Conference on Political Economic Indicators

The
Claremont Political
Economy Data Project



The goal of the Political Economy Data Project at the Claremont Colleges is to help to promote evaluations of the strengths, weaknesses, and most appropriate uses of political economy data.

To accomplish this, two means are needed: first, to increase the availability of and ease of access to political, institutional, economic and financial data for Claremont students and faculty; and second, to help encourage the rapidly developing research area in economics and politics that studies the interrelationships among political, institutional and economic variables. These include the study of the influence of a wide range of political variables such as election systems, number of veto players, political instability, and political capacity and institutional and social variables such as security of property rights, rule of law, proxies for degree of trust, exchange rate regimes, central banking laws and budgetary procedures, and the degree and structure of financial development on a variety of aspects of economic performance such as economic growth, inflation, and currency and financial crises. There is also considerable interest in the effects of economic development on political variables such as election outcomes and the influence of both political and economic variables on the choice of institutional structures and the choice of economic policies. Thus for some studies, variables like corruption and exchange rate regimes will be taken as independent variables while for others they will be taken as the variables to be explained.

Policy officials, political scientists, and economists increasingly recognize the importance of political economy analysis, fueling interest in this research. Also important has been the development of a number of new datasets which provide proxies for political and institutional variables of interest. These include various measures of economic freedom, rule of law, competitiveness of political systems, degree of corruption, quality of government, political capacity, the structure of financial regulation, and the scope and stringency of international capital controls.

One major focus of our project is on the measurement of international economic interactions and policies.  This addresses issues in the measurement of international economic and financial interdependence and policies.  A great deal of recent research has been concerned with estimating the effects of policies such as capital controls, trade policies, and exchange rate policies and financial liberalization on currency and financial crises, economic growth, etc.  A number of important new data sets have become available, but there are several important conceptual issues involved in evaluating how well they measure various aspects of policy.  There is also considerable disagreement about the best way to analyze the degree of international financial integration, the variability of capital controls, and the severity of currency crises.  Our project evaluates such issues.

We are preparing a volume that will present short readable surveys that discuss the data available for analyzing international economic interactions and policies. They will indicate the major sources of data and their strengths and weaknesses focusing especially on their relationships to the major concepts of interest for research and policy analysis. The focus will include both primary data and the construction of indices to measure policies and institutions. Each essay will also give illustrations of how the data and concepts are used in studies by economists and political scientists. While advanced conceptual and econometric measures will be addressed in footnotes or short appendices, the essays should be readable by students thinking about paper topics as well as professional analysts and researchers.
In connection with this volume (and the accompanying one discussed below) a Claremont Political Economy Data website will be constructed.  To help meet length constraints and present better broad overviews, the papers in the volume will include only short illustrative tables and summaries of the literature. In many cases these will be complemented by more extensive postings on the website.

A second volume nearing completion is coming out of our earlier workshops.  King Banaian and Bryan Roberts are editing a book on Political Economy Indicators.  The October 2007 workshop is based largely (but not exclusively) on presentations of work from these two projects.  Discussion of a wider range of issues will be encouraged.

In summary, the goal of the project is to help to promote evaluations of the strengths, weaknesses, and most appropriate uses of political economy data. Methods that we will use include workshops and sessions at professional meetings devoted to such subjects, sponsoring data creation and evaluation projects and providing a focal point for the exchange of information among students and scholars. The upcoming workshop October 12-13th of this year is built around several foci, including a continuation of discussion from a series of panels at recent Annual Meetings of the Western Economic Association International, the Leblang/Willett NSF project on the political economy of exchange rate regimes and currency crises, the forthcoming special issue of International Interactions on the Measurement of International Economic Interactions and Policies, the Claremont Political Economy Data Project, the Harvard-Claremont project on measuring good governance, and the forthcoming Banaian/Roberts book on political economy indicators.