optimization of india s power sector strategies using weight restricted stochastic data envelopment analysis abstract india s power sector has a significant impact on the country s development and climate change mitigation efforts optimization of energy planning is therefore key to achieving the overall planning goals the hierarchical multi objective policy optimization is a policy centric multi level bottom up iterative approach designed from a developing country perspective utilizing the optimality principle of dynamic programming it is applied to the indian power sector by grouping the strategies into three portfolios namely power generation mix demand side efficiency group and supply side efficiency group each portfolio is optimized taking into account the objectives of cost minimization and comprehensive risk and barrier reduction the portfolios are further combined and optimized at a higher level with respect to higher level objectives namely economic growth energy equity energy security and climate sustainability this paper focuses on the second level optimization utilizing data envelopment analysis dea both the deterministic and stochastic variations have been analysed and the results compared in respect of unrestricted as well as restricted weight models the analysis shows that weight restricted stochastic dea model is most appropriate for efficiency optimization of power sector strategies the methodology can be effectively used for energy planning in developing countries

why democracies produce efficient results by applying the standard tools of microeconomic analysis i argue that democratic markets work as well as economic markets in particular i show that previous work has greatly exaggerated the existence of principal agent and informational problems in electoral markets and has drawn incorrect conclusions

the effect of legislature size on public spending evidence from a regression discontinuity design what is the effect of legislature size on public spending an answer to this question is provided by weingast et al j polit econ 89 4 642 664 1981 whose law of 1 n posits that an increase in the number of elected representatives always leads to an increase in public spending because elected politicians regard the tax base as a common pool from which they can finance specific projects for their constituencies and these specific constituencies internalize the full benefits of the projects but only bear a fraction of the costs projects are financed from the common tax base fiscal inefficiency will increase with the number of representatives in this paper i test the validity of the law of 1 n using a dataset of 9325 german municipalities between 2008 and 2010 through the application of a regression discontinuity design many of the methodological pitfalls of previous studies can be avoided and a valid estimation of the causal effect of legislature size on public spending for german municipalities can be determined the results do not corroborate the positive findings of previous studies which generally supported the implications of the law of 1 n for the years 2008 2010 i find a negative effect of legislature size on public spending in german municipal councils

a bargaining theory of inefficient redistribution policies when two policies are available to achieve the same goal why is the relatively inefficient one often observed we address this question in the context of policies used to redistribute income towards special interest groups sigs in a two stage model in the first stage the set of constraints on policy instruments is chosen in the second stage the government and sigs bargain over the level of the available transfer policies restrictions on the use of efficient policies and the use of inefficient ones reduce the surplus over which sigs and governments can bargain there is however an offsetting effect not generally recognized in models of inefficient redistribution an improvement in the government s bargaining position which allows it to capture a larger share of the surplus we show that this positive effect for the government dominates under plausible conditions inefficient policies are the equilibrium outcome under alternative first stage mechanisms for policy selection such as the election of policymakers or in some cases bargaining between sigs and the government jel classification d7 f13 c70 h23

political accountability and sequential policymaking abstract we develop a model of political accountability with sequential policymaking when a bureaucrat s actions are transparent his overseer faces a political time inconsistency problem she is tempted to revise her retention rule in the middle of the policymaking process as a result the bureaucrat s equilibrium behavior overemphasizes later tasks if the overseer knows the technology by which policies translate into outcomes then she can eliminate these distortions using task specific budget caps however if the overseer is uncertain about this technology such budget caps introduce ex post inefficiency when uncertainty is sufficiently large and consequential the overseer prefers an institutional environment with a fungible budget and no transparency such an environment allows the overseer to exploit the bureaucrat s expertise though at the cost of weaker overall incentives

the political economy of the tariff cycle how can protectionism and free trade succeed one another our answer focuses on the changing balance of private actors political demands these actors acquire interests in tariff policies because their assets are spatially concentrated and trade in these assets is subject to various limitations actors in regions experiencing no new investment in an established industry old regions have interests that sometimes differ from those in regions where there is new investment we show that old regions have no reason to be involved in tariff politics at business cycle peaks during troughs whether a state becomes more or less protectionist depends ceteris paribus on the relative political strength of old import competing and old exporting interests if old import competing industries outweigh the old exporters then protection will tend to increase at the trough and decrease at the peak of a business cycle the opposite result occurs when old exporters are more influential

political preferences for the pork barrel a generalization this paper provides a rational explanation for the observation of oversized coalitions often approaching unanimous size in the realm of distributive policies distributive policies are those which concentrate benefits in specific geographic areas states congressional districts while spreading costs through general taxation the explanation offered here that legislators may rationally prefer universalism to hard ball coalition politics generalizes earlier work of weingast and fiorina in particular it extends their results to pork barrel politics i e projects that are economically inefficient and demonstrates how packages of economically inefficient projects can nevertheless be politically popular the main theoretical feature that induces preferences for universalism is uncertainty over the composition of winning coalitions and consequently the desire for the political insurance that universalism provides

the politics and economics of pork barrel spending the case of federal financing of water resources development this paper empirically investigates the economic and political factors that have influenced annual corps of engineers water resource spending despite the common view that pork barrel spending is economically unjustified and purely politically motivated economic factors have been important in determining water resource spending from 1865 1920 economic development and industrialization increase spending and from 1921 1988 spending appears to be counter cyclical there is also evidence that majority parties control spending levels in the post civil war period while in recent times legislators act under a norm of constrained universalism and are influenced by the costs to their constituents of increased spending

licensing in the theory of innovation this article analyzes licensing in a noncooperative r d game we ask two questions what are the incentives for licensing a production technology and what is the impact of licensing on the pattern of innovation and the consequent evolution of industry costs and market structure the gainsfrom trading information through licensing contracts are achieved through the replacement of inefficient production techniques the ex post incentive and the elimination of inefficient research expenditures the ex ante incentive in a duopoly the availability of licensing encourages research when the firms initial production technologies are close in costs and discourages research when initial costs are asymmetric

the new economics of organization over the last ten years or so an important new approach to the study of organizations has emerged within economics it is perhaps best characterized by three elements a contractual perspective on organizational relationships a theoretical focus on hierarchical control and formal analysis via principal agent models this paper provides political scientists with an overview of the new economics of organization and explores its implications for the study of public bureaucracy so far positive political theory has not contributed much to our understanding of public bureaucracy in part this is due to the unsympathetic treatment that rational modeling and most other modes of quantitative analysis have long received from students of public administration the other side of the coin however is that positive theorists have not made much of an effort to develop theories of bureaucracy their concerns have centered around two basic mechanisms of social choice voting and markets and they have devoted little systematic attention to a third mechanism that is clearly important for understanding how societies and other aggregates make collective decisions this third and relatively unexplored mechanism is hierarchy movement toward a positive theory of hierarchies would fill a serious gap in the social choice literature while at the same time making a theoretical contribution that strikes to the essence of public bureaucracy indeed of all organizations in fact significant steps toward a positive theory of hierarchies have very recently been taken but by economists not political scientists in small numbers of course economists made contributions to the study of public bureaucracy some time ago with the pioneering works of downs 1967 tullock 1965 and niskanen 1971 but this new wave of theoretical work is different it is already a large complex body of literature that is the focus of innovation and excitement among a growing number of economists and it reflects an unusual degree of theoretical coherence and cumulative effort work in this tradition tends to receive orientation from a distinctive economic approach to the analysis of organizations an approach perhaps best characterized by three elements a contractual perspective on organizational relationships a focus on hierarchical control and formal analysis via principal agent models this approach has emerged from recent attempts to move beyond the neoclassical theory of the firm which assumes away all organizational considerations to a theory of economic organizations that can explain why firms corporations and other enterprises behave as they do propo

an adaptive model of bureaucratic politics in this article we outline a new framework for the formal analysis of bureaucratic politics it departs from standard neoclassical approaches notably those of niskanen 1971 and peltzman 1976 in several important respects first our approach explicitly models a system of three way interaction among bureaus politicians and interest groups second it allows for institutional features of each type of participant third it is a model of dynamic process fourth participants make choices adoptively rather than optimizing fifth participants are only minimally informed the result is a dynamic model of adaptive behavior very much in the spirit of simon s 1947 behavioral tradition that offers a new perspective on political control bureaucratic power and the intelligence of democracy

the president and the distribution of federal spending scholarship on distributive politics focuses almost exclusively on the internal operations of congress paying particular attention to committees and majority parties this article highlights the president who has extensive opportunities both ex ante and ex post to influence the distribution of federal outlays we analyze two databases that track the geographic spending of nearly every domestic program over a 24 year period the largest and most comprehensive panels of federal spending patterns ever assembled using district and county fixed effects estimation strategies we find no evidence of committee influence and mixed evidence that majority party members receive larger shares of federal outlays we find that districts and counties receive systematically more federal outlays when legislators in the president s party represent them

the political economy of benefits and costs a neoclassical approach to distributive politics this essay offers a rational political explanation for the notorious inefficiency of pork barrel projects with an optimization model of legislative behavior and legislative institutions the model emphasizes the economically arbitrary from a welfare point of view importance of the geographic incidence of benefits and costs owing to the geographic basis for political representation we explore the implications of a legislator s objective function and derive conditions under which a representative legislature will select an omnibus of projects each of which exceeds the efficient scale

public spending and the paradox of supermajority rule this article examines the paradox that a supermajority rule in a legislature promotes excessive government spending we propose a simple conjecture if rent seeking coalitions dominate legislative politics and if individual legislators demands for rent seeking activities are price inelastic a change of legislative rules from simple majority to a supermajority will lead to greater public spending other things equal using data from u s state legislatures 1970 to 2007 we find that the adoption of a supermajority rule has a robust positive impact on various types of tax revenues and government expenditures

the evolution of tax structures certain themes recur throughout this paper the traditional account of the evolution of tax structures through the interaction of increasing efficiency and the claims of special interests plays a role but is not the whole story different taxes create tradeoffs between the costs of administration and compliance specification of these costs creates a framework in which long term trends like the growth and centralization of revenues and the increasing dependence on direct taxation can be understood this framework applies to observable collective decisions to alter tax structures uncertainty about ultimate incidence plays a major role in such decisions it also applies to the decentralized context of adjustment and resistance this framework can be used to investigate the extent of redistribution within tax systems and of the requirement of frequent reforms to sustain redistribution against resistance the simultaneous consideration of economic and political aspects of taxation can only improve future research

why so much stability one of duncan black s 1958 more important contributions was a classically simple proof that with complex issues and majority voting a stable outcome is unlikely this very simple proof that there would normally be no motion which can get a majority against all others and hence that any possible outcome is dominated by another has been elaborated and made more precise by later work without most improbable conditions endless cycling would be expected this is particularly true when logrolling is present as it normally is if we look at the real world however we observe not only is there no endless cycling but acts are passed with reasonable dispatch and then remain unchanged for very long periods of time thus theory and reality seem to be not only out of contact but actually in sharp conflict it is the purpose of this article to demonstrate that our existing theory when properly looked at does indeed imply a relatively stable outcome to voting in some cases however this stability will not be a true equilibrium because a random member of a large set will be chosen and then that random outcome will be left unchanged for long periods of time it does not dominate all other outcomes but is retained merely because of its particular history there are already several possible explanations for the observed stability in the literature we will take them up as they become relevant to the general line of reasoning i should however warn the reader that my own previous work including joint work with buchanan will play a major role here this may simply reflect egotism but i think that some of the early work which is now partially forgotten can provide solutions for more modern problems much recent public choice work has involved spatial models and these models frequently ignore logrolling the reason presumably is that it is very hard to put logrolling in a two dimensional diagram we shall begin considering such special models and assume that the issues are the sort that does not lead to logrolling and then turn to more complex logrolling problems with respect to the first situation in which logrolling does not occur there is already one possible explanation for the observed stability in the literature

strategic behavior by federal agencies in the allocation of public resources how do government agencies allocate program resources some authors presume that agencies seek to maximize program objectives others suggest agencies favor the districts important to the president s election in addition agencies may distribute larger program resources to those districts whose congressional representatives are best positioned to help the agency we examined how federal government agencies responded both to the 2006 election when control of congress shifted from the republican to the democratic party and to the 2010 election when the house switched from democratic to republican control we used a difference in difference analysis to evaluate the impact of each election on the agencies allocations of contracts agencies generally responded to the elections by allocating more contract resources to districts represented by the winning party however federal agencies reacted differently to changing political environments depending on the characteristics of the agency for example after the 2006 election those agencies with programs favored by republican members of congress allocated more resources to democratic districts these republican agencies presumably are the most vulnerable to the risk of losing future appropriations democratic agencies and neutral agencies facing no significant threats to their appropriations did not respond to the election as strongly finally more vulnerable districts received the most support especially by the republican agencies we reaffirmed these results by using the 2010 congressional elections in which the political orientations of the districts favored with more contract distributions was reversed

transaction costs and coalition stability under majority rule 1 introduction under a majority voting rule representatives of specific political districts must bargain with representatives of other districts to build a coalition for enacting legislation that benefits their narrow constituencies but the theoretical public choice literature warns of potential for unstable majorities minimum winning coalitions divide program benefits just among their members creating incentives for those left out to entice defection by offering rewards to those who leave and form a different coalition as noted in mueller 1989 new coalitions emerge undermining the old ones leading to cyclical majorities short term programs and highly skewed distributions of program benefits 1 despite these dire predictions there is a general consensus in the literature such as tullock 1981 that programs are more stable and allocations more equal than the theory suggests 2 in an effort to explain the discrepancy between prediction and observation researchers have pointed to institutional rules and practices in congress for example as stated in shepsle and weingast 1981a and weingast and marshall 1988 the committee system provides a structure induced equilibrium that limits the possible range of vote trading and thereby helps maintain coalitions further shepsle and weingast 1981b miller and oppenheimer 1982 and collie 1988 argue that universalist sharing of program benefits enlarges the winning coalition and extends its political support 3 in this article we offer additional evidence of broad stable sharing in many programs enacted by congress by describing interstate distributions from the federal highway trusts fund htf the allocation formula for the htf was initiated in 1916 but despite wide divergence across the states in growth of various economic factors over the rest of the twentieth century such as vehicle registration and population that might have led to redirection of highway funds there were comparatively limited htf allocation adjustments analysis of state receipts from the htf relative to tax payments into the fund reveals that some states collect much more than they contribute whereas others pay in more than they receive even so interstate ratios of htf apportionments to payments have remained stable across the years varying less than changes in highway use measures would suggest going beyond this specific program we examine overall federal expenditure and tax shares among the states from 1975 to 1997 and show that there has been a similar continuity in the interstate distribution of federal funds and taxes 4 as with the highway program there is broad stable sharing of federal expenditures across the states with some receiving more than they contribute in taxes to the federal government to better understand this observed stability and use of relatively egalitarian sharing rules and to go beyond existing explanations we emphasize the desire of politicians to minimize the high transaction costs of negotiating and enforcing political coalitions politicians have incentive to prevent unraveling of political agreements to avoid the costs of searching for new coalition partners reaching agreement on the nature and distribution of program benefits and costs and verifying compliance these activities detract from a legislator s ability to address other voter concerns moreover legislators seek to protect constituent benefits accruing from long term programs that would be lost if coalitions unraveled 5 accordingly we argue that politicians assemble greater than minimum sized coalitions to build broad political support for their legislative programs offering benefits to a larger constituency in exchange for additional votes considerable negotiation over the distribution of program benefits a nd costs may be required so that once agreements are reached politicians will be loath to consider a major reallocation that could undermine the coalition

political solutions to market problems for some market failures serve as a rationale for public intervention however the fact that self interested market behavior does not always produce felicitous social consequences is not sufficient reason to draw this conclusion it is necessary to assess public performance under comparable conditions and hence to analyze self interested political behavior in the institutional structures of the public sector our approach emphasizes this institutional structure warts and all and thereby provides specific cautionary warnings about optimistic reliance on political institutions to improve upon market performance

taxation and the political economy of the tariff traditional accounts of u s tariff policy emphasize trade strategies and interest group politics this article makes a departure it opens with an observation up until world war i the tariff was the largest single source of federal government revenues it then explores the significance of tariffs as taxes theoretically and empirically in its first part the article develops a theory of taxation politics and applies it to the tariff in its second part it submits the theory to an empirical test modeling changes in u s tariff rates from 1829 to 1940 the politics of tariff revision it argues followed from two characteristics of the tariff as tax from the extent of the treasury s dependence upon it and from the distributive pattern of its burdens and benefits taken together the article concludes revenue dependence and distributive incidence account for several diverse aspects of american tariff policy including the structure of its coalitions the shifts in its objectives and the timing of its innovations

distributive politics and the costs of centralization this paper studies the choice between centralization and decentralization of fiscal policy in a political economy setting with centralization regional delegates vote over agendas comprising sets of region specific projects the outcome is inefficient because the choice of projects is insufficiently sensitive to within region benefits the number of projects funded may be non monotonic in the strength of project externalities the efficiency gains from decentralization and the performance of constitutional rules such as majority voting which may be used to choose between decentralization and centralization are then discussed in this framework weaker externalities and more heterogeneity between regions need not increase the efficiency gain from decentralization

amend the old or address the new broad based legislation when proposing policies is costly if each legislator wishes to encourage other legislators to address new problems in future periods then a subgame perfect nash equilibrium can exist with the following properties 1 no legislator finds it worthwhile to make a narrow proposal that appeals to a minimum majority 2 instead legislators propose policies that appeal to all members not for fear of retaliation but rather to encourage other members to work on new problems in succeeding periods 3 in succeeding periods no legislator amends the existing broad policy we find an equilibrium with these properties in finite as well as infinite period games

pork barrel politics and electoral returns at the local level does the targeted spending of public resources provide electoral benefits for incumbents despite the attention of scholars to that question the empirical results are mixed thus far the present paper supplies insights into the electoral benefits of discretionary funding on local elections i study the consequences of pork barrel politics in 7355 competitive mayoral elections in slovakia between 2006 and 2018 finding that more grants from the central government enhance the likelihood of mayors winning reelection the same advantage applies to mayors whose municipalities receive grants in local election years the effects of the number of grants obtained as well as the timing of their distribution are however moderated by municipal population more specifically a larger number of grants and resources obtained near the end of the mayoral term provides electoral benefits only to small town mayors but give no advantage to the mayors of larger urban areas