Most recent papers:

• Self‐Preserving Leviathans Evidence from Local‐Level Data.
  Jan Kluge, Gunther Markwardt, Christian Thater.
  Kyklos. October 03, 2017
  This paper investigates the impact of the intensity of political competition on the leviathan behavior of local politicians. While we find only weak effects of strong parties on total expenditures and, thus, only weak traces of standard leviathan behavior, we find strong evidence that the spending pattern during a legislative period depends on the distribution of power in local councils. In municipalities with weak political competition, the public spending reaches a peak in election years. If parties face politically strong opponents, they do not initiate a political budget cycle. Our results indicate that local politicians act as self‐preserving leviathans.

  October 03, 2017   doi: 10.1111/kykl.12150   open full text
• Occupational Prestige and the Gender Wage Gap.
  Kristin J. Kleinjans, Karl Fritjof Krassel, Anthony Dukes.
  Kyklos. October 03, 2017
  Occupational segregation by gender remains widespread and explains a significant part of the gender wage gap. We shed light on the reasons why occupational segregation persists despite the increases in women's education and labor force participation, and why it results in a gender wage gap. Women express a stronger relative preference than men for occupations that are valuable to society, which we argue is captured by their occupational prestige. If women prefer occupations with higher occupational prestige, they will earn lower wages because of compensating wage differentials. Using conditional logit models of occupational choice, we find statistically significant support for this hypothesis. The effect is economically significant: the gender differences in the weights placed on prestige and wages can explain up to one half of the gender wage gap resulting from occupational segregation, or about one fourth of the overall gender wage gap. Our results are strongest for individuals with low ability, which suggests that social norms may be an important factor in generating these gender differences.

  October 03, 2017   doi: 10.1111/kykl.12149   open full text
• The Electoral Politics and the Evolution of Complex Healthcare Systems.
  Roger D. Congleton, Alberto Batinti, Rinaldo Pietratonio.
  Kyklos. August 25, 2017
  There is no abstract available for this paper.

  August 25, 2017   doi: 10.1111/kykl.12146   open full text
• Do Economics Departments Improve after They Appoint a Top Scholar as Chairperson?
  Amanda H. Goodall, John M. McDowell, Larry D. Singell.
  Kyklos. August 25, 2017
  There has been almost no research into what makes an effective chairperson in a university department. This paper constructs a historical longitudinal dataset on economics departments in 58 US research universities. It documents evidence that a department's research output tends to improve substantially when the incoming department Chair is himself or herself an outstanding scholar (in particular, is highly cited). The analysis adjusts for a set of other possible influences, including the standing of the department, university resources, the previous Chair, the trend in the department's productivity, and time‐lags. Possible interpretations, and implications for future research, are discussed.

  August 25, 2017   doi: 10.1111/kykl.12148   open full text
• Fiscal Fairness as a Political Argument.
  Bram Mahieu, Benny Geys, Bruno Heyndels.
  Kyklos. August 25, 2017
  Governments typically apply several tax instruments. The tax choice literature sees the choice among these as depending on the political costs involved. One source of such costs is (horizontal) inequity in the distribution of the tax burden. In this article, we provide the first empirical test of the question whether and to what extent such inequity affects tax choices. Using data on housing sales and tax policy in Flemish municipalities, we create an indicator for the inequity of the local property tax. The latter is levied on the property's assessed rental value, and its inequity is a by‐product of the slow reassessment procedure, leading to a situation in which properties of identical value are taxed very differently. We find clear evidence that municipalities in which property taxation is more inequitable tend to rely less on this tax as a source of municipal revenue.

  August 25, 2017   doi: 10.1111/kykl.12151   open full text
• Differences in National Identity, Violence and Conflict in International Sport Tournaments: Hic Sunt Leones!
  Raul Caruso, Marco Di Domizio, David A. Savage.
  Kyklos. August 25, 2017
  This work examines the relationship between national identity and conflict during international sporting tournaments and the impact of referees as an institutional countermeasure. The empirical analysis covers the FIFA World, Confederations and Under 20's World Cups and Olympic tournaments from 1994 to 2014, resulting in 1152 individual matches. We use the issuing of cards (red and yellow) and the number of sanctions (fouls) as a conflict proxy, plus macro‐level national identity markers to determine between team variations. Our results indicate that national identity is robustly significant in the prediction of conflict, whereas the match‐specific variables seem to be of less importance. Additionally, we observe that referees are a highly successful control of on‐field aggression.

  August 25, 2017   doi: 10.1111/kykl.12147   open full text
• Online Networks and Subjective Well‐Being.
  Fabio Sabatini, Francesco Sarracino.
  Kyklos. July 06, 2017
  We test the relationship between the use of social networking sites (SNS) and a proxy of utility, i.e. subjective well‐being (SWB), using instrumental variables. Additionally, we disentangle the indirect effects of SNS on well‐being mediated by face‐to‐face interactions and social trust using a structural equation model. Results suggest that the use of SNS hampers people's well‐being directly and indirectly, through its negative effects on social trust. However, the use of SNS also has a positive impact on well‐being because it increases the probability of face‐to‐face interactions. Yet, the net effect of the use of SNS for SWB remains negative.

  July 06, 2017   doi: 10.1111/kykl.12145   open full text
• Fundamental Versus Granular Comparative Advantage: An Analysis Using Chess Data.
  Asier Minondo.
  Kyklos. July 06, 2017
  The Ricardian and Heckscher‐Ohlin models of international trade contend that firms do not play any role in shaping countries' export specialization. However, the evidence shows that few firms dominate exports in many countries. This paper analyzes the relative contribution of fundamental (country) and granular (individual) comparative advantage to the differences in specialization across countries in a particular activity: chess. Using data on the quality of around 146,000 chess players in 106 countries in 2015, I find that fundamental comparative advantage is the main contributor to the variation in countries' specialization in chess. However, the contribution of granular comparative advantage becomes larger when analyzing specialization in very high‐quality chess players. Despite the appearance of chess servers that allow playing online and offer tools to improve chess skills, I do not find convergence in fundamental comparative advantage over the period 2001‐2015.

  July 06, 2017   doi: 10.1111/kykl.12144   open full text
• Majority Rules in Constitutional Referendums.
  Stephan Michel, Ignacio N. Cofone.
  Kyklos. July 06, 2017
  The paper addresses the divergence in majority rules at the moment of creating or reforming constitutions. While constitutions require, in most cases, qualified majorities in order to be approved at the constitutional assembly, they normally require only simple majorities to be ratified at the referendum. We analyze the set of conditions under which each majority rule is preferable for constitutional referendums. We argue that the simple majority requirement for referendums in constitution‐making, which is nearly universally used, lacks a clear theoretical justification. Qualified majority rules increase legitimacy and provide additional checks on the drafters. We further highlight when simple majority rules have advantages: when decision‐making costs in the referendum are high. Thereafter, we present an evaluation mechanism to identify the cases in which each majority rule should be used to increase stability and legitimacy. We then apply this evaluation mechanism to the constitution‐making processes in Poland, Bolivia and Egypt, which are three examples of diverging majority rules.

  July 06, 2017   doi: 10.1111/kykl.12143   open full text
• Shaking Off Burdens – Debt Relief and Moral Intuitions.
  David Chavanne.
  Kyklos. July 06, 2017
  Motivated by the prevalence of debt crises and the resulting policy debates, this study uses a vignette‐based survey to examine the moral intuitions that underlie debt‐related policy preferences. After reading a hypothetical scenario involving a debtor and a lender, survey respondents rate the degree of fairness that they attach to a third party's decision to allow debt relief. The experimental design varies (1) the responsibility of lenders and debtors in terms of whether their situations stem from bad luck or poor choices, (2) the salience of a lender's profit motive and (3) whether the debtor and the lender are individuals or corporations. The results show that debt relief is more likely to be found fair in a corporate context compared to a personalized context and that the factors that drive the perceived fairness of debt relief differ across corporate and personalized contexts. With corporate debt, debtor and lender responsibility are strongly, and consistently, linked to the perceived fairness of debt relief. With personalized debt, lender responsibility is never a significant driver of the perceived fairness of debt relief, and debtor responsibility only matters if the lender's profit motive is made salient.

  July 06, 2017   doi: 10.1111/kykl.12142   open full text
• Work for Passion or Money? Variations in Artists’ Labor Supply.
  Trine Bille, Knut Løyland, Anders Holm.
  Kyklos. July 06, 2017
  This paper assesses the relative impact of work for money or work for passion on Norwegian artists by examining artists’ labor supply. Our contribution is twofold. The first is to test the work‐preference model and the second is to investigate the impact of arts grants on artists’ labor supply. The empirical specification draws two distinctions: between arts and non‐arts income and between labor and non‐labor income. Non‐labor income is divided into three different sources: (1) spouse's income, (2) income from financial assets and social benefits, and (3) arts grants and subsidies. Our contribution adds to the literature by estimating the significance of these various income sources on the time allocated to arts work, non‐arts work, and leisure. The results provide convincing evidence for the work‐preference model, and ad hoc evidence shows that art grants have a significant positive effect on the supply of arts hours. This finding supports arts policy and shows the impact of art grants on artists’ motivation to work on their arts. The causality of wages on supply is demonstrated by estimating the effects of wage shocks (grants) on arts labor supply using fixed‐effect and difference‐in‐difference methods.

  July 06, 2017   doi: 10.1111/kykl.12141   open full text
• Learning from the Swiss Corporate Governance Exception.
  Massimiliano Vatiero.
  Kyklos. April 10, 2017
  The Swiss economy represents an exception to the legal origin theory (e.g., Roe, 2006). Although Switzerland is a country belonging to the civil law family, many of its public companies have diffused corporate ownership, as do those in common law countries. This paper maintains that the Swiss exception relies on the complementarity between corporate ownership and policies addressing employment protection and innovation. The Swiss case presents two lessons. First, the current corporate governance is the result of a long and composite path in which politics plays a pivotal role; second, the institutional differences and similarities across countries, which one would try to explain along with the legal origin theory, can also emerge from politics‐based accounts, such as those referring to policies on employment protection and innovation.

  April 10, 2017   doi: 10.1111/kykl.12140   open full text
• Public Corruption in the U.S. States and Its Impact on Public Debt Pricing.
  Tima T. Moldogaziev, Cheol Liu, Martin J. Luby.
  Kyklos. April 10, 2017
  This study evaluates the levels of public corruption in the American states and their impact on the prices of public debt sold by underwriting banks to retail investors. Results suggest that the markups paid by retail investors to underwriters decrease significantly with the incidence of public corruption. The relationship remains significant even when existing anti‐corruption enforcement efforts are taken into consideration. Extant literature shows that the issuers of public debt from relatively more corrupt jurisdictions receive lower prices from underwriting banks in wholesale transactions. We develop and empirically show the mechanism through which this can occur. We offer the first evidence that the public debt market exerts disciplining pressures on the American states with greater levels of public corruption. When purchasing state‐issued public debt, retail buyers appear to demand narrower markups by factoring in public corruption. This, we argue, is an important reason why underwriting banks offer lower prices when dealing with less disciplined fiscal sovereigns.

  April 10, 2017   doi: 10.1111/kykl.12139   open full text
• The Increasing Irrelevance of Trade Diversion.
  Christopher S.P. Magee.
  Kyklos. April 10, 2017
  This paper is intended as a guide for policymakers considering new regional trade agreements. The data provided here show that only about a quarter of imports are potentially subject to trade diversion from new agreements (i.e. they come from countries outside of regional trading blocs and in industries with positive most‐favored nation tariffs). Since this percentage is steadily declining with the increasing number of regional trade agreements and the falling level of tariffs, trade diversion is becoming increasingly irrelevant as a concern for new trade deals. The paper also estimates how each potential new bilateral free trade agreement would affect a country's imports and exports, as well as whether the increased imports would replace domestic production, imports from other RTA partners, or imports from non‐RTA partners. In this way, the estimates are able to shed light on which countries make the best partners for new regional trade agreements. Finally, the paper provides estimates of the trade effects for two large potential new regional agreements: the Transatlantic Trade and Investment Partnership and the Trans‐Pacific Partnership.

  April 10, 2017   doi: 10.1111/kykl.12138   open full text
• Economic Freedom in the Early 21st Century: Government Ideology Still Matters.
  Kai Jäger.
  Kyklos. April 10, 2017
  Empirical studies show that government ideology has hardly influenced welfare expenditures since the 1990s, casting doubt on the general ability of national governments to design economic policies according to their programmatic appeals. This study takes a comprehensive view on policy‐making by using a modified version of the Fraser Institute's Economic Freedom of the World Index. I focus on the aspects of economic freedom that provoke party polarization and that national governments are capable of influencing. The results suggest that government ideology still matters in the early 21st century: The empirical analysis of 36 OECD or new European Union member states from 2000 to 2012 shows that left‐wing governments are associated with significantly lower economic freedom. Economic freedom continues to be the guiding principle that divides left and right in economic policy‐making because the left still promotes relatively higher levels of government spending and regulation.

  April 10, 2017   doi: 10.1111/kykl.12137   open full text
• Donations to Political Parties: Investing Corporations and Consuming Individuals?
  Alexander Fink.
  Kyklos. April 10, 2017
  What motivates donations to political parties? Two views prevail. Donors are perceived either as ideologically motivated consumers or as privilege‐seeking investors. To investigate differences in donor motivation between corporations and individuals, we analyze data from Germany. For the period from 1994 to 2014, we find that corporations act more like investors than individuals do. First, we test whether corporations or individuals are more inclined to give more to incumbent parties than to parties outside the governing coalition. Giving to incumbent parties whose representatives hold public offices may be more attractive for investing donors. Second, we test for differences between corporations and individuals in the relative increase in donations from non‐election years to election years. Investor donations may be more volatile than consumer donations. We find that only corporations donate more to incumbent parties and that corporations increase their party donations from non‐election years to election years more than individuals do. These differences in the behavior of corporate and individual donors provide some evidence for potentially undesirable exchanges between corporations as investors and parties. Further, the differences between individual and corporate donors tend to be more consistent for parties to the right on the political spectrum.

  April 10, 2017   doi: 10.1111/kykl.12136   open full text
• Is Decentralization Really Welfare Enhancing? Empirical Evidence from Survey Data (1994‐2011).
  Marta Espasa, Alejandro Esteller‐Moré, Toni Mora.
  Kyklos. April 10, 2017
  Decentralization is believed to constitute the optimal institutional arrangement for the provision of public expenditure. In contrast to centralization, it is thought to offer a better match between the provision of public services and individual preferences. We test this fundamental hypothesis propounded by the fiscal federalism literature by analyzing the process of decentralization undergone by Spain since the beginning of the 1980s. We exploit survey data in which respondents (coded according to their region of residence) are asked about their level of satisfaction with the provision of public goods. A higher degree of satisfaction is expressed when responsibility for education and health expenditure is assigned to the intermediate tier of government rather than to central government. This level of satisfaction, however, is not recorded in the case of Spain's largest regions. Likewise, the simultaneous presence of tax revenue decentralization does not guarantee further welfare gains. In the case of the administration of justice—where the nature of the responsibility assigned to some regional governments is of a merely administrative nature—decentralization does not appear to have any impact on the level of satisfaction expressed.

  April 10, 2017   doi: 10.1111/kykl.12135   open full text
• Early Retirement across Europe. Does Non‐Standard Employment Increase Participation of Older Workers?
  Jim Been, Olaf Vliet.
  Kyklos. April 10, 2017
  In many European countries, the labor market participation of older workers is considerably lower than the labor market participation of prime‐age workers. This study examines the variation in labor market withdrawal of older workers across 13 European countries over the period 1995‐2008. We seek to contribute to the international comparative macro literature by analyzing the effects of non‐standard employment. Accounting for a number of labor market institutions, the empirical analysis leads to the conclusion that part‐time employment—and in particular voluntary part‐time employment—is negatively related to labor market withdrawal of older men. As such, the results indicate that part‐time employment functions as ‘bridge employment’ between full‐time employment and retirement. Additionally, we find that part‐time employment at older ages does not decrease the average actual hours worked. Taken together, our results show that in countries with a high prevalence of part‐time employment among older workers, the labor supply of older workers is higher both at the extensive and the intensive margin.

  April 10, 2017   doi: 10.1111/kykl.12134   open full text
• Are Left‐Wing Governments Really Pro‐Labor? An Empirical Investigation for Latin America.
  Krishna Chaitanya Vadlamannati, Artur Tamazian.
  Kyklos. January 21, 2017
  Are left‐wing governments in Latin America, as proclaimed by their leaders, really pro‐labor? It is often argued that left‐wing governments in Latin America have implemented pro‐labor policies. In this paper we put these claims to an empirical test using 37 aspects of de facto (practices) and de jure (laws) violations of labor rights. Using panel data on 26 Latin American and Caribbean countries during the period 1985–2002, we do not find any effect of left‐leaning chief executives on labor rights. While left‐leaning chief executives do legislate laws protecting labor rights, the enforcement of these laws is abysmally weak. Further evidence suggests that cohesive left‐wing governments are more likely to legislate laws protecting labor rights than diverse governments. These results are robust to alternative measures of ideology, estimation methods, and controlling for endogeneity. The policy implications suggest that irrespective of the political ideology, upholding labor rights in Latin America requires strengthening the enforcement capacity.

  January 21, 2017   doi: 10.1111/kykl.12133   open full text
• Historical Prevalence of Infectious Diseases, Cultural Values, and the Origins of Economic Institutions.
  Boris Nikolaev, Raufhon Salahodjaev.
  Kyklos. January 21, 2017
  It is widely believed that economic institutions such as competitive markets, the banking system, and the structure of property rights are essential for economic development. But why economic institutions vary across countries and what are their deep origins is still a question that is widely debated in the developmental economics literature. In this study, we provide an empirical test for the provocative hypothesis that the prevalence of infectious diseases influenced the formation of personality traits, cultural values, and even morality at the regional level (the so called Parasite‐ Stress Theory of Values and Sociality), which then shaped economic institutions across countries. Using the prevalence of pathogens as an instrument for cultural traits such as individualism, we show in a two‐stage least squares analysis that various economic institutions, measured by different areas of the index of Economic Freedom by the Heritage Foundation, have their deep origins in the historical prevalence of infectious diseases across countries. Our causal identification strategy suggests that cultural values affect economic institutions even after controlling for a number of confounding variables, geographic controls, and for different sub‐samples of countries. We further show that the results are robust to four alternative measures of economic and political institutions.

  January 21, 2017   doi: 10.1111/kykl.12132   open full text
• Greying the Budget: Ageing and Preferences over Public Policies.
  Luiz Mello, Simone Schotte, Erwin R. Tiongson, Hernan Winkler.
  Kyklos. January 21, 2017
  This paper looks at how individual attitudes towards the allocation of government spending change along the life cycle. As individuals age and re‐evaluate the benefits and costs of government programs, such as education, healthcare and old‐age pensions, they also influence the level and composition of government spending. Using the Life in Transition Survey II for 34 countries of Europe and Central Asia, we find that older individuals are less likely to support hikes in government outlays on education and more likely to support increases in spending on pensions. These results are very similar across countries, and they do not change when using alternative model specifications, estimation methods and data sources. To our knowledge, this the first paper to provide evidence of the “grey peril” effect for a large group of developed, middle‐income and low‐income economies. Our findings are consistent with a body of literature arguing that conflict across generations over the allocation of government expenditure may intensify in ageing economies.

  January 21, 2017   doi: 10.1111/kykl.12131   open full text
• Public Attitudes toward Fiscal Consolidation: Evidence from a Representative German Population Survey.
  Bernd Hayo, Florian Neumeier.
  Kyklos. January 21, 2017
  The poor state of public finances in many countries has led to calls for fiscal consolidation. In practice, implementing concrete consolidation measures appears to meet with public resistance, suggesting that the success of consolidation efforts strongly depends on the popularity of the chosen measures. To identify public attitudes toward fiscal consolidation and alternative consolidation measures, we conducted a survey among 2,000 German citizens. Applying ordered and multinominal logit models, we test theory‐based hypotheses about the determinants of individual attitudes toward public debt. We find that, inter alia, personal economic situation, time preferences, fiscal illusion, and trust in politicians exert a significant impact on attitudes toward fiscal consolidation and preferences for alternative consolidation measures.

  January 21, 2017   doi: 10.1111/kykl.12130   open full text
• Do More of Those in Misery Suffer from Poverty, Unemployment or Mental Illness?
  Sarah Flèche, Richard Layard.
  Kyklos. January 21, 2017
  Studies of deprivation usually ignore mental illness. This paper uses household panel data from the USA, Australia, Britain and Germany to broaden the analysis. We ask first how many of those in the lowest levels of life‐satisfaction suffer from unemployment, poverty, physical ill health, and mental illness. The largest proportion suffers from mental illness. Multiple regression shows that mental illness is not highly correlated with poverty or unemployment, and that it contributes more to explaining the presence of misery than is explained by either poverty or unemployment. This holds both with and without fixed effects.

  January 21, 2017   doi: 10.1111/kykl.12129   open full text
• A Prey‐Predator Model of Trade Union Density and Inequality in 12 Advanced Capitalisms over Long Periods.
  Louis Chauvel, Martin Schröder.
  Kyklos. January 21, 2017
  This article shows empirically how trade union membership and income inequality are mutually related in twelve countries over more than 100 years. While past research has shown that high income inequality occurs alongside low trade union membership, we show that past income inequality actually increases trade union membership with a time lag, as trade unions recruit more members after inequality has been high. But we also show that strengthened trade unions then fight inequality, thereby destroying what helped them to recruit new members in the past. As trade union density decreases, inequality increases and eventually re‐incentivises workers to join unions again. By showing this empirically, we reconceptualise the relationship between inequality and union density as a prey and predator model, where predators eat prey – unions destroy inequality, but thereby also destroy their own basis for survival. By empirically showing that trade union density and social inequality influence each other in this way over long periods, this article contributes to a dynamic approach on how social problems and social movements interact.

  January 21, 2017   doi: 10.1111/kykl.12128   open full text
• The Effects of 9/11 on Attitudes toward Immigration and the Moderating Role of Education.
  Simone Schüller.
  Kyklos. October 25, 2016
  The 9/11 terror attacks are likely to have induced an increase in anti‐immigrant and anti‐foreigner sentiments, not only among US residents but also beyond US borders. Using unique longitudinal data from the German Socio‐Economic Panel and exploiting exogenous variation in interview timing throughout 2001, I find that the 9/11 events caused an immediate shift of around 40 percent of one within‐standard deviation to more negative attitudes toward immigration and resulted in a considerable decrease in concerns over xenophobic hostility among the German population. The quasi‐experiment 9/11 provides evidence on the relevance of non‐economic factors in attitude formation and the role of education in moderating the negative terrorism shock. Additional descriptive analysis suggests that the effects have also been persistent in the years after the attacks.

  October 25, 2016   doi: 10.1111/kykl.12122   open full text
• It's Politics, Stupid! Political Constraints Determined Governments' Reactions to the Great Recession.
  Fabian Gunzinger, Jan‐Egbert Sturm.
  Kyklos. October 25, 2016
  This paper quantifies the effect of political constraints, as measured by legislative control by the incumbent government, on the size of fiscal stimulus packages that have been put in place as a reaction to the Great Recession. On average, political constraints reduced the size of a country's fiscal stimulus package by between 1 and 2.7 percentage points of GDP. This finding is robust to a number of alternative dependent variables, control variables, and sample specifications and is in line with the widely held, but never tested, perception that political reality limits the de facto application of discretionary fiscal policy as reaction to economic shocks.

  October 25, 2016   doi: 10.1111/kykl.12121   open full text
• Social Media and the Diffusion of Information: A Computational Experiment on the Emergence of Food Scares.
  Benoît Desmarchelier, Eddy S. Fang.
  Kyklos. October 25, 2016
  This paper examines how social media have modified the process through which information spreads within a population. Building on agent‐based modeling and a behavioral survey on information diffusion following a food scare in China (n = 586), we study diffusion networks in simulated populations with and without access to social media. While the use of social media does not increase the likelihood of informational cascades, our results suggest a significant change in the topology of diffusion networks. Social media facilitate the formation of feedback loops through the emergence of multiple links, which can potentially lead to instances of market and social panic.

  October 25, 2016   doi: 10.1111/kykl.12120   open full text
• Prediction Markets, Social Media and Information Efficiency.
  Leighton Vaughan Williams, J. James Reade.
  Kyklos. July 12, 2016
  We consider the impact of breaking news on market prices. We measure activity on the micro‐blogging platform Twitter surrounding a unique, newsworthy and identifiable event and investigate subsequent movements of betting prices on the prominent betting exchange, Betfair. The event we use is the Bigotgate scandal, which occurred during the 2010 UK General Election campaign. We use recent developments in time series econometric methods to identify and quantify movements in both Twitter activity and Betfair prices, and compare the timings of the two. We find that the response of market prices appears somewhat sluggish and is indicative of market inefficiency, as Betfair prices adjust with a delay, and there is evidence for post‐news drift. This slow movement may be explained by the need for corroborating evidence via more traditional forms of media. Once important tweeters begin to tweet, including importantly breaking news Twitter feeds from traditional media sources, prices begin to move.

  July 12, 2016   doi: 10.1111/kykl.12119   open full text
• Attenuation Bias, Recall Error and the Housing Wealth Effect.
  Yvonne McCarthy, Kieran McQuinn.
  Kyklos. July 12, 2016
  There is no abstract available for this paper.

  July 12, 2016   doi: 10.1111/kykl.12118   open full text
• Learning to Cooperate: Applying Deming's New Economics and Denzau and North's New Institutional Economics to Improve Interorganizational Systems Thinking.
  Arthur T. Denzau, Henrik P. Minassians, Ravi K. Roy.
  Kyklos. July 12, 2016
  Public administrators often go about their business blind to how their actions both affect, and are affected by, the activities and processes of agents operating outside their own organizations. In truth, no single agency or department operates in a vacuum or in isolation of other organizational entities. According to world‐renowned leadership and management expert, W. Edwards Deming, a given agency's ability to perform its duties effectively is the result of a myriad of interdependent processes and operations with other organizations. Consequently, effective leaders must develop an understanding of how the departments they oversee both influence, and are at the same time influenced by the outside agencies and organizations upon whom they mutually depend. 1) We draw jointly on W. Edwards Deming's System of Profound Knowledge (SoPK) framework and Arthur T. Denzau and Douglass C. North's (1994) New Institutional Economics (NIE)‐based work on Shared Mental Models (SMM) to explore why inter‐agency cooperation tends to be limited in ‘traditional’ organizational environments. 2) Drawing on Denzau and North's SMM, we then suggest how inter‐organizational communication and cooperation can be facilitated via two means of learning—training and experiential. 3) We then apply concepts from Denzau and North's SMM to suggest a modified model of the Nash equilibrium used in game theory. This model is then used to operationalize the learning path to Deming's approach to ‘systems thinking’ (SoPK.) 4) Finally, we provide a real‐world example to illustrate the modified model.

  July 12, 2016   doi: 10.1111/kykl.12117   open full text
• Individual Responsibility and Economic Development: Evidence from Rainfall Data*.
  Lewis Davis.
  Kyklos. July 12, 2016
  This paper estimates the effect of individual responsibility on economic development using an instrument derived from rainfall data. I argue that a taste for collective responsibility was adaptive in preindustrial societies that were exposed to high levels of agricultural risk, and that these attitudes continue to influence contemporary social norms and economic outcomes. The link between agricultural risk and collective responsibility is formalized in a model of optimal parental socialization effort. Empirically, I find a robust negative correlation between rainfall variation, a measure of exogenous agricultural risk, and a measure of individual responsibility. Using rainfall variation as an instrument, I find that individual responsibility has a large positive effect on economic development. The relationships between rainfall variation, individual responsibility and economic development are robust to the inclusion of variables related to climate and agricultural and institutional development.

  July 12, 2016   doi: 10.1111/kykl.12116   open full text
• Student Employment and Later Labour Market Success: No Evidence for Higher Employment Chances.
  Stijn Baert, Olivier Rotsaert, Dieter Verhaest, Eddy Omey.
  Kyklos. July 12, 2016
  We investigate the impact of student work experience on later hiring chances. To completely rule out potential endogeneity, we present a field experiment in which various forms of student work experience are randomly disclosed by more than 1000 fictitious graduates applying for jobs in Belgium. Theoretical mechanisms are investigated by estimating heterogeneous treatment effects by the relevance and timing of revealed student work experience. We find that neither form of student work experience enhances initial recruitment decisions. For a number of candidate subgroups (by education level and occupation type), even an adverse effect is found.

  July 12, 2016   doi: 10.1111/kykl.12115   open full text
• Cultural Influence on Preferences and Attitudes for Environmental Quality.
  Yiannis Kountouris, Kyriaki Remoundou.
  Kyklos. April 22, 2016
  We investigate national culture's influence on preferences for and attitudes to environmental quality. We use the cultural diversity of immigrants in European countries to isolate the effect of culture from the confounding effect of the economic and institutional environment. Results suggest that culture is a significant determinant of migrants' individual environmental preferences and attitudes. Migrants from countries with higher levels of environmental preferences are more willing to trade off income for environmental quality when controlling for individual characteristics, country of residence, and country of origin macroeconomic and environmental conditions. Furthermore, culture significantly influences individual beliefs about limits to growth, the fragility of the balance of nature, and the likelihood of an ecological crisis. The result is robust to alternative definitions of the cultural proxy and points to the significance of accounting for cultural influences in the design of domestic and international environmental policy and the application of environmental valuation techniques.

  April 22, 2016   doi: 10.1111/kykl.12114   open full text
• (Please Don't) Say It to My Face! The Interaction of Feedback and Distance: Experiments with Vulgar Language.
  David Blake Johnson.
  Kyklos. April 22, 2016
  I extend current understanding of non‐monetary punishments by introducing one‐way unrestricted feedback (vulgar language) from responders in laboratory and online ultimatum games. Feedback changes in the expected direction. Negative feedback is returned in the event of low offers while higher offers receive positive feedback. Additionally, the possibility of unrestricted feedback significantly increases amounts sent by proposers, but only in the lab. This effect is statistically significant and large in magnitude but is not present in the online experiments. These results illustrate that increases in social distance and/or physical proximity can weaken the effectiveness of non‐monetary punishments.

  April 22, 2016   doi: 10.1111/kykl.12113   open full text
• Do Constitutions Matter? The Effects of Constitutional Environmental Rights Provisions on Environmental Outcomes.
  Chris Jeffords, Lanse Minkler.
  Kyklos. April 22, 2016
  We use a novel data set within an instrumental variables framework to test whether the presence and language of constitutional environmental rights influence environmental outcomes. The outcome variables include Yale's Environmental Performance Index and its components. We employ two‐stage least squares to account for reverse causality, that is, the possibility that a country which takes steps to protect the environment might also be more likely to constitutionalize environmental rights. Our first stage theory combines constitution norms, opposition costs, and generation effects. Our controls include country income, which means that our study is also related to the Environmental Kuznets Curve literature. We find that constitutions do indeed matter for positive environmental outcomes, which suggests that we should not only pay attention to the incentives confronting polluters and resource users, but also to the incentives and constraints confronting those policymakers who initiate, monitor, and enforce environmental policies.

  April 22, 2016   doi: 10.1111/kykl.12112   open full text
• How Do Voters React to Complex Choices in a Direct Democracy? Evidence from Switzerland.
  Zohal Hessami.
  Kyklos. April 22, 2016
  Direct democracy may impose significant information demands on voters, especially when individual propositions are highly complex. Yet, it remains theoretically ambiguous how proposition complexity affects referendum outcomes. To explore this question, I use a novel dataset on 153 Swiss federal referendums that took place between 1978 and 2010. The dataset includes hand‐collected data on the number of subjects per proposition based on official pre‐referendum information booklets as a measure of complexity. My estimation results suggest that the relationship between proposition complexity and the share of yes‐votes follows an inverse U‐shape. Using micro‐data from representative post‐referendum surveys, I provide evidence for two opposing channels. More complex propositions are supported by a more diverse group of voters. On the other hand, voters find it more difficult to estimate the personal consequences of complex propositions and are therefore more likely to reject them.

  April 22, 2016   doi: 10.1111/kykl.12111   open full text
• China's Impact on Africa – The Role of Trade, FDI and Aid.
  Matthias Busse, Ceren Erdogan, Henning Mühlen.
  Kyklos. April 22, 2016
  This paper investigates the impact of Chinese activities in sub‐Saharan African countries with respect to the growth performance of economies in that region. Using a Solow‐type growth model and panel data for the period 1991 to 2010, we find that African economies that export natural resources have benefited from positive terms‐of‐trade effects. In addition, there is evidence for displacement effects of African firms due to competition from China. On the other hand, Chinese foreign investment and aid in Africa does not appear to have a significant impact on African growth.

  April 22, 2016   doi: 10.1111/kykl.12110   open full text
• The Effect of Over‐Indebtedness on Health: Comparative Analyses for Europe.
  Stefan Angel.
  Kyklos. April 22, 2016
  The aim of this paper is twofold. First, it tests whether an effect of over‐indebtedness on self‐assessed health exists. Fixed‐effects panel regression models based on panel data for 25 European countries show that being in arrears increases the likelihood of reporting bad/very bad health. However, effects are weak in terms of economic significance. The second research question focuses on the effect heterogeneity of overindebtedness among different European countries. It asks whether country‐level factors moderate the effect of problematic debt on health. These macro‐variables are the accessibility of health services, debt management and debt discharge regulations, dispute resolution with banks/insurance companies, and the social stigma of being over‐indebted/in debt. Descriptive analyses showed that some aspects of the legal debt‐collection process (e.g., higher costs of debt collection) are associated with a stronger effect of over‐indebtedness on subjectively assessed poor health. There is also some evidence that easier dispute resolution with banks and insurance companies is correlated with smaller effects of over‐indebtedness on health.

  April 22, 2016   doi: 10.1111/kykl.12109   open full text
• Corruption: Transcending Borders.
  Esteban Alemán Correa, Michael Jetter, Alejandra Montoya Agudelo.
  Kyklos. April 22, 2016
  Is corrupt behavior transmitted internationally? Using panel data for 123 countries from 1995 to 2012, our results suggest a positive and statistically meaningful relationship between neighboring countries’ corruption levels and domestic graft. This result is robust to including two‐way fixed effects, country‐specific time trends, and the standard set of control variables. The effect becomes stronger as income increases, if capital cities are located closer to each other, and if countries share a common political union, such as the European Union. We find less evidence for common language or comparable institutional backgrounds (e.g., similar degrees of democracy), but some evidence for trade relationships as potential transmission channels. These findings allow two main conclusions. First, a country with corrupt neighbors will find it difficult to get rid of corruption. Second, on a more positive note, efforts aimed at decreasing domestic corruption levels could produce positive externalities in affecting neighboring countries. This could particularly hold true within a common institutional framework, such as the European Union.

  April 22, 2016   doi: 10.1111/kykl.12108   open full text
• European Identity and Support for European Integration: A Matter of Perceived Economic Benefits?
  Soetkin Verhaegen, Marc Hooghe, Ellen Quintelier.
  Kyklos. April 10, 2014
  Economic utilitarian theory assumes a relationship between economic benefits, support for European integration and European identity. While the relationship between economic benefits and support for European integration has already been empirically investigated, this is not the case for European identity. Therefore, we test the association between economic indicators and European identity, while performing the same analysis for support for European integration. Eight different objective and perceived economic parameters are tested, covering the whole spectrum of sociotropic, egocentric, objective and perceived benefits. The multilevel analyses on Eurobarometer data show that economic considerations are positively associated with support and European identity. This is especially the case for perceived benefits, indicating that earlier findings about perception of benefits in the study of support for European integration are valid for European identity as well.

  April 10, 2014   doi: 10.1111/kykl.12055   open full text
• Conceptualising Work in Economics: Negating a Disutility.
  David A. Spencer.
  Kyklos. April 10, 2014
  This paper starts from the premise that economics has offered a one‐sided conception of work. Standard economic theory, specifically, has defined work as a means to income and consumption; it has failed to grasp the importance of work as an end in its own right. The aim of the paper is to develop an alternative conception of work that captures the formative impacts of work on the well‐being of workers. The paper firstly outlines and criticises the different definitions of the disutility of work found in economics. It then offers a critical assessment of happiness research on work. The idea that the effects of work on worker well‐being can be captured by job satisfaction data and that the importance of work can be reduced to a subjective feeling in the heads of individual workers – two key aspects of happiness research – are challenged. The final part of the paper develops novel ideas about how the economics of work should progress in the future. The section proposes a needs‐based conception of work and then uses this conception to make the case for collective intervention aimed at enhancing the quality of work life.

  April 10, 2014   doi: 10.1111/kykl.12054   open full text
• Do Natural Disasters Enhance Societal Trust?
  Hideki Toya, Mark Skidmore.
  Kyklos. April 10, 2014
  In this article we investigate the relationship between disasters and societal trust. A growing body research suggests that factors such as income inequality, ethnic fractionalization and religious heritage are important determinants of social capital in general and trust in particular. We present new panel data evidence of another important determinant of trust – the frequency of natural disasters. Frequent naturally occurring events such as storms require (and provide opportunity for) societies to work closely together to meet their challenges. While natural disasters can have devastating human and economic impacts, a potential spillover benefit of greater disaster exposure may be a more tightly knit society.

  April 10, 2014   doi: 10.1111/kykl.12053   open full text
• The Effect of Political Connections on Credit Access: Does the Level of Financial Development Matter?
  Addisu A. Lashitew.
  Kyklos. April 10, 2014
  Although growing evidence indicates that political connections affect firm performance, little is known how institutional factors moderate the process. This paper investigates the effect of political connections on credit access, and the role of financial development in moderating the relationship between the two. The analysis is based on a unique dataset of manufacturing firms that covers dozens of developing and transition countries. The results show that the strength of political connections, measured by the amount of time the firm's senior managers spend with government officials, has a significant positive effect on credit access. Exploiting the cross‐country dimension of the dataset, I then show that the effect of political connections is higher in countries where the banking sector is more concentrated and has higher net interest margin. Furthermore, the effect of political connections is lower in countries that have credit information sharing mechanisms. These results suggest that a competitive banking sector improves efficiency of credit allocation by reducing politically motivated lending.

  April 10, 2014   doi: 10.1111/kykl.12051   open full text
• Competition between Judaism and Christianity: Paul's Galatians as Entry Deterrence.
  Mario Ferrero.
  Kyklos. April 10, 2014
  This paper sets forth a theory of competition between exclusive religions as an entry deterrence game, in which the incumbent may find it profitable not to accommodate but to deter the competitor's entry by precommitting to sufficient capacity expansion in the event of entry. If entry costs are high enough, deterrence is optimal and the incumbent remains a monopolist, although the entry threat distorts its effort upward. The model is then used to explain the Jews' withdrawal from proselytism in the face of Christian competition in the first century CE. We review the historical evidence on conversion to Judaism before and after the first century and argue that the demise of Jewish proselytism was due not to the destruction of the Second Temple in 70 CE but to the apostle Paul's strategic decision, in his letter to the Galatians, that Gentiles need not convert to Judaism to become Christians.

  April 10, 2014   doi: 10.1111/kykl.12050   open full text
• On the Performance of Monetary Policy Committees.
  Etienne Farvaque, Piotr Stanek, Stéphane Vigeant.
  Kyklos. April 10, 2014
  This paper examines the influence of the biographical experience of monetary policy committee members on their performance in managing inflation and output volatility. Our sample covers major OECD countries in the 1999 to 2010 period. Using data envelopment analysis, we study the efficiency of monetary policy committees. Then, we look at the determinants of these performances. The results in particular show that (i) in crisis times, a smaller committee is more efficient, (ii) policymakers' background influence the performance, with a positive role for committee members coming from academia, central banks and the financial sector, although the latter lost their edge during the Great Recession. It is also shown that some committees have reduced the inefficiency created by the crisis more rapidly than others.

  April 10, 2014   doi: 10.1111/kykl.12049   open full text
• Crony Capitalism: Rent Seeking, Institutions and Ideology.
  Paul Dragos Aligica, Vlad Tarko.
  Kyklos. April 10, 2014
  This paper elaborates the notion of “crony capitalism” and advances an innovative approach to the analysis of the phenomenon in case, seen as a type of rent‐seeking society. The argument leads to a pioneering attempt to elaborate an original theory of crony capitalism as a sui generis system and with that end in view it combines three complementary perspectives: microeconomics (dealing with the basic economics of rent‐seeking), institutional or structural (dealing with the specific structures and configurations of institutions, policies and processes via which rent seeking gets materialized), and ideological (dealing with the ideas, rhetoric, beliefs, doctrines and other forms of legitimization and justification of the specific policies and institutions). The paper identifies significant functional differences between crony capitalism in high‐income and developing countries and advances a novel interpretation of the special nature of crony capitalism by focusing on the distinctive features of its ideological component.

  April 10, 2014   doi: 10.1111/kykl.12048   open full text
• Privacy and Freedom: An Economic (Re‐)Evaluation of Privacy.
  Dominik Aaken, Andreas Ostermaier, Arnold Picot.
  Kyklos. April 10, 2014
  Departing from the mostly skeptical view of privacy encountered in economics, we re‐evaluate privacy from the perspective of economic liberalism. We argue that freedom is fundamental to economics and conceive privacy as a specific form of freedom. We then apply the principle that freedom cannot be ‘self‐defeating’ (no one is free not to be free) to privacy. This principle requires that restrictions of freedom and, by extension, privacy be revocable. We thus develop a novel concept of privacy, which leads us to evaluate privacy favorably, and apply the revocability requirement to identify unacceptable restrictions of privacy.

  April 10, 2014   doi: 10.1111/kykl.12047   open full text
• The Effect of Immigration on Entrepreneurship.
  Yaron Zelekha.
  Kyklos. July 12, 2013
  This research focuses on the impact of immigration on entrepreneurship. I find clear evidence that immigration has a significant impact on entrepreneurship. The paper makes three important contributions to the research of both immigration and entrepreneurship. First, it proposes unique empirical evidence using a cross‐section analysis in which the country's level of immigrants has a significantly positive affect on its level of entrepreneurship. Second, it adds to the theoretical understanding of the mechanisms and environments that characterize positive immigration effects on entrepreneurship. I suggest that country‐specific characteristics – in particular urban, open, competitive and culturally diversified (including open minded for ethnic and gender diversity) – influence significantly the positive effect of immigrants on the country's level of entrepreneurship. Furthermore, these positive effects are magnified as the flow of immigrants grows. Third, it uses for the first time in the literature a cross‐section data set of 176 countries of immigrants and entrepreneurial activity.

  July 12, 2013   doi: 10.1111/kykl.12031   open full text
• Calling Democracies and Dictatorships: The Effect of Political Regime on International Long‐Distance Rates.
  Christian Bachelder Holkeboer, James Raymond Vreeland.
  Kyklos. July 12, 2013
  Do political regimes systematically impact the price of international long‐distance phone calls? We argue that, compared to autocracies, democratic governments have stronger incentives to regulate the provision of telephone service efficiently. In contrast, autocracies have incentives to limit communication between their citizens and the rest of the world. We thus expect the price of international long‐distance to vary with political regime. Controlling for other factors that may impact long‐distance pricing – such as level of economic development – we test this hypothesis using a cross‐section of 190 countries and find evidence of a democracy‐discount. It costs less to call democracies by about 25 percent.

  July 12, 2013   doi: 10.1111/kykl.12030   open full text
• Mind Matters.
  Slavisa Tasic.
  Kyklos. July 12, 2013
  This paper argues that two different worldviews may be identified in economics and hypothesizes about the origins of this differentiation. I argue that the differences in economic worldviews go beyond technical academic, methodological or ideological distinctions; instead, they may be related to both old conceptions of the two types of mind and some newer findings in cognitive neuroscience. In particular, I analyze the recent developments in economics from the brain lateralization point of view and argue that some salient trends in economic thought are largely compatible with the hypothesis of the increased left brain hemisphere dominance.

  July 12, 2013   doi: 10.1111/kykl.12029   open full text
• Green by Default.
  Cass R. Sunstein, Lucia A. Reisch.
  Kyklos. July 12, 2013
  There is no abstract available for this paper.

  July 12, 2013   doi: 10.1111/kykl.12028   open full text
• The Impact of Multinationals on the Size of the Banking System.
  Dirk Schoenmaker, Dewi Werkhoven.
  Kyklos. July 12, 2013
  After the global financial crisis, the size of the banking sector has become a hotly debated topic. To measure the size of the banking system a country's banking assets divided by the country's gross domestic product (GDP) is commonly applied as a general yardstick. This paper shows that this yardstick does not take into account differences in financial needs. In particular, countries differ with regard to the number and size of multinational enterprises. In a cross‐country empirical study, we find a statistically significant relationship between the presence of large banks and the presence of multinationals, after controlling for the size of the country. That is why we develop an additional specific yardstick for firm specific financial needs.

  July 12, 2013   doi: 10.1111/kykl.12027   open full text
• The Dictatorship of the Popes.
  Fabio Padovano, Ronald Wintrobe.
  Kyklos. July 12, 2013
  This paper takes the view that theocracies are essentially a form of dictatorship and verifies whether this interpretation is empirically supported when applied to the longest lasting example of theocracy, the temporal power of the Popes. The length of its record and the many historical shocks it had to face reveal information about the incentives and constraints that characterize it. We use this information to test some of the predictions of a theory of dictatorship about the durability of, and the source of opposition to the various regimes on data about the Papacy. The results appear to support the theory.

  July 12, 2013   doi: 10.1111/kykl.12026   open full text
• No Youth Left behind? The Long‐Term Impact of Displacement on Young Workers.
  Inés Hardoy, Pål Schøne.
  Kyklos. July 12, 2013
  We investigate short‐ and long‐term impacts on labour market outcomes of experiencing a displacement for young workers. The period under study is 2000–2009. The end of the observation period is characterised by a shrinking labour market, coinciding with the start of the financial crisis. The main merit of the study is the inclusion of a wide battery of dependent variables. In general we find sizeable short‐term effect on both unemployment and wage‐employment. Furthermore, the results indicate that displacement has a long‐term negative effect on wage employment. Part of this pattern seems to be masked by an increased likelihood of self‐employment. A positive effect on self‐employment is desirable from a policy perspective. Finally, among those who are employed in the final observation year, we find a small negative effect of displacement on hourly wages. This is solely explained by the foregone work experience of the displaced workers in the years after displacement.

  July 12, 2013   doi: 10.1111/kykl.12025   open full text
• Immigration and Political Instability.
  Tesfaye A. Gebremedhin, Astghik Mavisakalyan.
  Kyklos. July 12, 2013
  Immigration may adversely affect political stability if immigrants are perceived unfavourably by host country populations. Using a large sample of countries this study confirms that a higher immigrant share of a population is associated with decrease in the level of political stability. We further demonstrate that a higher immigrant share leads to increased military spending through the channel of political stability. The negative effect of immigration on political stability appears to be stronger in countries with assimilative citizenship laws. We account for the endogeneity of immigrant share by using an instrument constructed from gravity model estimates.

  July 12, 2013   doi: 10.1111/kykl.12024   open full text