co2 emissions and income dynamics what does the global evidence tell us this paper analyzes the co evolution of two major determinants of social welfare namely income and carbon emissions in particular by using a distribution dynamics approach based on markov chains we investigate the shape and behavior of the joint distribution of per capita income and carbon dioxide emissions we arrive at several interesting conclusions especially in the context of international negotiations on climate change first evidence does not support theoretical models predicting the existence of a poverty environment trap specifically in the long run two main groups of countries will emerge poor versus polluting countries second the typical development path leads initially to high emission levels and subsequently to high income third the convergence process towards the stationary distribution is very slow finally for carbon emissions whenever it is observed the environmental kuznets curve seems to be only a transitory phenomenon

electoral politics and the executive veto a predictive theory we argue that winner take all voting in states and the unequal distribution of electoral votes across states in presidential elections makes incumbent presidents rationally place more weight on the preferences of voters in closely contested larger states when making policy decisions this hypothesis is tested by examining whether presidential veto decisions are influenced by the floor votes of senators from these electorally crucial states in a pooled sample of 325 individual bills from 1970 through 1988 we find significant evidence of this behavior by incumbent presidents

climate change industrial transformation and environmental growth traps this paper examines the potential interactions in the global economy between the impacts of climate change on productivity with existing technology and increasing returns in the development of less vulnerable and lower emission technology a simple specification is used in which the global economy can produce a single homogeneous consumption good with two different technologies the old technology has global diminishing returns to scale and depends on the use of fossil energy that gives rise to long lived damaging climate change the new technology has convex concave production due to set up cost and is not vulnerable to climate change through simulations we show that if output with the new technology does not grow fast enough to move through the phase of increasing returns then the economy could experience an environmental growth trap lingering at a low level of income indefinitely or achieving some progress but then getting driven back to a lower level of income by productivity reducing environmental degradation we discuss how the prospects of such a trap depend on the productivity and energy intensity of the old technology as well as the magnitude of the set up cost

election goals and the allocation of campaign resources this paper compares the equilibrium behavior and outcomes in a model of two party competition for legislative seats under two different assumptions about the parties goals 1 parties maximize the expected number of seats won and 2 parties maximize the probability of winning a majority of the seats the two goals may lead to qualitatively different behavior and studying the differences yields insights into the relationship between the goals and the role of assymetries between the parties

optimal growth resource amenities and the preservation of natural environments this paper examines the conditions for which it is optimal to permanently preserve natural environments in which a productive natural resource is found the conditions are more restrictive than those previously indicated in the literature on the economics of natural environments increasing consumption and declining commodity prices are not sufficient to warrant permanent preservation the initial capital stock can be an important determinant of the optimal level of preservation in addition resource amenity values will increase the initial resource price and decrease the rate of growth of the resource price the natural world provides a variety of services to the human community natural resources are essential inputs in the production of goods and services in addition the natural world generates a variety of amenity services including the scientific recreational and aesthetic value of preserved natural environments krutilla 1967 krutilla and fisher 1975a this paper examines the impact of resource amenity values on the optimal growth of an economy which depends upon natural resource inputs for the production of goods and services in particular the paper examines the conditions under which it is optimal to permanently preserve some natural environments in which the productive resource is found the conditions which warrant permanent preservation are more restrictive than previously indicated by the literature on the economics of natural environments increasing consumption and declining commodity prices are not sufficient to warrant permanent preservation in addition the initial capital endowment can be an important determinant of the optimal level of preservation

spatial equilibrium with entry this paper examines spatial equilibrium in political competition when established parties choose their platforms competitively while rationally anticipating entry of a vote maximizing third party the resulting equilibrium is substantially different from the hotelling median equilibrium established parties are spatially separated and third parties will generally lose the election this provides one theoretical explanation for the stability of two party systems namely that non cooperative behavior between established parties can effectively prevent third parties from winning

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

bargaining in legislatures over particularistic and collective goods we develop a bargaining model in which a legislature divides a budget among particularistic and collective goods by incorporating both private and public goods in a unified model we uncover nonmonotonic relationships between legislative preferences for collective spending and the amount of the budget actually allocated to collective goods put simply policy proposers can exploit coalition partners strong preferences for public goods to actually provide fewer public goods in equilibrium while directing more private goods to themselves these results explain why policy reforms to limit special interest spending often fail this unified model also sheds new light on when legislatures prefer open or closed amendment rules and when coalitions take different sizes and shapes

appropriate technology in a solovian nonlinear growth model we propose a solovian growth model with a convex concave production function and international technological spillovers we test the empirical implications of the model analysing the effects of the productivity slowdown that followed the oil shocks of the 1970s we argue that this slowdown altering the world income distribution affected the pattern of international technological spillovers taking the poorest countries further away from the technological leaders and therefore unable to exploit their technologies the result is the emergence of a poverty trap for low income countries

effectiveness of electoral systems for reducing government corruption a game theoretic analysis abstract a theoretical model is developed for predicting the relative effectiveness of different electoral systems for reducing government corruption we consider voting games in which parties with known corruption levels and known positions on a major policy question compete for legislative seats we find that approval voting and proportional representation are fully effective in the sense that all equilibria exclude corrupt parties from legislative seats plurality voting is partly effective in the sense that there always exist some equilibria that exclude corrupt parties borda voting is ineffective because for some political situations no equilibria can guarantee the exclusion of corrupt parties journal of economic literature classification number d72

elections coalitions and legislative outcomes predictions of electoral behavior in a multiparty setting should be a function of the voters beliefs about how parties will perform following an election similarly party behavior in a legislature should be a function of electoral promises and rewards we develop a multistage game theoretic model of three party competition under proportional representation the final policy outcome of the game is generated by a noncooperative bargaining game between the parties in the elected legislature this game is essentially defined by the vote shares each party receives in the general election and the parties electoral policy positions at the electoral stage parties and voters are strategic in that they take account of the legislative implications of any electoral outcome we solve for equilibrium electoral positions by the parties and final policy outcomes

how substitutable is natural capital one of the recurring themes in the sustainability literature has been the extent to which a loss of natural capital can be made up for in welfare terms by an increase in other forms of capital this issue was raised early on in the debate on sustainability by pearce and has never really been resolved this paper is an empirical attempt to measure the degree of substitutability between different forms of capital a nested ces production function is used to allow flexibility in the estimated elasticities of substitution also within this specification natural resources and other inputs are combined in different levels of the function thus allowing for different levels of substitutability institutional and economic indicators are also incorporated in the production function estimated results show that the elasticities derived from functions involving land resources were generally around one or greater implying a fairly high degree of substitutability furthermore changes in trade openness and private sector investment have a statistically significant and direct relationship on the efficiency of production and hence on income generation no statistically significant relationship between income and any of the institutional indicators was found

the significance of the probabilistic voting theorem for centuries it has been recognized that democratic government is endangered by two unfortunate properties of majority rule voting the absence of an electoral equilibrium comparable to the general equilibrium in the economy and the risk of expropriation of minorities by majorities much of democratic theory is devoted to the study of how these dangers can be averted the probabilistic voting theorem has been alleged to show that these dangers are illusory it is argued in this paper that though the theorem is valid on its assumptions these assumptions are considerably stronger and the theorem is less comforting about the stability of democratic government than one might at first suppose

the origins of state capacity property rights taxation and politics economists generally assume that the state has sufficient institutional capacity to support markets and levy taxes this paper develops a framework where policy choices in market regulation and taxation are constrained by past investments in legal and fiscal capacity it studies the economic and political determinants of such investments demonstrating that legal and fiscal capacity are typically complements the results show that among other things common interest public goods such as fighting external wars as well as political stability and inclusive political institutions are conducive to building state capacity some correlations in cross country data are consistent with the theory

a complete characterization of optimal growth paths in an aggregated model with a non concave production function the convexity of technology has played a crucial role in economic analyses of optimal one sector growth problems for example two of the key results on the traditional model of ramsey 1928 that have relied on the convexity of the technology are that optimal intertemporal growth involves moving monotonically towards a unique steady state as in cass 1965 koopmans 1965 and that the value function is a concave differentiable function of the initial capital stock as in benveniste and scheinkman 1979

incentives to cultivate favored minorities under alternative electoral systems a simple model is used to compare under different electoral systems the incentives for candidates to create inequalities among otherwise homogeneous voters by making campaign promises that favor small groups rather than appealing equally to all voters in this game model each candidate generates offers for voters independently out of a distribution that is chosen by the candidate subject only to the constraints that offers must be nonnegative and have mean 1 symmetric equilibria with sincere voting are analyzed for two candidate elections and for multicandidate elections under rank scoring rules approval voting and single transferable vote voting rules that can guarantee representation for minorities in multiseat elections generate in this model the most severely unequal campaign promises

government turnover in parliamentary democracies in this paper we consider a dynamic model of government formation and termination in parliamentary democracies that accounts for the following phenomena 1 cabinet terminations due to replacement or early election 2 cabinet reshuf es 3 minority and surplus governments 4 the relative instability of minority governments

environmental economics climate change policy and beyond a tribute to anil markandya environmental and natural resource economics is concerned with questions about how environmental and natural resources are and should be developed and managed among the main challenges in this research area is the excessive use of the earth s atmosphere as a sink of greenhouse gas emissions anil markandya is one of the internationally outstanding researchers not only addressing theoretical aspects of environmental problems but also developing appropriate policy approaches this paper depicts the milestones of his contributions to environmental economics and gives some special attention to his more recent works

the provision of public goods under alternative electoral incentives politicians who care about the spoils of office may underprovide a public good because its benefits cannot be targeted to voters as easily as pork barrel spending we compare a winner take all system where all the spoils go to the winner to a proportional system where the spoils of office are split among candidates proportionally to their share of the vote in a winner take all system the public good is provided less often than in a proportional system when the public good is particularly desirable we then consider the electoral college system and show that it is particularly subject to this inefficiency

thresholds in concave renewable resource models abstract a number of renewable resource models some of them just recently published e g about shallow lakes refer to convexities with respect to the resource stock as the source for multiple steady states and associated thresholds this short paper draws attention to the fact that multiple steady states and thresholds are possible in well behaved i e concave models too the ecological consequence is that renewable resource management is sensitive to initial conditions in more cases than so far suggested in the literature

voting behavior and information aggregation in elections with private information we analyze two candidate elections in which voters are uncertain about the realization of a state variable that affects the utility of all voters each voter has noisy private information about the state variable we show that the fraction of voters whose vote depends on their private information goes to zero as the size of the electorate goes to infinity nevertheless elections fully aggregate information in the sense that the chosen candidate would not change if all private information were common knowledge equilibrium voting behavior is to a large extent determined by the electoral rule i e if a candidate is required to get at least x percent of the vote in order to win the election then in equilibrium this candidate gets very close to x percent of the vote with probability close to one finally if the distribution from which preferences are drawn is uncertain then elections will generally not satisfy full information equivalence and the fraction of voters who take informative action does not converge to zero

the political economy of new deal fiscal federalism in 1930 the average american received somewhat more than 50 percent of his government services from local government 20 percent from state government and the remainder from the federal government by 1940 this pattern had been reversed with the federal government supplying roughly 50 percent state government 20 percent and local government 30 percent figure 1 shows how shares of non military expenditures by the three levels of government shifted dramatically away from local governments toward the national government during the decade the same was true of revenues this transition in the relative importance of state federal and local government was dramatic and from the perspective of the 1990s permanent figure 1 omitted the most important cause of the shift in fiscal terms was the implementation of national relief programs under the new deal the federal emergency relief administration fera the works progress administration wpa the social security programs and others between 1932 and 1940 direct relief expenditures account for roughly 45 percent of the growth in national expenditures 60 percent of the growth in state expenditures and 20 percent of the growth in local expenditures almost all of which came from federal and state grants for relief purposes even more revealing are the figures for the period between 1932 and 1935 in those three years national government expenditures rose by slightly less than 2 billion while expenditures for relief alone reached 2 2 billion in 1935 from zero in 1932 1 the increase in federal expenditures was significant but an important reason why state and national governments grew but local governments did not lay in the fiscal structure of the relief programs the extensive use of matching grants to finance relief expenditures created incentives for states to expand their fiscal effort while local governments were effectively able to substitute national and state relief grants for their own funds matching grants also allowed the states to control the amount spent in each program the national government was and is still today unable to control expenditures on these programs or to equalize welfare standards across states open ended matching grants entitled the states to unencumbered access to the federal treasury 2 the programs also permanently altered the american welfare system the categorical assistance programs of the social security act brought about a basic realignment of financial and administrative responsibilities between the federal state and local governments old age assistance aid to dependent children and aid to the blind were independently administered by state governments the act contained strong restrictions on the ability of the social security board to influence the administration of programs within the states explicitly forbidding the board to set personnel policies 3 why were open ended matching grants and a decentralized administrative structure adopted rather than some other institutional form public finance theory suggests that it may have been the best way for the federal government to support relief expenditures without discouraging continued state and local participation matching grants are usually proposed as a remedy to problems of externalities in this case the spillover is the movement of persons seeking relief from low benefit to high benefit states they solve the externality problem through the use of fiscal incentives as gramlich 1977 276 notes for matching grants the central government is expressly trying to stimulate spending in a certain area as we will see below matching grants did have this effect federal grants expanded rapidly but the state and local sector did not substitute federal grant moneys for state and local tax dollars on a large scale recent empirical studies of matching grants indicate that they result in somewhat less spending than the size of the grant indicating that state and local governments reduce their own expenditures on grant programs slightly in the presence of matching grants in contrast to lump sum grants where state and local governments are able to substitute significant amounts of federal grants for their own tax dollars

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

on the form of transfers to special interests an important question in political economy concerns the form of transfers to special interests the chicago view is that political competition leads politicians to make such transfers efficiently the virginia position is that lack of information on the part of voters leads politicians to favor inefficient sneaky methods of redistribution this paper analyzes the form of transfers in a model of political competition in which politicians have incentives to make transfers to special interests it shows that when voters have imperfect information about both the effects of policy and the predispositions of politicians inefficient methods of redistribution may be employed

redistributive politics and economic efficiency the political process often compensates the losers from technical change or international competition in an economically inefficient way namely by subsidizing or protecting declining industries instead of encouraging the movement of resources to other more productive uses we find that a dynamic inconsistency in the game of redistributive politics contributes to this outcome to achieve economically efficient outcomes it is necessary that those making economically inefficient choices not be given offsetting transfers but the political process distributes income on the basis of political characteristics which are in general different from the economic characteristics that are rewarded by the market we identify circumstances in which the inefficient choosers have desirable political characteristics and are therefore immune from threats of having to face the economic consequences of their choices

presidential campaign expenditures evidence on allocations and effects this paper analyzes the impact of presidential campaign spending on election results analyses of expenditures and voting are often plagued by simultaneity between campaign spending and expected vote share however game theoretic models of resource allocation decisions made by a central actor i e a presidential campaign suggest that candidates will spend more in close races and in races likely to be pivotal we provide empirical support for this theory using federal communications commission data from the 1972 presidential election we find that expenditures were higher in states where the election was expected to be closer and in states likely to be pivotal we use these two factors as instruments in a two stage least squares model to estimate the effect of spending on votes we find that contrary to previous theory and research presidential campaign spending significantly increases a candidate s vote share

radio s impact on public spending if informed voters receive favorable policies then the invention of a new mass medium may affect government policies since it affects who is informed and who is not these ideas are developed in a voting model the model forms the basis for an empirical investigation of a major new deal relief program implemented in the middle of the expansion period of radio the main empirical finding is that u s counties with many radio listeners received more relief funds more funds were allocated to poor counties with high unemployment but controlling for these and other variables the effects of radio are large and highly significant

income inequality regime repressiveness and political violence death rate from political violence is postulated to vary cross nationally as a positively accelerated time lagged function of income inequality and as a nonmonotonic inverted u function of regime repressiveness the former hypothesis is consistent with approaches to the explanation of collective political violence that emphasize the general concept of discontent or more specifically relative deprivation the latter hypothesis is consistent with a political process version of the resource mobilization approach in the context of a multivariate model estimated across two decades 1958 67 and 1968 77 support is found for the inequality hypothesis support also is foundfor the regime repressiveness hypothesis in the decade 1968 77 for which the index of regime repressiveness is available the u curve effect of regime repressiveness appears to have stronger impact on variation in rates of deadly political violence than the positively accelerated effect of income inequality

how the electoral college influences campaigns and policy the probability of being florida this paper analyzes how us presidential candidates should allocate resources across states to maximize the probability of winning the election by developing and estimating a probabilistic voting model of political competition under the electoral college system actual campaigns act in close agreement with the model there is a 0 9 correlation between equilibrium and actual presidential campaign visits across states both in 2000 and 2004 the paper shows how presidential candidate attention is affected by the states number of electoral votes forecasted state election outcomes and forecast uncertainty it also analyzes the effects of a direct national popular vote for president

presidential pork executive veto power and distributive politics mitigated to the extent that the president prefers spending in some districts over others the model also generates new insights and predictions about fiscal policy under the separation of powers including the effects of divided government electoral rules and term limitations for the executive

the economics of split ticket voting in representative democracies in u s elections voters often vote for candidates from different parties for president and congress voters also express dissatisfaction with the performance of congress as a whole and satisfaction with their own representative the authors develop a model of split ticket voting in which government spending is financed by uniform taxes the benefits from this spending are concentrated while the model generates split ticket voting overall spending is too high only if the president s powers are limited overall spending is too high in a parliamentary system the authors model can be used as the basis of an argument for term limits copyright 1997 by american economic association

a drawback of electoral competition in most major democracies there are very few parties compared to the number of possible policy positions held by voters we provide an efficiency rationale for why it might be appropriate to limit the proliferation of parties in our model the larger the number of parties the greater the inefficiency of the outcome of electoral competition the reason is that when the number of parties increases electoral incentives push each party to focus its electoral promises on a narrower constituency and then special interest policies replace more efficient policies that have diffuse benefits the analysis provides a possible explanation for the existence of institutional features that limit the extent of electoral competition thresholds of exclusion runoff electoral systems and majoritarian two party political systems jel d82 l15

the arsenal of democracy production and politics during wwii abstract we study the geographic distribution of military supply contracts during world war ii this is a unique case where 3 trillion current day dollars was spent we find robust evidence consistent with the hypothesis that economic factors dominated the allocation of supply contracts and that political factors or at least winning the 1944 presidential election were at best of secondary importance general industrial capacity in 1939 as well as specialized industrial capacity for aircraft production are strong predictors of contract spending across states electoral college pivot probabilities are weak predictors of contract and new facilities spending and under the most plausible assumptions they are essentially unrelated to spending this is true over the entire period 1940 1944 and also for shorter periods leading up to the election in november 1944 that is we find no evidence of an electoral cycle in the distribution of funds

desperation votes and private interests an analysis of confederate trade legislation the confederate congress passed draconian trade legislation in february 1864 to regulate the blockade running business in contrast to their free trade agenda this legislation created higher prices and deadweight costs except in areas under union control we examine the series of votes and proposed amendments relating to the passage of this legislation and find that representatives were more likely to vote for trade regulations if their districts would be largely unaffected by the legislation such as those districts under union occupation this private interest explanation provides a heretofore unexplored historical example of public choice theory under extreme conditions

the political economy of benefits and costs a neoclassical approach to distributive politics this essay offers a rational political explanation for the notorious inefficiency of pork barrel projects with an optimization model of legislative behavior and legislative institutions the model emphasizes the economically arbitrary from a welfare point of view importance of the geographic incidence of benefits and costs owing to the geographic basis for political representation we explore the implications of a legislator s objective function and derive conditions under which a representative legislature will select an omnibus of projects each of which exceeds the efficient scale

a dynamic theory of public spending taxation and debt this paper presents a dynamic political economy theory of public spending taxation and debt policy choices are made by a legislature consisting of representatives elected by geographically defined districts the legislature can raise revenues via a distortionary income tax and by borrowing these revenues can be used tofinance a national public good and district specific transfers interpreted as pork barrel spending the value of the public good is stochastic reflecting shocks such as wars or natural disasters in equilibrium policy making cycles between two distinct regimes business as usual in which legislators bargain over the allocation of pork and responsible policy making in which policies maximize the collective good transitions between the two regimes are brought about by shocks in the value of the public good in the long run equilibrium tax rates are too high and too volatile public good provision is too low and debt levels are too high in some environments a balanced budget requirement can improve citizen welfare

was v for victory or votes a public choice analysis of world war ii federal spending several studies on the new deal have found that politicalfactors played a significant role in determining 1930s federalspending this suggests that federal spending was not capturedby special interest groups and self interested politiciansrecently but rather that it has been affected by thesefactors since the era of big government began we examinethe military emergency of the 1940s to determine whetherfederal spending during this crisis was similarly affected bypolitics

poverty trap and global indeterminacy in a growth model with open access natural resources abstract in this paper we use global analysis techniques to analyze an economic growth model with environmental negative externalities giving rise to a three dimensional dynamic system the framework is the one introduced by wirl 1997 53 the dynamics of our model admits a locally attracting stationary state p 1 which is in fact a poverty trap coexisting with another stationary state p 2 possessing saddle point stability global dynamical analysis shows that under some conditions on the parameters if the initial values of the state variables are close enough to the coordinates of p 1 then there exists a continuum of equilibrium trajectories approaching p 1 and one trajectory approaching p 2 therefore our model exhibits global indeterminacy since either p 1 or p 2 can be selected according to agent expectations moreover we prove that conditions guaranteeing the attractivity of p 1 also imply the saddle point stability of p 2 however when p 1 is not attractive numerical simulations show the possible existence of one or two limit cycles an attractive one surrounding p 1 and one endowed with a two dimensional stable manifold surrounding p 2

the effect of international dependence on income inequality and political violence recent studies of collective political violence have overlooked international causal factors this cross national study of 46 51 nations including analyses of influential cases expends on earlier analyses by simultaneously examining both the external international and the internal intranational determinants of collective political violence regression analysis suggests that transnational corporate penetration an international factor contributes to increased political violence both directly and indirectly through its effect on income inequality we conclude that theoretical and empirical integration of intraand international factors yields the most comprehensive explanation of the causes of collective political violence

majority rule bargaining and the under provision of public investment goods abstract despite evidence that modern democracies systematically shortchange public investment goods relatively little theoretical work exists to explain this phenomenon we build on baron and ferejohn s american political science review 83 4 1989 1181 1206 bargaining model to describe public investments in a setting of budgetary politics specifically we show that underinvestment inherently arises from distributive politics within a majoritarian institution the inability of current majorities to contract with future ones drives a wedge between spending on consumption today and investing for future consumption extensions to the model demonstrate that earmarking future returns to specific players and or detaching consumption from investment decisions yields more efficient levels of public investment

divergence and convergence in international development a decomposition analysis of inequality in the world system the convergence hypothesis of conventional modernization theory suggests that the nations of the world are becoming more similar critics have argued that nations are diverging and becoming dissimilar over time this paper brings unique data analytic procedures and a world system perspective to bear on this debate we suggest that world system theory provides a framework for explaining the simultaneous occurrence of both convergence and divergence specifically the logic of world system theory suggests that divergence occurs between the three zones of nations core semiperiphery and periphery whereas convergence occurs within them with respect to economic development our analyses indicate that predictions concerning divergence were partially supported and predictions concerning convergence held only for the core trends within the periphery and semiperiphery question the utility of world system theory

periphery revolutions in world system perspective 1821 1985 periphery revolutions from 1821 to 1985 are surveyed in light of the world system perspective theoretical propositions regarding secular trends and cycles are tested for revolutionary activity and success revolution is shown to vary with the trends as well as the rhythms world leadership cycle and kondratieff longwaves of the world system although an upward trend in revolutionary activity is observable no such growth of revolutionary success is evidenced revolutionary activity increases during kondratieff upswings revolutionary success is more common during the deconcentration phase of the world leadership cycle the implications of the findings for world system stability are discussed

sources of inefficiency in a representative democracy a dynamic analysis this paper studies the efficiency of policy choice in representative democracies it extends the citizen candidate model of democratic policy making to a dynamic environment equilibrium policy choices are shown to be efficient in the sense that in each period conditional on future policies being selected through the democratic process there exists no alternative current policy choices which can raise the expected utilities of all citizens however policies that would be declared efficient by standard economic criteria are not necessarily adopted in political equilibrium the paper argues that these divergencies are legitimately viewed as politicalfailures

ballots and bullets election riots in the periphery 1874 1985 modernisation theory argues that the liberal institutions of the industrialised or core nations have taken root in underdeveloped or periphery ones and produced the pacific flowers of political development critics of the theory however are less sanguine suggesting that core institutions represent foreign imports into the periphery and are viable only when closely managed by core authorities the study tracks election riots in the periphery between 1874 and 1985 an upward trend in rioting is observable further riots occur more frequently during periods of loose control by the core the implications for global liberalism are then discussed

historical presidential betting markets this paper analyzes the large and often well organized markets for betting on u s presidential elections that operated between 1868 and 1940 four main points are addressed first we show that the market did a remarkable job forecasting elections in an era before scientific polling second the market was fairly efficient despite the limited information of participants and active attempts to manipulate the odds third we argue political betting markets disappeared largely because of the rise of scientific polls and the increasing availability of other forms of gambling finally we discuss lessons this experience provides for the present

growth effects of foreign and domestic investment over tha past few years numerous studies in sociology have concluded that foreign investment harms poor nations these studies have focused on the coefficient for foreign capital stock controlling for flow new investment and defying logic have inferred that a negative coefficient for stock reflects dependency effects that retard economic growth since capital stock is the denominator for investment rate the greater the stock the lower the investment rate for a given level of new investment hence the negative coefficient for capital stock found in dependency studies indicates a beneficial investment effect not a harmful effect this point is demonstrated by reanalysis of the data used in dependency studies in these data foreign investment spurs growth earlier analysts have concluded otherwise only because their conclusions have belied their findings

employment politics and economic recovery during the great depression in earlier studies economic historians found that political goals rather than social or humanitarian objectives motivated much of new deal spending using new information on annual state level employment for the 1930s this paper shows that while politics are still important responding to the needs of the unemployed was an important determinant of new deal spending

the swing voter s curse the authors analyze two candidate elections in which some voters are uncertain about the realization of a state variable that affects the utility of all voters they demonstrate the existence of a swing voter s curse less informed indifferent voters strictly prefer to abstain rather than vote for either candidate even when voting is costless the swing voter s curse leads to the equilibrium result that a substantial fraction of the electorate will abstain even though all abstainers strictly prefer voting for one candidate over voting for another copyright 1996 by american economic association

a model of political competition with citizen candidates the authors develop a model of electoral competition in which citizens choose whether or not to run as candidates a winner implements her favorite policy the equilibrium number of candidates depends negatively on the cost of running and positively on the benefits of winning for some parameter values all equilibria under plurality rule have exactly two candidates whose positions are distinct two candidate elections are more likely under plurality rule than under a runoff system the candidates positions are less differentiated under a runoff system there exist equilibria under both systems in which some candidates have no chance of winning

electoral incentives public policy and the new deal realignment this paper develops a model of the effects of electoral incentives on policy then applies the model to the new deal realignment in the model policy is the outcome of an agenda setter game between the president and legislators specifically the president sets policy subject to legislative approval the president s ability to concentrate benefits in states with high electoral payoffs depends in part on his or her power to influence legislators prospects for reelection regression analysis shows that new deal spending and roll call voting patterns in the house of representatives support the model historical accounts of other aspects of new deal policy including labor and civil rights issues are consistent with the model together the theoretical results and the empirical evidence help to explain several striking features of the policy and politics of the 1930s including i why a government dominated by the democratic party would provide high benefits to swing states and much lower benefits to the traditionally democratic south ii why favoritism of swing states increased from the 1933 1934 period to the 19371938 period iii why favoritism of swing states decreased from 1938 to 1939 and iv why with the rise of the conservative coalition in congress in the late 1930s it was the representatives from traditionally loyal democratic districts that created the strongest democratic opposition to roosevelt and the new deal this paper develops a model of the effects of electoral incentives on policy then applies the model to the new deal realignment in the model policy is the outcome of an agenda setter game between the president and legislators specifically the president sets policy subject to legislative approval the president s ability to concentrate benefits in states with high electoral payoffs depends in part on his or her power to influence legislators prospects for reelection regression analysis shows that new deal spending and roll call voting patterns in the house of representatives strongly support the model historical accounts of other aspects of new deal policy including positions on labor and civil rights issues are also consistent with the model together the theoretical results and the empirical evidence contribute to the understanding of several striking features of the policy and politics of the 1930s