There is a public debate and large body of politico-economic literature discussing the design of fiscal rules and other instruments of fiscal governance assumed to prevent solvency problems and bailouts of countries. Essentially and implicitly, this literature discusses the issue of how to regulate the ‘demand side’ of the ‘market’ for sovereign bailouts. This chapter complements this strand of research by discussing the possibilities and limitations of regulating the ‘supply side’ of this market (namely, governments, central banks, and international organizations in their role as potential rescuers). Thinking about the governance of this market makes sense because well-intentioned sovereign bailouts may have serious side-effects, such as the ‘moral hazard problem’ and the ‘soft budget constraint problem’. Finally, it is discussed whether the citizens of potential ‘rescuer-jurisdictions’ should get the opportunity to vote in a binding referendum on whether ‘to bail out, or not to bail out?’
Conceptual and Regulatory Challenges
Starting at least with Adam Smith’s seminal book The Wealth of Nations (1776), there is a long tradition of politico-economic research investigating to what extent the state should intervene in the economy and other spheres of society. This chapter explores what ‘political economy’ as an interdisciplinary research program at the intersection of political science and economics can contribute to the debate on the governance issue of how to protect individuals’ privacy in public spaces. Following similar examinations of other phenomena in the existing politico-economic literature on the proper role of government, tools and insights from the toolkit of political economy are used to examine to what extent it is necessary for the state to secure individuals’ privacy in public spaces. Or, put differently, the authors take a market-liberal perspective in order to analyze to what extent individuals themselves are able to protect their privacy in public spaces.