Volume 61, Issue 3

The article focuses on political cartels with special reference to the EU. It is argued that political cartels are harmful principally not less than are economic cartels of private companies because both impede or do away with competition. It is often argued that political cartels - contrary to economic cartels - are beneficial because political agents principally act benevolently. But, as is known, Public Choice and empiricism evidently tell the opposite: Politicians - like private agents - are self-interested agents. This is the reason for arguing that political cartels, by analogy to economic cartels, need a supervisory authority for sanctioning strategies against political competition in the EU. These strategies are manifold of which this article focuses on two: the late “rescue screen” for Greece (and the Euro) of May 2010 and the creeping tendency towards harmonization and centralization in the EU-governance. It is argued that the rescue package is pure political cartelizing at the disadvantage of the European tax payer to whom - off from the creditor banks - the risk of ultimately paying the bill for insolvent countries is transferred. This has been done by neglecting especially article 125 of the Lisbon-Treaty which strictly outlaws to bail out encumbered countries. Contrary to the political agents’ official announcements that there was “no alternative” to their rescue package, in this article some incentivecompatible non-cartel alternatives are presented. The political cartelization implied in the creeping tendency towards harmonization and centralization in the EU is controversial to the application and enforcement of the basic principle of subsidiarity in the Lisbon-Treaty. It is argued that a supervisory authority (“Senate for Political Competition”) should be established to control political cartelization in the EU as regards their doing away with political competition by neglecting the essential subsidiarity principle.

Opportunistic politicians use the composition of public debt as a signal for competence. A competent government will not issue long-term nominal debt, as optimal to balance the budget, but long-term inflation-indexed debt. We consider politicians that pursue the objective of a balanced budget subject to the Stability and Growth Pact and reelection. A government’s competence is reflected by its ability to produce a public service at a lower cost (taxes). Competence is private information of politicians.

In Germany, donations to charitable institutions can be deducted from the taxable income. The government subsidizes each donated Euro by the household′s marginal tax rate. Unfortunately, this system has some serious shortcomings. Therefore, the existing tax deduction of donations should be replaced by a uniform tax abatement rate. Such a reformed system would be more transparent than the existing system and it would lead to a price of donating that is equal for all households. Furthermore, the empirical analysis of this study has shown that for an abatement rate of roughly 50 % a positive (though small) fiscal effect occurs.

Without a doubt, the 2010 World Cup of soccer in South Africa was a great experience for both soccer fans, who enjoyed a safe and efficiently-run tournament, and their South African hosts. The sporting and social spectacle was broadcast around the world and focused unprecedented media attention on South Africa. Despite the manifest success of the tournament, its short-term effects on international tourism, which are the nucleus of all other short-term positive effects on economic variables such as employment, income and taxes, have turned out to be of a much smaller magnitude than expected or even as reported during the tournament. This may be attributable to self-defeating prophecy effects. This study is a warning against the abuse of economic impact studies, especially those pertaining to major sporting events. It is also a call to use the “correct” arguments of measurable awareness effects and potential long-term development effects in discussing major sporting events. Methodologically, this study is innovative in its economic analysis of major sporting events because it (i) uses data from social networks and (ii) uses high-frequency daily data on tourism.

The paper looks back on the historical role of money. It starts by commenting on the different perceptions of money and a monetary economy by economists and noneconomists. Later on special emphasis is given to the most important functions and the different kinds of money in history. Furthermore there is a short review on the money creation process as well as on the effects of money on the real sector in the economy, sometimes stimulating production and employment and sometimes generating inflation. The paper finally links the historical monetary experiences to two recent disturbing monetary developments: the 2008 worldwide crisis of the banking and financial industries on the one hand and the actual and potential solvency crisis of Euro-area countries. It concludes with some remarks on the feasability of a monetary union between countries with different levels of and different attitudes to public debt.