International coordination of macroeconomic policies has attracted much attention in recent years. The main issue has been whether economic performance can be improved by coordination. Although still a controversial issue, many economists have argued that coordination would make a positive contribution to economic performance. This paper deals with the requirements for successful fiscal coordination. It concludes that those requirements are such that the best fiscal policies that countries can pursue are those aimed at putting their house in order.

In recent years the hopes of finding a solution for the puzzle of mass unemployment shifted to labor market institutions such as the system of regulation and industrial relations. The following study takes up a much neglected aspect of labor market institutions, the issue of financing labor market policy. After developing the analytical framework, the systems of financing labor market policy in six countries are briefly described. Next are analyzed the effects of different financing systems on expenditures for active labor market policy – as an essential element in fighting unemployment. Financial systems, however, influence not only the level but also the structure of labor market policy which in turn has implications for its allocational and distributional effects. Finally, some lessons are drawn from the international comparison, the main thesis is illustrated by the German case. Institutional incongruity, i.e. a mismatch between organizational structures and functions, may have two effects, leading political decision makers to behave in a generally unexpected way, and channelling the effects of political programmes in unintended directions.

The economic content of security, i.e. to what extent security is influenced by economic variables, is a difficult and widely debated one. There has been a tendency, to broaden the concept of security to include certain purely economic interests. The paper is concerned with a precise understanding of the difference between a narrow and territorial definition of security, and a broader definition of security encompassing economic interests. The first section defines security and its economic ramifications and the second discusses the subject within the context of a general equilibrium model. The policy dilemmas of security are then considered at the conceptual level, including the dilemmas in the general equilibrium model.

This paper examines the determinants of Japan's most serious postwar blunder: failure to define and implement effective and timely counter-measures to deal with its change from deficit to surplus international monetary status during the 1969–1971 period. It concludes that intense bureaucratic compartmentalization and a lack of supra-ministerial leadership of national policy were key determinants of this failure, leaving Japan's political system dependent upon irresistible external pressure (gai-atsu,) in this case from the United States, to define and force implementation of necessary policy changes. This critical but largely ignored episode illustrates a negative aspect of the traditional insulation of Japan's national bureacracy from political (as opposed to administrative) interference in the definition and pursuit of basic national policy objectives.

Public enterprises in the Federal Republic of Germany are about average for all nonsocialist countries and markets are more heavily regulated than in the United States. Compared to American deregulation and British privatization, there have been few developments in the Federal Republic. Why? In the last ten years new schools of thought have provided a stronger normative foundation for and a stronger positive explanation against deregulation and privatization in Germany in the near future. The German political debate on deregulation and privatization is characterized by three institutional peculiarities. Major steps to deregulate or privatize economic sectors require legislation, which is influenced by political parties. Trade unions exert a strong influence on the major parties and are opposed to privatization and deregulation. The European Community forces some deregulation upon the Federal Republic in order to liberalize service sectors.