voter turnout and fiscal policy abstract in this paper we examine whether shocks in voting costs can impact elected representatives quality defined as the capacity to fund projects at the lowest cost using data on french municipalities and local variations in seasonal infections incidence as a shock on voting cost we estimate that higher incidence lowers voter turnout increases subsidies obtained by a municipality decreases harmful financial decisions and increases the municipality s investment in infrastructure we present a model where these predictions would hold in particular for municipalities with a high base level of turnout

cycles in politics wavelet analysis of political time series spectral analysis and arma models have been the most common weapons of choice for the detection of cycles in political time series controversies about cycles however tend to revolve around an issue that both techniques are badly equipped to address the possibility of irregular cycles without fixed periodicity throughout the entire time series this has led to two main consequences on the one hand proponents of cyclical theories have often dismissed established statistical techniques on the other hand proponents of established techniques have dismissed the possibility of cycles without fixed periodicity wavelets allow the detection of transient and coexisting cycles and structural breaks in periodicity in this article we present the tools of wavelet analysis and apply them to the study of two lingering puzzles in the political science literature the existence of cycles in election returns in the united states and in the severity of major power wars

the origins of ethnolinguistic diversity this study explores the determinants of ethnolinguistic diversity within as well as across countries shedding light on its geographic origins the empirical analysis conducted across countries virtual countries and pairs of contiguous regions establishes that geographic variability captured by variation in regional land quality and elevation is a fundamental determinant of contemporary linguistic diversity the findings are consistent with the proposed hypothesis that differences in land endowments gave rise to location specific human capital leading to the formation of localized ethnicities jel j15 j24 z13

political dynasties and the incumbency advantage in party centered environments a handful of recent studies have investigated the causal effect of incumbency on dynasty formation in candidate centered electoral contexts we use candidate level data and a regression discontinuity design to estimate the incumbency advantage and its relation to dynasty formation in the party centered closed list proportional representation setting of norway the results indicate that the incumbency advantage exists even in this party centered environment however in contrast to recent findings for the united states and the philippines we find no evidence that incumbency is important to the formation of dynasties this finding underscores the need for more research into the role of internal party organizational networks in the perpetuation of political dynasties

the looks of a winner beauty and electoral success abstract we study the role of beauty in politics using candidate photos that figured prominently in electoral campaigns our investigation is based on visual assessments of 1929 finnish political candidates from 10 011 respondents of which 3708 were finnish as finland has a proportional electoral system we are able to compare the electoral success of non incumbent candidates representing the same party an increase in our measure of beauty by one standard deviation is associated with an increase of 20 in the number of votes for the average non incumbent parliamentary candidate the relationship is unaffected by including education and occupation as control variables and withstands several other robustness checks

incumbency advantages in the canadian parliament we apply a regression discontinuity approach to determine incumbency advantages in the canadian parliament finding that incumbents enjoy a 9 4 11 2 increased probability of winning over non incumbents owing to the presence of multiple parties an incumbency advantage in terms of vote share does not always translate to an increased probability of winning because incumbents do not necessarily obtain votes from their closest opponent also under the assumption that strategic exit is not an issue we are able to split the incumbency advantage into party incumbency and individual candidate incumbency components finding that the advantage is almost entirely due to the individual on utilise une approche par la methode de regression avec discontinuite pour determiner les avantages qu il y a aetre l elu en place dans les elections au parlement du canada on decouvre que les elus en place ont une probabilite de gagner de 9 4 a 11 2 de plus que leurs adversaires a cause de la presence de multiples partis politiques l avantage de l elu en place en termes de proportion du vote ne se traduit pas toujours par une probabilite accrue de gagner parce que les elus en place ne capturent pas necessairement les votes de leur plus proche adversaire de plus en presumant qu il ne s agit pas de sortie strategique on peut departager l avantage de l elu en place en composantes correspondant a l effet de parti et l effet de l individu on decouvre que l avantage est presque completement attribuable a l individu

the political economy of linguistic cleavages article i nfo this paper uses a linguistic tree describing the genealogical relationship between all 6912 world languages to compute measures of diversity at different levels of linguistic aggregation by doing so we let the data inform us on which linguistic cleavages are most relevant for a range of political economy outcomes rather than making ad hoc choices we find that deep cleavages originating thousands of years ago lead to better predictors of civil conflict and redistribution the opposite pattern emerges when it comes to the impact of linguistic diversity on growth and public goods provision where finer distinctions between languages matter 2011 elsevier b v all rights reserved

on the salience of ethnic conflict ray acknowledges support from the national science foundation under grants 0421852 and 0617827 esteban is a member of barcelona economics xrea and is grateful for support from the generalitat de catalunya and the cicyt sej 2006 00369 this research is part of the polarization and conflict research project cit2 ct 2004 506084 funded by the european commission dg research sixth framework program

where does microfinance flourish microfinance institution performance in macroeconomic context abstract we study whether and how the success of microfinance institutions mfi s depends on the country level context in particular macroeconomic and macro institutional features understanding these linkages can make mfi evaluation more accurate and further can help to locate microfinance in the broader picture of economic development we collect data on 373 mfis and merge it with country level economic and institutional data evidence arises for complementarity between mfi performance and the broader economy for example mfis are more likely to cover costs when growth is stronger and mfis in financially deeper economies have lower default and operating costs and charge lower interest rates there is also evidence suggestive of substitutability or rivalry for example more manufacturing and higher workforce participation are associated with slower growth in mfi outreach overall the country context appears to be an important determinant of mfi performance mfi performance should be handicapped for the environment in which it was achieved

the incumbency effects of signalling much literature on political behaviour treats politicians as motivated by re election choosing actions to signal their types to voters we identify a novel implication of incumbent signalling because incumbents only care about clearing a re election hurdle signals will tend to cluster just above the threshold needed for re election this generates a skew distribution of signals leading to an incumbency advantage in the probability of election we also solve for the optimal threshold when voters have the ability to commit

interest rates and currency prices in a two country world abstract this paper is a theoretical study of the determination of prices interest rates and currency exchange rates set in an infinitely lived two country world which is subject both to stochastic endowment shocks and to monetary instability formulas are obtained for pricing all equity claims nominally denominated bonds and currencies and these formulas are related to earlier closely related results in the theories of money finance international trade

comparing the impact of credit constraints on the growth of smes in a transition country with an established market economy in this paper we compare the role of internal finance on the growth of firms between a leading transition country slovenia and an established market economy belgium we find that firms in slovenia are more sensitive to internal financing constraints than their belgian counterparts furthermore we find that de novo firms and firms with long term debt are most constrained and that micro and smes can face great difficulties in accessing external sources of finance foreign firms however are able to raise external finance and consequently their growth is less reliant on the availability of internal finance our findings appear to indicate that although slovenian firms are no longer recipients of soft budget constraints the financial environment is not yet fully functional

a natural experiment in proposal power and electoral success does lawmaker behavior influence electoral outcomes observational studies cannot elucidate the effect of legislative proposals on electoral outcomes since effects are confounded by unobserved differences in legislative and political skill we take advantage of a unique natural experiment in the canadian house of commons that allows us to estimate how proposing legislation affects election outcomes the right of noncabinet members to propose legislation is assigned by lottery comparing outcomes between those who were granted the right to propose and those who were not we show that incumbents of the governing party enjoy a 2 7 percentage point bonus in vote total in the election following their winning the right to introduce a single piece of legislation which translates to a 7 increase in the probability of winning the causal effect results from higher likeability among constituents these results demonstrate experimentally that what politicians do as lawmakers has a causal effect on electoral outcomes

do regulated microfinance institutions achieve better sustainability and outreach cross country evidence in spite of increasing pressure on microfinance institutions mfis operating in developing countries to transform into regulated financial intermediaries to date no study has investigated whether regulated mfis actually achieve better financial results and reach more poor clients than nonregulated mfis this article explores the impact of regulation on mfi performance using newly released data for 114 mfis from 62 countries in an empirical model where performance is specified as a function of mfi specific regulatory macroeconomic and institutional variables consistent with recent cross country evidence on the impact of banking regulations on bank performance barth et al 2004 this article finds that regulatory involvement does not directly affect performance either in terms of operational self sustainability or outreach the article also finds that less leveraged mfis have better sustainability the policy implication is that mfis transformation into regulated financial institutions is may not

the impact of ethnic diversity on microenterprise start ups until recently factors determining the decisions made by microfinance institutions mfis to extend loans to business start ups had not been explored recent evidence shows that mfi performance wi

the marginals never vanished incumbency and competition in elections to the u s house of representatives 1952 82 the average vote margin enjoyed by incumbent candidates for the u s house of representatives increased sharply during the 1 960s despite this and contrary to assumptions common in the literature on recent congressional elections electoral data show that house incumbents are no safer now than they were in the 1950s the marginals properly defined have not vanished the swing ratio has diminished little if at all and competition for house seats held by incumbents has not declined vote margins increased without adding to incumbent security diminishing competition or dampening swings because the heterogeneity of interelection vote swings increased at the same time

the term structure and time series properties of nominal interest rates implications from theory restrictions on the time series properties of one and two period nominal interest rates implied by a representative agent cash in advance model are derived and tested among these are the correlation of the difference between the forward rate and the one period spot rate with the subsequent change in the one period spot rate the relative volatility of long and short rates and the magnitude and sign of the term premium while the first two implications are corroborated by the data the observed behavior of the term premium is dramatically at odds with the predictions of the model for the data analyzed the average term premium was positive while the model predicts that it should be negative copyright 1990 by ohio state university press

bond and stock returns in a simple exchange model this paper studies asset pricing in a general equilibrium representative agent exchange model the assumptions of isoelastic period utility and lognormal endowment allow the derivation of closed form solutions for asset returns without restricting the serial correlation of the log endowment risk premiums on stocks and real bonds are found to be simple functions of relative risk aversion the variance of the log endowment innovation and the weights in the moving average representation of the log endowment the paper analyzes the sign of term premiums the size of the equity premium and the effect of taste shocks on asset prices

incumbency advantage and political campaign spending limits abstract this paper presents a model which captures the three main arguments for and against campaign spending limits campaign spending limits are purported to restrict the incumbent s ability to exploit his fundraising advantage in contrast to conventional wisdom a ceiling increases the incumbent s probability of victory regardless of the candidates relative fundraising abilities as long as the challenger is not more effective in campaign spending if the challenger is more effective in campaign spending ceilings have a non monotonic effect when the incumbent enjoys a mild initial voter disposition advantage a moderate ceiling decreases the incumbent s probability of victory but further restricting the limit favors the incumbent irrespective of incumbency status the marginal benefit to quality decreases with a more restrictive cap in an open seat contest a more restrictive limit improves the electoral prospects of the superior quality candidate stricter ceilings may lead to the unintended consequence of increased expected spending

incumbent challenger and open seat elections in a spatial model of political competition in groseclose am j political sci 45 862 886 2001 candidates with asymmetric valence scores and varying degrees of policy motivation simultaneously choose divergent policies i take a version of the groseclose model with policy motivated candidates and extend it to allow for sequential policy announcements this may be a suitable approach for incumbent challenger elections because the incumbent s policy is typically known before the challenger s i show that policy divergence is greater when candidates announce policies sequentially as opposed to simultaneously i also show that policy motivated incumbents benefit from a first mover advantage

leviathan in the crosshairs following in the spirit of the leviathan hypothesis this paper empirically examines how the degree of local government market power influences efficiency in the local public sector market power is measured by the number and relative size distribution of similar government units in the same market area to avoid confusing market power with the comparative efficiency or superiority of larger sized organizations the relative size distribution of the individual government unit is held constant in the empirical analysis in the empirical test aggregate property values serve as the measure of efficiency the empirical results suggest that aggregate property values are lower and thus efficiency suffers in more concentrated municipal market areas ceteris paribus thus providing some evidence for leviathan type governments in connecticut

changes in the vote margins for congressional candidates a specification of historical trends recent research on house elections has focused on the decline in congressional competition since the mid 1960s however this body of research suffers from three major problems 1 an imprecise specification of the nature of change in the degree of congressional competition 2 its exclusive reliance on a limited time frame which calls into question the generalizability and adequacy of its explanations and 3 its overemphasis on incumbency oriented explanations using a multiple interrupted time series mits analysis of trends in aggregate electoral data from 1824 to 1980 we find that current low levels of congressional competition are not historically unique but instead constitute a continuation of a long term trend established in the mid 1890s in addition and in contrast to the general thrust described in the literature there appears to be a post 1965 trend toward greater competition although the absolute level of competition is lower after the mid 1960s finally a disaggregation of electoral results by incumbency status suggests a growth in the incumbency advantage since the mid 1890s but that lower post 1965 levels of congressional competition are the result of a winners and not an incumbency advantage such findings cast doubt on the adequacy of explanations that focus on post 1965 incumbency oriented factors

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

the industrial organization of congress or why legislatures like firms are not organized as markets this paper provides a theory of legislative institutions that parallels the theory of the firm and the theory of contractual institutions like market institutions legislative institutions reflect two key components the goals or preferences of individuals here representatives seeking reelection and the relevant transactions costs we present three conclusions first we show how the legislative institutions enforce bargains among legislators second we explain why given the peculiar form of bargaining problems found in legislatures specific forms of nonmarket exchange prove superior to market exchange third our approach shows how the committee system limits the types of coalitions that may form on a particular issue

win lose or withdraw a categorical analysis of career patterns in the house of representatives 1948 1978 the literature on incumbency advantage has focused on margin as an indicator for electoral security but while electoral margin is a goodex ante measure it is a poorex post measure of security further existing work has not integrated the choice of retirement with changes in the level of security to improve the specification and definition of marginality a multinomial logit model is proposed where the dependent variable is categorical account is therefore taken of all the ways a representative s term in office can end including reelection defeat retirement or pursuit of other office the sample includes all u s representatives elected for the first time between 1948 and 1978 the results indicate that 1 margin in the previous election is a significantex ante proxy for the probability of electoral defeat and 2 while the electoral safety of all incumbents in the house has been increased the increases are greater for members elected for the first time in the period since 1965

depth of outreach and financial sustainability of microfinance institutions the primary justification for subsidizing microfinance institutions mfis is their enhancement of social welfare by extending credit to the poor households therefore recent emphasis on their financial self sufficiency has created concern that this may adversely affect the mission of social outreach utilizing data from 702 mfis operating in 83 countries this study shows empirical evidence of a positive complementary relationship between financial sustainability and depth of outreach

habit persistence and the nominal term premium puzzle a partial resolution i introduction the consumption based capital asset pricing model ccapm has become the dominant paradigm in asset pricing theory because of its intuitive characterization of asset risk that is unlike expectations based asset pricing theories e g the present value model of stock prices which inherently assume risk neutrality the ccapm is predicated upon risk averse agents attempting to achieve a smooth consumption profile through the trading of assets from this perspective the risk of an asset is captured by the covariance of the asset s return with agents marginal utility of consumption or more broadly agents intertemporal marginal rate of substitution of wealth with this characterization the ccapm extends the results of the standard capm i e the risk of an asset is reflected in the covariance of the asset s return with the market portfolio to a general equilibrium setting however this intuitively appealing theory has not found much empirical support perhaps the most famous demonstration of inconsistency between the theory and data was rajnish mehra and edward prescott s 1985 analysis of the equity premium i e the difference between the average return on equity and that on government bonds using calibration methods rather than a formal statistical approach they showed that a standard ccapm severely underpredicts the size of the risk premium on equity the important implication of this finding is that the basic ccapm incorrectly models the covariance structure between the return on equity and asset holders intertemporal marginal rate of substitution economists response to this empirical rejection has been to either identify new sources of risk e g that implied by a particular monetary environment as in labadie 1989 or define alternative preferences toward risk e g the use of non expected utility theory as presented in weil 1989 and epstein and zin 1989 the potential for this research was illustrated recently by george constantinides s 1990 resolution of the equity premium puzzle in a model that included habit formation in consumption by relaxing the standard ccapm s assumption of time separable preferences constantinides demonstrated that a relatively smooth consumption profile and large risk premium on equity are consistent with equilibrium in a complete markets rational expectations framework 1 i use this insight to study another risk premium puzzle specifically the behavior of the nominal term premium the existence of a nominal term premium puzzle was demonstrated in papers by backus gregory and zin 1989 and salyer 1990 in which the term structure implications within a lucas 1982 type cash in advance cia economy were studied while some equilibrium characteristics of this model were consistent with the data both papers demonstrated that the model predicts the wrong sign of the term premium the theory implies the term premium should be negative while based on quarterly data for yields of three and six month u s treasury bills over the period 1959 1 1989 4 the observed term premium is positive similar to the equity premium puzzle as posed by mehra and prescott 1985 the prediction of a negative average term premium signals a critical discrepancy between the risk associated with nominal bonds as perceived by market participants and as captured by the models moreover this term premium puzzle is in some sense a stronger rejection of the underlying asset pricing model than that embodied by the equity premium puzzle to see this recall that within the consumption based asset pricing model the sign of the risk premium on any asset depends on the sign of the covariance between the marginal utility of consumption and that asset s return applying this reasoning to the case of the equity premium suggests that while the discrepancy in size between the observed equity premium and that generated within the model is troubling the model s prediction of a positive equity premium implies that the basic payout structure of equity within the model is consistent with that in the data e

fractionalization entrepreneurship and the institutional environment for entrepreneurship the vast majority of the literature on ethnicity and entrepreneurship focuses on the construct of ethnic entrepreneurship however very little is known about how ethnic heterogeneity affects entrepreneurship and the institutional arrangements affecting entrepreneurship this study attempts to fill the gap and thus examines the effect of ethnic heterogeneity on various outcomes associated with entrepreneurship and the institutional environment for entrepreneurship using indices of ethnic and linguistic fractionalization we show that ethnic heterogeneity negatively influences entrepreneurship we argue that potential channels that can explain the negative effect of fractionalization on entrepreneurship include trust social network and innovation among others this study provides a new perspective on the existing debate that seeks to understand why the levels of entrepreneurial success vary across countries

ethnic diversity and poverty we examine the relationship between ethnic diversity and poverty for a cross sectional sample of developing countries we measure diversity using indices of ethnic and linguistic fractionalization and measure poverty using the multidimensional poverty index mpi multidimensional poverty headcount mph intensity of deprivation poverty gap and poverty headcount ratio we find that ethnic and linguistic fractionalization contributes to poverty levels specifically after controlling for endogeneity we find that a standard deviation increase in ethnic fractionalization is associated with a 0 32 0 44 and 0 53 standard deviation increase in the mpi mph and the intensity of deprivation respectively moreover a standard deviation increase in ethnic fractionalization is associated with between a 0 34 and 0 63 standard deviation increase in the population living below 1 90 and 3 10 the poverty gap at 1 90 and 3 10 a day and the headcount ratio at 1 90 and 3 10 a day similar results are also observed for linguistic fractionalization with standardized coefficients between 0 53 and 0 93 we find that our results are robust to alternative ways to measure poverty and ethnic diversity including ethnic polarization as well as alternative approaches to address endogeneity

crash states and the equity premium solving one puzzle raises another abstract this paper examines the behavior of asset returns as predicted by the consumption based capital asset pricing model within an artificial economy that includes a low probability crash state in consumption and dividends it is demonstrated that the behavior of agents intertemporal marginal rate of substitution in such an economy is consistent with the hansen and jagannathan 1991 frontier even though the consumption process in the model is calibrated to actual data preferences are time separable and agents relative risk aversion is restricted to moderate levels moreover as demonstrated by rietz 1988 the crash state economy can replicate the mean of excess returns on equity i e the equity premium however the model severely underpredicts the volatility of excess returns

old voters new voters and the personal vote using redistricting to estimate the incumbency advantage we provide new estimates of the size of the personal vote in u s house elections from 1872 to 1990 we take advantage of the natural experiment that attends decennial redistricting every ten years most incumbents are given new districts that contain a combination of old and new territory by contrasting an incombent s vote in the new part of the district with his or her vote in the old part of the district we can estimate the magnitude of the personal vote the vote that the incumbent receives because he or she represented the voters in the past our estimates confirm prior work that shows that a large fraction of the incumbency advantage owes to the personal vote as opposed to challenger quality unlike past research we are able to estimate the relationship between district partisanship and the personal vote we find a significant interaction which shows that incumbents develop larger personal votes in areas where they are electorally most vulnerable here is no doubt that incumbents today have a substantial advantage over nonincumbents in u s house elections the overall size of this advantage has been fairly well established as has the fact that incumbents electoral strength has increased dramatically over the postwar period measured in terms of vote share the overall incumbency advantage grew from a modest 1 3 percentage point edge in the 1940s and early 1950s to a 7 10 percentage point edge in the 1980s and early 1990s 1 there is much less agreement about the sources of the incumbency advantage and the causes of its growth congressional scholars have identified a variety of factors that may be responsible which can be grouped into three broad categories the first and the focus of this paper is electoral advantage that stems from a legislator s homestyle members of the house are reputedly very responsive to their constituents in turn their constituents reward them with their votes mayhew 1974b fenno 1974 and others detail the sorts of activities that legislators do to build a widely known and respected name including casework frequent visits to the district position taking on issues and securing federal benefits a second source of the incumbency advantage is candidate quality incumbents may win because they are the best candidates running and they do noticeably worse when they face state legislators and other experienced challengers finally incumbency may simply act as a voting cue a label which voters rely on because party has become less relevant assessing the importance of these different factors has significant implications for our normative evaluations of the modern congress and our understanding

incumbency effects in political campaigns in this paper we examine two effects of incumbency first an incumbent may have an advantage in creating a favorable image in the eyes of the voters second the incumbent may have to chose a position before the challenger this second aspect of incumbency is modelled as stackelberg leadership in the model two candidates run for election by choosing a position in an ideological spectrum voters care about candidates chosen positions as well as non policy attributes of candidates which we call charisma charismata are not known when candidates choose policy positions they are only revealed on election day so that winning is not usually a certain prospect candidates care about the probability of winning but they also dislike compromising their own ideals

ethnicity and credit in african manufacturing abstract this paper investigates whether market interaction can by itself perpetuate the lack of ethnic diversity that is observed in the business communities of many developing countries using case study data on manufacturing firms in kenya and zimbabwe we find no evidence that blacks or women are disadvantaged in the attribution of bank credit once we control for firm size and other observable characteristics in contrast an ethnic and gender bias is noticeable in the attribution of supplier credit although we cannot rule out the presence of discrimination the bulk of the evidence indicates that network effects play an important role in explaining this bias

declining electoral competitiveness in the house of representatives the differential impact of improved transportation technology this paper advances the hypothesis that improvements in the national transportation and communication infrastructure are responsible for the vanishing marginals or the increased electoral security of u s representatives we assume that margin and security are directly affected by the amount of time a legislator or a member of her staff devotes to direct contact with constituents in the home district formally we demonstrate that a decline in the time opportunity cost associated with travel to the district improves victory margins where we proxy improvement in transportation technology by using a distance variable across three different historical samples 1890 1928 and 1970 this proposition offers a potentially more fundamental explanation of declining electoral competition than existing explanations focusing on professionalism careerism redistricting and bureaucratic casework in fact the technology communication hypothesis may well encompass such explanations the model specified here offers at best a crude test of the hypothesis that technology and communication are the cause of the vanishing marginals a superior test would include the actual time required to travel to each district in each sample year because a closer but more inaccessible location would be less electorally favorable according to the logic underlying our model while distance is therefore an imperfect proxy we are encouraged by the results of the preliminary test the next step for future research is to identify which technological innovations have had the greatest impact in order to accomplish this a more complete model of the link between legislators and constituents must be established

money and asset prices in a cash in advance economy an asset pricing model with money introduced via a cash in advance constraint is presented the monetary velocity is variable hence money demand does not obey the trivial quantity equation the effects of disturbances in output and money growth on real balances the price level and interest rates are examined monetary policy has effects on real asset prices the fisher relation and the premium on nominal bonds are discussed the precise role of the timing of information and transactions for properties of price levels and interest rates are clarified

why did the incumbency advantage in u s house elections grow theory a simple rational entry argument suggests that the value of incumbency consists not just of a direct effect reflecting the value of resources such as staff attached to legislative office but also of an indirect effect reflecting the fact that stronger challengers are less likely to contest incumbent held seats the indirect effect is the product of a scare off effect the ability of incumbents to scare off high quality challengers and a quality effect reflecting how much electoral advantage a party accrues when it has an experienced rather than an inexperienced candidate hypothesis the growth of the overall incumbency advantage was driven principally by increases in the quality effect methods we use a simple two equation model estimated by ordinary least squares regression to analyze u s house election data from 1948 to 1990 results most of the increase in the incumbency advantage at least down to 1980 came through increases in the quality effect i e the advantage to the incumbent party of having a low quality challenger this suggests that the task for those wishing to explain the growth in the vote denominated incumbency advantage is to explain why the quality effect grew it also suggests that resource based explanations of the growth in the incumbency advantage cannot provide a full explanation

climbing the ranks incumbency effects in party list systems abstract incumbents tend to have a solid electoral advantage in candidate centered electoral settings do similar incumbency effects exist in more party centered environments we estimate incumbency effects in an open list proportional representation system exploiting that seats are first allocated across parties and then to candidates within party lists using data from norwegian local elections 2003 2015 we document that a candidate that barely wins a seat in the local council has about a 9 percentage points 43 higher probability of being elected in the next election compared to a candidate that just misses out on a seat on the same party list we find no evidence that voters contribute to this personal incumbency advantage rather it seems as if party elites are instrumental in securing the electoral success of their party affiliates we show that incumbents and non incumbents run again in the subsequent election at about equal rates but that incumbents tend to advance in the party hierarchy and obtain safer ballot positions in future elections which is what ultimately leads to electoral success

bankers at the gate microfinance and the high cost of borrowed logics in this paper we examine how the interaction between influences of commercial banking and poverty alleviation shaped the evolution of modern microfinance using institutional theory as a lens we observe that the commercial banking logic increasingly displaced the microfinance field s foundational poverty alleviation and development principles over time we argue that this process of displacement can occur inadvertently as organizations that embody multiple logics draw disproportionately on only one of those logics when developing legitimating accounts of their activity to stakeholders furthermore we introduce the concept of permeability the extent to which the elements of a logic are ambiguous and loosely coupled to explain why some logics may be more or less open to the influence of other logics we conclude by discussing implications for entrepreneurship and poverty alleviation more generally

electoral equilibria with restricted strategies we construct a spatial election model in which candidates inherit initial positions in the strategy space presumably from previous political activity and they are restricted to strategies close to their initial positions we establish sufficient conditions for the existence of an equilibrium the equilibrium need not entail an expectation of a zero plurality for each candidate we then apply this model to a sequence of elections in which a series of opposition candidates challenge incumbents given certain regularity conditions the result will be an apparent incumbency advantage corresponding to that observed in recent congressional elections

entrepreneurship as a solution to poverty individuals living in poverty remain a critical issue this special issue focuses on how entrepreneurship can help to solve such poverty rather than viewing those in poverty as a market for goods the solution lies in understanding how to help those living in poverty create their own businesses ultimately entrepreneurship among those in poverty will create a long lasting solution to their poverty herein we initially examine the extant knowledge about entrepreneurship we then examine where future research on this important topic should move finally we introduce the five articles that make up this special issue these five articles came from the initial 71 submissions and enhance our knowledge about entrepreneurship as a pathway to reducing poverty

divided government versus incumbency externality effect quasi experimental evidence on multiple voting decisions abstract this paper explores the causal relationship between vote outcomes in different elections we ask 1 does the partisan identity of the mayor influence the voter s decision in subsequent town council elections 2 do voters condition their vote for the mayor on the result of the last council election the analysis mainprod type flply relies on a regression discontinuity design focusing on close election outcomes based on municipal level data for germany we find that the party of the mayor can receive a significant bonus in the next town council election moreover voters punish mayor candidates of parties that performed strongly in earlier council elections throughout the paper we highlight how these findings can be related to an incumbency externality effect and to the theory of divided government

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

the extent of the market and stages of agricultural specialization this paper provides empirical evidence of nonlinearity in the relationship between crop specialization in a village economy and the extent of the market size of the urban market relevant for the village the results suggest that the portfolio of crops in a village economy becomes more diversified initially as the extent of the market increases however after the market size reaches a threshold the production structure becomes specialized again this evidence on the stages of agricultural diversification is consistent with the stages of diversification identified in the recent literature for the economy as a whole and also for the manufacturing sector the evidence highlights the importance of improving farmers access to markets through investment in transport infrastructure and removal of barriers to trading

segregation and the quality of government in a cross section of countries we provide a new compilation of data on ethnic linguistic and religious composition at the subnational level for a large number of countries using these data we measure segregation of groups within the country to overcome the endogeneity problem that arises because of mobility and endogenous in ternal borders we construct an instrument for segregation we find that more ethnically and lin guistically segregated countries i e those where groups live more spatially separately have a lower quality of government there is no relationship between religious segregation and governance trust is an important channel of influence it is lower in more segregated countries jel hi 1 h77 j15 017 z12 z13 racial and religious conflicts are often associated with poor politicoeconomic performance especially in developing countries economists have recently turned their attention to ethnolinguistic fractionalization as an explanation of differences in the pace of development starting with an influential paper by william easterly and ross levine 1997 since then many others have shown that fractionalization is negatively correlated with a host of policy outcomes and the quality of government 1 however many ethnically diverse countries the united states for instance are quite successful what makes different countries more or less capable of handling

using repeat challengers to estimate the effect of campaign spending on election outcomes in the u s house previous studies of congressional spending have typically found a large positive effect of challenger spending but little evidence for effects of incumbent spending those studies however do not adequately control for inherent differences in vote getting ability across candidates high quality challengers are likely to receive a high fraction of the vote and have high campaign expenditures even if campaign spending has no impact on election outcomes to avoid that bias this paper examines elections in which the same two candidates face one another on more than one occasion differencing eliminates the influence of any fixed candidate or district attributes estimates of the effects of challenger spending are an order of magnitude below those of previous studies campaign spending has an extremely small impact on election outcomes regardless of who does the spending campaign spending limits appear socially desirable but public financing of campaigns does not

what s a losing party to do the calculus of contesting state legislative elections existing theories of contesting elections typically treat all potential challengers as identical while under playing the importance of political parties and primary contests we offer a theory addressing these issues based on how the various actors in the process define and evaluate the probability of winning an election and the value of the office being contested we test our theory by estimating a model predicting which of three responses a party that loses a legislative race makes in the next cycle nominating the same candidate nominating a new candidate or nominating no one we find substantial empirical support for our theory

voter uncertainty and failure of duverger s law an empirical analysis real world simple plurality elections rarely bear out the strong duvergerian prediction that in equilibrium only two competitors receive votes recent advances in strategic voting theory demonstrate that voter uncertainty about competitors true support levels in the constituency may lead to limited strategic voting and hence incomplete desertion of trailing parties this is the first attempt to estimate empirically the impact of uncertainty on incentives to vote strategically calibrating a model of strategic voting to voting results from simple plurality elections in german constituencies it is found that strategic voters operate under high levels of uncertainty these results support the proposition that uncertainty about party support impedes formation of duvergerian equilibria

legislator voting and shirking a critical review of the literature we set out to critically review the progress in answering two related questions what determines how legislators vote and how can shirking by legislators be measured in the first category the hypothesis that legislators shirk in order to indulge their personal ideological preferences has led researchers astray the theoretical underpinning is shaky on two counts first legislators who indulge their preferences at the expense of their constituents preferences put themselves at a competitive electoral disadvantage second the original two stage procedure used to measure ideological shirking is severely flawed among many other problems the residual measure of shirking implicitly assumes that the median voter is the relevant constituent principal for the legislator agent

the disadvantaged incumbents estimating incumbency effects in indian state legislatures this paper estimates the incumbency effects using a large dataset on state legislative elections in india during 1975 2003 i use a regression discontinuity design rdd that estimates the causal effect of incumbency by comparing candidates in closely fought elections i find that there is a significant disadvantage to incumbency in indian state legislative elections and the adverse effect of incumbency has increased after 1991 also the incumbency disadvantage is higher in states that have lower availability of public goods such as health centers and lower employment poverty and per capita income

term limitation in a dynamic model of partisan balance in november 1992 voters in fourteen states considered ballot propositions to adopt term limits for members of congress all fourteen propositions passed ten received more than 60 support bringing the total number of states with congressional term limits to fifteen much of the discussion of term limitation has focused on issues of representation the strength of parties and the functioning of congress after the adoption of limits benjamin and malbin 1992 will 1992 this paper explores an important but less discussed consequence of term limitation its impact on the partisan balance of legislatures we inquire how electoral dynamics incumbent advantage and voluntary retirement interact with a term limit to produce a new balance between parties in a two party legislature which party is favored by the introduction of term limits how does the length of the term limit matter are there conditions such that one party will be favored by any limit regardless of how restrictive

the failed africanization of commerce and industry in kenya abstract in the 1970s a number of authors challenged the dependency perspective with respect to kenya they maintained that a viable domestic capital class nurtured by state sponsorship had emerged since independence this article questions the revisionist interpretation of state business relations in kenya kenya does possess a dynamic entrepreneurial sector led mainly by kenyan indians government efforts to aid african entrepreneurs or to establish a vigorous state capitalist sector have been ineffective this is evident from surveys of the state enterprise sector private manufacturing and commerce revisionist authors tended to overestimate the capacity of kenyan state agencies to implement policy goals and they neglected the political context of africanization as an instrument of ethnic patronage for state leaders

election results and opportunistic policies a new test of the rational political business cycle model the literature on the rational pbc suggests that politicians systematically manipulate economic and fiscal conditions before elections to increase their chances of reelection most tests of this theory look for evidence of pre election distortions in fiscal policy we propose a new test that explores the two way interaction between the magnitude of the opportunistic distortion and the margin of victory the test is implemented using a large panel of portuguese municipalities the results show that opportunism leads to a larger win margin for the incumbent and that incumbents behave more opportunistically when their win margin is small these results are consistent with the theoretical model

candidate quality the personal vote and the incumbency advantage in congress most political observers agree that incumbent legislators have a considerable advantage over nonincumbents in modern congressional elections yet there is still disagreement over the exact source of this advantage and the explanation for its growth over time to address this debate we utilize a unique set of historical elections data to test for the presence of an incumbency advantage in late nineteenth century house elections 1872 1900 we find a modest direct effect of incumbency and a substantial candidate quality effect moreover the cartel like control of ballot access by nineteenth century political parties created competition in races that the modern market like system simply does not sustain our results suggest that candidate quality is a fundamental piece of the puzzle in understanding the historical development of the incumbency advantage in american politics

representation through legislative redistricting a stochastic model this paper builds a stochastic model of the processes that give rise to observed patterns of representation and bias in congressional and state legislative elections the analysis demonstrates that partisan swing and incumbency voting concepts from the congressional elections literature have determinate effects on representation and bias concepts from the redistricting literature the model shows precisely how incumbency and increased variability of partisan swing reduce the responsiveness of the electoral system and how partisan swing affects whether the system is biased toward one party or the other incumbency and other causes of unresponsive representation also reduce the effect of partisan swing on current levels of partisan bias by relaxing the restrictive portions of the widely applied uniform partisan swing assumption the theoretical analysis leads directly to an empirical model enabling one more reliably to estimate responsiveness and bias from a single year of electoral data applying this to data from seven elections in each of six states the paper demonstrates that redistricting has effects in predicted directions in the short run partisan gerrymandering biases the system in favor of the party in control and by freeing up seats held by opposition party incumbents increases the system s responsiveness bipartisan controlled redistricting appears to reduce bias somewhat and dramatically to reduce responsiveness nonpartisan redistricting processes substantially increase responsiveness but do not have as clear an effect on bias however after only two elections prima facie evidence for redistricting effects evaporate in most states finally across every state and type of redistricting process responsiveness declined significantly over the course of the decade this is clear evidence that the phenomenon of vanishing marginals recognized first in the u s congress literature also applies to these different types of state legislative assemblies it also strongly suggests that redistricting could not account for this pattern

a reform dilemma in polarized democracies abstract we study the feasibility and efficiency of policy reforms in democracies we develop a simple election model where i reforms are costly for voters and politicians and these costs increase with the extent of policy change and ii politicians differ in their ability to carry out reforms efficiently we identify a so called reform dilemma which manifests itself in two variants from a static perspective low reform ability politicians are elected when political parties are polarized who then impose high costs on citizens for each reform step this property of elections arises as low reform ability is a substitute for policy commitment from a dynamic perspective incumbents may choose socially undesirable policies to align the social need for reform with their own reform ability and are thus re elected regardless of their reform ability

the social sub optimality of competitive elections comment buchler public choice 133 3 4 439 456 2007 models elections as methods of making social choices among different options and argues that increased electoral competition may produce inferior outcomes however competitive elections also play a role in affecting the behavior of candidates and of elected officials in office once this role is recognized competitive elections must be seen as a necessary but not sufficient ingredient in the production of socially optimal government

the impact of campaign spending on votes in multiparty elections abstract the impact of candidate campaign spending on votes and abstention in multiparty elections is estimated from the specification of a structural model of voter behavior this model accounts for the endogeneity of campaign spending as well as the heterogeneity in voter preferences empirical results are estimated from aggregate actual election data the results demonstrate the importance of spending during the campaign period and voter heterogeneity with respect to these expenditures the own and cross expenditure vote share elasticity estimates reveal that political campaign spending not only redistributes voters across parties but also decreases the size of the abstaining group of the electorate

the political costs of tax increases and expenditure reductions evidence from state legislative turnover this paper estimates the political costs of increasing taxes and cutting expenditures for members of a legislature it is found that both costs are individually significant but that they are not significantly different this coincides with the first order condition for maximization of the probability of reelection republican legislatures have a higher political cost for taxes thus the party s relative bias toward smaller government is founded in stronger constituent preferences against taxes not for lower spending additionally by being ideologically conservative republicans lower the political costs of taxes while by being more liberal democrats lower the cost of cutting expenditures

incumbency electoral safety and turnover in the house of representatives 1952 76 two hypotheses have received a great deal of attention from students of congressional elections first many analysts have concluded that an increase in the electoral value attached to incumbency accounts for the rise in incumbents victory margins observed since the mid sixties second many scholars have attributed the decline in electoral turnover to the percentage increase in victory margins analyzing the electoral histories of 13 house cohorts 1952 76 this study reexamines these two hypotheses within theframework of a quasi experimental design the results presented here in contrast to those of previous studies cast doubt on the increased incumbency effect moreover little relationship is found between an increase in electoral safety as reflected by increased victory margins and a decline in electoral turnover

an analysis of congressional career decisions 1947 1986 most previous research on congressional career decisions has focused on one of two binary choices between retiring and running for reelection or between running for reelection and seeking higher office but most of the time representatives face all three choices simultaneously employing a mother logit model we estimate the effects of relevant variables both on pairwise comparisons conditional probabilities and on the unconditional probabilities of choosing each one of these three alternatives probably most intriguing is our finding that a member s age has little or no effect upon the unconditional probability of running for reelection the interrelatedness of career options is seen particularly clearly in the case of incumbents who had been redistricted out of their seats when they had an opportunity to run for higher office they were likely to take it only when they lacked such an opportunity were they more likely than other members to opt for retirement

new techniques to extract market expectations from financial instruments this paper is a selective survey of new or recent methods to extract information about market expectations from asset prices for monetary policy purposes traditionally interest rates and forward exchange rates have been used to extract expected means of future interest rates exchange rates and inflation more recently these methods have been refined to rely on implied forward interest rates so as to extract expected future time paths very recently methods have been designed to extract not only the means but the whole risk neutral probability distribution from a set of option prices

the impact of microfinance in sub saharan africa a systematic review of the evidence microfinance is seen as a key development tool and despite the current deepening crisis within the industry it continues to grow in sub saharan africa we systematically reviewed the evidence of the impacts of micro credit and micro savings on poor people in sub saharan africa we considered impacts on income savings expenditure and the accumulation of assets as well as non financial outcomes including health nutrition food security education child labor women s empowerment housing job creation and social cohesion the available evidence shows that microfinance does harm as well as good to the livelihoods of the poor

building sustainable hybrid organizations the case of commercial microfinance organizations we explore how new types of hybrid organizations organizations that combine institutional logics in unprecedented ways can develop and maintain their hybrid nature in the absence of a ready to w

the term structure of interest rates departures from time separable expected utility this paper assesses the ability of general equilibrium models of asset pricing using two recently developed sets of preferences to quantitatively account for the observed variability in the canadian term structure of interest rates the preference structures are non expected utility and habit persistence associated with epstein and zin 1989a and constantinides 1990 respectively the framework adopted follows backus gregory and zin 1989 where a numerical version of the theory is specified and empirical features of the artificial economy are compared against actually data neither preference structure is able to satisfactorily mimic the magnitude or the variability of the risk premiums

estimating incumbency advantage without bias in this paper we prove theoretically and demonstrate empirically that all existing measures of incumbency advantage in the congressional elections literature are biased or inconsistent we then provide an unbiased estimator based on a very simple linear regression model we apply this new method to congressional elections since 1900 providing the first evidence of a positive incumbency advantage in the first half of the century incumbency advantage is the most frequently studied factor in the last 15 years of congressional elections research discovery of the increase in incum bency advantage has sparked controversy over its origins historical pattern cur rent magnitude and electoral democratic and policy consequences even the most basic descriptive information about incumbency advantage is flawed be cause every previous measure based on aggregate data in this literature is plagued by selection bias inconsistencies and inefficiencies we prove this result and also propose a new unbiased and statistically efficient measure that is very easy to calculate congressional elections from 1900 to the present fit our theoretical model our empirical reanalyses do not challenge the existing scholarly consen sus that incumbency advantage is much larger than it once was however we do challenge the prevailing belief that incumbency advantage was nonexistent and the evidence that it was negative in house elections during the first half of this century alford and brady 1988 we show instead that the average advantage of incumbency in these elections was about two percentage points in section 1 of this paper we define incumbency advantage and section 2 gives an intuitive sense of the problems identifying it even in ideal electoral sys tems section 3 formally proves that sophomore surge and retirement slump are biased estimates of incumbency advantage and section 4 briefly reveals the flaws

political action committee spending and senate roll call voting this paper addresses how pac spending affects the roll call voting behavior of u s senators using a theoretical framework which draws broadly on the voting literature we develop models that explain senatorial voting behavior in a pre pac and post pac world testing both models we find weak support for a downs black view of voting participation in the first model the second model supports the alteration of voting incentives resulting from pac spending we find that pacs have a positive effect on voting participation the conjecture remains whether pacs change voting outcomes but it is clear that they buy voting participation

economic voting and the symbolic politics argument a reinterpretation and synthesis economic voting is generally regarded as a straightforward political demand for the amelioration of economic grievances this assumption about motives underlies the implicit theories of politicians and the imputations of interests to voters in aggregate time series models several recent articles have argued that voting is not self interested but a manifestation of symbolic preferences at the level of the collectivity this article places the dispute between personal and collective decision referents into the broader perspective of a multi stage model of information processing and decision making personal and collective decision referents are shown to define the poles of a continuum and several hypotheses are derived to predict the relative weights assigned to each in the voter s calculus the model is used in analyses of both the public s evaluations of incumbent economic management and economic voting in different electoral arenas by varying issue publics designed to maximize comparability with aggregate studies this research includes both objective and subjective measures of economic conditions and indexes changes in personal conditions over time from panel data

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

using multimember district elections to estimate the sources of the incumbency advantage in this article we use a novel research design that exploits unique features of multimember districts to estimate and decompose the incumbency advantage in state legislative elections like some existing related studies we also use repeated observations on the same candidates to account for unobserved factors that remain constant across observations multimember districts have the additional feature of copartisans competing for multiple seats within the same district this allows us to identify both the direct office holder benefits and the incumbent quality advantage over nonincumbent candidates from the same party we find that the overall incumbency advantage is of similar magnitude as that found in previous studies we attribute approximately half of this advantage to incumbents quality advantage over open seat candidates and the remainder to direct office holder benefits however we also find some evidence that direct office holder benefits are larger in competitive districts than in safe districts and in states with relatively large legislative budgets per capita