fighting with one hand tied behind the back political budget cycles in the west german states theories of political budget cycles have been contested because scholars find that incumbents can manipulate deficits in the pre election period only if fiscal transparency is low i argue that these findings do not generally rule out the possibility of fiscal electioneering governments may increase spending on highly visible policies the composition of the budget serves as a second best strategy it increases political support without straining the budget balance an empirical analysis of the west german states reveals alternative electoral budget strategies and ultimately point to the importance of analyzing how governments choose between alternative fiscal instruments

political cycles and economic performance in oecd countries empirical evidence from 1951 2006 this paper examines whether electoral motives and government ideology influence short term economic performance i employ data on annual gdp growth in 21 oecd countries over the 1951 2006 period and provide a battery of empirical tests in countries with two party systems gdp growth is boosted before elections and under leftwing governments in the first two years of a legislative period these findings indicate that political cycles are more prevalent in two party systems because voters can clearly punish or reward political parties for governmental performance my findings imply that we need more elaborate theories of how government ideology and electoral motives influence short term economic performance

political cycles in oecd economies this paper studies whether the dynamic behaviour of gnp growth unemployment and inflation is systematically affected by the timing of elections and of changes of governments the sample include the last three decades in 18 oecd economies we explicitly test the implication of several models of political cycles both of the opportunistic and of the partisan type also we confront the implication of recent rational models with more traditional approaches our results can be summarized as follows a the political business cycle hypothesis as formulated in nordhaus 1975 on output and unemployment is generally rejected by the data b inflation tends to increase immediately after elections perhaps as a result of pre electoral expansionary monetary and fiscal policies c we find evidence of temporary partisan differences in output and unemployment and of long run partisan differences in the inflation rate as implied by the rational partisan theory by alesina 1987 d we find virtually no evidence of permanent partisan differences in output growth and unemployment

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

do parties matter estimating the effect of political power in multi party systems abstract when there are more than two parties policy outcomes are typically the result of a bargaining process we investigate whether changes in political power for various parties have an effect on tax policies we use an instrumental variable approach where close elections provide the exogenous variation in our variable of interest voting power in order to isolate close elections in a proportional election system we develop a new simulation algorithm using data from german municipalities in the state of bavaria our estimation results suggest that political power does matter for policies somewhat surprisingly the center left party spd is found to lower all three locally controlled taxes whereas the greens increase both property taxes considerably these results remain robust across a range of specifications our partisan effect for the spd is also confirmed by a simple regression discontinuity estimation using mayoral elections

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

reading the wind how middle managers assess the context for selling issues to top managers issue selling is an important mechanism for creating change initiatives in organizations this paper presents two studies that examine what middle managers think about as they decide whether or not to sell strategic issues to top management in study 1 middle managers identify themes that indicate a favorable or unfavorable context for issue selling top management s willingness to listen and a supportive culture were the most often named contributors to context favorability while fear of negative consequences downsizing conditions and uncertainty were thought to signal that a context was unfavorable for issue selling study 2 identifies factors that middle managers associate with image risk in the context of issue selling violating norms for issue selling selling in a politically vulnerable way and having a distant relationship with top management were regarded as major contributors to a middle manager s level of image risk both studies enrich our understanding of the social psychological mechanisms that undergird the strategic change process 1997 by john wiley sons ltd

bio cooperation and the benefits of crop genetic resources the case of mexican maize abstract concern for equity and conservation has prompted the creation of bio prospecting contracts for biological resources from less developed countries one potential type of contract is between farmers who provide crop genetic resources and seed companies or agencies that use these resources theoretically bio contracts will reward peasant farmers for preserving genetic resources and balance equities between farmers and seed companies using maize from mexico as a case study this paper concludes that contracting is problematic on both efficacy and equity grounds bio cooperation is presented as an alternative institutional support and licensing agreements that support human capital development are proposed as alternatives

the institutional and psychological foundations of natural resource policies abstractthe pressures of political interests which drive the resource curse are well understood but ordinary citizens are usually cast both as the innocent victims of this process and as the potential solution if only governments could be made more accountable to them this paper draws upon recent developments in social psychology to discuss the formation of mass opinions on two aspects of resource ownership one is the spatial assignment of ownership between local and national claims which has been a significant cause of conflict the other is the assignment of revenues between current consumption and future investment which has usually been excessively biased towards the former i suggest why in the absence of an active government communications policy to offset them known psychological biases may interact with resource discoveries to generate mass opinions which contribute to these problems

soft budget constraints and strategic interactions in subnational borrowing evidence from the german states 1975 2005 abstract cooperative federations are usually characterized by the existence of bailout guarantees and intergovernmental transfer schemes this paper explores whether such features of cooperative federations lead to subnational soft budget constraints using panel data from the german states covering the 1975 2005 period the methodology is based on the premise that subnational governments borrowing will exhibit vertical and horizontal strategic interactions if they operate under soft budget constraints therefore a test for strategic interactions in subnational borrowing can be used to infer whether a cooperative federation like germany is susceptible to soft budget constraints the results suggest that state borrowing in germany exhibited horizontal but not vertical interactions during the time frame of the analysis this indicates i that german states faced soft budget constraints and ii that they were more concerned about the likelihood of a bailout than about its volume

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

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

do fiscal rules dampen the political business cycle this paper develops and tests the theory that fiscal rules limit politicians ability to manipulate the budget for electoral gain using panel data from the american states i find evidence suggesting that stringent balanced budget rules dampen the political business cycle that is while spending rises before and falls after elections in states that can carry deficits into the next fiscal year this pattern does not exist in states with strict no carry rules neither binding gubernatorial term limits nor the partisan composition of government appear to significantly affect the magnitude of the political business cycle

do elections affect the composition of fiscal policy in developed established democracies this paper investigates the impact of elections on the level and composition of fiscal instruments using a sample of 19 high income oecd democracies during the period 1972 1999 we find that elections shift public spending towards current expenditures at the cost of public investment although we find no evidence for an electoral cycle for government deficit and overall expenditures we find a negative effect of elections on revenue attributed to a fall in direct taxation our results apply for predetermined electoral periods while endogenous elections seem to increase deficit and leave the composition of fiscal policy unaffected

political business cycles 40 years after nordhaus the aim of this article is to survey the huge literature that has emerged in the last four decades following nordhaus s rev econ stud 42 2 169 190 1975 publication on political business cycles pbcs i first propose some developments in history of thought to examine the context in which this ground breaking contribution saw the light of the day i also present a simplified version of nordhaus s model to highlight his key results i detail some early critiques of this model and the fields of investigations to which they gave birth i then focus on the institutional context and examine its influence on pbcs the actual research agenda finally i derive some paths for future research

asset specificity and economic organization abstract this paper examines the optimization problem of firm and market organization in which both production cost and transaction cost differences are expressed as a function of asset specificity in general markets enjoy advantages by aggregating the demands of many buyers thereby realizing economies of scale or scope such production cost savings need to be assessed in relation to the transaction cost advantages that internal organization sometimes enjoys over markets in adapting to changed circumstances as it turns out both production cost economies and the transaction cost differences between firm and market organization vary systematically with the characteristics of the investments this paper employs a unified framework to assess the choice of organization form the condition of asset specificity is featured

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

fiscal policy deficits and politics of subnational governments the case of the german laender the first part of the paper briefly describesinstitutional aspects of the german federal system andexamines the economic and fiscal performance of thegerman laender since 1970 taking into account theinstitutional settings especially the fact that thegerman laender cannot set tax rates individually wedevelop a highly stylized model of subnationalgovernments that do not have access to the tax rateinstrument and thus have to use expenditures as apolicy variable the model implies an expendituresmoothing policy of subnational governments andcomplements the famous tax smoothing model theempirical section examines whether governments ofvarious ideology show significant differences infiscal stabilization policy our results indicatethat regional differences in public debt accumulationand public expenditure policy in general is largelydetermined by interregional differences in economicperformance whereas we do not find any significantimpact on the ideological composition of the laendergovernments

an essay on the rationality of economic policy the test case of the electional cycle the literature on electional cycles is discussed in the light of the empirical findings by in particular the author two basically different types of explanations of such cycles are compared explanations based on the maximizing behavior of governments aiming at re election explanations building on the insufficiently controlled pressures of events in a democracy it is demonstrated that even when the most well known theory under the nordhaus macraemodel is a rather fragile construction a more robust argument termed the popularity investment argument can be constructed yielding the same basic result from the empirical literature it is concluded that almost the opposite pattern actually occurs in the data it is finally demonstrated that the weak but significant empirical pattern is easy to explain by the elections generate promises which give most real expansion in the second governmental year and most inflation in the third year an average behavior which hardly implies even medium term maximization by governments as assumed under

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

biocomplexity conceptual challenges for institutional analysis in biodiversity governance abstract institutions for biodiversity governance are located at the interface of human and ecological systems the analysis of such institutions is challenged due to addressing a multitude of complex interactions between these two systems occurring at different natural scales and levels of human organization due to this complexity empirical analysis of biodiversity management often leads to context specific explanations providing little scope for comparative work or the development of more generalised theory based accounts we aim at reducing complexity in understanding human biodiversity relations making cases comparable across sites and propose that in order to address complexity we need a method of abstraction that leads to the development of a more structured analysis based on selection of explanatory factors according to cconceptual models as well as empirical significance we suggest that the stylisation of typical resource use perspectives the combination of typical transactions that are inextricably linked by the interest of the actor can be a useful method for realizing appropriate model selection in this paper we provide an account of how use perspectives can be developed and to what kind of analysis they can contribute using the example of agrobiodiversity in grain as seed food or genetic material

the electoral budget cycle on municipal waste collection expenditure abstractthis article analyses the determinants of municipal waste collection expenditure specifically the effects of electoral cycles on municipal waste collection expenditure we use a database with information on spanish municipalities with more than 1000 inhabitants for the period 2002 2011 our results reveal that incumbents adopt an opportunistic behaviour increasing spending on waste in the preelection year and reducing it in the election and post election years therefore we confirm an electoral budget cycle on waste collection expenditures in spain additionally we find that the levels of income unemployment and upper level governments transfers have a positive impact on waste collection spending finally population density level of urbanization average age of the population of the municipality and less fragmented governments negatively influence waste collection spending

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

electoral cycles in government employment evidence from us gubernatorial elections abstract incumbents may opportunistically design policies increasing employment before elections or postpone cuts until afterwards i investigate electoral cycles in public sector employment around us gubernatorial elections exploiting staggered gubernatorial election cycles across states i use both county fixed effects models and a geographic discontinuity design that compares neighboring counties at state borders with a difference in gubernatorial election cycles consistent with manipulation state and local government employment per capita are higher leading up to elections afterwards employment abruptly returns to normal political and spatial heterogeneities are investigated including by election competitiveness term limits incumbent party affiliation and ideological alignment between the incumbent and the state legislature or local citizens differences across types of government employment and private sector employment are also explored

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

electoral cycles and budgetary growth in veterans benefit programs while many studies have generated negative findings regarding the general existence of electoral cycles in economic phenomena we have found an apparently robust electoral cycle in veterans benefits this pattern was found between 1961 and 1978 but has disappeared since then we use this case to investigate the possibility that electoral cycles might contribute to the growth of government spending using two different methods of inference we find no strong basis to conclude that such cycles cause increasing public sector growth

opportunistic politicians and fiscal outcomes the curious case of vorarlberg using a unique set of electoral rules present in the austrian state of vorarlberg we explore the question ofwhether direct election of the mayor affects the size of local governments using difference in differences estimation and propensity score matching we find evidence that direct elections of the mayor are associated with less expenditure on public administration and public personnel and higher expenditure in the visible categories of spending i e transportation infrastructure and economic subsidies to firms and individuals

electoral cycles and the earnings of federal bureaucrats this paper analyzes the relationship between the timing of federal elections and the pay raises received by civilian employees of the federal government the theoretical framework discusses how electoral wage cycles are generated as a result of optimizing behavior on the part of voters bureaucrats and the government the empirical analysis uses a time series of wage rates for the twenty eight largest federal agencies over the period 1961 1978 the study indicates that pay hikes during the presidential election year are significantly greater about 2 to 3 percent higher than bureaucratic pay raises in other years

opportunistic and partisan election cycles in brazil new evidence at the municipal level this article tests the hypothesis of opportunistic and partisan cycle models using a new large data set of brazilian municipalities over the 1989 2005 period the results show an increase in total and current expenditures and a decrease in municipal investments local tax revenues and budget surplus in election years they also show that partisan ideology exerts a relative influence on the performance of the local public accounts these results confirm that both opportunistic and partisan cycles have occurred in the management of the budgets of brazilian municipalities after the end of the military government

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

political business cycles and macroeconomic credibility a survey there is clear evidence that government popularity and election performance is affected in part by economic performance suggesting that governments may manipulate the economy to political advantage simple models incorporating adaptive expectations which allowed the government to exploit this relationship were developed in the 1970s but fell out of fashion with the advent of new classical economics however modern theories of the political business cycle which are closely related to the macroeconomic policy game literature assume rational expectations and lead to forms of political business cycle driven by the existence of uncertainty of one type or another the international evidence suggests that some aspects of the theories apply although definitive conclusions are as we might expect hard to come by

the keynesian and political determinants of unbalanced budgets u s fiscal policy from eisenhower to reagan the political business cycle proposition that politicians manipulate fiscal policy for political advantage is largely untested more often than not such manipulation is only assumed to occur on the basis of observed movements in inflation and unemployment and the few direct tests of the manipulation hypothesis are characterized by limited consideration of the full possibilities for political influence inadequate control for nonpolitical stabilization policy and inconsistent results this paper constructs several models of political fiscal policy incorporates them into a simple model of keynesian stabilization policy and tests the combined models using u s budget surplus deficit data from fy54 to fy83 the results provide little support for either the electoral motivation or partisan differences interpretations of the political business cycle the implications of these findings for the political business cycle literature long term economic management and deficit directed proposals for institutional reform are discussed

accountability and incentives of appointed and elected public officials political agency models suggest that elected public officials choose different policies than appointed officials do this paper is the first a to apply a clean empirical design to study whether t

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

property rights issues involving plant genetic resources implications of ownership for economic efficiency the economic theory of property rights is applied to the issue of the conservation of plant genetic diversity an issue often discussed in terms of benefit sharing in order to demonstrate that the assignment of property rights is important for reasons of efficiency as well as for equity given the existence of transaction costs within an industry the location of a property rights assignment is a crucial factor determining the incentives for efficient levels of investment at various levels of that industry in the context of plant genetic resources this means that property rights that are located at the retail end of the pharmaceutical and plant breeding industries may not have sufficient effect to generate the incentives to supply adequate amounts of plant genetic resources to the research and development sectors at the base of these industries

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

electoral cycles in active labor market policies we examine how electoral motives influence active labor market policies that promote short term job creation such policies reduce measures of unemployment using german state data for the period 1985 to 2004 we show that election motivated politicians pushed job promotion schemes before elections

equilibrium political budget cycles political business cycle theories generally rely on nominal rigidities and voter myopia this paper offers an equilibrium theory that preserves some basic insights from earlier models though with significant refinements the political budget cycle emphasized here is in fiscal policy rather than output and inflation it arises via a multidimensional signal process one can consider the welfare implications of proposals to mitigate the cycle and the effects of altering the electoral structure copyright 1990 by american economic association

political budget cycles the case of the western german lander this paper focuses on the issue of the electoral andideological cycles in state government budget for the elevenwestern german lander we verify this hypothesis over theperiod 1974 1994 for the following budgetary variables totalexpenditures surplus deficit administration health care education roads and social security benefits while overallour results seem to show that generally the party variabledoes not play a systematic role in spending decisions theyprovide some support to the opportunistic cycle theory showingthat the only relevant phenomenon is the effect of theupcoming election on the government spending inclinations

the electoral dynamics of human development this paper analyses the impact of elections on the dynamics of human development in a panel of 82 countries over the period 1980 2013 the incidence of partisan and political support effects is also taken into account a gmm estimator is employed in the empirical analysis and the results point out to the presence of an electoral cycle in the growth rate of human development majority governments also influence it but no clear evidence is found regarding partisan effects the electoral cycles have proved to be stronger in non oecd countries in countries with less frequent elections with lower levels of income and human development in presidential and non plurality systems and in proportional representation regimes they have also become more intense in this millennium

federalism and accountability with distorted election choices abstract random factors such as bad weather or exogenous economic shocks affect the re election of politicians and can reduce accountability such distorted election choices interact with the architecture of government contrasting centralized with decentralized political systems this study shows that centralization is likely to result in higher accountability if election choices are subject to small random distortions furthermore equity and efficiency arguments for uniform policies in centralized systems are derived as these are likely to result in the better overall performance of politicians and in more equal performance across regions

on the existence of a political monetary cycle this paper examines electoral influence on monetary policy as measured by ml money growth i find a significant four year electoral cycle in money growth even when controlling for the influence of interest rates income and budget deficits further the residual electoral cycle produces the income and inflation movements associated with the political business cycle when it is used in simulations of simple reduced form macro models the paper concludes by discussing the difficulties in rationalizing cyclical monetary policy with rational expectations

elected or appointed how the nomination scheme of the city manager influences the effects of government fragmentation abstract empirical research on the causal effect of government fragmentation derives diverse results one reason for this diversity might be that studies are typically settled in a variety of institutional environments to assess the extent to which the local political system might shape the effects of fragmentation this study measures the causal effect of a change in the nomination scheme of the city manager on the council size effect i combine a regression discontinuity design with a difference in differences approach in a large panel dataset of german municipalities the study finds that when the manager is appointed by council there is no significant council size effect but that there is a negative effect when the manager is elected by voters for those expenditure categories over which the manager has the most discretion these findings suggest that the nature of the political system does indeed matter

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

from bioprospecting to reflexive governance in this paper i evaluate the contribution of new institutional economics to reflexive governance in the field of bioprospecting my hypothesis is that the design of governance arrangements that are both efficient and legitimate necessitates taking into account the reflexivity of the actors on the proposed institutional design in considering this hypothesis i apply current theoretical insights from new institutional economics as developed by oliver williamson and douglas north to the issue of complex contractual relationships in the field of bioprospecting building on these insights i propose some means for ameliorating the current proposals for institutional framing of the contractual relationships d 2005 elsevier b v all rights reserved

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

voting suffrage and the political budget cycle evidence from the london metropolitan boroughs 1902 1937 we study the opportunistic political budget cycle in the london metropolitan boroughs between 1902 and 1937 under two different suffrage regimes taxpayer suffrage 1902 1914 and universal suffrage 1921 1937 we argue and find supporting evidence that the political budget cycle operates differently under the two types of suffrage taxpayer suffrage where the right to vote and the obligation to pay local taxes are linked encourages demands for retrenchment and the political budget cycle manifests itself in election year tax cuts and savings on administration costs universal suffrage where all adult residents can vote irrespective of their taxpayer status creates demands for productive public services and the political budget cycle manifests itself in election year hikes in capital spending and a reduction in current spending

rationality and the political business cycle the case of local government the empirical results which have been reported support the hypotheses implied by the model of rational political behavior set out in section 2 in pre election periods local government development expenditures deviate significantly from their normal levels the extent of deviation is approximately 20

tax structure turbulence in oecd countries this paper analyses whether and to what extent politiciansmanipulate tax structures strategically in order to winelections or for ideological purposes we introduce anindicator for tax structure turbulence which measures thedegree to which a country s tax structure changes from oneyear to another using data on 18 oecd countries over theperiod 1965 1995 we find clear evidence of a politicalbudget cycle in national tax structures more precisely wefind that in election years tax structures are changedsignificantly less than in other years further thedispersion of political power significantly lowers the abilityof governments to change the tax structure we do not however find any evidence of partisan budget cycles innational tax systems following political regime changes

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

the electoral budget cycle this article begins with a review of the now substantial literature on the thesis that polticians manipulate governmental outputs so as to favor their chances of reelection it concludes that while this electoral cycle thesis was initially overstated by its proponents it retains more plausibility than recent critics have allowed this conclusion is then demonstrated through an analysis of expenditures by the ten provincial governments in canada between 1951 and 1984

divided government versus incumbency externality effect quasi experimental evidence on multiple voting decisions abstract this paper explores the causal relationship between vote outcomes in different elections we ask 1 does the partisan identity of the mayor influence the voter s decision in subsequent town council elections 2 do voters condition their vote for the mayor on the result of the last council election the analysis mainprod type flply relies on a regression discontinuity design focusing on close election outcomes based on municipal level data for germany we find that the party of the mayor can receive a significant bonus in the next town council election moreover voters punish mayor candidates of parties that performed strongly in earlier council elections throughout the paper we highlight how these findings can be related to an incumbency externality effect and to the theory of divided government

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

leader openness nationality dissimilarity and voice in multinational management teams we argue that leader directed voice i e communicating critical suggestions for change to the leader is a relational phenomenon and that it is affected by an inherent feature of multinational teams members dis similarities in nationality we tested our hypotheses in a sample of middle managers who were working in multinational teams the results of this study show that leaders of multinational teams are more likely to profit from the local know how of employees from underrepresented nationalities when they are open to their ideas and when they have the same nationality the study also shows that the effects of being open to employees ideas and sharing the same nationality are mediated by affective commitment and psychological safety respectively we discuss how even though the current relational demography perspective with its dichotomous understanding of dis similarity is not suited to capture the dynamics of cultural differences it does set the stage for future studies to examine the cultural dynamics behind an individual s experience of being different from other team members in multinational teams we also discuss the practical implications of these findings for multinational companies

public spending interactions and local politics empirical evidence from french municipalities this paper aims at testing whether there exist spending interactions between french municipalities by estimating a dynamic panel data model our results suggest that there are some interactions between neighbouring municipalities as regards primary and investment expenditures a positive relationship between municipalities wage bill and un employment rates is likely to stress a rise of temporary employment in those municipalities that suffer from social troubles further the estimation results show that these interdepen dences also exist between cities whose mayors have the same partisan affiliation finally our results confirm the opportunistic behaviour of local governments which increase all categories of public spending in pre electoral periods

political budget cycles and fiscally conservative voters abstract i test whether the political budget cycle depends on the level of fiscal conservatism among voters to this end i use data from a referendum to collect revealed preferences for fiscal conservatism i find that pre election spending is increased only if voters have a sufficiently low level of fiscal conservatism if voters are highly fiscally conservative incumbents even decrease spending before elections

political budget cycles and divided government abstractpolitical budget cycles and divided government regional studies this study empirically examines the effect of divided governments on the existence of political budget cycles it uses a setting at the german municipality level where divided governments occur frequently and can be clearly disentangled from the underlying political system in this setting the executive does not have full discretion over expenditures and tax rates and needs support from the legislative to manipulate policy before executive elections the study shows that political budget cycles in expenditures and tax rates are more likely when the same party controls executive and legislative under divided government policy manipulation is significantly smaller

election results and opportunistic policies a new test of the rational political business cycle model the literature on the rational pbc suggests that politicians systematically manipulate economic and fiscal conditions before elections to increase their chances of reelection most tests of this theory look for evidence of pre election distortions in fiscal policy we propose a new test that explores the two way interaction between the magnitude of the opportunistic distortion and the margin of victory the test is implemented using a large panel of portuguese municipalities the results show that opportunism leads to a larger win margin for the incumbent and that incumbents behave more opportunistically when their win margin is small these results are consistent with the theoretical model

political models of the business cycle should be revived political models of the business cycle have typically been ignored because they appear inconsistent with rational behavior and because empirical evidence is inconclusive this paper addresses the second issue demonstrating for u s real gnp unemployment and inflation that electoral cycles persistent patterns across electoral terms are significant but apparently only for republican incumbents and that partisan cycles persistent differences between parties are also significant these findings are consistent with the conjecture that a minority party is more constrained by electoral concerns whereas a majority party is freer to pursue partisan objectives

seeing the forest through the trees a meta analysis of political budget cycles despite a vast number of articles the political budget cycle literature contains many conflicting theories and empirical results i conduct the first ever meta analysis of this literature in order to establish whether a link between elections and government budgets exists using data on 1198 estimates across 88 studies published between 2000 and 2015 i find evidence of a statistically significant yet substantively small increase in government expenditures and public debt around elections and reductions in revenues and fiscal balance using meta regression analysis combined with bayesian model averaging i find support for some of the context conditional theories in the literature although the findings of political budget cycles are robust to publication bias as well as some of the methodological and study specific choices authors are forced to make they also shed light on how certain decisions may affect a study s findings this has implications for current and future research on political budget cycles

the approach of institutional economics this paper assesses the old institutional economics it emphasizes the importance of key old institutionalist themes concerning the necessity of habits and rules and the role of institutions a problem in the alternative theoretical program of the new institutionalism is the untenability of its assumption of an original institution free market or state of nature even optimizing behavior requires the prior existence of habits and rules although it still lacks a complete and systematic theory the evolutionary approach of the old institutionalists tackles the problem of the interactive relationship of actor to structure without analytical reduction to one or the other

elections and the fed is there a political monetary cycle to understand the political causes of macroeconomic policy it is necessary to examine the institutions that actually make such policy and the incentives those institutions face an explanation of the political causes of united states monetary policy must treat the various institutions that are influential in the monetary policy process which are at a minimum the federal reserve fed and the executive including the president the treasury department and other advisors in the executive office of the president the reelection motive has proven useful in modeling presidential incentives in this article i investigate whether electoral incentives associated with the theory of the political business cycle pbc can help to explain the behavior of the fed over the last quarter century the political business cycle has had a curious hold on modern political economy while the empirical evidence in favor of the cycle is far from overwhelming its theoretical importance leads to continuing empirical

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

overlapping political budget cycles we advance the literature on political budget cycles by testing for cycles in expenditures for elections to the legislative and the executive branches using municipal data we identify cycles independently for the two branches evaluate the effects of overlaps and account for general year effects we find sizable effects on expenditures before legislative elections and even larger effects before joint elections to the legislature and the office of mayor in the case of coincident elections we show that it is important whether the incumbent chief executive seeks reelection to account for the potential endogeneity of that decision we apply an iv approach using age and pension eligibility rules

electoral manipulation via voter friendly spending theory and evidence abstract we present a model of the political budget cycle in which incumbents try to influence voters by changing the composition of government spending rather than overall spending or revenues rational voters may support an incumbent who targets them with spending before the election even though such spending may be due to opportunistic manipulation because it may also reflect sincere preference of the incumbent for types of spending voters favor classifying expenditures into those which are likely targeted to voters and those that are not we provide evidence supporting our model in data on local public finances for all colombian municipalities our findings indicate both a pre electoral increase in targeted expenditures combined with a contraction of other types of expenditure and a voter response to targeting

toward a model of issue selling by subsidiary managers in multinational organizations in multinational organizations local market responsiveness is critical to the development of effective strategies this responsiveness is expected to occur in part as the result of upward influence from local subsidiary managers who represent the local culture and shift relevant priorities accordingly issue selling defined as directing top management s attention to particular issues and helping them understand such issues is one important way in which subsidiary managers pursue upward influence the purpose of this paper is to help multinational organizations better facilitate and exploit potentially valuable input from local subsidiary managers to do so we propose an acculturated view of issue selling more specifically we argue that subsidiary managers socialized by different national cultures vary 1 in the extent to which their intention to sell issues is influenced by various contextual cues and 2 in their choice of selling strategies these theoretical differences suggest that local subsidiary managers from different cultures will differ in the way they approach issue selling and in turn in the way they influence the strategy making process the discussion traces the implications of this line of reasoning for future research on the influence of local subsidiary managers and more generally for research on the cultural embeddedness of the strategy process

politics and business cycles in industrial democracies politics alberto alesina influences from political competition on macroeconomic policy are often thought to be a source of economic fluctuations politicians are described as being driven by two not mutually exclusive main motivations they want to be reelected and they harbour political or ideological biases when such theories are confronted with actual cycles in a number of industrial countries the pattern of inflation unemployment output and budget deficits indicates that partisan policy making is a fairly widespread phenomenon with more limited evidence that electoral preoccupations result in major fluctuations the combination of partisanship and electoral cycles may easily result in socially undesirable outcomes in particular the degree of politico institutional stability and the independence of the central bank have a bearing on macroeconomic outcomes these observations raise a number of important questions about the design of political institutions

political cycles in a developing economy effect of elections in indian states the author studies the effect of state legislative assembly elections on the policies of state governments in 14 major states of india from 1960 to 1996 she identifies the effect of the timing of elections using an instrument for the electoral cycle that distinguishes between constitutionally scheduled elections and midterm polls she contrasts two levers of policy manipulation fiscal policy and public service delivery to distinguish between alternative models of political cycles the predictions of three models are tested 1 populist cycles to woo uninformed and myopic voters 2 signaling models with asymmetric information 3 a moral hazard model with high discounting by political agents the empirical results for fiscal policy show that election years have a negative effect on some commodity taxes a positive effect on investment spending but no effect on deficits primarily because consumption spending is reduced with regard to public service delivery elections have a positive and large effect on road construction by state public works departments strikingly the fiscal effects are much smaller than the effect on roads the author argues that the pattern of evidence is inconsistent with the predictions of models of voter myopia and asymmetric information she explores an alternative moral hazard model in which the cycle is generated by high political discounting and career concerns persuade politicians to exert greater effort in election years on the management of public works

direct democracy and local public finances under cooperative federalism this paper exploits the introduction of the right of referenda at the local level in the german state of bavaria in 1995 to study the fiscal effects of direct democracy in the first part of the paper we establish the relationship between referenda activity and fiscal performance by using a new dataset containing information on all 2500 voter initiatives between 1995 to 2011 this selection on observables approach however suffers from obvious endogeneity problems in this application the main part of the paper exploits population dependent discontinuities in the signature and quorum requirements of referenda to implement a regression discontinuity design rdd to safeguard against co treatments that might affect fiscal outcomes simultaneously at the same thresholds we validate our results by extending the rdd approach to a difference in discontinuity did design by studying direct legislation in an archetypical cooperative federation as germany our paper extends the literature to a novel institutional setting the results indicate that in our setting and in contrast to most of the evidence from switzerland and the us direct democracy causes an expansion of local government budgets

opportunistic political cycles test in a young democracy setting this paper tests the theory of opportunistic cycles in a decade old democracy russia finds strong evidence of cycles and provides an explanation for why previous literature often found weaker evidence using regional monthly panel data we find that 1 the budget cycle is sizable and short lived public spending shifts toward direct monetary transfers to voters 2 the magnitude of the cycle decreases with democracy government transparency media freedom voter awareness and over time and 3 preelectoral manipulation increases incumbents chances for reelection the short length of the cycle explains underestimation of its size by previous literature because of low frequency data used in previous studies

political budget cycles in indonesia at the district level we find significant political budget cycles pbcs for indonesian districts only for direct not for indirect elections pbcs are significantly stronger if the incumbent runs for reelection they are well identified due to the exogenously different timing of elections

public expenditures in canadian provinces an empirical study of politico economic interactions it is widely believed that government ideology and electoral constraints are two major factors that influence the level of public expenditures however frey and schneider argue that the effects of the two phenomena are not simultaneous only when a government is popular can it pursue ideological goals and when popularity is low energies must be redirected toward gaining support from voters to win the next election data draw from the canadian provincial case are used to test empirically this hypothesis the findings support the frey and schneider explanation

material transfer agreements an economic and econometric analysis this paper uses econometric analysis for understanding the determinants that affect the payment mechanism in material transfer agreements mtas these contracts regulate the exchange of peculiar ecosystem services genetic and biological materials between a provider and a recipient of the service the paper uses a set of model contracts from the late 2000s gathered from the u n world intellectual property organization wipo and the convention of biological diversity cbd empirical results show that the probability that a payment scheme is included in the contract negatively depends on the presence of an acknowledgment obligation to the provider of the material probably aware of the complexity and uncertainty of the recipient s research activity the provider and the cbd requires to be compensated through the recognition of his her important input to the research venture in economics this can be interpreted as payment in terms of moral satisfaction