the futile quest for a grand explanation of long run government expenditure this paper carries out a critical reappraisal of the two contending theories purporting to explain long run government spending wagner s law and different variants of the ratchet effect we analyze data spanning from the early 19 th century until the present day in sweden and the united kingdom hence in contrast to previous studies we evaluate the validity of wagner s law and the ratchet effect hypothesis over a very long time period starting at the beginning of industrialization cointegration analysis is used to investigate the long run relationships between government expenditure and gdp focusing on sub periods and structural breaks moreover we test the ratchet effect hypothesis by estimating models which allow for asymmetric adjustment according to our main results wagner s law does not hold in the long run although the data are consistent with wagner s law between roughly 1860 and the mid 1970s this can be traced to the formation of the modern public sector including the introduction of public education health care and so forth yet wagner s law did not hold during the initial industrialization phase before 1860 and in recent periods gdp only affects the government spending share when we control for population age structure finally we find some evidence of asymmetric adjustment in the uk particularly in the post wwii period however the ratchet effect is not a general cause of the growth of government spending

wagner s hypothesis evidence from kuwait using cointegration tests this paper investigates the relationship between public expenditure and a number of socioeconomic variables including the level of income in kuwait a general form of the public expenditure function is formulated and recent developments in time series econometrics including unit roots and cointegration tests and an error correction model are used given the characteristics of the economy alternative measures for each variables are used the analysis in the paper is based on time series data covering the period from 1969 70 to 1994 95 in general the findings lend little support to the existence of long run equilibrium relationship between public expenditure and the socioeconomic variables and the evidence does not lend support to the validity of wagner s law in kuwait

a test of the wagner s hypothesis for the fiji islands in this article we examine wagner s law for fiji for the period 1970 to 2002 using the johansen 1988 test for cointegration we find one cointegration relationship between national output and government expenditure using five different long run estimators we find robust results on the impact of national income on government expenditure the elasticity ranges from 1 36 to 1 44 implying that a 1 increase in income leads to a 1 36 1 44 increase in government expenditure moreover we find that in the long run national income granger causes government expenditure while these results are consistent with wagner s law we warn policy makers that because fiji s total debt stands at around 69 of gdp in future the bulk of expenditure will go towards debt financing at the expense of productive sectors

a political economic analysis of congressional voting patterns on nafta this paper delves into the question of the determinants of congressional voting on nafta it uses a logit model to examine both house and senate votes and is able to use district specific estimates in the former it finds only very limited support for the thesis that narrowly defined employment gainers and losers were important determinants of congressional voting patterns though some substantial support that districts that were highly agricultural or already possessed a substantial hispanic population and skilled labor force and had the most to gain from the general effects of nafta lead to a positive effect on the probability that a member of the house would vote affirmatively contributions from labor unions lowered the likelihood of affirmative votes political partisanship and ideological positions apparently had little effect on the votes a representative s political capital had a marginally significant effect on the probability on an affirmative vote but it performed positively in the senate and negatively in the house

political and institutional determinants of fiscal policy in the european community in recent theoretical and empirical research the variation in political and institutional arrangements which may affect the process of national policy formation is examined in order to explain cross country differences with respect to fiscal policies pursued in this paper we build upon this literature and examine whether and how cross country differences in debt accumulation and public sector size of member countries of the european community during the 1980s can be explained we conclude that the growth of government debt is positively related to the frequency of government changes and negatively to sound budgetary procedures in countries with left wing governments the growth of the share of government spending in total output generally tends to be higher

openness external risk and volatility implications for the compensation hypothesis a central assumption in the globalization literature is that economic openness generates economic insecurity and volatility based on this assumption schol ars of international political economy have proposed the compensation hypothesis which claims that globalization bolsters rather than undermines the welfare state by increasing public demand for social protection against externally generated eco nomic instability the openness volatility link is dubious however on both theoret ical and empirical grounds in this study i revisit the volatility assumption focusing on a crucial difference between openness and external risk in their effect on volatil ity my statistical analysis of a panel data set from 175 countries 1950 2002 finds a consistent effect of external risk on volatility of the major economic aggregates but a largely insignificant effect of openness these findings suggest that economic volatility may be a mistaken link in explaining the openness spending nexus calling for further research on the causal mechanisms linking the two the general growth of government in the post world war ii era is one of the most important empirical regularities in political science measured by general govern ment consumption or sectoral expenditures government size grew dramatically during most of the postwar period intrigued by this phenomenal government growth political scientists offered numerous accounts some viewing this growth as a corollary of economic phenomena such as modernization industrialization income distribution or fiscal illusion and others attributing government growth to political causes such as bureaucratization interest group politics and electoral competition 1

legislative systems with absolute party discipline implications for the agency theory approach to the constituent legislator link this paper examines how the presence of absolute party discipline forces one to re examine some of the issues surrounding the constituent legislator link with absolute party discipline slack at the individual district level is determined by the policy choices of a political party rather than by the choices of the individual legislator this party discipline not only has implications for the representational effectiveness of individual legislators but also results in the terms slack and shirking no longer necessarily being synonymous the empirical work shows that canadian political parties engaged in wide scale shirking on the 1988 u s canada free trade agreement

the political economy of israeli protectionism an empirical analysis the aim of this study was to examine the tariff structure in israel in terms of the four main theoretical models of endogenous commercial policy the empirical results for levels of protection in israel support several of the models in particular the pressure group model performs well and especially the variable that represents the lobbying power of the histadrut public sector in israel this is consistent with the longstanding political power of the histadrut in israel the histadrut s role in the israeli economy rises above the western concept of a labor union and takes on a quasi governmental function the clearest example of this elevated status is seen when the government included the histadrut as part of the commission charged with the responsibility of carrying out the nominal liberalization process of the 1960s evidently it is this kind of political economic power that allowed the histadrut to affect the level of protection histadrut dominated industries received

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

europe s tired poor huddled masses self selection and economic outcomes in the age of mass migration during the age of mass migration 1850 1913 one of the largest migration episodes in history the united states maintained a nearly open border allowing the study of migrant decisions unhindered by entry restrictions we estimate the return to migration while accounting for migrant selection by comparing norway to us migrants with their brothers who stayed in norway in the late nineteenth century we also compare fathers of migrants and nonmigrants by wealth and occupation we find that the return to migration was relatively low 70 percent and that migrants from urban areas were negatively selected from the sending population keep ancient lands your storied pomp cries she with silent lips give me your tired your poor your huddled masses yearning to breathe free the wretched refuse of your teeming shore send these the homeless tempest tost to me i lift my lamp beside the golden door emma lazarus 1883

constituent interest vs legislator ideology the role of political opportunity cost this paper applies the economic model of legislative voting to the automobile industry domestic content vote in the u s house of representatives in 1982 we consider constituent interests for and against the ml and compare the predictive powers of alternative indicators of ideological preferences we also examine the role of political opportunity cost and find that lame ducks were significantly less likely to vote for the bill than were returnees to congress given the political advantages of voting for the bill this is consistent with the view that legislators were influenced by the case for freer trade

immigration and trade creation econometric evidence from canada immigrants may expand trade with their country of origin owing to superior knowledge of or preferential access to market opportunities the authors test this proposition using canadian trade data with 136 partners from 1980 to 1992 in an augmented gravity equation they find that a 10 percent increase in immigrants is associated with a 1 percent increase in canadian exports to the immigrant s home country and a 3 percent increase in imports they also find that among the primary categories of immigrants independents have the greater influence on trade immigration via the entrepreneur class appears to have less impact on trade than all other classes except refugees

hub and spoke free trade areas theory and evidence from israel we study how the sequential formation of free trade areas affects trade flows between member countries in a three country three good model of comparative advantage if two countries have an fta and both sign a similar agreement with the third trade between the two decreases however if only one of them signs an additional fta a hub and spoke pattern arises and trade between the initial members increases israel s experience lends strong support to our model trade between israel and the eu subject to an fta since 1975 increased by an additional 29 after the introduction of the us israel fta in 1985 on etudie comment la formation sequentielle de zones de libre echange affecte les flux commerciaux entre les pays membres dans un modele d avantage comparatif avec trois pays et trois biens si deux pays ont un accord de libre echange et qu ils signent tous deux un accord similaire avec un tiers pays le commerce entre les deux pays originaux decroit cependant si seulement un des deux pays originaux signe un accord avec le troisieme un reseau en etoile emerge et le commerce entre les deux payx d origine s accroit l experience d israel donne un fort support au modele le commerce entre israel et l union europeenne sujet a un accord de libre echange depuis 1975 s est accru de 29 apres l introduction de l accord de libre echange entre israel et les etats unis en 1985

explanations of protectionism in international trade votes in this study we analyze the voting records of u s senators on three recent international trade bills our objective is to assess the importance of ideology and constituent interest as forces that influence protectionist vs free trade voting behavior the methodology uses discriminant analysis supplemented with expert judgement the first conclusion is that ideology is the more important force in generic protectionism issues and local constituent interests are more important for commodity specific issues second we find that protectionism is especially associated with liberal ideology high import impact and low export dependence although the discriminant analysis outperforms expert judgement in classifying protectionist vs free trade votes in two of the three bills studied the best explanation is obtained by using both methods together

intermarriage and the economic assimilation of immigrants this article investigates the assimilation role of intermarriage between immigrants and natives intermarried immigrants earn significantly higher incomes than endogamously married immigrants even after we take account of human capital endowments and endogeneity of intermarriage the premium does not appear to be a reward for unobservable individual characteristics natives who intermarry do not receive this premium nor do immigrants who intermarry into another ethnic group the premium is mainly attributable to a faster speed of assimilation rather than any difference in labor market quality between intermarried and nonintermarried immigrants at the point of arrival

protectionist pressures and aggregate economic conditions comment on takacs this paper explores the influence of u s macroeconomic conditions and the international trade position on protectionist pressures as measured by escape clause cases brought before the international trade commission several possible difficulties with takacs pioneering empirical study of this topic are considered it is argued that while further support is found for her principal conclusion that the state of the domestic economy is a significant determinant of such protectionist pressures the quantitative strength of such aggregate factors is less than was suggested by takacs original study

wagner s hypothesis in time series and cross section perspectives evidence from real data for 115 countries internationally comparable data on income and government expenditure for 115 countries covering the period 1950 80 are used to assess the validity of wagner s hypothesis individual country time series data and several intercountry cross sections are studied besides a tremendous diversity in the position for various countries the results indicate that while there is support for the hypothesis in some time series data sets such support is lacking in most cross section estimates much of the support for the hypothesis reported in many earlier studies therefore was probably due to either use of limited samples or inadequate data comparability across the observations studied copyright 1987 by mit press

a bound testing analysis of wagner s law in nigeria 1970 2006 this study tests wagner s law the tendency for government activities to expand along with economic expansion for nigeria using annual time series data between 1970 and 2006 it adopts the bounds test approach proposed by pesaran et al 2001 based on unrestricted error correction model uecm and toda and yamamoto s 1995 granger noncausality tests empirical results from the bounds test indicate that there exists no long run relationship between government expenditure and output in nigeria in addition toda and yamamoto s 1995 causality test results show that wagner s law does not hold for more than the period being tested rather we found a weak empirical support in the proposition by keynes that public expenditure is an exogenous factor and a policy instrument for increasing national income

do more open economies have bigger governments another look abstract we reconsider the evidence of a positive relationship between openness and the size of government recently established by rodrik rodrik d 1998 why do more open economies have bigger governments journal of political economy 106 997 1032 and others while the existing literature focuses on expenditure based measures of government we consider non budgetary measures such as government ownership of enterprises price controls asset expropriation each of these may have little impact on government expenditures yet can make the role of government sizable we demonstrate that the scope of government is much larger in less open economies when considering non budgetary measures additionally we show that higher levels of non budgetary government are positively correlated with trade barriers finally we provide further evidence on the hypothesis that larger governments provide social insurance in open economies subject to terms of trade shocks although we find that greater terms of trade risk is weakly associated with larger government in all forms these interventions include price controls and greater risk of asset expropriation which are hard to reconcile with a pure insurance motive

domestic politics foreign interests and international trade policy reply this paper incorporates the foreign interest in the determination of a country s international trade policy into a model of political competition between candidates contesting elective office we envisage foreign and domestic producer interests as expressing political support for a candidate via campaign contributions and candidates as making trade policy pronouncements to maximize political support from producer interests tariffs are divisive but vers are consistent with conciliatory policy positions yielding mutual gain to foreign and domestic interests no candidate has an interest in formulating a trade policy position using a tariff if a ver is a policy option protection in the developed countries has in recent years often taken the form of bilaterally negotiated voluntary export restraints vers rather than the more traditional unilaterally imposed import restrictions the use of voluntary export restraints has been paralleled by interest in the theoretical literature the effects of vers have been compared with tariffs and quotas and vers have been examined in a political economy framework with a view to identifying the gainers and losers from this form of restric

explaining house voting on the north american free trade agreement this paper analyzes representatives voting patterns on nafta the public choice model posits that representatives vote to redistribute wealth to constituents evidence presented here indicates that the heckscher ohlin model is appropriate to represent the redistributional effects of nafta using a three factor variant of the heckscher ohlin model evidence is presented indicating that representatives voted to redistribute wealth to their geographical and electoral constituents the ability of geographically concentrated interests and of special interests to influence representatives votes helps to explain the weak party allegiance demonstrated on the nafta vote

return migration wage differentials and the optimal migration duration in simple static models migration increases with the wage differential between host and home country in a dynamic framework and if migrations are temporary the size of the migrant population in the host country depends also on the migration duration this paper analyses optimal migration durations in a model which rationalises the decision of the migrant to return to his home country despite persistently higher wages in the host country the analysis shows that if migrations are temporary the optimal migration duration may decrease if the wage differential grows larger using micro data for germany the second part of the paper provides empirical evidence which is compatible with this hypothesis

wagner s law revisited cointegration and causality tests for new zealand wagner s law states that the share of government expenditure in gross national product gnp will increase with economic development many associated empirical studies substitute gnp with gross domestic product gdp this article presents an empirical investigation into the validity of wagner s law for new zealand over the period 1960 to 2007 and compares the results obtained using these two measures of output application of the autoregressive distributed lag ardl bounds test suggests a cointegrating relationship between either output measure and the share of government spending and further application of general to specific gets engle and granger eg phillip hansen s fully modified ordinary least squares fmols and johansen s time series techniques illustrate statistical robustness and an income elasticity between 0 56 and 0 84 the results suggest that output measures granger cause the share of government expenditure in the long run thereby providing support for wagner s law and these resul

comparing evidence on wagner s hypothesis from conventional and real data abstract conventional and internationally comparable data for 34 countries are utilized to assess the relationship between general government expenditure and income while the conventional data can be deemed as mildly supportive of wagner s hypothesis evidence from the icp data suggests a decline in the share of general government as income per capita rises

the curious attraction of wagner s law wagner s law of increasing state activity has recently been subjected to intensive use of recondite econometric testing procedures an examination of the relevant articles reveals ignorance both of wagner s definition of state activity and of his insistence that he was not engaged in prediction consequently the omission of public enterprises contained in wagner s definition leads to a model misspecification and the object of testing his hypothesiss remains obscure

the economic situation of first and second generation immigrants in france germany and the united kingdom a central concern about immigration is the integration into the labour market not only of the first generation but also of subsequent generations little comparative work exists for europe s largest economies france germany and the uk have all become perhaps unwittingly countries with large immigrant populations albeit with very different ethnic compositions today the descendants of these immigrants live and work in their parents destination countries this article presents and discusses comparative evidence on the performance of first and second generation immigrants in these countries in terms of education earnings and employment it is widely believed that many european countries have a serious problem with the integration of immigrants and their children leed 2006 many northern european countries have accumulated sizeable populations of immigrants but the lack of longterm strategies and policies to integrate these into societal structures and the labour market is often cited as one reason for social and economic exclusion of the children of these immigrants in the past decade southern european countries such as spain and italy have experienced similar if not larger immigrations than the large northern european economies france germany and the uk in the late 1950s to early 1970s again it seems that there is little thought devoted to long term strategies for immigrants and their descendants the experience of those countries that had large scale immigration in the last half of the twentieth century should be of importance for devising future immigration and integration policies however there is rather little hard evidence in the literature about the relative position of immigrants and their descendants in these countries in a manner that allows comparisons to be made in this article we aim to provide a comparative study of a number of outcomes education earnings and employment of both first and second generation immigrants of different origins in the three largest european economies france germany and the uk

tobin s q and the importance of focus in firm performance using tobin s q as a measure of performance we seek to estimate the relative importance of industry focus and share effects in determining firm performance our methods are analogous to those of richard schmalensee and like him we find that industry effects account for the majority of the explained variance however we also find that firm effects exist in the form of focus effects that is narrowly diversified firms do better than widely diversified firms we interpret this finding as consistent with profit maximization by firms with different factor endowments

economic interests and voting on the omnibus trade bill of 1987 this paper presents an econometric analysis of the votes on five pivotal amendments to the omnibus foreign trade bills of the u s house and senate in 1987 probit estimation is used to identify the relationships between geographic variations in employment in trade sensitive industries and congressional voting on changes in foreign trade policy procedures the implied pattern of expected net benefits for the industries from the five amendments is highly consistent with qualitative evidence on the costs and benefits at stake two general conclusions stand out 1 procedural foreign trade policy proposals can have very specific beneficiaries 2 diffuse export interests can be influential in opposition to procedural protectionism

not just a work permit eu citizenship and the consumption behavior of documented and undocumented immigrants this paper explores the impact of the 2007 european union enlargement on the consumption behavior of immigrant households using data from a unique italian survey and a difference in differences approach we find that the enlargement induced a significant consumption increase for the immigrant households from new member states both in the short and in the medium run this enlargement effect cannot be attributed to the mere legalization as it concerns both undocumented and documented immigrants albeit through different channels detailed information on immigrants legal status undocumented documented and sector of employment informal formal allows us to shed light on the exact mechanisms following the enlargement previously undocumented immigrants experienced an increase in the labor income by moving from the informal towards the formal economy whereas immigrants who were already working legally in italy benefitted from the increased probability of getting a permanent contract enhanced employment stability in turn reduced the uncertainty about future labor income leading to an increase in documented immigrants consumption expenditure

senate voting patterns on the 1991 extension of the fast track trade procedures prelude to nafta in 1991 then president george bush requested an extension of fast track procedures from congress for the primary purpose of negotiating a north american free trade agreement this paper uses an econometric model to test the importance of three themes related to nafta that surfaced during senate debates over whether to approve the request that of employment effects environmental effects and the impact on immigration from mexico the empirical results show that expected job gains and losses were significant in explaining senate voting patterns on fast track extension immigration was found to be somewhat important but environmental issues were not found to statistically significant in addition the impact of organized labor and political ideology as proxied by political party were found to be important factors that shaped senate voting patterns on fast track

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

immigrant earnings assimilation estimates from longitudinal data analysis of longitudinal data for immigrants presents a more pessimistic portrait of immigrants economic success first the rate of growth of immigrant earnings was overstated in census based studies second the worsening of immigrant earnings for more recent arrival cohorts is deeper than previously suggested against these two negative findings one must keep in mind an important caveat the steeper cohort decline in earnings may be a sign of greater human capital investment by more recent immigrants longitudinal data suggest a strong degree of earnings convergence immigrants who start at lower earnings quickly make up a large part of the deficit relative to their immigrant counterparts

assimilation changes in cohort quality and the earnings of immigrants this paper reexamines the empirical basis for two facts that seem to be found in most cross section studies of immigrant earnings 1 the earnings of immigrants grow rapidly as they assimilate into the united states and 2 this rapid growth leads to many immigrants overtaking the earnings of the natives within 10 15 years after immigration using the 1970 and 1980 u s censuses this paper studies the earnings growth experienced by specific immigrant cohorts during the period 1970 80 it is found that within cohort growth is significantly smaller than the growth predicted by cross section regressions for most immigrant groups this differential is consistent with the hypothesis that there has been a secular decline in the quality of immigrants admitted to the united states

toward a business cycle model of tariffs a modified interest group model links movements in tariffs to changes in the level of economic activity within nations this model is introduced and tested for tariff behavior in the 19th and early 20th centuries in three nations the united states great britain and germany empirical analysis lends strong support to the model s central thesis that tariffs are sensitive to movements within a business cycle tariff changes occurring in the three nations with the exception of british tariff increases generally conform to the expectations of the model furthermore business cycle sensitivity provides an explanation of the behavior of tariffs superior to two prominent alternatives those based on ideology and on hegemonic stability

the economics of special interest politics the case of the tariff this paper investigates the interaction of politicians and special interest lobbies the goal is to model the equilibrium levels of redistributive policies such as taxes subsidies tariffs and regulatory decisions the model is applied throughout to the setting of tariffs by contributing to political campaigns special interest lobbies generate economic returns higher tariffs generate revenue for import competing industries through higher product prices higher milk support prices raise dairy farm income and so forth the lobby invests to maximize these net economic returns in evaluating their chances of election politicians weigh the favorable effects of special interest money against the unfavorable association with the lobby and the social cost of the redistributive policy section i explores the lobby s problem it describes a formalization of mancur olson s discussion of the voluntary provision of public goods and optimal contributions by lobbies to political campaigns section ii describes determination of the equilibrium tariff positions of each politician in a political campaign

the effect of naturalization on wage growth a panel study of young male immigrants for young male immigrants naturalization facilitates assimilation into the u s labor market following naturalization immigrants gain access to public sector white collar and union jobs and wage growth accelerates consistent with removal of employment barriers the faster wage growth of immigrants who naturalize might alternatively result from greater human capital investment prior to naturalization stemming from a long term commitment to u s labor markets but there is no evidence that wage growth accelerates or the distribution of jobs improves until citizenship is attained finally the gains from naturalization are greater for immigrants from less developed countries and persist when we control for unobserved productivity

international trade policy in israel another model unusual circumstances can give rise to economies with special characteristics leo kahane has ventured in the above paper into the realm of one such economy that of israel to study the determination of international trade policy kahane tests using pre 1977 data on israel four theories of endogenous protection that have been previously empirically tested for the united states and canada because a country s institutions and history influence economic and political decision making a simple transplanting of theories and hypotheses can miss alternative more pertinent explanations and in empirical studies the data and results may not be sufficiently discriminating to reveal the appropriate distinctions

political interaction in the senate estimating a political spatial weights matrix and an application to lobbying behavior many motivations exist that cause legislators to behave strategically when voting these include logrolling towing the party line or political favor trading however it has proven difficult in the existing literature to uncover the magnitude of the interaction among politicians this paper takes a spatial approach to the problem using a spatial autoregressive model to not only uncover the magnitude of interactions but also the direction of the interactions in contrast to most applications of spatial econometrics i allow the elements of the spatial weights matrix to be estimated as parameters the political spatial weights matrix is calculated for 96 senators in the 110th u s congress furthermore in a marginal effects simulation i calculate the overall effect on voting from flipping a senator s vote allowing flipped votes to have a cascading effect i apply these measures to study political fundraising mildly suggesting that political interest groups direct donations to senators with the most influence

public expenditure and national income causality further evidence on the role of omitted variables whether changes in public expenditure growth help predict changes in national income growth and or vice versa remains an important issue of sustained interest in the empirical public finance literature in recent years attention has mainly been confined to two specific areas namely estimation of the impact of the public sector on output growth by means of regression analysis and causality testing unfortunately the outcome of both types of analysis has been inconclusive focussing on the impact studies we note that a number of empirical investigations have attempted to measure the effect of the size of the public sector on overall economic growth for instance ram 19 utilizing a two sector model found that growth of government size has a positive effect on economic growth landau 14 15 however presented opposite evidence indicating that the government sector expansion led to a decline in output growth for many dcs and ldcs since 1960 in a recent study barth keleher and russek 4 estimated variants of ram s models with data for 30 countries their empirical results largely support a negative relationship between the scale of government and aggregate economic activity furthermore using the hausman procedure they rejected the hypothesis that the independent variables namely real government spending or other measures of the scale of the government depending on the specification in the regression equations are exogenous this strongly suggests that the conclusions reached by

cointegration and wagner s hypothesis time series evidence for canada it is argued that wagner s hypothesis is essentially a proposition about the secular comovement of income growth and public spending using the engle and granger cointegration tests and time series data from canada the long run validity of wagner s hypothesis is maintained

access to citizenship and the economic assimilation of immigrants immigrants often have lower employment rates and earnings than natives our empirical analysis relies on two reforms generating exogenous variation in the waiting time for citizenship we find that faster access to citizenship improves the economic situation of immigrant women especially their labour market attachment with higher employment rates longer working hours and more stable jobs immigrants also invest more in host country specific skills like language and vocational training faster access to citizenship seems a powerful policy instrument to boost economic integration in countries with traditionally restrictive citizenship policies

determinants of the tariff structure of the israeli industrial sector 1965 1977 abstract this paper examines the determinants of the tariff structure of the israeli manufacturing sector in the mid 1960s and late 1970s a period marked by considerable trade liberalization the empirical results point to the made to measure nature of the tariff structure i e relatively inefficient industries were granted higher rates of protection the relative inefficiency measure which was derived from the ces production function kept a high explanatory power along a wide range of substitution elasticities the empirical results also show that in the early 1960s tariffs favoured low wage labor intensive industries while in the late 1970s industries with high levels of concentration lobbied successfully for higher levels of protection

free trade fair trade strategic trade and protectionism in the u s congress 1987 88 what conditions led the one hundredth congress of the united states to enact fair trade and strategic trade policies into law during 1987 88 political partisanship is an important force with democrats supporting and republicans opposing all types of trade intervention otherwise the coalitions of support for and opposition to the various trade policies differ particularly in the senate in that body international business is associated with support for fair trade policies and with opposition to classical protectionism while domestic u s business is associated with support for classical protectionism liberalism is strongly associated with support for fair and strategic trade policies but is not associated with classical protectionism in the house of representatives the long standing protectionist coalition remains an influence few forces in support of free trade remain in u s politics changing international market conditions rapidly affect the making of u s trade policy

the textile bill of 1985 the determinants of congressional voting patterns the following tables show the results of the probit analysis for the senate and the house a table including results for different combinations of the independent variables is included in an unpublished appendix available from the authors upon request the results of the probit analysis for the senate are shown in table 1 all the variables except exp had the expected signs however the results indicate that the two other employment variables and party affiliation are the only factors which we can say with confidence influenced a senator s decision to vote for or against this bill the coefficients reported and labeled der of prob measure the derivative of the probability of a yes vote evaluated at the means of the independent variables in question thus for example the coefficient for unemp in the top line of table 1 should be interpreted as indicating that a one percentage point increase in a state s unemployment rate will cause a 5 89 increase in the probability that the senator will vote for the bill the result for dr the party of the senator shows that in general democrats are more apt to vote for protectionist policies than are republicans this is consistant with president reagan s negative stand on the bill and his threat to veto it should it pass the amendment in question passed the senate on 24 october 1985 by a vote of 54 for to 42 against but the bill it was attached to has been postponed indefinitely the house bill which was passed on 10 october 1985 by a vote of 262 for to 159 against was vetoed by reagan on 17 december 1985 the results of the probit analysis for the house of representatives are shown in table 2 state employment data was used for the house as opposed to data for each voting district this was done for three reasons first employment data is usually reported by state or by county since counties are often divided by congressional district boundaries much personal judgement would be necessary to assign employment figures second the most recent county industry employment data is from 1981 while the data used in this analysis is from 1984 third we feel that in general logrolling is prevalent among a state s representatives for this bill the representatives from twenty six states voted as a block and in all but six states one third or less of that state s representatives voted contrary to the majority all of the probabilities are significant at the 05 confidence level representative s voting patterns are influenced by all of the included factors when unionization is added to the equation its coefficient is very small and negative although it is significant at the 05 confidence level one would expect more significance here since there are more degrees of freedom for the house analysis than for that of the senate when the data from the house and senate are pooled the results are similar to those of the house alone the null hypothesis that the data cannot be pooled was tested using a statistic with eight degrees of freedom 9 721 meaning that the null hypothesis is rejected as in the senate the state unemployment rate and the percent employed in textiles are important influences on the representative s vote and democrats in the house are more likely to vote for protectionist bills than republicans however unlike the senate the percent of a representative s campaign contributions that are donated by industry special interest groups has a significant effect on voting patterns although the point estimates for the magnitudes of the influence are very similar in both cases seventy four percent of the house received campaign contributions from these special interest groups while only 54 of the senate received contributions from these same sources this is probably because only one third of the senate was up for reelection during the time period considered while the entire house was in the process of campaigning for reelection exports also play a role in influencing the probability of a yes vote reducing this probability as employment in export industries increases but the magnitude of the coefficient is only 11 of that for textile employment the significance of this variable in the house is probably due to fear of retaliation expressed by both democrats and republicans this variable was not significant in the senate model most likely because the senate version excluded from the 1 import quota growth rate many countries who might have retaliated representatives appear to respond to a wider variety of constituent interests than do senators while senators voting patterns are only significantly influenced by their political affiliation their state s unemployment rate and the importance of textiles to their state the voting behavior of representatives is influenced by these factors as well as the importance of exports to their state and campaign contributions by textile special interest groups these results affirm the validity of the approach used by baldwin and coughlin they differ from baldwin who finds exports are not a significant influence on the house and from coughlin who does not include export employment as an explanitory variable or analyze the differences in voting patterns between the house and the senate

openness government size and the terms of trade this paper investigates the relationship between trade openness and the size ofngovernments both theoretically and empirically we argue that openness can increase the size of governments through two channels 1 a terms of trade externality whereby trade lowers the domestic cost of taxation and 2 the demand for insurance whereby trade raises risk and public transfers we provide a unified framework for studying and testing these two mechanisms our main theoretical prediction is that the relative strength of the two explanations depends on a key parameter namely the elasticity of substitution between domestic and foreign goods moreover while the first mechanism is inefficient from the standpoint of world welfare the second is instead optimal in the empirical part of the paper we provide new evidence on the positive association between openness and government size and we explore its determinants consistently with the terms of trade externality channel we show that the correlation is contingent on a low elasticity of substitution between domestic and foreign goods our findings raise warnings that globalization may have led to inefficiently large governments

is the new immigration really so bad this article reviews the recent evidence on us immigration focusing on two key questions 1 does immigration reduce the labour market opportunities of less skilled natives 2 have immigrants who arrived after the 1965 immigration reform act been successfully assimilated overall evidence that immigrants have harmed the opportunities of less educated natives is scant on the question of assimilation the success of the us born children of immigrants is a key yardstick by this metric post 1965 immigrants are doing reasonably well even children of the least educated immigrant origin groups have closed most of the education gap with the children of natives

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

domestic content legislation house voting and the economic theory of regulation house voting on domestic content legislation provides a rare opportunity to examine the political economy of protectionism with respect to a particular issue rather than by using the traditional interindustry approach the results indicate that a representative s vote in favor of the content legislation and the intensity of the legislator s preferences are positively related to the importance of the auto and steel industries in the representative s district an increasing unemployment rate campaign contributions from labor groups affiliation with democratic party and a liberal ideology despite ideology s statistical significance the results suggest this variable can be disregarded because neither the predictive accuracy nor the explanatory power of the model is improved by its inclusion the estimates also provide insights concerning the impact of changes in the independent variables upon voting patterns

public expenditure growth in greece and portugal wagner s law and beyond in the tradition of wagner s law this study examines the relationship between aggregate income and public expenditures in greece and portugal during the years 1958 85 unlike more conventional specifications our analysis focuses on the movement of different componenets of public expenditures permanent income relative prices stabilization policy and socio political factors emerge as thomain determinants of public expenditures while the results reveal significant difference in responses to these determinants across components of expenditures and between the two countries

a theory of political entrenchment can an incumbent political party increase its chances at re election by implementing inefficient policies that harm its constituency this paper studies the possibility of such a phenomenon which we label political entrenchment we use a two party dynamic model of redistribution with probabilistic voting political entrenchment by the left occurs only if incumbency rents are sufficiently high low skill citizens may vote for this party even though they rationally expect the adoption of these policies we discuss the possibility of entrenchment by the right the scope for commitment to avoid entrenchment policies and the effect of state capacity income inequality and party popularity on the likelihood of entrenchment we illustrate our theory with a number of historical examples

world product and income international comparisons of real gross product the volume reports on the third phase of the united nations international comparison project icp the main results provide comparisons of real gross domestic product gdp per capita for thirty four countries in 1975 quantity and price comparisons are given also for personal consumption capital formation and public consumption and further subdivisions of final expenditures on gdp are estimated

training wages and sample selection estimating sharp bounds on treatment effects this paper empirically assesses the wage effects of the job corps program one of the largest federally funded job training programs in the u s even with the aid of a randomized experiment the impact of a training program on wages is difficult to study because of sample selection a pervasive problem in applied microeconometric research wage rates are only observed for those who are employed and employment status itself may be affected by the training program this paper develops an intuitive trimming procedure for bounding average treatment effects in the presence of sample selection in contrast to existing methods the procedure requires neither exclusion restrictions nor a bounded support for the outcome of interest identification results estimators and their asymptotic distribution are presented the bounds suggest that the program raised wages consistent with the notion that the job corps raises earnings by increasing human capital rather than solely through encouraging work the estimator is generally applicable to typical treatment evaluation problems in which there is nonrandom sample selection attrition copyright wiley blackwell