the growth potential of startups over the business cycle this paper shows that employment in cohorts of us firms is strongly influenced by aggregate conditions at the time of their entry employment fluctuations of startups are procyclical they persist into later years and cohort level employment variations are largely driven by differences in firm size rather than the number of firms an estimated general equilibrium firm dynamics model reveals that aggregate conditions at birth rather than post entry choices drive the majority of cohort level employment variation by affecting the share of startups with high growth potential in the aggregate changes in startup conditions result in large slow moving fluctuations in employment

the need for enemies we develop a model where some politicians have an edge in undertaking a task and this gives them electoral advantage creating an incentive to underperform in the task we test the empirical implications in the context of fighting against insurgents using colombian data the main prediction is that large defeats for the insurgents reduce the probability that these politicians fight them especially in electorally salient places we find that after the largest victories against farc rebels the government reduced its counterinsurgency efforts especially in politically important municipalities politicians need to keep enemies alive in order to maintain their political advantage

media markets and localism does local news en espanol boost hispanic voter turnout the same time the availability of these products reduces the consumption of local news not only because some consumers prefer national and global content to local information but also because local media products that lose a significant number of consumers are forced to cut qual ity and they may even cease to exist if their audience falls below a critical threshold for these reasons some scholars claim that the rise of integrated media markets undermines local civic engagement robert d putnam 2000 against this backdrop many regulatory agencies including the federal communications commission fcc of the united states seek to protect local media and promote localism for instance by limiting ownership concentration 1 however localism is desirable only if there are in fact positive spillovers from the provision of local content that can help justify the loss of private welfare that integrated media markets would provide in this paper we propose a simple test for the existence of spillovers from local news pro gramming asking if the presence of local television news affects civic behavior the ubiq uity of local news programming across all us metro areas makes it impossible to study its effects on the general population in contrast the availability of spanish language news has increased considerably in recent years providing us with an experiment to study the effect of local news on one important measure of civic engagement voter turnout in local elections in particular we use a differencing approach asking whether hispanic voter turnout is higher in relation to non hispanic turnout in metro areas with spanish language local television news our results indicate that spanish language local television news raises hispanic turnout by more than 4 percentage points local news targeted at hispanics has no effect on the participa tion of non hispanics and as one would expect a significantly smaller effect in years with a presidential race in markets with spanish language news about a quarter of hispanics turn to these programs our estimates thus imply that news in spanish caused about a fifth of spanish language news viewers to start voting interestingly hispanics with access to news in spanish do not increase the time they spend watching news content analyses of spanish language news programs in the united states find that these shows are much more likely to report on

conditions for government support of private research and development abstract based on a model by joglekar and hamburg this article examines the problem of identifying conditions for government support of private resource allocation to r d the behavioral assumptions of the original model are modified in two ways first the impact of a matching behavior only with respect to applied research and development on the relation between individually optimal spending and pareto optimal spending is examined the results are largely the opposite of the findings of joglekar and hamburg for investment in basic research second the assumption of a competitive orientation for both kinds of research is integrated into the model the results show the possibility of overinvestment in basic research this leads to the conclusion that the industry s behavior must be considered very carefully when government support instruments are implemented

redistribution income and voting a model that reconciles the positive association between income and voting found in cross sectional studies with the negative correlation between income and turnout over time is developed voting is modeled as a group rational activity voter turnout rates in the united states for the 1948 1960 1968 and 1980 elections are used to test the model voter turnout is found first to fall and then to rise as families move up the income distribution voter turnout also rises as real wages fall as educational attainment increases as elections become closer and as poll taxes and literacy tests are removed

turnout across democracies world democracies widely differ in legislative executive and legal institutions different institutional environments induce different mappings from electoral outcomes to the distribution of power we explore how these mappings affect voters participation in an election we show that the effect of such institutional differences on turnout depends on the distribution of voters preferences we uncover a novel contest effect given the preferences distribution turnout increases and then decreases when we move from a more proportional to a less proportional power sharing system turnout is maximized for an intermediate degree of power sharing moreover we generalize the competition effect common to models of endogenous turnout given the institutional environment turnout increases in the ex ante preferences evenness and more so when the overall system has lower power sharing these results are robust to a wide range of modeling approaches including ethical voter models voter mobilization models and rational voter models

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

local economic gains from primary election spending this article asks how government and private consumption spending affect earnings in service sectors to do this we exploit the variation across states and time in the money spent while campaigning for a party s presidential primary nomination we create a novel data set combining the date each state held its primary from 1976 to 2008 the date in each election cycle in which only one candidate remained and quarterly state earnings by sector using an instrumental variable strategy we find that hosting a primary election increases earnings particularly in the retail and accommodation sectors these results remain consistent when using data on primary campaign expenditures across states in the 2004 and 2008 elections

political advertising and election results we study the persuasive effects of political advertising our empirical strategy exploits fcc regulations that result in plausibly exogenous variation in the number of impressions across the borders of neighboring counties applying this approach to detailed data on television advertisement broadcasts and viewership patterns during the 2004 12 presidential campaigns our results indicate that total political advertising has almost no impact on aggregate turnout by contrast we find a positive and economically meaningful effect of advertising on candidates vote shares taken at face value our estimates imply that a one standard deviation increase in the partisan difference in advertising raises the partisan difference in vote shares by about 0 5 percentage points evidence from a regression discontinuity design suggests that advertising affects election results by altering the partisan composition of the electorate

wage rigidity and job creation recent research in macroeconomics emphasizes the role of wage rigidity in accounting for the volatility of unemployment fluctuations we use worker level data from the cps to measure the sensitivity of wages of newly hired workers to changes in aggregate labor market conditions the wage of new hires unlike the aggregate wage is volatile and responds almost one to one to changes in labor productivity we conclude that there is little evidence for wage rigidity in the data

ignoring the electoral college why public choice economists understate the probability of decisive voters when considering the probability of voters being decisive in presidential elections public choice economists typically proceed as if the probability can reasonably be approximated by assuming that the winner is determined by simple majority vote it is well known the electoral college can cause presidential candidates to lose elections despite winning the popular vote an election inversion but the electoral college s ability to increase the probability of some voters being decisive effectively has been ignored despite such increases having occurred in 10 of the last 49 presidential elections by examining the influence of the electoral college in most of the presidential elections from 1824 to 2016 i explain and give examples of how the probabilities of some voters being decisive were elevated above what they would have been under majority rule with the increase being truly astounding in several cases the examples do not weaken the importance of expressive voting but our understanding of such voting is improved by considering the probability effects of the electoral college on voter decisiveness

redistributive shocks and productivity shocks abstract a productivity innovation reduces labor share at impact making it countercyclical it subsequently produces a long lasting increase that peaks five years later at a level larger in absolute terms than the initial drop before slowly returning to average i e labor share overshoots we estimate a bivariate shock process to the production function that under competition in factor markets accounts for this overshooting we pose this process in an otherwise standard real business cycle economy and we find that the contribution of productivity innovations to the variance of hours is 1 of that in the standard rbc model

capital is back wealth income ratios in rich countries 1700 2010 how do aggregate wealth to income ratios evolve in the long run and why we address this question using 1970 2010 national balance sheets recently compiled in the top eight developed economies for the united states united kingdom germany and france we are able to extend our analysis as far back as 1700 we find in every country a gradual rise of wealth income ratios in recent decades from about 200 300 in 1970 to 400 600 in 2010 in effect today s ratios appear to be returning to the high values observed in europe in the eighteenth and nineteenth centuries 600 700 this can be explained by a long run asset price recovery itself driven by changes in capital policies since the world wars and by the slowdown of productivity and population growth in line with the s g harrod domar solow formula that is for a given net saving

real wages over the business cycle evidence from panel data one topic on which keynes did not disagree with classical economists was the cyclical behavior of real wages keynes 1936 as well as various classical writers predicted that real wages should move countercyclically quoting the general theory p 17 in general an increase in employment can only occur through the accompaniment of a decline in real wages thus i am not disputing this vital fact which the classical economists have rightly asserted as indefeasible this prediction is based on the premise of competition and a given short run capital stock increases in employment then correspond to more intensive use of capital and through diminishing product lower real wages for this reason evidence by dunlop 1938 and tarshis 1939 that real wages move procyclically was viewed as paradoxical both dunlop and tarshis based their findings on an observed positive correlation between real and money wages which given the procyclical movement of money wages implies a positive correlation between

the size distribution of innovating firms in the uk 1945 1983 a survey of 4 378 significant innovations shows that firms with fewer than 1 000 employees commercialized a much larger share than is indicated by their share of r and d expenditures innovations per employee have been consistently above average in firms with more than 10 000 employees and have become so in firms with fewer than 1 000 intersectoral variation in the size distribution of innovating firms can be explained as a function of r and d based technological opportunities and of technological ease of entry by user firms with principal activities outside the sector copyright 1987 by blackwell publishing ltd

forecasting the presidential vote in the states this research examines an equation developed to forecast the two party presidential vote in the states the equation is composed of 16 independent variables measured at the national regional and state levels it includes national trial heat polls from early in the campaign the growth in the national economy presidential incumbency the state s voting record in the previous two presidential elections home state and regional advantages for the candidates the partisan division of the state legislature following the last midterm election an index of state ideology based on the roll call voting of its house delegation and five regional trend variables to take into account partisan shifts over time the equation is estimated over 531 state elections from 1948 to 1988 the overall fit of the equation is quite good it accounts for nearly 85 of the variance leaves a standard error of less than four percentage points and has an average error of just three percentage points of the vote this level of accuracy is comparable to that of steven rosenstone s equation in his forecasting presidential elections 1983 moreover the equation is quite parsimonious and yields forecasts by early september of the election year

technology shocks and job flows we consider a version of the solow growth model where technological progress can be investment specific or investment neutral the labour market is subject to search frictions and the existing productive units may fail to adopt the most recent technological advances technological progress can lead to the destruction of technologically obsolete jobs and cause unemployment we calibrate the model to replicate the high persistence that characterizes the dynamics of firms neutral technology and the frequency of firms capital adjustment we find that neutral technological advances increase job destruction and job reallocation and reduce aggregate employment investment specific technological advances reduce job destruction have mild effects on job creation and are expansionary hence neutral technological progress prompts schumpeterian creative destruction while investment specific technological progress operates essentially as in the standard neoclassical growth model using structural var models we provide support to the key dynamic implications of the model copyright 2007 wiley blackwell

what is the probability your vote will make a difference i introduction what is the probability that one vote will make a difference this is of interest in the utility theory of voting and also for campaign strategists who must assess the costs and benefits of attempting to persuade or turn out voters in particular states 1 in a presidential election the probability that your vote is decisive is equal to the probability that your state is necessary for an electoral college win times the probability the vote in your state is tied conditional on your state being necessary broadly speaking there are three ways of estimating the probability of a decisive vote the first approach and the oldest in the literature 2 is to set up a theoretical model for the joint distribution of the popular vote margin in the separate jurisdictions in this case the 50 states plus the district of columbia and then analytically compute the probability of each state being nationally decisive and locally tied such models offer important insights but are not directly useful for presidential elections given that our interest is in the particularities of individual states in 2008 rather than on general properties of an electoral system the second approach is purely empirical an estimate of the form y n where n is the number of elections in some large historical sample and y is the number that were tied elections are very rarely tied so one can instead use an estimate such as y 2 000 n where y is now the number of elections decided by less than 1 000 votes such an empirical analysis can be embedded into a regression of vote differential on election level predictors mulligan and hunter 2003 use such a model for estimating the average probability of a decisive vote in legislative elections and gelman katz and bafumi 2004 use the distribution of aggregate vote margins to study the dependence of the probability of a tie on the number of voters 3 unfortunately the complex structure and the small number of presidential elections rule out a purely empirical approach in this case the third method which we use here is to set up a forecasting model for the current election the uncertainties for the 50 statewide elections in such a model should be correlated or equivalently the model should have a national error term and possibly regional error terms in addition to any independent state errors given a forecast that is a joint probability distribution one can calculate the probability of decisive vote using simulation or in a setting such as a national election in which the probability of a tied election is tiny one can use a mix of simulation and analytic calculations as was done by gelman king and boscardin 1998 4 ii method we use a state by state election forecast computed on october 24 2008 based on the latest opinion polls silver 2008 earlier in the campaign polls are not particularly informative and it is better to use regression based forecasts at least to account for possible national swings see lock and gelman 2008 and for further discussion wlezien and erikson 2004 and the references therein by late october however polls are close to the actual election outcome and so it is reasonable to construct a forecast distribution using poll aggregation 5 the result of our forecasts is a 10 000 x 51 matrix representing 10 000 computer simulations of the election with each simulation including the vote margin for obama e g a margin of 0 208 in alabama corresponds to obama and mccain receiving 60 4 and 39 6 respectively of the two party vote in the state we convert this percentage to a numerical vote margin by multiplying by the voter turnout in the state which we estimate by taking the two party turnout from 2004 and adding 4 corresponding to population increase and another 4 to account for an anticipated increase in turnout this year 6 as discussed earlier the simulations for the states are correlated the joint probability distribution of the 51 election outcomes includes uncertainty about the national swing as well as state by state fluctuations

the downsian voter meets the ecological fallacy this paper presents evidence that voter participation does not depend on the probability that one vote is decisive an extensive summary of the empirical participation literature is provided which shows that most but not all studies have found that turnout in an electoral district is higher when the race is closer individual level vote regressions for the 1979 and 1980 canadian national elections are estimated using objective measures of closeness as opposed to self reported measures the main finding is that a citizen is no more likely to vote in a close election than in a lands lide election district level turnout regressions for the same elections are also estimated and a significant relation between closeness and turnout is observed this suggests that aggregation bias may generate a spurious closeness turnout relation in district level regressions

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

closeness expenditures and turnout in the 1982 u s house elections students of elections have repeatedly found that the closeness of an election is modestly correlated with turnout this may be due to a direct response of instrumentally motivated voters but recent theoretical work casts doubt on the adequacy of this explanation another possibility is that elite actors respond to closeness with greater effort at mobilization we explore the latter possibility by using fec and state data on campaign expenditures in house senate and gubernatorial races our results indicate that closeness has an effect at both the mass and elite levels we also provide quantitative estimates of the effect of senate and gubernatorial expenditure on house turnout

a homogeneous industry model of resource allocation to basic research and its policy implications in a recent paper we showed that unaided industry allocation to basic inappropriable research is suboptimal and that in stimulating this allocation provision of government seed money is generally counterproductive while the provision of matching subsidies is not cost efficient here we consider a special case of the model developed in the earlier paper i e we now consider a homogeneous industry and investigate the effects of several relevant factors upon an industry s allocation of resources to basic research an extensive numerical example is presented that helps to verify and to interpret the model in realistic terms our findings question the validity of a number of popular beliefs about the need for government support of basic research in various types of industries for example contrary to popular belief the greater the risk aversion displayed by member firms in an industry the lesser may be the need for government support of its basic research also the larger the number of firms in an industry the greater may be the need for government support of that industry s basic research

the political economy of immigration in a direct democracy the case of switzerland abstract in this paper we analyze the determination of immigration policy in a direct democracy setting we formulate a model of voting and participation behavior integrating instrumental and expressive motivations the model is estimated using data drawn from a survey carried out after a vote in switzerland in 2000 on a popular initiative proposing to implement immigration restrictions the model enables us to recover estimates of participation costs and preferences towards immigration and analyze how these preferences are translated into actual voting outcomes the results reveal a substantial gap participation bias between attitudes towards immigration in the general population 43 favorable to restrictions and the outcome of the vote 26

the ethnic logic of campaign strategy in diverse societies theory and evidence from kenya much of the existing ethnic politics literature suggests that in settings where ethnicity is politically salient electoral competition encourages rival parties to focus narrowly on mobilizing thei

campaign allocations under probabilistic voting we develop a probabilistic voting model where candidates compete by advertising in different media markets ads are viewed by everyone within a market and cannot be targeted to subgroups such as one candidate s partisans candidates estimate the distribution of voter preference intensities in a market and campaign ads then shift this distribution individuals with any intensity vote with some probability for each candidate we derive comparative static implications of changes in a variety of factors on the advertising decisions of each candidate using campaign advertising data from 2002 we find these results to be consistent with actual campaign allocation behavior

the size and scope of government comparative politics with rational politicians we try to demonstrate how economists may engage in research on comparative politics relating the size and composition of government spending to the political system a downsian model of electoral competition and forward looking voting indicates that majoritarian as opposed to proportional elections increase competition between parties by focusing it into some key marginal districts this leads to less public goods less rents for politicians more redistribution and larger government a model of legislative bargaining and backward looking voting indicates that presidential as opposed to parliamentary regimes increase competition between both politicians and voters this leads to less public goods less rents for politicians less redistribution and smaller government we confront these predictions with cross country data from around 1990 controlling for economic and social determinants of government spending we nd strong and robust support for the prediction that the size of government is smaller under presidential regimes and weaker support for the prediction that majoritarian elections are associated with less public goods

r d appropriability opportunity and market structure new evidence on some schumpeterian hypotheses one of the largest bodies of literature in the field of industrial organization is devoted to the interpretation and testing of several hypotheses advanced by joseph schumpeter 1950 concerning innovation and industrial market structure one set of hypotheses focuses on the role of firm size as a determinant of r d spending and the rate of technological advance another set focuses on the effect of market concentration on r d and technological advance in this paper we reexamine the latter set of hypotheses at the industry level using new data on r d appropriability and technological opportunity collected by levin et al 1984 in a survey of r d executives in 130 industries

electoral systems and public spending we study the effects of electoral institutions on the size and composition of public expenditure in oecd and latin american countries we emphasize the distinction between purchases of goods and services which are easier to target geographically and transfers which are easier to target across social groups we present a theoretical model in which voters anticipating government policymaking under different electoral systems have an incentive to elect representatives more prone to transfer public good spending in proportional majoritarian systems the model also predicts higher total primary spending in proportional majoritarian systems when the share of transfer spending is high low after dee ning rigorous measures of proportionality to be used in the empirical investigation we e nd considerable support for our predictions

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

an evaluation of federal policy instruments to stimulate basic research in industry a model of the resource allocation behavior of a group of firms demonstrates that unaided industry allocation to basic inappropriable research is suboptimal furthermore provision of seed money is generally counterproductive while the provision of a matching subsidy is not very cost efficient in increasing the allocation innovative policy alternatives are proposed

the downsian model of electoral participation formal theory and empirical analysis of the constituency size effect this paper applies a game theoretic model of participation under uncertainty to investigate the negative relationship between constituency size and voter turnout rates theconstituency size effect we find that this theoretical model accounts for almost all of the variation in turnout due to size in cross sectional data from school budget referenda

universalism and the value of political power although legislatures typically use majority rule to allocate a budget in distributive legislation unanimous consent over the broad allocation of benefits is pervasive i develop a game theoretic model where members strategically interact in a universal coalition to determine allocations with noncooperative bargaining as a threat point for the breakdown of cooperation to quantify the effects of political power on the agreed upon allocation i structurally estimate the model using the bridge bill capital budget in 1992 i find that 16 73 of the budget would be allocated differently if allocations were determined only based on actual needs

conditions for government support of private research and development abstract in a recent paper brockhoff and warschkow 1993 attempt to extend joglekar and hamburg s work under alternative behavioral assumptions joglekar and hamburg 1986 brockhoff and warschkow mainly obtain results that are opposite to joglekar and hamburg s findings unfortunately as shown below brockhoff and warschkow s model is flawed because 1 it is inconsistent with joglekar and hamburg s assumption that firms are individually rational and 2 it misrepresents the concept of pareto optimality consequently brockhoff and warschkow s conclusions cannot be seen as valid

the economic model of voter participation a further test the central hypothesis of the economic model of voter participation was put to an empirical test it was found that the coefficient of population size which represents the subjective probability of affecting election results is negative and significant in municipal local elections but insignificant in national knesset elections therefore this variable is unable to represent subjective probability in the latter case

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

inter regional redistribution through infrastructure investment tactical or programmatic in this paper we study the political economy of the inter regional allocation of investment in infrastructure in an effort to disentangle tactical and programmatic motives where tactical politics refers to the discretionary allocation of investment to districts with more political clout and programmatic politics refers to the allocation of investment according to certain objective criteria e g income level we use a panel of data from the spanish electoral districts for the period 1964 2004 to estimate an equation in which investment depends both on economic and political variables the results show that tactical politics do matter since the districts receiving the most funds are those in which i the incumbent s vote margin is low ii few votes are needed to win an additional seat in the legislature iii the central and regional governments are controlled by the same party and iv regional parties play a pivotal role in the legislature however the results also show that programmatic politics matter since inter regional redistribution is shown to increase i with the arrival of democracy and european union funds ii under leftist governments and iii the weaker the correlation is between political clout and regional income

industry concentration and allocation of resources to basic research while the mainstream of western economic thought believes in competitive markets the schumpeterian school considers concentrated industry to be the ideal vehicle for the advancement of industrial technology empirical evidence on the schumpeterian hypothesis that a concentrated industry allocates relatively more resources to its research and development rd joglekar p m hamburg 1987 industry resource allocation to basic research under normally distributed benefits decision sci winter 1 24 who showed that industries consisting of smaller numbers of firms allocate relatively greater amounts of resources to their basic research than industries consisting of larger numbers of firms extending joglekar and hamburg s models here we find that when two industries consist of the same number of firms in most cases a heterogeneous industry falls as short of its pareto optimal investment in basic research as its comparable homogeneous counterpart numerical examples suggest that in some cases concentrated heterogeneous industries may do worse policy implications of the results as well as directions for further research are discussed

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

advertising effects in presidential elections presidential elections provide both an important context in which to study advertising and a setting that mitigates the challenges of dynamics and endogeneity we use the 2000 and 2004 general elections to analyze the effect of market level advertising on county level vote shares the results indicate significant positive effects of advertising exposures both instrumental variables and fixed effects alter the ad coefficient advertising elasticities are smaller than are typical for branded goods yet significant enough to shift election outcomes for example if advertising were set to zero and all other factors held constant three states electoral votes would have changed parties in 2000 given the narrow margin of victory in 2000 this shift would have resulted in a different president

decomposing political advertising effects on vote choices this paper studies the channels through which political television advertising influences individuals voting decisions scholars are interested to learn whether advertising primarily persuades people to change their choices of candidates or mobilizes people to vote i find that advertising does both about 60 to 70 of advertising s effect is persuasion and 30 to 40 of it is mobilization advertising s effects are stronger on those who did not plan to vote for a major party candidate to decompose the impact into its components the present paper estimates a multinomial probit model that permits analysis of decisions of turnout and candidate choice jointly in a markov chain framework in contrast to most studies that estimate the effects of aggregated exposure to advertising on voters choices on election day i study how advertising influences peoples monthly voting intentions leading up to election day in the context of the 2008 presidential election the magnitude of the advertising effect is not large enough to overcome john mccain s significant deficit but it potentially could have changed the outcomes of other close elections such as those in 2000 and 2016

proportional versus winner take all electoral vote allocations this paper considers how the welfare of voters is affected under an electoral college system when some state elects to award electoral votes in proportion to the number of votes received by each candidate rather than awarding all electoral votes to the winner of the state i show that a majority of voters in that state is made worse off as a result of the change i also give conditions under which voters in other states are made better or worse off as a result of the change

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

a swing state theory of trade protection in the electoral college this paper analyzes trade policy determination in the electoral college in the presence of swing voters it determines the circumstances under which incumbent politicians have an incentive to build a reputation for protectionism thus swaying voting decisions and improving their re election probability strategic trade protection is shown to be more likely when protectionist swing voters have a lead over free trade supporters in states with relatively strong electoral competition and in states representing a larger proportion of electoral college votes an empirical test using a measure of industrial concentration in swing and decisive u s states lends support to the theoretical findings

the impact of competition on management quality evidence from public hospitals in this paper we examine the causal impact of competition on management quality we analyze the hospital sector where geographic proximity is a key determinant of competition and english public hospitals where political competition can be used to construct instrumental variables for market structure since almost all major english hospitals are government run closing hospitals in areas where the governing party has a small majority is rare due to fear of electoral punishment we find that management quality measured using a new survey tool is strongly correlated with financial and clinical outcomes such as survival rates from emergency heart attack admissions ami more importantly we find that higher competition as indicated by a greater number of neighboring hospitals is positively correlated with increased management quality and this relationship strengthens when we instrument the number of local hospitals with local political competition adding another rival hospital increases the index of management quality by one third of a standard deviation and leads to a 10 7 reduction in heart attack mortality rates

the time varying volatility of macroeconomic fluctuations we investigate the sources of the important shifts in the volatility of us mac roeconomic variables in the postwar period to this end we propose the esti mation of dsge models allowing for time variation in the volatility of the structural innovations we apply our estimation strategy to a large scale model of the business cycle and find that shocks specific to the equilibrium condition of investment account for most of the sharp decline in volatility of the last two decades jel c51 e32

on the design of citizens initiatives in a union of states the paper studies the design of popular initiatives in unions of states we analyze the effect of state specific threshold requirements on the incentives of a rational campaign organizer who decides which constituencies to target if the heterogeneity of preferences in a population increases with its size degressively proportional thresholds satisfy the normative objective of neutrality between individuals from different states in contrast thresholds which are linear in population size are neutral if a priori no differences between states are acknowledged

do polls create momentum in political competition abstract we explore how public opinion polls affect candidates campaign spending in political competition generally polls lead to more asymmetric behavior under a majority rule there always exists an equilibrium in which the initially more popular candidate invests more in the campaign and thereby increases her lead in expectation polls create momentum when campaigning is very effective and the race is very close a second type of equilibrium may exist the trailing candidate outspends and overtakes his opponent regardless of the type of equilibrium polls have a tendency to decrease expected total campaigning expenditures by amplifying ex ante asymmetries between candidates and thus defusing competition when candidates care also for their vote share in addition to having the majority candidates incentives crucially depend on the distribution of voters candidate preferences

political careers or career politicians two main career paths are prevalent among politicians in modern democracies there are career politicians i e politicians who work in the political sector until retirement and political careers i e there are politicians who leave politics before retirement and work in the private sector in this paper we propose a dynamic equilibrium model of the careers of politicians in a political economy with a private sector and a political sector where individuals are heterogeneous with respect to their market ability as well as their political skills we characterize the conditions under which the two career paths emerge in equilibrium and establish a number of comparative statics results with respect to the quality of politicians and their careers

the ins and outs of unemployment an analysis conditional on technology shocks we analyze how unemployment job finding and job separation rates react to neutral and investment specific technology shocks neutral shocks increase unemployment and explain a substantial portion of it volatility investmentspecific shocks expand employment and hours worked and contribute to hours worked volatility movements in the job separation rates are responsible for the impact response of unemployment while job finding rates for movements along its adjustment path the evidence warns against using models with exogenous separation rates and challenges the conventional way of modelling technology shocks in search and sticky price models

a structural model of electoral accountability this paper proposes a structural approach to measuring the eects of electoral ac countability we estimate a political agency model with imperfect information in order to identify and quantify discipline and selection eects using data on u s governors for 1982 2012 we nd that the possibility of reelection provides a signi cant incentive for incumbents to exert eort we also nd a selection eect although it is weaker in terms of its eect on average governor performance according to our model the widely used two term regime improves voter welfare by 4 2 compared to a one term regime and nd that a three term regime may improve voter welfare even further

the electoral benefits of unemployment clientelism and distributive politics abstract we show that in the month prior to the 2003 argentine presidential election the expenditures of an argentine poverty relief program exhibit a partisan bias taking into consideration the number of potential recipients the unemployed with children 18 years old or less the counties that were ideologically against the incumbent received a disproportionately large amount of the spending hence instead of targeting swing or core districts as established in the distributive politics literature in argentina the incumbent targeted opposition strongholds to identify these effects and to classify districts into swing core and opposition ones we exploit the 2001 crises in argentina in particular we use the 2001 political discontent that led to 15 of blank and null votes to estimate swing districts finally we also show that this tactical spending had an electoral purpose in counties where it was arguably cheaper to monitor the recipients voting behavior the spending was significantly larger in return the clientelist exchange took place in districts with greater spending and monitoring thus the politicians incentives to design an appropriate poverty relief program may be at odds with their electoral motivation

resource allocation and voter calculus in a multicandidate election this paper links campaign resources and voter calculus through a microeconomic optimization framework i assume that candidate policy positions are fixed while personal valence scores and the salience of issue dimensions are malleable low valence candidates with many proximate competitors in the policy space will focus on building valence high valence candidates who are relatively unclustered in the policy space will focus on manipulating issue salience resources devoted to diminishing others valence scores will increase as the number of viable candidates decreases the model s results are tested where feasible using data from the democratic party primary of 2004

suspiciously timed trade disputes abstract this paper shows that electoral incentives crucially affect the initiation of trade disputes focusing on wto disputes filed by the united states during the 1995 2014 period we find that u s presidents are more likely to initiate a dispute in the year preceding their re election moreover u s trade disputes are more likely to involve industries that are important in swing states to explain these regularities we develop a theoretical model in which re election motives can lead an incumbent politician to file trade disputes to appeal to voters motivated by reciprocity

the seeds of negativity knowledge and money this paper studies the tendency to use negative ads for this purpose we focus on an interesting industry political campaigns and an intriguing empirical regularity the tendency to go negative is higher in close races we present a model of electoral competition in which ads inform voters either of the good traits of the candidate or of the bad traits of his opponent we find that in equilibrium the proportion of negative ads depends on both voters knowledge and the candidate s budget furthermore for an interesting subset of the parameter space negativity increases in both knowledge and budget using data on the elections for the u s house of representative in 2000 2002 and 2004 we examine the model and its implications using nonstructural estimation we find that negativity indeed increases in both voters knowledge and the candidate s budget furthermore we also find that knowledge and budget mediate the effect of closeness on negativity using structural estimation we reinforce these findings specifically we find that the model s parameters are within the subset of the parameter space discussed above thus the evidence implies that the model is not only helpful in identifying variables that were ignored by previous studies i e knowledge and budget but also in explaining an intriguing empirical regularity

does negative advertising affect giving behavior evidence from campaign contributions abstract this paper contributes to a growing literature that explains why individuals contribute to political campaigns we build a panel dataset that follows contributors from primary to general elections to quantify the persistence of giving in political contests those who gave to winning candidates in the primary were most likely to contribute again in the general election next we use an instrumental variable strategy to document that within party negative advertising decreases the probability that individuals contribute to their preferred party in the general election regardless of whether they initially contributed to a winning or losing primary candidate

market structure and innovation a survey economics we all recite deals with allocation of limited resources towards satisfaction of unlimited wants resources are typically identified as land labor and capital plus a technology that determines their transformation into consumer goods disparity between the available goods and services and the desired gives rise to scarcity and the question of what how and for whom to produce the focus then shifts to description and evaluation of alternative resource allocation mechanisms for making the choices the pareto criterion by which an allocation of resources is deemed efficient if any reallocation improving the position of some individual worsens the position of others is a commonly employed gauge of a mechanism s performance in the absence of externalities increasing returns to scale and uncertainty a perfectly competitive market system yields a pareto optimal allocation of resources this underlies the view that individual self interest is compatible with society s interest the further conclusion that pareto optimality may not be achieved via the market system in the presence of monopoly elements provides an economic rationale for antitrust laws the objective of a resource allocation mechanism appears to be according to the analysis described above to make the best of available resources the alternative objective of relaxing constraints through expanding the resource base or developing new technology seems to be beyond its scope thus until rather recently technical advance had been regarded in the mainstream of economic theory as unmotivated by the quest for profits and substantially unaffected by resource allocation instead as j schmookler observed technology had been viewed as a parameter like the weather affecting the outcome of resource allocations but itself unaffected by them 84 1965 evidence that technological progress has significantly contributed to growth in productivity together with a substantial increase in research and development activity largely financed by government and carried out by industry see f machlup 51 1962 may have spurred reconsideration of this view once technical advance is regarded as an economic variable it is natural to in

the road to power partisan loyalty and the centralized provision of local infrastructure this paper sets out a simple dynamic probabilistic voting model in which a government allocates a fixed budget across electoral districts that differ in their loyalties to the ruling party the model predicts that the geographic pattern of spending depends on the way the government balances long run machine politics considerations and the more immediate concern to win over swing voters empirical results obtained from a panel of electoral districts in quebec provide robust evidence that districts which display loyalty to the incumbent government receive disproportionately more spending especially close to an election at odds with the standard swing voter view

an evaluation of federal policies concerning joint ventures for applied research and development current federal policies toward interfirm cooperation in research and development are designed to maximize society s use of available technology models of industry resource allocation behavior demonstrate that these policies are detrimental to the formation of risk sharing consortia for the development of new technology the reason is that current policies often deprive applied research and development activities of their appropriability analytical results suggest that if appropriability is maintained an underinvestment in applied research and development can be corrected in most cases simply by permitting firms to share the benefits and costs of projects in proportion to firms investments a permissive governmental posture may be particularly effective for industries consisting of a large number of firms with some firms relatively larger than others industries consisting of small numbers of relatively equal size firms may require government as a participant in consortia for applied research and development appropriable but risky r d activities

crossing party lines the eects of information on redistributive politics this paper explores how the quality of information available to voters in uences the choices they make in the polling booth and in turn aects the strategies of political parties competing for their support to do so the paper builds a model of redistributive politics under asymmetric information and then tests the resulting propositions with data from recent elections in sierra leone using the lindbeck and weibull 1987 model as a foundation i incorporate a new determinant of voting choice candidate quality which is only imperfectly observed by voters i show that voters with better information about candidates are more likely to cross ethnic party lines to support a high quality candidate furthermore since information encourages voters to consider characteristics like candidate charisma that are di cult for parties to observe it makes party forecasting of expected vote shares more uncertain such electoral uncertainty in turn induces parties to spread their resources more evenly across jurisdictions two institutional attributes of the empirical setting ethnicity based politics and decentralization enable direct tests of these informational propositions as well as a novel identi cation strategy for the classic swing voter hypothesis my results suggest that information could break the low accountability equilibrium in which citizens cast their votes blindly along partisan lines creating little incentive for political parties to invest in candidate quality or provide resources to areas outside the most tightly contested jurisdictions

unemployment and the labor share abstract the labor share fluctuates over the business cycle to explain this behavior we develop a novel model featuring direct competition between heterogeneous firms to hire workers this simultaneously endogenizes both average match productivity and the division of output between workers and firms in existing matches wages partly reflect labor market conditions at the time of hiring a positive tfp shock therefore reduces the aggregate labor share making it counter cyclical however greater competition and lower unemployment increase labor s share among new firms as more firms enter the aggregate labor share rises and eventually overshoots its initial level as in the data

the performance of rational voter models in recent presidential elections in an economic theory of democracy downs hypothesized that rational utility maximizing citizens would calculate the benefits from voting as opposed to abstaining altogether and then vote if this expected benefit exceeded voting cost this hypothesis is logically derived from economic principles of rational behavior but is counterintuitive even if the utility increment is plausibly large the probability of casting a pivotal tie breaking vote in any sizable polity is minute hence the expected benefit will be less than the time cost of voting and no rational person will vote nevertheless a number of statistical studies have found that voter turnout does respond to differences in the probability of casting a decisive vote even though that probability may be small this article uses data gathered at the state level from the 1968 1972 1976 and 1980 general elections to reestimate the relationship between voter turnout and the probable closeness of the election pooled data least squares dummy variable lsdv regressions are used whenever preliminary tests indicate that such pooling is permissible the empirical results suggest that the relationship between closeness and turnout is weak unstable or nonexistent in all of the models tested

vote motivated candidates abstract we study stochastic voting models where the candidates are allowed to have any smooth strictly increasing utility functions that translate vote shares into payoffs we find that if a strict nash equilibrium exists in a model with an infinite number of voters then nearby equilibria should exist for similar large but finite electorates if the votes are independent random events then equilibria will not depend on the utility functions of the candidates our results have implications for existing models of redistributive politics and spatial competition as the properties of pure strategy equilibria in such games carry over to equilibria in games with arbitrary candidate preferences on the other hand candidate utility functions will matter if the individual voting decisions are correlated in the presence of aggregate uncertainty such as changing economic conditions or political scandals the preferences of parties and candidates with respect to shares of votes will have an effect on political competition

why noncompetitive states are so important for understanding the outcomes of competitive elections the electoral college 1868 2016 brams and kilgour public choice 170 99 113 2017 begin their recent essay on the electoral college ec by pointing out the obvious but nonetheless regularly neglected fact that noncompetitive states may have a decisive impact on ec outcomes and shape the electoral strategies of the candidates in the competitive states especially if there is asymmetry in the partisan balances in the non competitive states their contribution is to offer combinatorics insights into the implications of such asymmetries in the form of three new indicators winningness vulnerability and fragility they then explore the magnitude and effects of these three measures for the presidential elections of 2000 2004 2008 and 2012 the major contribution of this note is to extend their analyses of these measures to an additional 34 elections every election in the modern two party post civil war era from 1868 to 2016 we find the winningness measure to predict very well over the entire set of 38 presidential elections inspired by their work we also offer a new and simpler metric for partisan asymmetries in noncompetitive states and show how it can predict the expected closeness of ec outcomes as well or better than the more complex combinatorics measures they propose

is it whom you know or what you know an empirical assessment of the lobbying process abstract do lobbyists provide issue specific information to members of congress or do they provide special interests access to politicians we present evidence to assess the role of issue expertis

your vote counts on account of the way it is counted an institutional solution to the paradox of not voting when we explicitly lay out all its steps we find that the paradox of not voting since the chance of one vote s making a difference is about zero why trouble to vote rests on a false but hitherto unremarked assumption about the institutional context of elections my solution to the paradox is more conservative than others that have been proposed and it yields a rational choice model of voting whose consequence accord well with empirical findings on turnout

follow the leader theory and evidence on political participation using state by state voting data for u s presidential elections the authors observe that voter turnout is a positive function of predicted closeness to explain the strategic component of political participation they develop a follow the leader model political leaders expend effort according to their chance of being pivotal which depends on the expected closeness of the race at both state and national levels and how voters respond to their effort structural estimation supports this model for example a 1 percent increase in the predicted closeness at the state level stimulates leaders efforts which increases turnout by 0 34 percent

a test of the hotelling valuation principle time series tests of the hotelling r percent rule for natural resource prices have not been strongly supportive but the tests and the data are subject to serious difficulties we propose here an alternative testing strategy based on another but less widely known implication of the hotelling model we test this implication which we call the hotelling valuation principle by regressing the market values of the reserves of a sample of u s domestic oiland gas producing companies on their estimated hotelling values we find that the estimated hotelling values account for a significant portion of the observed variations in market values and that the hotelling measures are better indicators of the market values of petroleum properties than two widely cited publicly available alternative appraisals

a theory of endogenous commitment commitment is typically modelled by assigning to one of the players the ability to take an initial binding action the weakness of this approach is that the fundamental question of who has the opportunity to commit cannot be addressed as it is assumed this paper presents a framework in which commitment power arises endogenously from the fundamentals of the model we construct a finite dynamic game in which players are given the option to change their minds as often as they wish but pay a switching cost if they do so we show that for games with two players and two actions there is a unique subgame perfect equilibrium with a simple structure this equilibrium is independent of the order and timing of moves and is robust to other protocol specifications moreover despite the perfect information nature of the model and the costly switches strategic delays may arise in equilibrium the flexibility of the model allows us to apply it to various environments in particular we study an entry deterrence situation its equilibrium is intuitive and illustrative of how commitment power is endogenously determined copyright 2008 wiley blackwell

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

the dynamic effects of neutral and investment specific technology shocks the neoclassical growth model is used to identify the short run effects of neutral technology shocks which affect the production of all goods homogeneously and investment specific shocks which affect only investment goods the real equipment price crucial for identifying the investment shocks experiences an abrupt increase in its average rate of decline in 1982 so the analysis is based on a split sample on the basis of the preferred specification the two technology shocks account for 73 percent of hours and 44 percent of output s business cycle variation before 1982 and 38 percent and 80 percent afterward the shocks also account for more than 40 percent of hours and 58 percent of output s forecast errors over a three to eight year horizon in both samples the majority of these effects are driven by the investment shocks

industry investment in basic research assuming interdependence of benefits from appropriable and inappropriable activities using a model of the resource allocation behavior of a group of firms joglekar and hamburg 1983 demonstrate that unaided industry allocation to basic research is suboptimal and that in stimulating this allocation provision of government seed money is generally counterproductive while the provision of matching subsidies is not cost efficient using basically the same model but focusing on the case of a homogeneous industry joglekar and hamburg 1986 further identify several industry characteristics that increase the degree of suboptimality of investment in basic research and consequently the need for government intervention joglekar and hamburg 1983 1986 assume that a firm s benefits from its investment in appropriable activities are independent of its benefits from the industry s total investment in the pertinent basic i e inappropriable research investment theory suggests that a firm s benefits often depend upon its investment portfolio and that an investment in basic research that is not supported by suitable investments in other activities e g plant and equipment personnel training etc may yield far smaller benefits than could be potentially obtained therefore in this paper i present a model that assumes such an interdependence of benefits i find that most of joglekar and hamburg s 1983 1986 conclusions are confirmed by the new model

the political participation puzzle and marketing abstract this study shows that one of the most intriguing findings on political participation that the participation rate is higher in close elections is due to the omission of variables namely the marketing activities this relationship between closeness and participation is intriguing because 1 it implies that people participate in elections because their vote might be decisive but 2 such an incentive to vote is unreasonable this study presents a theoretical model that suggests that closeness does not affect the turnout rate directly but rather through the marketing activities of the parties in other words in equilibrium close elections attract higher marketing spending which in turn increases turnout the author uses data on the 1996 2004 presidential elections in the united states to examine the model and its implications using structural and nonstructural estimation the author finds that the data support the model and its implications furthermore the effect of marketing on turnout i

public education and pensions in democracy a political economy theory a dynamic political economy theory of scal policy is presented to explain the simultaneous existence of public education and pensions in modern democracies the driving force of the model is the intergenerational conict over the allocation of the public budget successive generations of voters choose scal policies through repeated elections the political power of elderly voters creates the motive for adults to support public investment in the human capital of future generations since it expands future pension possibilities we characterize the markov perfect equilibrium of the voting game in a small open economy the equilibrium reproduces salient features of intergenerational