economic performance and u s senate elections reply major criticisms made by chressanthis and shaffer c s are addressed the authors failure to include noneconomic variables in the regression model the inclusion of open elections in the sample and the use of variables other than the state unemployment rate as economic performance measures errors in c s s interpretations are noted additional regression results are reported using modifications of the authors original model these suggest that the change notrelative change as in c s in state unemployment rate is superior and that the authors model yields a stronger effect of state economic performance on election outcomes than does the c s model

causality testing of the popularity function an empirical investigation for the federal republic of germany 1971 1982 relying on allensbach and infratest data it is asked if there is a relation between the perception of the general economic situation and the voting intention modern time series techniques are employed box jenkins analysis and granger causality tests the test results as well as ex post predictions show that voting intentions are strongly influenced by the perceived economic situation thus the null hypothesis of no relationship between the variables can not only be rejected by using classical econometric methods as is done in previous studies but also by employing modern time series procedures

unemployment rates and political outcomes an incentive for manufacturing a political business cycle in recent years the interdependence of politics and economics has received an increasing amount of attention by both economists and political scientists the explanation for this interest lies in the rediscovery of political economy and may be at least partly due to the recent experiences that governmental advisors have had with simultaneously increasing inflation and unemployment conventional macroeconomic approaches have failed to pin point causes for the stagflation and to provide methods for solving the problem the traditional economic policies may have failed in part because these traditional solutions were simply not plausible in the political environments in which they were proposed it is the intent of a growing body of work to develop macromodels with endogenous political sectors the inference made in this literature is that 1 the economy can be manipulated or affected by a political sector and that 2 there is an incentive for the political sector to manipulate the economy this literature has however just begun to formalize the interaction of the political and economic sectors and empirical work is virtually nonexistent the purpose of this paper is to present some evidence on these two inferences in section 1 the first inference is examined in section ii literature on which the first inference is based is reviewed and evidence on the possible incentive to create such a cycle is presented in section iii concluding remarks are offered

welfare consequences of the six year presidential term evaluated in the context of a model of the u s economy we evaluate the six year presidential term proposal in the context of a model of the u s economy characterized by a short run but not a long run trade off between inflation and unemployment votes and public welfare are separately conceptualized as functions of inflation and unemployment which are indirectly controlled by the president through manipulation of government spending in a series of simulation experiments the vote maximizing choice of policy instruments led to less we fare loss with six than with four year terms under most conditions ironically vote maximizing was shown to lead not only to short and long term welfare loss but also to long run political disadvantage

buying votes vs supplying public services political incentives to under invest in pro poor policies this paper uses unique survey data to provide for the first time in the literature direct evidence that vote buying in poor economies is associated with lower provision of public services that disproportionately benefit the poor various features of the data and the institutional context allow the interpretation of this correlation as the equilibrium policy consequence of clientelist politics ruling out alternate explanations such as for example poverty driving both vote buying and health outcomes the data come from the philippines a country context that allows for measuring vote buying during elections and services delivered by the administrative unit controlled by winners of those elections the data reveal a significant robust negative correlation between vote buying and the delivery of primary health services in places where households report more vote buying government records show that municipalities invest less in basic health services for mothers and children and quite strikingly as a summary measure of weak service delivery performance a higher percentage of children are severely under weight

reinterpreting the role of inflation in politico economic models the author attempting to analyze the interplay between politics and economics is faced with a large number of problems ranging from an always too small and idiosyncratic data set to the lack of any generally accepted theory of the process which has testable implications my aims have been 1 to show that past studies have typically treated inflation in an extremely naive way disregarding the fact that it may have political pluses if unanticipated and 2 to test the sensitivity of established formulations to what i believe is the more useful view of voter behavior given in model ii since model i and model ii represent polar extremes of amnesiac and eidetic behavior tests of intermediate lag structures are clearly in order because of administration peculiarities however lost data points will pose a serious problem

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

general economic conditions and national elections the fact that economic conditions influence voters is a leading commonplace of conversation in election years the question is is this fact in fact a fact despite the overwhelming popularity of the fact it has received neither an explicit theoretical analysis presumably because it is so obvious that economic adversity should create political adversaries nor until recently a satisfactory statistical analysis gerald h kramer has presented a multivariate analysis of congressional elections which would strongly suggest that fluctuations in the rate of unemployment have no appreciable effect upon elections but that fluctuations in per capita real income are influential in the following pages i propose to 1 reaffirm his finding on the electoral unimportance of ordinary fluctuations in unemployment 2 argue that contrary to kramer fluctuations in real income also do not have important electoral effects and 3 present an argument based upon rational voter behavior for the unimportance of general economic conditions in national elections

money politics and the post war business cycle abstract the political economy literature has enshrined as stylized fact the view that lower inflation and temporarily lower growth follow the election of republican presidents and has emphasized political manipulation of monetary policy as an explanation support for the monetary explanation comes in econometric work that largely ignores identification issues that dominate the literature on measuring the effects of monetary policy we generalize a standard vector autoregression framework to accommodate discrete political party variables we find almost no support for the view that political effects on the macroeconomy operate through monetary policy and only weak evidence that political effects are significant at all

clientelism as persuasion buying evidence from latin america in distributing clientelistic payoffs to citizens the best strategy a party machine can pursue we argue is to target citizens who are opinion leading epicenters in informal conversation networks this persuasion buying strategy carries the highest potential yield for the party because the payoff can create a social multiplier the effect of the clientelistic gift can be magnified via the conversion of multiple voters within a payoff recipient s personal networks using cross sectional survey data from 22 latin american countries and a panel survey from mexico we confirm that individuals who engage in frequent political persuasion and who are located in large political discussion networks are the most likely recipients of clientelistic payoffs we also show that a finding that is key to previous theories namely that loyal partisans are the most likely targets of clientelism is driven by omitted variable and endogeneity bias

business cycle and political election outcomes evidence from the chilean democracy this paper explores the influence of economic variables in chilean presidential elections we use a panel where the dependent variable corresponds to the share of the vote obtained by the incumbent at a municipal level in the presidential elections of 1989 1993 and 1999 we focus on the unemployment rate and the output gap and find that both have a significant influence on the vote we also find that if the mayor is from the same coalition as the incumbent people will further punish the incumbent when regional unemployment is above national unemployment

economic conditions and national elections post sample forecasts of the kramer equations there has long been a division of opinion among economists concerning the effects of economic developments on voting behavior in his well known study kramer 1971a concluded that the fluctuations in economic activity have a systematic influence on u s congressional elections his findings were challenged by various economists including stigler 1973 the purpose of this paper is to extend the analysis of kramer s results by examining the post sample forecast performance of his models as noted by christ 1966 pp 546 49 the acid test of a time series model is its ability to perform well outside the sample period the results discussed below demonstrate that kramer s equations have relatively good post sample predictive ability the findings thus support the view that short term economic fluctuations have important effects on national elections however the results also suggest that economic factors alone are not sufficient to account for all variations of voter behavior

a new technique for postsample model selection and validation abstract the model selection and granger causality literatures have focused on insample rather than postsample hypothesis testing this is because postsample model validation periods are usually short whereas the correlations in typical postsample forecast errors require large sample methods a resampling based postsample inference procedure is described which explicitly estimates the uncertainty which its large sample approximation induces in the inference significance levels it produces the procedure is applied to postsample forecasting errors from the ashley et al 1980 study examining granger causation between us consumption and advertising expenditures postsample model validation is apparently feasible but requires longer postsample periods than past studies have allocated

presidential and congressional vote share equations three vote share equations are estimated and analyzed in this paper one for presidential elections one for on term house elections and one for mid term house elections the sample period is 1916 2006 considering the three equations together allows one to test whether the same economic variables affect each and to examine various serial correlation and coattail possibilities the resulting three equation model can then be analyzed dynamically which is done in section 4 the main conclusions are briefly 1 there is strong evidence that the economy affects all three vote shares and in remarkably similar ways 2 there is no evidence of any presidential coattail effects on the on term house elections the presidential vote share and the on term house vote share are highly positively correlated but this is because they are affected by some of the same variables 3 there is positive serial correlation in the house vote in that the previous mid term house vote share positively affects the on term house vote share and the previous on term house vote share positively affects the mid term house vote share 4 the presidential vote share has a negative effect on the next mid term house vote share the most likely explanation for this is a balance argument where voters are reluctant to let one party become too dominant ruled out as possible explanations for this fourth result is any reversal of a coattail effect since there is no evidence of an effect in the first place and a regression to the mean since the positive serial correlation in the house vote implies no such regression also it is not simply voting against the party in the white house because the presidential variable is a vote share variable not a 0 1 incumbency variable

econometric estimations of popularity functions a case study for austria in this paper we investigate the effects of changes in economic conditions on the popularity of political parties in austria after a brief description of the austrian political system we estimate single equations and simultaneous systems of popularity functions for different parties based on traditional theoretical foundations results show that some effects of economic variables on popularity exist although they are different between different policy regimes traditional popularity functions nevertheless outperform models based on the assumption of voters rational expectations which claim that only unexpected changes in economic conditions affect political popularity

on the granger causality between median inflation and price dispersion the granger causal relationship between the size and dispersion of fluctuations in sub components of the us consumer price index cpi is examined using both in sample and out of sample tests and data from january 1968 to december 2008 strong in sample evidence is found for feedback between median inflation and price dispersion the evidence for granger causation from median inflation to price dispersion remains strong in out of sample testing but is less strong for granger causation in the opposite direction the implications of these results for the variety of price level determination models in the literature are discussed

agency growth salaries and the protected bureaucrat agency growth salaries and the protected bureaucrat i introduction in recent years increased attention has been directed towards understanding bureaucratic behavior and its implications for economic performance a key element of this literature is the application of utility maximization for deriving implications about bureaucratic behavior representative is niskanen 1971 38 who argues that bureaucratic decisions are made rationally to maximize utility which is assumed to be a function of salary perquisites reputation power patronage and output implicit in the literature is an activist bureaucracy which engages in purposeful action to advance its interests an important part of some of the bureaucracy literature is the notion that government employees are a source of the documented growth of government it is commonly asserted that government employees acting in their own self interest will foster the growth of their organization growth of the organization is seen as a means for increasing salaries as well as the other arguments in the utility function the positive link between salaries and growth is emphasized by downs 1967 11 in his classic study of bureaucracy any organization experiencing rapid overall growth provides many more opportunities for promotion in any given time period than a static one additional references to the importance of agency growth for salaries include niskanen 1971 38 41 1975 619 tullock 1974 127 and heclo 1977 131 building on that theme other researchers such as bush and denzau 1977 borcherding bush and spann 1977 and bennett and orzechowski 1983 have argued that government employees will use their power to influence election outcomes to promote government growth and hence salaries despite the often critical nature of the salary growth relationship in recent discussions of bureaucratic behavior and the growth of government there is no direct empirical evidence of the asserted linkage related evidence provided for example by wolfinger and rosenstone 1980 97 101 that government employees have higher voter participation rates than do private employees is not conclusive support for the growth salary assertion voting results alone do not permit one to distinguish the underlying reasons for the higher participation rates and there are many more importantly for the federal government at least the assertion that salaries of government employees are significantly affected by agency growth seems inconsistent with the idea that the civil service system shields federal white collar employees from the uncertain fluctuations of political outcomes skepticism about the growth salary linkage due to the constraints of the civil service system is noted by wilson 1980 375 few officials need fear for their jobs and their salaries are determined by government wide laws and regulations rather than by the size rate of growth or success of the organization further while senior agency officials would be in the best positions to promote the growth of their agencies within the federal government the salaries of high gs general schedule level and senior executive service personnel are capped by law and may not exceed those paid to officials in executive level v the restriction limits the salaries of senior managers regardless of the growth of the agency one could however argue that managers promote growth to motivate their subordinates or that medium and lower level employees are the primary proponents of agency growth but as kaufman 1981 79 notes most officers and employees once they have attained career status could do nearly as well materially without pushing themselves as they could by working at capacity the absence of incentives and resulting inertia can contribute to the often cited tension between career bureaucrats and political appointees the above discussion points out a serious problem with the growth salary linkage often asserted in the bureaucracy literature

the relationship between relative prices and the general price level it is very nearly a truismi amaong neoclassical economists that the public is wont to confuse changes in the general price level with relative price changes correspondingl y one might speak of the independence between the two as one of the central postulates of the neoclassical tradition william stanley jevons was aml ong the first to identify this basic dichotomin economic life as well as to attempt to explain the ordinary citizen s seenming incapacity to understand it

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

a new view of political accountability for economic performance most political support models imply that in evaluating economic performance voters use a standard that would provide poor predictions of the future and leave the economy vulnerable to manipulation by vote hungry politicians drawing on macroeconomic theory we develop a simple standard of evaluation which encompasses a concern not only for current economic outcomes but also for accurately assessed future consequences of current policies we find that political support for the president can be explained as well by models that assume that voters use this sophisticated standard as by models that assume voter naivete our analysis questions the wisdom of measures typically used to assess voter evaluation of economic performance in a variety of theoretical contexts the results also help to explain the absence of convincing evidence that governments exploit voter ignorance in manipulating the economy

a note on the variability of inflation and the dispersion of relative price changes abstract the relationship between the variance of inflation and the variability of relative price changes is analyzed empirically a strong positive association is found for 1948 1969 and 1948 1975 application of chow s test indicates structural instability and granger s test suggests a feedback effect between these variables

the cyclicality of consumption wages and employment of the public sector in the euro area this study empirically examines the business cycle behaviour of public consumption and its main components the public wage bill including its breakdown into compensation per employee and public employment and intermediate consumption in the euro area aggregate euro area countries and a group of selected non euro area organization for economic co operation and development oecd countries denmark sweden the uk japan and the us it looks across a large number of variables and methods using annual data from 1960 to 2005 it finds robust evidence supporting that public consumption wages and employment co move with the business cycle in a pro cyclical manner with 1 2 year lags notably for the euro area aggregate and euro area countries the findings reflect mainly the correlation between cyclical developments but also point to an important role of pro cyclical discretionary fiscal policies

the role of subnational politicians in distributive politics political bias in venezuela s land reform under chavez this article examines how the partisanship of empowered subnational politicians can affect within district benefit distribution i present a theory of the role of subnational politicians in distributive politics and then test this theory on a distributive venezuelan land reform initiative by leveraging unique individual level data on revealed voter preferences and the receipt of particularistic benefits using data from a list of millions of voters who signed petitions to recall former president chavez i match information on recent land grant applicants to petition signers to measure how political preferences affect the likelihood of applying for and receiving land and how state governors condition this relationship i find evidence for both strategic core voter targeting and blockage of benefits to opposition voters these effects however are modified by the political affiliation of governors the findings point to the importance of considering how intervening subnational politicians influence distr

civil service and the growth of government abstract i study a model of elections which links the scale of government activity to civil service rules without tenure protections bureaucrats career prospects are tied to the electoral prospects of the party that hires them to avoid wasteful partisan spending voters only consent to minimal taxation if bureaucrats are protected by tenure they have no incentive to favour one party over another and governments only produce public goods in turn voters consent to high taxes however because higher tax revenues increase the ability of governing parties to co opt the bureaucracy through favourable compensation large scale government activity is accompanied by inefficiently high public sector wages

exposing corrupt politicians the effects of brazil s publicly released audits on electoral outcomes author s finan frederico ferraz claudio abstract this paper examines the extent to which access to information enhances political accountability based upon the results of brazil s recent anti corruption program that randomly audits municipal expenditures of federally transferred funds it estimates the effect of the disclosure of local government corruption practices upon the re election success of incumbent mayors in municipal elections comparing municipalities which were randomly audited before the elections with those audited after the analysis shows that the disclosure of audit results had a significant impact on the re election rates of mayors found to be corrupt for a one standard deviation increase in reported corruption the audit policy reduced the incumbent s likelihood of re election by 25 percent this effect is more pronounced in municipalities where radio stations are present and higher levels of corruption are identified these findings highlight the value of information and the role of the media in reducing informational asymmetries in the political process thus enabling voters to not only hold corrupt politicians accountable but also to reward non corrupt politicians

public and private sector wages interactions in a general equilibrium model it is common wisdom that public sector wages are not determined in the same way as private sector wages at the same time the empirical evidence available for oecd countries finds a strong positive correlation between public and private sector wages in this paper we develop a model that is consistent with a political economy view of the determination of public sector wages and employment while being consistent with the said empirical evidence public finance constraints are crucial in booms governments expand employment and wages while in downturns lack of tax revenues forces the government to cut back the wage bill

robustness of the relationship between price variability and inflation for us manufacturing we study the relationship between relative price variability and inflation in two different ways we first look at product class census unit values for five time periods between 1958 and 1982 and find evidence of a positive relationship between variability and inflation then we directly update the vining and elwertowski 1976 study for the period 1974 91 using individual commodity series from the bureau of labor statistics we conclude by discussing differences across industries in price stickiness

letting the good times roll a theory of voter inference and experimental evidence this paper examines inference and attribution in a simple and ubiquitous strategic situation a voter is faced with discerning whether a leader worked on his or her behalf after observing an informative but noisy signal about the leader s performance we characterize perfect bayesian equilibria quantal response equilibria qre and provide a simple model of a heuristic based approach referred to as strategic naivete within a wide class of such environments we also discuss experiments conducted to examine human behavior within such an environment while it is clear that the observed behavior is inconsistent with perfect bayesian equilibrium distinguishing between qre and strategic naivete will require further work we conclude with a discussion of the broader implications of probabilistic and or heuristic based attribution processes for electoral politics and political economy

presidential politics budget deficits and monetary policy in the united states 1960 1976 this paper has focused on the extent to which the traditional tools of macroeconomic management in the united states monetary and fiscal policy have contributed to a political business cycle regardless of whether politicians can successfully influence real economic variables to their own ends the evidence presented here suggests that they tried and that they enjoyed some at least indirect aid from their independent monetary authorities in doing so several major conclusions emerge

business cycles and the political process the interrelationship between the political sector and the macroeconomy in democratic societies has been examined extensively in recent years research in this area has generally been concerned with two issues first following the lead of kramer 16 various authors have examined the impact of economic conditions on congressional 1 13 21 24 and presidential elections 4 5 the results at the congressional level have been mixed but it is reasonably safe to conclude that economic conditions do affect presidential elections the second issue and the one of primary concern in this study has dealt with the development of models of politico economic interaction the basic concept in these models is that an administration s popularity and therefore the probability of staying in power depends critically on economic conditions knowing this the administration seeks to manipulate the economy in order to maintain power the use of economic tools for political goals by governments is well established in the literature theoretical contributions by nordhaus 20 and macrae 18 have demonstrated the potential for a politically motivated business cycle in a world of politico economic interaction empirical support for the existence of such a cycle is provided by the work of frey and schneider 7 8 9 the main purpose of this paper is to develop a theoretical model of the political business cycle that generates empirically testable proposition the goal is to integrate the theoretical conclusions of a formal model similar to the nordhaus 20 and macrae 18 framework with the empirical support provided by frey and schneider 7 8 9 the possibility of a political business cycle is important for several reasons in macroeconometric models government policy that is endogenous to the system is usually treated as if it were exogenous this may cause serious misspecification errors further forecasts of the future course of economic events which depend heavily on government action will be inaccurate unless the political motivations of governments are considered

the political economy of government responsiveness theory and evidence from india the determinants of government responsiveness to its citizens is a key issue in political economy here we develop a model based on the solution of political agency problems having a more informed an politically active electorate strengthens incentives for governments to be responsive this suggests that there is a role both for democratic institutions and the mass media in ensuring that the preferences of citizens are reflected in policy the ideas behind the model are tested on panel data from india we show that public food distribution and calamity relief expenditure are greater controlling for shocks where governments face greater electoral accountability and where newspaper circulation is highest

employment unemployment and the minimum wage a causality model some empirical work concerning the minimum wage tends to confirm the negative impacts of the law on employment but much of that work leaves the existence and size of the fiat s effects uncertain furthermore many of the theoretical and statistical advances of the past 1 decades have yet to be incorporated into the analysis of the law s effects we apply time series and causality testing analysis developed from the transfer function to the minimum wage employment unemployment series we find some evidence that the minimum wage has lowered the employment of white male teenagers age 16 19 and nonwhite males over the age of 20 however these impacts are small no other significant employment impacts are discovered and no significant unemployment impacts are found additional study of the law s impacts using advanced statistical methods is required

inflation and the distribution of price changes across markets a causal analysis recent advances in time series methodology are applied to the investigation of causal relationships between monthly changes in the consumer price index and changes in its dispersion across different consumption categories this dispersion is associated with the degree to which relative prices are changing past inflation rates seem useful in forecasting changes in relative prices but not vice versa there is also a significant contemporaneous correlation between these series hence it is concluded that fluctuations in the inflation rate help cause fluctuations in relative prices but not vice versa unless the entire effect occurs within a month the analysis also serves to illustrate a new way to implement the granger causality concept

presidential popularity and the economy abstract this study tests the hypothesis that the sensitivity of the president s popularity to economic events differs across distinct demographic groups assuming that presidental popularity is negatively related to both the unemployment rate and the inflation rate the electorate is disaggregated according to sex age race education income and political affiliation and separate regressions are estimated for the individual subgroups using quarterly data covering 1976 through 1988 statistically significant differences in the marginal effects of unemployment and inflation on presidential approval are discovered for the various subgroupings

rational adaptive and learning behavior of voters evidence from disaggregated popularity functions for sweden the disaggregated study confirms earlier aggregated studies showing that unemployment strongly affects the popularity of the swedish government the results presented here however suggest that there are differences among popularity functions estimated across groups differing in age income and gender consequently popularity functions estimated at an aggregated level ignore reaction patterns within various groups in society

the distributive politics of enforcement why do some politicians tolerate the violation of the law in contexts where the poor are the primary violators of property laws i argue that the answer lies in the electoral costs of enforcement enforcement can decrease support from poor voters even while it generates support among nonpoor voters using an original data set on unlicensed street vending and enforcement operations at the subcity district level in three latin american capital cities i show that the combination of voter demographics and electoral rules explains enforcement supported by qualitative interviews these findings suggest how the intentional nonenforcement of law or forbearance can be an electoral strategy dominant theories based on state capacity poorly explain the results

on inflation and real price variability this paper studies the consequences of costly price adjustments for the variability of real prices accompanying inflation for constant elasticity demand and cost of production it is shown that a higher demand a lower cost of production or a lower cost of price adjustment leads to less intertemporal variability of real prices if the marginal cost of production does not increase too fast then the average real price is less than the real price that would prevail in the absence of inflation additionally a higher demand a lower cost of production or a lower cost of price adjustment leads to a higher level of real prices

variability of inflation and the dispersion of relative prices evidence from the chinese hyperinflation of 1946 1949 abstract this paper uses data from the chinese hyperinflation of 1946 1949 to focus on the relationship between the variability in the general price level and the dispersion in relative prices the issue is important because it bears on the natural rate hypothesis which supports the postulate that these two monetary variables are independent our results reinforce the bulk of previous evidence which suggests a positive correlation between the variation in inflation rate and the dispersion in relative prices during inflationary episodes

when parties meet voters assessing political linkages through partisan networks and distributive expectations in argentina and chile this article provides a new comparative methodology for the study of party voter linkages from the perspective of voters where the critical question that distinguishes clientelistic from programmatic parties is access to publicly provided benefits in the former case partisan networks mediate access to goods in the latter beneficiaries are defined by policy and access is independent from partisan distribution networks we show that these different access mechanisms shape voters distributive expectations and the nature of their linkages to political parties by developing a unique methodology to measure party networks we test it using original survey data from argentina and chile and show variation both across and within countries on party voter linkages based on differential access to benefits and parties organizational capacity

the countervailing effects of competition on public goods provision when bargaining inefficiencies lead to bad outcomes political competition is widely recognized as a mediator of public goods provision through its salutary effect on incumbents electoral incentives we argue that political competition additionally mediates public goods provision by reducing the efficiency of legislative bargaining these countervailing forces may produce a net negative effect in places with weak parties and low transparency typical of many young democracies we provide evidence of a robust negative relationship between political competition and local public goods using panel data from mali tests of mechanisms corroborate our interpretation of this relationship as evidence of legislative bargaining inefficiencies to explore the generalizability of these findings we analyze cross country panel data and show that political competition leads to better worse public goods provision under high low levels of party system institutionalization the paper sheds light on why political competition is only selectively beneficial and underscores the importance of considering both the electoral and legislative arenas

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

voting and the economic cycle sophisticated voters assess incumbent competence by filtering out economic cycles which they do not like from trend growth which they do naive voters on the other hand respond only to raw economic growth this implies that voting in the aggregate should respond asymmetrically to the economic cycle upswings are rewarded by the naive but punished by the sophisticated downswings are punished by all voters using an established dataset of over 400 general elections we find that the incumbent vote share a responds differently to trend growth than to the cycle b does not respond significantly to positive variation in the economic cycle and c responds significantly and negatively to negative realizations in the economic cycle in contrast to standard formulations of the grievance asymmetry this asymmetric vote response is found to be independent of trend growth

investigating the causal relationship between quits and wages an exercise in comparative dynamics this paper examines the causal relationship between wages and quits in u s manufacturing industries logit and regression models then relate causality test results to industrial characteristics once these relationships are identified they can be used to predict the causality classification for each industry based on the characteristics of that industry this technique can help the researcher choose the appropriate theoretical model for analysis one finding is that quits respond to wages in most industries but not in industries with highly skilled workforces

policy oriented voting in response to economic issues this study explores the hypothesis that voting in response to economic problems is policy oriented voters concerned about unemployment ore predicted to give greater support to democratic candidates while those concerned about inflation are predicted to vote more republican in light of evidence from previous research this study investigates the electoral effects of inflation and unemployment as 1 problems directly experienced by the individual and 2 problems deemed serious for the nation as a whole support is strongest for the unemployment side of the hypothesis voters personally affected by unemployment gave a modest boost to democratic candidates in virtually every election and in years of high unemployment the large percentage of voters who fell it was a serious national problem voted heavily democratic as well this study concludes by discussing the important implications these findings have for our understanding of how economic conditions influence voting behavior in american national elections

on the normality of relative price changes abstract the purpose of this paper is to present evidence on the non normality of relative price changes in west germany based on annual data for forty industries krengel et al n d the question of normality is examined only for germany

labor turnover in the u s federal bureaucracy this paper presents an empirical analysis of labor turnover in the u s federal bureaucracy the results indicate that job experience in politically important federal agencies is valued by the private sector hence high level bureaucrats employed in these agencies have high turnover probabilities the analysis also shows that equalization of federal sector and private sector wage rates would lead to a relatively small increase in turnover but to substantial savings in federal payroll costs

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

relative prices and money a vector autoregression on brazilian data recent data on brazilian agricultural prices industrial prices and money supply are analyzed in a vector autoregression the empirical findings show strong one way granger type causality from money supply to agricultural prices while feedback is observed between industrial prices and money supply under the usual monetarist ordering of contemporaneous innovation covariance agricultural prices do not adjust faster than industrial prices to a shock in the money supply

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

the economics of choice in the allocation of intergovernmental grants to local authories the empirical study and modelling of processes and motivations behind government behavior has been relatively meager this paper has formulated and estimated a model designed to explain the allocation of intergovernmental grants to local authorities the model takes into consideration the fact that this process is governed by mixed motivations associated with both the desire to adopt policies and actions based on the concept of public interest and with the desire for re election the model was applied to data pertaining to 52 local authorities in israel under two governments the principal findings of the foregoing analysis can be summarized as follows first the behavioral mechanism operating beyond intergovernmental grants allocation is inherent in the political system and equally applies to the two governments second this mechanism is governed both by factors representing objective criteria describing the needs of the populations and by political factors representing the desire for re election differences in the behavior of the two governments seem to be significant as far as some objective variables are concerned but are almost insignificant as far as the political variable is concerned third as in other studies conducted in the u s our findings support the hypothesis that in their attempt to maximize the prospects for re election governments find it preferable to pursue policies which reward their supporters rather than buy off their opponents lastly by allowing per capita grants to be a non monotonous function of the political variable it was found that indeed both governments have increased per capita grants as a function of pol up to a certain level and decreased it thereafter

beyond the machine clientelist brokers and interest organizations in latin america organizational membership is one of the strongest yet overlooked predictors of vote buying across latin america we argue that this relationship is driven by the fact that politicians outsource some of their vote buying efforts to interest associations in contrast to the existing literature that focuses on party brokers who are loyal to a single political machine we introduce the concepts of organizational brokers who represent interest associations and renegotiate ties to political parties between election cycles and hybrid brokers who split their loyalties between an interest association and a single political party we illustrate the operation of these alternative broker types through case studies of street vending organizations in an uninstitutionalized party system colombia and peasant organizations in an institutionalized party system mexico attention to the role of brokers and the organizations that they represent has implications for political accountability collective action and the

what wins votes why some politicians opt out of clientelism in a context where clientelism is widespread why do some politicians choose not to condition the delivery of goods and services to citizens on individual political behavior i argue that the answer to this question lies in the heretofore unexamined electoral costs of clientelism clientelism decreases support from nonpoor constituents even while it generates votes from among the poor taking into account these costs and other factors that shape politician incentives i posit that the interaction between political competition and poverty will explain variation in clientelism i test this claim using an original measure of clientelism that assesses mayoral involvement in social policy implementation in argentine municipalities the results of statistical analysis suggest that high levels of political competition are compatible with clientelism when poverty is also high only when high competition is coupled with low rates of poverty does clientelism decline

brand dilution and the breakdown of political parties in latin america why would a national political party that has been competitive for decades collapse overnight in recent years parties across latin america went from being major contenders for executive office to electoral irrelevance over the course of a single electoral cycle the author develops an explanation that highlights the impact of elite actions on voter behavior during the 1980s and 1990s leaders across the region implemented policies that were inconsistent with their traditional party brand provoked internal party conflicts and formed strange bedfellow alliances with traditional rivals these actions diluted the brands of their parties eroding voters partisan attachments without the assured support of partisans parties become more susceptible to retrospective voting voters who now had no party attachments deserted incumbent parties when they performed poorly the author tests this interactive hypothesis using matched comparisons of six party election cases from argentina and venezuela

who delivers partisan clients in the argentine electoral market why do some parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain such differences by focusing on political parties access to resources supply side and voters dependence on fiscal largesse demand side we show how these differences affect the patron s choice of public sector wages and employment we use subnational level data to show different electoral returns from patronage for the two major political coalitions in argentina peronism and the ucr alianza and their effect on preferences over public sector wages and employment w hy do some political parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain returns to patronage by highlighting differences in the political parties access to resources supply side and the voter s dependence on public sector jobs demand side we propose that just as political parties cater their policies to particular groups of voters they pursue different strategies when allocating pork in exchange for support on the supply side we highlight the importance of partisan biases in the fiscal and electoral institutions that regulate the access and distribution of public resources on the demand side we show that patronage is a distributive mechanism that provides different returns to voters with different skills and labor market expectations

government subsidies and presidential election outcomes evidence for a developing country summary we explore the effects of government subsidies on presidential elections in chile in 1989 99 we use a panel with three periods the elections of 1989 1993 and 1999 and 229 counties we correct for the potential simultaneity problem deriving from the fact that an incumbent facing a difficult political scenario might react by increasing subsidies to improve his her electoral performance our results indicate that the greater the coverage of these types of programs i e the percentage of people receiving subsidies the higher the votes for the incumbent

are there election cycles in wage agreements an analysis of german public employees in this article the possibility of nordhaus political wage cyclesin the west german public services during 1961 1965 is investigated since wage negotiations are centralized one might expect a systematicallyhigher wage increase shortly before a federal election a regression ofwage increases from 30 consecutive public sector pay contracts is run onan election variable and several additional explanatory variables thenull of no election influence is rejected for worker wage increases theestimated increase in wages due to an imminent election is predicted to bein the range of 2 5 to 3 percentage points

a new look at forecasting annual corporate earnings in the u s a abstract in this study composite earnings per share models are estimated for 35 chemical food and utility firms during the 1981 1982 period although it is generally held that financial analysts produce superior earnings forecasts when compared to time series model forecasts the results of this study indicate that analysts fared very poorly in 1982 and the average mean square forecasting error of analyst forecasts may be reduced by 74 2 percent by combining analyst and univariate time series model forecasts this reduction is very interesting when one finds that the univariate time series model forecasts do not substantially deviate from those produced by random walk drift models the arima 0 1 1 process moreover despite the high degree of correlation existing among analyst and time series forecasts the ordinary least squares estimation of the composite earnings model is a better forecasting model than the composite earnings models estimated with ridge regression and latent root regression techniques

dynamic linkages among real interest rates in international capital markets abstract short run and long run dynamic linkages among weekly real interest rates for g 10 countries are examined using a variety of time series tests these tests give special attention to the time series properties of nominal interest rates ex ante expected rates of inflation and real interest rates term structure information is used to recover a theoretically consistent measure of ex ante expected inflation in sample and out of sample granger causality tests are also examined to evaluate lead lag relationships among real interest rates the results provide strong support for well integrated markets particularly in the long run the results imply leadership roles for the us in international asset markets