do better schools matter parental valuation of elementary education the evaluation of numerous school reforms requires an understanding of the value of better schools given the difficulty of calculating the relationship between school quality and student outcomes i turn to another method and use house prices to infer the value parents place on school quality i look within school districts at houses located on attendance district boundaries houses then differ only by the elementary school the child attends i thereby effectively remove the variation in neighborhoods taxes and school spending i find that parents are willing to pay 2 5 percent more for a 5 percent increase in test scores this finding is robust to a number of sensitivity checks

squealer dealers the market for information in federal drug trafficking prosecutions never rat on your friends and always keep your mouth shut jimmy conway goodfellas citing his invaluable aid in the war against the mafia a federal judge yesterday rewarded a once powerful mob figure who became a major government informer by sentencing him to just five years in prison despite his admitted involvement in 19 murders the new york times september 27 19941 i introduction since the seminal theoretical work of becker 1968 the economics of crime has developed an extensive empirical literature 2 this article adds to that literature by studying markets for information in federal prosecutions of drug trafficking conspiracies in these markets law enforcement demands information that can help prosecute and imprison suspected drug traffickers while other drug traffickers supply the information 3 the price over which demanders and suppliers higgle is the size of an informer s sentence reduction 4 mustard 2001 using federal sentencing data found that different demographic groups have different rates relative quantities of providing substantial assistance the federal legal term meaning information against other defendants 5 this article adds to mustard 2001 by using federal sentencing of convicted drug traffickers to uncover whether different demographic groups have different relative prices for their information i e whether different groups receive larger sentence reductions higher prices or smaller sentence reductions lower prices when providing substantial assistance then in a simple manner similar to well known examinations of the returns to education in the 1970s and 1980s levy and mumane 1992 murphy and welch 1989 price and quantity determine whether certain groups experience different relative demand or relative supply for their testimony groups experiencing high relative demand have their information highly sought by law enforcement and therefore have high rates quantities of providing substantial assistance and large sentence reductions prices when doing so those with low relative demand have low quantities and low prices groups with high relative supply of substantial assistance have high quantities but low prices while those with low relative supply have low quantities and high prices this article further adds to the literature by going beyond demographic factors and examining what criminality related factors e g criminal history role in a criminal conspiracy and type of drug dealt affect supply and demand for information and by examining supply and demand conditional on expected prison sentence results show that women and better educated defendants experience high relative demand for information while blacks hispanics and non u s citizens experience low relative demand groups facing long prison sentences dealers of harder drugs those with long criminal histories and high level dealers have high relative supply while those facing short sentences primarily low level dealers have low relative supply when controlling for expected sentence crack dealers high level dealers and dealers with long criminal histories experience low demand race specific estimations show that women of all races experience high relative demand for information the rest of this article is organized as follows section ii discusses the federal criminal justice system emphasizing reforms established by the sentencing reform act of 1984 and the anti drug abuse act of 1986 section iii discusses the data and provides summary statistics section iv discusses my empirical methodology section v shows results and section vi attempts to explain them section vii discusses results from race specific estimations and section viii concludes ii federal criminal sentencing through most of the 1980s and before federal judges possessed near total discretion in determining sentences for criminals convicted of violating federal statutes e

the economic consequences of partisanship in a polarized era with growing affective polarization in the united states partisanship is increasingly an impediment to cooperation in political settings but does partisanship also affect behavior in nonpolitical settings we show evidence that it does demonstrating its effect on economic outcomes across a range of experiments in real world environments a field experiment in an online labor market indicates that workers request systematically lower reservation wages when the employer shares their political stance reflecting a preference to work for co partisans we conduct two field experiments with consumers and find a preference for dealing with co partisans especially among those with strong partisan attachments finally via a population based incentivized survey experiment we find that the influence of political considerations on economic choices extends also to weaker partisans whereas earlier studies show the political consequences of polarization in american politics our findings suggest that partisanship spills over beyond the political shaping cooperation in everyday economic behavior

flexing muscle corporate political expenditures as signals to the bureaucracy when corporations and their employees spend money in the political arena to what extent are they purchasing special treatment complaints about the deleterious effects of corporate money in politics are ubiquitous in american political discourse however in order to pinpoint the place of these expenditures in american democracy and to appreciate fully the consequences of various reform proposals itiscriticaltoidentifytheprecisemechanism through which any preferential treatment might occur in this spirit scholars have suggested that corporations make political expenditures because they hope to influence government behavior through either explicit quid pro quos with legislators for constituency service or favorable votes baron 1989 grossman and helpman 1994 2001 improved access to legislators hall and wayman 1990 langbein 1986 or enhancement of the electoral prospects of sympathetic incumbents pooleandromer1985 empiricalevidenceverifying a definitive relationship between expenditures and specific policy change unfortunately has proven elusive in a recent review essay ansolabehere de figueiredo and snyder 2003 116 conclude contributions explain a miniscule fraction of the variation in voting behavior in the u s congress they suggest thatcontributionsarebetterthoughtofasconsumption goods that fulfill a desire to participate in politics than as investment in a political marketplace

how trading institutions affect financial market performance some laboratory evidence i introduction trading institutions vary considerably across contemporary financial markets 1 but most can be classified into one of two basic types the continuous double auction da allows traders to submit public offers to buy or to sell and to accept other traders offers at any moment in time the double auction institution offers immediacy but non uniform transaction prices the other basic trading institution the clearinghouse ch gathers offers and clears them at a unified price at a pre specified time it sacrifices immediacy for uniform transaction prices 2 the two types of institutions have co existed and evolved for centuries but now are emerging in new electronic versions market participants and policy makers would like to know which institution or variant or combination is most efficient but theoretical and empirical work to date provides little guidance this paper reports on a series of laboratory asset markets experiments designed to compare variants of the double auction and clearinghouse trading institutions the markets are small usually with eight or nine traders but the traders are profit motivated and experienced with the trading institutions the traded asset has uncertain market value and traders receive useful but inconclusive private information they can only learn the asset s true value during the course of trade laboratory markets offer several advantages for empirical study of financial market institutions first private information is observable even controllable in the laboratory and therefore the investigator can directly measure market efficiency 3 second the complexity of the environment can be varied systematically in the laboratory and its effects on market performance can be separated from the effects of the market institution and other forces finally the market institution itself is controllable in the laboratory so it is possible to make valid causal inferences on how the market institution shapes market performance i begin with a survey of relevant literature and other preliminaries in the rest of this section section ii outlines the laboratory procedures the creation of trading environments of varying complexity the electronic implementation of the clearinghouse and double auction trading institutions the computation of theoretical benchmark prices and allocations and the measurement of market performance section iii collects the results following an illustrative account of a double auction trading period and a clearinghouse trading period i use descriptive statistics to summarize market performance in each of the thirty nine experiments the main conclusions are based on statistical comparisons of market performance across alternative market institutions the clearinghouse institution does surprisingly well it delivers greater market depth than the double auction discovers prices at least as efficiently and produces final allocations almost as efficient as the double auction the main institutional variants examined in this paper concern the amount of information made public regarding order placement orderflow the data suggest that public display of the orderflow enhances double auction efficiency but may impair clearinghouse efficiency a study of trading volume shows higher volume in the double auction in both institutions volume increases when important private news arrives and when the trading period is about to end the paper concludes with a brief summary and discussion of the results a companion paper friedman 1991 considers the effects of awarding various privileges to some but not all traders copeland and friedman 1987 1991 provide useful background information on laboratory procedures and computerized double auction markets instructions for the current experiments are available on request the need for empirical work a skeptic might argue that empirical work is unnecessary the mere fact that the double auction and clearinghouse institutions both persist in major financial markets implies that both are highly efficient because a more efficient institution would displace less efficient institutions

a test of the structure of pac contracts an analysis of house gun control votes in the 1980s enactment of the bill was a major victory for the national rifle association which had worked for years to win relaxation of the landmark gun control act of 1968 congressional quarterly almanac 1986 p 82 i introduction every election the same political action committees pacs contribute millions of dollars to candidates for office well informed participants in the political process surely must get value for their money yet empirical research fails to provide systematic evidence that campaign contributions influence congressional roll call votes 1 a mischaracterization of the exchange between pacs and politicians may produce these contradictory results empirical studies of roll call voting typically use pac contributions from only one election cycle earlier studies generally assume prepayment in the prior congress while more contemporary studies assume a spot exchange recent empirical work however suggests another possibility interest groups may buy current influence with money spent over multiple election cycles stratmann 1995 shows that contributions from both the current and the previous election cycles influence floor votes on agricultural price supports snyder 1990 1992 presents evidence that interest groups make long term investments in politicians previous studies by arbitrarily imposing a payment structure may have produced erroneous estimates of the influence of pac money on legislative votes we examine roll call votes on gun control in the u s house of representatives during the 1980s to determine whether pacs make spot market purchases prepay for votes in the prior election cycle or make long term investments we investigate whether pac contributions have a durable long term investment effect as snyder 1992 suggests we consider two types of evidence concerning the campaign contribution contract first we examine the pattern of expenditures by the two dominant interest groups concerned with gun control the national rifle association nra and hand gun control hgc their expenditures provide strong evidence against the spot market exchange hypothesis both groups made significant expenditures in sessions of congress in which no floor vote occurred nor were these expenditures purchasing services such as committee work in a spot market exchange further 1986 nra expenditures are significantly higher for first term representatives which is consistent with long term investments but contradicts a spot exchange since freshmen have the least influence to sell second we include expenditures from both the current and the five previous election cycles as separate independent variables in a model of roll call voting to date no empirical paper tests whether pac money from more than two cycles influences roll call voting and only stratmann 1995 and grenzke 1989 use a model that specifies money from more than one cycle in an equation explaining roll call votes our probit estimates indicate that nra expenditures in the three most recent election cycles and hgc expenditures in the two most recent cycles buy votes the independent effect of expenditures from different cycles suggests that contributions are neither an unqualified one session prepayment nor a spot exchange the influence of nra expenditures two sessions prior to the roll call votes is evidence of a long term investment the literature on the determinants of roll call voting assumes that pac contributions alter representatives votes interest groups might instead simply provide campaign assistance to their supporters to affect the composition of congress stratmann 1991 bronars and lott 1997 if a difficult to quantify variable and thus omitted from regressions signals a representative s true position and interest groups make campaign contributions on the basis of this variable pac contributions might appear to influence votes the pattern of contributions and votes on gun control however indicates attempts by the nra and hgc to influence votes not merely the composition of congress

constituency opinion and pac contributions a case of the national abortion and reproductive rights action league to test whether interest group politics doharm to a representative democracy thispaper simulates congressionaldistrict level constituency opinion onabortion analyzing the relationshipbetween the constituency opinion andnaral s contributions in the 102nd and103rd congresses this paper presentsempirical evidence that naral scontribution decision is influenced byconstituency opinion the evidence however is mixed constituency opinioninfluences naral s decision on who will getits money constituency opinion however does not influence naral s decision on whowill get more money according to theseresults financial representation byinterest groups does not seriously causeharm to a representative democracy but itcan still bias the representativeness tosome extent an interest group may selectlegislators whose districts support itsposition less strongly and contribute agreater amount of money to the legislators

are emily and greg more employable than lakisha and jamal a field experiment on labor market discrimination we study race in the labor market by sending fictitious resumes to help wanted ads in boston and chicago newspapers to manipulate perceived race resumes are randomly assigned african american or white sounding names white names receive 50 percent more callbacks for interviews callbacks are also more responsive to resume quality for white names than for african american ones the racial gap is uniform across occupation industry and employer size we also find little evidence that employers are inferring social class from the names differential treatment by race still appears to still be prominent in the u s labor market jel j71 j64

the theory of economic regulation and public choice and the determinants of public sector bargaining legislation in this study we used the theory of economic regulation and public choice to derive a model to explain the pattern of public sector bargaining laws among the states we find this type of legislation is influenced by the following demand factors 1 the extent of public sector union membership which represents the interest group hypothesis has a positive influence on pro union legislation 2 the extent of employer opposition to unions as measured by unfair labor practice charges against employers in representation elections has a negative effect on bargaining laws 3 two taste variables the salaries of public employees and the percent of nonwhite employment in the state have a positive influence on these laws a result which will be surprising to many people is that the extent of private sector union membership has no significant influence on the passage of public sector bargaining legislation

bureaucrats legislators and the size of government some recent theories have blamed the growth of government on budget maximizing bureaucrats who are assumedly capable of imposing their most preferred budget output combination on legislatures subject to cost and demand constraints however theoretical examination of the range of bargaining outcomes that might occur between bureau and legislature shows that budget maximizing behavior does not necessarily lead to super optimal levels of production nor do the suggested reforms of competition and privatization necessarily improve the situation in this bargaining model the central determinants of governmental growth are not budget maximizing bureaucrats but the legislature s decisions regarding mode of oversight and form of internal organization

price formation in single call markets this paper reports a laboratory experiment designed to examine the price formation process in a simple market institution the single call market the experiment features random values and costs each period so each period generates a new price formation observation other design features are intended to enhance the predictive power of the bayesian nash equilibrium bne theory developed recently for this trading institution we find that the data support several qualitative implications of the bne but that subjects bid and ask behavior is not as responsive to changes in the pricing rule as the bne predictions bids and asks tend to reveal more of the underlying values and costs than predicted particularly when subjects are experienced nevertheless observed trading efficiency falls below the bne prediction the results offer more support for the bne when subjects compete against nash robot opponents a simple learning model accounts for several of the deviations from bne

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

the logic of private and collective action since mancur olson s logic of collective action 1965 it is impossible for political scientists to conceive of political participation without reference to his powerful argument linking numbers of participants public goods and participatory outcomes what is puzzling is the poor empirical support for this argument in the domain where it should work best namely explaining business political activity olson thought his arguments principally applicable to economic groups and for the empirical development of his arguments olson drew heavily on business interests the most active segment of the interest group community we explore these arguments with business political activities data by examining the statistical performance of various measures of market structure in determining business political activity and find little empirical support we do offer an alternative basis for business behavior lodged in both private and collective goods that preserves business rationality and also helps explain not only the amount of business political participation but the modes of business participation w hen we think about the paradox of participation one of the formative puzzles of modern political science we tend to think first of voting and citizen participation we think of the large numbers involved the small probability that an individual vote will be decisive and we conclude that no one will vote the puzzle then becomes why so many people do vote to find a solution we tend to plead some sort of diminished rationality such as the costs of voting are too low even to consider carefully or that they are outweighed by the norm of civic duty in this article we examine the paradox of participation in the principal context that olson 1965 considered it for the empirical development of his arguments olson drew heavily on business interests he observed that business was the most active segment of the interest group community and noted that for large numbers of participants seeking pubic goods the dominant choice is to do nothing he argued that business activity derived from multiple markets and related industries segmenting the larger business community into small groups in an oligopolistic market it is rational for the individual firm to participate in association with others or on its own a

beyond microfoundations towards a not too rational macroeconomics at ucla we are establishing a center for computable economics i have been very much involved in this effort this may surprise you that a non mathematical macro monetary economist should become an enthusiast for this project is one of those things that do not compute but then as i will explain we take a special interest in things that do not compute one may come to computable economics by many intellectual routes i will trace my own not because it makes a particularly edifying story but because it will tell you what kind of problems i hope we can make progress on by developing the field of computable economics but before we get to that i had better explain what i mean by computable economics

how internal constraints shape interest group activities evidence from access seeking pacs interest groups contribute much less to campaigns than legally allowed consequently prevailing theories infer these contributions must yield minimal returns i argue constraints on pac fundraising may also explain why interest groups give little i illuminate one such constraint access seeking pacs rely on voluntary donations from affiliated individuals e g employees and these pacs alienate donors with partisan preferences when giving to the opposite party first difference in differences analysis of real giving shows donors withhold donations to access seeking pacs when pacs contribute to out partisan politicians next an original survey of corporate pac donors demonstrates they know how their pacs allocate contributions across parties and replicates the observational study in an experiment donors partisanship thus limits access seeking pacs fundraising and influence this provides a new perspective on why there is little interest group money in elections and has broad implications for how partisan preferences and other internal constraints shape interest group strategy

competitive lobbying and supermajorities in a majority rule institution this paper presents a complete information model of competitive lobbying in a majority rule institution where lobbying consists of providing politically valuable resources to legislators legislators have three roles first they act as allies or opponents in deciding whether to consider a lobbyist s offer second they act as agenda setters in deciding whether to bring a policy alternative to a vote third they vote on the agenda the stationary equilibria include minimal majorities and supermajorities and involve unilateral counteractive and preemptive lobbying supermajorities are recruited either to influence agenda formation or to preempt the opposing lobbyist

the jeffords effect abstract in may 2001 senator james jeffords left the republican party and tipped control of the u s senate to the democrats this paper uses the surprise event to demonstrate what i term the jeffords effect changes in the political landscape have large effects on the market value of firms i use a firm s soft money donations to the national parties as the measure of how the firm aligns itself politically in this event study a firm lost 8 percent of market capitalization the week of jeffords s switch for every 250 000 it gave to the republicans in the previous election cycle on the basis of the point estimates the stock price gain associated with democratic donations is smaller than the loss associated with republican donations but the estimates are consistent with the effects being equal and opposite the results withstand several robustness checks and the effects appear to persist over time

why is there so little money in u s politics in this paper we argue that campaign contributions are not a form of policy buying but are rather a form of political participation and consumption we summarize the data on campaign spending and show through our descriptive statistics and our econometric analysis that individuals not special interests are the main source of campaign contributions moreover we demonstrate that campaign giving is a normal good dependent upon income and campaign contributions as a percent of gdp have not risen appreciably in over 100 years if anything they have probably fallen we then show that only one in four studies from the previous literature support the popular notion that contributions buy legislators votes finally we illustrate that when one controls for unobserved constituent and legislator effects there is little relationship between money and legislator votes thus the question is not why there is so little money politics but rather why organized interests give at all we conclude by offering potential answers to this question this abstract was borrowed from another version of this item

market theories evolve and so do markets responding to mirowski s target article this paper discusses some intellectual currents of the 1970s to 1990s and offers suggestions on measuring market performance on including automated agents as market participants on evolving new market formats and on dealing with highly differentiated goods acknowledgments i am grateful to associate editor rosser for inviting me to participate in this symposium and to philip mirowski for writing a timely and engaging target article some of the material comes from a recent nsf proposal co written with james c cox the paper mentions many other intellectual debts of course i retain sole responsibility for lapses of style and substance

the ideological component of senate voting different principles or different principals evidence exists on both sides of the question of whether or not legislator specific ideologically driven shirking of constituent interest occurs in this paper we use a well known model of such shirking by senators as our point of departure and add measures of inter state constituent interests the role of campaign contributions and hence the importance of whether or not senators are up for reelection we find some evidence that the model provides a stronger explanation for senators up for reelection than for those who are not and that campaign contributions help determine voting decisions by these legislators finally accounting for inter state constituent interests shirking is not a significant variable in the voting decisions of senators facing reelection thus it appears that the reelection interests of some senators have been mistaken for ideologically driven shirking

racial discrimination among nba referees the nba provides an intriguing place to assess discrimination referees and players are involved in repeated interactions in a high pressure setting with referees making split second decisions that might allow implicit racial biases to become evident we find that more personal fouls are awarded against players when they are officiated by an opposite race officiating crew than when they are officiated by an own race refereeing crew these biases are sufficiently large so that they affect the outcome of an appreciable number of games our results do not distinguish whether the bias stems from the actions of white or black referees

electoral competition and special interest politics have fixed positions on some issues but vary their positions on others in order to attract votes and campaign contributions in this context we examine whether special interest groups are governed by an electoral motive or an influence in their campaign giving and how their contributions affect the equilibrium platforms we show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups the party that is expected to win a majority of seats caters more to the special interests

the booker decision and discrimination in federal criminal sentences i introduction the sentencing reform act passed by congress in 1984 established the federal sentencing guidelines the guidelines were designed to improve standardization in punishments handed out to convicted criminals by limiting what had been federal judges nearly unfettered discretion in sentencing anderson kling and stith 1999 stith and cabranes 1998 for federal crimes committed after november 1 1987 the act established that sentences of incarceration were to be determined by a table mapping the severity of the offense a level between 1 and 43 and the defendant s criminal history a level between i and vi to a potential range of months imprisonment table 1 shows the united states sentencing commission s ussc sentencing table a defendant for example with a final offense level of 20 and a criminal history category of ih should according to the guidelines be sentenced to somewhere between 41 and 51 months in federal prison the actual sentence would be an integer within that range 1 the act also abolished parole for federal crimes though up to 15 of an inmate s sentence could be reduced for good behavior 2 the sentencing reform act declared that table 1 s guideline ranges were mandatory federal judges had to incur a nontrivial cost to sentence a defendant outside them but on january 12 2005 the united states supreme court ruled in the two part decision u s vs booker that a the sentencing guidelines violated a defendant s constitutional fight to a jury trial 3 and b in order to maintain constitutionality the guidelines were to be effectively advisory instead of mandatory 4 legal observers had expected the overturning of the federal sentencing guidelines system since june 2004 when the supreme court decision blakely v washington invalidated washington state s sentencing guidelines system because it violated a defendant s right to a jury trial denniston 2004 by making the sentencing guidelines advisory rather than mandatory booker reduced the cost of sentencing outside the guidelines and increased the ambiguity of federal judges sentencing decisions according to bertrand chugh and mullainathan 2005 ambiguity is one of three situations in which implicit discrimination is likely to occur the other two situations are inattentiveness to task and time pressure implicit discrimination unlike taste based discrimination becker 1957 or statistical discrimination aigner and cain 1977 reflects implicit attitudes that bertrand chugh and mullainathan 2005 state are unintentional and outside of the discriminator s awareness research indicating implicit discrimination include findings that national basketball association referees call fewer fouls against players of their own race price and wolfers 2010 that major league baseball umpires are more likely to call strikes when the pitcher is of their own race parsons et al 2007 and that screeners of resumes are more likely to ignore job applications with black names than ones with white names bertrand and mullainathan 2004 each of these scenarios describes a situation where ambiguity inattentiveness or time pressure is a factor and where a statistically significant amount of discriminatory treatment is detected 5 this paper tests whether the booker decision by increasing the ambiguity of federal judges sentencing decisions increased manifestations of discrimination in accordance with the hypothesis of bertrand chugh and mullainathan 2005 difference in difference results show that conditional on a defendant s table 1 guideline cell booker reduced sentences significantly for the default group of defendants white male u s citizens who never earned a high school diploma female defendants and defendants with terminal high school degrees received significantly larger booker related sentence reductions and college graduates received significantly smaller ones

interest group politics under majority rule abstract we develop a model of interest group politics in which the groups and coalitions that arise and the form of redistributive policies sought are jointly determined the model generates three key results first programs intended to reduce income inequality are more likely to involve direct payments than are programs that redistribute wealth across groups with similar incomes second nonequalizing redistribution is unlikely unless the various participants in the political process face significantly different political and economic costs of obtaining transfers third many policies that induce asymmetries among interest groups also impose significant deadweight costs stable nonequalizing redistribution will therefore tend to involve indirect and economically inefficient methods of transferring income

allocative efficiency of markets with zero intelligence traders market as a partial substitute for individual rationality we report market experiments in which human traders are replaced by zero intelligence programs that submit random bids and offers imposing a budget constraint i e not permitting traders to sell below their costs or buy above their values is sufficient to raise the allocative efficiency of these auctions close to 100 percent allocative efficiency of a double auction derives largely from its structure independent of traders motivation intelligence or learning adam smith s invisible hand may be more powerful than some may have thought it can generate aggregate rationality not only from individual rationality but also from individual irrationality

making the crime fit the penalty the role of prosecutorial discretion under mandatory minimum sentencing abstract this paper empirically documents one way in which prosecutorial discretion may be used to dampen the effects of mandatory minimum sentencing laws specifically prosecutors can use their discretion over prosecution charges to circumvent a mandatory minimum sentencing law for some defendants by prosecuting defendants who were initially arrested for the crime targeted by the sentencing law for lesser crimes not covered by the law i document the use of such discretion with respect to several state three strikes type repeat offender laws imposed throughout the 1990s and i find that prosecutors become significantly more likely to lower a defendant s prosecution charge to a misdemeanor when conviction for the initial felony arrest charge would lead to sentencing under a three strikes law moreover accounting for such behavior is important as i show that failure to do so can lead to overstating the effects of these laws on average sentencing by almost 30 percent

legislators and interest groups how unorganized interests get represented this paper derives a supply price for public policy using a constrained maximization model in the model three sets of agents each have preferences over outcomes organized interest groups offer campaign contributions to improve their own wealth voters offer votes to obtain outcomes closer to their most preferred outcomes and legislators seek both campaign contributions and votes to obtain reelection a given legislator s supply price for policy is shown to depend on the productivity of his effort as determined by committee assignments priority and ability and by the preferences of his unorganized constituency in the home district two extreme assumptions about the effectiveness of campaign spending in eliciting votes are used to illustrate the comparative statics properties of the model the prediction of the model is that interest groups will in general seek out legislators whose voters are indifferent to the policy the interest group seeks thus voters who do have preferences over policy are in effect represented even though they are not organized

the determinants of industry political activity 1978 1986 c ampaign contributions made by corporate political action committees pacs are increasingly important and controversial in u s elections influence purchasing is often alleged by pundits and campaign finance reform is continually debated in congress in the academy social scientists have analyzed the allocation of interest group monies and have looked for possible impacts on legislation few however have tried to explain the total contributions of economic interest groups we shall analyze variations in contributions across industries and over time with an empirical model based on organizationally constrained profit maximizing behavior we assume that corporate pac contributions in an industry are raised to enhance industry profits subject to the constraints of organization costs and freeriding incentives our empirical work covers 124 industries over five election cycles from 1978 through 1986 both the costs and benefits of political activity vary across industries we argue that the benefits of political action are determined by direct contact with the government as a regulator or purchaser of industry output by government s ability to ameliorate adverse market conditions and by the industry s ability to solve collective action problems without government assistance the costs of industry political action arise mainly from collective action problems because effective political activity often requires concerted action by the constituent firms in each industry we also make a methodological contribution previous studies use statistical techniques that suffer from sample selectivity bias or else force the probability of acting politically to be explained by the same set of coefficients as is the amount of action taken we explain and employ a technique that accounts for both problems the results are consistent with the theses that industries follow investment oriented goals in deciding the amount of political action to undertake and that collective action problems are important constraints on industry political activity we can explain between 60 and 80 of the variation in contributions in our sample first we review existing work on corporate political activity particularly papers examining patterns of aggregate pac spending by industry then we present an organization cost constrained industryprofit maximizing model based on a comparison between an idealized zero organization cost industry and the more realistic case where organizing collective action is difficult the independent variables used in the analysis are also discussed and defined next we discuss the dependent variable and total industry contributions and explain our statistical method then the results are presented followed by a discussion of industry structure and political activity to make clear how our results can explain different contribution patterns we give examples using five actual industries

judicial lobbying the politics of labor law constitutional interpretation this paper links the theory of interest groups influence over the legislature with that of congressional control over the judiciary the resulting framework reconciles the theoretical literature of lobbying with the negative available evidence on the impact of lobbying over legislative outcomes and sheds light to the determinants of lobbying in separation of powers systems we provide conditions for judicial decisions to be sensitive to legislative lobbying and find that lobbying falls the more divided the legislature is on the relevant issues we apply this framework to analyze supreme court labor decisions in argentina and find results consistent with the predictions of the theory

interest group competition and the organization of congress theory and evidence from financial services political action committees we develop a positive theory of how interest group competition shapes the organization of congress and use it to explain campaign contribution patterns in financial services since interest groups cannot enforce fee for service contracts with legislators legislators have an incentive to create specialized standing committees which foster repeated dealing between interests and committee members the resulting reputational equilibrium supports high contributions and high legislative effort for the interests contribution patterns by competing interests in the congressional battle over whether banks can enter new businesses support the theory which also has implications for term limits and campaign reform

earning through learning in legislatures this inquiry applies gary becker s theoretical notions of general and specific training to the experiential learning that occurs within political institutions in particular the u s congress in the process we isolate economic facets of these legislative experiences that influence the rental value of human capital derived from congressional training we identify four factors that structure legislators post elective wages pre congressional salary year of entry tenure and variables closely related to general training in congress specifically assignment to powerful legislative committees acquisition of broad skill packages investment in expanding skill set proficiencies and to a lesser extent life cycle driven declines in such investments

bailout for sale the vote to save wall street this paper provides a public choice analysis of the 2008 banking bailout in the united states the paper introduces heterogeneity of congressional districts into the common agency problem in special interest politics district heterogeneity implies district specific electoral constraints on legislators ability to collect rents from and cast dissonant votes in support of special interests an empirical analysis examines legislative voting on the initial bailout proposal using campaign contributions to legislators from special interest groups and the importance of financial services for employment within congressional districts as the main explanatory variables the empirical analysis corrects for possible endogeneity bias using valid instruments and considers several intuitive sub sample estimations as alternative methods for addressing the endogeneity issue the paper provides empirical evidence that campaign contributions from the financial services sector influenced legislative voting on the banking bailout