equal votes equal money court ordered redistricting and the distribution ofpublic expenditures in the american states a study of the effects of legislative re districting in the states during the 1960 s also contains data file

performance comparisons and dynamic incentives it is well known that comparative performance information cpi can enhance efficiency in static principal agent relationships by improving the trade off between insurance and incentives in the design of explicit contracts in dynamic settings however there may be implicit as well as explicit incentives for example managerial career concerns and the ratchet effect in regulation we show that the dynamic effects of cpi on implicit incentives can either reinforce or oppose the familiar static insurance effect and in either case can be more important for efficiency the overall welfare effects of cpi are thus ambiguous and can be characterized in terms of the underlying information structure

voters as fiscal conservatives voters penalize federal and state spending growth this is the central result of my analysis of voting behavior in presidential senatorial and gubernatorial elections from 1950 1988 the composition of federal spending growth seems irrelevant the vote loss to the president s party from an extra dollar of defense or nondefense spending is the same however in gubernatorial elections expansion of state welfare spending exacts a disproportionate political price deficit financing of federal or state spending does not appear to matter politically i conclude by discussing the obvious question of why government budgets have grown in the face of this voter hostility

on home grown ness in politics evidence from the 1998 election for alabama s third congressional district faith and tollison 1983 argue that since itis costly to fire a representative for poor performance voters will rationally prefer local candidates withlongstanding ties to the district such candidates implicitlyput more specific human or other types of capital at risk as aklein and leffler 1981 type of performance bond than doother candidates with lesser ties to the district votersunderstand and appreciate the implied efficiency of castingtheir ballots in favor of someone who has a lot to loselocally from nonperformance as their representative usingprecinct level data from the 1998 election for the thirdcongressional district in alabama we find compelling evidencein support of home grown ness in politics

a political economy theory of partial decentralization we revisit the classic problem of tax competition in the context of federal nations and derive a positive theory of partial decentralization a capital poor median voter chooses to use redistributive capital taxes to provide public goods the expectation of high capital taxes however results in a small capital stock which lowers returns to redistribution the median voter therefore wants to commit to a lower level of capital taxes she does so by setting a partial degree of decentralization in the constitution the equilibrium degree of decentralization balances the positive effect of tax competition on capital taxes with the loss in redistribution that results we show that the degree of decentralization is nonmonotonic in inequality increasing in the redistributive efficiency of public good provision and decreasing in capital productivity when public goods are heterogeneous in their capacity to transfer funds all voters agree that goods with high redistributive capacity should be decentralized

taxation and presidential approval separate effects from tax burden and tax structure turbulence previous research has established that taxation may impose significant electoral costs on politicians this literature however focuses exclusively on the effect of the tax burden in this paper we test the hypothesis that both the level of the tax burden and the change in the tax structure affect the us president s approval ratings over the 1959 2006 period our results support this proposition specifically we find a negative impact from the magnitudes of the tax burden and the deficit as well as from changes in the tax structure on presidential approval ratings

mps for sale returns to office in postwar british politics many recent studies show that firms profit from connections to influential politicians but less is known about how much politicians financially benefit from wielding political influence we estimate the returns to serving in parliament using original data on the estates of recently deceased british politicians applying both matching and a regression discontinuity design to compare members of parliament mps with parliamentary candidates who narrowly lost we find that serving in office almost doubled the wealth of conservative mps but had no discernible financial benefits for labour mps conservative mps profited from office largely through lucrative outside employment they acquired as a result of their political positions we show that gaining a seat in parliament more than tripled the probability that a conservative politician would later serve as a director of a publicly traded firm enough to account for a sizable portion of the wealth differential we suggest that labour mps did not profit from office largely because trade unions collectively exerted sufficient control over the party and its mps to prevent members from selling their services to other clients

the vp function a survey of the literature on vote and popularity functions after 25 years vp functions explain the support for the government at votes and polls by economic and political variables most studies analyze macro time series we also cover studies of individual voters socio economic groups and regional cross sections the theory starts from the responsibil ity hypothesis voters hold the government responsible for economic conditions it works in two party block systems but not else voters in most countries are found to be sociotropic egotropic voting also occurs voters myopia is well established voting is retrospective as expectations are static it costs the average government almost 2 of the vote to rule

divided government fiscal institutions and budget deficits evidence from the states does partisan control of american state government have systematic effects on state spending and taxing levels does divided control affect the government s ability to make hard decisions do institutional rules like legal deficit carryover restrictions matter using a formal model of fiscal policy to guide empirical analysis of data covering the american states from 1968 to 1987 we conclude that 1 aggregate state budget totals are driven by different factors under democrats and republicans the net result being that democrats target spending and taxes to higher shares of state level personal income 2 divided government is less able to react to revenue shocks that lead to budget deficits particularly where different parties control each chamber of the legislature and 3 unified party governments with restricted ability to carry deficits into the next fiscal year outside the south have sharper reactions to negative revenue shocks than those without restrictions

the effects of industry structure on economic exposure abstract a firm is subject to economic exposure if changes in exchange rates affect the firm s value as measured by the present value of its future cash flows this paper shows that in many forms of competition including the most commonly studied case of monopoly the economic exposure of an exporting firm is simply proportional to the firm s net revenues based in foreign currency this simple result breaks down under some but not all forms of competition between the exporting firm and foreign firms in that case the exporting firm needs to know about the price elasticity of its product demand and its marginal cost in order to assess its exposure to exchange rates the key determinant of economic exposure therefore is the competitive structure of the industry in which a firm operates

intergovernmental political competition in american federalism many policies in the united states are jointly determined by federal and state actions in the game theoretic model offered here politicians in both the state and national governments seek credit for providing goods desired by the public and avoid blame for the taxes necessary to provide the goods in line with peterson s 1995 theory of functional federalism the level of government that is better able to supply particular goods and services tends to take the lead in their provision even to the extent of fully crowding out much less efficient governments however under a broad set of circumstances both state and national politicians seek credit via public spending and their joint provision leads to a relative oversupply of public goods and services and thus to overtaxation under joint provision states vary in their responses to changing federal spending patterns based both on the causes of the national changes and on state characteristics

old voters new voters and the personal vote using redistricting to estimate the incumbency advantage we provide new estimates of the size of the personal vote in u s house elections from 1872 to 1990 we take advantage of the natural experiment that attends decennial redistricting every ten years most incumbents are given new districts that contain a combination of old and new territory by contrasting an incombent s vote in the new part of the district with his or her vote in the old part of the district we can estimate the magnitude of the personal vote the vote that the incumbent receives because he or she represented the voters in the past our estimates confirm prior work that shows that a large fraction of the incumbency advantage owes to the personal vote as opposed to challenger quality unlike past research we are able to estimate the relationship between district partisanship and the personal vote we find a significant interaction which shows that incumbents develop larger personal votes in areas where they are electorally most vulnerable here is no doubt that incumbents today have a substantial advantage over nonincumbents in u s house elections the overall size of this advantage has been fairly well established as has the fact that incumbents electoral strength has increased dramatically over the postwar period measured in terms of vote share the overall incumbency advantage grew from a modest 1 3 percentage point edge in the 1940s and early 1950s to a 7 10 percentage point edge in the 1980s and early 1990s 1 there is much less agreement about the sources of the incumbency advantage and the causes of its growth congressional scholars have identified a variety of factors that may be responsible which can be grouped into three broad categories the first and the focus of this paper is electoral advantage that stems from a legislator s homestyle members of the house are reputedly very responsive to their constituents in turn their constituents reward them with their votes mayhew 1974b fenno 1974 and others detail the sorts of activities that legislators do to build a widely known and respected name including casework frequent visits to the district position taking on issues and securing federal benefits a second source of the incumbency advantage is candidate quality incumbents may win because they are the best candidates running and they do noticeably worse when they face state legislators and other experienced challengers finally incumbency may simply act as a voting cue a label which voters rely on because party has become less relevant assessing the importance of these different factors has significant implications for our normative evaluations of the modern congress and our understanding

a state space forecasting approach to optimal intertemporal cross hedging cross commodity hedging between fishmeal and soybean meal is investigated the approach uses successively updated out of sample forecasts to approximate subjective price expectations and forecast error variance covariance matrices to measure risk forecasts are generated by state space models of vector valued time series in a stationary environment uncertainty reduces to the difference between the historical autocovariance of the random process and the variance covariance of out of sample forecasts results indicate that weakly risk averse agents can increase average marketing returns within acceptable risk levels by combining information from price forecasting models with an appropriate hedging strategy

econometrics and presidential elections this paper discusses an econometric equation that explains votes for president as a function of economic events and incumbency information the history of the equation is reviewed the update after the 1992 election is discussed and a prediction for the 1996 election is made conditional on an economic forecast

decentralisation as an incentive scheme recent changes have introduced more decentralization in a number of traditionally centralized countries 1 in the case of france it is sometimes claimed that the 1982 1983 reform of subcentral government is of historical importance although the principles of that reform are not contested any more by the new majority elected in 1986 opinions still differ on a number of policy issues some of the issues are presented in this introductory section but the main purpose of this paper is not to expose or discuss in detail the problems of decentralization in france as argued in the second part of the introductory section the theoretical framework in which the policy issues of decentralization are usually discussed by economists is somewhat unsatisfactory in particular when applied to unitary states such as britain or france the bulk of the paper is devoted to the exploration of a different approach to decentralization it is not purported however that this approach could completely replace the more traditional one consequently when in the concluding section we return briefly to the policy issues identified here this is to be read as a preliminary attempt to evaluate the relevance of the reasoning developed in the paper

economic voting and multilevel governance a comparative individual level analysis an important component of incumbent support is the reward punishment calculus of economic voting previous work has shown that clarity of responsibility within the central state government conditions national economic effects on incumbent vote choice where clarity is high low economic effects are greater less this article advances the clarity of responsibility argument by considering the effect of multilevel governance on economic voting in institutional contexts of multilevel governance the process of correctly assigning responsibility for economic outcomes can be difficult this article tests the proposition that multilevel governance mutes effects of national economic conditions by undermining responsibility linkages to the national government individual level data from the comparative study of electoral systems module 1 are used to test this proposition results demonstrate that economic voting is weakest in countries where multilevel governance is most prominent findings are discussed in light of the contribution to the economic voting literature and the potential implications of multilevel governance

accountability and decentralisation in government an incomplete contracts model this paper approaches the question of the appropriate level of decentralisation of power in government as a problem in the allocation of control rights under incomplete contracts the model of the paper compares allocations of power to local central and regional government as alternative means of motivating governments to act in the interests of citizens centralisation allows benefits from policy coordination but has costs in terms of diminished accountability which can be precisely defined as the reduced probability that the welfare of a given region can determine the re election of the government the model is extended to allow for conflicts of interest within regions and externalities between central and local governments in a federation it is also applied to determining levels of fiscal transfer between localities and to circumstances where governments may act as leviathans appropriating resources for their own use

it s the economy and then some modeling the presidential vote with state panel data using data for the 50 us states for presidential elections from 1972 to 2004 two theories for determining state voting outcomes are considered jointly the economy matters and home grown ness theories fixed effects regressions show that measures of the economy matters real income unemployment and a proxy for inflation have the predicted effects on state voting patterns for presidential elections the home grown theory receives mixed support there is weak evidence that incumbent party candidates garner greater support in their home states there is strong support however for the proposition that incumbent party candidates fare worse in the home state of rival party candidates

party cues in elections under multilevel governance theory and evidence from us states this is the authors accepted refereed and final manuscript to the article the final publication is available at www elsevier com

the role of political parties an analysis based on transaction costs this paper explores the proposition that political parties reduce the transaction costs of electoral participation political parties provide a low cost signal of a candidate s policies and personal characteristics and in this way reduce voters information costs with reference to transaction cost economics political parties offer an implicit contract between voters and politicians and thereby reduce the scope for opportunism by politicians this impact on transaction costs is important in any evaluation of public policy towards political parties

parties as political intermediaries this paper argues that parties regulate competition among like minded factions so as to enhance reputation building by and voter trust in the politicians standing for a given cause while intra and interparty competition contributes to keeping politicians on their toes unbridled competition may encourage politicians to challenge good platforms and to wage competition along socially suboptimal dimensions for example by privileging form over content the paper builds a simple model of intraparty competition and studies whether various hierarchical or democratic party institutions constitute an efe cient form of party governance the paper shows that intraparty disagreements when they occur hurt the party s position in the general election but that their possibility enhances party image and that parties must be able to avoid behind the scene allocations of portfolios and spoils in order to be credible last it analyzes the impact of political polarization and interparty competition on the choice of party governance

using multimember district elections to estimate the sources of the incumbency advantage in this article we use a novel research design that exploits unique features of multimember districts to estimate and decompose the incumbency advantage in state legislative elections like some existing related studies we also use repeated observations on the same candidates to account for unobserved factors that remain constant across observations multimember districts have the additional feature of copartisans competing for multiple seats within the same district this allows us to identify both the direct office holder benefits and the incumbent quality advantage over nonincumbent candidates from the same party we find that the overall incumbency advantage is of similar magnitude as that found in previous studies we attribute approximately half of this advantage to incumbents quality advantage over open seat candidates and the remainder to direct office holder benefits however we also find some evidence that direct office holder benefits are larger in competitive districts than in safe districts and in states with relatively large legislative budgets per capita