who would be left behind by enhanced private school choice abstract debate over school choice is central to many discussions of public elementary and secondary educational reform the debate has largely focused on conceptual arguments rather than careful empirical research that attempts to sort out competing claims an important unresolved issue is the question of cream skimming who will move and who will be left behind as a result of enhanced school choice this paper uses data from the national educational longitudinal survey nels 88 to estimate a model of public private school choice which is used to simulate who would likely leave public schools as a result of enhanced private school choice building upon the work of k train et al 1987 the review of economics and statistics 69 383 391 we employ a probit model with latent explanatory variables to account for the unobserved attitudes of parents and their children regarding education the model allows us to consider such latent interests in education as well as the academic and socioeconomic characteristics of those students who would likely switch to private schools our findings indicate that concerns about bright flight or academic cream skimming in response to increased school choice appear to be overstated however we estimate that there would be substantially more economic and racial segregation of students as movers tend to be white and have higher incomes than those who are left behind

entry barriers in politics and uncontested elections abstract lott 1986 1987a argues that brand names can be barriers to entry in political markets because political brand names cannot be sold our empirical model examines the effect of inalienability of political capital on entry into nineteenth century british political markets we test the hypothesis that since county races were more expensive than borough races owing to greater costs of information the level of non transferable investment produced by a given number of past campaigns was greater in the rural districts and produced more significant entry barriers

school finance reform and private school enrollment evidence from california abstract abstract this paper uses the school finance reforms in california in the 1970s to examine whether the constraints such reforms impose on school districts lead to switching to private schools misspecifications of demand in previous work have led to understatement of reform effects an empirical model of schooling share equations is derived from a discrete choice framework large biases are shown to result from failure to account for heterogeneity of demanders and school district specific fixed effects simulations indicate that the changes in public provision potentially resulting from reform explain a sizeable portion of the growth in the private school share

shirking and political support in the u s senate 1964 1984 several empirical studies have suggested that legislators engage in a surprisingly large degree of on the job consumption or ideological behavior these findings cast doubt on the hypothesis that legislators can be modelled as though they seek to maximize political support this paper attempts to determine whether commonly used proxies for ideology in fact represent behavior to which voters are averse the results show that legislators who engage in more of this behavior lose general election support without generally receiving compensating increases in partyprimary support a corollary to this result is that voters punish shirking legislators significantly

brand names and barriers to entry in political markets the most obvious implication of this discussion is that barriers to entry in politics will raise the costs of governments transferring wealth more generally it will raise the cost of public provision of goods and services in the case of transfers the inefficiency created by barriers depends on whether one values government transfers the total transfer the transfer to the beneficiaries plus the politician s commission is maximized by the politician who can create support the most efficiently for other governmental services which are viewed as efficiency creating e g national defense these barriers reduce the amount of a valuable output we desire to purchase this result also supplies a possible efficiency explanation for the limitation on the number of terms imposed on the presidency and many governorships brand names are not really the barriers information costs are what cause brand name to be used and are the more fundamental barrier to entry what we are arguing is that private and not public organizations can in certain respects better overcome these information costs

competition between private and public schools vouchers and peer group effects a theoretical and computational model with tax financed tuition free public schools and competitive tuition financed private schools is developed students differ by ability and income achievement depends on own ability and on peers abilities equilibrium has a strict hierarchy of school qualities and two dimensional student sorting with stratification by ability and income in private schools high ability low income students receive tuition discounts while low ability high income students pay tuition premia tuition vouchers increase the relative size of the private sector and the extent of student sorting and benefit high ability students relative to low ability students

land contingent poverty alleviation schemes abstract target groups for rural poverty alleviation schemes in south asia and elsewhere have often been identified in terms of their landholding class with landless or near landless households being the intended beneficiaries this paper offers a quantitative approach to the analysis and design of land contingent poverty alleviation schemes an application to bangladesh suggests that when income is generally unobserved landholding class is a good instrument for targeting poverty relief in that it is strongly correlated with the informationally feasible allocations which minimize aggregate poverty for a given budget it is however far from being a perfect instrument even under otherwise ideal conditions the maximum feasible reduction in poverty which is attainable by relying solely on land based targeting is substantially less than that attainable with perfect income information indeed the poverty alleviation impact of domestically financed and revenue neutral transfers across 10 landholding classes in rural bangladesh could also be achieved without targeting by simply giving every household a lump sum payment equivalent to 10 of mean rural income political restrictions on tax powers or errors made in administration will further reduce the gains from land contingent targeting greater impact on poverty for a given budgetary cost will require more precise targeting within landholding classes

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

an explanation for why senators from the same state vote differently so frequently abstract this paper explains why rational well informed voters elect politicians with divergent platforms given well defined constituencies and the costliness of any individual politician creating transfers across all interest groups we show that different politicians from the same district can successfully represent vastly different constituencies and still have each politician producing the support maximizing level of transfers our explanation focuses on how obtaining wealth transfers reduces successful constituencies returns to obtaining additional transfers the evidence strongly rejects alternative explanations based upon the median voter and polarized policy preference approaches

televising legislatures some thoughts on whether politicians are search goods the evidence that televising legislative sessions helps politicians from homogeneous districts where everyone agrees with his positions but hurts politicians from heterogeneous districts does not differentiate between whether politicians are search or experience goods while evidence does exist that politicians are search goods e g lott 1987b it relies on the presence of the last period problem if the conclusion that politicians are search goods is correct it has important implications because it contradicts the commonly held belief that it is the threat of re election that prevents politicians from behaving opportunistically it also indicates that there are fundamental differences between firm and political brand names

efficiency and equity in the provision of public education the paper focuses on the benefits derived from public elementary and secondary education monetary values of households perceived benefits from operating expenditures are estimated information concerning the preference mappings of citizens is obtained using a random utility model to analyze micro voting data the estimated model in turn provides information concerning the efficiency and distributional consequences of public education expenditures the conclusion is that operating expenditures exceed the estimated efficient level furthermore it may be difficult to justify the inefficiently large expenditures on equity grounds since the estimated distribution of households perceived benefits net of local taxes is pro rich g overnment provision of goods and i j services has the potential of greatly affecting the welfare of citizens this paper focuses on the benefits derived from one such service public elementary and secondary education monetary values of households perceived benefits from public education expenditures are estimated information concerning the preference mappings of citizens is obtained using a multinomial probit random utility model to analyze micro voting data the estimated model in turn provides information concerning the efficiency and distributional consequences of public education expenditures the conclusion is that operating expenditures exceed the estimated efficient level furthermore it may be difficult to justify the inefficiently large expenditures on equity grounds since the estimated distribution of households perceived benefits net of local taxes is pro rich in contrast to this study a number of studies employ ad hoc rules to measure citizens benefits from public elementary and secondary education initially total benefits are assumed to equal the cost of educational services this input cost measure of benefits is then allocated to households using some unproven rule of thumb when an ad hoc rule is used to allocate a questionable measure of total benefits the results are even more suspect conceptually it is quite odd to determine assume total benefits and then allocate the total to individuals or households the correct method is first to obtain estimates of individuals or households benefits these estimates can then be used to determine the magnitude of total benefits and analyze how the benefits are distributed across the population aaron and mcguire 1970 criticize ad hoc benefit measures and propose the income value measure for x units of the politically allocated good x this measure is iv mrsj x where mrsj is the marginal rate of substitution of x for a composite commodity evaluated at x and one s aftertax income this measure is comparable to measures of the income values of goods purchased in private markets while aaron and mcguire argue for preferencebased benefit measures the lack of information concerning preference mappings necessitates that they assume the shape of the utility function even though the results by maital 1973 based on a similar method are slightly less restrictive a number of restrictive assumptions are common to both studies not only are households assumed to have identical separable utility functions but the existing levels of politically allocated goods are assumed to be efficient implying the total income value equals the input cost also the allocation of benefits from mixed goods e g public education between public and private components is based on ad hoc rules the major contribution of the current study is that the benefit estimates are based on information concerning the preference mappings of individuals as revealed through referenda voting 2 the estireceived for publication march 9 1983 revision accepted for publication june 4 1984 state university of new york albany this paper was improved as a result of the advice and encouragement of kenneth wertz john akin david guilkey and james wilde as well as the helpful comments of two referees financial support for this research was in part provided by a dissertation research fellowship from the brookings institution 1 an example is the 1967 tax foundation study 2nmicro voting data are also used by rubinfeld 1977 to obtain information about citizens preferences for public school expenditures he uniquely estimates the parameters of a demand function up to an unknown multiplicative constant a micro demand function for education is uniquely estimated by bergstrom rubinfeld and shapiro 1982 using a different type of survey data while the method used here is to directly estimate preference mappings the information concerning such mappings embedded in such a demand function provides an

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

looking beyond reelection revising assumptions about the factors motivating congressional behavior this paper challenges the assumption inherent in most models of legislative behavior namely that congressmen are driven by the desire for reelection i offer an alternative perspective incumbents seek to maximize their discretionary investments and the income generated by the job the only constraint on this behavior is that legislators provide a satisfactory level of constituency service a product that i suggest entails slight opportunity and few manufacturing costs for congressmen and one that is unlikely to lose its value with increased production i also demonstrate that increases in salary and discretionary investments have lengthened congressional careers

tiebout choice and universal school vouchers abstract this paper examines who is likely to gain and who is likely to lose under a universal voucher program following epple and romano d epple r e romano competition between private and public schools vouchers and peer group effects american economic review 88 1998 33 62 d epple r e romano neighborhood schools choice and the distribution of educational benefits in c m hoxby ed the economics of school choice the univ of chicago press chicago 2003 pp 227 286 and nechyba t j nechyba mobility targeting and private school vouchers american economic review 90 2000 130 146 t j nechyba introducing school choice into multidistrict public school systems in c m hoxby ed the economics of school choice the univ of chicago press chicago 2003 pp 145 194 we focus on the idea that gains and losses under a universal voucher depend on two effects changes in peer group composition and changes in housing values we show that the direction and magnitude of each of these effects hinge critically on market structure i e the amount of school choice that already exists in the public sector in markets with little or no tiebout choice potential changes in peer group composition create an incentive for high socioeconomic ses households to vote for the voucher and for low ses households to vote against voucher in contrast in markets with significant tiebout choice potential changes in housing values create an incentive for high ses households to vote against the voucher and for low ses households to vote for the voucher using data on vote outcomes from california s 2000 voucher initiative we find evidence consistent with those predictions

shirking representation and congressional behavior voting on the 1983 amendments to the social security act our central goals at the outset of the paper were three 1 to report on the relative significance of a sophisticated measure of constituent economic interest and a commonly used variable ada score that purports to measure the personal ideology of the candidate 2 demonstrate that the constituent economic interest variable should be adjusted to account for the fact thatvoters not citizens are the only effective principals in influencing a legislator s voting activities and 3 call into question on both theoretical and empirical grounds the claim that legislators shirk their responsibilities to voters by voting their own ideological preferences in order to evaluate our efforts consider table 5 for a large majority 15 of the 18 relevant runs the ideological variable is significant our measure of constituent economic interests does not eliminate the explanatory power of the ideological voting variable but this does not indicate shirking as opposed to shirking we may observe ideological voting because 1 it provides brand name capital 2 it represents the ideological preferences of the constituents or 3 it acts as a measure of median voter economic preferences further ada scores do not allow us to differentiate between these competing explanations for 11 of the 18 models one of the economic variables accounts for a significant portion of the variance in the dependent variables the results derived from our measure of constituent economic interests contradict most findings of the lasi school and raise questions about the validity of the empirical characterization of constituent interests in that research a breakdown of the results by chamber indicates that significant differences in the degree of ideological voting between the house and senate may exist this is important in that most research has focused only on the senate where ideological voting is more prevalent for the house table 5 reveals the constituent economic interest variable isalways significant and in fully one half of the relevant regressions it is theonly significant variable knocking ada out of the race as noted earlier the insignificance of ada is some indication of the absence of ideological shirking though its significance may indicate only measurement error voter ideology or reputational capital in the senate the results are more evenly split though it is clear that the adjusted for reelection constituency economic interest variable is an improvement ada is significant in all 12 senate regressions and the respective economic variables are significant in 5 or just under half this side by side comparison is provocative though it remains to be tested in detail but our preliminary conclusions can be stated as follows first as peltzman 1984 suggested a better specification of economic interest and constituency representation reduces though it does not eliminate the role of the ada variable in the senate second we find evidence that ideological shirking if it exists is much smaller in the house in fact from an institutional perspective it can be argued that economic interests are dominant since house districts are smaller and more homogeneous further the shorter terms for house members may make them more directly accountable to voters and smaller groups of voters may force a lesser reliance on pure ideological campaigning and require a more personal presentation of self

a reexamination of the principal agent relationship in politics abstract that senators from the same state often have a large difference in their ideological voting records has proven inconvenient for a literature that has largely relied on a median voter model of elections one exception is palfrey review of economic studies 1984 51 139 156 whose analysis implies the hypothesis that the expected difference in such voting records varies directly with the variance of that state s density function of constituent ideological preferences this paper provides empirical testing consistent with this hypothesis the paper then argues that currently accepted methodology for measuring senatorial shirking is systematically biased towards indicating shirking and provides empirical analysis consistent with this argument

the last period problem in politics do congressional representatives not subject to a reelection constraint alter their voting behavior this study of roll call voting behavior in the u s house of representatives empirically documents the existence of an important simultaneity bias in the heretofore much investigated relationship between legislator ideological shirking and the security with which a legislator holds office the results indicate that while greater security allows a policymaker more leeway for ideological consumption increases in ideological on the job consumption also diminish a policymaker s security in office

voting and imitative behavior political behavior generates private benefits by helping people fit in with desired friends a voter imitates other voters but at the same time they imitate him an equilibrium solution requires exogenous variables the narrow self interest of the participants the reduced form makes one s vote a function of the narrow self interest of others as well as one s own in accord with the model a person s party identification depends on his ethnic group s current income and its income in 1909 as well as his own income i introduction what determines how people vote most economists such as peltzman 1980 have emphasized self interested motivations but kau and rubin 1982 and kalt and zupan 1984 claim that ideology based in part on altruism influences voting patterns both hypotheses have the same fundamental flaw they focus on the consequences of the policies for which people vote in the peltzman model a person votes for those policies which maximize his real income i call this narrow self interest in the standard altruism models of economists a person maximizes some weighted average of the real income of himself and others 1 however an individual s vote has a minuscule impact on the outcome of any election therefore his vote for a policy yields extremely small expected returns through the impact of that policy on the voter other returns from voting will dominate in determining behavior if such returns exist some economists for example brennan and buchanan 1984 have recognized this problem with the standard or economic view no one however has developed an alternative theory based on other returns to voting the key point of this paper is that political behavior can generate private benefits by helping people fit in with desired friends and associates a herd effect to give this phenomenon a name political positions are thus chosen not because they produce the desired outcomes for voters but rather because voters want to associate with certain people who have certain positions that is people imitate others in choosing political positions the idea for imitation in political positions is hardly new berelson et al 1954 provide a prima facie case for imitation in voting behavior they found that a person s political position was closely related to the political positions of his coworkers and friends of course these results could be attributable to the fact that these groups share common characteristics but the berelson data also show that people change their political position toward that of their associates a phenomenon more difficult to explain by the common characteristic hypothesis imitation is uninteresting as a predictor of behavior by itself however a voter imitates other voters but at the same time they imitate him an equilibrium solution requires exogenous variables i assume these to be the narrow self interest of the participants the resulting model differs from a simple narrow self interest model in the reduced form one s political decision is a function of the narrow self interest of others as well as one s own narrow self interest imitation along with the self interest of the participants leads both to additional tests of imitation and makes the imitation model of interest in understanding political behavior imitation could be an attempt to please others who have a primitive preference for friends who imitate themselves alternatively imitation could signal an offer of friendship by the imitator without invoking preferences for friends who imitate such signalling could therefore explain why people care whether somebody imitates their political behavior or not imitation could also arise from another process people s views of appropriate behavior could be determined by the behavior of those with whom they associate 2 narrow self interest can also generate a form of imitation imitating the behavior of people with like interests who are more informed

devaluation a critical appraisal of imf s policy prescriptions it is by now well understood that the use of the extended facility of the fund or approval for standby loans involve the undertaking of comprehensive programs of adjustment that include policies required to correct structural imbalances even after the fund s internal review of its guidelines on conditionality in march 1979 approval of standby agreements almost always requires severe tightening of expenditures through contractionary fiscal and monetary policy measures such as the imposition of ceilings on net government borrowing and or net domestic assets of the central bank or an upward adjustment of nominal interest rates in those cases where rates are fixed by the government approval also involves an understanding with the fund on exchange rate policy and exchange rate arrangements the understanding usually includes a substantial devaluation of the currency devaluation thus becomes part of a restrictive policy package which aims at improving the balance of payments of the country and its foreign exchange reserve position the advocacy of the same short run demand oriented policy package in different countries at different times has created the belief that underlying the policy prescriptions there exists a uniform imf line of thought and more importantly for our purposes here a consistent and uniform analytical model a cursory review of recent documents and mission reports however reveals that often the same policy prescriptions are based on different analytical arguments some justified and some not that cast some doubt on the widespread acceptance within the imf of a particular theoretical structure as a guideline for policy thus by 1982 as theoretical advances in macroeconomics and international finance have cast substantial doubt on the empirical if not theoretical validity of a simplistic monetary approach to the balance of payments the analytical arguments that are used to sustain the traditional policy line have become by necessity murkier and more cumbersome this is nowhere more clear than in the analysis of exchange rate policy which is the focus of this short paper the use of exchange rate adjustment as an active policy tool is critically analyzed in the following in terms of its effectiveness as a stabilization policy tool and as a substitute for tax or redistribution policy

consumer attitudes and voluntary rate schedules for public utilities attitudes enter as latent explanatory variables in a model of consumers choice among optional rate schedules offered by a public utility a consistent estimator of the choice model is described that utilizes the distribution of the latent attitude variables conditional on manifest indicator variables the model is applied to households choice between time of use and non time differentiated rates for electricity to determine the impact of attitudes about energy conservation copyright 1987 by mit press

the nonexcludable publicness of primary and secondary public education abstract existing theoretical models of education as with most practical applications of public good theory suggest some form of joint public private financing empirical work has only rarely addressed these theoretical considerations employing individual level observations we model and estimate the private and social demands for public education in a community an ordered probit model with known thresholds is used to obtain unique parameter estimates the individual private and social demands are then employed to construct a measure of the publicness of education at various quantities

structure of public support for national agricultural research systems a political economy perspective abstract this paper initiates development of a set of stylized facts concerning the structure of public support for national agricultural research systems nars within a neoclassical political economy framework the aim is to place public funding of nars in the broader context of the overall level of direct government assistance to agriculture using a newly constructed data set on nars expenditures over the 1970 1985 period we observe a growing disparity in agricultural research intensity ratios which measure the level of public support for nars in relation to agricultural gross domestic production aggdp between low and high income countries this growing disparity appears to be driven by much larger increases in support for agricultural research by high income countries coupled with a significantly slower growth in the size of their agricultural sector despite the propensity of low and middle income countries to increase real support to agricultural research as per capita incomes rise the public agricultural expenditure ratio which measures public expenditures on agriculture relative to the size of the agricultural sector aggdp increases substantially public expenditures on agriculture were indexed on agricultural and non agricultural populations to give a rough indication of the increasing incentives for rural distributional coalitions to seek a redistribution of public expenditures in their favor a relative research expenditure rre ratio is developed which measures the proportion of total public expenditure on agriculture spent on agricultural research it provides an indication of the relative importance given to research on agriculture within the constraints imposed by overall public spending on agriculture in contrast to the agricultural research intensity ratios the rre ratios suggest that agricultural research appears to command as large a share of the public purse devoted to agriculture in low and middle income countries as it does in high income countries expectations derived from the neoclassical political economy literature that research may have fared relatively better in high compared with low income countries were not supported by the data

urban bias and the political economy of agricultural price reform abstract this paper is an exercise in the incorporation of political economy constraints into the analysis of policy reform it is an illustrative exercise focusing on the potential distributional consequences of agricultural price reform in the stylized model discussed in the paper urban bias is reflected in the ability of the urban sector to maintain its standard of living in the face of price reform through the channel of increased government expenditure on the output of the sector it is shown that in such a setting price reform may have completely unintended effects the paper appears in a somewhat unusual format the first half of the paper presents the arguments in an entirely non technical verbal manner the second half of the paper presents a formal mathematical development which makes precise the heuristic and intuitive discussions of the first half

international capital markets and interest groups capital market integration has increased the scale and mobility of capital movements within and among nations to unprecedented levels integration is fairly recent frankel concludes from his review of the literature that barriers in the major world financial markets were sufficiently low that by 1989 financial markets could be viewed as being fully integrated the scale and mobility of capital flows among nations has numerous implications to currency values interest rates wealth and through current capital account linkages to relative product and factor prices capital flows that have real economic effects also affect the functioning of policy instruments and how effective they are in remunerating an interest group at the expense if any of others this paper provides insights into the process and linkages by which the integration of capital markets has altered economic policy through interest group pressures on government if economic policy is viewed as the outcome of interest groups seeking through the power of the state that which cannot be provided by the market alone then capital market adjustments that affect the return to policy instruments can also affect the returns to lobbying resources and hence the balance of political influence among the various groups 2 this type of explanation for economic policy has been forwarded under the rubric of models of rent seeking krueger 1974 3 the paper is organized as follows 4 selected historical evidence linking capital markets to pressures for legislation in the united states and other countries is briefly reviewed in some cases capital market adjustments have eased pressures for protection while in other cases adjustments either forced policy change because of a liquidity constraint or made unprofitable the lobbying for sustaining policy in face of these adjustments the discussion in the next section provides deeper insight into capital market lobbying linkages discussion focuses on the results from a simple model of rent seeking where government intervenes in markets and provides sector specific public goods

rural credit markets and institutions in developing countries lessons for policy analysis from practice and modern theory this article presents evidence of the failure of government intervention in rural credit markets of ldcs in the past three decades it then shows how lessons for policy analysis can be drawn from modern theory particularly those theories focussing on credit rationing in competitive markets and interlinking of credit contracts with labor and land contracts the article outlines the policy implications of these theories and finds them insufficient to account for the empirical evidence it contends that a more systematic and rigorous analysis of institutions and institutional environments is essential for understanding and implementing effective policy reforms of rural credit markets it presents suggestions for undertaking such an analysis

on the mis measurement of legislator ideology and shirking in this paper we show that current statistical measures of legislator s shirking are implicitly based on the electoral concept of a unique majority rule equilibrium point in the policy space where elections are contested we note that such equilibria do not exist generically and present statistical results showing that cross sectional regressions where legislators voting indices are predicted by district average demograhic and economic data are mis specified we also discuss a weaker equilibrium construct the uncovered set and present statistical evidence showing that differences in voting behavior between senators from the same state are positively related to the heterogeneity of the electorate we argue that current evidence alleged to show shirking by senators is equally consistent with senators who perfectly represent an idiosyncratic constituency that cannot be represented by district average data

campaign war chests as a barrier to entry in congressional races i introduction issues surrounding the nature and degree of competition in political races have been examined extensively in both the economic and political science literature with most attention focused on the interplay between incumbent and challenger expenditures and electoral success this study extends our understanding of political competition by investigating the impact of an incumbent s war chest on a challenger s decision to mount a campaign 1 for this purpose a war chest is defined as a pool of unencumbered funds accumulated prior to the start of a campaign for elective office 2 sorauf 1988 182 has observed that early receipts even without early spending discourage competition in the primary and attractive challengers in the general election jacobson 1985 26 has argued the most effective strategy for keeping a seat in congress is to avoid serious opposition contemporary critics and reformers of campaign financing practices use such words as frighten intimidate and overpower to describe the role of an incumbent s war chest 3 despite this kind of attention little is actually known about the degree to which war chests diminish entry or reduce the quality of a challenge we present three alternative mechanisms to explain how an incumbent s war chest might deter entry each is based upon a war chest serving as a credible commitment to spend heavily if challenged specifically war chests may either represent excess capacity in financing a campaign or serve as a signal of non observable incumbent characteristics that define a formidable opponent aside from determining whether an incumbent is challenged a war chest might also affect the quality of the challenger for example potential candidates with prior political experience may be unwilling to risk their political capital on a long shot proposition to test for these effects on entry into house races a trichotomous logit model is estimated the choices are uncontested race contested by an ordinary challenger and contested by an experienced challenger although the empirical model is not sufficiently rich to fully distinguish among competing mechanisms the regression results are robust incumbent war chests negatively affect the likelihood of a contested race and the quality of the challenger ii war chests as a barrier to entry becker 1958 106 in comparing economic and political competition observed i n an ideal political democracy competition is free in the sense that no appreciable costs or artificial barriers prevent an individual from running for office in the theory of the firm entry occurs when the expected postentry stream of profits minus the cost of entry is positive analogously an individual will enter a political race when the expected gain from holding office is positive expected gain as defined by baron 1989 is a function of campaign costs the probability of winning and the personal valuation placed by the candidate on the office the first two determinants are partly endogenous depending upon the strategic interplay of the candidates the third aside from its direct effects indirectly affects the first two for example persons hungry for office may be committed to expending greater effort and funds on their campaigns thus increasing their probability of winning similarly as lott has emphasized nontransferable brand name capital would be another factor creating a commitment to aggressively pursue office thereby affecting campaign costs and the probability of winning 4 that some challengers are deterred however need not imply the existence of a political market failure in a contestability sense the lack of a viable challenger on the ballot does not imply a lack of competition good representation will discourage entry similarly the fact that some incumbents will aggressively seek re election frightening away potential challengers is not a sign that competition is lacking

time series evidence on shirking in the u s house of representatives this paper presents time series evidence on the voting behavior of members of the u s house of representatives from 1975 to 1990 the empirical results indicate that voting behavior of individual congressmen is remarkably stable over time we find no evidence of economically significant last term effects on voting behavior nor are there important effects of legislative tenure on voting patterns the most significant deviations in voting behavior occur for congressmen who failed to win their reelection bid suggesting that sizable deviations from previous policy positions may result in swift retribution by constituents in the district