Papers by Alison Johnston
Education Economics, 2022
Public higher education is chronically under-funded in developing countries, making private inves... more Public higher education is chronically under-funded in developing countries, making private investment necessary for human capital development. We investigate if information provision mobilizes support for private investment in public higher education by employing an online RCT in Afghanistan. We find that information cues impact respondents’ support for how education should be financed. Respondents that received information about the current amount of funding devoted to different levels of education (including tuition amounts for private tertiary programs), became more partial to prioritizing public funding for primary and secondary education over tertiary education but also became more supportive of tuition introduction in public universities.
SSRN Electronic Journal, 2015
Analyses in international political economy (IPE) identify interest rate convergence, magnified i... more Analyses in international political economy (IPE) identify interest rate convergence, magnified in the process of European monetary integration, and financial market liberalization as causal factors behind the rise of house prices. Despite these common credit supply shocks, developed economies experienced heterogeneous trends in housing inflation throughout the 1990s and 2000s. Turning towards demand determinants of housing prices, we focus on whether wage-setting institutions blunt financial liberalization's impact on housing inflation via their restraining effect on incomes. Employing both a panel regression analysis and a structured comparison of housing developments in Ireland and the Netherlands, we uncover two findings. First, income growth is a more important predictor of housing bubbles across OECD economies than financial variables (although income's impact on house prices is severely mitigated for the United States). Second, countries with coordinated labor market institutions that grant political coalitions in the export sector veto powers over non-tradable sector interests, realize more restrained income growth and, in turn, are less prone to housing bubbles.
Growth and Welfare in Advanced Capitalist Economies, 2021
Wages and wage bargaining institutions are foundational components of comparative capitalism rese... more Wages and wage bargaining institutions are foundational components of comparative capitalism research. Supply-side comparative capitalism research has often assumed that wage moderation – facilitated through highly coordinated wage-setting institutions – produces beneficial growth outcomes. This supposition stems from the logic that restrained unit labor cost growth causes firms to increase employment and output. However, through its demand-side perspective, new growth model literature questions the virtues of wage moderation, because the restraint of wages can be detrimental to growth via its suppression of domestic consumption. This chapter empirically tests under what conditions will wage moderation produce economic growth. Using a first-difference, distributive lag panel analysis of 18 OECD countries from 1970 to 2015, its findings largely resonate with predictions within the growth model literature. In the presence of wage restraint, countries with larger export shares and highly coordinated wage-setting institutions realize higher growth and lower unemployment than countries with smaller export shares and uncoordinated wage-setting institutions. In contrast, wage inflation produces better growth outcomes for countries with uncoordinated wage setting, relative to those with highly coordinated wage-setting institutions. These results suggest that wage restraint is not a winning strategy for all growth models. Rather, wage moderation is associated with better growth (and unemployment) outcomes only for countries with export-facing growth strategies.
Review of International Political Economy, 2020
Household mortgage debt unleashed devastating consequences for the global economy in 2007–2008. D... more Household mortgage debt unleashed devastating consequences for the global economy in 2007–2008. Despite the growing importance of household debt in financial markets, international political economy and comparative political economy have not theorized why it varies so much across Europe. We argue that variation in household debt can be explained by the intersection of two domestic institutions: labor market institutions (and by extension the welfare state) that enable households to withstand negative employment/income shocks, and mortgage finance institutions that govern households’ credit access. We empirically demonstrate via a panel analysis of 17 advanced capitalist democracies that the impact of these institutions on household debt is co-dependent. Strong collective bargaining institutions (and generous welfare states), which protect borrowers from income and employment insecurity, are associated with higher household indebtedness, but only if housing finance institutions that encourage mortgage lending are present (i.e. in Scandinavia and the Netherlands). In contrast, liberal (financialized) economies have comparatively lower household indebtedness because their labor market institutions inhibit income security for borrowers. As household debt becomes more central to comparative political economy, our findings suggest that scholars who study financialization need to integrate labor market (and welfare state) institutions into their analysis to understand how domestic financial systems function.
West European Politics, 2019
Housing has important economic, political, and social ramifications for Western Europe and beyond... more Housing has important economic, political, and social ramifications for Western Europe and beyond. Despite its importance in shaping economic and political outcomes, however, housing remains in the peripheral vision of major comparative political economy debates. This introduction to the special issue accomplishes four objectives. First it demonstrates how housing defies current political economy typologies by failing to conform to their theoretical and empirical predictions. Second it summarises the current state of housing research within political science, which still remains in its infancy. Third it highlights how the contributions in this special issue expand our understanding of how housing causes and is shaped by political and economic outcomes in Europe. Finally, this introduction concludes by outlining how the special issue contributions demonstrate housing's importance for the welfare state, political preferences and electoral shifts, regulatory and redistributive policies, and financialisation and household indebtedness in Europe.
JCMS: Journal of Common Market Studies, 2015
The Varieties of Capitalism literature offers two competing hypotheses on institutional resilienc... more The Varieties of Capitalism literature offers two competing hypotheses on institutional resilience. One argues that globalization promotes convergence towards a neo-liberal system. Another stipulates that diverse capitalist regimes promote different comparative advantages, enabling diverse political economies to co-exist. In this article, we argue that the compatibility of diverse models of capitalism is contingent upon monetary regime. We examine how different currency regimes influence the mutual co-existence of export-led growth models (euro core) and domestic demand-led growth models (euro periphery). Under EMU, we find that these two models have become increasing incompatible, as unsustainable divergences in external balances have emerged between them. We hypothesize that external imbalances between these two growth regimes did not emerge prior to EMU because of the presence of two inflation adjustment mechanisms in the real exchange rate; the nominal exchange rate (in soft currency regimes) and national central banks’ promotion of inflation convergence (in hard currency regimes).
Recent literature on the European debt crisis emphasizes that rising external trade and lending i... more Recent literature on the European debt crisis emphasizes that rising external trade and lending imbalances between the European Monetary Union's (EMU) Northern and Southern member states served as a crucial determinant behind speculative divergence between these two regions. However, these gaping external imbalances only emerged with the launch of the single currency. In this paper, we examine how three different currency regimes -monetary union, fixed exchange rate, and flexible exchange ratesinfluence the mutual co-existence of export-led growth models (which predominate in the Eurozone's crisis-spared Northern economies) and domestic demand-led growth models (which predominate in the Eurozone's crisis-prone Southern economies). We hypothesize that external imbalances between these two growth models did not emerge prior to EMU because of the presence of two adjustment mechanisms in the real exchange rate: the nominal exchange rate (in soft currency regimes) and the promotion of inflation convergence by national central banks (in hard currency regimes). European monetary integration removed these two readjustment mechanisms, leading to a persistent divergence in the real exchange rate and ultimately to external imbalances between Europe's diverse models of capitalism. iv MPIfG
Transfer: European Review of Labour and Research, 2012
ABSTRACT The recent financial crisis has once again highlighted the precarious situation of trade... more ABSTRACT The recent financial crisis has once again highlighted the precarious situation of trade unions: austerity measures have targeted unions’ traditional institutional ally, the welfare state, as well as their last organizational stronghold, the public sector. The purpose of this article is to examine how trade unions have responded to reductions in welfare provision, due either to reform or to state inaction, and how state retrenchment can provide a silver lining for unions via the enhancement of unions’ bargaining responsibilities. We argue that, apart from retrenchment and privatization, there is a third road to welfare reform which involves unions’ ‘collectivization’ of social risks through the take-up of marginalized policies in bargaining agreements. Presenting evidence from a most-likely (the Netherlands) and least-likely (Greece) case, we identify instances where unions have acted as pivotal political substitutes to the state in the realm of welfare provision.
SSRN Electronic Journal, 2000
ABSTRACT This paper analyses how wage policy in Austria and the Netherlands was affected by econo... more ABSTRACT This paper analyses how wage policy in Austria and the Netherlands was affected by economic and monetary union (EMU). The paper concludes that EMU and the macroeconomic shifts resulting from it have had little influence on wage-setting in Austria and the Netherlands. While wage restraint outcomes did diverge for both countries after the start of EMU, this paper will argue that different wage institutions lead to this divergence. The EMU’s new macroeconomic order did not significantly change either countries microeconomic wage institutions.
Higher Education Policy, 2014
American students graduate from college with tens of thousands of dollars in debt, leading to sub... more American students graduate from college with tens of thousands of dollars in debt, leading to substantial repayment burdens and potentially inefficient shifts in spending patterns and career choices. A political trend towards austerity coupled with the rising student debt make the effective allocation of federal higher education resources and manageable repayment burdens on graduates high priorities. In this article, we evaluate the net cost and distributional characteristics of four methods of US student loan repayment: the standard option, the income-based option, Pay-As-You-Earn option, and the proposed Student Loan Fairness Act. Conducting repayment simulations on 1993 and 2008 graduate debt levels for 502 constructed graduate salary paths, we find an inherent tradeoff between public loan cost and repayment burdens; student loans that are more generous to poorer graduates are also those that are most expensive to the taxpayer. We conclude with a discussion of how the introduction of a targeted interest rate on income-contingent loans can circumvent this policy trade-off by extracting greater repayments from higher earning graduates.
Public sector unions push for unmerited wage increases, exacerbating inflation and deficits. Desp... more Public sector unions push for unmerited wage increases, exacerbating inflation and deficits. Despite this conventional wisdom, governments in several European countries successfully limited public sector wage growth during the 1980s and 1990s. This article argues that the recent rise in public sector wage inflation in the eurozone is an unintended consequence of the shift towards Economic and Monetary Union. I argue that monetary union's predecessors, the European Monetary System and Maastricht, imposed an institutional constraint on governments, which enhanced their ability to impose moderation: national-level, inflation-averse central banks that could punish rentseeking sectoral wage-setters via monetary contraction. Monetary union's alteration of this constraint weakened governments' capabilities to deny inflationary settlements.
Working Papers on the Reconciliation of Work and Welfare in Europe, 2009
Journal of Higher Education Policy and Management, 2013
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Papers by Alison Johnston
response to adverse economic shocks, as insurance against drastic negative corrections (‘rating failures’). Therefore, we hypothesize that famously inflexible entitlement programs trigger rating penalties, but welfare spending that is easier to adjust does not. Our panel analysis of ratings from Standard & Poor’s, Moody’s and Fitch awarded to 23 AMEs between 1995 and 2014 demonstrates that entitlement spending systematically incurs lower ratings, but discretionary spending on public
employment and social services does not. In contrast, bond-spreads are not affected by entitlement spending, once the effect of ratings is controlled for. We conclude that CRAs’ desire to avoid ‘rating failures’ is an important factor in generating negative market reactions against entitlements.
export-led growth over domestic demand-led growth is present in other
facets of integration, including EU accession, financial integration, the free movement of people, fiscal governance and the Europe 2020 growth strategy. Findings here provide important insights for both the European integration and comparative capitalism literature, highlighting that the unique economic ties being forged within the European project may be problematic for those countries outside northwestern Europe and for workers in low-wage domestic sectors.