out of step out of office electoral accountability and house members voting does a typical house member need to worry about the electoral ramifications of his roll call decisions we investigate the relationship between incumbents electoral performance and roll call support for their party controlling for district ideology challenger quality and campaign spending among other factors through a series of tests of the 1956 1996 elections the tests produce three key findings indicating that members are indeed accountable for their legislative voting first in each election an incumbent receives a lower vote share the more he supports his party second this effect is comparable in size to that of other widely recognized electoral determinants third a member s probability of retaining office decreases as he offers increased support for his party and this relationship holds for not only marginal but also safe members

candidate reputations and the incumbency effect abstract a major shortcoming of the classical median voter model is that its central prediction convergence of platforms to the median voter s ideal is seldom observed one reason is that the classical model neglects the importance of voter expectations as a determinant of votes here we associate voters expectations about candidates with past as well as current candidate pronouncements and assume that incumbents whose actions are consistent with their reputations are perceived as less risky than challengers in equilibrium candidates choose distinct platforms typically neither adopts the median voter s ideal point either candidate may win depending on how well the incumbent s reputation reflects current voter tastes and how relatively risky the electorate perceives the challenger to be

approval voting borda winners and condorcet winners evidence from seven elections we analyze 10 three candidate elections and mock elections conducted under approval voting av using a method developed by falmagne and regenwetter 1996 that allows us to construct a distribution of rank orders from subset choice data the elections were held by the institute of management science the mathematical association of america several professional organizations in britain and the institute of electrical and electronics engineers seven of the 10 elections satisfy the conditions under which the falmagne regenwetter method is suitable for these elections we recreate possible underlying preferences of the electorate on the basis of these distributions of preferences we find strong evidence that av would have selected condorcet winners when they exist and would have always selected the borda winner thus we find that av is not just simple to use but also gives rise to outcomes that well reflect voter preferences our results also have an important implication for the general study of social choice processes they suggest that transitive majority orderings may be expected in real world settings more often then the formal social choice literature suggests in six out of seven data sets we find social welfare orders only one data set generates cycles anywhere in the solution space

buying negative agenda control in the u s house we explore the foundations of the legislative party cartel as theorized by cox and mccubbins 1993 2005 to determine how majority party moderates who suffer net policy losses from the majority leadership s use of negative agenda control are kept from defecting from the cartel arrangement first we identify formally the group of majority party members who are net policy losers we find that those members occupying the initial 30 of the space within the majority party blockout zone that space closest to the floor median are hurt on a pure policy basis by the cartel arrangement second we find that members in this 30 zone are rewarded disproportionately by majority party leaders relative to members in other intervals on the same side of the floor median via side payments in the form of campaign contributions in addition majority party members within the 30 zone receive side payments commensurate with their particular policy loss

expenditures and receipts testing for causality in state and local government finances the results of our tests indicate similarities between the expenditure tax receipt relations of state governments to those previously reported for the federal government in manage and marlow 1986 the results reported here indicate support for the hypothesis that tax receipts cause expenditures at the state level of government for tests utilizing symmetric lag structures ranging from three to five years state expenditures appear to follow state tax receipts for the shortest lag length 2 2 the determination of bidirectional causality does not make us reject the hypothesis that higher spending levels result from higher revenue levels rather the causality appears to be in both directions for the shortest lag length

property tax and fiscal discipline in oecd countries this paper investigates the effects of property taxation on fiscal discipline for a sample of oecd countries over the period 1973 2011 we find that aggregate property taxation in total tax revenues is not statistically correlated with the primary surplus to gdp ratio in contrast a greater reliance on property taxes pertaining to sub national governments contributes to fiscal discipline suggesting that fiscal decentralization should favor responsive tax base instruments

politicians as experts electoral control and fiscal restraints we propose an argument for fiscal restraints that is based on the premise that the services of politicians are credence goods politicians are experts who specialize in observing the true state of the economy budget maximizing politicians are better informed than the electorate about the level of public spending necessary to manage public affairs voters who are able to observe the size of the budget but not the necessary level of spending affect the government s spending behavior via electoral control a fiscal restraint limits the maximum spending a government can choose we identify conditions under which such a fiscal restraint improves voter welfare and discuss the role of the political opposition as a second expert in situations in which the state of the economy requires a level of spending which exceeds the fiscal restraint

a comprehensive analysis of expenditure decentralization and of the composition of local public spending sacchi a and salotti s a comprehensive analysis of expenditure decentralization and of the composition of local public spending regional studies many industrialized countries have recently implemented fiscal decentralization reforms assigning more spending responsibility to sub national governments this paper investigates the causes of the decentralization of different categories of public expenditure in 19 developed countries over the period 1980 2006 different models for each of the spending functions under analysis are estimated adopting a general to specific empirical approach results confirm existing findings on the negative link between regional income disparities and expenditure decentralization a similarly negative relationship is found for a set of demographic variables leading to the conclusion that macroeconomic and more importantly political factors are responsible for the recent increase in decentralization finally the analysis is completed by a study of the factors driving sub n

an empirical example of the condorcet paradox of voting in a large electorate social choice theory suggests that the occurrence of cyclical collective preferences should be a widespread phenomenon especially in large groups of decision makers however empirical research has so far failed to produce evidence of the existence of many real world examples of such and none in large electorates this paper demonstrates the existence of a real cyclical majority in a poll of danish voters preferred prime minister using pair wise comparisons this result is compared with those of a similar poll but by using different voting methods each resulting in different choices the example demonstrates the empirical reality of cyclical collective preferences and the importance of the choice of institutions

irrigation districts and water markets an application of cooperative decision making theory water supply organizations control a large portion of agricultural water rights in the western u s this paper applies cooperative and club theory models to analyze the response of these organizations to potential rural to urban water transfers application of the models is to a proposed water trade between southern california s imperial irrigation district and metropolitan water district the analysis reveals that substantial intraorganizational conflict can emerge in response to specific transfer proposals and this conflict may be sufficient to defeat or delay otherwise beneficial transfers poorly defined property rights and a failure to align these rights with operational control in the water supply organization are pinpointed as key sources of conflict

rules transparency and political accountability rules of allocation and redistribution in the public sector are often less contingent on available information than normative theory would suggest this paper offers a political economy explanation under different rules even if the observable outcomes of policies remain the same the informational content which can be extracted by these observations is different less contingent rules allow citizens to gain more information on politicians and this improved information may be used to better select politicians this advantage may overcome the efficiency loss induced by flatter rules 2001 elsevier science b v all rights reserved

on the economic dividend of devolution rodriguez pose a and gill n 2005 on the economic dividend of devolution regional studies 39 405 420 recent political and academic discourse about devolution has tended to stress the economic advantages of the transfer of power from national to subnational institutions this economic dividend arises through devolved administrations ability to tailor policies to local needs generate innovation in service provision through inter territorial competition and stimulate participation and accountability by reducing the distance between those in power and their electorates this paper however outlines two related caveats first there are many forces that accompany devolution and work in an opposite direction devolved governmental systems may carry negative implications in terms of national economic efficiency and equity as well as through the imposition of significant institutional burdens second the economic gains as well as the downsides that devolution may engender are contingent to some

government spending and budget deficits in the industrial economies fiscal policy nouriel roubini and jeffrey sachs this paper examines the evolution of the size of government and of budget deficits in oecd economies we highlight the rapid increase in government spending in the 1970s the sharp rise in budget deficits and public debt after 1973 and the reversal in these trends in the 1980s the increase in the size of government was associated in part with the slowdown in growth after 1973 but also reflected gradual adjustment of the ratio of spending to output towards a long run target which depends on political and institutional characteristics of the economy the political orientation of the government the degree of wage indexation and the degree of stability of the political system such factors also explain the size of budget deficits when faced with an adverse shock subsequent deficit reduction requires a measure of political consensus we note that such consensus is hard to achieve in multi party coalitions in consequence countries with such a political structure tended in consequence countries with such a political structure tended toin consequence countries with such a political structure tended to experience much more rapid increases in their debt gnp ratios

second generation fiscal federalism political aspects of decentralization and economic development summary this essay contributes to second generation fiscal federalism sgff which traces the implications of incentives created by political and fiscal institutions the approach explores how various forms of fiscal federalism work in the presence of political officials who rather than being benevolent social planners face various forms of political incentives the paper focuses on three sets of positive models first it explores self enforcing federalism that is how federal systems are held together given various tendencies for federal systems to become centralized or fall apart second it considers how specific political institutions such as democracy interact with decentralization finally it studies various political impediments to economic growth again highlighting the interaction with decentralization 2013 elsevier ltd all rights reserved

severing the electoral connection shirking in the contemporary congress studies of representation focusing on legislative shirking tend to offer an interesting tension when the opportunity presents itself it seems that exiting members do not change their votinq behavior ideological shirking but do reduce their effort level by voting less participatory shirking our analysis avoids the pitfalls of prior studies by defining a simple quasi experimental research design contrasting those certain that they are seeking reelection with those sure that they are departing the house for the102nd 103rd and 104th congresses 1991 1996 we measure changes in ideology and participation using all roll call votes in the last six months of election years controlling for possible member selection effects and short term influences and show that legislators are disposed toward ideological and participatory shirking while selection effects are unimportant thus we reconcile results seemingly at odds and suggest that policies affecting member turnover such as term limits can interfere with representation a fundamental issue concerning political representation is the extent to which the necessity of reelection constrains officeholders if incumbents plan to retire thus freeing themselves of their electoral shackles or if they pursue higher office and face a distinct constituency will they behave differently or do members continue to behave in the same manner even in the absence of an electoral connection to the districts they represent answers to such questions have important implications for how we understand and model the representative process additionally they have ramifications for the likely impact of public policy choices that affect member turnover rates such as the imposition of term limits on the political system a primary means of drawing inferences regarding shirking which we simply define as legislator behavior that differs from what would be observed given perfect monitoring and effective punishment by constituents is to determine if politicians change their behavior when electoral discipline is removed most notably scholars examine members actions during their last period in office on the grounds that those voluntarily departing can behave according to a distinct set of preferences even if they run afoul of their districts or of their electoral coalitions empirical results on final period behavior are voluminous and sometimes contradictory bender and lott 1996 nevertheless two general inferences seem to have gathered support first there is little evidence for shirking in terms of vote choice ideological shirking while as we will discuss shortly there are a variety of potential explanations for such nonfindings one intuitive and frequently offered reason is that they reflect member specific selection effects this implies that

the case for restricting fiscal policy discretion this paper studies the effects of discretionary fiscal policy on output volatility and economic growth using data for 91 countries we isolate three empirical regularities 1 governments that use fiscal policy aggressively induce significant macroeconomic instability 2 the volatility of output caused by discretionary fiscal policy lowers economic growth by more than 0 8 percentage points for every percentage point increase in volatility 3 prudent use of fiscal policy is explained to a large extent by the presence of political constraints and other political and institutional variables the evidence in the paper supports arguments for constraining discretion by imposing institutional restrictions on governments as a way to reduce output volatility and increase the rate of economic growth

the influence of decentralized taxes and intergovernmental grants on local spending volatility abstractthe influence of decentralized taxes and intergovernmental grants on local spending volatility regional studies this paper studies what affects the volatility of sub central public spending in 20 organisation for economic co operation and development oecd countries the evidence based on data from 1972 to 2007 shows that the volatility of intergovernmental grants from upper levels is positively associated with the volatility of local expenditure on the other hand the volatility of local tax revenues mainly that of property taxes exerts the opposite effect these findings suggest that making local governments rely more on grants than own tax revenues adversely affects their spending stability allowing them to levy autonomously taxes relying on responsive tax bases provides incentives to smooth their expenditure

on the empirical relevance of condorcet s paradox condorcet s paradox occurs when there is no alternative that beats every other alternative by majority the paradox may pose real problems to democratic decision making such as decision deadlocks and democratic paralysis however its relevance has been discussed again and again since the celebrated works of arrow social choice and individual values 1963 and black the theory of committees and elections 1958 the discussion varies from one extreme to the other from very relevant to practically irrelevant this paper tries to bring more clarity to the discussion by reviewing the literature on the empirical relevance of condorcet s paradox since a definition of the paradox for even numbers of voters and alternatives and for weak voter preferences is missing in the literature we first define the paradox clearly and simply then three topics are investigated namely domain conditions culture and the likelihood of the paradox and the empirical detection of the paradox domain conditions express regularities in voter preference profiles that prevent the paradox frequent observations of these domain conditions would make condorcet s paradox empirically less important cultures define probability distributions over the set of voter preferences observation of cultures might be a first step to indicate the relevance of the paradox the empirical detection of the paradox speaks for itself we will try to identify the number of observations of the paradox so far the overall conclusion is that the empirical relevance of condorcet s paradox is still unsettled

does fiscal federalism promote regional inequality an empirical analysis of the oecd 1980 2005 sorens j does fiscal federalism promote regional inequality an empirical analysis of the oecd 1980 2005 regional studies this paper explores the relationship between fiscal federalism understood as institutionalized regional economic self rule and convergence in regional per capita incomes the principal economic argument against fiscal federalism is that unless paired with generous equalization grants it will enhance regional inequalities by reducing inter regional redistribution does the evidence support this claim multilevel spatial regressions on primary sub national jurisdictions in twenty five organisation for economic co operation and development oecd countries show that lower income regions tend to catch up with higher income regions only when they enjoy substantial economic powers indeed there is more convergence across member states of the european union than across regions within almost any of the european union member states fiscal federalism may pose less serious tradeoffs tha

party government and the cohesive power of public plunder we argue that party government in the u s house of representatives rests on two pillars the pursuit of policy goals and the disbursement of particularistic benefits existing theories of party government argue that the majority party in the house is often successful in biasing policy outcomes in its favor in the process it creates policy losers among its own members who nevertheless support their party on procedural votes we posit that the majority party creates an incentive for even the policy losers to support a procedural coalition through judicious distribution of particularistic benefits that compensates policy losers at a rate commensurate with the policy losses that they suffer we evaluate our theory empirically using the concept of roll rates in conjunction with federal domestic outlays data for the period 1983 96 we find that within the majority party policy losers are favored in the distribution of pork barrel spending throughout this period

political decentralization and corruption evidence from around the world abstract how does political decentralization affect the frequency and costliness of bribe extraction by corrupt officials previous empirical studies using subjective indexes of perceived corruption and mostly fiscal indicators of decentralization have suggested conflicting conclusions in search of more precise findings we combine and explore two new data sources an original cross national data set on particular types of decentralization and the results of a firm level survey conducted in 80 countries about firms concrete experiences with bribery in countries with a larger number of government or administrative tiers and given local revenues a larger number of local public employees reported bribery was more frequent when local or central governments received a larger share of gdp in revenue bribery was less frequent overall the results suggest the danger of uncoordinated rent seeking as government structures become more complex

a critical review and an extension of the political shirking literature after substituting actual and real changes for proposed and nominal changes in budgetary and employment levels it is clear that the size and scope of the federal leviathon had not been reduced over 1982 83 it is also clear that the agencies which witnessed real budget cuts over this period were of minor importance in terms of the total u s budget future research on why only small agencies receive real budget cuts will provide us with a better understanding of the budgetary process

rights equity and economic efficiency the adelman morris premise that economic development and equity are incompatible is not supported by the evidence of a strong relationship between equality of rights and the income distribution the premise that equity requires the denial of individual rights and the affirmation of state control is an oxymoron what has been overlooked in the literature on growth and equity is the effect of the rights structure on both economic efficiency and on the income distribution the evidence is that free societies have much larger shares of income going to the middle 60 percent of the distribution than is observed in societies where men are not free to choose in politically open societies compared to politically closed regimes the share of income to the middle three quintiles is q2 10 7 vs 8 0 q3 16 0 vs 11 5 and q4 22 9 vs 17 9 in the aggregate the shares to the middle quintiles are 49 6 vs 37 4 in nations that obey the rule of law compared to regimes in which the rights of the state relative to the individual are paramount the comparisons are q2 11 2 vs 7 4 q3 16 3 vs 10 6 q4 23 0 vs 17 3 summing the three quintiles yields a comparison of 50 5 vs 35 3 in countries that have private property market allocation of resources and minimum intervention by the state compared to command economies the shares of income to the middle quintiles are q2 10 8 vs 8 0 q3 16 0 vs 11 1 and q4 22 8 vs 17 7 aggregated the shares of the middle class in regimes with high levels of economic liberty are 49 6 vs 36 8 for regimes with restricted private economic rights

fiscal decentralization and economic growth abstract fiscal decentralization may indeed have a direct impact on economic growth but the theoretical underpinnings for this relationship remain largely undeveloped a fair summary of the empirical search for a direct relationship between fiscal decentralization and economic growth is that it remains an open question much less attention has been devoted in the literature to the indirect channels through which fiscal decentralization may affect economic growth we argue that much work remains to be done before policy advisors and decision makers can formulate and implement decentralization programs on the basis of improving the rate of economic growth

fiscal decentralization and the size of government a european country empirical analysis this article is an original contribution to the understanding of the relationship between fiscal decentralization and government size using a panel data set of the eu 15 countries we analyse the effect of decentralization on aggregate national and subnational government sizes by separating the long run effects of decentralization from its short run dynamics in the long run tax autonomy reduces central expenditure but increases and to a greater extent subnational public expenditure leading to higher aggregate public expenditure we find also that vertical imbalances tend to increase the sizes of subnational national and aggregate governments

condorcet winners and the paradox of voting probability calculations for weak preference orders choice literature given this problem social choice theorists have attempted to estimate the probability of condorcet winners given certain empirical or theoretical conditions we shall estimate the probabilities of condorcet winners and intransitive aggregate orders for various numbers of individuals with strong or weak preference orders across various numbers of alternatives we find using computer simulation a stark contrast between these estimates assuming strong individual preferences and the estimates allowing for individuals indifference between pairs of alternatives in contrast to earlier work which depends on the strong preference assumption we suggest that the problem is most acute for small committee decision making and least acute for mass elections with few alternatives

leviathan in a dual economy this paper studies the policies of a leviathan state with an ambition to make money and to stay in power the economic framework is a developing country characterized by dual markets government revenue is raised by taxing the agricultural sector part of this revenue is offered to the politically influential urban population in the form of low productive but well paid public sector employment i calculate the optimal level of rural taxation from the point of view of the leviathan and investigate its effects on migration industrialization public sector employment and urban unemployment in different political scenarios

the power to tax analytical foundations of a fiscal constitution preface 1 taxation in constitutional perspective 2 natural government a model of leviathan 3 constraints on base and rate structure 4 the taxation of commodities 5 taxation through time income taxes capital taxes and public debt 6 money creation and taxation 7 the disposition of public revenues 8 the domain of politics 9 open economy federalism and taxing authority 10 toward authentic tax reform prospects and prescriptions epilogue notes selected bibliography index

macroeconomic volatility and welfare in developing countries an introduction macroeconomic volatility both a source and a reflection of underdevelopment is a fundamental concern for developing countries their high aggregate instability results from a combination of large external shocks volatile macroeconomic policies microeconomic rigidities and weak institutions volatility entails a direct welfare cost for risk averse individuals as well as an indirect one through its adverse effect on income growth and development this article provides a brief overview of the recent literature on macroeconomic volatility in developing countries highlighting its causes consequences and possible remedies it then introduces the contributions of a recent conference on the subject sponsored by the world bank and pompeu fabra university barcelona

dynamic estimation of ideal points for the us congress theories of candidate positioning suggest that candidates will respond dynamically to their electoral environment because of the difficulty of obtaining bridge votes most existing approaches for estimating the ideal points of members of congress generate static ideal points or ideal points that move linearly over time we propose an approach for dynamic ideal point estimation using project vote smart s national political awareness test to construct bridge votes we use our dynamic estimates to measure aggregate change to measure individual level change and to study the institutional and structural factors that explain the changing positions of house candidates and members of congress we demonstrate that while the republican party has been selecting increasingly extreme candidates democratic incumbents have become more extreme while in office we also find that the congruence between elected members of congress and their constituents is mostly explained by the selection as opposed to the responsiveness of the candidate nonetheless we find evidence of dynamic responsiveness of incumbents in specific circumstances we find that competitiveness midterm elections and sharing the president s party affiliation are associated with greater responsiveness conversely retirement is not associated with a change in responsiveness we find no evidence of responsiveness of challengers finally we find that close elections draw challengers who are more in line with the district s ideology

the cyclical behaviour of fiscal policy evidence from the oecd this paper addresses the topic of cyclicality in scal policy in particular we show that the level of cyclicality varies across spending categories and across oecd countries in line with leading theories of scal cyclicality we show that countries with volatile output and dispersed political power are the most likely to run procyclical scal policies wage government consumption is highlighted as the most important channel by which these variables affect scal cyclicality

decentralization as a constraint to leviathan a panel cointegration analysis this paper extends the empirical literature about the effects of fiscal decentralization on the growth of government along three dimensions it distinguishes between the effects of the level of decentralization from the way local governments finance their expenditures common pool versus own resources it uses a panel cointegration approach to separate the long run effects of decentralization from the short run dynamics and it extends and revises the datasets generally used in these empirical analyses the results show that the amount of revenue raised by sub national governments leads to a long term fall in the size of government but grants have the opposite effect in addition a greater decentralization of expenditure leads to greater overall spending when the short term is considered these influences work slowly as the speed of adjustment towards the desired government size is relatively sluggish in addition in the short run there is also a clear effect from the role of local revenue raising powers that stimulates the growth of government these results appear robust to changes in the composition of the variables countries and periods included the sample

the political economy of intergovernmental grants evidence from a maturing democracy we evaluate the impact of political forces in the allocation of intergovernmental grants in portugal as it matured from a young to an established democracy using a large and unexplored dataset we show that political variables condition the granting system and that their importance changed over time while tactical manipulation in the distribution of grants among municipalities seems to exist only in the early years of democracy opportunistic effects are stronger in the latter years we argue that the latter effect is due to a change in the political environment and to the electorate s lack of information on intergovernmental grants

a model of candidate location when one candidate has a valence advantage that under some fairly weak assumptions for all levels of the valence advantage the advantaged candidate chooses a more moderate position than the disadvantaged candidate empirical studies of congressional elections by fiorina 1973 and ansolabehere snyder and stewart 2001 support this result d owns 1957 seminal work presents a puzzle for scholars of u s elections why do candidates not converge to the median voter one of the best explanations is that the candidates themselves have ideological preferences as calvert 1985 and wittman 1977 1983 have shown when candidates have such preferences and they are sufficiently uncertain about the preferences of the median voter then they do not converge although they may moderate their positions from their ideal point the basic version of the calvert wittman model however does not account for another basic fact of u s elections often one of the candidates has an advantage due to a nonpolicy factor such as incumbency greater campaign funds better name recognition superior charisma superior intelligence and so on stokes has dubbed such factors valence factors and he has noted their importance in u s elections stokes 1963 1992 1 in this article i extend the basic calvert wittman model by giving one candidate a valence advantage over the other i show that if the valence characteristics of the candidates are approximately equal then when a candidate s valence advantage increases this causes her to move toward the

openness country size and government abstract this paper shows that smaller countries have a larger share of public consumption in gdp and are also more open to trade these empirical observations are consistent with recent theoretical models explaining country formation and break up and may account for the observed positive empirical relationship between trade openness and government size

reviving leviathan fiscal federalism and the growth of government this article revisits the influential leviathan hypothesis which pos its that tax competition limits the growth of government spending in decentralized countries i use panel data to examine the effect of fiscal decentralization over time within countries attempting to distinguish between decentralization that is funded by intergovernmental transfers and local taxation first i explore the logic whereby decentralization should restrict government spending if state and local governments have wide ranging authority to set the tax base and rate especially on mobile assets in countries where this is most clearly the case decentralization is associated with smaller government second consistent with theoretical arguments drawn from wel fare economics and positive political economy i show that governments grow faster as they fund a greater portion of public expenditures through intergovernmental transfers

the revised theory of surge and decline the status of angus campbell s theory of surge and decline is a matter of considerable controversy while analysis of the composition and voting behavior of presidential and midterm electorates fails to support the theory analysis of aggregate congressional election results yields supporting evidence this research seeks to reconcile these findings by proposing and examining a revised version of the surge and decline theory the analysis finds that in presidential elections there is a surge in turnout among partisans of the advantaged party and a surge in support for the advantaged party among independent voters both surges are proportional to the magnitude of short term forces as measured by the partisan division of the presidential vote in midterm elections both the one sided partisan turnout surge and the independent vote surge for the advantaged party recede

municipal annexation and local monopoly power we have found that the fiscal power of a city can be increased by extension of its borders within a land area that is homogeneous with respect to earning opportunities even when numerous rival jurisdictions exist in the area we hypothesized that extending municipal boundaries will have a positive effect on discretionary outlays and on expenditures per capita the evidence presented supports these hypotheses furthermore municipal wages appear to be significantly increased in cities experiencing annexation growth therefore we would expect to find that municipal employees are more inclined to favor annexation than the rest of the electorate from a policy standpoint this study suggests that significant perverse effects on fiscal efficiency may follow adoption of legal reforms that facilitate the ability of municipalities to extend their borders or that restrict the formation of new municipalities

property taxation as incentive for cost control empirical evidence for utility services in norway recent theoretical research suggests that property taxation has incentive effects that can help control cost problems in the public sector the institutional setting in norway allows this first empirical investigation of the incentive effect of property taxation since we can separate between local governments with and without property tax the raw data of the variation in the unit cost level for utilities show that local governments with property tax have about 20 lower unit cost using both linear regression and propensity score matching we are not able to wash out the difference in unit costs our interpretation is that having a visible and controversial local tax related to property stimulates voter interest in local government activities and thereby may help cost control the incentive effect is of interest for the design of fiscal federalism

empirical evidence of paradoxes of voting in dutch elections in this paper we analyze four national elections held in 1982 1986 1989 and 1994 in the netherlands on the occurrence of the condorcet paradox in addition we investigate these elections on the occurrence of three so called majority plurality paradoxes the first paradox states that a party having a majority over another party may receive less seats the second states that a condorcet winner may not receive the largest number of seats and even may not receive a seat at all the third says that the majority relation may be the reverse of the ranking of parties in terms of numbers of seats

tax policy and state economic growth the long run and short run of it this paper uses a pooled mean group pmg estimator to evaluate the effects of tax policy on state level growth we find that property and sales tax rates have negative effects on long run income growth while income tax rates have no impact

an approach to empirical studies of voting paradoxes an update and extension by tradition public choice theorists have pointed out many paradoxes of collective choice the phenomenon of cyclical majorities and the more general issue of political equilibrium have proven to be fertile searching grounds one class of paradoxes derives from the intransitivity of social orderings implied by the cycle as riker 1982 notes this property of majority rule is most perplexing and paradoxical to those who hold populist beliefs that voting reflects a fair and meaningful amalgamation of individual preferences and must therefore reflect the will of the people if voting in general elections and committees is interpreted this way then the existence of voting cycles and the implied intransitivity or more generally the impossibility of any rule for making social choices assuring transitive sometimes equated with rational outcomes shakes the foundations of populist principles of political philosophy another paradox of cyclical majorities and simulations of voting games in general concerns the stability of political equilibria the body of theory regarding this issue is skillfully summarized by shepsle and weingast 1982 and can be reduced to a simple proposition with sufficient assumptions regarding the states of participants knowledge and the manipulability of

second generation fiscal federalism the implications of fiscal incentives abstract first generation fiscal federalism fgff studies the performance of decentralized systems under the assumption of benevolent social planners second generation fiscal federalism sgff studies performance based on the fiscal and political incentives facing subnational officials the paper focuses on three aspects of sgff first it considers the design of intergovernmental transfers while fgff emphasizes correcting vertical and horizontal equity sgff emphasizes the importance of fiscal incentives for producing local economic prosperity sgff extends fgff approaches by showing how non linear transfer systems can produce both equalization and high marginal fiscal incentives to produce local economic growth second the paper raises the fiscal incentive approach showing how different tax systems produce different fiscal incentives for political officials to choose policies third the paper discusses the interaction of democracy and fiscal federalism

tax decentralization and local government size this paper investigates the relationship between fiscal federalism and the sizes of local governments while many empirical studies emphasized that grants encourage the growth of local public spending and local taxes constrain it they are more silent regarding the effects of different types of tax autonomy the paper addresses this issue by arguing that tax decentralization as organized on tax bases used only by local governments tax separation rather than on tax base sharing would restrain local public expenditures using an unbalanced panel of oecd countries the key finding is that only property taxes mostly based on a tax separation scheme seem to favor smaller local governments thus while tax decentralization is a necessary condition for limiting the growth of local governments it does not appear sufficient as tax separation schemes among government levels would in fact be required

dynamic responsiveness in the u s senate id evelop a theory of dynamic responsiveness that suggests that parties that win elections choose candidates who are more extreme and parties that lose elections choose candidates who are more moderate moreover the size of past victories matters close elections yield little change but landslides yield large rc hanges in the candidates offered by both parties i test this theory by analyzing the relationship between republican vote share in u s senate elections and the ideology of candidates offered in the subsequent election the results show that republican democratic victories in past elections yield candidates wh oa re more less conservative in subsequent elections and the effect is proportional to the margin of victory this suggests that parties or candidates pay attention to past election returns one major implication is that parties may remain polarized in spite of their responsiveness to the median voter

does fiscal decentralization constrain leviathan new evidence from local property tax competition this paper reexamines whether fiscal decentralization constrains leviathan government using panel data for pennsylvania we compare actual property tax rates to the leviathan revenue maximizing rates for municipalities school districts and counties using spatial econometric methods we also estimate the degree of spatial dependence at the three levels of local government we find that fiscal decentralization results in stronger intergovernmental competition and lower tax rates we also find evidence of collusion among school districts that exhibit high interdependence but also high tax rates this calls into question the current literature s blind use of spatial dependence as a measure of intergovernmental competition

diversity and redistribution abstract in this paper we analyze the interaction of income and preference heterogeneity in a political economy framework we ask whether the presence of preference heterogeneity arising for example from different ethnic groups or geographic locations affects the ability of the poor to extract resources from the rich we study the equilibrium of a game in which coalitions of individuals form parties parties propose platforms and all individuals vote with the winning policy chosen by plurality political parties are restricted to offering platforms that are credible in that they belong to the pareto set of their members the platforms specify the values of two policy tools a general redistributive tax which is lump sum rebated or used to fund a general public good and a series of taxes whose revenue is used to fund specific targeted goods tailored to particular preferences or localities our analysis demonstrates that taste conflict first dilutes but later reinforces class interests when the degree of taste diversity is low the equilibrium policy is characterized by some amount of general income redistribution and some targeted transfers as taste diversity increases in society the set of equilibrium policies becomes more and more tilted towards special interest groups and against general redistribution as diversity increases further however the only policy that can emerge supports exclusively general redistribution

fiscal stability during the great recession putting decentralization design to the test this paper provides an empirical analysis aimed at disentangling the roles played by decentralization level and design as well as the extended decentralized framework provided by subnational borrow

political economy of mechanisms we study the optimal mirrlees taxation problem in a dynamic economy in contrast to the standard approach where the taxation mechanism is operated by a benevolent planner with full commitment power we focus on economies in which policy decisions are made by self interested politicians who cannot commit to policies the society controls politicians using elections we show that the provision of incentives to politicians can be partly separated from redistribution across agents and that political economy constraints can be modeled as introducing additional aggregate distortions in the dynamic mirrlees problem we provide conditions under which the political economy distortions persist or disappear in the long run if the politicians are as patient as the agents the best sustainable mechanism leads to an asymptotic allocation where the aggregate distortions arising from political economy disappear in contrast when politicians are less patient than the citizens positive aggregate labor and capital taxes remain even asymptotically we conclude by providing a brief comparison of centralized

using satellite imagery to create tax maps and enhance local revenue collection although taxes on land and property have many desirable attributes the challenge of ensuring completeness of tax rolls and currency of valuations preclude their effective use to support urbanizati