This article reinforces our 2007 Political Analysis publication in demonstrating that the fixed effects vector decomposition (FEVD) procedure outperforms any other estimator in estimating models which suffer from the simultaneous presence of time-varying variables correlated with unobserved unit...

This paper suggests a three-stage procedure for the estimation of time-invariant and rarely changing variables in panel data models with unit effects. The first stage of the proposed estimator runs a fixed-effects model to obtain the unit effects, the second stage breaks down the unit effects...

The estimation of slowly and rarely changing variables in panel data with unobserved unit effects suffers from inefficiency of the fixed effects estimator. Point estimates lack reliability when the within variance (the variation across time) remains small. The estimate's efficiency can be...

This paper analyzes fiscal competition under budget rigidities and tax equity (fairness norms). We outline a numerically solvable political economic model that treats the outcome of tax competition as one argument in the governments utility function, the others being public expenditure and tax...

This paper analyzes the estimation of time-invariant variables in panel data models with unit-effects. We compare three procedures that have frequently been employed in comparative politics, namely pooled-OLS, random effects and the Hausman-Taylor model, to a vector decomposition procedure that...

This paper perceives the politics of EU eastern enlargement to be a twofold process, in which governments of transition countries decide whether or not to apply for membership and in turn EU members decide whether or not to accept these applicants. Specifically, we argue that the level of...

The introduction of the Euro has considerably affected the de facto monetary policy autonomy - defined as statistical independence from monetary policy in the key currency areas - in countries outside the European Currency Union. Using a standard open economy framework we argue that de facto...

Economic damage from natural hazards can sometimes be prevented and always mitigated. However, private individuals tend to underinvest in such measures due to problems of collective action, information asymmetry and myopic behavior. Governments, which can in principle correct these market...

Health policies seek to achieve conflicting objectives. We argue that the objective of saving lives is best served by a careful balancing of fairness and efficiency considerations. Open, fair and equitable access to health care for all citizens will lower overall mortality rates by enabling the...