nonmonetary effects of the financial crisis in propagation of the great depression this paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period our approach is complementary to that of friedman and schwartz who emphasized the monetary impact of the bank failures we focus on non monetary primarily credit related aspects of the financial sector output link and consider the problems of debtors as well as those of the banking system we argue that the financial disruptions of 1930 33 reduced the efficiency of the credit allocation process and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand evidence suggests that effects of this type can help explain the unusual length and depth of the great depression this abstract was borrowed from another version of this item

transparency in parliamentary voting how does transparency affect voting behavior to answer this question we exploit a switch from a show of hands to electronic voting in the upper house of the swiss parliament the change which took place halfway through the 2011 2015 legislative period also brought about the online publication of individual voting records using the lower house as a control group we compare individual voting decisions in a set of identical votes in both chambers this unique framework makes it possible to estimate the causal effect of increased transparency on legislators choices since the reform members of the upper house are less likely to deviate from the majority decision of their party legislators representing the same canton are also less likely to cast an aligned vote suggesting that voters lose influence over their representatives in parliament

political economy of public policies insights from distortions to agricultural and food markets the agricultural and food sector is an ideal case for investigating the political economy of public policies many of the policy developments in this sector since the 1950s have been sudden and transformational while others have been gradual but persistent this paper reviews and synthesizes the literature on trends and fluctuations in market distortions and the political economy explanations that have been advanced based on a rich global data set covering a half century of evidence on commodities countries and policy instruments the paper identifies hypotheses that have been explored in the literature on the extent of market distortions and the conditions under which reform may be feasible

poverty reduction patronage or vote buying the allocation of public goods and the 2001 election in madagascar abstract this article uses data from madagascar to examine how an upcoming election or political patronage might induce governments to deviate from goals such as poverty reduction using a nationwide commune level data set the article tests three competing explanations of how public goods are allocated across districts projects can be allocated on the basis of local need with the goal of reducing poverty or rewarding one s political base or the desire to win votes for an upcoming election the evidence from an analysis of three projects suggests that two of the three projects responded to local needs and a third seemed to be influenced by both election and patronage concerns an analysis of the 2001 presidential election in madagascar shows that voters do appear to reward the incumbent for projects received in their districts

media proliferation and democratic transition in africa the case of madagascar summary state controlled media have historically dominated press outlets across much of africa yet recently economic and political liberalization together with new communication technologies have triggered rapid growth and increasing private sector involvement changes which hold potentially important implications for development and governance this paper explores the origins and impact of recent private sector media growth in madagascar where over 90 private radio stations and 15 private television stations have begun operation over the past decade the resulting profusion of private media has played a key role in improving governance most recently in the hotly contested presidential election of 2001

capture and ideology in the economic theory of politics the economic theory of regulation long ago put public interest theories of politics to rest these theories have correctly been viewed as normative wishings rather than explanations of real world phenomena they have been replaced by models of political behavior that are consistent with the rest of microeconomics anthony downs 1957 james buchanan and gordon tullock 1965 george stigler 1971 sam peltzman 1976 recently however debate has arisen over whether some version of a public interest theory of regulation will have to be readmitted to our thinking about actions and results in the political arena what is at issue is the empirical importance of the altruistic publicly interested goals of rational actors in determining legislative and regulatory outcomes james kau and paul rubin 1979 kalt 1981 peltzman 1982 this study assesses the nature and significance of publicly interested objectives in a particular instance of economic policymaking u s senate voting on coal strip mining regulations the existence of such objectives is of course no contradiction of the economic view of human behavior kenneth arrow 1972 gary becker 1974 and may well be rooted in genetic biological history becker 1976 jack hirshleifer 1978 generally however individuals altruistic publicly interested goals have been given little attention this reflects the judgment that such goals are so empirically unimportant as to allow the use of occam s razor in positive models or well founded apprehensions that these goals are unusually difficult to identify measure and analyze notwithstanding the latter problem we find that approaches which confine themselves to a view of political actors as narrowly egocentric maximizers explain and predict legislative outcomes poorly the tracking and dissecting of the determinants of voting on coal strip mining policy suggest that the economic theory of politics has been prematurely closed to a broader conception of political behavior

political agency government responsiveness and the role of the media abstract the role of mass media in making governments responsive to the needs of citizens is a relatively neglected area in economics we sketch a theoretical example with a role for media in enhancing government responsiveness based on asymmetric information between citizens and government we then use data for the period 1958 1992 on the extent to which indian state governments responded to food shortages via the public distribution of food correlating these with proxies of media political and economic development we find that states that are more responsive tend to also be those with high levels of newspaper circulation electoral turnout and literacy in contrast richer states do not tend to be more responsive than poorer states

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

the tax revolt and electoral competition this paper explores the effect of electoral competition onstate and local expenditures in the us during the politicalenvironment following the tax revolt of the late 1970s itutilizes a theoretical model in which both electoralcompetition and tax and expenditure limits impact spending empirical results indicate the tax revolt s primary impact wastransmitted through political candidate competition notthrough the adoption of tax or expenditure limitations as iscommonly believed however tax and expenditure limits doaffect public education expenditures

food aid and malnutrition in developing countries evidence from global food aid allocation abstract this study investigates the allocation of dietary energy iron vitamin a and zinc within global food aid the response of us and non us donors to nutritional needs and donor interests is estimated with a dynamic correlated random effects tobit model aid flows of the period 1993 2007 are analysed the empirical results show that nutrient shipments in emergency food aid have been allocated towards poorer countries but also face inertia and media bias project food aid from the us is found to be targeted towards politically stable and rural regions while non us project aid focuses on populations with high nutritional requirements

eminent domain power and afterwards leviathan s post taking opportunism this paper investigates post taking procedures a research area not yet fully explored it discusses the economic implications underlying the landowner s repurchase right rr which can be invoked upon the occurrence of a so called change in use after taking rr is compared with the government s discretion regarding such changes the lack of post taking accountability tends to create power ripe for abuse and rr appears to be an effective device for constraining leviathan s opportunism finally a parsimonious estimation supports that under the overriding rr regime there exists the systematic post taking opportunism whereby original public projects are changed into inappropriate projects

political uncertainty and public financing costs evidence from u s gubernatorial elections and municipal bond markets this research investigates how political uncertainty around u s gubernatorial elections in uences the borrowing costs of public debt measured by yields of municipal bonds our evidence from both the new issuance market and the secondary market shows that yields of municipal bonds increase sharply by 6 to 8 basis points before elections and then reverse afterward elections have more pronounced impact during economic downturns when outcomes are less predictable and when states have more outstanding debt several state institutions such as gaap budgeting spending limits and tax increase limits help to mitigate the adverse impact of political uncertainty

food safety the media and the information market availability of information has increased rapidly over the past decades yet information on food safety is still considered problematic economists have extensively researched the effects of imperfect information however little attention has been paid to the institutional organization of the supply of information and the incentive schemes in the information market this paper analyzes how and when information is supplied by media organizations and what the implications are we first develop a theoretical framework and afterwards provide empirical evidence from media coverage of two recent food safety crises in europe

does electoral accountability affect economic policy choices evidence from gubernatorial term limits this paper analyzes the behavior of u s governors from 1950 to 1986 to investigate a reputation building model of political behavior we argue that differences in the behavior of governors who face a binding term limit and those who are able to run again provides a source of variation in discount rates that can be used to test a political agency model we find evidence that taxes spending and other policy instruments respond to a binding term limit if a democrat is in office the result is a fiscal cycle in term limit states which lowers state income when the term limit binds

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

environmental protection a theory of direct and indirect competition for political influence how is it that environmental groups can have a strong impact on environmental policy but without much lobbying this paper develops a model of direct lobbying the government and indirect persuading the public competition for political influence and finds that they are complementary however an increase in the effectiveness of public persuasion or a rise of public environmental awareness induces substitution between the two the findings establish that the empirical phenomenon of lack of political contribution from environmental groups may not be related to financial constraints but to their greater effectiveness in public persuasion and growing public environmental awareness the size of its economic stake and hence the associated lobbying effort and the efficiency of its organization in exerting political influence how then can we explain why some environmental groups have been very successful against polluting industries when the latter s economic stakes seem very high and they lobby more and their interests are more efficiently organized some might suggest that the reason for the success of the environmental movement is that environmental groups have large memberships and can provide block votes 2 however according to olson 1965 a large membership of an interest group is not necessarily an advantage and it is still uncertain whether environmental groups are able to mobilize their members to cast votes based on such affiliations this paper suggests an alternative explanation by developing a theory of direct and indirect competition between special interests for political influence rather than marshalling block votes a primary feature of our framework is that two opposing interest groups an environmentalist group and an industrialist group compete directly and indirectly for political influence in a three stage game the indirect competition takes place in the first stage in which interest groups exert effort in persuading the public to indirectly influence government policy the direct competition takes place in the second stage in which interest groups exert effort in

endogenous changes in the exchange rate regime a bureaucratic incentive model public choice submits that legal changes can be endogenous in such a way that they are manipulated by bureaucrats who want to maximize rents from transactions with various interest groups this paper takes the change in exchange rate regimes to empirically examine the premise it offers a two stage method in which we first show that the exchange rate is influenced by interest group pressures and subsequently that the 1990 market average regime mar as a phase in policy in korea was introduced mainly to serve bureaucratic incentives this method is expected to be useful to a host of countries for various studies attempting to test a possible existence of bureaucratic or other hidden motivations behind any isolated event of policy change

the term structure of interest rates and the demand for money during the great depression new estimates of the term structure of interest rates are used to investigate movements of and along the u s money demand function during the period 1920 38 the entire term structureand not just its short end is found to be important to the interwar demand for money function therefore the low short term interest rates of the early 1930s cannot be identified as evidence of easy money instead the widened spread between shortand long term interest rates is evidence of the liquidity crisis proposed by friedman and schwartz f s 10 in their explanation of the great depression this finding critically depends on use of new correctly measured term structures of interest rates the received estimates which are widely recognized to be crude approximations mask the important role played by the term structure in the monetary dynamics of the inter war period

corruption via media capture the effect of competition in this article we compare a government s optimal choice of whether to engage in corruption by capturing the media outlets through bribery in two alternative media market structures monopoly versus duopoly while there is an extra bribe claimant in a media duopoly relative to monopoly it may also be harder for each firm to individually expose corruption when the rival co opts with the government we find that when the latter effect is stronger than the former media is captured at lower bribes under duopoly relative to monopoly and in such instances media competition facilitates rather than hindering corruption

mass media and special interest groups abstract media revenues are an important determinant of media behavior it is generally accepted that news coverage depends not only on the preferences of media consumers but also on the preferences of advertisers or subsidizing groups however existing models reach the opposite conclusions about the relationship between the profitability of advertising and media bias we present a theoretical model that reconciles these results the model shows that the sign of the effect of marginal costs of production or marginal advertising revenues on the level of distortion in news coverage depends on complementarity or substitutability between media bias and audience size for an interest group the existence of a budget constraint for an interest group and media outlets reliance on subscription in addition to advertising revenues

media monitoring and capture of public funds evidence from madagascar summary this paper investigates the role of media and monitoring in reducing capture we analyze data on capture of public expenditures by local officials in madagascar our findings indicate important constraints on decentralization of public service delivery in particular in remote areas capture could be successfully constrained through a combination of media programs and monitoring intensive monitoring and access to media reduce capture however the impact of media is conditional on characteristics of the population with high illiteracy in poor regions the effectiveness of newspaper and poster campaigns is limited and radio and television programs are more important to reduce capture

summits riots and media attention the political economy of information on trade and globalisation supply of information has increased rapidly through the growth of commercial media and technological innovations yet economists still blame anti globalists demonstrations and public opposition to trade liberalisation on poor information this paper analyses how the structure of the media industry affects the distribution of information on trade policy and globalisation we present an empirical analysis of belgian media reporting on trade policy and globalisation over the 1999 2002 period supports these hypotheses and finds strong negative bias in media coverage moreover we find that media coverage of trade policy and globalisation is highly concentrated around summit meetings of political leaders media attention in the popular press is heavily influenced by riots and demonstrations at summits the paper points at important implications for public information on trade policy and globalisation and for economists

the political determinants of fiscal policies in the states of india an empirical investigation abstract using data from the 14 major states of india we investigate whether state governments fiscal policy choices are tempered by political considerations our principal findings are twofold first we show that certain fiscal policies experience electoral cycles state governments raise less commodity tax revenue spend less on the current account and incur larger capital account developmental expenditures in election years than in all other years second we show that coalition state governments raise less own non tax revenues and spend less on the current account than state governments that are more cohesive in composition in sum the dispersion of political power affects government size

mass media and public policy global evidence from agricultural policies mass media play a crucial role in information distribution and in the political market and public policy making theory predicts that information provided by the mass media reflects the media s incentives to provide news to different groups in society and affects these groups influence in policy making the paper use data on agricultural policy from 69 countries spanning a wide range of development stages and media markets to test these predictions the empirical results are consistent with theoretical hypotheses that public support for agriculture is affected by the mass media in particular an increase in media television diffusion is associated with policies that benefit the majority to a greater extent and is correlated with a reduction in agriculture taxation in poor countries and a reduction in the subsidization of agriculture in rich countries ceteris paribus the empirical results are consistent with the hypothesis that increased competition in commercial media reduces transfers to special interest groups and contributes to more efficient public policies

dynamic government performance honeymoons and crises of confidence we use a formal theoretical framework to explore the interplay between a government s longevity and its performance ministers perform well when their careers are valuable this is so when the government s duration is expected to be long the government s survival depends on its popularity and finally that popularity depends on its ministers performance the feedback loop between performance and longevity means that multiple rational expectations equilibria can arise ministers work hard for a popular government but divert efforts elsewhere if they believe the government is doomed these alternatives are both self fulfilling prophecies however the presence of perhaps small random events that buffet the performance and popularity of a government is sufficient to pin down a unique equilibrium we explore the dynamics that arise a crisis of confidence involving the rapid collapse of a government s performance is sparked when a sequence of negative shocks push the popularity of the government below a unique critical threshold

lame ducks and local fiscal policy quasi experimental evidence from portugal i use the introduction of mayoral term limits in portugal to identify how an exogenous variation in eligibility for office affects policy decisions relying on a quasi experimental difference in differences approach i find that term limited incumbents pursue more conservative fiscal policies than those who are eligible for re election heterogeneous effects show that the treatment effects primarily reflect the behaviour of right leaning term limited incumbents results are in line with a model in which right leaning officeholders try to maintain a good reputation by pleasing an electorate prone to redistribution while they are eligible but adopt policies closer to their true preferences when term limited

the political economy of the media coverage of the lumber tariff dispute the political economy of groups suggest that policies are more likely to be implemented if the benefits are concentrated and the costs are dispersed the importance of the role of media in society changes the classic models media can awaken the sleeping masses to the dispersed costs of a policy and raise resentment towards the group who benefits thus the content of media coverage can affect policy stromberg s 2001 model shows that the amount of newspaper space devoted to an issue should rise as the square of the number of people affected this paper finds empirical support for stromberg s theoretical findings with content analysis of newspaper coverage of the lumber tariff dispute

economies of scope in endangered species protection evidence from interest group behavior abstract this paper looks for positive spillovers from the legal protection of one species to the welfare of others and for evidence of economies of scope in the costs associated with protecting species under the endangered species act the analysis uses data on the intensity of interest group comment activity in response to proposals to protect new species the results suggest that these phenomena are significant strengthening arguments that wildlife protection policy should be shifted toward species groups or ecosystems however the findings are also consistent with diminishing public willingness to pay for protected species in a given area a pattern which also has public policy implications

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

media freedom and gender equality a cross national instrumental variable quantile analysis we investigate the impact of media freedom on gender equality in education for a sample of 63 countries taken over the period 1995 2004 our analysis is motivated by the idea that the impact of media freedom on gender equality may differ over the conditional distribution of the response variable using instrumental variable quantile regression to control for endogeneity in per capita income we find that greater freedom of the media improves gender equality only in the 0 25 and 0 50 quantiles of the conditional distribution countries with the greatest disparities in gender outcomes experience no significant impact of media freedom

balancing environmental protection and energy production in the federal hydropower licensing process the u s federal energy regulatory commission ferc must balance environmental protection of riverine resources with the nation s growing demand for power production every time it issues a hydroelectric license this paper models the bureaucratic agency s decision making process in issuing these licenses data on nearly 500 hydro power licenses issued from 1983 to 2005 are utilized it is discovered that legislative and institutional constraints are by far the largest influences on ferc s regulatory decisions implying that if the current allocation of surface water in the united states is considered inefficient the most effective way to alter this allocation is by passing new legislation or by implementing institutional reform at ferc

money demand and the term structure of interest rates some consistent estimates heller and khan 1979 hereafter hk employ a quadratic function of the term structure of interest rates to obtain quarterly coefficient estimates of its level slope and curvature these estimates are substituted for the interest rate variable in a short run money demand function hk conclude that their specification is stable during the turbulent 1972 1974 period this note shows that hk s stability findings are dependent upon their use of the cochrane orcutt iterative technique hereafter corc not the inclusion of term structure variables we show that money demand equations incorporating term structure information specifically the specifications of hk bilson and hale 1980 hereafter bh and our own which uses a cubic function of the term structure are not stable when the hatanaka 1974 hereafter hat procedure is employed to correct for serial correlation

inequality and media capture abstract popular support of redistributive policies depends on information they have about the tax system and efficiency of public projects mass media provides a convenient means for manipulating public opinion even when voters understand that the media can be biased i develop a theory of media capture in which the rich can influence information published in a media outlet at a cost the model shows that higher inequality is associated with lower media freedom this effect is stronger in democratic regimes i find empirical support for the model in both panel data and cross country analysis

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

term limits and electoral competitiveness evidence from california s state legislative races california s legislative term limits have dramatically reduced campaign expenditures real expenditures during the three general elections after the term limits initiative passed in 1990 were lower than in even 1976 this drop has occurred at the same time that races have become closer contests and more candidates are running for office by any measure term limits have coincided with large changes in the level of political competition even before term limits have forcibly removed a single politician from office the changes are so large that more incumbents are being defeated races are closer more candidates are running and fewer single candidate races than occur at any other time during our sample period from 1976 to 1994

electoral accountability and corruption evidence from the audits of local governments we show that political institutions affect corruption levels we use audit reports in brazil to construct new measures of political cor ruption in local governments and test whether electoral account ability affects the corruption practices of incumbent politicians we find significantly less corruption in municipalities where mayors can get reelected mayors with reelection incentives misappropriate 27 percent fewer resources than mayors without reelection incentives these effects are more pronounced among municipalities with less access to information and where the likelihood of judicial punish ment is lower overall our findings suggest that electoral rules that enhance political accountability play a crucial role in constraining politician s corrupt behavior jel d72 k42 017

selection vs accountability an experimental investigation of campaign promises in a moral hazard environment abstract we examine retrospective and prospective voting considerations in an experiment implementing a simple voting model in each period the official chooses how much rent to appropriate from a social endowment announcement of this choice is followed by an election between the official and a randomly selected challenger with the winner becoming the official in the next period we vary two features of the setting a the discount factor and b whether candidates can make costless non binding campaign promises about their behaviour if elected consistent with the model s predictions both raising the discount factor and introducing campaign promises lead to lower rent appropriation by officials and worse electoral outcomes other things equal for incumbents campaign promises despite being cheap talk have real effects promising less appropriation is rewarded by voters but breaking such promises is punished finally we find a weak positive association between campaign promises and officials subsequent behaviour

separating economic from political influences on government decisions abstract the public interest theory is a poor predictor of government decisions relative to interest group theories but a sophisticated public interest theory is a more serious alternative to the former testing the sophisticated theory s predictions is problematic however when public interest is coincident with an interest group s interests a four step method is developed that disentangles public interest and interest group interests by separating economic from political incentives applying the method to the national forest service decisions about wilderness designations indicates whether interest groups were successful in influencing allocation decisions and whether allocation decisions were in the public interest

monetary factors in the great depression this paper examines the role of monetary policy in the early stages of the great depression and considers the mechanism whereby this policy may have affected real activity i conclude that the depression was preceded by a dramatic shift towards a highly contractionary monetary policy the economic impact of this policy seems unlikely to have come through the conventional keynesian channels of a shortage of liquidity and high ex ante real interest rates but instead may have operated through unanticipated deflation and after 1930 through the disruption of financial intermediation as a consequence of the banking panics

job design with conflicting tasks reconsidered a principal wants two sequential tasks to be performed by wealth constrained agents suppose that there is an outcome externality i e a first stage success can make second stage effort more or less effective if the tasks are conflicting the principal s profit maximizing way to induce high efforts is to hire one agent to perform both tasks so that the prospect to get a larger second stage rent after a first stage success motivates the agent to work hard in the first stage in contrast when there is an effort externality i e first stage effort reduces or increases the probability of a second stage success then the principal prefers to hire two agents whenever the tasks are conflicting

political economy of the media and consumer perceptions of biotechnology although households are flooded with information through dozens of tv channels plenty of newspapers journals and radio the public is said to be poorly informed on many important issues for example european consumers oppose genetically modified gm foods despite scientists and official institutions claiming those products are safe these reactions are blamed on consumers being poorly informed there is an extensive literature on imperfect information see akerlof stiglitz an important implicit assumption in this literature is that such information problems may be solved by providing more information the problem is that information provision is assumed to be neutral however in reality most information is not provided by institutions whose objective is to foster the public good but by organizations who have an internal incentive to select certain information and certain forms of information over other information it is either provided by private sources with their own profitmaximizing objectives or by public sources that may have the formal goal of providing objective information but administrators and governments may have incentives to bias the information this issue is particularly relevant for consumers risk perceptions about gm foods over 90 of consumers receive information about food and biotechnology primarily through the popular press and television hoban and kendall extensive media coverage of possible risks can lead to decreased demand for example johnson shows how media coverage of product contamination by