Constitutions devised by rank-and-file legislative politicians in the ‘Third Wave’ of democratization tend to exhibit an inverse relationship between party strength and executive strength. Party strength refers to the extent to which legislators campaign on the basis of their parties' reputations as providers of public policy as opposed to personal reputations as providers of more narrowly targeted services. Executive strength refers to the constitutional authority of the executive to influence policy independent of partisan support in the legislature. Politicians' interest in one configuration of power or another can be deduced logically from the situation in which they find themselves at the time they are designing a new democratic regime.

The political and economic couplings between wage bargaining institutions and macro-economic policy regimes are explored in this article. It is argued that in advanced industrialized democracies with well-organized unions and employers' associations, macro-economic performance (especially unemployment) is the outcome of an interaction between the centralization of the wage bargaining system and the monetary policy regime. Thus, a decentralized bargaining system in which the government in credibly committed to a non-accommodating monetary policy rule poses an institutional alternative to a centralized mode of wage regulation where the government enjoys macro-economic policy flexibility. Based on time-series data from ten highly organized market economies, I show that both of these institutional ‘equilibria’ produce superior employment performance, but also that the two systems are associated with very different distributional outcomes, and that they are supported by different coalitions of organized interests. In addition to predicting economic outcomes, the proposed model provides a theoretical framework for analysing institutional change in wage bargaining systems and in macro-economic policy regimes.

Little is known about how ordinary Europeans feel about the central policy-making institutions of the European Union (EU). This has encouraged us to analyse mass attitudes towards the legitimacy of the European Court of Justice (ECJ). Relying on a cross-time (1992–93) panel analysis, as well as a cross-institutional analysis (the ECJ, the European Parliament and the high courts of the member states), we discover that (a) the ECJ does not possess a surplus of legitimacy, and it is doubtful whether the legitimacy shortfall is only a short-term function of the row over Maastricht; (b) attitudes toward the ECJ, although in the aggregate fairly stable, changed significantly over the one-year panel survey; (c) the European Parliament has little legitimacy it can share with the ECJ; and (d) although the national high courts do have greater legitimacy, there is little evidence that they are capable of transferring that legitimacy to the ECJ. We conclude with some speculation about whether the ECJ will be able to build greater legitimacy, and the consequences for the EU if the court fails to do so.

The political economy literature has not considered in detail the dynamic interrelationship between one politico-economic system and another. To fill this lacuna, the author uses a VAR model to study the relationship between social democratic popularity and the economy not only within but also between the Scandinavian countries. In addition to the expected macroeconomic interdependence, there is empirical support for the traditional partisan theory. Economic voting is found only in Denmark. Social democratic popularity is not much affected by the economy, but it is found that the economy is influenced by social democratic popularity. An increase in the popularity of the social democrats eventually causes higher inflation. In particular, the popularity of the Swedish Social Democrats creates inflationary pressure in Sweden, and this pressure is exported to Denmark and Norway as well.

Changes in activism among grassroots members of the Labour and Conservative parties in Britain are modelled using panel surveys in this article, with party members being surveyed before and after the 1992 general election. The evidence suggests that a decline in activism over time has occurred in both parties, but this decline is greater in the Labour party than in the Conservative party. This is attributed to a number of political, cultural and sociological changes in society over time, but in the short run the main factor is the outcome of the general election in 1992. These trends are modelled by means of a ‘general incentives’ theory of activism, which explains the decline in activism in terms of changing incentives for political action. Reductions in incentives for activism were, with one exception, greater for Labour party members than for Conservatives, which explains the differences between the two parties. This may produce a ‘spiral of demobilization’ in which electoral losses produce a decline in activism and campaigning at the local level, which in turn leads to further electoral losses.

We study the relationship between voters' preferences and the emergence of party platforms in two-party democratic elections with adaptive parties. In the model, preferences of voters and the opposition party's platform determine an electoral landscape on which the challenging party must adaptively search for votes. We show that changes in the underlying distribution of voters' preferences result in different electoral landscapes which can be characterized by a measure of ruggedness. We find that locally adapting parties converge to moderate platforms regardless of the landscape's ruggedness. Greater ruggedness, however, tempers a party's ability to find such platforms. Thus, we are able to establish a link between the distribution of voters' preferences and the responsiveness of adaptive parties.

Over the past thirty years, the Democratic party has carried the mantle of racial liberalism. The party's endorsements of equal rights, fair housing laws and school busing have cost it the support of some whites, but these losses have been concentrated at the periphery of the party, among those least committed to its guiding principles or most unsympathetic to its efforts on behalf of racial equality. We argue that with the rise of affirmative action as the primary vehicle to advance racial equality, racial politics have become divisive in a new way, and that opposition to affirmative action now encompasses whites within the liberal core of the Democratic party.

Contrasting traditional survey measures of affirmative action attitudes with an experimentally-based, unobtrusive measure of opposition to affirmative action, we show that racially liberal whites are reluctant to admit their anger over racial preferences when confronted with traditional survey questions in a telephone interview. When measured with an unobtrusive instrument, however, white opposition to affirmative action is found to be just as strong among liberals as conservatives, among Democrats as Republicans, and among those most committed to racial harmony and equality as among those least committed to such values. We argue that whites' anger over affirmative action stems less from a lack of concern with racial equality than from a commitment to individual achievement and self-reliance. Thus, while core constituents of the Democratic party are more opposed to affirmative action than has previously been recognized, the Democrats can draw strength from the enduring commitment of many whites to the goal of racial equality.

Party competition is central to the operation of representative democracy. Just as competition between firms in private markets is supposed to ensure the efficient provision of services required by consumers, so competition between parties delivers the policies desired by the electorate. As Elkins argues, party competition implies that governments ‘will not be self perpetuating and that elections can, and in some cases do, lead to the replacement of one set of officials with another set. The chance, or probability, of turnover is perhaps the most salient feature of this system of accountability’ If competition works then the ruling party is fearful of loss of office and seeks to produce policies that satisfy the electorate. Correspondingly, opposition parties will adopt a platform which is intended to be more popular than that of the incumbents. This, in essence, is the Downs model of party behaviour in a representative democracy: the struggle for electoral support leads rival parties to adopt ‘moderate’ policies that reflect median voter preferences. In the absence of competition, the ruling party would be free to neglect public opinion and pursue ‘extreme’ policies in line with the views of its activists or financial backers.D. Elkins, ‘The Measurement of Party Competition’, American Political Science Review, 68 (1974), 682–700, p. 682.A. Downs, An Economic Theory of Democracy (New York: Harper & Row, 1957).D. Robertson, A Theory of Party Competition (London: Wiley, 1976).

Despite mass privatization and market reforms in Russia, the central state continues to redistribute considerable amounts of money between the country's eighty-nine regions. About 4.3 per cent of gross domestic product (GDP) – or 31 per cent of federal tax revenues – was transferred back to the budgets of the regions in 1994. The average region recovered about 45 per cent of the taxes it remitted to the centre in different kinds of budget transfers, up from 37 per cent in 1993. But this understates the true scale of redistribution. In addition, many federal spending programmes, while not explicitly targeted at particular regions, had a geographically concentrated impact. This includes ‘indirect’ transfers due to revisions of the proportion of tax the regions were permitted to keep from those proportions voted in the federal budget. Russia's 4.3 per cent compares to grants to state governments of 0.7 per cent of GDP in Austria (1992), 2.5 per cent in the United States (1992), 3.6 per cent in Germany (1992), and 3.9 per cent in Canada (1991) (calculated from OECD, Revenue Statistics of OECD Member Countries: 1965–1994 (Paris: OECD, 1995)).Aleksei Lavrov, ‘Rossiiskiy Byudzhetny Federalizm: Pervie Shagi, Pervie Itogi’, Segodnya, 104 (7 June 1995), p. 5.

In a thought-provoking paper, Schultz develops an idea first put forward in a number of papers by Frey and Schneider and argues that governments will have less incentive to manipulate the economy when they lead in the polls. This helps to explain why electoral cycles have been so hard to detect. As other authors have observed, the best evidence suggests that electoral cycles (in output or instruments) are weak and irregular.Kenneth A Schultz ‘The Politics of the Political Business Cycle’, British Journal of Political Science, 25 (1995), 79–99.For example, Bruno Frey and Friedrich Schneider, ‘A Politico-Economic Model of the United Kingdom’, Economic Journal, 88 (1978), 243–53. Frey and Schneider were subjected to a severe critique at the time: see Alec Chrystal and James Alt, ‘Public Sector Behaviour: The Status of the Political Business Cycle’, in David Currie, Robert Nobay and David Peel, eds, Macroeconomic Analysis (London: Croom Helm, 1981).Alberto Alesina, ‘Macroeconomic policy in a Two-Party System as a Repeated Game’ Quarterly Journal of Economics, 102 (1987), 651–78; Alberto Alesina ‘Macroeconomics and Politics’, NBER Macroeconomics Annual (Cambridge, Mass: MIT Press, 1988); Alberto Alesina ‘Evaluating Rational Partisan Business Cycle Theory: A Response’, Economics and Politics, 5 (1990), 1–30; Alberto Alesina, G. Cohen and N. Roubini, ‘Electoral Business Cycles in Industrial Democracies’, European Journal of Political Economy, 9 (1993) 1–23; Stephen Sheffrin, ‘Evaluating Rational Partisan Business Cycle Theory’. Economics and Politics, 1 (1989) 239–60.