Since the late 1970s European governments have been forced to change their traditional modes of governance in response to such trends as increasing international competition and deepening economic and monetary integration within the European Union. Strategic adaptation to the new realities has resulted in a reduced role for the positive, interventionist state and a corresponding increase in the role of the regulatory state: rule making is replacing taxing and spending. The paper's first part identifies three sets of strategies leading to the growth of the regulatory state as external or market regulator, and as internal regulator of decentralised administration. The second part examines major structural changes induced by changes in regulatory strategies. The institutional and intellectual legacy of the interventionist state is a major impediment to the speedy adjustment of governance structures to new strategies. It would be unwise to underestimate the difficulties of the transition from the positive to the regulatory state, but it is important to realise that international competition takes place not only among producers of goods and services but also, increasingly, among regulatory regimes. Regulatory competition will reward regimes in which institutional innovations do not lag far behind the new strategic choices.

The shift from a command economy to a market economy is not only a question of following appropriate macro-economic policies but also a matter of instilling a market ethic in the minds of people who had been socialized and rewarded in a non-market command economy. In that system, many concentrated on technical rules of survival. The lumpenproletariat in favoured industries were rewarded even when they shirked or pilfered from state enterprises. The ethics of the lumpenintelligentsia reflected Communist party values, as professional. associations were under party control. The maintenance of such attitudes creates substantial resistance to the transformation of the economy, because a Weberian protestant ethic is lacking. Transition does occur, but the legacy of the old ethic imposes high transaction costs, inefficiencies and inhibits forward direct investment.

This paper advances the concept of a policy conspiracy – perpetrators strive together to steer the policy process in a direction which they believe to be worthwhile and possible. A policy conspiracy is conceived as an exclusive social network of policy participants who commit themselves to the advancement of a policy quest which embodies their shared hopes and who promote one another to positions of influence on the basis of the mutual trust they develop through regular interaction. The degree to which the network of technocrats, technopols and change agents who played a pivotal role in the implementation and consolidation of the ‘New Zealand experiment’ between 1984 and 1993 exhibit these characteristics is considered. By examining the way this policy conspiracy took advantage of a significant window of opportunity for reform, this paper seeks to make a contribution to the literature concerned with the conditions for radical policy reform.

Within the advanced capitalist world, Japan and France have normally been the main examples of strong, interventionist states. From the 1960s onwards, government policy in each nation attempted to cultivate a domestically based computer industry in response to American dominance. This seemed to be parallel cases of strong states attempting to target an industry in order to catch up. However, by the start of the 1980s it was clear that French policy had failed, whereas Japan was relatively successful. We explain this difference by stressing that Japanese policy was ultimately more market conforming. This occurred because Japanese companies were less dependent on government financing and procurement for their business compared to French counterparts. In short, the Japanese state had less power over its domestic computer companies than did the French state. This national difference in ‘state strength’, i.e., state-business power relations, accounts for a negotiated pattern of industrial restructuring in Japan compared to the predominantly state-led pattern in France.

For nearly 100 years the Indian Congress organization has flourished in and through the press. Of the 72 representatives who gathered in Bombay at the first Congress meeting in 1885, more than a dozen were professional journalists. Not only did the early and subsequent nationalist leaders collect news for, editorialize in, or own outright, important vernacular and English-language newspapers—one thinks of, among others, Tilak's Kesari, Surendranath Banerjea's Bengalee, Motilal Nehru's Leader and Mahatma Gandhi's Young India and Harijan—but they readily submitted themselves to the curious, often naive probings of foreign correspondents from Europe and America. It was Gandhi who taught the Congress both how to spin its cotton and how, when it served a purpose, to wash its linen in public. Jawaharlal Nehru, when prime minister, brought to a high art the interview granted to the favored Indian or foreign correspondent.

In the most global of industries, such as telecommunications and finance, international competition remains governed primarily by national regulations. When multiple national regulators govern international markets, the regulators themselves compete. But do they compete in laxity, trying to reduce regulation as much as possible, or do they compete in regulatory subsidy, trying to rig regulations to favor domestic firms? These questions are examined in Britain and Japan. In telecommunications and finance there has been no single global trend toward regulatory laxity or regulatory subsidy; national regulations still set the terms for international competition; the game of regulatory competition is so complex that it is difficult to find any single strategy for winning; and national authorities will continue to have difficulty in shifting regulation to the international level.

All countries in Central and Eastern Europe require rapid and drastic restructuring of their public pension schemes for macro- and microeconomic reasons. While initial considerations were geared towards streamlining the unfunded scheme, reducing many distortions and making it financially sound, some transition economies initiated reform plans for a move from unfunded to funded retirement income provision. The paper reviews the need for reform and surveys the discussion and current plans before addressing three central open questions: How to structure the first and unfunded tier? How to finance the transition toward the second and funded tier? What are the minimum financial sector requirements before funded provisions can be initiated? The success of the current pension reform efforts in Central Europe will have an important bearing on developments throughout Europe. A failure in one transition economy caused by bad design, unprojected deficits, or insufficient financial market preparation could discredit a funded pension system in the whole region; a successful move towards an unfunded-funded multi-tier pension scheme in Eastern Europe could positively stimulate the discussion of pension reform in the European Union.

Military administrators in sub-Saharan Africa often appoint civilian political elites to cabinet positions for the following reasons: to advance effective governance, as a response to demands for transition to civilian rule, and as a political technique to civilianize the military regime. Empirical patterns of civilian cabinet appointments by the types of post-military political regimes show that the nature of civilian involvement in military administration is a valid predictor of the types of regime likely to follow military rule. Further findings confer some historical insights to the programmed and the national conference models of democratization in the region. In addition, military administrative analysis is a way to gain new insights into military transition in the region.

This article seeks to answer the question of why we see continuity in German monetary policy but relative discontinuity in German policy toward European monetary regimes. The paper develops an analytical framework for understanding the factors that account for the dynamics of policy. The article argues that the institutional structure of policy-making is the key factor that accounts for patterns of policy dynamics. The way domestic policy institutions are structured will determine who has a say and when they have a say in policy-making, thus shaping the pattern of policy dynamics. The article shows that the institutions of policy-making are crucial determinants in the dynamics of German monetary and regime policy by the way they offer or block opportunities, at particular points in the policy process, for interested policy actors to achieve the types of policies they want.

What is the impact of direct democracy, e.g. referendums, on public policymaking? The study will present data for Switzerland, the United States, Australia and Germany leading to the conclusion that direct democracy is an effective, but flexible veto player against expansive spending and taxation. The level of public expenditure and taxation is significantly lower in countries that have elements of direct democracy compared to pure representative democracies. Several theoretical arguments support this finding. For example, the social discount rate of voters is lower than that of politicians. Also direct democracy is related to the benefit principle in public finance. Taxpayers want their payments to be related to public services they receive. They are therefore inclined to veto projects not reflecting their preferences. Moreover, referenda have an implicit restraining effect on governments and the mere threat can reduce their capacity to act.

The United Kingdom's system of utility regulation – controlling prices rather than profits – is under increasing criticism. At the same time, the government continues to employ rate of return controls when purchasing from the defence and pharmaceutical industries. The existence of alternative regulatory regimes raises three questions. First, has price cap regulation enabled the UK utilities to earn excessive profits? Second, has profit regulation prevented excessive profitability in the defence and pharmaceutical industries? Third, how does profitability compare between price cap (utilities) and rate of return (defence/pharmaceuticals) regulation? Our results suggest that three of the four utilities studied have been able to earn rates of return that are considerably greater than in the corporate sector as a whole. Price caps have been far too lenient. In defence and pharmaceuticals there is less evidence of excessive profitability but these suppliers still earn 25 per cent more than comparable firms elsewhere.

Within the space of a few years a remarkable transformation took place in the taxation system of the Federated Malay States (FMS). Up until the early 1900s the British administration of these states relied, as had the sultans and chiefs from whom the British had taken control in the 1870s, on the revenue farm system for collecting many taxes. Most revenue farms were constituted according to the standard pattern found elsewhere in Southeast Asia at this time and in Europe up to the eighteenth century. The government granted a private contractor, the revenue farmer, the exclusive right to collect a certain tax in a specified area for a set number of years in return for a fixed rent, and the farmer kept for himself any money which he collected over and above what he owed the government in rent. A great variety of taxes were collected in this way. There were farms to collect the export duty on atap, firewood, timber, and rattan; most towns had market farms; and in Perak there was even a ‘farm of river turtle eggs’.

Many countries have experimented with decentralization and privatization policies in hopes of increasing public sector efficiency. This article explores the impact of decentralization and privatization of education in Chile. Decentralization did have some benefits such as improved administrative efficiency and greater productive efficiency. However, government size, as measured by the total personnel working in the education sector, increased under decentralization. Privatization of education in Chile created a type of voucher system. Although educators are more accountable to parents who compare products, the greatest problem is that schools do not necessarily respond to competition by promoting better quality education. Comparisons of student performance in public and private schools in Chile is not conclusive, but national average scores have not risen even though private provision of education has expanded dramatically while public education has waned. Finally, both decentralization and privatization resulted in greater inequity in expenditures and in the performance of students from different income groups.

Malaysia's planning organization has become the institutional centrepiece of that country's development effort. Indeed, Malaysia ranks as one of the non-Communist developing countries where planning is most highly institutionalized. Malaysian planning evolved as an effective policy mechanism for directing the authoritative allocation of public resources towards declared developmental objectives. Despite this attachment to national planning, Malaysia remains a staunchly market-oriented, open, and predominantly private enterprise economy. Nevertheless, as the role of planning expanded, private sector activity became increasingly subject to policy interventions predicated upon the politically-determined goals of development planning.

In order to shed light on the recent debates that are reinterpreting the role played by organized employers in the development of modern social policy, this paper examines the origin of the system of contributory social insurance during the Weimar period. Contrary to ‘laborist’ accounts of the origin of the modern welfare state that view the working class as the most important protagonist behind the transition from ‘assistance’ to ‘insurance’ policies, this paper argues that employers' dissatisfaction with the means-tested system of unemployment assistance and employers' endorsement of an insurance solution to the risk of unemployment remained the decisive factor leading to the introduction of the insurance system during the Weimar period. Drawing on employers' deliberations and archival material, the paper reconstructs the process of preference formation of German employers. The significance of a sectoral conflict between employers of large and small firms about the organization of the ‘risk pool’ within the system of unemployment insurance is also highlighted. While the existing literature fails to characterize employers' preferences towards social policies and to explain the variation in the degree of employers' support for particular social policies, this paper does so. Firms' preferences towards social policies can be analyzed along three dimensions: ability of social policies to redistribute risks, locus of control within alternative policy arenas and the costs imposed by different social policies.