This paper contributes to the ongoing debate over European Monetary Union (EMU), reviewing the economics literature on the merits of a single currency (‘optimum currency area’) and on the requirements for astable currency (‘credibility’). To understand Europe's drive for EMU and the transition strategy adopted at Maastricht both issues must be analysed together. The controversial convergence criteria in the Maastricht Treaty, in particular, primarily address valid concerns about the (price) stability performance of a future single currency by determining the timing and membership of EMU. In general, we propose to interpret the Maastricht design as a mechanism that must reconcile conflicting interests, solve credibility problems over time and extract information about candidate countries’ ‘stability culture’ in the run-up to monetary union.

This article addresses and expands on two points made by Robert Putnam in his recent study Making Democracy Work. The first concerns the observation that in order to find the cultural roots of Italian institution building, we may have to go further back in history than the 12th century, where Putnam stopped, and the second relates to the possible implications of this historical approach for the current transformation in the former Soviet bloc. The theoretical presentation revolves around the concepts of path dependence and multiple equilibria, finding much common ground between several of the social science disciplines. In conclusion it is argued that there may be cases of ‘pathological path dependence’, where public policy can have positive effects only if preceded by careful study of the anatomy of the pathological institutions that cause development traps.

Analyses of European integration processes are still dominated by the dichotomous debate between intergovernmentalism and suprana-tionalism. Sides are often taken in this debate based on very case-specific empirical findings. An analysis of two cases, European telecommunications and electricity policy, illustrates how misleading such generalisations can be. The former case is often used to support supranational claims, while the latter highlights the importance of intergovernmental vetos. However, further analysis reveals the very parallel supranational policy approach of the European Commission to both sectors and the resulting weakness of the dominant interpretation. An analysis using a multilevel governance approach to European integration can avoid these difficulties.

Does political regime matter? Parallel analyses of Spanish public expenditure and taxation policies under the authoritarian Franco regime and in the current democracy, as well as of decision-making processes under both regimes, based upon extensive in-depth interviews with relevant government officials from 1974 to 1996, indicate that political regime characteristics can have a profound impact on both policy processes and outputs. Ruling out a ‘socioeconomic’ explanation, the author concludes that striking aberrations in state spending and taxation policies in the early 1970s were systematic products of unusual features of Franquist policy-making processes, which were directly linked to the authoritarian nature of the regime itself. Subsequently, democratization has been accompanied by dramatic changes in both policy processes and outputs.

Whereas many studies of democratization evaluate it in idealist terms, Winston Churchill offered a relativist criterion, democracy being a lesser evil compared to other types of regime. Since everyone in a post-Communist society has lived in at least two different regimes, the New Democracies Barometer survey of post-Communist countries can ask people to evaluate five alternative regimes: a return to Communist rule, the army taking over, monarchy, rule by a strong leader, and decision making by economic experts. Factor analysis shows endorsement of three alternatives—the return to Communism, army rule, and personal dictatorship—form an authoritarianism scale. It also shows support for authoritarian rule is confined to a minority. Five hypotheses are tested to see what accounts for this. The political legacy of the past is more important than current government performance, economic attitudes, social structure differences, and national culture and traditions. Endorsement of economic technocrats making decisions is not related to authoritarianism; it reflects some national differences. Given the importance of experiencing both democratic and undemocratic regimes, the Churchill hypothesis does not apply in a country that has not yet attempted to introduce democratic institutions.

This article presents an alternative trajectory to policy paradigm change to that outlined by Peter A. Hall's social learning model, in which unsuccessful efforts by state officials to respond to policy failures and anomalies in the existing paradigm eventually trigger a broader, societal, political partisan debate about policy principles. From this society-wide contestation over policy goals, problems, and solutions, a new policy paradigm emerges. Drawing on the conceptual tools of policy feedback and policy networks, this article describes an alternative route to paradigm shift in which change is negotiated between state actors and group representatives. Discussions of change are largely confined to sectoral policy networks and the result is a more managed series of policy changes that culminate in a paradigm shift. This argument for a second, cumulative trajectory to paradigm shift is developed by examining agricultural policy change in three countries: the United States, Canada, and Australia.

In recent years, issues of environment and human development have been gathered together under the integrative framework of sustainability (sustainable development), creating unprecedented demands on policy. Major policy processes have been constructed and are producing new and supposedly far reaching agreements, policies and strategies. However palatable politically, the likelihood of these leading to significant positive changes in the environment or human use of it, however, is questionable. This situation is sketched, using the Australian setting as an example. The article then establishes in detail the problem attributes particular to sustainability, and argues the crucial proposition that this policy field is different from others in both kind and degree. Some implications of this for policy analysis and prescription are noted.

The failure of attempts at neoliberal social security reform in Brazil since 1990 demonstrates the limited political influence of seemingly powerful economic forces, especially private business and international financial institutions. Besides power-dispersing constitutional structures, the fragmentation of social forces, the weakness of political parties, and the internal segmentation of the state apparatus have hindered the efforts of Brazilian governments to gain the political support necessary to cut entitlements and thus stem the rapid rise in pension spending.

This paper is concerned with the political determinants of the significantly different rates of welfare expenditure which characterise advanced capitalist countries. The research concentrates on the connections between the organization and mobilization of a key political actor pursing social wage benefits – the labour movement – and different levels across nations of welfare provision, including expenditure on health, social security consumption expenditure and social security transfers. The paper uses disaggregated, pooled time series data on welfare provision in 15 OECD countries, 1974–1988, to test the association between more comprehensive welfare state regimes and state structures that facilitate the intervention of organized labour movements in the policy process.

A new form of barter economy is emerging in many industrial nations. People are exchanging goods and services through Local Exchange and Trading Systems (LETS). These are local associations whose members list their offers of, and requests for, goods and services in a directory and then exchange them priced in a local unit of currency. Using a United Kingdom case study of Totnes LETS, this paper presents a preliminary appraisal of their economic, social equity and community-building objectives. It finds that although LETS are fulfilling these objectives, achievements could be substantially improved with some alterations in public policy towards LETS.