

March 4, 1996

February 26, 1996

Dr. James T. Thomson, Associates in Rural Development, and Visiting Scholar at the Workshop in Political Theory and Policy Analysis, Indiana University. "State Theory and Practice in Francophone Africa: French Roots and Perspectives."

February 20, 1996 Special Tuesday Colloquium

Professor Peter Bogason, Department of Social Science, Roskilde University, Denmark. "Collective Action in the Locality: Institutional Theory and Research Bottom-up."

February 19, 1996

Tjip Walker, Doctoral Candidate in the Department of Political Science."Both Pretense and Promise: The Political Economy of Privatization in Africa."

February 12, 1996

Professor Lee Benham, Department of Economics, Washington University, St. Louis, and Professor Alexandra Benham, St. Louis. "Institutional Reform in Central and Eastern Europe: Altering Paths with Incentives and Information."

February 5, 1996

Professor Michele Fratianni, School of Business, Indiana University, and Free University of Berlin. "Variable Integration in the European Union."

January 29, 1996

Warren Ilchman, Professor of Politics and Philanthropic Studies, IUPUI and Executive Direcor of the Indiana University Center on Philanthropy. "The Utility of a Faddish Concept: Civil Society and the Comparison of Regimes."

January 22, 1996

Brian Collins, Doctoral Student, Departmentof Political Science, Indiana University. "Optimism or Opportunism: Evaluating U.S. State Government Revenue Forecasting."

January 15, 1996

Dr. Michael Cernea Cancelled

April 26, 1996, Special IFRI Colloquium Presentation, 3:30-5:00 p.m.

Dr. Shree Shah, Agriculture and Forestry Department Associates (AFORDA), Kathmandu, Nepal, and Visiting Scientist at the Workshop in Political Theory and Policy Analysis, IFRI Program, will be the speaker for a special IFRI Colloquium on Friday, April 26, 1996."Natural Resources in Nepal: Sustainable Development of Forests and Grasslands for the People."

If there is a paper for this session, it will be available at the time of the presentation. Coffee will be provided free of charge, and soft drinks are available. We hope you will be able to join us!

April 30, 1996, Special Tuesday Colloquium Presentation

Vernon Smith, Economic Science Laboratory, University of Arizona, will be the speaker for the Workshop Colloquium on Tuesday, April 30, 1996. His presentation is entitled "Game Theory and Reciprocity in Some Extensive Form Experimental Games." An abstract of his paper [co-authors Kevin A. McCabe, Carlson School of Management, University of Minnesota, and Stephen J. Rassenti, Economic Science Laboratory, University of Arizona] is provided below.

We examine decision making in two-person extensive form game trees using nine treatments that vary matching protocol, payoffs and payoff information. Our objective is to establish replicable principles of cooperative versus noncooperative behavior that involve the use of signalling, reciprocity, and backward induction strategies depending on the availability of dominated direct punishing strategies, and the probability of repeated interaction with the same partner. We find surprising support for cooperation under complete information even in various single-play treatments. Only under private information do we observe strong support for noncooperative game theory.

A copy of his paper is available by calling the above telephone number. Colloquium sessions begin at 12 noon and adjourn promptly at 1:30 p.m. You are welcome to bring your lunch. Coffee is provided free of charge, and soft drinks are available. We hope you will be able to join us!

April 22, 1996

Professor Rick K. Wilson, Department of Political Science, Rice University, will be the speaker for the Workshop Colloquium on Monday, April 22, 1996. His presentation is entitled "Context, Institutional Powers and Leadership Traits: Disentangling Leadership and Followership." An abstract of his paper [co-author Carl M. Rhodes, Department of Political Science, Rice University] is provided below.

Why do some leaders succeed and others fail? What motivates followers to follow some leaders and not others? We argue that leaders do a number of things for followers. They bear the costs for providing pure public goods; they structure the agenda, thereby limiting decision costs for followers; they often provide leadership in its traditional sense of getting followers to pay attention to novel ideas and solutions; and finally, they serve as a focal point around which followers rally. All of these leadership tasks are crucial, are defined by different contexts, and demand different skills and styles by leaders. This research begins with one component of leadership--its coordinating role--and disentangles how leadership matters for followers.

The coordinating role of leaders cannot be understated. In a setting like a legislature where members are autonomous, the institution is not hierarchical, and leaders have few formal powers at their disposal to compel follower behavior, getting followers to move in the same direction is extremely difficult. It is often assumed that leaders automatically serve as a focal point around which followers rally when confronted with a simple coordination game. In this paper, we explore this conjecture.

While most of the analysis proceeds as a simple one-sided signaling game from leaders to followers, as we note, credible signals (and actions) are derived from leader reputations. Reputations are notoriously difficult to pinpoint. This research takes a page from the work in social psychology that discusses traits associated with high quality leaders.

The analysis is based on a series of laboratory experiments in which groups of 4 actors were involved in a series of one-stage coordination games. The primary manipulations included: whether or not the group had a leader who could provide "cheap talk" signals to followers; uncertain types of leaders (both "good" and "bad"); and pre-play reputational cues attributed to leaders.

The findings show, not surprisingly, that leadership is crucial for coordinating followers. However, introducing uncertainty as to the type of leader decreases coordination. Finally, reputational cues produce dramatic improvements in rates of coordination, pointing to the importance of the priors that followers hold when gauging the credibility of leader signals

April 15, 1996

Professor Hakan Myrlund, Department of Political Science, Lulea University, Lulea, Sweden will be the speaker for the Workshop Colloquium on April 15, 1996. His presentation is entitled "Attitudes and Latitudes: Attitudes to the European Union among High School Students in Northern and Southern Sweden." An abstract of his paper is provided below.

Sweden's relations to the European Community have been debated since the European integration process started after World War II. The Swedish attitude was for many years reluctant and skeptical. Somewhat surprisingly, the Swedish Government applied for full membership of the European Union in 1991. This started a debate in Sweden which continued for four years and included a referendum and the first election for the European Parliament.

The attitudes of young people toward politics in general and the European integration is a most interesting issue for political scientists. The Swedish youth is well educated, perhaps the most educated of all generations, has a good knowledge of languages and experiences from visiting other countries. It is probably easier for the younger generation to get information about the integration process and its results than it is for the parent generation.

The paper discusses differences in attitudes toward the European Union among high school students in two different areas of Sweden. Norrbotten is the northernmost county in Sweden, is sparsely populated, and has traditionally been dependent on forest and iron ore. The unemployment figures have been the highest in the country for almost the whole 19th century. The county has for many decades been dominated by the Social Democratic Party. The province of Skane consists of two counties, Kristianstad and Malmohus. The first one has a tradition of farming and small-scale industry, while the latter one is partly dominated by industry and partly by the administrative and service sectors.

The basis for the comparison is a questionnaire given to more than 1200 students in the two districts. The attitudes toward the European Union are mainly negative in Norrbotten, especially among the females. There are only small differences between the attitudes of the students and the adult generation. The attitudes of the male students grew more positive just before the referendum in 1994. It seems from the referendum and the EU-election that the attitudes have become more negative during Sweden's first year as a member of the Union.

The attitudes are much more positive in Skane and the most positive group is the male students. The attitudes changed to a more positive view during the year preceding the referendum.

One of the conclusions from the comparison is that the attitudes toward a political issue like the Union membership mostly follow ideological patterns and that the students are to a great extent influenced by their parents and mass media.

April 8, 1996

Professor Leonid Hurwicz, Department of Economics, University of Minnesota, will be the speaker for the Workshop Colloquium on Monday, April 8, 1996. His presentation is entitled "Modeling Institutions." A summary of his presentation is provided below.

I will discuss different uses of the term "institution," but focus mainly on institutions (institutional arrangements) as rules (rather than as behavior patterns or organizations). Institutions are viewed as game forms, i.e., rules governing a game (rather than as a game); this involves specifying the admissible moves and strategies, as well as the consequences of the players' choices. More specifically, the formal counterpart of an institution is a class of game forms (rather than a single game form). But not all game forms correspond to institutions. To qualify, they must have been generated by human actions, apply to a class of situations ("categoricity"), and be, in a well defined sense, effective. I propose possible models formalizing these attributes.

An advantage of formalization in terms of game forms is that it makes possible the utilization of results and techniques from the theory of mechanism design and implementation in analyzing institutional phenomena.

My thinking has been greatly influenced by the work of Schotter, Reiter and Hughes, North, and Ostrom.

As background material, copies of his papers "Economic Design, Adjustment Processes, Mechanisms, and Institutions" [ECONOMIC DESIGN 1: 1-14, 1994] and "Institutions as Families of Game Forms" [THE JAPANESE ECONOMIC REVIEW 47(2) (June): 113-132, 1996] are available by calling the above telephone number.

April 1, 1996

Dr. Thomas Apolte, Department of Economics, University of Duisburg, Germany, will be the speaker for the Workshop Colloquium on Monday, April 1, 1996. His presentation is entitled "American Federalism and Emerging Federal Structures in Europe: A Comparative View." An abstract of his paper is provided below.

Since the 1930s, a considerable policy centralization has occurred in the United States. The reason behind this centralization has been a mingling of responsibilities between the different federal levels. In Europe, a deepening of integration and especially economic integration is, on the one hand, intended. On the other hand, however, a centralization such as that in the United States is feared. The reason for this is assumed to be the same as in the U.S., namely that there already exists a high degree of mixed responsibilities among the different federal levels. This, in turn, enables member-state politicians to form policy cartels at the level of the European Union. As a solution for these problems, a strong decentralization of policy responsibilities has been proposed, which, in turn, would promote a process of competition among member-state governments for the most efficient systems of regulation and supply of public goods. According to this idea, many activities of the European Union, especially the harmonization of member-state regulations, will be made superfluous. In this paper, it is argued that such a process of competition requires an adequate institutional setting, which the competitive process itself is not able to bring about. EU institutions should thus be interpreted as an "interjurisdictional competition enforcement agency" and reformed along these lines. On this basis, guidelines for a reform of the EC treaty in the direction of a European constitution are developed. These guidelines are based on the notion of "dual federalism" as it existed in the United States until the early 1930s. The central aim of this constitutional reform will be a decartelization of EU and member-state governmental level.

March 25, 1996

Franco Furger, the Institute of Public Policy, George Mason University, will be the speaker for the Workshop Colloquium on Monday, March 25, 1996. His presentation is entitled "Intermediary Organizations as Instruments of Environmental Policy: The Case of the Maritime Industry." An abstract of his paper is provided below.

Many discussions of modern environmental problems are informed by a Hobbesian view of society. In this view, strong, centralized governmental action is required to mitigate the negative effects of individuals blindly pursuing their narrowly focused interests. Scholars in the tradition of the Scottish moral philosophers advocate a complementary view of modern environmental problems. In their perspective, the market is not the source of (environmental) evil, but rather the most effective means to manage environmental degradation.

The positions sketched above are tacitly based on a fundamentally atomistic view of market interactions and of society more generally, one that is essentially drawn from classical mechanics. A closer look at real markets reveals that the fundamental distinction between market and government as basic units of analysis is largely unwarranted. Between market and government are additional institutions, which for lack of a better label could be called intermediary institutions. Once these institutions are explicitly taken into account, seemingly irreconcilable positions converge.

A particularly interesting example is the maritime industry. Over the last 200 years, this industry has developed a number of distinctive institutions. Together, they now form what I call the self-governance structure of this industry. Each of these organizations has a specific impact on economic actors operating in the global shipping market. The history of the marine self-governance structure shows that these organizations have not always been successful in maintaining or improving high levels of safety or in protecting the marine environment. By asking why this happened and how self-governance structures could be made more effective, new policy approaches begin to emerge that draw on the best features of market incentives and regulations.

March 18, 1996

Professor Melvin J. Hinich, Department of Government, University of Texas-Austin, will be the speaker for the Workshop Colloquium on Monday, March 18, 1996. His presentation is entitled "New Issues and the Dynamics of Political Change." An abstract of his paper [co-author Michael C. Munger, Department of Political Science, University of North Carolina-Chapel Hill] is provided below.

The theoretical spatial model of ideology is adapted to account for the introduction of a new issue. The logic of the model builds on the empirical findings of Poole and Rosenthal. Basic parameters that influence the change in the voter's induced ideal point along the ideological dimension are derived. These include the difference between the status quo and the voter's ideal point on the new policy, the weight given the new policy in the voter's utility function, and size of the mapping between the policy and the prevailing ideology. The implications for a strategy of "heresthetics" are discussed, including a distinction that has not been made in previous work: issues accounted for by the existing ideological split change positions of candidates, while issues outside the prevailing ideology change the policy space itself. The empirical work of Poole and Rosenthal is shown to be consistent with this conclusion. Importantly, the paper concludes that the introduction of new issues is much more important in real-world politics than other kinds of "movement" commonly assumed in spatial models of voting.

This presentation is being co-sponsored by the Interdisciplinary Consortium for Statistical Applications. A copy of his paper is available by calling the above telephone number. Colloquium sessions begin at 12 noon and adjourn promptly at 1:30 p.m. You are welcome to bring your lunch. Coffee is provided free of charge, and soft drinks are available. We hope you will be able to join us!

March 4, 1996

Professor Susan J. Buck , Department of Political Science, University of North Carolina-Greensboro, and Visiting Scholar at the Workshop in Political Theory and Policy Analysis, will be the speaker for the Workshop Colloquium on Monday, March 4, 1996. Her presentation is entitled "Saving All the Parts: Federal-State Cooperation in Wildlife Management." A summary of her presentation is provided below.

Since the early 1900s, state fish and wildlife agencies have focused on improving opportunities for recreational hunting and fishing. By the mid-1970s, there was general agreement that nongame species also need specialized management. In 1980, Congress passed the Fish and Wildlife Conservation (Forsythe-Chafee or Nongame) Act, but although the act was reauthorized in 1986 and 1990, it has never been funded. In the early 1990s, a coalition of wildlife interest groups, professional associations, and the U. S. Fish and Wildlife Service (FWS) initiated a campaign to provide funding for the Nongame Act. The campaign, known as the Wildlife Diversity Funding Initiative (WDFI), proposes a funding mechanism modelled on two extremely successful programs also administered by the FWS: Federal Aid in Wildlife Restoration (Pittman- Robertson or P-R) Act of 1937, and Federal Aid in Sport Fish Restoration (Dingell-Johnson or D-J) Act of 1950. The basic funding mechanism used in these two laws is a federal excise tax on hunting and fishing equipment, which is redistributed to the states for wildlife and sportfish programs. The WDFI proposes a similar tax on nonconsumptive wildlife-related recreational supplies such as binoculars, bird seed, and tents.

The two existing programs are successful for several reasons: remarkable congruence between users and payers; user access to the agencies and commissions that manage the resource; strong support from industries, governments, and the private sector involved with the resource; and no active opposition to the programs. These conditions do not exist for the funding mechanism proposed by the WDFI. The rationale for the WDFI proposal rests on two arguments: first, that P-R and D-J programs are inadequate because they neglect nongame species, and second, on the principle of "user pays," participants in nonconsumptive wildlife-related recreation should be taxed to support their activities.

The WDFI is an example of well-intentioned, wooly thinking. First, it ignores the social context of P-R and D-J programs, using a false analogy to apply P-R and D-J funding mechanisms and outputs to current demands for ecosystem management, sustainability, and biodiversity protection. Second, empirical evidence does not support the WDFI contention that P-R and D-J are neglecting nongame species or that the proposed tax would primarily affect the nonconsumptive users who would benefit. Finally, institutional analysis suggests that even if such a mechanism were in place, it would not be enduring.

I begin this paper with a brief description of the P-R and D-J programs. In the second part, I present the WDFI, drawing on interviews with representatives of the outdoor recreation industry, wildlife interest groups, and government agencies to explain the rationale behind the proposal and the objections raised by industry. In the third section, I use data from the 1991 National Survey of Hunting, Fishing, and Wildlife-Associated Recreation to show that the arguments advanced by the WDFI proponents are not supported by empirical evidence. In the conclusion, I draw on institutional analysis to explain why P-R and D-J have worked so well and why the WDFI is unlikely to succeed.

A copy of her background paper is available by calling the above telephone number. Her paper entitled "Saving All the Parts: Federal-State Cooperation in Wildlife Management" will be available at a later date. Colloquium sessions begin at 12 noon and adjourn promptly at 1:30 p.m. You are welcome to bring your lunch. Coffee is provided free of charge, and soft drinks are available. We hope you will be able to join us!

February 26, 1996

Dr. James T. Thomson, Associates in Rural Development, and Visiting Scholar at the Workshop in Political Theory and Policy Analysis, Indiana University, will be the speaker for the Workshop Colloquium on Monday, February 26, 1996. His presentation is entitled "State Theory and Practice in Francophone Africa: French Roots and Perspectives." A synopsis of his presentation is provided below.

This presentation addresses an institutional dilemma in Francophone Africa: official rejection or suppression of local initiatives. The paper highlights the dilemma by reference to renewable natural resource governance and management (RNRGM) issues, generally in Francophone countries of the West African Sahelian and particularly in Mali. The intended audience for the paper is practitioners--local leaders, non-governmental organization (NGO) staff, government and foreign assistance officials--engaged in development work in that region.

A common institutional design for state structures is found practically everywhere in francophone areas of Africa, from Madagascar to Mali, Guinea to Cameroon. That the same basic design should persist thirty-five years after independence in some fifteen countries, despite serious difficulties, suggests not only a common tradition of institutional practice but strong common intellectual roots. This is indeed the case. Since the ideas underlying state practices have real impacts on people's lives and life chances, it is important that practitioners in the area understand the general implications of those ideas.

The West Sahelian states in question all face critical RNRGM problems. Most have tried to address these questions by various forms of state-planned intervention, financed by foreign aid (both government donors and NGOs) and loans from multinational development banks. Most of these efforts have failed to either recognize existing social capital in the sector, or to build on it in meaningful ways, although more recently some NGOs have made real progress in this area. Nonetheless, conflicts persist between RNR users' and state officials' and technicians' views of how resources should be governed and managed.

The paper traces the roots of French political theory that underlie these conflicts, and shows how they continue to impede both users' efforts to govern resources and efficient use of local social capital. It ends with recommendations for reforms designed to improve the environment for locally- based RNRGM.

February 20, 1996

Professor Peter Bogason, Department of Social Science, Roskilde University, Denmark, will be the speaker for a "Special" Workshop Colloquium on Tuesday, February 20, 1996. His presentation is entitled "Collective Action in the Locality: Institutional Theory and Research Bottom-up." Excerpts from the "Preface" of his draft manuscript of this same title is provided below.

Today institutional analysis abounds. But, as a former colleague of mine once mumbled: "If everyone nods in agreement about a research result, it is probably wrong. . . ." So the growing interest made me think things over again, and helped by some of my experiences from the empirical research I got engaged in a number of speculations on the developmental patterns of society.

Keeping my grumbling former colleague in mind, I have left some of my early ideas but kept the basic tenets, and added postmodernity as an explicit rationale for the analysis--if nothing else to assure that not everybody will nod in agreement. I first touched upon postmodernism in 1989, but dared not adopt it explicitly in my theoretical thinking. In the final chapter of an anthology, summing up the writings of the contributors on urban administration, I wrote:

. . . The consequences of this (i.e., the postmodern, PB) form of analysis for the environment will be something like "exit" the technical-rational order and "exit" the discipline-divided scientific universe seeking the definite explanation which is incongruent with an ambiguous reality.

But with such an annihilation of the existing organization of research postmodernism has temporarily set a pause for itself as a scientific phenomenon with influence. . . . Enormous powers of persons, resources and thought are bound in the existing division of labor. More than just some meta-scientific ideas are needed to change those conditions (Bogason 1989, translated by PB).

Indeed. And for sure we are not yet at a juncture where such a change is likely. But more and more social scientists are adopting post-modern stances in their craft, and therefore one may safely predict that gradually, postmodern science will break through.

Insofar as research must reflect on social change, the time is right to combine institutional analysis and the problems of the Western societies, which I have chosen to phrase postmodern--whether or not one likes the name of concept is of no importance, but it is important to heed the problems that the concept signals.

THERE WILL NOT BE A PAPER FOR THIS SESSION. Colloquium sessions begin at 12 noon and adjourn promptly at 1:30 p.m. You are welcome to bring your lunch. Coffee is provided free of charge, and soft drinks are available. We hope you will be able to join us!

February 19, 1996

Tjip Walker, Doctoral Candidate in the Department of Political Science, will be the speaker for the Workshop Colloquium on Monday, February 19, 1996. His presentation is entitled "Both Pretense and Promise: The Political Economy of Privatization in Africa." An introduction to his talk is provided below.

In a major 1994 review of economic reform in Africa, the World Bank concluded:

Reform efforts generally have not been too successful in the areas where the state has intervened most heavily. Privatizing and reforming state-owned enterprises [has] . . . proved to be among the most difficult of adjustment reforms. . . . The available data . . . are disappointing, showing no significant reduction in the number of enterprises, little improvement in their financial performance, unacceptable returns on government investment, and inability to meet the demand for cost-effective, efficient provision of public utilities. Divestiture is proceeding slowly among small and medium-sized firms and scarcely at all among large enterprises.

My research over the last few years, my dissertation, and this colloquium are devoted to answering the question of why privatization has been so problematic in Africa and identifying what, if anything, can be done to improve its prospects. My view is that privatization does have promise in Africa, but only if we lift off the pretense in which it is enshrouded. The pretense is of two sorts: economic and political. The economic pretense is proffered by development agencies, particularly the World Bank, which have extracted a narrow model from the West European privatization experience and applied it without nuance to a very different African context. The political pretense emerges principally from African governments who have acceded to ambitious privatization programs knowing full well that to carry out such programs is to attack the core of the rent-seeking regimes that keep them in power.

Cutting through the pretense and realizing the promise of privatization requires a better understanding of the economics and politics--the political economy--of Africa. To advance understanding of the economics of privatization, I offer an institutionally-grounded framework for analyzing market structures and their reform; a framework that supports consideration, design, and implementation of a broader range of privatization strategies. To advance understanding of the political forces shaping the structure of commercial activity in Africa, I argue that the defining characteristic of African regimes is the systematic creation and extraction of rents.

During this colloquium, I will elaborate each of these constructs and suggest how the insights they afford can improve the promise of privatization in Africa. A brief description of the market-structure framework and an extended discussion of Africas rent-seeking regimes (chapter 4 of my dissertation) are available as background.

The aforementioned background papers are available by calling the number above. Colloquium sessions begin at 12 noon and adjourn promptly at 1:30 p.m. You are welcome to bring your lunch. Coffee is provided free of charge, and soft drinks are available. We hope you will be able to join us!

February 12, 1996

Professor Lee Benham, Department of Economics, Washington University, St. Louis, and Professor Alexandra Benham, St. Louis, will be the speakers for the Workshop Colloquium on Monday, February 12, 1996. Their presentation is entitled "Institutional Reform in Central and Eastern Europe: Altering Paths with Incentives and Information." The "Introduction" to their paper [co- author Michael Merithew] is provided below.

What is known about the paths which lead from centrally planned systems to successful market economies? This paper explores this question by examining concepts and perspectives from the economics literature on reform in Central and Eastern Europe and the more general literature on institutional development. We focus on the constraints imposed by path dependence and on the role of information and incentives in the transformation process. The paper is addressed to those who are involved directly or indirectly in bringing about institutional change.

While economic theory expounds upon the workings of a market system, it does not tell us how to build one. Most scholars agree that, to work efficiently, markets require rules of the game which are conducive to low-cost exchange. There are constraints, however, on the introduction of new rules into a system. In particular, the path taken previously constrains the choices available now. In these terms, the major issue facing Central and Eastern Europe is how to move away from old sets of formal and informal rules, mental models, and norms of behavior so that new sets of rules and norms can become effective.

The outcomes of policies will depend in large measure upon specific local conditions, particularly the historical experience of the region. This paper can offer no master blueprint for reform. But there appear to be some identifiable elements of successful reform which are broadly applicable. We focus on several of those factors. Researchers and policy makers will best be able to apply them to their own circumstances in their own countries.

Section 2 of the paper examines path dependence and some persisting features of the earlier regimes in Central and Eastern Europe, including the continuation of the old elites and the lack of social capital. Section 3 discusses some key elements for implementing reform: incentives, measuring and monitoring behavior, constraining corruption, establishing and maintaining credibility in the laws and structures that make up the reform, and encouraging bottom-up approaches to reform.

Section 4 addresses the strategy of reform. Not everything can be done at once; not every outcome can be foreseen. It is therefore essential to assess priorities and tradeoffs, consider the time frame, and respond to unanticipated consequences. Finally, the conclusion examines the importance of information flows in the marketplace for reform ideas. We argue for more trade across intellectual and geographic arenas.

Our argument is plain: moving away from the legacies of central planning toward efficient markets and improved economic performance is not easy; close attention to information and incentives will help.

A copy of their paper is available by calling the phone number above. Colloquium sessions begin at 12 noon and adjourn promptly at 1:30 p.m. You are welcome to bring your lunch. Coffee is provided free of charge, and soft drinks are available. We hope you will be able to join us!

February 5, 1996

Professor Michele Fratianni, School of Business, Indiana University, and Free University of Berlin, will be the speaker for the Workshop Colloquium on Monday, February 5, 1996. His presentation is entitled "Variable Integration in the European Union." An extended abstract of his paper is provided below.

The expansion of the EU adds significantly to the heterogeneity of the membership. The existing tension between deepening and enlargement will be exacerbated. Additional flexibility is inevitable. The critical question is how much flexibility to put into the system without emasculating the acquis communautaire. The menu approach to integration is not acceptable because it creates too much flexibility. Member countries could choose and pick clubs without any respect to the degree of integration already achieved. The menu approach would be resisted by the original members of the Community, which would proceed with deeper integration any way. Much of the appeal of the EU to new entrants would disappear if the menu approach would prevail.

On the other hand, the federation approach would create too little flexibility. Several member countries, both old and aspiring, are not ready to accept the degree of centralization and the less restrictive decision-making process that are usually found in federal systems. So we are left with two possible choices: the multi-speed approach and the variable geometry (VG) approach. The multi-speed adds flexibility only in the implementation stage. Ultimate objectives are common to all members. There is no question about a member joining a club, say the MU club; the flexibility lies in postponing entry into the club.

The VG approach differs from multi-speed Europe in the sense that integration is defined in terms of member countries, which differ in their desire to pursue different areas of integration. Both the German and French versions of VG would divide the EU between a center and peripheries, defined in terms of countries rather than policy fields. A center would consist of a club whose members cooperate on an extensive range of activities, say economic, monetary and political union. Peripheries are clubs whose members cooperate on a specific policy area, e.g., social policy. The two versions of VG differ in the way the periphery clubs operate, interact with one another, and interact with the center. In the German version, periphery clubs are ranked in a predetermined order. For example, in terms of location relative to the center, the MU club would be the closest, a common payment system farther, and the Single Market would be the farthest. A member country would qualify to join the center club, i.e., maximum integration, only if it had qualified for all the periphery clubs in the specified sequence; hence, the label of concentric circles. Furthermore, for every area of integration only one club is operational. Clubs cannot compete for area of integration; for example, there is only one club for MU and only one club for social policy. This feature creates an externality that is eliminated by letting all EU member countries have a voice on the entry conditions and operation of the periphery clubs. In the French proposal, the exclusionary practices of a club do not harm those who have not joined because there is always the possibility for the outsiders to form a competing club. Furthermore, the road to the center is not predetermined as in the German version of VG. In sum, the French proposal has more flexibility than the German proposal.

The weakness of both proposals lies in identifying center and peripheries with countries rather than with policy areas. The center includes countries that want to cooperate on virtually all aspects of integration, without defining these aspects. The periphery includes countries that desire instead limited cooperation, again without defining what limited cooperation means. It would be more productive and less divisive to discuss variable integration in terms of policy areas and the requirements that countries must meet to join clubs with specified objectives.

A copy of his paper is available by sending email to the address listed below. Colloquium sessions begin at 12 noon and adjourn promptly at 1:30 p.m. You are welcome to bring your lunch. Coffee is provided free of charge, and soft drinks are available. We hope you will be able to join us!

January 29, 1996

Warren Ilchman, Professor of Politics and Philanthropic Studies, IUPUI and Executive Direcor of the Indiana University Center on Philanthropy, will be the speaker for the Workshop Colloquium on Monday, January 29, 1996. His presentation is entitled "The Utility of a Faddish Concept: Civil Society and the Comparison of Regimes." A synopsis of his presentation is provided below.

My presentation will be a consideration of contributions to the study of politics that an understanding of philanthropy might make. By defining philanthropy as "voluntary action for some vision of the public good" and seeing in the currently fashionable concept of civil society a way to talk about the political implications of philanthropy, I hope to provide tentative answers to certain questions about particular state- society relationships in a variety of regimes. The questions to be addressed:

Can we talk collectively--and with profit--about networks, organizations, attitudes, that dispose individuals to associate with others to achieve ends they value, without necessarily "leave" from the state, as if the collectivity can be measured, described, spoken about? Can one argue that these activities help define one's humanness and political character? Does it let us see activities and issues in a different light--allow increased clarity? Less clarity? Is the "state-society" distinction superior to the "public-private" distinction? What is gained thereby? What is lost?
If the notions about and the development of civil society arose in relation to particular historical forces, do those forces limit what can arise elsewhere with similar characteristics?
Can we talk about "stronger" and "weaker" civil societies over time and in space? What are the indicators of strength? Of weakness? Can one talk about the health and "illth" of civil society? Can it erode? What does erosion look like? Can we invest in strengthening civil society? What kind of investments strengthen civil society? What is the utility of the notion of social capital?
If civil society is repressed, can it recover? If civil society is suppressed, can it recover?
If government uses constituents of civil society to deliver government services, is civil society weakened or strengthened? Does it depend on the service delivered?
What are the transnational dimensions of civil society? Does the state-society language lose value in such situations?

January 22, 1996

Brian Collins, Doctoral Student, Department of Political Science, Indiana University, will be the speaker for the Workshop Colloquium on Monday, January 22, 1996. His presentation is entitled "Optimism or Opportunism: Evaluating U.S. State Government Revenue Forecasting." A synopsis of his presentation is provided below.

This presentation offers an answer to the question "Why do some governments manage a political economy better than others?" Institutional analysis suggests that governments can improve economic performance when they secure property rights, provide public goods such as infrastructure, and manage common-pool resources effectively. I argue that policy makers face incentives to engage in distributive politics that result in insecure property rights, an undersupply of public goods, or the misappropriation of common-pool resources. These incentives arise from institutional arrangements that (1) make policy makers agents of an electorate who face very high monitoring costs and (2) provide those agents with monopoly governance powers.

I offer a framework of contestable markets as one means of constraining policy makers from engaging in distributive politics that undermines economic performance. A contestable market framework highlights the importance of "potential competition" in restraining natural monopolists; that is, a contestable market is characterized by a credible threat of replacement. I hypothesize that policy makers are better managers of the political economy when the market for government goods and services is more contestable. Two important determinants of contestability are the costs of obtaining positions in policy making institutions and relocation costs for citizens and capital.

This framework is relevant for polities at all levels of analysis. At the most fundamental level, I raise questions about the relationship between governance and economic efficiency. I examine state governments in the United States to test these hypotheses. I argue that policy makers in state governments use revenue forecasts to create funding for distributive politics. This behavior has negative consequences for state economies in the short and long term, especially the state's ability to debt finance. I find evidence to support that forecasting errors in state government revenue projections is inversely related to government supply contestability.

A copy of his paper entitled "Competition, Contestability and Government Performance" is available by sending email to the address listed below. Also, further background material is available upon request from the Workshop. Colloquium sessions begin at 12 noon and adjourn promptly at 1:30 p.m. You are welcome to bring your lunch. Coffee is provided free of charge, and soft drinks are available. We hope you will be able to join us!

January 15, 1996

First Session for the Spring 1996 Series

We are sorry to announce that Dr. Michael Cernea will not be able to be our guest speaker at the Colloquium presentation this coming Monday, January 15. Similar to last semester, we will use this opportunity for a Roundtable discussion of the ongoing research projects of our colleagues. We hope that you will be able to join us.

To request a full text copy of a paper, if it is available, send an email to workshop@indiana.edu, or contact Gayle Higgins at ghiggins@indiana.edu.