expectations about voter choices a comment the only essential differences in the examples analyzed above are in the assumptions that are used to derive or directly specify the choice behavior that the candidates expect from any given voter conditional on his utility function when the central behavioral assumption from the traditional models was used the equilibrium was a median outcome a conclusion directly analogous to what happens in the corresponding unidimensional traditional voting models when the central behavioral assumptions from the probabilistic voting model developed in coughlin and nitzan 1981 were used the equilibrium was at the maximum of the expected log utility function a conclusion directly analogous to what happens in the model in coughlin and nitzan 1981 indeed it was only when the corresponding assumptions from ledyard 1984 were used i e the particular assumptions that ledyard used to derive the choice behavior that the candidates expect from any given voter conditional on his utility function that the conclusions were substantially different from the conclusions derived from earlier models this reflects the important role these assumptions play in making ledyard s conclusions about candidate strategies substantially different from earlier results in the literature on spatial models of elections

political uncertainty and macroeconomic performance abstract it is often claimed that politically induced economic flucturations are harmful for the society in this paper we show that this conjecture is not necessarily correct and such fluctuations can actually improve society s macroeconomic performance

strategic extremism why republicans and democrats divide on religious values party platforms differ sharply from one another especially on issues with religious content such as abortion or gay marriage given the high return to attracting the median voter why do vote maximizing politicians take extreme positions in this paper we find that strategic extremism depends on an intensive margin where politicians want to induce their core constituents to vote or make donations and the ability to target political messages toward those core constituents our model predicts that the political relevance of religious issues is highest when around one half of the voting population attends church regularly using data from across the world and within the united states we indeed find a nonmonotonic relationship between religious extremism and religious attendance

in search of the good samaritan estimating the impact of altruism on voters preferences this paper continues the development of a theoretical foundation for measuring altruistic behaviour with respect to tax versus expenditure preferences in three specific spheres health education and welfare payments particular emphasis is placed on analysing the choice theoretic calculus that underlies individual preferences using this theoretical foundation econometric techniques allow progress to be made in measuring the characteristics of the underlying utility function the empirical work relates to the uk and confirms that both self interest and public interest with a slight emphasis on the latter determine overall preferences the implications of this for the public choice school are then examined

why democracies produce efficient results by applying the standard tools of microeconomic analysis i argue that democratic markets work as well as economic markets in particular i show that previous work has greatly exaggerated the existence of principal agent and informational problems in electoral markets and has drawn incorrect conclusions

the poll tax origin errors and remedies this paper begins with an account of the context in which this decision was taken and of the reasons for it it will then be seen that the situation has developed so very differently from expectations that a fresh start is required the over riding objective when the new system was being devised in i984 5 was to check the persistent growth in local expenditure which had caused so much concern to both labour and conservative governments the situation in britain was therefore in sharp contrast to that traditionally envisaged in the literature on fiscal federalism which largely reflects conditions in the united states for it was usually assumed that local government neglects externalities notably in education and should therefore be encouraged to spend more by schemes for rewarding tax effort musgrave i 96 i more recently when brennan and buchanan i980 have discussed the means of reducing total government expenditure they recommended an increase in the scope of local government an astonishing suggestion from a british point of view whatever the reasons for such national differences it should be common ground that the reason for having some taxing power at the local level is to permit some diversity of choice if the choice is to be effectively exercised however an appropriate form of local taxation is clearly required

tax progression in lindahl equilibrium abstract this paper demonstrates that the incidence of benefit taxation depends on the ratio of income and price elasticities of demand for public goods several previously stated special cases of this formula are derived and some conflicting empirical evidence is discussed

macroeconomic policy in a two party system as a repeated game this paper considers the interaction of two parties with different objectives concerning inflation and unemployment and rational and forward looking wage setters if discretionary policies are followed an economic cycle related to the political cycle results in equilibrium this cycle is significantly different from the traditional political business cycle reputational mechanisms due to the repeated interaction of the two parties and the public or commitments to a common policy rule can improve upon the discretionary outcome by reducing or eliminating the magnitude of the economic fluctuations

the limits of political compromise debt ceilings and political turnover we study the desirability of limits on the public debt and of political turnover in an economy where incumbents have an incentive to set public expenditures above the socially optimal level due to rent seeking motives parties alternate in office and cannot commit to future policies but they can forge a political compromise where each party curbs excessive spending when in office if it expects future governments to do the same in contrast to the received literature we find that strict limits on government borrowing can exacerbate political economy distortions by making a political compromise unsustainable this tends to happen when political turnover is limited conversely a tight limit on the public debt fosters a compromise that yields the efficient outcome if political turnover is vigorous our analysis thus suggests that to sustain good economic policies a society needs to restrict either the extent of political turnover or the ability of governments to issue debt but not both

tax perceptions and preferences over tax structure in the united kingdom do voters know their tax liabilities accurately or do they systematically misperceive them could such misperceptions influence voters choices over alternative tax structures proposed by politicians this paper assesses the accuracy of individuals tax perceptions in the uk using micro data from the british social attitudes survey 1995 and tests an empirical model of the determinants of tax structure preferences including tax misperceptions a systematic bias towards over estimation of income and expenditure tax vat liabilities is found and individ uals tax preferences appear to be both dominated by self interest and distorted by tax misperceptions whether using a traditional utility maximisation framework or a variety of public choice frameworks economists agree that consumer voters or taxpayer voters dislike taxes taxes lower the consumption possibility set and thereby utility politicians proposing higher taxes expect to lose votes unless they can persuade voters that the utility gain from the use of those taxes will exceed the tax induced utility loss of course the extent of individuals losses will depend on their circumstances and how revenues are raised the tax structure traditional tax incidence and excess burden analyses and models of political costs associated with the tax structure hettich and winer 1984 1988 each provide guidance on the extent to which different individuals may be expected to suffer and vote differently under alternative tax structures much will depend on attitudes towards and perceptions of specific taxes especially personal income taxes and consumption taxes underlying most such analyses are two common presumptions i tax preferences are dictated by self interest and ii individuals accurately assess their tax liabilities and so make informed choices two largely independent areas of literature have challenged these assumptions first models incorporating altruism

demand for local public spending evidence from the british social attitudes survey the british social attitudes survey bsas is a uk wide survey that provides a rich source of information on individuals attitudes to a variety of topics including locally provided service in this paper we seek to model answers to questions on attitudes to local authority spending which invite the expression of a private demand for local public spending a convincing picture has emerged of locally provided public goods as imperfectly congested public goods with a price elastic and probably income inelastic demand the view that central government grants may induce voter confusion over tax prices of public services also finds support

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

on decomposing the wage gap a critical comment on blinder s method many studies have found that the impact of schooling on earnings is greater for females than for males despite the fact that females tend to earn less both absolutely and controlling for personal characteristics this study investigates possible

political reputations and campaign promises we analyze conditions under which candidates reputations may affect voters beliefs over what policy will be implemented by the winning candidate of an election we develop a model of repeated elections with complete information in which candidates are purely ideological we analyze an equilibrium in which voters strategies involve a credible threat to punish candidates who renege on their campaign promises and in which all campaign promises are believed by voters and honored by candidates we characterize the maximal credible campaign promises and find that the degree to which promises are credible in equilibrium is an increasing function of the value of a candidate s reputation jel d8

political parties and political shirking using ada roll call voting scores for the 1947 2006 period i find that senators shirk in their last term the degree of shirking is limited by political parties which constrain the politician in his last term and varies by post senate career choices the results highlight the importance of political parties in the repeated game that is electoral politics

congestion function specification and the publicness of local public goods abstract this paper is about the measurement of congestion within the median voter demand framework the model of congestion traditionally used in the literature and four others are compared and tested in a median voter framework the results show that a more flexible functional form which imposes fewer a priori restrictions on the data does at least as good a job of explaining variations in local government expenditures furthermore it is shown that measured publicness of local public goods depends entirely on the a priori restrictions imposed on the congestion function

testing limits to policy reversal evidence from indian privatizations abstract we examine the effect of regime change on privatization in the 2004 indian election the pro reform bjp was unexpectedly defeated by a less reformist coalition stock prices of government controlled companies that had been slated for privatization by the bjp dropped 3 5 relative to private firms government controlled companies that were under study for possible privatization fell 7 5 relative to private firms this is consistent with investor belief of a point of no return where advanced reforms are more difficult to reverse further analysis suggests that layoffs combined with the privatization announcement served as a credible commitment to privatize

on the measurement of congestion in the provision of local public goods abstract this paper contends that a measurement problem the zoo effect has led to upwardly biased estimates of the degree to which local public goods are subject to congestion the suggestion is that the observed positive correlation between public expenditure and population size reflects in large measure the wider range of services provided in more populous jurisdictions not simply a high propensity of these goods to become congested

fiscal illusion and political accountability theory and evidence from two local tax regimes in britain local tax reform in britain in 1993 reinstating a propertytax may have reversed some intended fiscal illusion reducing and accountability improving features of the poll tax itself a reform introduced in 1990 with the specific aim ofpromoting accountability we formalize these features withina median voter model of the demand for local publicexpenditure that distinguishes between accountability andfiscal illusion effects the model shows that a prioriaccountability effects on expenditures are ambiguous available data for england and wales are used to test themodel we find strong evidence of grant illusion the flypapereffect similar across tax regimes with evidence of renterillusion and of less accountability under the property tax the degree of local income inequality appears to affectexpenditure levels only with the property tax

an overlapping generations model of electoral competition this paper presents a dynamic model of political competition between two parties with different policy preferences a party is explicitly modeled as a sequence of overlapping generations of candidates all of whom face finite decision horizons in general there is a conflict between the interests of the individual policymakers and those of the party which includes subsequent generations of candidates we characterize this conflict and suggest a scheme of intergenerational transfers within the party which can resolve or mitigate this conflict the paper shows how the overlapping generations model can be usefully applied to the political arena this abstract was borrowed from another version of this item

credibility and policy convergence in a two party system with rational voters the traditional approach to modeling political parties behavior based upon the contribution of anthony downs 1957 assumes that the parties unique objective is to win elections thus they maximize their popularity the crucial implication of this assumption for a two party system is that if the two parties have the same information about voters preferences full convergence of policies results from electoral competition this is the crucial implication of the median voter theorem more generally it may be argued that different parties are motivated differently because they represent different constituencies parties may not care only about winning elections per se but also about the quality of the policies resulting from an election in this case the candidates of the two parties view winning an election not only as a goal per se but also as a means of implementing a better policy for their respective constituencies this paper shows that electoral competitions imply dynamic inconsistency if the voters are modeled as rational and forwardlooking agents and parties do not care exclusively about being elected but also about which policy to implement once elected the dynamic inconsistency arises as follows the parties have an incentive to announce convergent platforms to increase their chances of election however if the elected party is not committed to its electoral platform it has an incentive to follow its most preferred policy rather than the policy announced in its platform if voters are rational they account for this incentive thus in general in a one shot electoral game the only timeconsistent equilibrium is one in which no convergence is possible the two parties follow their most preferred policies and the voters rationally expect this outcome full convergence of parties platforms results only as a limiting case when the parties are completely indifferent with respect to the quality of the policies resulting from the election thus these results differ from the existing literature on ideologically motivated politicians for instance donald wittman 1977 1983 randall calvert 1985 which implicitly assumes the possibility of binding commitments to electoral platforms complete or partial policy convergence can be the outcome of political competition if the interaction between the parties and the voters is modeled as an infinitely repeated game in fact if the candidates have concave objective functions the welfare maximizing policy rule implies a complete convergence of parties policies however this cooperative and agreed upon policy may or may not be sustainable as a subgame perfect equilibrium depending on parameter values in particular it depends on the discount rates of the two parties the degree of polarization of their preferences and the relative popu graduate school of industrial administration carnegie mellon university pittsburgh pa 15213 and national bureau of economic research cambridge ma 02138 this paper is based upon a chapter of my unpublished doctoral dissertation at harvard university i am greatly indebted to jeffrey sachs for directing my attention toward these issues and for many conversations i also wish to thank andrew abel dilip abreu olivier blanchard ramon caminal andrew caplin alex cukierman morris fiorina benjamin friedman herschel grossman howard rosenthal and the referees for very useful comments the responsibilitv af anv n mtnkieis af calrirp nfnlv mine the result of policy convergence in a two party system is more general than the median voter theorem for discussions of convergence results not at the median see john ledyard 1984 peter coughlin 1984 coughlin and shmuel nitzan 1981 melvin hinich 1977 for earlier work on spatial competition see richard mckelvey 1975 hinich ledyard and peter ordeshook 1972 1973 and the references quoted therein the present paper focuses on the result of convergence rather than on the median voter theorem per se

incomplete information and ideological explanations of platform divergence one of the paradoxes of formal spatial voting models is the robustness of the theoretical result that candidates will converge toward centrists positions and the empirical observation of persistent policy divergence of candidates a solution is that candidates are ideological have policy preferences when candidates have policy preferences and incomplete information about voter preferences then platform divergence is theoretically predicted experimental tests of the ideological model are presented it is shown that platform divergence is significant when candidates are ideological and have incomplete information about voter preferences however candidate positions are more convergent on average than the theory predicts suggesting that subjects value winning independently of the expected payment

tax price effects on attitudes to hypothecated tax increases abstract perceptions of private benefits from hypothecated tax increases may be more or less correlated with income both because individuals with different incomes have different interests in expanding public services and because they anticipate bearing different shares of the implied tax burden we report on analysis of cross sectional data from the united kingdom in which respondents have been randomly allocated to different but precisely specified tax instruments in a way which should allow separation of the two effects we estimate perceptions of tax costs and attitudes to tax increases jointly finding little evidence of any effect from tax prices on perceptions of private benefits from increased public spending this renders implausible the suggestion that the weak income correlations in this data might be arising from offsetting income and price effects nonetheless the special features of the data allow us to show perceptions of tax increases are correlated with both observed and unobserved influences on demand in a way which has the potential to generate serious biases in demand estimates if ignored

discrimination and detailed decomposition in a logit model abstract the paper suggests how to use the logit model to decompose the gender difference in the probability of an occurrence the technique is illustrated by an analysis of formal sector employment in urban zambia

dormancy as a strategic response to detrimental public policy organizations in democratic societies often encounter detrimental public policies that are later reversed through rather predictable political cycles the standard organizational responses to detrimental public policies examined in the literature include exiting the market altogether attempting to change the public policy through various political strategies or passively complying with the policy however these responses might not be suitable when a detrimental policy is likely to be reversed in this paper i consider organizational dormancy which entails a temporary reduction in an organization s level of activity as a viable alternative response i propose that some organizations might be able to undergo a period of strategic inactivity in response to the onset of a detrimental public policy and maintain this inactivity until a favorable public policy returns i also propose that such dormancy is rewarded when the favorable policy returns an investigation of a panel of private commercial banks in the indian banking industry from 1981 to 2004 lends support to this proposal

the politics of persuasion when voters are rational a democratic society is considered where the voters but not the politicians are uncertain about how the economy works the parties therefore have a strategic motive to misinform the voters will the voters learn how the economy works and will the policy decisions be efficient it turns out that the degree of polarization of the political parties is crucial if the parties are very polarized voters will not trust the parties and the policy will not reflect how the economy actually works whereas the opposite is true if the parties are less polarized

union certification success under voting versus card check procedures evidence from british columbia 1978 1998 the author estimates the impact of compulsory election laws on certification success using data on over 6 500 private sector certifications from british columbia over the years 1978 98 a unique quasi experimental design is used by exploiting two changes in the union recognition law first in 1984 the introduction of mandatory elections and second in 1993 the repeal of elections and their replacement by the original card check procedure the author also estimates the effectiveness of management opposition tactics across union recognition regimes success rates declined by an average of 19 percentage points during the voting regime and then increased by about the same amount when card checks were re instituted the results indicate that the mandatory election law can account for virtually the entire decline in addition the findings suggest that management opposition was twice as effective under elections as under card checks

special interest groups and the allocation of public funds i propose a fully rational model of government contracting that explains differences in local government spending from grants and other income in this model violations of fungibility arise from dynamic interactions between politicians and interest groups with the ability to raise funds for the local government the predictions of the model are tested by exploiting unique features of windfalls received by states under a settlement with the tobacco industry although windfalls are legally unrestricted the median state increased spending on tobacco control programs from zero to 2 30 per capita upon receipt of funds the marginal propensity to spend on such programs is 0 20 from settlement revenue and zero from overall income states which were not involved in the settlement lawsuits spend less these results cannot be explained by existing models in the literature

democracy as an equilibrium observation shows that while democracy is fragile in poor countries it is impregnable in developed ones to explain this pattern i develop a model in which political parties propose redistributions of incomes observe the result of an election and decide whether to comply with the outcome or to launch a struggle for dictatorship democracy prevails in developed societies because too much is at stake in turning against it more income can be redistributed in developed than in poor countries without threatening democracy limits on redistribution arise endogenously so that constitutions are not necessary for democracy to endure a democratic culture characterizes the equilibrium

interest groups and the electoral control of politicians abstract we develop a model of interest group influence in the presence of repeated electoral competition in each period of the game an interest group attempts to buy an incumbent s policy choice and a voter chooses whether to replace the incumbent with an unknown challenger the voter faces a tension between retaining good politician types and rewarding past performance the model predicts that above average incumbents face little discipline but others are disciplined increasingly and re elected at a higher rate as the interest group becomes more extreme extensions of the model consider term limits long lived groups and multiple groups

public goods an exercise in calibration this paper considers a measure of the publicness of goods and services implicit in responses that individuals make when asked about public sector spending at the limit all consumers consume equal amounts of a public good thus any differences between an individual s self interest preferences and public interest preferences cannot be based on differential provision but only on differences in the individual s public and self interest utility functions if we rule out the latter self interest and public interest preferences for a pure public good are identical using sample survey data it is possible to calibrate the public good content of different public goods

partisan conflicts and parliamentary dominance the norwegian political business cycle this is the author s final accepted and refereed manuscript to the article the final publication is available at www springerlink com

a theory of self fulfilling political expectations abstract in their pursuit of being re elected politicians might not choose high quality policies but just conform to popular wisdom the larger are the office spoils and the more precise is an incumbent s knowledge of voter opinion the more likely that she will resort to such populism my main result is that the public s trust or distrust in politicians behavior may be self fulfilling when voters assess the quality of an incumbent politician they will compare her policy choices with their own prior opinion if voters think that the incumbent was just trying to conform a failure to do so will be even more damaging for the incumbent s election chances however this only increases the incumbent s incentives to conform which indeed confirm voters skepticism loosely put a skeptic voter attitude tends to generate conformist politicians while a trusting attitude tends to generate confident ones

incumbent performance and electoral control in the pure theory of electoral competition citizens compare the platforms of the candidates and vote for the one whose platform is preferred candidate strategies are identified with promises about future performance in office models of this sort have been developed in both static mckelvey 1975 and dynamic kramer 1977 i settings and all appear to have the property that if the set of alternatives is large enough in some sense equilibrium platforms rarely exist but these models have another feature that is quite as disturbing as their instability in the static setting discussed by mckelvey little attention is paid to the possibility that once in office the politician s preferences may diverge from those of his constituents and that he may therefore choose policies at variance from his platform instead it is simply assumed that promises will be kept whether or not such behavior is congruent with the interest of the officeholder it is sometimes argued that an enforcement mechanism may exist to discipline politicians for failing to keep promises but without a specification of the mechanism it is not obvious that it would be in the interests of the

political business cycles and central bank independence this paper develops a dynamic model of rational partisan business cycles in which wage contracts overlap elections and wage setters have to make a prediction about the election result empirical analysis of 20 oecd countries supports the theoretical implication that left wing incumbents increase output but increased expectation of a left wing regime reduces it the model is extended to incorporate the effects of alternative measures of central bank independence cbi the measure of objective independence outperforms the other measures and it is found that cbi reduces politically induced business cycles

fiscal incidence at the local level this paper represents an attempt to make aaron and mcguire s 1 approach to incidence operational 2 the tax paid by any individual is interpreted by aaron and mcguire as the sum of two components the first is a lindahl tax equal to the individual s marginal rate of substitution between the public good and income times the amount of the public good provided the second component is a negative or positive transfer equal to the lindahl tax minus the tax the individual has actually paid this second component is used to measure the incidence or redistributional impact of a particular budget program empirically aaron and mcguire found that the computation of lindahl taxes is highly sensitive to the choice of individual utility functions under certain assumptions that sensitivity is reflected in the value of a coefficient related to the marginal rate of substitution between the public good and income maital 16 later on used three separate identical estimates of this coefficient to reduce the ambiguity in the computation of lindahl taxes this paper offers an alternative computational approach to aaron and mcguire s the key information on lindahl tax prices or marginal rates of substitution is obtained from individual demand curves for public goods which are estimated using the median voter model see 5 an advantage of this approach over aaron and mcguire s is that it does not assume separability of the public good and income in taxpayers preferences the present approach also permits the study of the incidence of a budget policy on groups defined by socio demographic characteristics other than income on the other hand and because of empirical reasons which will become apparent below the present approach is useful for the study of incidence at the local level only section 1 of the paper restates the measure for the simultaneous incidence of taxes and one public good henceforth called fiscal incidence in the context of a formalized political process this section also discusses some of the theoretical difficulties involved in extending the case with one public good to the multi

optimal districting with endogenous party platforms representation is one of the most important criteria by which to judge electoral systems in this paper i focus on one aspect of representative democracy the formation of electoral district boundaries it is well known that majoritarian systems give rise to highly biased seat vote curves causing representation to be less than ideal what should therefore be the optimal constituency design when the objective is to maximize voters welfare i show that when parties take account of districting while setting platforms then the district design problem reduces to a very simple rule do nothing when voters are risk neutral and when voters are risk averse choose a bias that is against the largest partisan group calibrating the model on data of the u s state legislative elections during the 1990s i show that the welfare gain due to optimal districting is very small

political parties and the business cycle in the united states 1948 1984 this paper tests the existence and the extent of a politically induced business cycle in the u s in the post world war ii period the cycle described in this paper is different from the traditional political business cycle of nordhaus it is based on a systematic difference between the monetary policies of the two parties in a model with labor contracts from an explicit optimization problem we derive a system of equations for output and money growth then we successfully test the non linear restriction imposed by the theory on the parameters of the system of equations we cannot reject the hypothesis that money growth has been systematically different under the two types of administration and that this difference contributes to explain output fluctuations

public choice perspectives on the poll tax the community charge which was introduced to england and wales on i april i990 is part of a reform of local government finance with the avowed intention of enhancing local accountability by creating a direct link between local expenditure local taxation and local voting this paper applies public choice theories to evaluate both the economics of its introduction and the responses of the public to the charge in its initial months section ii reviews the main public choice rationale for the community charge and relates accountability to efficient resource allocation section iii examines evidence on voter awareness and fiscal illusion in order to consider whether the replacement of domestic rates by this tax will increase local accountability the stance taken in sections ii and iii is one in which the conservative government is privy to the messages of public choice theory and acts as if to further the public interest by eliciting the correct responses to slay the local government leviathan however any government may have interests other than and divergent with those of the public and this will introduce distortions even in the implementation of public choice prescriptions this point is developed in section iv to offer one explanation of the recent history of the community charge

media as watchdogs the role of news media in electoral competition abstract we develop an equilibrium model to analyze the role of the media in electoral competition when policy payoffs are state dependent party policies do not converge to the median voter s ideal policy if the media report only party policies news analysis about the state though possibly biased can discipline off equilibrium deviations and make the parties adopt more centrist policies since voters are rational the party favored by the media need not win with a higher probability instead media bias may reduce the effectiveness of electoral competition and lead to more polarized policies

inter country differences in voter satisfaction with the democratic process a study of world elections using data from the comparative study of electoral systems this paper examines differences between west and east european countries in their levels of satisfaction with the way democracy works compared to east european countries satisfaction levels were considerably higher in western countries west europe north america and oceania moreover there was considerably greater inequality in the distribution of satisfaction in east european compared to western countries when these facts were combined to construct equity sensitive satisfaction averages the gap between western countries and east european countries was even greater than suggested by a comparison of average satisfaction levels this raised the question of why satisfaction levels varied so markedly between these two sets of countries a logit model suggested that a number of factors were important for determining whether people were satisfied with the way democracy worked in their countries while there was a difference between western countries and east european countries in their endowments of these satisfaction inducing factors income gender participation education among others when the equations were estimated separately for the western countries and east european countries the coefficient responses associated with several of these factors also differed markedly between the two groups

is there a dead spot new evidence on fomc decisions before elections using new data that chronicle the fed s internal forecast of the output gap from 1973 to 1998 this paper tests for an electoral cycle in the decisions of the federal open market committee fomc the paper provides evidence of a dead spot in the committee s decisions before presidential elections for given values of these internal forecasts the fomc is less likely to decide to tighten monetary policy in the year preceding a presidential election than at other times

signaling character in electoral competition we study a one dimensional hotelling downs model of electoral competition with the following innovation a fraction of candidates have character and are exogenously committed to a campaign platform this is unobservable to voters character is desirable and a voter s utility is a convex combination of standard policy preferences and her assessment of a candidate s character this structure induces a signaling game between strategic candidates and voters since a policy platform affects voters utilities not only directly but also indirectly through inferences about a candidate s character the model generates a number of predictions starting with a failure of the median voter theorem jel d72 d82

tiebout bias and the demand for local public schooling institute of university of ii business and california economic research berkeley center for real estate and urban economics working paper series working paper 86 109 tiebout bias and the demand for local public schooling by daniel l rubinfeld perry shipiro judith roberts these papers are preliminary in nature th urpose 39 to stimulate 39 ussion comment therefore they are not t cited or quoted 39 ny p ation wit express permissio the author graduate school of business administration

the impact of congestion on local public good production abstract this paper models local public goods production where allocation of the publicly provided input occurs simultaneously with production of the final service output the framework models local public goods as developed in club theory where congestion is an increasing function of population central to identification of the model is that the quantities of the input police are differentiated from the produced output safety estimation is across neighborhoods within a single city the results show there is a very low elasticity of congestion on average but safety in some neighborhoods in more congested than private goods

a need for speed rural internet connectivity and the no access dial up high speed decision as residential high speed internet access has become more prevalent the nature of the rural urban digital divide in access has shifted in 2000 dial up access rates in rural households lagged behind their urban counterparts by 11 percentage points by 2003 however dial up access rates were equal in rural and urban areas but high speed access rates were 14 percentage points higher in urban areas this article uses a nested logit model to explore the household decision between no internet access dial up access and high speed access a decomposition technique is then used to estimate the contributions of various factors including education income and infrastructure levels to differences in internet access among rural and urban households the results suggest that policies which solely promote infrastructure in rural areas fail to address the dominant factors in the emerging high speed digital divide

loss aversion in politics we study how loss aversion affects the political equilibrium in a simple majority voting model first we show a status quo bias which leads to path dependence second loss aversion implies a moderating effect on the most extreme voters third in a dynamic setting the effect of loss aversion diminishes with the length of the planning horizon of voters however in the presence of a projection bias majorities are partially unable to understand how fast they will adapt to a new policy this makes changes less likely and induces time inconsistency policy changes are timid at the beginning while in later periods they are made progressively more radical fourth in a stochastic environment loss aversion yields a significant distaste for risk but also a smaller attachment to the status quo the application of these results to a model of redistribution leads to empirically plausible implications

candidates credibility and re election incentives i study elections between citizen candidates who cannot make binding policy commitments before taking office but who are accountable to voters due to the possibility of re election in each period a representative voter chooses among heterogeneous candidates with known policy preferences the elected candidate chooses the policy to implement and how much rent seeking to engage in when in office as the voter decides both which candidate to elect and subsequently whether the candidate is retained this framework integrates elements of electoral competition and electoral accountability i show that in the best stationary equilibrium when utility functions are concave over policy non median candidates are elected over candidates with policy preferences more closely aligned with the voter in this equilibrium there are two candidates who are elected at some history and the policies these candidates implement in office do not converge this divergence incentivizes candidates to engage in less rent seeking increasing voter welfare copyright 2013 oxford university press

plant size and the decline of unionism abstract declining plant size is shown to explain a significant portion of the recent decline in unionism particularly in manufacturing the paper also shows how to use the probit model to decompose the change in unionism into explained and unexplained components

political rents and voter information in search equilibrium abstract political parties committed to grab rents may run for election and even win if citizens are uninformed but how is the political equilibrium affected if citizens can mitigate this information problem through costly information search we propose a political equilibrium theory with endogenous information search and turnout we show that i the political equilibrium generates political uncertainty characterized by a distribution of rent policies i i the expectation of this rent distribution is inversely u shaped in the information search cost i i i turnout is lower and rents are higher the more proportional is the electoral system

do voters affect or elect policies evidence from the u s house there are two fundamentally different views of the role of elections in policy formation in one view voters can affect candidates policy choices competition for votes induces politicians to move toward the center in this view elections have the effect of bringing about some degree of policy compromise in the alternative view voters merely elect policies politicians cannot make credible promises to moderate their policies and elections are merely a means to decide which one of two opposing policy views will be implemented we assess which of these contrasting perspectives is more empirically relevant for the u s house focusing on elections decided by a narrow margin allows us to generate quasi experimental estimates of the impact of a randomized change in electoral strength on subsequent representatives roll call voting records we find that voters merely elect policies the degree of electoral strength has no effect on a legislator s voting behavior for example a large exogenous increase in electoral strength for the democratic party in a district does not result in shifting both parties nominees to the left politicians inability to credibly commit to a compromise appears to dominate any competition induced convergence in policy

why is poverty so high among afro brazilians a decomposition analysis of the racial poverty gap this study aimed to identify the major factors underlying the large discrepancy in poverty levels between two brazilian racial groups whites and afro brazilians we performed an oaxaca blinder type decomposition for nonlinear regressions in order to quantify the extent to which differences in observed geographic sociodemographic and labor characteristics characteristics effect account for this difference the remaining unexplained part coefficients effect provides evidence on how these characteristics differentially impact on the risk of poverty in each group a detailed decomposition of both effects allows the individual contribution of each characteristic to be determined our results show that the characteristics effect explains a large part of the discrepancy in poverty levels with education and labor variables of household members explaining at least one half of the effect and geographic and demographic variables accounting for the remainder however the unexplained part that remains significant has increased in importance in recent last years and probably results from unequal access to high quality education and the persistence of discrimination against colored workers in the labor market