democracy and human capital formation education spending in latin america 1980 to 1997 this article examines the relationship between democratic representation and spending on education in latin america the authors assess the impact that democracy has on the distribution of resources between different levels of schooling and on total spending on education specifically they test whether democratic governments allocate a greater share of resources to primary education the level that benefits the largest segment of the electorate and that is most critical for human capital formation in developing countries using time series cross sectional analysis the authors find that democracies devote a higher percentage of their educational resources to primary education and that they maintain higher absolute spending levels on education in the aggregate thereby enhancing the prospects of human capital formation

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

the limits of political compromise debt ceilings and political turnover we study the desirability of limits on the public debt and of political turnover in an economy where incumbents have an incentive to set public expenditures above the socially optimal level due to rent seeking motives parties alternate in office and cannot commit to future policies but they can forge a political compromise where each party curbs excessive spending when in office if it expects future governments to do the same in contrast to the received literature we find that strict limits on government borrowing can exacerbate political economy distortions by making a political compromise unsustainable this tends to happen when political turnover is limited conversely a tight limit on the public debt fosters a compromise that yields the efficient outcome if political turnover is vigorous our analysis thus suggests that to sustain good economic policies a society needs to restrict either the extent of political turnover or the ability of governments to issue debt but not both

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

voters as fiscal conservatives voters penalize federal and state spending growth this is the central result of my analysis of voting behavior in presidential senatorial and gubernatorial elections from 1950 1988 the composition of federal spending growth seems irrelevant the vote loss to the president s party from an extra dollar of defense or nondefense spending is the same however in gubernatorial elections expansion of state welfare spending exacts a disproportionate political price deficit financing of federal or state spending does not appear to matter politically i conclude by discussing the obvious question of why government budgets have grown in the face of this voter hostility

internationalisation conceptualising an entrepreneurial process of behaviour in time this paper presents a three stage process of conceptual development in response to the call for a unifying direction for research in the emergent field of international entrepreneurship drawing on classic approaches to internationalisation and importing insight from entrepreneurship as a separate and distinct field of study the paper develops three potential models of internationalisation as a time based process of entrepreneurial behaviour the models evolve from the simple through general to precise levels of conceptualisation research implications are discussed

electoral competition and local government responsiveness in brazil summary the empirical literature on the effects of competition on the supply of public goods shows controversial results at the local level the main objective of this paper is to investigate this relationship in a federalist country brazil where the political system places few barriers to the entry of competitors and local governments have the independence to establish their own public policy we show that a higher effective number of candidates running for the executive branch increase the supply of local public goods the number of student enrollments teachers and free immunizations

plurality and runoff systems and numbers of candidates although political scientists have in the last few decades learned much about the abstract properties of multicandidate electoral systems we have accumulated little theoretical knowledge on the ways in which strategic behavior of voters and candidates changes when we move from one voting system to another this essay has illustrated how the relative desirability of voting systems can change when the number of candidates usually considered fixed in such comparisons is taken as endogenous to the voting system in force at the time our main conclusion is therefore that the method of voting must be understood in relation to the total electoral system it is not enough to analyze properties of voting systems in the abstract but also in terms of the interactions that voting systems have with political groups and the constitutional setting

electoral rules political competition and fiscal expenditures regression discontinuity evidence from brazilian municipalities we exploit a discontinuity in the rules of brazilian mayoral elections to investigate whether political competition has a causal impact on fiscal policy choices in municipalities with fewer than 2

on the vote purchasing behavior of incumbent governments a couple of months before the swedish election in 1998 the incumbent government distributed 2 3 billion sek to 42 out of 115 applying municipalities this was the first wave of a four year long grant program intended to support local investment programs aimed at an ecological sustainable development this temporary grant program differs from traditional intergovernmental grants in several aspects most importantly in the sovereign decision making power given to the incumbent central government in this paper we investigate whether there were any tactical motives behind the distribution of these grants we find support for the hypothesis that the incumbent government used the grant program under study in order to win votes in particular we find strong support for the lindbeck weibull dixit londregan model in which parties distribute transfers to regions where there are many swing voters this result is statistically as well as economically significant we do however not find any support for the model that predicts that the incumbent government transfer money to its own supporters

incentives to cultivate favored minorities under alternative electoral systems a simple model is used to compare under different electoral systems the incentives for candidates to create inequalities among otherwise homogeneous voters by making campaign promises that favor small groups rather than appealing equally to all voters in this game model each candidate generates offers for voters independently out of a distribution that is chosen by the candidate subject only to the constraints that offers must be nonnegative and have mean 1 symmetric equilibria with sincere voting are analyzed for two candidate elections and for multicandidate elections under rank scoring rules approval voting and single transferable vote voting rules that can guarantee representation for minorities in multiseat elections generate in this model the most severely unequal campaign promises

the foreign exchange risk premium is it real this paper presents a numerical analysis of an optimizing equilibrium model of the risk premium in the forward foreign exchange market an overlapping generations model with incomplete markets is employed because the equilibria are analytically intractable the model must be solved numerically the authors show how changes in the distribution of the exogenous variables affect the distribution of the risk premium they find that the properties of the real risk premium have far more intuitive appeal than those of the more commonly employed nominal risk premium copyright 1995 by ohio state university press

demographic change intergenerational linkages and public education in this brief paper i explore several issues related to u s demographic change and the political economy of public education i describe the existing empirical evidence that suggests that older and childless voters are less likely to support public school spending than younger voters with children i then note several unresolved issues about the degree to which rational self interest should lead older voters to vote for low levels of public school spending excerpt

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

constitutions and economic policy at the rare moments in history when a nation debates constitutional reform the key issues often concern how the reforms might affect economic policy and economic performance for example italy abandoned a system of pure proportional representation where legislators were elected according to the proportions of the popular national vote received by their parties and moved toward including ingredients of plurality rule where legislators are elected in each district according to who receives the highest number of votes key italian political leaders are now considering proposals to introduce elements of presidentialism where the head of government is elected by direct popular vote rather than the current parliamentary regime a common argument in italy was that the electoral reform would help stifle political corruption and reduce the propensity of italian governments to run budget deficits in the 1990s constitutional reforms have been debated and implemented in a number of other countries too for instance new zealand moved away from a pure system of plurality rule in single member districts to a system mixing elements of proportional representation japan also renounced its special form of plurality rule the so called single nontransferable vote in favor of a system that mixes elements of proportional and plurality representation similar proposals have been debated in the united kingdom in latin america questions have been raised as to whether the poor and volatile economic performance of many countries can be traced to their presidential form of government

fiscal restraints and voter welfare this paper explores the logic of fiscal restraints in a political agency model with both moral hazard and adverse selection the role of the political process is both to discipline incumbents who may act against the public interest and to sort in those politicians who are most likely act in voters interests we use the model to examine the optimality of inefficient taxation limits on the size of government increasing transparency and yardstick competition some conclusions are surprising for example we show that some forms of fiscal restraint can only be desirable when incumbents are sufficiently likely to be benevolent

a drawback of electoral competition in most major democracies there are very few parties compared to the number of possible policy positions held by voters we provide an efficiency rationale for why it might be appropriate to limit the proliferation of parties in our model the larger the number of parties the greater the inefficiency of the outcome of electoral competition the reason is that when the number of parties increases electoral incentives push each party to focus its electoral promises on a narrower constituency and then special interest policies replace more efficient policies that have diffuse benefits the analysis provides a possible explanation for the existence of institutional features that limit the extent of electoral competition thresholds of exclusion runoff electoral systems and majoritarian two party political systems jel d82 l15

incumbent performance and electoral control in the pure theory of electoral competition citizens compare the platforms of the candidates and vote for the one whose platform is preferred candidate strategies are identified with promises about future performance in office models of this sort have been developed in both static mckelvey 1975 and dynamic kramer 1977 i settings and all appear to have the property that if the set of alternatives is large enough in some sense equilibrium platforms rarely exist but these models have another feature that is quite as disturbing as their instability in the static setting discussed by mckelvey little attention is paid to the possibility that once in office the politician s preferences may diverge from those of his constituents and that he may therefore choose policies at variance from his platform instead it is simply assumed that promises will be kept whether or not such behavior is congruent with the interest of the officeholder it is sometimes argued that an enforcement mechanism may exist to discipline politicians for failing to keep promises but without a specification of the mechanism it is not obvious that it would be in the interests of the

the countervailing effects of competition on public goods provision when bargaining inefficiencies lead to bad outcomes political competition is widely recognized as a mediator of public goods provision through its salutary effect on incumbents electoral incentives we argue that political competition additionally mediates public goods provision by reducing the efficiency of legislative bargaining these countervailing forces may produce a net negative effect in places with weak parties and low transparency typical of many young democracies we provide evidence of a robust negative relationship between political competition and local public goods using panel data from mali tests of mechanisms corroborate our interpretation of this relationship as evidence of legislative bargaining inefficiencies to explore the generalizability of these findings we analyze cross country panel data and show that political competition leads to better worse public goods provision under high low levels of party system institutionalization the paper sheds light on why political competition is only selectively beneficial and underscores the importance of considering both the electoral and legislative arenas

predicting the number of parties a quantitative model of duverger s mechanical effect iby means of a quantitative model the model predicts the range within which the effective number of parties in a district should fall for a given magnitude number of seats of the district at the national level a related model predicts the effective number of parties based on the effective magnitude and the number of seats in the national assembly the institutional variables considered magnitude and assembly size define a great portion of the structural constraints within which a given country s politics must take place the model developed provides a good fit to data in spite of its having been developed from outrageously simple starting assumptions tf one had to give a single number to characterize the politics of any country that employs competitive elections it would be the number of parties active in its national assembly this number would not tell the whole story by any means but it tells us more than any other single number or term could the number of parties directly or indirectly affects other important aspects of how a political system functions including how long its cabinets last if the system is parliamentary lijphart 1984 and how elections translate into citizen control of policymakers powell 1989 the number of parties is a most important feature in a country s politics and therefore in comparative studies also we shall discuss the ways of defining this number operationally further on what determines the number of parties history present issues and institutions all intervene but if one had to give a single major factor it would have to be the district magnitude m that is the number of seats allocated in an electoral district rae 1967 the well known duverger rule says that one seat districts tend to lead to two party systems while multiseat districts tend to go with multiparty systems duverger 1951 1954 see also riker 1982 one can be more precise since even within the multiseat category a larger m tends to go with a larger number of parties but before we can attempt to define a relationship between district magnitude and the number of parties we need to establish a means to measure the number of parties

electoral competition and special interest politics have fixed positions on some issues but vary their positions on others in order to attract votes and campaign contributions in this context we examine whether special interest groups are governed by an electoral motive or an influence in their campaign giving and how their contributions affect the equilibrium platforms we show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups the party that is expected to win a majority of seats caters more to the special interests

children and their parents labor supply evidence from exogenous variation in family size although theoretical models of labor supply and the family are well developed there are few credible estimates of key empirical relationships in the work family nexus this study uses a new instrumental variable the sex composition of the first two births in families with at least two children to estimate the effect of additional children on parents labor supply in the united states instrumental variables estimates using the sex mix are substantial but smaller than the corresponding ordinary least squares ols estimates moreover unlike the ols estimates the female labor supply effects estimated using sex mix instruments appear to be absent among more educated women and women with high wage husbands we also find that married women who have a third child reduce their labor supply by as much as women in the full sample while there is no relationship between wives child bearing and husbands labor supply excerpt

electoral competition globalization and subnational education spending in mexico 1999 2004 this article examines the determinants of primary education spending among 29 mexican states from 1999 to 2004 there is wide variation in spending despite expectations of policy convergence due to market forces associated with globalization and in spite of the unique potential of education spending to complement economic strategies in achieving equitable growth this study exploits significant advantages of subnational analysis in exploring political and economic variables that have been useful in explaining spending levels cross nationally consistent with these studies this article shows that greater electoral competition leads to increased spending in contrast to other work however this study finds that exposure to the global economy has distinctly mixed effects on education spending these findings thus further highlight the positive returns to higher quality democracy while underscoring the need to examine the effects of many different aspects of globalization representing a wide variety of strategies employed by governments in engaging the international economy

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

who delivers partisan clients in the argentine electoral market why do some parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain such differences by focusing on political parties access to resources supply side and voters dependence on fiscal largesse demand side we show how these differences affect the patron s choice of public sector wages and employment we use subnational level data to show different electoral returns from patronage for the two major political coalitions in argentina peronism and the ucr alianza and their effect on preferences over public sector wages and employment w hy do some political parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain returns to patronage by highlighting differences in the political parties access to resources supply side and the voter s dependence on public sector jobs demand side we propose that just as political parties cater their policies to particular groups of voters they pursue different strategies when allocating pork in exchange for support on the supply side we highlight the importance of partisan biases in the fiscal and electoral institutions that regulate the access and distribution of public resources on the demand side we show that patronage is a distributive mechanism that provides different returns to voters with different skills and labor market expectations

a model of political competition with citizen candidates the authors develop a model of electoral competition in which citizens choose whether or not to run as candidates a winner implements her favorite policy the equilibrium number of candidates depends negatively on the cost of running and positively on the benefits of winning for some parameter values all equilibria under plurality rule have exactly two candidates whose positions are distinct two candidate elections are more likely under plurality rule than under a runoff system the candidates positions are less differentiated under a runoff system there exist equilibria under both systems in which some candidates have no chance of winning