Why do countries open their economies to global capital markets? A number of recent articles have found that two types of factors encourage politicians to liberalize their capital accounts: strong macroeconomic fundamentals and political pressure from proponents of open capital markets. However, these conclusions need to be re-evaluated because the most commonly used measure of capital account openness, Chinn and Ito's (2002) Kaopen index, suffers from systematic measurement error. We modify the Chinn-Ito variable and replicate two studies (Brooks and Kurtz 2007;Chwieroth 2007) to demonstrate that our improved measure overturns some prior findings. Some political variables have stronger effects on capital account policy than previously recognized, while macroeconomic fundamentals are less important than previous research suggests.
Conventional wisdom holds that autocracies are more likely than democracies to adopt interventionist and protectionist economic policies, including fixed and undervalued exchange rates. This article suggests that this view is only partially correct: nondemocracies are a heterogeneous grouping, and only some types of authoritarian regimes adopt different foreign economic policies from those of their democratic counterparts. Using the example of exchange rate policy, the authors show that foreign economic policy varies across monarchic, military, and civilian dictatorships. More specifically, they hypothesize that monarchies and military regimes are more likely than democracies and civilian dictatorships to maintain fixed exchange rate regimes because the former regimes have smaller “selectorates” than the latter. The authors also expect that monarchies and civilian dictatorships maintain more undervalued exchange rates than democracies and military regimes because the former regimes provide their leaders with greater tenure security than the latter regimes. These hypotheses are evaluated using a time-series–cross-sectional data set of a large sample of developing countries from 1973 to 2006. The statistical results accord with these predictions. These findings indicate that the ways in which democracies engage with the global economy may be less unique than many believe.
This paper examines the relationship between political regime type and currency crises. Some theories suggest that democratic regimes, owing to their greater political transparency and larger number of veto players, should have a lower risk of currency crisis than dictatorships. Alternative arguments emphasize the advantages of political insulation and rulers with long time horizons, and imply that crises should be most likely in democracies and least common in monarchic dictatorships. We evaluate these competing arguments across four types of political regimes using a time‐series cross‐sectional dataset that covers 178 countries between 1973 and 2009. Our findings suggest that the risk of currency crisis is substantially lower in monarchies than in democracies and other types of dictatorship. Further analyses indicate that the adoption of prudent financial policies largely account for this robust negative association between monarchies and the probability of currency crises. This suggests that political regimes strongly influence financial stability, and perverse political incentives help explain why currency crises are so common.
Hughlings Jackson's neurological ideas are scientifically valid and practically useful. He began by emphasizing the focal lesion as the key to analysing patients' symptoms. He proclaimed that 'Epilepsy is the name for occasional, sudden, excessive, rapid, and local discharge of grey matter.' He eliminated any need for a direct appeal to metaphysical agents by asserting that the nervous system is an exclusively sensorimotor machine constrained by the newly discovered conservation laws. In constructing his neurophysiology he accepted the phrenological assumption that the nervous system is composed of a number of physiologically discrete organs, each with a single function accessible to the diagnostician. By observing the march of epileptic seizures he developed the idea of somatotopic representation. He claimed that the nervous system is an evolutionary hierarchy of three levels connected by the process of weighted ordinal representation. His assertion of the Doctrine of Concomitance further separated the concerns, and the institutions, of the neurophysiologist from that of the psychiatrist. He came to reject the idea of the unconscious because he could not observe unequivocally unconscious behaviour at the bedside. Each of these ideas emerged from contemporaneous scientific streams, but Hughlings Jackson was the one to incorporate them into practical medicine. These neurological ideas gave physicians the methods, tools, principles and structures with which to establish a new science of clinical neurology.
John Hughlings Jackson proposed a mechanism of neurologic compensation based on his theory of cerebral localization. According to Hughlings Jackson, there are three levels of evolution of the nervous system. Each element of each level contains a complete representation of the next lower level. Each element of the middle and highest levels contain a representation of the entire body, weighted for a particular part of the body. If the nervous system is damaged so that an area heavily weighted for a particular part of the body is destroyed, less heavily weighted areas are immediately activated according to their weighting. This activation partially compensates for the function of the destroyed tissue. As time passes, the weighting of representation in the unaffected areas changes, amplifying the degree of recovery. Recent clinical studies and PET cerebral blood flow studies show that various ipsilateral and contralateral areas are activated in recovery. The activated areas reside in what Hughlings Jackson would call the middle and highest evolutionary levels. Modern clinical and neurophysiologic observations are therefore consistent with Hughlings Jackson's theory of compensation.
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