Prof. Arye L. Hillman

Prof.
Prof. Arye L. Hillman
Telephone: 
Fax: 
Office: 
Mail Box Number: 
Office hours: 
Research interests: 
The Political Economy of Public Policy

CV

Professional Summary

Arye Hillman’s research has placed public policy in a political-economy context. He pioneered the political-economy approach to international trade policy, which became the standard view for explaining the conduct of trade policy. He formulated political-economy perspectives on development failure and on transition from socialism when the focus of debate in the academic and policy community was on identifying ‘correct policies’, rather than on why rents stood in the way of recommended policies being implemented. He has proposed models to predict the magnitude of social loss when politically assigned rents are contested and has studied rent seeking as a source of inefficiency in different public-policy contexts.

His professional career has been at Bar-Ilan University in Israel. He has been an invited professor and has taught at various universities including UCLA, Princeton, the University of Paris 1 (Panthéon-Sorbonne), the University of Freiburg, and the Australian National University, and has been an invited fellow of the Japanese Society for the Promotion of Science. He is a joint recipient with Heinrich Ursprung of the Max-Planck Prize for Humanities Sciences. He has an honorary doctorate from the University of Genoa. He has a BA (first-class honors and the University Medal) from the University of Newcastle NSW and a PhD in economics from the University of Pennsylvania.

His book ‘The Political Economy of Protection’ (1989; reprinted 2001; reissued in 2014) provided the first comprehensive overview of the politics of international trade policy. His book ‘Public Finance and Public Policy: Responsibilities and Limitations of Government’ (Cambridge University Press, 3rd edition 2019) integrates classical public finance with political economy, including application of public choice concepts. Editions of the book have been published in various languages. He has published some 150 research papers in professional journals and volumes.

Between 1994 and 2015, he was editor and editor-in-chief of the European Journal of Political Economy (Elsevier), for which he serves as editorial advisor. The editorial policy was one of openness to new ideas and unconventional truths. Since 1989, he has co-organized the annual Silvaplana Workshop in Political Economy, at which young scholars can present their research in the presence of more senior scholars.

He was born in 1947 in Germany, the only child of survivors. He and his wife Jeannette have 4 children, 18 grandchildren, and presently one great grandchild.

Personal Information and Professional Activity

Date of birth: January 13, 1947

Place of birth: Bad Wörishofen, U.S. zone, Germany

Higher education

  • PhD Economics, University of Pennsylvania, USA 1970-1973 (thesis advisors Albert Ando, Wilfred Ethier)
  • M. Ecs. (Honors), Macquarie University, Sydney, Australia 1968-1970, degree awarded in 1972 (external thesis advisor Peter Lloyd, Australian National University)
  • B.A., First Class Honors in Economics and the University Medal, University of Newcastle, Australia 1963-1967 (honors thesis advisor Paul Sherwood)

Academic family tree: Ron Jones, to Wilfred Ethier; and Albert Ando

Principal position

  • Bar-Ilan University, Department of Economics, from 1980.
  • Professor of Economics and William Gittes Chair, 1984 -2015.
  • Associate Professor 1982-1984.
  • Senior Lecturer 1980-1982.
  • Professor emeritus with retained office and teaching from 2016.

Previously

  • Tel-Aviv University, Lecturer, Department of Economics, lecturer 1974-1978.
  • University of Pennsylvania, U.S.A., Research Fellow, Economics Research Unit (concurrent with graduate studies) 1970-1973.
  • Macquarie University, Sydney, Australia. Senior teaching fellow 1968, lecturer with tenure 1969-1970 (resigned June 1970 to begin graduate school)

Other affiliations

  • CESifo, Munich, Senior Research Fellow.
  • Kiel Institute of World Economics, International Research Fellow (up to 2015).
  • CEPR, London, Senior Research Fellow (resigned 2016).

Offices and honors

  • Honorary doctorate, University of Genoa, March 2016.
  • Fellow, Japanese Society for the Promotion of Science, 2000.
  • President, European Public Choice Society, 1996-1997.
  • Max-Planck-Prize for Humanities Sciences, joint with Heinrich W. Ursprung, 1994.

Editorial positions

  • European Journal of Political Economy (Elsevier): Editorial Advisor since 2015; editor and editor-in-chief, 1994-2014.
  • Open-Assessment E-journal, Kiel Institute of World Economics, Associate editor for Political Economy and Institutions since 2006.
  • Australian Economic Papers, editorial board since 2004.
  • Editorial Board, The Journal of International Trade and Economic Development, since 1995.
  • International Advisory Board, Weltwirtschaftliches Archiv, 1995-2015.
  • Associate Editor, Economics and Politics, 1990-1999.
  • Advisory Board, Encyclopedia of Public Choice, 1999.

Visiting positions

  • Université Paris 1 Panthéon-Sorbonne, Centre d’Économie de la Sorbonne, visiting professor, Master in Economics Program, Spring semesters 2010, 2011, 2012
  • University of Freiburg, Institute for Economic Research, visiting professor, Master in Economics Program, summer semester 2009
  • Princeton University, Woodrow Wilson School of Public Policy and International Affairs and Department of Economics, visiting professor of economics, spring semester 1989, fall semester 2004
  • The World Bank, Washington DC, Research Fellow, Socialist Economies Reform Unit, February – September 1990
  • University of California at Los Angeles, visiting professor, Department of Economics, 1985-1987
  • Australian National University, visiting lecturer in Public Finance, The Faculties, 1979
  • University of Illinois at Urbana, visiting assistant professor of economics, 1973-1974

Short-term visitor

  • Huazhong University of Science and Technology, School of Public Administration, Wuhan, China, November 2016
  • Guangxi Normal University, School of Political Science and Public Administration, Guilin, China, November 2016
  • The University of Queensland, Department of Economics, November-December 2015
  • The University of NSW, School of Banking and Finance, November 2015
  • The University of Melbourne, Faculty of Business and Economics, Melbourne Institute, July 2013
  • Monash University, Department of Economics, August 2012.
  • The University of NSW, School of Economics, July 2012
  • University of Havana, Cuba, October 2006
  • Huazhong University of Science and Technology, Wuhan, China, August 2005
  • Cambridge University, UK, Faculty of Economics, January-February 2005
  • International Monetary Fund, Washington D.C., Fiscal Affairs Department, summers 2000-2003
  • Nanyang Technological University, Singapore, Albert Winsemius Professor, August 2000
  • University of Catania, Sicily, March 2000
  • Kobe University, Japan, January-February 2000
  • Monash University, Australia. Visiting researcher, Center for Excellence, July 1981, July 1982.
  • Australian National University, visiting researcher, the Research School of Social Sciences, summer 1980

Silvaplana workshop in political economy

Jointly organized with Professor Heinrich Ursprung of the University of Konstanz, annually since 1989

Plenary talks and public and invited lectures (excludes departmental seminars)

  • Armenian Economic Association, Yerevan, June 14-16 June 2018. Keynote speaker on: Politics and public policy; A review.
  • The University of the West Indies at Mona, Kingston, Jamaica. 1st Conference of Caribbean Economists, March 9-10 2017. Plenary lecture on ‘The political economy of public policy’: The case of income support and work incentives’.
  • Guangxi Normal University, School of Political Science and Public Administration, Guilin, China, November 1 and November 3, 2016, “Public finance and public policy”
  • Huazhong University of Science and Technology, School of Public Administration, Wuhan, China, November 7, “Public finance and public policy”
  • University of Genoa, lecture on “Political economy”, at ceremony conferring an honorary doctorate, March 4 2016.
  • Tullock Memorial Conference, George Mason University, Arlington, VI, USA. “The political economy of an idea: The case of rent seeking”, 2-3 October 2015.
  • Centre for Studies in Social Sciences, Kolkata, Conference on Public Finance, Public Economics, and Public Policy, keynote speaker, “Expressive behavior and public policy”, 5-6 December 2013. http://ctrpfp.ac.in/program_dec_2013.pdf 
  • Trade and the Organization of Production in the Global Economy: A Conference in Honor of Wilfred Ethier, Vanderbilt University, “Rent extraction and income redistribution: A behavioral perspective on international trade policy”, October 25-26, 2013.
  • Australasian Public Choice Conference, University of Tasmania. Plenary lecture: “Beyond criticism: Logrolling and decoy voting in the United Nations”, December 10-11 2012
  • National University of Singapore, Lee Kuan Yew School of Public Policy. Public lecture: “Expressive behavior and public policy”, August 13, 2012
  • World Bank, ECA PREM Seminar, Washington DC, on “Lost in transition”, June 19, 2012
  • XII International Conference on Economic and Social Development, Higher School of Economics, Moscow, “The professional literature in economics”, 3-4 April 2012 http://conf.hse.ru/en/2012/honorary
  • Public Choice Society, World Conference, Miami. Plenary talk on the contributions of Gordon Tullock, “A good idea: So what”. March 2012
  • Jerusalem Institute for Market Studies May 2011. Public lecture on: "Identity and expressive behavior in voting in Israel"
  • http://www.youtube.com/watch?v=q2tz5_RW35o
  • Public Choice Society, San Antonio, March 2011. Plenary presentation: “Behavioral political economy”
  • Silvaplana Workshop on Political Economy. Pontresina, July 2010. “Expressive policy traps”
  • CESifo 3rd Workshop on Political Economy, Dresden, December 2009. Keynote speaker on “Expressive behavior”
  • European Public Choice Society, Athens, April 2009. Plenary lecture on: “Expressive behavior in economics and politics: An overview and a perspective”
  • Alexander von Humboldt Foundation: The Israeli Humboldt Club, the Humboldt Kolleg Symposium on “When Science and Humanities Meet”, January 8, 2009. Invited lecture: “The welfare state”
  • Jerusalem Institute for Market Studies, 21 May 2008. Public lecture: "The work ethic and the welfare state"
  • Hubei College of Economics, China, October 10, 2007. Public lecture: “Is social justice achievable?”
  • Singapore Economic Review annual public lecture, Nanyang University, September 20, 2007, “Globalization and social justice”
  • Humboldt University, Berlin, July 9-13 2007, MEMS guest lecturer, public lectures on “Current aspects of public finance and public policy” 
  • BESA Institute for Strategic Studies, Bar-Ilan University, May 7, 2007, public lecture on “Why does the Arab world remain poor?”
  • University of Havana, 44th Anniversary of the Initiation of the Study of Economics, Havana, Cuba, October 6, 2006. Plenary lecture on: “The elusive quest for social justice”
  • Mont Pelerin Society General Meetings, Salt Lake City, August 15-20, 2004.  Plenary address on: “Institutions of international decision making: the United Nations”
  • The World Bank, PREM Conference, Washington DC, April 27-28, 2004.  Debate with Jeffrey Sachs on: “Economic policies for failed states”
  • http://www.nytimes.com/2004/11/07/magazine/07SACHS.html?pagewanted=all&_r=0
  • European Public Choice Society, Berlin, April, 2004. Plenary lecture on: “Development failure”
  • Nanyang Technological University, Singapore, Public lecture, “Why are some countries rich and others poor?” August 2000.
  • Israel Economic Association, Symposium on 50 years of Economic Research in Israel, April 28, 1999. Invited lecture on: “Political Economy”
  • European Public Choice Society Annual Conference, Prague, April 1997. Presidential Address: "Political economy and political correctness"
  • Mont Pelerin Society General Meeting, Cannes, September 1994. Plenary address: "Nostalgia, self-interest, and the transition from socialism"
  • European Public Choice Society Annual Conference, Portrush, April 1993. Plenary address: "The transition from socialism: Some comforting thoughts for adherents to a public choice perspective"
  • Geneva Environmental Meetings, Environment and Development: Conflict and Convergence, May 1992. Presentation on: "Environmental protection and international trade"
  • Annual Meetings of the Economic Association of Israel, Tel-Aviv, December 1991. Plenary lecture: "The political economy of international trade policy"
  • European Public Choice Society Annual Conference, Meersburg, April 1990. Plenary lecture on "International trade policy: Benevolent dictators and optimizing politicians"
  • Taft Lecture, University of Cincinnati, April 1989. Public lecture on: “Liberalizing socialist industry"

PhD thesis supervision, Bar-Ilan University

  • Yoav Zeif, 1999. Three essays in international trade policy and income distribution
  • Shirit Katav-Herz, 2002, Social norms, labor standards, and international consequences
  • Ronen Bar-El, 2006. Essays in intergenerational economics
  • Odelia Rosin, 2008. The economic consequences of obesity
  • Yariv Weltzman, 2010. The persistence of ineffective aid
  • Rezina Sultana, 2011. Essays on the political economy of economic development
  • Doron Klunover, 2016. Three essays in the theory of contests

Courses taught (graduate and undergraduate)

  • Public economics
  • Political economy
  • Public policy
  • International economics
  • Microeconomic theory

Books

The Political Economy of Protection

Arye L. Hillman, 1989. Harwood Academic Publishers, Chur. Reprinted 2001 by Routledge, London, and 2014 by Taylor and Francis (Routledge), London

A basic principle of the theory of international trade is that free trade is efficient. Possible externalities aside, people can only gain from voluntary exchange. This book considered the reasons why political decision makers have chosen not to allow free trade. Standard trade theory at the time of writing of the book had used the Musgrave separation between efficiency and distributional decisions through lump-sum taxes and transfers.  Yet, because such taxes and transfers are generally not available, the efficiency of free trade is compromised by governments seeking distributional objectives through trade policies. Standard trade theory also assumed benevolent governments choosing policies to maximize social welfare and explained protectionism as a second-best policy of the social-welfare maximizing governments. This volume describes decision makers who have political objectives that are not necessarily consistent with the public interest. Since the initial publication of the book, the political-economy themes of the book have become common place in the literature on international trade policy.

Public Finance and Public Policy: A Political Economy Perspective on Responsibilities and Limitations of Government

Arye L. Hillman, 2019 (3rd edition). Cambridge University Press, New York NY (1st Edition, 2003, 2nd Edition, 2009).

Other language editions: Japanese 2006, Keiso Shobo, Tokyo; Chinese 2006, Chinese Academy of Social Sciences, Beijing; Russian, 2009, Publishing House of the State University, Higher School of Economics, Moscow; Greek, 2013, Papazisis publishers, Athens; Hebrew (electronic)

Public Finance and Public Policy studies the responsibilities and limitations of government in a market economy. Featuring the same wealth of real-life examples and rigorous but accessible exposition of previous editions, the third edition has been reorganized and fully updated. The traditional public-finance topics are covered of public goods, externalities, unwanted markets, and asymmetric information. The quest for social justice is considered in terms of social insurance, moral hazard, and social mobility. Public choice concepts are applied to evaluating how politics affects societal efficiency and income distribution. Political economy is supplemented by behavioral concepts such as trust, fairness, envy, and hyperbolic discounting. The book is suitable for advanced undergraduate and graduate students taking courses on public policy and government and the market, this book offers an accessible introduction to the subject without excessive technicality.

Edited Volumes

Publications

Menu

  1. Selected Publications By Topic
    • Political Economy Topics
      1. A political economy perspective on public policy
      2. The creation and contesting of rents
      3. Protectionism
      4. Trade liberalization
      5. Boycotts and embargos
      6. International migration
      7. Trade policy: History of political economy
      8. Transition from socialism
      9. The transition of Israel
      10. Economic development
      11. Expressive behavior and public policy
      12. Prejudice
    • Other
      1. International trade
      2. Public policy
  2. All Publications (Chronological Order)

Selected Publications By Topic

Political Economy

A Political Economy Perspective

In 1988, at the then Karl Marx (now Budapest) School of Economics, with Hungary still under communist rule that was to end with free elections in March 1990, I presented to an audience of local economists the ‘western model of public policy’ inclusive of lump-sum taxes and a social planner maximizing a social welfare function. The audience at first thought that I was joking. Then, having been convinced that ‘western models’ of recommended public policy did indeed take the form that I had described, the local academics declared themselves to be aghast that the ‘western model’ embodied characterizations of political institutions (an omniscient planner) and human behavior (contribution according to ability and not incentives) that they were hoping to escape. I attempted to explain that the model was normative (describing what ought to be). That did not allay their distress.

When, around the mid-1990s, political economy began to enter mainstream western literature, there was a tendency to model a median voter as determining policy. As was shown by Moises Ostogorski in 1903, policies determined by the median voter can be precisely the contrary of the policies determined by voting under representative democracy. The median-voter models downplay, or indeed ignore, political discretion and rent seeking: politicians are not present in these models. The standard mainstream model went from a government maximizing social welfare to absence of government, with politicians and political discretion hidden. This was not the case for the standard model of Public Choice.

My research has focused on representative democracy, for which the political principal-agent problem, political discretion, the public-finance common-pool problem, and rent seeking are present. I have been fortunate to have the ‘Public Choice school’ to provide a forum to give a hearing to my political-economy ideas. My research has been consistent with the principles of the Public-Choice school, although I have not been a card-carrying member.

In [1], a diverse range of topics was addressed from a public-choice perspective by invited authors. In [2], comprehensive coverage is provided of responsibilities and limitations of government. The traditional normative issues of public finance are integrated with political economy, using public choice concepts, and including behavioral concepts and evidence from empirical studies and experiments.

  1. Arye L. Hillman (Ed.), 1991. Markets and Politicians: Politicized Economic Choice. Kluwer Academic Publishers, Dordrecht and Boston.
  2. Arye L. Hillman, 2019 (3rd edition). Public Finance and Public Policy: A Political Economy Perspective on Responsibilities and Limitations of Government, Cambridge University Press, New York NY
    1st Edition, 2003, 2nd Edition, 2009. Other language editions: Japanese 2006, Keiso Shobo, Tokyo; Chinese 2006, Chinese Academy of Social Sciences, Beijing; Russian, 2009, Publishing House of the State University, Higher School of Economics, Moscow; Greek, 2013, Papazisis publishers, Athens; Hebrew (electronic)
 
The Creation and Contesting of Rents

Rents are an intrinsic part of political economy [7]. If not for rents, there would be limited need for politics. Rents are created through political responses to private-sector influence over policy decisions. The rents are in general shared between private-sector beneficiaries and the political creators of the rents. Rent seeking can result in socially unjust income distribution but a primary question has been the social cost of rent seeking through resources used in contesting rents. Rent-seeking contests (or contests for political influence) cannot generally be observed. There are political and personal incentives to keep such contests out of sight.

Contest models are a means of inferring social loss from the unproductive use of resources in the quest for rents. With a known value of a contested rent, contest models identify the value of resources used in a contest, which can be compared with the value of the contested rent. Gordon Tullock, in introducing rent-seeking contests in 1980, assumed a probabilistic contest-success function (rent-seeking outlays were like buying lottery tickets, with possible scale effects). In the Tullock contest, rent dissipation (the value of resources used in contest relative to the value of the contested rent) is in general incomplete. A contest-success function specifying that ‘the highest outlay in a contest wins’ (which can be derived from the Tullock function as a special case) results in the value of a contested rent equal to resources used in contesting the rent for any number of contenders in a contest [3]. Asymmetric valuations can be introduced with both the Tullock contest-success function and when the ‘highest outlay wins’ (also known as an “all-pay auction”). In the all-pay auction with asymmetric valuations, only the two high-valuation contenders in a contest actively compete and rent dissipation does not exceed the value of the rent to the low-valuation contender [4]. Competitive rent seeking (free entry into contests) completely dissipates rents but not when there is risk aversion [1].

Studies of rent seeking, beginning with Tullock’s original observations in 1967, have viewed rents at a point in time, yet rents in general endure over time and could disappear or require re-contesting in the future, which requires a reformulation of the basic rent-seeking model [5].

Bribes are transfers of income but are also sources of social loss when the positions to which the bribes accrue are contested: rent seeking and rent dissipation occur when a bribe is distributed up a bureaucratic hierarchy, with officials at each level of the hierarchy benefitting from a share of the bribe [2].

The political incentive for rent creation can explain a multiplicity of independent jurisdictions created from former centralized governments [6].

There is an issue why rent seeking is not more extensive, given the rents available to be contested [8].  

  1. Arye L. Hillman and Eliakim Katz, 1984. Risk-averse rent seekers and the social cost of monopoly power, Economic Journal 94, 104-110.
    Reprinted in:
    • The Political Economy of Rent Seeking, Charles Rowley, Robert Tollison and Gordon Tullock (Eds.), Kluwer Academic Publishers, Boston, 1988, pp. 81-90.
    • The Economic Analysis of Rent Seeking, Roger Congleton and Robert Tollison (Eds.), Edward Elgar, Oxford, 1995, pp. 243 – 249.
    • The Political Economy of Rent Seeking, Charles K, Rowley, Robert D. Tollison, and Gordon Tullock, Kluwer Academic Publishers, Boston and Dordrecht, pp. 81-90.
    • Forty Years of Research on Rent Seeking 1 – The Theory of Rent seeking. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 97 – 103.
  2. Arye L. Hillman and Eliakim Katz, 1987. Hierarchical structure and the social costs of bribes and transfers. Journal of Public Economics, 34, 129-142.
    Reprinted in:
    • The Economics of Corruption and Illegal Markets, Gianluca Fiorentini and Stephano Zamagni (Eds.), Edward Elgar, Cheltenham UK 1999. In the series The International Library of Critical Writings in Economics.
    • Forty Years of Research on Rent Seeking 1 – The Theory of Rent seeking. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 523 – 536.
  3. Arye L. Hillman and Dov Samet, 1987. Dissipation of contestable rents by small numbers of contenders, Public Choice, 54, 63-82.
    Reprinted in:
    Forty Years of Research on Rent Seeking 1 – The Theory of Rent seeking. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 165 – 184.
    See also: Hillman, Arye L. and Dov Samet, 1987. Characterizing equilibrium rent-seeking behavior: A reply to Tullock, Public Choice, 54, 85-87.
  4. Arye L. Hillman and John Riley, 1989. Politically contestable rents and transfers. Economics and Politics 1, 17-39.
    Reprinted in:
    • Forty Years of Research on Rent Seeking 1 – The Theory of Rent seeking. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 185 – 207.
  5. Toke Aidt and Arye L. Hillman, 2008. Enduring rents. European Journal of Political Economy 24, 454 – 53.
  6. Arye L. Hillman, 2005. Political institutions, jurisdictional boundaries, and rent creation. Keio Economic Studies, 42 nos. 1-2, 25 – 37. Special issue in honor of Professor Michihiro Ohyama, edited by Wilfred J. Ethier and Makoto Yano.
  7. Arye L. Hillman, 2015. Rent seeking as political economy. In: Roger D. Congleton and Arye L. Hillman (Eds.), Companion to Political Economy of Rent Seeking, Edward Elgar, Cheltenham UK, 2015, chapter 2, pp. 10-16.
  8. Arye L. Hillman and Heinrich W. Ursprung, 2016. Where are the rent seekers? Constitutional Political Economy 27(2), 124-141. Special issue in memory of Gordon Tullock. CESifo Working Paper No. 5833 (March 2016)

 

Protectionism

My research on political economy began in international trade policy with protectionism. Neither policy-created rents nor political discretion were present in the mainstream trade model international trade policy of the 1980s. I proposed a model [1] in which political objectives underlie trade-policy decisions. Subsequently Grossman and Helpman (1994) proposed a model that they called ‘protection for sale, which popularized the view that there is a link between politics and policy. I described an import-competing industry confronting a decline in the world price of its output (the terms of trade improve). A government concerned with political support responds by levying a tariff that moderates gains and losses from the change in the world price. The government’s policy partly counters the terms of trade improvement (which suggests contrary to the mainstream normative model that governments do not necessarily seek improvements in the terms of trade).

When world prices decline, sudden collapses can occur in the output of import-competing industries. The collapses are inconsistent with movement along a smooth supply function. The puzzle of a sudden collapse is resolved by accounting for changes in political calculations of whether policies supportive of the industry is worthwhile [2].

Trade policy can be described as determined through political competition, with advocates of policies providing campaign contributions to favored political candidates [3]. A policy of voluntary export restraints creates a foreign cartel and results in Hotelling-type convergence of candidates’ policy positions in a Nash equilibrium with benefits to both foreign and domestic producers at the expense of domestic consumers. If a tariff is used to restrict trade, foreign exporters and domestic producers have opposing policy preferences and political candidates’ policy positions diverge. Voluntary export restraints deteriorate the terms of trade through a rent transfer to foreign producers.

Environmental lobbies can have a common policy interest in international trade policy with producers or consumers. Policies preferred by environmentalists depends on whether the environmentalists care only about their local environment (are ‘not-in-my-backyard’ types) or are concerned with the global environment. The political economy of environmental policy is described in [5], which was an invited presentation for a conference organized at the GATT (replaced by the WTO) on trade and the environment. [6] is an extension.

“The Political Economy of Protection” [4], first published in 1989, provided an overview of international trade policy as a political-economy phenomenon. In the 1980s, the political-economy perspective on trade policy set out in the book was not mainstream. Normative models of benevolent government were the usual means of portraying trade policy.

  1. Arye L. Hillman, 1982. Declining industries and political-support protectionist motives. American Economic Review 72, 1180-1187.
    Reprinted in:
    • The WTO, Safeguards, and Temporary Protection from Imports, Chad Brown (Ed.), Edward Elgar, Cheltenham UK, 2006.
    • The WTO and the Political Economy of Trade Policy, Wilfred Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. 43 – 50.
    • Forty Years of Research on Rent Seeking 2 – Applications Rent Seeking in Practice. Roger D. Congleton et al. (Eds.), Springer, Berlin, 2008, pp. 105 – 112.
  2. James H. Cassing and Arye L. Hillman, 1986. Shifting comparative advantage and senescent industry collapse. American Economic Review 76, 516-523.
    Reprinted in:
    • The WTO and the Political Economy of Trade Policy, Wilfred J. Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. 516 – 523.
  3. Arye L. Hillman and Heinrich W. Ursprung, 1988. Domestic politics, foreign interests and international trade policy. American Economic Review 78, 729-745.
    Reprinted in:
    • International Trade, J. Peter Neary (Ed.), Edward Elgar, Cheltenham UK, 1996.
    • The Globalization of the World Economy: Trade and Investment Policy, Thomas Brewer (Ed.), Edward Elgar, Cheltenham UK, 1999, pp. 470 – 86.
    • The WTO and the Political Economy of Trade Policy, Wilfred J. Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. 99 -115.
    • See also: Arye L. Hillman and Heinrich W. Ursprung, 1994. Domestic politics, foreign interests, and international trade policy: Reply, American Economic Review, 1994, 84, 1476-78.
  4. Arye L. Hillman, 1989. The Political Economy of Protection. Harwood Academic Publishers, Chur. Reprinted 2001 by Routledge, London. Reprinted 2013 by Taylor and Francis Abingdon UK.
  5. Arye L. Hillman and Heinrich W. Ursprung, 1992. The influence of environmental concerns on the political determination of international trade policy. In: Kym Anderson and Richard Blackhurst (Eds.), The Greening of World Trade Issues, University of Michigan Press, Ann Arbor MI, 1992, pp. 195 – 220.
  6. Arye L. Hillman and Heinrich W. Ursprung, 1994. Greens, super greens, and international trade policy: Environmental concerns and protectionism. In: Carlo Carraro (Ed.), Trade, Innovation, Environment, Springer, Heidelberg, pp. 75 – 108.

 

Trade Liberalization

Trade liberalization is in practice a process of “political exchange of market access” [1], [2]. Governments cannot provide exporters with export subsidies, which are illegal by international-trade law. Agreements by governments to “exchange market access” provide mutual benefits for countries’ exporters, at the expense of import-competing industries that face increased domestic competition. An “exchange-of-market” view is consistent with the actual conduct of trade negotiations and is inconstant with the standard trade model that focuses on “optimal tariffs” and improvement in the terms of trade, and means of returning to the contract curve.

The proposal that trade liberalization is a process of “exchange of market access” was not well-received by reviewers, in being contrary to the heart of the standard model of trade negotiations in which countries’ governments are concerned with their terms of trade. The paper was published in the conference volume and in the Swiss Journal of Economics and Statistics.

Why do governments unilaterally liberalize trade? An explanation for unilateral liberalization is domestic asset diversification. In [3] capital markets are introduced into the specific-factors model of international trade. Diversification of ownership of industry-specific capital moderates protectionist interests.

  1.  Arye L. Hillman, Peter Moser and Ngo Van Long, 1995. Modeling reciprocal trade liberalization: The political-economy and national-welfare perspectives. Schweizerische Zeitschrift für Volkswirtschaft und Statistik (Swiss Journal of Economics and Statistics) 131, 503-515.
  2. Arye L. Hillman and Peter Moser, 1996. Trade liberalization as politically optimal exchange of market access. In: Matthew Canzoneri, Wilfred Ethier, and Vittorio Grilli (Eds.), The New Transatlantic Economy, Cambridge University Press, New York, NY, pp. 295-312.
    Reprinted in:
    • The Global Trading System, volume 2, Core Rules and Procedures, Kym Anderson and Bernard Hoekman (Eds.), I.B. Tauris and Co Ltd, London and New York, 2002.
    • The WTO and the Political Economy of Trade Policy, Wilfred Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. 290 – 307.
  3. JoAnne Feeney and Arye L. Hillman, 2004. Trade liberalization through asset markets. Journal of International Economics 64, 151-167.
    Reprinted in:
    • The WTO and the Political Economy of Trade Policy, Wilfred J. Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. 173 - 189.

 

Boycotts and Embargos

Just as Jews throughout the millennia have been subjected to boycotts, the state of Israel, since its modern inception in 1948, has been subject to trade embargos. A contemporary BDS movement (boycott, divestment, sanctions) is directed at Israel. The U.S. was also subjected to embargo by OPEC for supporting Israel. [1], [2], and [3] were the first studies of trade subject to the threat of boycotts or embargoes. [1] describes a country subject to embargo threat for necessary products such a defense equipment. [2] derives public-policy conclusions when a country that is threatened with embargo on imports of a depletable resource such as oil has substitutable domestic resources that can be used. [3] describes the OPEC cartel as having joint monopoly power in the international oil and capital markets, s allowing the cartel to influence both sides of the Hotelling rule for extraction of depletable resources (the price of oil and the interest rate).

  1. Ruth W. Arad and Arye L. Hillman, 1979. Embargo threat, learning and departure from comparative advantage, Journal of International Economics 9, 265 – 75.
  2. Arye L. Hillman and Ngo Van Long, 1983. Pricing and depletion of an exhaustible resource when there is anticipation of trade disruption. Quarterly Journal of Economics, 98, 215 – 33.
  3. Arye L. Hillman and Ngo Van Long, 1985. Monopolistic recycling of oil revenue and intertemporal bias in oil depletion and trade. Quarterly Journal of Economics, 100, 597 – 624.

 

International migration

An invitation to a Kiel week conference in the early 1990s led me to formulate a view of international migration policy in a context of politics and culture. I viewed migration as involving people [2]. The standard model viewed migration as ‘factor movements’, of labor in a way symmetric to international capital movements. Movement of people introduces issues that have consequences for social and economic policies, including use of immigrants to finance intergenerational transfers that have been made non-viable because a country’s low fertility, with a conflict between the retired population that can benefit from productive immigrations who can be taxed and a younger population that views immigration as contrary to sustaining traditional domestic culture [3].

Further studies explained why illegal immigration might be permitted as long as the employment of immigrants was confined to particular sectors [4] and described the motive for migration to be to escape a predatory domestic culture [5].Unemployed immigrants are consistent with an efficiency-wage labor-market equilibrium [6]. Immigrants might be sought to reduce the per capita costs of public goods [1].

  1. Ruth W. Arad and Arye L. Hillman., 1979. The collective good motive for immigration policy. Australian Economic Papers 18, 243-257.
  2. Arye L. Hillman, 1994. The political economy of migration policy. In: Horst Siebert (Ed.), Migration: A Challenge for Europe, J.C.B. Mohr Paul Siebeck, Tübingen, pp. 263 – 282.
  3. Arye L. Hillman, 2002. Immigration and intergenerational transfers. In: Horst Siebert (Ed.), Economic Policy for Aging Societies. Springer, Heidelberg, pp. 213 – 26.
  4. Arye L. Hillman and Avi Weiss, 1999. A theory of permissible illegal immigration. European Journal of Political Economy 15, 585-604.
  5. Epstein, Gil S., Arye L. Hillman, and Heinrich W. Ursprung, 1999. The king never emigrates, Review of Development Economics, 3, 107 – 21.
    Reprinted in:
    • Forty Years of Research on Rent Seeking 2 – Applications: Rent Seeking in Practice. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 265 – 79.
  6. Epstein, Gil and Arye L. Arye L. Hillman 2003. Unemployed immigrants and voter sentiment in the welfare state, Journal of Public Economics, 87, 1641-1655.
    Reprinted in:
    • Seiichi Katayama and Heinrich W. Ursprung (Eds.), International Economic Policies in a Globalized World, Springer, Berlin, 2004, pp. 119 – 32.

 

Trade Policy: History of Political Economy

The authors of the 1929 Brigden Report on Australia’s trade policy displayed awareness of the Stolper-Samuelson theorem (Protection and real wages, Review of Economic Studies 1941) in proposing that protection increased real wages and thereby provided an incentive for immigration from high-income countries. More direct visible methods of subsidizing immigration might encounter voter opposition or create moral hazard by residents who could threaten to leave if not subsidized. The Brigden committee predated expositions of ‘rational ignorance’ and ‘economic illiteracy’ in explaining choice of public policy [1].

The mainstream model of international trade policy avoided relating to creation of producer rents through exchange of market access and described tariffs as imposed to improve the terms of trade, and trade liberalization as taking place to reduce or eliminate previously levied optimum tariffs. McCloskey (1998) proposed in “The Rhetoric of Economics” that economists be viewed as storytellers. Given the evidence that trade policy decisions in real-life involve rents and are distributionally motivated, and that trade negotiators do not seem to care about optimum tariffs and can resist improvements in the terms of trade, a question of interest is why story without rents and with optimum tariffs was the mainstream model [3]. Was political correctness involved, in the intent to keep portrayal of government as socially beneficial and devoid of political and private-sector self-interest [2]?

  1. Arye L. Hillman, 1977. The Brigden Theorem. Economic Record, 53, 434-446.
  2. Arye L. Hillman, 1998. Political economy and political correctness. Public Choice 96, 219-239. 
    Reprinted in:
    • Forty Years of Research on Rent Seeking 2–Applications: Rent Seeking in Practice. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer, Heidelberg, pp. 791-811.
  3. Arye L. Hillman, 2015. Rents and international trade policy. In: Roger D. Congleton and Arye L. Hillman (Eds.), 2015. Companion to Political Economy of Rent Seeking, Edward Elgar, Cheltenham UK, chapter 12, pp. 187-202.

 

Transition from Socialism

The end of communism was a rent-creating event of great magnitude. Rents were created through the wholesale privatization of state-owned assets. Some of the assets were worthless, but others were not. The rents available created distractions from productive activity [4]. Political liberalization made access to rent-seeking opportunities a contestable privilege, with political outsiders being able to contest bureaucratic and political positions to become insiders, who could directly contest rents from privatization and from other means of privileged rent assignment [7]. The banking tended to be particularly problematical because of the political objective of ensuring that factories remained viable, which would not be the case if debts had to be paid [5].

Invitations by the World Bank in the 1990s and also later to accompany missions to various post-communist countries allowed first-hand observation of ‘transition’ [1],[2],[3]. There was self-interested political opportunism, starting from the top. This was not Moses taking his people to the Promised Land [8]. Predictions depended on whether political culture [6] would be retained or would change.

Transition implies an endpoint but the ‘transition’ from socialism (communism) remained an ongoing process. An analogy is with the metamorphosis of a caterpillar to a butterfly but in the case of the butterfly a beautiful creature emerges in a process that is predictable but not observable, whereas the transition from socialism has been observable but the outcome not predictable [9].

Political correctness seemed to have been an impediment to describing the reality of the transition. The emphasis in the literature was on how behavior could be changed to make political leaders and government bureaucrats want to implement the policies that would allow socially desirable outcomes. Eventually the role of political impediments came to be accepted.

  1. Arye L. Hillman and Branko Milanovic (Eds.), 1992. The Transition from Socialism in Eastern Europe: Domestic Restructuring and Foreign Trade. The World Bank, Washington, D.C.
  2. Arye L. Hillman, 1994. The transition from socialism: An overview from a political-economy perspective. European Journal of Political Economy 10, 191 – 225. Special issue, Festschrift in honor of Peter Bernholz, edited by Manfred Gärtner and Heinrich W. Ursprung.
  3. Arye L. Hillman and Željko Bogetić (Eds.), 1995. Financing Government in Transition, Bulgaria: The Political Economy of Tax Policies, Tax Bases, and Tax Evasion. The World Bank, Washington, D.C., 1995. Reprinted by Avebury Publishing, Brookfield, Vermont, 1996
  4. Alan Gelb, Arye L. Hillman, and Heinrich W. Ursprung, 1998. Rents as distractions: Why the exit from transition is prolonged. In: Nicolas C. Baltas, George Demopoulos, and Joseph Hassid (Eds.), Economic Interdependence and Cooperation in Europe, Springer, 21 – 38.
  5. Arye L. Hillman and Heinrich W. Ursprung, 1999. The political economy of banking sector reform in the transition. In: Mario Blejer and Marko Škreb (Eds.), Financial Sector Transformation: Lessons from Economies in Transition, Cambridge University Press, New York, pp. 132 – 149.
  6. Arye L. Hillman and Otto Swank, 2000. Why political culture should be in the lexicon of economics, European Journal of Political Economy 16, 1 – 4.
  7. Arye L. Hillman and Heinrich W. Ursprung, 2000. Political culture and economic decline, European Journal of Political Economy 16, 189-213.
    Reprinted in:
    • Forty Years of Research on Rent Seeking 2 – Applications: Rent Seeking in Practice. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 219 – 243.
  8. Hillman, Arye L., 2002. On the way to the Promised Land: ten years in the wilderness without Moses. Published in Russian (translated by Mark Levin). Economics and Mathematical Methods - Journal of the Central Economic and Mathematical Institute of the Russian Academy of Sciences 38, 78 – 94.
  9. Hillman, Arye L., 2003. Interpretations of transition. In: Nauro F. Campos and Jan Fidrmuc (Eds.), Political Economy of Transition and Development: Institutions, Politics, and Policies, Kluwer Academic Publishers, Dordrecht, pp. 23 – 40.

 

The Transition of Israel

The economy of Israel is part of the study of transition. Israel underwent a successful transition to a high-income economy from a prior economic system in which collective ‘workers-owned’ and privately owned monopolies were protected from domestic and import competition. The justification for the protection was workers’ job security. In 1988, at a conference to mark the 40th anniversary of the re-establishment of the state of Israel, I presented a paper [1] on ‘Impediments to a competitive environment in Israel’. I described the pre-transition economic system, which protected workers’ jobs but was a source of inefficiency and created rents for the managers of the workers-owned and other collective and private monopolies and cartels. Trade and domestic liberalization were required because of the free-trade agreements with the U.S. and Europe. There were ‘liberalization dilemmas’ [2] for an economy in which competition had been viewed as inconsistent with social objectives.

  1. Arye L. Hillman, 1988. Impediments to a competitive environment in Israel. Presented at Symposium on American-Israel Economic Relations in Honor of the 40th Anniversary of the State of Israel, New York (June 1988). With preface added January 2016.
  2. Arye L. Hillman 1991. Liberalization dilemmas. In Markets and Politicians: Politicized Economic Choice, Arye L. Hillman (Ed.), Kluwer Academic Publishers, Dordrecht and Boston, chapter 10, pp. 189 – 207.

 

Economic Development

The puzzle in low-income countries is failure of economic development and inability of ordinary people (not the elites) to escape from poverty, despite the substantial aid provided by the World Bank and International Monetary Fund and from other sources. The low-income countries have often been called ‘developing’ countries, even if not developing. Donors, in particular the administering bureaucracy, require that there be a justification to provide aid, which may require that aid-recipient countries be ‘developing’. In the mainstream development literature, the emphasis was normative, on how successful development was in principle achievable. There was a large gap between a political-economy view and the academic mainstream. An editor of a leading journal (himself originally of the elite of a ‘developing’ country) told me that ‘corruption is overrated’. Yet the evidence has indicated substantial corruption and rent seeking in low-income countries.

It is possible to go beyond corruption. When asked during a stay at the International Monetary Fund to write a review of the role of corruption in undermining economic development, I chose instead to formulate a model of a Nietzschean society [1]. There is no ethical restraint and no rule of law. The ‘strong’ do as they please with the ‘weak’, whose output the strong can appropriate, although at a cost. The weak can choose not to be productive, or to pretend to be incapable of being productive, and also to pretend to be lazy, to reduce the expected benefit of predation by the strong. A prediction is that the weak will invest in non-appropriable sources of utility. In a repeated game, a version of the folk-theorem of game theory ensures efficiency with restrained appropriation.

Ineffectiveness of government schooling results in self-financing of education of their children by the poor in various low-income countries [2]. Quite remarkably, there had been criticism of parents’ resorting to self-financing of schooling, for example, by the NGO Oxfam, on the grounds that governments should provide schooling for children, and not parents. Oxfam came out against the poor self-financing schools for their children but not the elites sending their children to exclusive private schools or sending their children abroad to go to school. Oxfam proposed that, for the poor, only reliance on government is permitted, even when governments have failed to fulfil their responsibilities of providing reasonable quality education.

The presence of rent seeking in low-income counties was suggested in an empirical study of deficit spending by governments of low-income countries [3]. Reduced public spending (or a smaller government budgetary deficit) increased growth of per capita income. This could not be due to the inverse of a ‘crowding-out effect’ (government spending increasing domestic investment through a decline in the interest rate) because the countries in the sample did not have functioning private domestic capital markets. The revealed negative marginal product of government spending in low-income countries signals rent seeking and corruption, which are reduced when public spending is reduced.

The theory of encompassing interest proposes that autocratic rulers, as residual claimants, would resolve all inefficiencies and maximize national income. The theory had its origins in Hobbes’ Leviathan. The incentives of governments and elites in low-income countries can be contrary to the predictions of encompassing interest. Governments and elites can be motivated by the objective of avoiding a middle class that would ask for the political transparency and accountability of democracy [4].

As occurred in the literature on trade policy and the transition, mainstream views changed, and corruption, rent seeking, and ‘governance’ became topics of enquiry in the study of less developed countries. When William Easterly left the World Bank and published a book on his ‘development experiences’ (Easterly 2001), the gates were fully opened to asking questions about how governments and associated elites impeded economic development.

  1. Arye L. Hillman, 2004. Nietzschean development failures, Public Choice 119(3), 263 – 280.
  2. Arye L. Hillman and Eva Jenkner, 2004. User payments for basic education in low-income countries. In: Helping countries Develop: The Role of Fiscal Policy, Sanjeev Gupta, Benedict Clements, and Gabriela Inchauste (Eds.), International Monetary Fund, Washington DC, 2004, pp. 233 – 264.
    Non-technical version: How to pay for basic education: Poor children in poor countries, Economic Issues 33, 2004, International Monetary Fund, Washington DC.
  3. Baldacci, Emanuele, Arye L. Hillman, and Naoko Kojo, 2004. Growth, governance, and fiscal-policy transmission channels in low-income countries. European Journal of Political Economy 20, 517 – 549.
    Reprinted in:
    • Helping countries Develop: The Role of Fiscal Policy, Sanjeev Gupta, Benedict Clements, and Gabriela Inchauste (Eds.), International Monetary Fund, Washington DC, 2004, pp. 67 – 104.
  4. Arye L. Hillman, 2007. Democracy and low-income countries. In José Casas Pardo and Pedro Schwartz (Eds.), Public Choice and Challenges of Democracy, Edward Elgar, Cheltenham, U.K., pp. 277 – 294.

 

Expressive Behavior

Expressive voting has been proposed as explaining the paradox of voting (which is that people vote when the likelihood of their vote being decisive is effectively zero). Expressive behavior extends beyond voting to expressive rhetoric and expressive giving. In behaving expressively, people confirm an identity. The identity can have been chosen to appeal to others. Expressive behavior would be of no social consequence if there were no adverse externalities. There are externalities when voting has resulted in an expressive-policy trap, which occurs when a majority of non-decisive expressive voters has supported a policy that each voter would veto if decisive. Expressive behavior explains outcomes in experiments when the expressive utility from playing out a generous or trusting identity exceeds monetary losses or gains. Expressive giving occurs when donors give to benefit expressively from a generous identity and do not monitor or care about whether their aid is being used effectively [1].

Evidence on expressive behavior, in particular expressive voting, has principally come from experiments conducted with students. A natural experiment is provided by voting behavior of Jews in the U.S. A study of voting in U.S. presidential elections can be interpreted in expressive terms [2]. One group votes to confirm ‘liberal’ identity and allegiance to a ‘progressive’ ideology. A second group bases identity on traditional values.

When group identity predetermines persisting majorities and minorities, there is no scope for a loyal opposition waiting a turn in government. A case study shows how sustained democracy can nonetheless co-exist with voting based on group identity [3]. The persistence of democracy is explained by expressive voting by non-decisive voters and instrumental voting when groups can be decisive. Democracy in such instances differs from usual political competition.

  1. Arye L. Hillman, 2010. Expressive behavior in economics and politics. European Journal of Political Economy 26, 404 – 419.
  2. Arye L. Hillman, 2011. Expressive voting and identity: evidence from a case study of a group of U.S. voters. Public Choice 148, 249-257.
  3. Arye L. Hillman, Kfir Metsuyanim, and Niklas Potrafke, 2015. Democracy with group identity. European Journal of Political Economy, 40(Part B), 274-287. (Special issue on Behavioral Political Economy).

 

Prejudice

Data complied on all United Nations General Assembly resolutions on which voting took place between January 1990 and June 2013 reveal a preoccupation with one country, Israel, which is criticized in 65 percent of instances in which a country is criticized in a resolution. No other country was criticized in more than 10 percent of resolutions. UN General Assembly voting is expressive because resolutions are non-binding. Comparative quantitative criteria confirm that the persistent voting to criticize Israel the consequence of discrimination. The discrimination can be explained by a combination of the vanity of autocrats who do not wish to have their violations of human rights on the agenda of the United Nations, the use of Israel as a decoy and voting against Israel as a Schelling focal point for deflection of criticism, and traditional prejudice against Jews transposed to the Jewish state. Israel is not unique in being the object of discrimination at the United Nations. Cases of autocratic countries criticizing democracies other than Israel for violation of human rights are presented [2].

The United Nations Goldstone Report accused the state of Israel of deliberately targeting civilians in the conflict with the Hamas government of Gaza. Evidence shows that support for the resolutions condemning Israel was less than in usual anti-Israel UN General Assembly resolutions, with the difference due to democracies not supporting the resolutions, because the resolutions had the more general implication that defense against state-supported terror was a war crime. For autocracies, voting to criticize Israel dominated any concerns of criminalizing self-defense against state-sponsored terror [3].

Can economic or behavioral concepts explain the prejudice against Jews and the Jewish state? The literature on traditional prejudice against Jews provides extensive historical accounts. There has been less attention directed at explaining the foundations of the prejudice. A behavioral explanation for the prejudice is based on historical continuity of envy and fear, and, in contemporary times, cognitive dissonance in the inability to harm Jews en masse, as was possible in particular in Europe in the past. The extent of prejudice against Jews and the Jewish state appears related to whether luck or effort is perceived to be the primary determinant of personal success. A view that luck is more important appears related to the extensive prejudice reported in egalitarian-preference populations in Europe. Low prejudice in populations in the U.S., Australia, and Canada appears associated with the view that personal effort is the primary determinant of personal success [2].

Prejudice can result in academic exclusion [4]. Alexander Del Mar, J.A. Hobson, and Gordon Tullock challenged mainstream views of their time. Del Mar challenged the mainstream view on the role of money and monetary theory, but in addition was excluded because, being Jewish and with a belief in eugenics in the background, Del Mar was declared by his ideological detractors to be incapable of original thought. Hobson was regarded as a traitor to his class for advocating fair treatment for lower classes. Tullock proposed rent seeking as a source of inefficiency to explain low empirical measures of social loss from monopoly and protectionism. Rent seeking implied government involvement in creating rents, which challenged the mainstream ideological view of government as benevolent and efficiency-seeking. Tullock’s paper introducing rent seeking was rejected by an editor of the American Economic Review who was an avowed Maoist, and who at the same time as rejecting Tullock’s paper accepted a paper that attributed inefficiency to people not contributing to the social good by shirking (and who might require re-education to contribute according to ability). After initial academic exclusion, Alexander Del Mar, J.A. Hobson, and Gordon Tullock were in due course recognized for the originality and the merits of their ideas. Each however incurred costs because of prejudice.

  1. Arye L. Hillman, 2013. Economic and behavioral foundations of prejudice. In Charles Asher Small (Ed.), Global Antisemitism: A Crisis of Modernity, Martinus Nijhoff Publishers, Leiden, Netherlands, and Boston, MA, pp. 51-67.
  2. Raphael N. Becker, Arye L. Hillman, Niklas Potrafke, Alexander H. Schwemmer, 2015. The preoccupation of the United Nations with Israel: Evidence and theory. Review of International Organizations 10(4), 413-437.
  3. Arye L. Hillman and Niklas Potrafke, 2015. The UN Goldstone Report and Retraction: An empirical investigation. Public Choice 163(3), 247-266.
  4. Arye L. Hillman and Heinrich W. Ursprung, 2016. Academic exclusion: Some experiences. Public Choice, 167(1), 1-20. CESifo working paper no. 5912 (May 2016)

 

Other (not political economy)

International Trade
  • ‘Revealed comparative advantage’

    ‘Revealed comparative advantage’ had been proposed by Bela Balassa a measure of comparative advantage. The measure has been a popular means of quantifying comparative advantage. I showed that the measure of ‘revealed comparative advantage’ does not necessarily reveal comparative advantage and derived a sufficient condition for the measure to be valid. This paper provided a first encounter with the sophistry than can be present in editorial decisions. The paper was submitted to the journal in which the original paper on ‘revealed comparative advantage’ had been published (the Manchester School). The editor rejected the paper on the grounds that ‘revealed comparative advantage was not intended to reveal comparative advantage’. In a reply to the editor, I pointed out that many people had been fooled.

    Arye L. Hillman, 1980. Observations on the relation between "revealed comparative advantage" and comparative advantage as indicated by pre-trade relative prices. Weltwirtschaftliches Archiv 116, 315 – 21.

    See also: Jeroen Hinloopen and Charles Van Marrewijk, 2008, Empirical relevance of the Hillman condition and comparative advantage. Applied Economics 40, 2313 – 2328.
  • Energy and the factor content of U.S. trade

    Empirical studies of the factor content of international trade had specified as factors of production capital (human and physical) and labor. Clark Bullard and I introduced energy as a factor of production into the U.S. input-output table and asked whether the U.S., which was importing energy (oil) directly at the time, was also importing energy indirectly through the factor content of international trade. We found a version of the Leontief Paradox based on factor complementarity between energy and capital. The U.S., which was a direct importer of energy, was exporting energy indirectly.

    Arye L. Hillman and Clark W. Bullard III, 1978. Energy, the Heckscher-Ohlin theorem and U.S. international trade. American Economic Review 68, 96-106.
    Reprinted in:
    • John Cunningham Wood (Ed.), 1997. Bertil Ohlin: Critical Assessments, Routledge, London.
  • Asset markets and strategic trade policy

    A favored mainstream model of policy has been ‘strategic trade policy’, which recommends that governments subsidize ‘national’ firms that compete in oligopolistic world markets. When investors are diversified, holding stock in the domestic firm and also in a competing foreign firm, the ‘strategic trade policy’ proposal is meaningless or counterproductive [3]. A diversified investor does not need a profit-shifting policy through government subsidies. Private investors lose from the suggestion of ‘strategic trade policy’ because of uncertainty created about whether the policy will actually be implemented. (A government, if it follows strategic-trade policy advice, is creating rents for domestic firms. Because of the rents, there are of course other political-economy issues suggesting strategic trade policy is a naïve policy proposal, such as rent seeking to become the beneficiaries of the subsidies and political motives for choosing who will receive the subsidies).

    JoAnne Feeney and Arye L. Hillman, 2001. Privatization and the political economy of strategic trade policy. International Economic Review 42, 535-556.

 

Public policy

Policies that do not have majority support from voters arise because of a principal-agent problem that prevents voter disciplining of policy decisions of political representatives. This paper studies a case in which voter disciplining in elections could take place and the policy decision was a choice between electoral popularity and the prospect of winning the Nobel Peace Prize. The study raises the question whether, because of the compromise of democratic accountability, it should be permissible for the Nobel Peace Prize to be awarded to politicians, either as incumbents or after they have left political office.

Arye L. Hillman and Ngo Van Long, 2018. Policies and prizes. European Journal of Political Economy. Special issue on The Political Economy of Public Policy.

 

A moral dilemma arises when it is known that terrorists belong to an identifiable population but who is a terrorist is not known before an act of terror is committed. Decision theory can be used to study the trade-off in such circumstances between preemption and public safety.

Raphael Franck, Arye L. Hillman, and Miriam Krausz, 2005. Public safety and the moral dilemma in the defense against terror, Defense and Peace Economics 16(5), 347 – 364. (CEPR DP 4736, November 2004).

 

Peter Bernholz (2017 and in previous papers – see [1]) described how compromise is impossible when an adversary has a supreme-value ideology. Supreme values that require conquest and subjugation of other people are inconsistent with economic progress because achieving the supreme-value objective takes precedence. High income would be a distraction from achieving the supreme-value objective of subjugation and victory. Explanations that have been proposed for low incomes in Muslim populations (see Timur Kuran, 2004, Why the Middle East is economically underdeveloped: historical mechanisms of institutional stagnation, Journal of Economic Perspectives 18, 71-90). Incomes are also low when a supreme-value ideology places the objective of conquest before economic development [2].

  1. Hillman, Arye L., 2007. Economic and security consequences of supreme values. Public Choice 30, 259 – 280.
    Also published as: An economic perspective on radical Islam. In Hillel Frisch and Efraim Inbar (Eds.), 2008. Radical Islam and International Security: Challenges and Responses, Routledge, London, pp. 44 – 69.
  2. Hillman, Arye L., 2018. Review of Peter Bernholz, ‘Totalitarianism, Terrorism and Supreme Values: History and Theory,’ Public Choice 176(3), 567-571.

Does religion influence economic freedom? Using a cross-sectional dataset for 137 countries averaged over the period 2001-2010, Niklas Potrafke and I studied how the relation between the three religions derived from Judaism – Protestantism, Catholicism, and Islam – and economic freedom. The Protestant ethic requires economic freedom, suggesting a prediction of greater economic freedom in Protestant societies. Empirical estimates confirm that Protestantism is most conducive to economic freedom, with Islam least conducive, and Catholicism in between.

Arye L. Hillman and Niklas Potrafke, 2018. Economic freedom and religion: An empirical investigation. Public Finance Review 46(2), 249-275. Special issue on ‘Economic Freedom and Race/Ethnicity’, Gary Hoover editor. CESifo working paper no. 6017 (July 2016)

 

  • Choosing to have a king

    Thomas Hobbes in his book Leviathan (1651), sought to justify a leviathan or king with all-encompassing power. To justify his leviathan, Hobbes used the response of the prophet Samuel to the request by the tribes of Israel that a king should be pointed over them. Hobbes portrayed Samuel as supporting choosing a king. Hobbes however misrepresented Samuel, who advised against having a king. Samuel warned ‘you will regret the day that you appointed a king’. Hobbes’ father was a clergyman and he had access to the bible, including in English.

    Hillman, Arye L., 2009. Hobbes and the prophet Samuel on leviathan government. Public Choice 141, 1 – 4.

    Hillman, Arye L., 2009. Hobbes and Samuel: reply (to Geoffrey Brennan). Public Choice 141, 13 – 15.
  • Tax competition

    Ostensibly the first paper describing tax competition in a federal system of government:

    James H. Cassing and Arye L. Hillman, 1982. State-federal resource tax rivalry. Economic Record 58, 235 – 241.
  • ‘Clubs’

    An alternative to public finance is voluntary sharing and self-financing. The theory of ‘clubs’, initiated by James Buchanan (An economic theory of clubs, Economica, 1965, 32, 1-14) but also conceptually similar to the locational model of Charles Tiebout (A pure theory of local expenditures, Journal of Political Economy, 1956, 64, 416-424) describes people entering into voluntary sharing arrangements for financing public goods or public spending more generally. Buchanan assumed that all people could join a club to their liking. Tiebout likewise assumed that all people would find locations to their liking. There was no exclusion. The possibility of exclusion changes the equilibrium condition for club membership [1]. Mechanisms for inclusion based on willing to pay can be designed. A mechanism for determining inclusion is sale of lottery tickets [2], [3], which can provide greater revenue than simply selling admission.
    1. Elhanan Helpman, and Arye L. Hillman, 1977. Two remarks on optimal club size. Economica 44, 293 – 96.
    2. Arye L. Hillman and Peter Swan, 1979. Club participation under uncertainty, Economics Letters 4, 307–12.
    3. Arye L. Hillman and Peter Swan, 1983. Participation rules for Pareto-optimal clubs, Journal of Public Economics 20, 55 – 76.

 

Survey Papers
  • Arye L. Hillman and Ngo Van Long, 2018. Rent seeking: the social cost of contestable benefits. In: Roger D. Congleton, Bernard N. Grofman, and Stefan Voigt (Eds.) Oxford Handbook of Public Choice, volume 1, chapter 25, Oxford University Press, Oxford UK, pp. 489-518.
  • Wilfred Ethier and Arye L. Hillman, 2018. The politics of international trade policy. In: Roger D. Congleton, Bernard N. Grofman, and Stefan Voigt (Eds.) Oxford Handbook of Public Choice, volume 2, chapter 32, Oxford University Press, Oxford UK, pp. 653-683.

 

All Publications (Chronological Order)

Books

  • Arye L. Hillman, 1989. The Political Economy of Protection. Harwood Academic Publishers, Chur. Reprinted 2001 by Routledge, London, and 2014 by Taylor and Francis (Routledge), London
  • Arye L. Hillman, 2019 (3rd edition). Public Finance and Public Policy: A Political Economy Perspective on Responsibilities and Limitations of Government, Cambridge University Press, New York NY (1st Edition, 2003, 2nd Edition, 2009).
  • Other language editions: Japanese 2006, Keiso Shobo, Tokyo; Chinese 2006, Chinese Academy of Social Sciences, Beijing; Russian, 2009, Publishing House of the State University, Higher School of Economics, Moscow; Greek, 2013, Papazisis publishers, Athens; Hebrew (electronic)

Edited Volumes

Journal Articles

  • Arye L. Hillman, 1977. The Brigden Theorem. Economic Record, 53, 434-446.
  • Gideon Fishelson and Arye L. Hillman, 1977. Inflationary government financing and the trade deficit: Evidence from Israel. In: Nadav Halevi and Ya'acov Kopf (Eds.), Studies in Economics 1977, Israel Economic Association, Jerusalem, August 1978, p. 94 – 107 (Hebrew).
  • Elhanan Helpman, and Arye L. Hillman, 1977. Two remarks on optimal club size. Economica, 44, 293 – 96.
  • Arye L. Hillman and Clark W. Bullard III, 1978. Energy, the Heckscher-Ohlin theorem and U.S. international trade, American Economic Review 68, 96-106. Reprinted in: Bertie Ohlin: Critical Assessments, John Cunningham Wood (Ed.), Routledge, London, 1997.
  • Arye L. Hillman, 1978. Symmetries and asymmetries between public input and public good equilibria. Public Finance/ Finances publiques, No. 3, 33, 269 – 279.
  • Arye L. Hillman and Se'ev Hirsch, 1979. Factor-intensity reversals: Conceptual experiments with traded goods aggregates. Weltwirtschaftliches Archiv 115, 272-283. .
  • Arad, Ruth W. and Arye L. Hillman, 1979. The collective good motive for immigration policy. Australian Economic Papers, 18, 243-257.
  • Arye L. Hillman and Peter Swan, 1979. Club participation under uncertainty, Economics Letters 4, 307–12.
  • Gideon Fishelson and Arye L. Hillman, 1979. Domestic monopoly and redundant tariff protection, Journal of International Economics 9, 47-55.
  • Ruth W. Arad and Arye L. Hillman, 1979. Embargo threat, learning and departure from comparative advantage, Journal of International Economics 9, 265 – 75.
  • Arye L. Hillman, 1980. Observations on the relation between "revealed comparative advantage" and comparative advantage as indicated by pre-trade relative prices. Weltwirtschaftliches Archiv 116, 315 – 21.
  • Gideon Fishelson, Arye L. Hillman, and Se'ev Hirsch, 1980. Comparative performance of Israel's industrial exports in the EEC and U.S. markets, in The Economic Integration of Israel in the EEC, edited by Herbert Giersch, J.C.B. Mohr, Paul Siebeck: Tübingen, pp. 125 – 174.
  • Arye L. Hillman, Edward Tower, and Gideon Fishelson, 1980. On water-in-the-quota, Canadian Journal of Economics 13, 310 – 317.
  • Gideon Fishelson, Arye L. Hillman, and Se'ev Hirsch, 1980. The factor-content characteristics of Israel's trade in a multilateral setting, in: The Economic Integration of Israel in the EEC, edited by Herbert Giersch, J.C.B. Mohr, Paul Siebeck: Tübingen, pp. 175 – 198.
  • Arye L. Hillman, 1980. Notions of merit want, Public Finance/ Finances publiques 35, 213 – 226.
  • Arye L. Hillman, 1981. Unilateral and bilateral trade policies for a minimum-wage economy, Journal of International Economics 11, 407 – 413.
  • James H. Cassing and Arye L. Hillman, 1981. A social safety net for the impact of technical change, Economic Record 57, 232 – 237.
  • Arye L. Hillman, 1982. Declining industries and political-support protectionist motives, American Economic Review 72, 1180-1187. Reprinted in: The WTO, Safeguards, and Temporary Protection from Imports, Chad Brown (Ed.), Edward Elgar, Cheltenham UK, 2006; The WTO and the Political Economy of Trade Policy, Wilfred Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. 43 – 50; Forty Years of Research on Rent Seeking 2 – Applications Rent Seeking in Practice. Roger D. Congleton et al. (Eds.), Springer, Berlin, 2008, pp. 105 – 112.
  • Mario I. Blejer and Arye L. Hillman, 1982. A proposition on short-run departures from the law of one price: Unanticipated inflation, relative price dispersion and commodity arbitrage, European Economic Review 17, 51-60. Reprinted (in Spanish): “Una explicacion de las desviaciones a corto plazo de la ley del precio unico: inflacion imprevista, dispersion de precios relativos y arbitraje commercial”. In Inflacion y varialibidad de los precios relativos, Mexico, DF, 1984, pp. 75 – 86.
  • Mario I. Blejer and Arye L. Hillman, 1982. On the dynamic non-equivalence of tariffs and quotas in the monetary model of the balance of payments, Journal of International Economics, August 1982, 13, 163 – 169. Reply, May 1985, 18, 381-382.
  • James H. Cassing and Arye L. Hillman, 1982. State-federal resource tax rivalry. Economic Record 58, 235 – 241.
  • Arye L. Hillman and Ngo Van Long, 1982. Substitutes for a depletable resource and the monopolistic conservationist presumption, Australian Economic Papers 21, 193-199.
  • Arye L. Hillman and Ngo Van Long, 1983. Pricing and depletion of an exhaustible resource when there is anticipation of trade disruption. Quarterly Journal of Economics, 98, 215 – 33.
  • Arye L. Hillman and Peter Swan, 1983. Participation rules for Pareto-optimal clubs, Journal of Public Economics [78]20, 55 – 76.
  • Arye L. Hillman and Eliakim Katz, 1984. Oil price instability and domestic energy substitution for imported oil, Economic Record, 1984, 60, 28-33.
  • Arye L. Hillman and Eliakim Katz, 1984. Excise taxes, import restrictions, and the allocation of time to illegal activity, International Review of Law and Economics 1984, 4, 213 – 22.
  • Arye L. Hillman and Eliakim Katz, 1984. Risk-averse rent seekers and the social cost of monopoly power, Economic Journal 94, 104-110. Reprinted in: The Political Economy of Rent Seeking, Charles Rowley, Robert Tollison and Gordon Tullock (Eds.), Kluwer Academic Publishers, Boston, 1988, pp. 81-90; The Economic Analysis of Rent Seeking, Roger Congleton and Robert Tollison (Eds.), Edward Elgar, Oxford, 1995, pp. 243 – 249; The Political Economy of Rent Seeking, Charles K, Rowley, Robert D. Tollison, and Gordon Tullock, Kluwer Academic Publishers, Boston and Dordrecht, pp. 81-90; Forty Years of Research on Rent Seeking 1 – The Theory of Rent seeking. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 97 – 103.
  • Franklin M. Fisher and Arye L. Hillman, 1984. The commodity composition of trade and the Heckscher-Ohlin theorem in the presence of aggregate and commodity specific factor-intensity reversals, Journal of International Economics 17, 159-172. Reprinted in: Aggregation: Aggregate Production Functions and Related Topics, chapter 11, pp. 261 – 275, Franklin M. Fisher, Harvester, Wheatsheaf and MIT Press, 1992.
  • Arye L. Hillman and Joseph Templeman, 1985. On the use of trade policy measures by a small country to counter foreign monopoly power. Oxford Economic Papers, 37, 346 – 52. .
  • Arye L. Hillman and Ngo Van Long, 1985. Monopolistic recycling of oil revenue and intertemporal bias in oil depletion and trade, Quarterly Journal of Economics, 100, 597 – 624.
  • James H. Cassing and Arye L. Hillman, 1985. Political-influence motives and the choice between tariffs and quotas. Journal of International Economics 19, 279-290.
  • Arye L. Hillman and Adi Schnytzer, 1986. Illegal activities and purges in a Soviet-type economy: A rent-seeking perspective, International Review of Law and Economics, June 1986, 6, 87-99. Reprinted in: Roger D. Congleton, Arye L. Hillman, Kai A. Konrad (Eds.), 2008. Forty Years of Research on Rent Seeking 2 – Applications: Rent Seeking in Practice. Springer: Heidelberg, pp. 545 – 557.
  • Arye L. Hillman and Eliakim Katz, 1986. Domestic uncertainty and foreign dumping, Canadian Journal of Economics 19, 403-416.
  • James H. Cassing, Arye L. Hillman, and Ngo Van Long, 1986. Risk aversion, terms of trade variability, and social consensus trade policy, Oxford Economic Papers 38, 234-242.
  • James H. Cassing and Arye L. Hillman, 1986. Shifting comparative advantage and senescent industry collapse. American Economic Review 76, 516-523. Reprinted in: The WTO and the Political Economy of Trade Policy, Wilfred Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. 516 – 523.
  • Arye L. Hillman and Dov Samet, 1987. Dissipation of contestable rents by small numbers of contenders, Public Choice, 54, 63-82. Reprinted in: Forty Years of Research on Rent Seeking 1 – The Theory of Rent seeking. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 165 – 184. See also: Arye L. Hillman and Dov Samet, 1987. Characterizing equilibrium rent-seeking behavior: A reply to Tullock, Public Choice, 54, 85-87.
  • Arye L. Hillman and Eliakim Katz, 1987. Hierarchical structure and the social costs of bribes and transfers. Journal of Public Economics, 34, 129-142. Reprinted in: The Economics of Corruption and Illegal Markets, Gianluca Fiorentini and Stephano Zamagni (Eds.), Edward Elgar, Cheltenham UK 1999. In the series The International Library of Critical Writings in Economics; Forty Years of Research on Rent Seeking 1 – The Theory of Rent seeking. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 523 – 536.
  • Arye L. Hillman, Eliakim Katz, and Jacob Rosenberg, 1987. Workers as insurance: Anticipated government intervention and factor demand, Oxford Economic Papers, 39, 813-820. Reprinted in: The WTO and the Political Economy of Trade Policy, Wilfred Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. pp. 585–592.
  • Arye L. Hillman, 1988. Impediments to a competitive environment in Israel. Presented at Symposium on American-Israel Economic Relations in Honor of the 40th Anniversary of the State of Israel, New York (June 1988).
  • Arye L. Hillman, 1988. Tariff-revenue transfers to protectionist interests: Compensation for reduced protection or supplementary reward for successful lobbying? Public Choice 58, 169 - 172.
  • Arye L. Hillman and Heinrich W. Ursprung, 1988. Domestic politics, foreign interests and international trade policy. American Economic Review 78, 729-745. Reprinted in: International Trade, J. Peter Neary (Ed.), Edward Elgar, Cheltenham UK, 1996; The Globalization of the World Economy: Trade and Investment Policy, Thomas Brewer (Ed.), Edward Elgar, Cheltenham UK, 1999, pp. 470 – 86; The WTO and the Political Economy of Trade Policy, Wilfred Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. 99 -115; see also Domestic politics, foreign interests, and international trade policy: Reply, American Economic Review, 1994, 84, 1476-78.
  • Arye L. Hillman and John Riley, 1989. Politically contestable rents and transfers, Economics and Politics 1, 17-39. Reprinted in: Forty Years of Research on Rent Seeking 1 – The Theory of Rent seeking. Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), Springer 2008, pp. 185 – 207.
  • Arye L. Hillman, 1989. Resolving the puzzle of welfare-reducing trade diversion: A prisoners' dilemma interpretation, Oxford Economic Papers 41, 452-455.
  • Arye L. Hillman, 1990. Protectionist policies as the regulation of international industry, Public Choice 67, 101-110.
  • Arye L. Hillman 1991. Liberalization dilemmas. In Markets and Politicians: Politicized Economic Choice, Arye L. Hillman (Ed.), Kluwer Academic Publishers, chapter 10, pp. 189 – 207.
  • Arye L. Hillman, 1991. Market structure, politics, and protection. In: Elhanan Helpman and Assaf Razin (Eds.), International Trade and Trade Policy, MIT Press, Cambridge MA, pp. 118 – 40.
  • Arye L. Hillman, 1991. Some problems of statistical measurement of economic activity in the transition from planned socialism. In: Petr O. Aven (Ed.), Economies in Transition: Statistical Measures Now and in the Future, International Institute for Applied System Analysis, Laxenburg, Austria, 1991, 69-78.
  • James H. Cassing and Arye L. Hillman, 1991. Equalizing the cost of success: Equitable graduation rules and the Generalized System of Preferences, Journal of International Economic Integration 6, 40-51.
  • Arye L. Hillman, 1992. Progress with privatization, Journal of Comparative Economics 16, 733 – 749.
  • Arye L. Hillman and Adi Schnytzer, 1992. Creating the reform-resistant dependent economy: Socialist comparative advantage, enterprise incentives and the CMEA. In: Arye L. Hillman and Branko Milanovic (Eds.), The Transition from Socialism in Eastern Europe: Domestic Restructuring and Foreign Trade,The World Bank, Washington, DC, chapter 10, pp. 243 – 262.
  • Arye L. Hillman and Heinrich W. Ursprung, 1992. The influence of environmental concerns on the political determination of international trade policy. In: Kym Anderson and Richard Blackhurst (Eds.), The Greening of World Trade Issues, University of Michigan Press, Ann Arbor MI, 1992, pp. 195 – 220. Invited paper for a conference organized at the GATT (replaced by the WTO).
  • Arye L. Hillman, 1992. The transition from socialist trade to European integration. In: The EC after 1992 - Perspectives from the Outside, Silvio Borner and Herbert Grubel (Eds.) Cambridge University Press, Cambridge UK, pp. 61 – 79.
  • Arye L. Hillman, 1992. The transition from the CMEA system of international trade. In: Trials of Transition: Economic Reform in the Former Communist Bloc, Michael Karen and Gur Offer (Eds.), Westview Press, Boulder, pp. 271 – 289.
  • Arye L. Hillman, 1992. International trade policy: Benevolent dictators and optimizing politicians, Public Choice 74, 1-15. European Public Choice Society Annual Conference, Meersburg, April 1990, plenary lecture
  • Arye L. Hillman, Istvan Abel, and David Tarr, 1992. The government budgetary consequences of reform of the CMEA system of international trade: The case of Hungary. In: Arye L. Hillman and Branko Milanovic (Eds.), The Transition from Socialism in Eastern Europe: Domestic Restructuring and Foreign Trade, The World Bank, Washington, DC, chapter 12, 277-293.
  • Arye L. Hillman 1993. Socialist clubs: A perspective on the transition, European Journal of Political Economy, 1993, 9, 307 – 319.
  • Arye L. Hillman and Heinrich W. Ursprung, 1993.  The multinational firm, political competition, and international trade policy, International Economic Review 34, 347 – 63.
  • Željko Bogetić and Arye L. Hillman, 1994. The tax base in the transition: The case of Bulgaria, Communist Economies and Economic Transformation, 6, 267-282. Policy Research Working Paper number 1267, The World Bank, Washington, DC, March 1994. Updated as: Bogetić, Željko and Arye L. Hillman, 1995. The choice of a tax system, in: Financing Government in Transition, Bulgaria: The Political Economy of Tax Policies Tax Bases, and Tax Evasion], Željko Bogetić and Arye L. Hillman (Eds.), The World Bank, Washington, D.C., pp. pp. 33 – 46.
  • Arye L. Hillman and Heinrich W. Ursprung, 1994. Greens, supergreens, and international trade policy: Environmental concerns and protectionism. In: Carlo Carraro (Ed.), Trade, Innovation, Environment, Springer, Heidelberg, pp. 75 – 108.
  • Arye L. Hillman, 1994. The political economy of migration policy. In: Horst Siebert (Ed.), Migration: A Challenge for Europe, J.C.B. Mohr Paul Siebeck, Tübingen, pp. 263 – 282.
  • Arye L. Hillman, 1994. The transition from socialism: An overview from a political-economy perspective. European Journal of Political Economy 10, 191 – 225. Special issue, festschrift in honor of Peter Bernholz, edited by Manfred Gärtner and Heinrich W. Ursprung.
  • Arye L. Hillman, Lubomir Mitov and R. Kyle Peters, 1995. The private sector, state enterprises, and informal economic activity. In Financing Government in Transition, Bulgaria: The Political Economy of Tax Policies, Tax Bases, and Tax Evasion, Željko Bogetić and Arye L. Hillman (Eds.), The World Bank, Washington, D.C., pp. 47 – 70. Summarized in: Arye L. Hillman and Željko Bogetić, 1995.
  • Arye L. Hillman, Peter Moser and Ngo Van Long, 1995. Modeling reciprocal trade liberalization: The political-economy and national-welfare perspectives, Schweizerische Zeitschrift für Volkswirtschaft und Statistik (Swiss Journal of Economics and Statistics), 131, 503-515.
  • Arye L. Hillman and Heinrich W. Ursprung, 1996. The political economy of trade liberalization in the transition, European Economic Review (Papers and Proceedings), April 1996, 40, 783 - 794.
  • Arye L. Hillman and Peter Moser, 1996. Trade liberalization as politically optimal exchange of market access. In: Matthew Canzoneri, Wilfred Ethier, and Vittorio Grilli (Eds.), The New Transatlantic Economy, Cambridge University Press, New York, NY, pp. 295-312. Reprinted in: The Global Trading System, volume 2, Core Rules and Procedures, Kym Anderson and Bernard Hoekman (Eds.), I.B. Tauris and Co Ltd, London and New York, 2002; The WTO and the Political Economy of Trade Policy, Wilfred Ethier and Arye L. Hillman (Eds.), Edward Elgar, Cheltenham UK, 2008, pp. 290 – 307.
  • Arye L. Hillman, 1996. Western economic theory and the transition: The public choice perspective. Economics and Mathematical Methods (Journal of the Central Economic and Mathematical Institute of the Russian Academy of Sciences) 32, 77-90. In Russian, translated by Mark Levin. Published in English in: Karl-Josef Koch and Klaus Jaeger (Eds.), 1998. Trade, Growth, and Economic Policy in Open Economies: Essays in Honor of Hans-Jürgen Vosgerau, Springer: Heidelberg, pp. 351 – 367.
  • Arye L. Hillman, Manuel Hinds, Branko Milanovic, and Heinrich W. Ursprung, 1997. Protectionist pressures and enterprise restructuring: The political economy of trade policy in transition. In: Trade and Tax Policy, Inflation and Exchange Rates, Assaf Razin and Hans-Jürgen Vosgerau (Eds.), Springer: Heidelberg, pp. 215 – 243.
  • Alan Gelb, Arye L. Hillman, and Heinrich W. Ursprung, 1998. Rents as distractions: Why the exit from transition is prolonged. In: Economic Interdependence and Cooperation in Europe, Nicolas C. Baltas, George Demopoulos, and Joseph Hassid (Eds.), Springer, 1998, 21 – 38. Basis for: Rents and the Transition, World Development Report Background Paper, The World Bank, Washington D.C., April 1996.
  • Arye L. Hillman, 1998. Political economy and political correctness. Public Choice 96, 219-239. Presidential Address, European Public Choice Society, Prague, April 1997. Reprinted in: Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), 2008, Forty Years of Research on Rent Seeking 2–Applications: Rent Seeking in Practice. Springer, Heidelberg, pp. 791 – 811.
  • Arye L. Hillman and Avi Weiss, 1999. A theory of permissible illegal immigration. European Journal of Political Economy 15, 585-604.
  •  Arye L. Hillman and Heinrich W. Ursprung, 1999. Foreign investment and endogenous protection with protectionist quid pro quo. Economics and Politics 11, 1 – 12.
  • Arye L. Hillman and Heinrich W. Ursprung, 1999. The trials and tribulations of banking in transition economies: A political economy perspective. In: Mario Blejer and Marko Škreb (Eds.), Financial Sector Transformation: Lessons from Economies in Transition, Cambridge University Press, New York, pp. 132 – 149.
  • Arye L. Hillman and Heinrich W. Ursprung, 1999. What is special about endogenous international trade policy in transition economies? In: Mario Blejer and Marko Škreb (Eds.), Balance of Payments, Exchange Rates, and Competitiveness in Transition Economies, Kluwer Academic Publishers, Boston and Dordrecht, 255 – 282.
  • Epstein, Gil, Arye L. Hillman, and Avi Weiss, 1999. Creating illegal immigrants, Journal of Population Economics 12, 3-21.
  • Epstein, Gil, Arye L. Hillman, and Heinrich W. Ursprung, 1999. The king never emigrates, Review of Development Economics 3, 107 – 21. Reprinted in: Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), 2008. Forty Years of Research on Rent Seeking 2 – Applications: Rent Seeking in Practice. Springer: Heidelberg 2008, pp. 265 – 79.
  • Arye L. Hillman, 1999. Political culture and the political economy of central bank independence. In Mario Blejer and Marko Škreb (Eds.), Major Issues in Central Banking, Monetary Policies, and Implications for Transition Economies, Springer: Heidelberg, pp. 73 – 86.
  • Arye L. Hillman and Heinrich W. Ursprung, 2000. Political culture and economic decline, European Journal of Political Economy, 16, 189-213. Reprinted in: Roger D. Congleton, Arye L. Hillman, Kai Konrad (Eds.), 2008. Forty Years of Research on Rent Seeking 1 – The Theory of Rent seeking. Springer: Heidelberg, pp. 219 – 243.
  • Arye L. Hillman and Otto Swank, 2000. Why political culture should be in the lexicon of economics, European Journal of Political Economy 16, 1 – 4.
  • JoAnne Feeney and Arye L. Hillman, 2001. Privatization and the political economy of strategic trade policy, International Economic Review 42, 535-556.
  • Arye L. Hillman, Ngo Van Long, and Antoine Soubeyran, 2001. Protection, lobbying, and market structure, Journal of International Economics 54, 383 – 409.
  • Arye L. Hillman, 2002. On the way to the Promised Land: ten years in the wilderness without Moses. Published in Russian (translated by Mark Levin). In Economics and Mathematical Methods - Journal of the Central Economic and Mathematical Institute of the Russian Academy of Sciences 38, 78 – 94.
  • Arye L. Hillman, 2002. Immigration and intergenerational transfers. In: Horst Siebert (Ed.), Economic Policy for Aging Societies. Kluwer Academic Publishers, Dordrecht and Boston, pp. 213 – 26.
  • Chen, Kang, Arye L. Hillman, and Gu Qingyang, 2002. Fiscal re-centralization and behavioral change of local governments: from the helping hand to the grabbing hand. China Economic Quarterly 2, 111-130.
  • Chen, Kang, Arye L. Hillman, and Gu Qingyang, 2002. From the helping hand to the grabbing hand: Fiscal federalism in China. In: John Wong and Lu Ding (Eds.), China's Economy into the New Century: Structural Issues and Problems. World Scientific, Singapore, pp. 193 – 215.
  • Arye L. Hillman, 2003. Interpretations of transition. In Political Economy of Transition and Development: Institutions, Politics, and Policies, Nauro F. Campos and Jan Fidrmuc (Eds.), Kluwer Academic Publishers, Dordrecht, pp. 23 – 40.
  • Arye L. Hillman, Ngo Van Long, and Antoine Soubeyran, 2003. Lobbying for tariff protection and allocation of entrepreneurial resources. In: New Developments in International Trade: Theoretical and Empirical Investigations, Seiichi Katayama and Kaz Miyagiwa (Eds.), Research Institute for Economics and Business Administration, Kobe, pp. 129 – 46.
  • Arye L. Hillman and Eva Jenkner, 2004. User payments for basic education in low-income countries. In: Sanjeev Gupta, Benedict Clements, and Gabriela Inchauste (Eds.), 2004. Helping countries Develop: The Role of Fiscal Policy, International Monetary Fund, Washington DC, pp. 233 – 264. Working Paper no 02/182, November 2002, International Monetary Fund, Washington D.C. Non-technical version: How to pay for basic education: Poor children in poor countries, Economic Issues 33, 2004, International Monetary Fund, Washington DC.
  • JoAnne Feeney and Arye L. Hillman, 2004. Trade liberalization through asset markets. Journal of International Economics 64, 151-167. Reprinted in: Wilfred Ethier and Arye L. Hillman (Eds.), 2008. The WTO and the Political Economy of Trade Policy, Edward Elgar, Cheltenham UK, pp. 173 - 189.
  • Arye L. Hillman, 2004. Nietzschean development failures, Public Choice 119, 263 – 280. Revised version of: Poverty, inequality, and unethical behavior of the strong. Working Paper no 00/187, November 2000, International Monetary Fund, Washington D.C.
  • Emanuele Baldacci, Arye L. Hillman, and Naoko Kojo, 2004. Growth, governance, and fiscal-policy transmission channels in low-income countries. European Journal of Political Economy 20, 517 – 549. Revised version of Working Paper no 03/237, December 2003, International Monetary Fund, Washington DC. Reprinted in: Sanjeev Gupta, Benedict Clements, and Gabriela Inchauste (Eds.), 2004. Helping countries Develop: The Role of Fiscal Policy, International Monetary Fund, Washington DC, pp. 67 – 104.
  • Arye L. Hillman, 2005. Globalization and the political economy of international trade policy. In: Sisira Jayasuriya (Ed.), 2005. Trade Policy Reforms and Development: Essays in Honor of Professor Peter Lloyd, Volume II, Edward Elgar, Cheltenham, U.K., pp. 3 – 22.
  • Arye L. Hillman, 2005. Political institutions, jurisdictional boundaries, and rent creation. Keio Economic Studies, nos. 1-2, 42, 25 – 37. Special issue in honor of Professor Michihiro Ohyama, edited by Wilfred J. Ethier and Makoto Yano.
  • Raphael Franck, Arye L. Hillman, and Miriam Krausz, 2005. Public safety and the moral dilemma in the defense against terror, Defense and Peace Economics 16(5), 347 – 364. (CEPR DP 4736, November 2004).
  • Arye L. Hillman 2007. Democracy and low-income countries. In José Casas Pardo and Pedro Schwartz (Eds.), Public Choice and Challenges of Democracy, Edward Elgar, Cheltenham, U.K., pp. 277 – 294.
  • Arye L. Hillman and Miriam Krausz, 2007. Directed credits and corruption. In Rahul Gupta and Santap Sanhari Mishra (Eds.), Corruption: The Causes and Combating Strategies. The Icfai University Press, Hyderabad, pp. 73-81.
  • Arye L. Hillman, 2007. Economic and security consequences of supreme values. Public Choice 30, 259 – 280. Also published as: An economic perspective on radical Islam. In Hillel Frisch and Efraim Inbar (Eds.), Radical Islam and International Security: Challenges and Responses, Routledge, London, 2008, pp. 44 – 69. [64]
  • Aidt, Toke and Arye L. Hillman, 2008. Enduring rents. European Journal of Political Economy 24, 454 – 53.
  • Arye L. Hillman, 2008. Globalization and social justice. Singapore Economic Review 53, 173 - 189. Invited lecture: Singapore Economic Review Public Lecture, September 2007.
  • Arye L. Hillman, 2009. Hobbes and the prophet Samuel on leviathan government. Public Choice 141, 1 – 4.
  • Arye L. Hillman, 2010. Expressive behavior in economics and politics. European Journal of Political Economy 26, 404 – 419.
  • Arye L. Hillman, 2011. Expressive voting and identity: evidence from a case study of a group of U.S. voters. Public Choice 148, 249-257.
  • Arye L. Hillman, 2013. Economic and behavioral foundations of prejudice. In Charles S. Small (Ed.), Global Antisemitism: A Crisis of Modernity. Leiden, Netherlands, and Boston, MA: Martinus Nijhoff Publishers, pp. 51-67. Available at:
  • Arye L. Hillman and Niklas Potrafke, 2015, The UN Goldstone Report and Retraction: An empirical investigation. Public Choice 163(3), 247-266.
  • Arye L. Hillman, 2015. Rent seeking as political economy. In: Roger D. Congleton and Arye L. Hillman (Eds.), Companion to Political Economy of Rent Seeking, Edward Elgar, Cheltenham UK, chapter 2, pp. 10-16.
  • Arye L. Hillman, 2015. Rents and international trade policy. In: Roger D. Congleton and Arye L. Hillman (Eds.), Companion to Political Economy of Rent Seeking, Edward Elgar, Cheltenham UK, chapter 12, pp. 187-202.
  • Raphael N. Becker, Arye L. Hillman, Niklas Potrafke, Alexander H. Schwemmer, 2015. The preoccupation of the United Nations with Israel: Evidence and theory. Review of International Organizations 10(4), 413-437.
  • Arye L. Hillman, Kfir Metsuyanim, and Niklas Potrafke, 2015. Democracy with group identity. European Journal of Political Economy 40, 274-287. In special issue on Behavioral Political Economy.
  • Arye L. Hillman and Heinrich W. Ursprung, 2016. Where are the rent seekers? Constitutional Political Economy 27(2), 124-141. Special issue in memory of Gordon Tullock.
  • Arye L. Hillman and Heinrich W. Ursprung, 2016. Academic exclusion: Some experiences. Public Choice, 67, 1-20.
  • Arye L. Hillman and Niklas Potrafke, 2018. Economic freedom and religion: An empirical investigation. Public Finance Review 46(2), 249-275. Special issue on "Economic Freedom and Race/Ethnicity", Gary Hoover editor.
  • Arye L. Hillman and Ngo Van Long, 2018. Policies and prizes. European Journal of Political Economy. Special issue on The Political Economy of Public Policy.
  • Arye L. Hillman and Ngo Van Long, 2018. Rent seeking: the social cost of contestable benefits. In: Roger D. Congleton, Bernard N. Grofman, and Stefan Voigt (Eds.) Oxford Handbook of Public Choice, volume 1, chapter 25. Oxford University Press, Oxford UK, pp. 489-518.
  • Wilfred Ethier and Arye L. Hillman, 2018. The politics of international trade policy. In: Roger D. Congleton, Bernard N. Grofman, and Stefan Voigt (Eds.), volume 2, chapter 32. Oxford Handbook of Public Choice, Oxford University Press, Oxford UK, pp. 653-683.

 

Lecture on Occasion of Honorary Doctorate, University of Genova

‘Political economy’, March 5, 2016.

 

Other Papers

  • Gil Epstein and Arye L. Hillman, 1998. Herd effects and migration. CEPR Discussion paper 1811. Centre for Policy Studies, London.
  • Christian Bjørnskov, Željko Bogetić, Arye L. Hillman, and Milenko Popović, 2014. Trust and identity in a small post-socialist post-crisis society. Europe and Central Asia Region, Poverty Reduction and Economic Management Unit, Policy Research Working Paper 6828, The World Bank, Washington DC.

 

Comments and Short Papers

  • A note on the distribution of tariff proceeds, Economic Record 1970, 46, 117-19. David E. James co-author.
  • A generalized cost allocation scheme: Comment. In: Steven A.Y. Lim (Ed.), Theory and Measurement of Economic Externalities, Academic Press, New York, 1976, pp. 103 – 106.
  • The case for terminal protection for declining industries: Comment, Southern Economic Journal, July 1977, 43, 155-160.
  • The theory of clubs: A technological formulation. In Agnar Sandmo (Ed.), Essays in Public Economics, D.C. Heath and Co., Lexington, Mass., 1978, 29 – 47.
  • Preemptive rent seeking and the social cost of monopoly power, International Journal of Industrial Organization, September 1984, 2, 277 – 281.
  • Producer and consumer interests, the state-owned pipeline, and public authority pricing of natural gas, Economic Record 1984, 60, 85-89.
  • Comment on: The political economy of protectionism: Tariffs and retaliation in the timber industry. In: Robert E. Baldwin (Ed.), Trade Policy Issues and Empirical Analysis, University of Chicago Press for NBER, 1988, pp. 364 – 368.
  • Comment on: Technology policy in the completed European market. In: L. Alan Winters and Anthony Venables (Eds.), European Integration: Trade and Industry, Cambridge University Press, Cambridge UK, 1991, pp. 161 – 164.
  • International trade policy in Israel: Another model, Public Choice, 1992, 74, 355-360.
  • The economics and politics of Europe 1992. In Europe 1992: The Perspective from Israel, In Arye L. Hillman and Zvi Sussman (Eds.), Israel International Institute for Applied Economic Policy Review, Tel-Aviv, 1991, pp. 7 – 22.
  • Comment on: Capital controls in direct democracies. In: Hans-Jürgen Vosgerau (Ed.), European Integration in the World Economy, Springer, Heidelberg, 1992, pp. 772 – 774.
  • Comment on: Money and credit in the transition of the Czechoslovak Republic. In: Horst Siebert (Ed.), The Transformation of Socialist Economies, J.C.B. Mohr Paul Siebeck, Tübingen, 1992, pp. 326 – 330.
  • Debate on the transition of post-communist economies to a market economy, Acta Oeconomica (Journal of the Hungarian Academy of Sciences) 1992, 44, 285 – 289.
  • Comment on: The philosophy of locational competition. In: Horst Siebert (Ed.), Locational Competition in the World Economy, J.C.B. Mohr Paul Siebeck, Tübingen, 1995, pp. 17 – 25.
  • The legal system in the transition from social to private property: with reference to Hobbesian anarchy, Locke's natural right of freedom, and the rule of law. In Proceedings of Conference on Challenges and Opportunities for Economic Transition in Yugoslavia, Goran Pitić (Ed.) USAID, Economic Institute, Chesapeake Associates, 1998, pp. 64-89.
  • Hobbes and Samuel: Reply (to Geoffrey Brennan). Public Choice 2009, 141, 13 –15.

 

Literature Surveys

  • Fred Gruen and Arye L. Hillman, 1981. A review of issues pertinent to liquid fuel policy, Economic Record 1981, 57, 11-27.
  • Arye L. Hillman 1989. Policy motives and international trade restrictions. In Hans-Jürgen Vosgerau (Ed.), New Institutional Arrangements for the World Economy, Springer, Heidelberg, 1989, pp. 284 – 302.
  • Arye L. Hillman and Avi Weiss, 1999. Beyond international factor movements: Cultural preferences, endogenous policies, and the migration of people, an overview. In: Jaime de Melo, Riccardo Faini, and Klaus Zimmermann (Eds.), Migration: The Controversies and the Evidence. Cambridge University Press, Cambridge UK, pp. 76 – 91.
  • Arye L. Hillman, 2001 (Italian). La politica del commercio internazionale per gli anni 2000: idee fondamentali e sviluppi. Il Futuro delle Relazione Economiche Internazionale, Saggi in onere di Fredrico Caffè, a cure di Giancarlo Corsetti, Guido M. Rey, and Gian Cesare Romagnoli, Franco Angeli, Milano 2001, pp. 27 – 63. (Translated by Maria Grazia Nicolosi).
  • Arye L. Hillman, 2003. International trade policy: Explaining departure from free trade. In: Charles Rowley and Friedrich Schneider (Eds.), Encyclopedia of Public Choice, Kluwer Academic Publishers, Dordrecht, pp. 129 – 138. See also Departure from free trade: A survey, CEPR Discussion paper 3707, January 2003. Reprinted in: Charles K. Rowley and Friedrich Schneider (Eds.), Readings in Public Choice and Constitutional Political Economy. Springer, New York, 2008.
  • Arye L. Hillman, 2003. Trade liberalization and globalization. In: Charles Rowley and Friedrich Schneider (Eds.), 2003. Encyclopedia of Public Choice, Kluwer Academic Publishers, Dordrecht, pp. 312 – 20. See also Trade liberalization and globalization: A survey, CEPR Discussion paper 3845, March 2003. Reprinted in: Charles K. Rowley and Friedrich Schneider (Eds.), Readings in Public Choice and Constitutional Political Economy. Springer, New York, 2008.
  • Arye L. Hillman, 2008. The gains from trade and refusal to trade. In: Ngo Van Long, Makoto Tawada, and Binh Tran Nam (Eds.), Globalization and Emerging Issues in Trade Theory and Policy. A volume in honor of the 80th birthday of Murray Kemp, Emerald Group Publishing, pp. 193 – 208.
  • Roger D. Congleton, Arye L, Hillman, and Kai Konrad, 2008. Forty years of research on rent seeking: An overview. In: 40 Years of Research on Rent Seeking. Springer, Heidelberg. Volume 1: Theory of Rent Seeking, Volume 2: Applications: Rent Seeking in Practice, pp. 1-44.
  • Arye L. Hillman, 2013. Rent seeking. In Michael Reksulak, Laura Razzolini, William F. Shughart, II (Eds.), The Elgar Companion to Public Choice (2nd Edition). Edward Elgar, Cheltenham U.K., pp. 307-330.
  • Arye L. Hillman and Ngo Van Long, 2018. Rent seeking: the social cost of contestable benefits. In: Roger D. Congleton, Bernard N. Grofman, and Stefan Voigt (Eds.) Oxford Handbook of Public Choice, volume 1, chapter 25, Oxford University Press, Oxford UK, pp. 489-518.
  • Wilfred Ethier and Arye L. Hillman, 2018. The politics of international trade policy. In: Roger D. Congleton, Bernard N. Grofman, and Stefan Voigt (Eds.) Oxford Handbook of Public Choice, Oxford University Press, Oxford UK.

 

Policy Documents

  • A program for restructuring of the Histadrut sector of the economy of Israel, August 1989. With Yitzhak Goldberg et al Hebrew and English.
  • Macroeconomic policy in Hungary and its microeconomic implications. In European Economy, Economic Transformation in Hungary and Poland, Economic Commission of the European Communities, Directorate-General for Economic and Financial Affairs, March 1990, 43, 55 – 66.
  • The economy of Israel: Misinformation or disinformation? Prepared for the Office of the Economic Advisor, Prime Minister's Office, Israel, January 1992.
  • Social marginalization: The effects of trade and technology. Research Department, World Trade Organization, Geneva, February 1997.
  • Israel and Jordan in a new Middle East. In Proceedings of Symposium on Israel-Middle East Relations in the Year 2000, American-Israel Economic Corporation, New York, 1996, pp. 122 – 124.
  • The past as a guide to the future. In: The Progress of Israel's Economy: The 50th Anniversary of the State of Israel, edited by Mordecai Hacohen, American-Israel Economic Corporation, New York, 1998.

 

Review Articles

  • Arye L. Hillman, 2002. The World Bank and the persistence of poverty in poor countries, European Journal of Political Economy 18, 783 – 95. Extended review of: The Elusive Quest for Growth, by William Easterly, MIT Press, 2001.
  • Arye L. Hillman, 2004. Corruption and public finance: an IMF perspective. European Journal of Political Economy 20, 1067 – 77. Extended review of: Governance, Corruption, and Economic Performance. George T. Abed and Sanjeev Gupta, (Eds.), International Monetary Fund, Washington, DC, 2002.
  • Arye L. Hillman, 2018. Review of Peter Bernholz, ‘Totalitarianism, Terrorism and Supreme Values: History and Theory,’ Public Choice 176(3), 567-571

 

Book Reviews

Review of Stephen P. Magee, William A. Brock and Leslie Young, ‘Black Hole Tariffs and Endogenous Policy Theory: Political Economy in General Equilibrium’, Journal of Economic Literature, 1991, 29(1), 104-106.

Review of Gordon Tullock, ‘The Economics of Special Privilege and Rent Seeking’, Kyklos, 1991, 44(4), 657-659.

Review of Jonathan Bendor, Daniel Diermeier, David A. Siegel, and Michael M. Ting: ‘A behavioral theory of elections’, Public Choice 2012, 150, 391-394.

Research

In 1988, at the then Karl Marx (now Budapest) School of Economics, with Hungary still under communist rule that was to end with free elections in March 1990, I presented to an audience of local economists the ‘western model of public policy’ inclusive of lump-sum taxes and a social planner maximizing a social welfare function. The audience at first thought that I was joking. Then, having been convinced that ‘western models’ of recommended public policy did indeed take the form that I had described, the local academics declared themselves to be aghast that the ‘western model’ embodied characterizations of political institutions (an omniscient planner) and human behavior (contribution according to ability and not incentives) that they were hoping to escape. I attempted to explain that the model was normative (describing what ought to be). That did not allay their distress.

When, around the mid-1990s, political economy began to enter mainstream western literature, there was a tendency to model a median voter as determining policy. As was shown by Moises Ostogorski in 1903, policies determined by the median voter can be precisely the contrary of the policies determined by voting under representative democracy. The median-voter models downplay, or indeed ignore, political discretion and rent seeking: politicians are not present in these models. The standard mainstream model went from a government maximizing social welfare to absence of government, with politicians and political discretion hidden. This was not the case for the standard model of Public Choice.

My research has focused on representative democracy, for which the political principal-agent problem, political discretion, the public-finance common-pool problem, and rent seeking are present. I have been fortunate to have the ‘Public Choice school’ to provide a forum to give a hearing to my political-economy ideas. My research has been consistent with the principles of the Public-Choice school, although I have not been a card-carrying member.

Presentations

Plenary talks and public and invited lectures (excludes departmental seminars)

  • Armenian Economic Association, Yerevan, June 14-16 June 2018. Keynote speaker on: Politics and public policy; A review.
  • The University of the West Indies at Mona, Kingston, Jamaica. 1st Conference of Caribbean Economists, March 9-10 2017. Plenary lecture on ‘The political economy of public policy’: The case of income support and work incentives’.
  • Guangxi Normal University, School of Political Science and Public Administration, Guilin, China, November 1 and November 3, 2016, “Public finance and public policy”
  • Huazhong University of Science and Technology, School of Public Administration, Wuhan, China, November 7, “Public finance and public policy”
  • University of Genoa, lecture on “Political economy”, at ceremony conferring an honorary doctorate, March 4 2016.
  • Tullock Memorial Conference, George Mason University, Arlington, VI, USA. “The political economy of an idea: The case of rent seeking”, 2-3 October 2015.
  • Centre for Studies in Social Sciences, Kolkata, Conference on Public Finance, Public Economics, and Public Policy, keynote speaker, “Expressive behavior and public policy”, 5-6 December 2013.
  • Trade and the Organization of Production in the Global Economy: A Conference in Honor of Wilfred Ethier, Vanderbilt University, “Rent extraction and income redistribution: A behavioral perspective on international trade policy”, October 25-26, 2013.
  • Australasian Public Choice Conference, University of Tasmania. Plenary lecture: “Beyond criticism: Logrolling and decoy voting in the United Nations”, December 10-11 2012
  • National University of Singapore, Lee Kuan Yew School of Public Policy. Public lecture: “Expressive behavior and public policy”, August 13, 2012
  • World Bank, ECA PREM Seminar, Washington DC, on “Lost in transition”, June 19, 2012
  • XII International Conference on Economic and Social Development, Higher School of Economics, Moscow, “The professional literature in economics”, 3-4 April 2012
  • Public Choice Society, World Conference, Miami. Plenary talk on the contributions of Gordon Tullock, “A good idea: So what”. March 2012
  • Jerusalem Institute for Market Studies May 2011. Public lecture on: "Identity and expressive behavior in voting in Israel"
  • Public Choice Society, San Antonio, March 2011. Plenary presentation: “Behavioral political economy”
  • Silvaplana Workshop on Political Economy. Pontresina, July 2010. “Expressive policy traps”
  • CESifo 3rd Workshop on Political Economy, Dresden, December 2009. Keynote speaker on “Expressive behavior”
  • European Public Choice Society, Athens, April 2009. Plenary lecture on: “Expressive behavior in economics and politics: An overview and a perspective”
  • Alexander von Humboldt Foundation: The Israeli Humboldt Club, the Humboldt Kolleg Symposium on “When Science and Humanities Meet”, January 8, 2009. Invited lecture: “The welfare state”
  • Jerusalem Institute for Market Studies, 21 May 2008. Public lecture: "The work ethic and the welfare state"
  • Hubei College of Economics, China, October 10, 2007. Public lecture: “Is social justice achievable?”
  • Singapore Economic Review annual public lecture, Nanyang University, September 20, 2007, “Globalization and social justice”
  • Humboldt University, Berlin, July 9-13 2007, MEMS guest lecturer, public lectures on “Current aspects of public finance and public policy” 
  • BESA Institute for Strategic Studies, Bar-Ilan University, May 7, 2007, public lecture on “Why does the Arab world remain poor?”
  • University of Havana, 44th Anniversary of the Initiation of the Study of Economics, Havana, Cuba, October 6, 2006. Plenary lecture on: “The elusive quest for social justice”
  • Mont Pelerin Society General Meetings, Salt Lake City, August 15-20, 2004.  Plenary address on: “Institutions of international decision making: the United Nations”
  • The World Bank, PREM Conference, Washington DC, April 27-28, 2004.  Debate with Jeffrey Sachs on: “Economic policies for failed states”
    http://www.nytimes.com/2004/11/07/magazine/07SACHS.html?pagewanted=all&_r=0
  • European Public Choice Society, Berlin, April, 2004. Plenary lecture on: “Development failure”
  • Nanyang Technological University, Singapore, Public lecture, “Why are some countries rich and others poor?” August 2000.
  • Israel Economic Association, Symposium on 50 years of Economic Research in Israel, April 28, 1999. Invited lecture on: “Political Economy”
  • European Public Choice Society Annual Conference, Prague, April 1997. Presidential Address: "Political economy and political correctness"
  • Mont Pelerin Society General Meeting, Cannes, September 1994. Plenary address: "Nostalgia, self-interest, and the transition from socialism"
  • European Public Choice Society Annual Conference, Portrush, April 1993. Plenary address: "The transition from socialism: Some comforting thoughts for adherents to a public choice perspective"
  • Geneva Environmental Meetings, Environment and Development: Conflict and Convergence, May 1992. Presentation on: "Environmental protection and international trade"
  • Annual Meetings of the Economic Association of Israel, Tel-Aviv, December 1991. Plenary lecture: "The political economy of international trade policy"
  • European Public Choice Society Annual Conference, Meersburg, April 1990. Plenary lecture on "International trade policy: Benevolent dictators and optimizing politicians"
  • Taft Lecture, University of Cincinnati, April 1989. Public lecture on: “Liberalizing socialist industry"

Teaching

  • Markets and public policy
  • Political economy and public policy
  • International trade

Personal

BIOGRAPHICAL NOTES – ARYE L. HILLMAN

I was born in one country (Germany), raised in another (Australia), went to graduate school and have spent subsequent time in another (the United States), and have lived on a continual basis in another (Israel). I was stateless as far as I can tell when I was born in the U.S. zone of Germany in 1947. My parents were refugees. My father Yehoshua Hillman (ז"ל) (Helman and Pinczewski families) and my mother Rosa (ז"ל) (née Borenstein), survived the Holocaust. There are different types of survivors, those who escaped by crossing into Russia and those who did not escape, like my parents. After liberation, in the case of my father and mother by the Red army, survivors went home to see who was left alive (a case of a Schelling focal point). My father found my mother wandering around in Lodz, alone and confused. Poland could at the time be dangerous for survivors, in particular those seeking to reclaim property. There was a pogrom against Jewish survivors in Kielce Poland in 1946. My parents left Poland in 1946, crossing borders, and reaching a displaced people's camp in southern Germany, from which they moved to the nearby small town of Bad Wörishofen, where I was born. I was to be their only surviving child. Both my mother and father had previously been married. Their respective spouses and children had perished. My first languages were Yiddish spoken in the house and German spoken in kindergarten and on the street. Yiddish remained the language of communication with my parents. There were special difficulties growing up in the house of survivors. Their memories stayed with them at all times and what they had witnessed and gone through, normal minds cannot imagine.

Bad Wörishofen is situated in Bavaria off the highway between Munich and Lindau. The town has spa waters that have purported curative properties. We lived in Bad Wörishofen until late 1951, at which time we moved to Australia. We arrived in Australia in early 1952. My parents chose to settle in the town of Newcastle, north of Sydney. We lived in a working-class area of a working-class town. My best friend often went to school barefoot, which I did also, not wanting to be different. Amazingly, in retrospect, shoes were not required at school, but this was the early 1950s in a large but provincial NSW town.

In our working class neighborhood, my parents built up a successful retail clothing business based on trust and personal credit, at a time when credit and trust were not part of the usual business model. Women came to my mother for clothes because, if a dress did not suit, she immediately said ‘not for you’. She imposed her taste but she apparently had good taste because the customers kept coming back. My father managed the business and continued with the tailoring of men’s suites that was his profession. He also, in time, became the equivalent of the local rabbi, which he could do because of his pre-war yeshiva studies. My parents were unfamiliar with western education. My mother was an effective businesswoman but had left school in pre-war Poland at the age of 12 and my father was learned in the traditional Jewish manner but he was unfamiliar with Latin characters.

Admittance to a selective regional high school introduced me to a milieu that I had known little about. Other children at the school certainly had more extensive English vocabularies. I was in the A class that studied Latin, which was a special privilege. The Latin teacher was said to be secretary of the local branch of the Communist Party and we were made familiar not only with Ovid but also Spartacus. I played rugby and also ‘Australian’ football. I was a member of the school chess team. After I won the local junior chess championship, the next step was participation in a more prestigious contest, which however coincided with the summer camp at which every year I could meet my wife to-be Jeannette, who lived in Sydney. I chose the summer camp. In 1967 I married Jeannette (née Mann) and in the same year completed an honors degree at the local University of Newcastle. With 1st class honors and the University Medal, I was encouraged by Professor Warren Hogan, who was my university mentor, to pursue an academic career. When Warren Hogan called to inform me that I had won the University Medal, I did not know that the Medal existed. I had to ask him what it was all about.

I was awarded a Commonwealth (of Australia) PhD scholarship and thought to study at the University of NSW in Sydney with Professor Murray Kemp, who had an international reputation in the field of international economics. Professor Harry Edwards, who was at the time setting up the economics department at newly opened Macquarie University in western Sydney, convinced me that I could complete a PhD while teaching. I accepted a teaching position and began a PhD at Macquarie, with Peter Lloyd from Australian National University as external advisor. I was happy to be able to contribute, years later, to Peter Lloyd’s retirement Festschrift. Harry Edwards left academia after being elected to the Australian federal parliament for the Liberal (actually conservative) Party and remained a backbencher for 22 years. With his Oxford PhD, he was surely a more competent economist than the politicians who had positions of economic decision making when the Liberal Party was in office. A good economist is apparently not necessarily a successful politician.

My wife Jeannette’s father Joseph Mann (ז"ל), who was a Sydney lawyer, arrived in Australia as a baby from Harbin in China. Her mother Netta (ז"ל) was born in Australia. Her parents had emigrated from Odessa and ran a pub in Ballarat in the gold-mining area of the state of Victoria, and subsequently had a pub in an inner western suburb of Sydney. Netta traveled from far to help out whenever she was needed. Our first great granddaughter is named Netta.    

Attempting a PhD at Macquarie University was leading nowhere. The road to an academic position in Israel went through a leading graduate school in the United States. Don Patinkin, who had arrived in Israel in the early years of the modern state and was the father of academic economics in Israel, had ensured that academic standards in economics in Israel would be high. In 1970, I resigned from the tenured position at Macquarie University and left with Jeannette and our two young daughters Tamara and Ilana to begin graduate school at the University of Pennsylvania in Philadelphia. Various graduate-school scholarship offers that I received were all for one year contingent on academic performance. I was risk-averse. Gerry Adams, head of the Economics Research Unit at Penn, offered a guaranteed three-year appointment as Research Fellow, a position that paid tuition and provided a small stipend and health insurance. Jeannette’s U.S. visa did not allow her to work but she volunteered at the local Jewish school. At Penn, I once more found myself again in a surreal world (like the first days at the selective high school). Fellow students included graduates from prestigious universities. Graduate school teachers included Irving Kravis, Wilfred Ethier, Albert Ando, Thomas Sargent, Oliver Williamson, Lawrence Klein, and Karl Shell. Sargent, Williamson, and Klein went on to receive a Nobel Prize. The three-year fellowship limitation provided an incentive to complete the PhD as soon as possible. Zvi Adar, a graduate student ahead of me, who subsequently became a professor in the Tel-Aviv University business school, gave me the invaluable advice to choose an advisor who had completed his own PhD thesis in a short period of time. I had nine months left of the Fellowship when I approached Albert Ando, who taught the public economics graduate course, and asked whether the remaining time was sufficient to write a thesis. Albert replied ‘I wrote my thesis in three months and I am three times cleverer than you, so you should be able to finish in nine months’ – which I did. The thesis combined international and public economics. Bill Ethier was co-advisor.

As the end of the three years of graduate school approached, Irving Kravis, the senior international-trade professor at Penn at the time, and whom I regarded as a mentor, offered to propose me for a position in a leading U.S. department (Stanford). I asked instead for a recommendation for a position in Israel. I accepted an offer from Tel-Aviv University. There was a detour. Our financial resources, not substantial in the first place, were depleted, and, although my thesis had been accepted, I had to make some ‘revisions’. We stayed in the U.S. an additional fourth year. I took an income-maximizing offer for a one-year visiting appointment at the University of Illinois in Urbana. We arrived in Israel in June 1974, with now four children, ranging in age from 6 years to 3 months, with our sons Nachman Eliyahu (Eli) and Benjamin additions to our two daughters Tamara and Ilana with whom we had arrived in the U.S. We had never previously been in Israel, which had been for us a concept rather than an actual physical location.

We had not been aware of the deep ideological division in Israel between the ‘left’ and the ‘right’. The division, which has persisted, has social, economic, and geopolitical dimensions. The ‘left’ had been instrumental in establishing the modern state of Israel through collective institutions, including the kibbutz, and also at the time controlled much of the economy through ‘the holding company of the workers’. The Jews returning to Israel from the later part of the 19th century on, did what Jews had not done in Europe during the long years of exile. They defended themselves and they worked the land. Many of the returnees also abandoned Jewish tradition, which was replaced by the ‘religion’ of socialism. The abandonment of Jewish tradition for socialism was a response to antisemitism. The premise of the left was (and is): ‘If we do not insist on our traditions that separate us from others, we will be more liked.’ My father told me how he would approach Polish Catholics and declare that “the enemy is the capitalist’. When I had asked him in Australia why he continued to vote for the left, he told me how, when he was with communist partisans toward the end of the war, a Polish nationalist group had arrived and demanded from the communists that they give them the “Jew”. The communists refused and my father felt that he had an eternal debt. There must have been many like my father. 

After our arrival in Israel, I settled in at the economics department of Tel-Aviv University. I had excellent colleagues. Elhanan Helpman and Efraim Sadka arrived when I did, having respectively studied at Harvard and MIT. Elhanan Helpman seemed focused on broader recognition than he believed possible as an academic in Israel and accepted a position at Harvard. Efraim Sadka went the other direction of local involvement including business activity. At Tel-Aviv University, I was instructed about the personal benefit from pragmatism of identifying with the ‘left’. I was advised to proclaim adherence to universal values and to position myself on the left of the spectrum of ideology, so as to be met with acceptance by academics in Israel and abroad who were uncomfortable with Jewish identity and the idea of Jewish state. I was advised to accept all blame that was directed at me as representative of the state of Israel, whatever the accusations. In a meeting with an attaché from the British Embassy in Tel-Aviv, I once asked what would happen if we actually did what we were accused of doing. His reply was ‘that would be awful’.

I found it difficult to comply with the directive to accept all blame that was levied against Israel and to appease people who, it seemed evident, wished us harm. I found, through my conversations, that our foreign critics were worried that we had the means to defend ourselves, which contradicted the historical presumption that Jews should be victims and should suffer. Jeannette and I have been told to our faces by a professor at a Berlin university that ‘you Jews do not necessarily have the right of self-defense’. It became clear that facts do not matter when critics of Israel make their case. In the beginning, I would attempt to point out that six Arab armies had invaded the nascent state of Israel in 1948 and that a population exchange had taken place as had occurred elsewhere around the same time, and that uniquely only the population exchange involving Jews and the Arabs was not recognized -  and that only the Arabs were permitted to pass their refugee status on their children, and that I had been a refugee when I was born and I was no longer a refugee being fed by a special United Nations agency set up with the purpose of keeping me a refugee indefinitely – and so on. For all of this, I received glares from the critics of Israel. If my colleagues of the left in Israel were present, I could see in their eyes that ‘I told you so. Just agree with them.’ In time, I became aware of the principles of adherents to post-modernism that that ‘there is no truth’ or ‘there are many truths’. So truth does not matter and emotion and bias prevail.

Having grown up in a working class neighborhood, my sympathy was with workers. I found that the Labor Party in Israel did not represent the workers but represented the privileged parts of society, including the managers of factories and businesses of the ‘socialist’ sector. Monopolies and cartels, and trade restrictions, were justified as protecting workers’ job security but were sources of privileged rents for ‘socialist’ managers (my 1988 paper lists the monopolies of the ‘holding company of the workers’). Socialism seems inevitably to benefit the privileged, or the haughty and smug who have not accumulated assets themselves but control and live off the ‘property’ of the workers. Foreign leftist visitors have strangely identified with the Labor Party, which the workers did not support. Workers in Israel have tended to vote not for Labor but for the Likud.

There are economists who claim that ‘capitalism’ is exploitative. Hayek was however right that capitalism (markets and private property) is the only economic system that has provided high standards of living for a majority of a population. Hayek’s argument was evolutionary. Other systems had been tried and had failed. Hayek also observed that socialism or communism caters to megalomaniacs, who seek to control everybody and everything in an economy. Markets and private property provide economic freedom that diminishes the personal power of the megalomaniacs. 

The unthinkable happened in 1977 when the ‘left’, which had won every election since the establishment of the modern state in 1948, lost the general election. I had much admiration for the wisdom and modesty of the new prime minister Menachem Begin.

Life was not intellectually comfortable at Tel-Aviv university. The best that could happen happened when I was denied tenure and moved in 1980 across town to Bar-Ilan University. I had tried to move to Bar-Ilan from Tel-Aviv some years previously, but, ironically, because of the deep ideological divide of the time, I was suspect in approaching Bar-Ilan from Tel-Aviv University. Jacob Paroush paved the way to Bar-Ilan. When I had asked Irving Kravis to approach a university in Israel on my behalf, I had not known about the existence of Bar-Ilan. Inertia could have kept me at Tel-Aviv.  My academic record was superior to some to whom tenure was given at Tel-Aviv but my traditional Jewish outlook and unwillingness to accommodate to the principles of the left made me, as one forthright faculty member old me, ‘not our sort of person’. Her honesty was much appreciated. I had believed naïvely that, despite ideological differences, academic standards would prevail in deciding academic questions. There was however no tolerance for dissent.

Bar-Ilan is the only university in Israel that was not founded with the support of the Labor (socialist) Party. Bar-Ilan insisted that secular studies and Jewish traditions were compatible. Bar-Ilan was stuck between two sources of enmity, the left who wanted to create the new man or woman with universal values and devoid of history, and orthodox Jews who reject the idea that anything beyond yeshiva learning is necessary and who object to male and female students in the same class at Bar-Ilan. The orthodox Jews are in a conceptually difficult situation. They continue to wait for the coming of the messiah to gather Jews from the corners of the earth to recreate that the state of Israel as the restored kingdom of David, but Israel has already been recreated and Jews ingathered. The conditions of the messianic age seem to be present. Jews can defend themselves and there is food and economic sustenance for everybody. The orthodox cannot however abandon their belief that the true reborn state of Israel is yet to come. Abandonment of the belief with contradict the foundations of their belief system.      

At Bar-Ilan, I self-discovered the Public Choice School by reading the 1980 volume ‘Toward a Rent-Seeking Society’. The papers of Gordon Tullock and others in the volume were wise and immediately comprehensible. Here was economics that expressed ideas directly and did not hide behind a façade of exaggerated technicality and abstraction that was intended to pass for intellect and sophistication. The economics department at Bar-Ilan grew around specialization in political economy and decision theory, and in particular the theory of rent seeking. In our intellectual endeavors, we complemented the Public Choice Center in Virginia. We were always kind to (in citations) and supportive of the Virginia School. I have no answer when I am asked why no member of the Bar-Ilan department (or for that matter any university in Israel) was ever invited to join the editorial board of the flagship journal Public Choice. Perhaps we were regarded as rivals.

In the age before the internet, visiting academic positions were a means of broadening perspectives. In Spring of 1979 a visit to the Australian National University led to joint research with Ngo Van Long, Peter Swan, and Jim Cassing (who was visiting from the University of Pittsburgh). Max Corden, Fred Gruen, and Robert Gregory were there for interesting discussions. During a stay as visiting professor at UCLA in 1985-87, I benefitted from the intellectual depth of Robert Clower, Harold Demsetz, Arnold Harberger, and Jack Hirshleifer. Sebastian Edwards, Ed Leamer, David Levine, and John Riley were also stimulating colleagues. At UCLA, I met Heinrich Ursprung, with whom a long research collaboration began. I benefitted from two semesters, separated by some years, at Princeton, where I had the good company of Gene Grossman and Avinash Dixit. A stay in 1990 in the newly created Transition Unit of the World Bank under the directorship of Alan Gelb and subsequent return visits sponsored by Manuel Hinds provided opportunities to travel to and study transition countries at first hand. Being ‘on the ground’ and having opportunities for discussions with government officials reaffirmed my political-economy perspective on the transition from socialism. A research program with Željko Bogetić of the World Bank continued over the years.

Beginning in the year 2000, Vito Tanzi and Sanjeev Gupta, who had introduced recognition of corruption as an impediment to development into IMF research and policy discussion, invited me to participate in studies of low-income countries with staff members of the IMF’s Fiscal Affairs Department. During my initial visit to the IMF, I formulated a Nietzschean view of development failure. It seemed to me that the primary impediment to development in low-income countries was not corruption but rather absence of ethics. The strong at will appropriated the output of the weak, which undermined incentives of the weak to be productive. With the strong controlling the state through authoritarian government, corruption is not defined as illegal because the rule of law required for such a definition is absent. The weak have an incentive to pretend to be lazy or unproductive, and to rely on non-appropriable means of happiness, such as music and dance. The domination of the weak by the strong includes the subjugation of women by men. I approached Stanley Fischer, then deputy chief of the IMF, and asked him whether it was acceptable to put out an IMF research paper on the themes of Nietzsche. He replied ‘fine as long as you do not blame the poor for their predicament’, which my Nietzschean explanation did not do.    

I have often been an iconoclast, beginning from viewing trade policy as a political-economy phenomenon and going on to political-economy perspectives on other public policies. I found amazing the wide interest in and acceptance of the ‘strategic trade policy’ argument that advised governments to subsidize firms competing in world markets, without a word about the rents that such a policy would create and the rent seeking that would ensue, and the political benefits that would be available for political decision makers. I have not been an iconoclast as a matter of principle, and not at all from the viewpoint of the public-choice school. I did not accept the at-the-time mainstream explanations for public policy based on the ‘public-economics’ model of benevolent government. Because of the Marxian connotations (contributing according to ability), I was uncomfortable with the lump-sum taxes there were present in the models. Such taxes did not exist or were not used but were mainstays of models of international trade and public finance. As the public-choice school proposed, whether making choices in the private sector or in government, ‘people are people’ are guided by their own self-interest.

‘People are people’ also applies in academia. From the experience of 20 years as editor and editor-in-chief of the European Journal of Political Economy (from 1994 to 2015), I have come to understand the extent of discretion that editors have over what will be published. My co-editor Henry Ursprung and I aimed for objectivity and fairness with authors. We did not wish to treat others as we had been treated by some editors, who had at times been supercilious and condescending, and for whom, in the absence of objective criteria for evaluating merit, the scope was present to favor friends and acquaintances, and perhaps authors from leading U.S. departments. We have all seen papers in the ‘leading’ journals that are no better than other papers that we know were denied publication in the same journals. I have encountered excellent economists who did not wish to forgo their identity and location for a career at a ‘leading’ U.S. university. ‘Out of sight, out of mind’ applies very well when editors and reviewers make judgments that compare people who they personally know with others who are just names on a page. Experiments have shown that revealing a person’s face induces sympathy and cooperation. A face behind a name has been shown to change how people relate to others. My time spent at UCLA and Princeton made evident that location matters in the academic world. There is reverse causality. ‘Good’ people are at ‘good’ universities, but they are also ‘good’ because of where they are. Editors may be reluctant to reject mediocre papers from authors from ‘good’ departments and the authors are ‘good’ because of their publications.   

Since 1989, Henry Ursprung and I have organized the Silvaplana workshop in political economy in the mountains of eastern Switzerland. The workshop was initiated to promote political economy when political economy was not mainstream. The workshop combines presentation of papers with mountain treks and on-the-way discussions. We issue an open call for papers every year. In 1994 Henry Ursprung and I were awarded the Max-Planck Prize for our research in political economy. In recent years I have benefited from having Niklas Potrafke as co-researcher. Niklas has joined me in addressing very interesting issues. I have also returned to a partnership with Ngo Van Long and have continued joint research with Henry Ursprung. I have maintained contact over the years with Bill Ethier, my graduate school advisor, who has told me that I am often ‘ahead of my time’. Which implies that I should wait. But I never do because I do not know what waiting will bring.

In October 2015, because of a legally specified age limit, I was obliged to change my status to professor emeritus. The change is fortunately inconsequential. I keep my office, students, research funds, and my professional life. A reduced teaching load provides more flexibility to travel.

I was proud in March 2016 to receive an honorary doctorate from the University of Genoa. The University has a long tradition, dating back to at least 1471. Genoa is the suggested birthplace of Christopher Columbus, the discoverer of the ‘new world’. There are indications that Columbus was a Converso or hidden Jew, who set out in 1492, the year of the Spanish expulsion of Jews, to find a new world where a Jew might be safe from the Inquisition. Jews were not safe from the Inquisition in the Spanish New World. The New World however resulted in the United States. Common people flocked to the United States to escape European privilege and hierarchy The independence of the Unites States provided indirectly another bastion of freedom, Australia where, often to the detriment of the native population, European settlement began as a penal colony, because the American colonies were no longer available to take England’s convicts.

Having rebuilt ourselves from the Holocaust, the extended Hillman family is vulnerable in all being in the same location. The rulers of Iran have called us a one-bomb country and European leftists and progressives and ‘liberals’ in the United States tell us not to take threats of annihilation seriously. A justification for the re-established state of Israel is being able to make our own decisions about our security. Europe and other democracies seem to be facing the security issues that we have had to confront.

 

Arye L. Hillman

September 6, 2018