What lessons does the current economic crisis in Sweden offer for other economies? Written in a clear and precise style and using modern theories of macroeconomics and economic policy to analyze Sweden's serious economic situation, Turning Sweden Around outlines recommendations for change that are both unusual and provocative. Combining economic and political analysis it covers wide-ranging areas and broad structural issues that encompass the necessity for institutional reforms as well as economic change.
The plunge in Sweden's economy has taken many by surprise, showing how much more vulnerable Sweden has been to macroeconomic disturbance than previously believed. Since 1990 industrial output has fallen dramatically, total unemployment has grown to 12 percent, the public sector deficit is 13 percent of GDP, and since the country shifted to a floating exchange rate last fall, the krona has depreciated by more than 20 percent.
The authors identify the deficiencies of Sweden's economic and political institutions, and suggest remedies that cut across virtually all aspects of economic and political life: product and factor markets, the system of wage formation, the public sector, and central and local government. They show that many of the current problems stem from an unclear division of responsibilities, describing a government that has taken on so many tasks that it is unable to fulfill its core obligations. Three chapters tackle the basic problems in the Swedish economy—stability, efficiency, and growth— while a fourth chapter suggests how to change the political system to strengthen democracy.
The variety of constitutional designs found in democratic governments has important effects on policy choices and outcomes. That is the conclusion reached in Democratic Constitutional Design and Public Policy, in which the constitutional procedures and constraints through which laws and public policies are adopted—election laws, the general architecture of government, the legal system, and methods for amendment and reform—are evaluated for their political and economic effects. Leading scholars, many of them pioneers in the new field of constitutional political economy, survey and extend recent empirical evidence on the policy effects of different constitutional procedures and restraints. Their findings are relevant not only to such dramatic changes as democratic transition throughout the world and the development of a European constitution but also to the continuing process of constitutional reform in established democracies.
Using the tools of rational choice analysis, the contributors approach the question of constitutional design from public choice, new institutionalist, and new political economy perspectives. Drawing on empirical evidence largely from the OECD countries, the book analyzes such issues as the policy effects of direct (as opposed to representative) democracy, democratic accountability in presidential as compared to parliamentary government, bicameralism and its relation to stable policies, the relative effectiveness of centralized and decentralized governments, the civil and legal regulatory system as a nation's "economic constitution," and the link between constitutional stability and the amendment process.
Contributors: John C. Bradbury, Roger D. Congleton, W. Mark Crain, Daniel Diermeier, Lars Feld, Bruno Frey, James D. Gwartney, Randall Holcombe, Hülya Eraslan, Brian Knight, Robert A. Lawson Antonio Merlo, Dennis Mueller, Torsten Persson, Bjørn Erik Rasch, Thomas Stratmann, Alois Stutzer, Birgitta Swedenborg, Guido Tabellini, Stefan Voigt, Barry Weingast