vote buying supermajorities and flooded coalitions in a recent paper banks 2000 adopting the framework of our model groseclose and snyder 1996 derives several new and noteworthy results in addition he provides a counterexample to our proposition 4 here we explain the error in our proposition but note that we can correct it easily if we invoke an additional assumption in equilibrium the winning vote buyer constructs a nonflooded coalition that is she does not bribe every member of her coalition we conclude with a brief discussion of the substantive implications of banks s proposition 1 we note that it provides additional support for our general claim that minimal winning coalitions should be rare in a vote buying game

measuring global oil trade dependencies an application of the point wise mutual information method abstract oil trade is one of the most vital networks in the global economy in this paper we analyze the 1998 2012 oil trade networks using the point wise mutual information pmi method and determine the pairwise trade preferences and dependencies using examples of the usa s trade partners this research demonstrates the usefulness of the pmi method as an additional methodological tool to evaluate the outcomes from countries decisions to engage in preferred trading partners a positive pmi value indicates trade preference where trade is larger than would be expected for example in 2012 the usa imported 2 548 7 kbpd despite an expected 358 5 kbpd of oil from canada conversely a negative pmi value indicates trade dis preference where the amount of trade is smaller than what would be expected for example the 15 year average of annual pmi between saudi arabia and the u s a is 0 130 and between russia and the usa 1 596 we reflect the three primary reasons of discrepancies between actual and neutral model trade can be related to position price and politics the pmi can quantify the political success or failure of trade preferences and can more accurately account temporal variation of interdependencies

will bounty hunting revenue agents increase enforcement while the final version of the 1986 tax reform act retained budget funding of the irs the senate proposal to finance spending from audit revenues represented a seriously debated alternative that continues to receive attention as a method for increasing enforcement at one level the ultimate failure of the proposal is puzzling given congress s unwillingness to raise tax rates to cover spending the budget deficits of the 1980s must be financed from some other source inflation borrowing or increased enforcement turning the irs into a bounty hunting agency would seem to be a straightforward way of producing extra revenue

the structure of third world economic interdependence empirical studies of interdependence have mainly focused on whether interdependence has been increasing or declining on a world scale in this research note i examine the nature of economic interdependence in the less developed countries ldcs the main question that i address is whether ldcs are more economically dependent in the sense of being more deeply involved in economic interdependence relationships than developed countries dcs richard cooper and edward morse have argued that economic interdependence is associated with increased industrialization and modernization implying that ldcs are less involved than dcs in interdependence relationships empirical evidence presented here suggests that ldcs are in fact more dependent than dcs

bureaucratic discretion or congressional control regulatory policymaking by the federal trade commission this paper extends stigler and peltzman s approach to regulation by incorporating a legislature the model yields comparative statics results and hence testable implications the paper then tests between two opposing approaches about regulatory agency behavior the first assumes agencies operate independently of the legislature and hence exercise discretion the second assumes that congress controls agency decisions the recent behavior of the federal trade commission provides the empirical setting substantial evidence is found for the specific predictions of the model including the hypothesis of systematic congressional influence over ftc decisions

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

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

the limits of independence and the policy of the ecb it is argued that the european central bank s independence is not as secure as it seems and that as a result it has appreciable institutional incentives to protect and enhance its position it follows that its behaviour should not be understood as being solely determined by the pursuit of price stability one consequence is that certain points on which it has been criticised on the basis that its approach makes for ineffective monetary policy might be better understood as often effective attempts to protect its position another is that making a central bank or any other institution completely independent may be much harder than it seems and failed attempts which come close are not necessarily to be preferred even by the advocates of independence to less ambitious designs

campaign contributions as investments the u s house of representatives 1980 1986 this paper treats the market for special interest campaign contributions and political favors as a simple asset market the model yields a simple equilibrium relationship among three variables the total amount of investor contributions a candidate receives the monetary value of the favors he has promised and his probability of winning using data on open seat races for the u s house of representatives i confront the model with a series of tests despite the starkness of the model the results of these tests are highly supportive

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

economic dependence and political democracy a cross national study this study critically examines the widely held hypothesis that a simple inverse relationship exists between economic dependence and political democracy a recent study presenting empirical evidence in support of this simple hypothesis is first criticized on methodological grounds a reanalysis of the author s data which takes these criticisms into account fails to confirm the author s original findings the simple hypothesis is then retested using other measures of economic dependence and democracy these analyses also fail to confirm the simple hypothesis finally an alternative theoretical framework for viewing the relationship between economic dependence and political democracy is developed based on the work of o donnell cordoso skidmore and kaufman although this framework is not empirically tested here it serves to highlight the weak theoretical foundation that underlies the simple hypothesis

the political economy of fema disaster payments a central contribution of public choice theory to the analysis of government activity is in viewing the activities of government not as determined by some single altruistic dictator but rather as the result of a process involving individual political agents who react to the incentives they face federal disaster relief administered by the federal emergency management agency fema is one activity that is ripe for political influence due to the process of disaster declaration and relief after a disaster strikes a particular state the governor makes a request to the president for disaster assistance following a governor s request the president then decides whether to declare the state or region a disaster area only after a disaster has been declared by the president can disaster relief be given fema is in charge of determining the level of relief funding for the area but additional appropriations are determined by congress in cases requiring large amounts of funding beyond fema s allocated budget the act which governs the rules of federal disaster declaration and expenditures gives the president the authority to declare a disaster without the approval of congress

translog flexible functional forms and substitutability of monetary assets this article attempts to establish the nature of the relationship between monetary assets by estimating a sequence of four nested demand systems the generalized translog the basic translog the linear translog and the homothetic translog the principal attraction of the empirical work is that i am able to test separately for both homothetic and quasi homothetic preferences over monetary assets the tests reject both homotheticity and quasi homotheticity and thus consistency of the strotz gorman two stage optimization i also perform tests on economic theory to establish whether the parameter estimates are consistent with the utility maximizing hypothesis underlying the models these tests indicate that the generalized translog is the preferred model

curvature restrictions on flexible functional forms an application of the minflex laurent almost ideal demand system to the pattern of spanish demand 1954 1987 this article introduces a new demand model labeled minflex laurent almost ideal demand system which has been achieved by combining the flexible functional minflex laurent form with the price independent generalized logarithm expenditures structure introduced by muellbauer the model has been applied to analyze the aggregate demand behavior of final consumer goods in the spanish economy from 1954 to 1987 when the flexible functional form has been empirically tested the curvature requirements imposed by economic theory have been studied

a political theory of regulation with some observations on railway abandonments one of the main themes of partisan dispute in the recent past and doubtless in the foreseeable future is whether or not the value of detailed governmental regulation of the economy exceeds the cost this is exactly the kind of dispute that might be resolved by raising it from the level of mere partisan interest to the level of economic and political science unfortunately however it has not been raised because we do not have the necessary intellectual apparatus namely a theory about the motivation for the operation of and the consequences of regulation as a result most of the discussion consists of biased ad hoc explanations of particular cases with little effort to formulate and test alternative generalizations we have therefore nothing but unresolved and unresolvable disputes about a more or less random collection of stories and some contradictory recipes about cause and effect

a revealed preference analysis of friedman and schwartz money in their seminal series of books friedman and schwartz concluded that the appropriate assets to aggregate into money are currency demand deposits and time deposits issued by commercial banks for this paper i used revealed preference analysis to test the validity of this conclusion i find that these financial assets pass tests for the existence of a monetary aggregate consistent with the economic theory of aggregation over goods for a short period after world war ii the data are consistent with a more broadly defined monetary aggregate a reputable index number like the divisia index must be employed to form these assets into an aggregate consistent with the economic theory of aggregation copyright 1995 by ohio state university press

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

the dynamic laurent flexible form and the demand for money i derive the dynamic full laurent model to estimate economic models that assume a dynamic process the application in this paper is to use the dynamic full laurent to estimate a system of dynamic asset demand equations the main results are that the dynamic full laurent rejects its static version and the estimated elasticities are variable over time results from a monte carlo analysis using a dynamic data generating process show that the prediction errors from the dynamic full laurent are much smaller than those from the static version thus when the data are generated by a dynamic process inferences from the static full laurent model can be severely biased 1997 john wiley sons ltd

nonparametric tests of utility maximization and weak separability for consumption leisure and money some of the most fundamental assumptions of economics are utility maximization and weak separability of the arguments in the represen tative consumer s utility function this paper contains results from nonparametric tests of these assumptions about consumer behavior the authors find that quarterly per capita data on consumption goods le isure and monetary assets are consistent with utility maximization further consumption goods and leisure meet necessary and sufficient conditions for weak separability additionally one grouping of relat ively liquid monetary assets meets the necessary conditions for weak separability they also test and find no evidence of homothetic prefe rences copyright 1987 by mit press

are factor substitutions in hmo industry operations cost saving past research on the potentials for cost saving scale and scope economies in multiproduct hmo operations in the united states are incomplete in their economics of the underlying technology structure this article exploits the translog cost model estimates of all past studies of hmo production to infer the extent to which pairwise factor substitutions e g administrative services vs medical care resources e g hospital days physician services suggest potential for cost savings in groups and independent practice associations given the industry s nonhomothetic production over a 20 year period the conceptually valid morishima elasticity measure at constant output reveals limited cost saving potentials from factor interchange and input demands these opportunities differ for groups and ipas across medicare and non medicare products my findings add a timely and significant dimension to understanding potential cost savings in hmo operations policy suggestions and cost implications are rationalized in light of the declining medicare hmo enrollment and recent changes in factor input prices

recovery and reinvestment act spending at the state level keynesian stimulus or distributive politics we examine the us state level pattern of american recovery and reinvestment act arra spending we relate spending to 1 keynesian determinants of countercyclical policy 2 congressional power and dominance and 3 presidential electoral vote importance we find that the arra is in practice poorly designed countercyclical stimulus after controlling for political variables coefficients on keynesian variables are often statistically insignificant when they are statistically significant they are often the incorrect sign on the other hand statistically significant effects are associated with majority party house of representative appropriations subcommittee and authorization committee membership one striking result is that the elasticity of arra spending with respect to the pre arra ratio of federal grants and payments to federal taxes paid is estimated to be greater than unity in most specifications states previously capturing large amounts of federal funds continue to do so under the arra stimulus

the impact of federal spending on house election outcomes while it is widely believed by academics politicians and the popular press that incumbent members of congress are rewarded by the electorate for bringing federal dollars to their district the empirical evidence supporting that claim is extremely weak one explanation for the failure to uncover the expected relationship between federal spending and election outcomes is that incumbents who expect to have difficulty being reelected are likely to exert greater effort in obtaining federal outlays since it is generally impossible to adequately measure this effort the estimated impact of spending is biased downward because of an omitted variable bias we address this estimation problem using instrumental variables for each house district we use spending outside the district but inside the state containing the district as an instrument for spending in the district federal spending is affected by a large number of actors e g governors senators mayors and other house members in the state delegation