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This title was formally part of the Studies in International Trade Policy Series, now called Studies in International Economics.

In recent years many countries have liberalized their financial markets as a central element of their efforts to reform their economies and increase their economic growth rates. Financial deregulation leads to a fundamental restructuring of a country's economy and polity, as market forces, not state officials, begin to determine who obtains financial resources and at what cost. A critical question is whether countries can undertake a program of liberalization while undergoing democratic transformation. In this study, Arvid John Lukauskas explores why governments tightly regulate their country's financial system and why they choose to liberalize it. Using a rational choice approach, Lukauskas contends that public officials provide the dynamic behind the evolution of financial regulation as they seek to retain power and generate public revenue. Lukauskas argues that the nature of a country's political institutions shape the incentives facing politicians and influence whether they seek to regulate closely or liberalize financial markets in the pursuit of their goals. Lukauskas then tests his ideas in an in-depth case study of the evolution of financial policy in Spain, a country that transformed its financial system into a mostly market-based system after years of heavy state intervention, while undergoing a transformation from a dictatorship to a democracy. Contrary to the conventional wisdom that leaders will not undertake structural change during periods of democratization, he finds that leaders in Spain undertook financial liberalization despite opposition from powerful groups, because democratization gave Spanish leaders a strong incentive to improve economic performance through financial reform in order to compete for votes. Regulating Finance will be of interest to political scientists and economists interested in studying financial markets and the effects of regime change, including democratization, on economic reform.

Resource Allocation in Higher Education describes how colleges, universities, and government agencies can use budgeting processes to improve program planning and productivity. Drawn from the contributors' direct experiences as well as research findings, it blends conceptual foundations with practical insights. Many resource allocation processes in higher education need reform, and this volume will stimulate and assist that effort. Beginning with the economic theory of nonprofits, the essays examine current budgeting systems in both theoretical and practical terms. Resource allocation systems from other domains such as health care are explored for relevant insights. Throughout, decentralization remains a major theme. Topics range from the eminently practical--how to establish a global accounting system or choose an endowment spending rate--to the more abstract--the theory of how various nonprofit enterprises balance academic values against market pressures. The volume ends by proposing value responsibility budgeting, which offers institutions a potentially better way of pursuing their academic values while remaining responsive to market pressures. Those within higher education institutions who are responsible for resource allocation, such as provosts, chief financial officers, or budget directors, will find much that speaks to them. While mostly in the domain of higher education economics, management, and planning, the essays are written for any serious reader concerned with the problem of reform in higher education. William F. Massy is Professor of Education and Business Administration at Stanford University.