the solution to the tullock rent seeking game when r 2 mixed strategy equilibria and mean dissipation rates in tullock s rent seeking model the probability a player wins the game depends on expenditures raised to the power r we show that a symmetric mixed strategy nash equilibrium exists when r 2 and that overdissipation of rents does not arise in any nash equilibrium we derive a tight lower bound on the level of rent dissipation that arises in a symmetric equilibrium when the strategy space is discrete and show that full rent dissipation occurs when the strategy space is continuous our results are shown to be consistent with recent experimental evidence on the dissipation of rents

the impact of political majorities on firm value do electoral promises or friendship connections matter this paper simultaneously estimates the impact of political majorities on the values of firms that would benefit from the platforms of the two main candidates at the 2007 french presidential election segolene royal and nicolas sarkozy and of those that are ruled or owned by sarkozy s friends we use prediction market data to track each candidate s victory probability and investigate how this relates to firms abnormal returns our estimates suggest that the value of firms that would likely benefit from the platforms of royal and sarkozy changed by 1 and 2 respectively with the candidates victory probabilities and that firms connected to sarkozy out performed others by 3 due to his election

political donations and the allocation of public procurement contracts abstract we study whether and when firms donations to political parties induce favouritism in public procurement allocations our analysis builds on a unique comprehensive dataset covering all public procurement contracts and all corporate donations to major political parties in the czech republic over the period from 2007 to 2014 and exploits changes in political control over regional governments within this period for identification purposes we find that firms donating 10 more to a political party gaining losing power witness an increase decrease in the value of their public procurement contracts by 0 5 0 6 importantly and in line with theoretical expectations these effects only arise for contracts allocated under less restrictive procurement allocation processes assessing the underlying mechanisms we show that donating firms receive more small contracts allocated under less regulated procurement procedures face less competition in more regulated and open procurement procedures and tend to win with bids further above the estimated cost of the procurement contract

betting on hitler the value of political connections in nazi germany this paper examines the value of connections between german industry and the nazi movement in early 1933 drawing on previously unused contemporary sources about management and supervisory board composition and stock returns we find that one out of seven firms and a large proportion of the biggest companies had substantive links with the national socialist german workers party firms supporting the nazi movement experienced unusually high returns outperforming unconnected ones by 5 to 8 between january and march 1933 these results are not driven by sectoral composition and are robust to alternative estimators and definitions of affiliation

are policy platforms capitalized into equity prices evidence from the bush gore 2000 presidential election abstract this paper tests for the capitalization of policy platforms into equity prices using a sample of 70 firms favored under bush or gore platforms during the 2000 u s presidential election two sources of daily data during the six months leading up to the election are incorporated firm specific equity returns and the probability of a bush victory as implied by prices from the iowa electronic market for this group of politically sensitive firms the daily baseline estimates demonstrate that platforms are capitalized into equity prices under a bush administration relative to a counterfactual gore administration bush favored firms are worth 3 more and gore favored firms are worth 6 less implying a statistically significant differential return of 9 estimates based on weekly returns are even stronger suggesting a differential return of 16 the most sensitive sectors include tobacco worth 13 more under a favorable bush administration microsoft competitors worth 15 less under an unfavorable bush administration and alternative energy companies worth 16 less under an unfavorable bush administration a corresponding analysis of campaign contributions which allows for heterogeneity in the importance of policy platforms to the firms supports the baseline estimates

macroeconomic policy in a two party system as a repeated game this paper considers the interaction of two parties with different objectives concerning inflation and unemployment and rational and forward looking wage setters if discretionary policies are followed an economic cycle related to the political cycle results in equilibrium this cycle is significantly different from the traditional political business cycle reputational mechanisms due to the repeated interaction of the two parties and the public or commitments to a common policy rule can improve upon the discretionary outcome by reducing or eliminating the magnitude of the economic fluctuations

bureaucratic capacity delegation and political reform thecentraltensionmotivatingcontemporarytheories of delegation from politicians to bureaucrats lies in the potential conflict between the value of bureaucratic expertise on one hand and the desire for political control on the other this tension is well known and has been debated at least since weber s classic work on bureaucracy modern bureaucracies are staffed with individuals who by virtue of rational bureaucratic organization are highly skilled policy experts who in principle should be able to help less knowledgeable politicians achieve their goals however the very skills and expertise that bureaucrats enjoy create the possibility that bureaucrats will usurp the rightful role of politicians in policymaking processes because the way this tension is resolved determines the ultimate compatibility of democracy and bureaucracy existing theories of delegation typically focus on understanding how and to what extent politicians can resolve it 1 in many contexts particularly developing democracies bureaucracy does not fit the weberian characteristics that are assumed in the existing delegation literature the bureaucracies may be staffed with individuals who lack the personal capacity to execute orders effectively the organizational structure may lead to breakdowns within bureaucratic hierarchies making it difficult for senior administrators to control their subordinates departments and ministries may lack basic budgets and resources to undertake implementation actions they may suffer from incentives for

estimation and decomposition of technical efficiency for sugarbeet farms this study computes technical efficiency for idaho sugarbeet farms and decomposes it into pure technical efficiency scale efficiency and congestion efficiency using nonparametric procedures the results indicate that the average efficiency is 0 88 with 45 of the farms in the sample exhibiting full efficiency improper scale operation and input overutilization are the major sources of inefficiency for remaining farms technical efficiency is independent of farm size a tobit model was used to examine the impacts of variables such as farm size specialization tenancy position hired labour location and managerial ability on efficiency inefficiency in sugarbeet production results in a shortfall of potential revenues not only for producers but also for landlords and processors

local economic gains from primary election spending this article asks how government and private consumption spending affect earnings in service sectors to do this we exploit the variation across states and time in the money spent while campaigning for a party s presidential primary nomination we create a novel data set combining the date each state held its primary from 1976 to 2008 the date in each election cycle in which only one candidate remained and quarterly state earnings by sector using an instrumental variable strategy we find that hosting a primary election increases earnings particularly in the retail and accommodation sectors these results remain consistent when using data on primary campaign expenditures across states in the 2004 and 2008 elections

post keynesian employment analysis and the macroeconomics of oecd unemployment the post keynesian hereafter pk theory of employment is derived from keynes s chapter 3 1936a the principle of effective demand where labour hire demand is derived from an effective demand point determined in the product markets 1 tobin 1992 p 392 states this chapter is the most important innovation of the general theory the effective demand principle means that there is an employment function keynes 1936a chapter 20 relating alternate labour hire decisions to alternate points of effective demand there is no aggregate demand for labour schedule with the real wage as the independent variable davidson 1983

executive constraint political stability and economic growth previous studies have argued that democracy diminishes the extent to which leadership contests depress economic growth by reducing the violence and uncertainty attendant on such contests we recon

did steve forbes scare the us municipal bond market abstract this paper investigates the relationship of the daily spread between taxable and municipal securities to a daily indicator of the likelihood of a tax reform that would eliminate the preference now accorded to municipal securities the flat tax the probability of tax reform is proxied by the market price of the shares of steve forbes a champion of the flat tax in the iowa electronic market we find evidence that the indicator of tax reform s prospects was correlated with a decline in the spread on five and ten year maturity bonds although not for 30 year maturity bonds the correlations do not however survive in first difference form suggesting either that forbes prospects did not immediately affect expectations of future tax policy that the correlations are coincidental rather than causal or that the decreased signal to noise ratio obscures a real but small causal relationship

committee assignments constituent preferences and campaign contributions committee assignments constituent preferences and campaign constributions the familiar economic model of regulation as developed by stigler 1971 peltzman 1976 and becker 1983 posits an essentially frictionless market process for regulatory policy formation in which a single regulator legislator chooses policy to maximize net support from competing groups in this paper we extend the supply side of this model by considering the effect of legislative institutions and unorganized constituent preferences on the ability of incumbents in the house of representatives to serve specific interest groups we then test this formulation by examining the recent history of interest group campaign contributions to these legislators our theoretical model concentrates on how a legislator allocates time between serving specific interest groups outside his district and serving his constituency we do not model interest group decisions directly assuming simply that they purchase their desired amount of service from the lowest cost suppliers our model sorts legislators by the supply price at which they can serve a particular group this price depends on the preferences of the voters in the legislators district and the productivity of the legislator in producing policy service for each group 1 the empirical section tests the model by examining the pattern of interest group campaign contributions to house incumbents from 1978 through 1984 our regression analysis tends to confirm both implications of the theory first the pattern of campaign contributions from specific interest groups to legislators is shaped by the division of substantive legislative and regulatory jurisdictions represented by the system of house standing committees second voter preferences influence the pattern of contributions by affecting the supply price at which a legislator can offer policy to interest groups legislators with sympathetic or indifferent constituencies are able to offer a lower price and are therefore able to attract larger sums than those with hostile constituencies these results are important for two reasons first the influence of congressional institutions such as committees on policy is not widely accepted while several studies faith levins and tollison 1982 weingast and moran 1983 weingast 1984 grier 1989 and robert 1990 have documented the effects of changes in a particular committee on policies under its jurisdiction this work considers the jurisdiction of only a single committee in each case 2 by examining the linkages between congressional committees and political action committees pacs we investigate whether interest groups act as if committees have power second while the chicago model of regulation emphasizes correctly in our view that policy is the result of vote maximizing calculations and the incremental balancing nature of any equilibrium the model is imprecise about which sets of preferences are most important in determining the levels of policy or the size of changes in policies focusing on committees promotes a parsimonious specification of both the political players members of the relevant committee rather than the entire congress and the pivotal voters committee members constituencies more than the nation determining specific policy outcomes the paper is organized as follows section i reviews some issues on the nature and sources of committee influence in the u s congress the second section incorporates committee assignments into a theory of decision making by interest group investors sections iii and iv describe our data and estimation technique and present the empirical results the fifth and final section discusses some implications and conclusions of this research i committee power in congress legislators differ substantively by virtue of their committee assignments committees in congress and particularly in the house of representatives possess disproportionate power over the policy areas in their respective jurisdictions have the right to hold hearings and recommend budget allocations for the bureaus in their jurisdiction goodwin 1970

how elastic is the government s demand for weapons abstract we estimate the elasticity of the government s demand for specific weapons by econometric analysis of the relationship between quantity and cost revisions across the population of major weapon systems the cost revisions are due in part to technological information generated in the course of research and development the elasticity of demand is 0 55 and is significantly different from both zero and unity thus the government s demand for specific weapons is inelastic but not perfectly inelastic weapons acquisition is evidently characterized by increasing returns the elasticity of total cost with respect to quantity is about 0 75

the economic value of military connections in turkey can financial connections to the military provide economic value in democratic environments we address this question by studying whether firms in which the turkish military had a controlling financial interest earned abnormally high stock returns on the istanbul stock exchange our findings from event studies are that this is indeed the case we infer that militaries can retain substantial power to influence economic policy from behind the scenes even after formally transferring it to democratically elected leaders the paper contributes to the literature in public choice by demonstrating econometrically that the military can be a major rent seeking actor even in democratic environments

institution shocks and economic outcomes allende s election pinochet s coup and the santiago stock market abstract to study the effect of political and institutional changes on the economy we look at share prices in the santiago exchange during the tumultuous political events that characterized chile in the early 1970s we use a transparent empirical strategy deploying previously unused daily data and exploiting two largely unexpected shocks which involved substantial variation in policies and institutions providing a rare natural experiment allende s election and subsequent socialist experiment decreased share values while the military coup and dictatorship that replaced him boosted them in both cases by magnitudes unprecedented in the literature the most parsimonious interpretation of these share price changes is that they reflected respectively the perceived threat to private ownership of the means of production under a socialist government and its subsequent reversal

mps for sale returns to office in postwar british politics many recent studies show that firms profit from connections to influential politicians but less is known about how much politicians financially benefit from wielding political influence we estimate the returns to serving in parliament using original data on the estates of recently deceased british politicians applying both matching and a regression discontinuity design to compare members of parliament mps with parliamentary candidates who narrowly lost we find that serving in office almost doubled the wealth of conservative mps but had no discernible financial benefits for labour mps conservative mps profited from office largely through lucrative outside employment they acquired as a result of their political positions we show that gaining a seat in parliament more than tripled the probability that a conservative politician would later serve as a director of a publicly traded firm enough to account for a sizable portion of the wealth differential we suggest that labour mps did not profit from office largely because trade unions collectively exerted sufficient control over the party and its mps to prevent members from selling their services to other clients

credibility and policy convergence in a two party system with rational voters the traditional approach to modeling political parties behavior based upon the contribution of anthony downs 1957 assumes that the parties unique objective is to win elections thus they maximize their popularity the crucial implication of this assumption for a two party system is that if the two parties have the same information about voters preferences full convergence of policies results from electoral competition this is the crucial implication of the median voter theorem more generally it may be argued that different parties are motivated differently because they represent different constituencies parties may not care only about winning elections per se but also about the quality of the policies resulting from an election in this case the candidates of the two parties view winning an election not only as a goal per se but also as a means of implementing a better policy for their respective constituencies this paper shows that electoral competitions imply dynamic inconsistency if the voters are modeled as rational and forwardlooking agents and parties do not care exclusively about being elected but also about which policy to implement once elected the dynamic inconsistency arises as follows the parties have an incentive to announce convergent platforms to increase their chances of election however if the elected party is not committed to its electoral platform it has an incentive to follow its most preferred policy rather than the policy announced in its platform if voters are rational they account for this incentive thus in general in a one shot electoral game the only timeconsistent equilibrium is one in which no convergence is possible the two parties follow their most preferred policies and the voters rationally expect this outcome full convergence of parties platforms results only as a limiting case when the parties are completely indifferent with respect to the quality of the policies resulting from the election thus these results differ from the existing literature on ideologically motivated politicians for instance donald wittman 1977 1983 randall calvert 1985 which implicitly assumes the possibility of binding commitments to electoral platforms complete or partial policy convergence can be the outcome of political competition if the interaction between the parties and the voters is modeled as an infinitely repeated game in fact if the candidates have concave objective functions the welfare maximizing policy rule implies a complete convergence of parties policies however this cooperative and agreed upon policy may or may not be sustainable as a subgame perfect equilibrium depending on parameter values in particular it depends on the discount rates of the two parties the degree of polarization of their preferences and the relative popu graduate school of industrial administration carnegie mellon university pittsburgh pa 15213 and national bureau of economic research cambridge ma 02138 this paper is based upon a chapter of my unpublished doctoral dissertation at harvard university i am greatly indebted to jeffrey sachs for directing my attention toward these issues and for many conversations i also wish to thank andrew abel dilip abreu olivier blanchard ramon caminal andrew caplin alex cukierman morris fiorina benjamin friedman herschel grossman howard rosenthal and the referees for very useful comments the responsibilitv af anv n mtnkieis af calrirp nfnlv mine the result of policy convergence in a two party system is more general than the median voter theorem for discussions of convergence results not at the median see john ledyard 1984 peter coughlin 1984 coughlin and shmuel nitzan 1981 melvin hinich 1977 for earlier work on spatial competition see richard mckelvey 1975 hinich ledyard and peter ordeshook 1972 1973 and the references quoted therein the present paper focuses on the result of convergence rather than on the median voter theorem per se

coups corporations and classified information we estimate the impact of coups and top secret coup authorizations on asset prices of partially nationalized multinational companies that stood to benefit from u s backed coups stock returns of highly exposed firms reacted to coup authorizations classified as top secret the average cumulative abnormal return to a coup authorization was 9 over 4 days for a fully nationalized company rising to more than 13 over 16 days precoup authorizations accounted for a larger share of stock price increases than the actual coup events themselves there is no effect in the case of the widely publicized poorly executed cuban operations consistent with abnormal returns to coup authorizations reflecting credible private information we also introduce two new intuitive and easy to implement nonparametric tests that do not rely on asymptotic justifications

economic efficiency in farm households trends explanatory factors and estimation methods factors explaining differences in economic efficiency between farms are of major interest to owners managers and other stakeholders as they strive to improve earnings and improve the chances of firm survival this study is undertaken to improve our understanding of interfarm differences in and opportunities to improve farm household efficiency in utilizing their land labor and capital resources to achieve household objectives the technical allocative and scale efficiencies of farm households are estimated using a nonparametric output based data envelopment analysis dea of a panel data set from 1993 to 2006 single and double bootstrapping procedures are used to estimate technical efficiency initial technical efficiency assuming variable returns to scale tev is estimated to be 0 83 using single bootstrapping the average bias corrected tev estimate is 0 70 using double bootstrapping the tev estimate is 0 72 allocative efficiency is estimated to be 0 81 scale efficiency is estimated to be 0 93 the only factor that is consistently associated with higher technical efficiency across analysis methods and years is larger farm size as measured by the log of farm income the significance of other factors changes with analysis methods

an application of the dea double bootstrap to examine sources of efficiency in bangladesh rice farming in this article we examine sources of technical efficiency for rice farming in bangladesh the motivation for the analysis is the need to close the rice yield gap to enable food security we employ the dea double bootstrap of simar and wilson 2007 to estimate and explain technical efficiency this technique overcomes severe limitations inherent in using the two stage dea approach commonly employed in the efficiency literature from a policy perspective our results show that potential efficiency gains to reduce the yield gap are greater than previously found statistically positive influences on technical efficiency are education extension and credit with age being a negative influence

value of corruption in china evidence from anti corruption investigation abstract using recent anti corruption investigation in china we show that chinese listed firms suffered an aggregate loss of usd 30 billion in firm value due to corruption furthermore we show that anti corruption investigation is more effective when top officials are targeted

how does corporate political activity allowed by citizens united v federal election commission affect shareholder wealth abstractthe us supreme court case citizens united v federal election commission significantly altered the regulatory landscape for corporate political activity by permitting unlimited corporate expenditures by independent politically active groups this paper uses that event to determine the impact of corporate political activity on the stock prices of those firms that are most likely to utilize these new opportunities for political engagement our findings show that corporate political activity enhances shareholder wealth particularly in firms that are small to medium sized firms that spend relatively less on lobbying and firms operating in more heavily regulated industries

radio and the rise of the nazis in prewar germany how far can the media protect or undermine democratic institutions in unconsolidated democracies and how persuasive can they be in ensuring public support for dictator s policies we study this question in the context of germany between 1929 and 1939 using geographical and temporal variation in radio availability we show that radio had a significant negative effect on the nazi electoral support between 1929 and 1932 when political news were slanted against nazi party this effect was reversed in just 5 weeks following hitler s appointment as chancellor and the transfer of control of the radio to the nazis pro nazi radio propaganda caused higher vote for the nazis in march 1933 election after full consolidation of power radio propaganda helped the nazis to enroll new party members and encouraged denunciations of jews and other open expressions of anti semitism the effect of nazi propaganda was not uniform depending on listeners priors about the message propaganda could be very effective or could backfire nazi radio was most effective in places where anti semitism was historically high and had a negative effect on the support for anti semitic policies in places with historically low anti semitism

the economics of the profit rate competition crises and historical tendencies in capitalism part 1 the profit rate the economics of the profit rate a summary definitions and measures of the profit rate part 2 competition and prices of production prices of production long term equilibrium in classical and walrasian models the classical analysis of competition convergence part 3 general disequilibrium a general disequilibrium model development of the basic model proportions and dimension in the short and long terms out of the mainstream part 4 stability and business fluctuations the real and monetary determinants of macro in stability the impact of the profit rate on the macroeconomy business fluctuations in other paradigms part 5 technology and distribution a historical perspective the historical profile of the profit rate historical tendencies accumulation and growth profitability trends part 6 history profitability and management a chronological overview the historical dynamics of capitalism

capitalization of capital gains taxes evidence from stock price reactions to the 1997 rate reduction abstract we empirically document that stock prices moved inversely with dividend yields during the may 1997 week when the white house and congress agreed on a budget accord that included a reduction in the capital gains tax rate the findings are consistent with equity prices capitalizing expected capital gains taxes two scenarios are possible first to the extent returns are expected to be taxed as capital gains a reduction in the expected capital gains tax rate enhances market value second to the extent individuals hold a stock a reduction in the expected personal capital gains tax rate increases market value

friends with benefits how political connections help to sustain private enterprise growth in china by analysing data from a survey of 511 chinese private enterprises we find that their owners respond to government discrimination by developing political connections with government officials a one standard deviation increase in the insecurity of property rights has the effect of increasing the number of friends in the government by a substantial 22 these friends significantly help to mitigate by half the negative effect arising from the difficulties of obtaining land and excessive regulations on enterprise growth this explains why an institutional environment of weak property rights has not stopped private enterprises in china from developing rapidly

us presidential elections and implied volatility the role of political uncertainty abstract this paper focuses on the effects of political uncertainty and the political process on implied stock market volatility during us presidential election cycles using monthly iowa electronic markets data over five elections we document that stock market uncertainty as measured by the vix volatility index increases along with positive changes in the probability of success of the eventual winner the association between implied volatility and the election probability of the eventual winner is positive even after controlling for changes in overall election uncertainty these findings indicate that the presidential election process engenders market anxiety as investors form and revise their expectations regarding future macroeconomic policy

aggregate demand conflict and capacity in the inflationary process this paper focuses on an alternative perspective on inflation to that of the non accelerating inflation rate of unemployment nairu it indicates that there are no automatic forces leading to a level of aggregate demand consistent with constant inflation inflationary pressures arise from conflict over income shares and from cost elements with the price of raw materials especially oil being the most important there are supply side factors impinging on the inflationary process which arise from the level of productive capacity relative to aggregate demand the supply side constraints are viewed as arising from capacity constraints rather than from the operation of the labour market copyright 2005 oxford university press

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

high level politically connected firms corruption and analyst forecast accuracy around the world the international business ib literature has widely recognized political forces as major factors that complicate the strategic decisions of multinational enterprises mnes analyses by financial intermediaries can help to reduce the risk of information asymmetry caused by such factors using firm level data from 17 jurisdictions between 1997 and 2001 this study investigates the association between a firm s high level political connections and earnings forecasts made by financial analysts an important group of financial intermediaries we find that after controlling for other determinants of forecast accuracy analysts experience greater difficulty in predicting the earnings of firms with political connections than those of firms with no such connections however in jurisdictions in which corruption level is relatively high earnings forecast accuracy is influenced more by a firm s political connections our findings contribute to the ib literature by demonstrating that political connections exacerbate the information asymmetry between investors and managers and also that anti corruption measures can curb the adverse effect of political connections on the corporate information environment these findings bear the practical implication that mnes must consider political issues when making resource allocation decisions

rise and fall in the third reich social advancement and nazi membership abstract we explore the relationship between nazi membership and social advancement using a unique and highly detailed dataset of the german military during the third reich we find that membership of a nazi organisation is positively related to social advancement when measured by the difference between fathers and sons occupations however we find that this observed difference is mainly driven by individuals with different characteristics self selecting into these organisations rather than from a direct reward to membership this result is supported by an instrumental variable approach that uses the location of catholic priests sympathetic to the nazis as an instrument for nazi membership in addition we explore the determinants of nazi membership we find that ns membership is associated with higher socio economic background and human capital levels in line with occupational choice models of radicalisation

the jeffords effect abstract in may 2001 senator james jeffords left the republican party and tipped control of the u s senate to the democrats this paper uses the surprise event to demonstrate what i term the jeffords effect changes in the political landscape have large effects on the market value of firms i use a firm s soft money donations to the national parties as the measure of how the firm aligns itself politically in this event study a firm lost 8 percent of market capitalization the week of jeffords s switch for every 250 000 it gave to the republicans in the previous election cycle on the basis of the point estimates the stock price gain associated with democratic donations is smaller than the loss associated with republican donations but the estimates are consistent with the effects being equal and opposite the results withstand several robustness checks and the effects appear to persist over time

law enforcement and political participation italy 1861 65 abstract does tougher law enforcement positively affect political participation this paper addresses this question which hinges upon the causal impact of formal institutions on informal ones by using a historical event from 19th century italy this event was the pica law which was introduced in 1863 to fight a surge of criminal violence in southern italy and to ensure a safer environment for wealthy people the only ones allowed to vote at that time our main finding obtained using a spatial regression discontinuity technique in a diff in diffs framework is that voter turnout greatly increased in those areas where the pica law was applied compared with bordering and otherwise similar areas this result is confirmed by a number of robustness checks and placebo exercises and turns out to be persistent over time

busting the princelings the campaign against corruption in china s primary land market using data on over a million land transactions during 2004 2016 where local governments are the sole seller we find that firms linked to members of china s supreme political elites the politburo obtained a price discount ranging from 55 4 to 59 9 compared with those without the same connections these firms also purchased slightly more land in return the provincial party secretaries who provided the discount to these princeling firms are 23 4 more likely to be promoted to positions of national leadership to curb corruption president xi jinping stepped up investigations and strengthened personnel control at the province level using a spatially matched sample e g within a 500 meter radius we find a reduction in corruption of between 42 6 and 31 5 in the provinces either targeted by the central inspection teams or whose party secretary was replaced by one appointed by xi accordingly this crackdown on corruption has also significantly reduced the promotional prospects of those local officials who rely on supplying a discount to get ahead

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

do political factors affect stock returns during presidential elections abstract this study investigates whether or not political factors such as government policy and political connections affected stock returns during the 2008 taiwanese presidential election we find that firms that benefitted from were threatened by the proposed three links policy of the winning party experienced positive negative stock returns during the election we use the sensitivities of firms returns to bilateral trade flows between taiwan and china to measure the government policy effect our results show that the effects of political connections weakly exist but they become more significant when the support ratio of the winning party increased in polling data we also find that only the government policy effect holds for different crash risk and corporate governance levels finally investment strategies based on both political factors can generate positive abnormal returns with respect to the fama french three factor model

do lenders favor politically connected firms rent provision in an emerging financial market corruption by the politically connected is often blamed for economic ills particularly in less developed economies using a loan level data set of more than 90 000 rms that represents the universe of corporate lending in pakistan between 1996 and 2002 we investigate rents to politically connected rms in banking classifying a rm as political if its director participates in an election we examine the extent nature and economic costs of political rent provision we nd that political rms borrow 45 percent more and have 50 percent higher default rates such preferential treatment occurs exclusively in government banks private banks provide no

market deregulation trade liberalization and productive efficiency in bangladesh agriculture an empirical analysis the impact of trade liberalization and of market deregulation in general on the performance of agriculture remains contentious and empirical issue in the literature following the random coefficient frontier modelling framework this paper attempts to contribute to this debate by computing the farm specific productive efficiency indices in bangladesh agriculture before and after reform it also examines the impact of some farm specific and policy variables on productive efficiency the empirical results show that there are wide variations in productive efficiency across farms and regions and the average efficiency of all regions increased modestly by 8 percentage points from the pre reform to post reform period the efficiency differentials are largely explained by farm size infrastructure households off farm income and the reduction of government anti agricultural bias in relation to trade and domestic policies the implication of these results suggests the need for further policy reform to augment p

the effects of media slant on firm behavior abstract the media can impose reputational costs on firms because of its important role as an information intermediary and its ability to negatively slant coverage we exploit a quasi natural experiment that holds constant the information event across firms but varies the availability of a major news outlet in local markets we find that firms subject to the threat of slanted coverage suppress the release of negative information before the event and release it subsequently our results are consistent with theory on the active role firms can play in managing their reputational capital through anticipatory actions to avoid negative media coverage

a generalized production frontier approach for estimating determinants of inefficiency in u s dairy farms this article investigates farm level efficiency of u s dairy farmers by estimating their technical and allocative efficiency technical inefficiency is assumed to be composed of a deterministic component that is a function of some farm specific characteristics and a random component by doing this we extend the stochastic frontier methodology in which determinants of technicial inefficiency are explicitly introduced in the model given the inputs variations in efficiency of farms are then explained by both deterministic and random components of technical inefficiency the empirical results indicate that a levels of education of the farmer are important factors determining technical inefficiency and b large farms are more efficient technically than small and medium sized farms both technical and allocative inefficiency are found to decrease with increase in the level of education of the farmer

hidden protectionism evidence from non tariff barriers to trade in the united states abstract can the enforcement of product standards be protectionism in disguise this paper estimates the costs of non compliance with u s product standards using a new database on u s import refusals from 2002 to 2014 we find that import refusals decrease exports to the united states this trade reducing effect is driven by developing countries and by refusals without any product sample analysis in particular during the subprime crisis and its aftermath we also provide evidence that given product standards were enforced more strictly during the crisis while the quality of imported products did not deteriorate these results are consistent with the existence of counter cyclical hidden protectionism due to non tariff barriers to trade in the united states

bad news from the front and from above bombing raids military fatalities and the death penalty in nazi germany we examine how the decision making of political elites respond to an imminent external threat to the existence of the state in times of war to do so we exploit exogeneous variation in exposure to battle deaths and bombing raids to estimate the effect of variation in the intensity of war on the probability that individuals charged with treason and or high treason in nazi germany received the death sentence a doubling of the number of military fatalities as well as bombing raids in the same week in which a defendant was sentenced increased the likelihood of receiving the death penalty by about 10 percentage points jel k14 n44

party connections interest groups and the slow diffusion of infrastructure evidence from britain s first transport revolution economic and political interests often block or delay infrastructure improvements this paper examines their effects by studying britain s river navigation improvements in the early 1700s a subject of intense lobbying in parliament it shows that stronger party connections and influence in neighboring areas likely to oppose or support projects affected whether a town got a river navigation act their estimated effects are comparable to geography and town economic characteristics in magnitude and help explain whether towns were blocked from getting navigation improvements the findings address institutions following the glorious revolution and broader issues concerning infrastructure technology diffusion and political connections this article is protected by copyright all rights reserved

measuring and explaining scale efficiency with the parametric approach the case of greek tobacco growers estimates of technical and scale inefficiencies of tobacco farms in greece during the period 1991 1995 are obtained by using the parametric approach the degree of technical efficiency was found to be lower than the degree of scale efficiency and thus a greater portion of overall inefficiency is due to producing below the production frontier than to producing at an inefficient scale in addition the vast majority of farms in the sample exhibited suboptimal scale implying that output should be expanded to reach the optimal scale empirical results are provided to determine the impact of various socioeconomic demographic and geoclimatic indicators on technical and scale efficiency

competition policy rivalries and defense industry consolidation declining outlays for new weapons programs have triggered a process of consolidation that promises to shrink the u s defense industry drastically consolidation in the defense industry raises complex competition policy issues that are not amenable to conventional antitrust merger analysis this paper presents a framework for identifying important contractor competencies assessing rivalries in defense industry segments and evaluating the competitive effects of mergers and other consolidation events as applied to antitrust oversight and to department of defense funding program and acquisition strategy decisions this framework can help preserve supply alternatives for developing state of the art weapons needed to satisfy national security requirements

political power economic freedom and congress effects on bank performance abstract this paper studies the linkages between bank performance connections to powerful politicians and the degree of economic freedom in a bank s home state we find that bank performance is positively related to state economic freedom we also reconfirm the finding of gropper et al 2013 that bank performance is improved by political connections however the positive effect of political connections appears to be significantly reduced when there is a higher degree of economic freedom in the state indicating that political connections may matter less to banks when there is more economic freedom economic freedom in a state can have a beneficial effect on state economic growth and hence may outweigh any political connection benefits however the declines in state economic freedom in recent years could make political connections potentially more valuable to banks

rigidities through flexibility flexible labour and the rise of management bureaucracies judging from organisation level survey data we find that organisations employing high shares of flexible workers have higher shares of managers in their personnel this is in line with earlier findings that anglo saxon countries with deregulated labour markets have thicker management bureaucracies than countries with more regulated labour markets of the rhineland style we argue that flexibility in labour markets i e easier firing and higher labour turnover damages trust loyalty and commitment this requires more management and control related research suggests that easy hire and fire is at the cost of organisational learning knowledge accumulation and knowledge sharing thus damaging innovation and labour productivity growth

the value of the revolving door political appointees and the stock market abstract we analyze stock market reactions to announcements of political appointments from the private sector and corporate appointments of former government officials using unique data on corporate affiliations and announcements of all senate confirmed u s defense department appointees of six administrations we find positive abnormal returns for political appointments these estimates are not driven by important observations volatile stocks industry wide developments or the omission of further commonly used return predictors placebo events for close competitors and alternative dates yield no effects effects are larger for top government positions and less anticipated announcements we also find positive abnormal returns for corporate appointments and positive effects of political connections on procurement volume our results suggest that concerns over conflicts of interest created by the revolving door seem justified even in a country with strong institutions

trading and voting complete financial markets transform the political choice between candidates with different redistribution policies if redistribution policies do not affect aggregate wealth then financial trade implies that wealth considerations have no effect on voting and so do not affect who wins however an election in which one candidate would redistribute results in redistribution and redistribution is the same whether or not he wins furthermore he proposes and if elected carries out more redistribution than he prefers if redistribution policies do affect aggregate wealth then everybody expects more wealth if the candidate with the higher aggregate wealth policy wins

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

frontier production functions and technical efficiency a survey of empirical applications in agricultural economics abstract the modelling and estimation of frontier production functions has been an important area of econometric research during the last two decades forsund lovell and schmidt 1980 and schmidt 1986 present reviews of the concepts and models involved and cite some of the empirical applications which had appeared to their respective times of publication this paper seeks to update the econometric modelling of frontier production functions associated with the estimation of technical efficiency of individual firms a survey of empirical applications in agricultural economics is an important part of the paper

politicians payments in a proportional party system abstract are there monetary returns to politics this question is approached in this paper as one of few to quantify the monetary returns to holding political office in a country with proportional representation system i apply a difference in difference setting with a carefully chosen control group to rich data on candidates to the swedish national parliament both short and long run effects of being elected on different types of income are estimated results show that yes mostly thanks to relatively high remuneration while still in office politics can yield positive monetary returns in the long run however the effect is instead compositional in the sense that ex politicians receive more pension income and work less

partisan impacts on the economy evidence from prediction markets and close elections analyses of the effects of election outcomes on the economy have been hampered by the problem that economic outcomes also influence elections we sidestep these problems by analyzing movements in economic indicators caused by clearly exogenous changes in expectations about the likely winner during election day analyzing high frequency financial fluctuations following the release of flawed exit poll data on election day 2004 and then during the vote count we find that markets anticipated higher equity prices interest rates and oil prices and a stronger dollar under a george w bush presidency than under john kerry a similar republican democrat differential was also observed for the 2000 bush gore contest prediction market based analyses of all presidential elections since 1880 also reveal a similar pattern of partisan impacts suggesting that electing a republican president raises equity valuations by 2 3 percent and that since ronald reagan republican presidents have tended to raise bond yields

political connections and the process of going public evidence from china abstract we examine how political connections impact the process of going public specifically we test how political connections impact the pricing of the newly offered shares the magnitude of underpricing and the fixed cost of going public based on the experience of the newly public firms from chinese security markets and using multiple measures of political connections we find robust evidence that the issuing firms with political connections reap significant preferential benefits in the process of going public to be specific we find that firms irrespective of their ownership status with greater political connections have relatively higher offering price lower underpricing and lower fixed costs during the going public process

historical presidential betting markets this paper analyzes the large and often well organized markets for betting on u s presidential elections that operated between 1868 and 1940 four main points are addressed first we show that the market did a remarkable job forecasting elections in an era before scientific polling second the market was fairly efficient despite the limited information of participants and active attempts to manipulate the odds third we argue political betting markets disappeared largely because of the rise of scientific polls and the increasing availability of other forms of gambling finally we discuss lessons this experience provides for the present

unemployment and the real wage the economic basis for contesting political ideologies using the keynesian theory of effective demand this paper demonstrates how particular models such as that of cooperative capitalism enunciated by the left keynesian social democrats the marxian model of profit squeeze emphasizing distributive conflict and even the conservative model relying on supply side stimulus fit in as particular variants of a more general theoretical scheme through a reconstruction of the familiar is schedule the argument is weaved around the theme of the relations between unemployment and real wage in the context of both a closed and an open economy to explain the common macroeconomic basis of contesting ideologies copyright 1990 by oxford university press

peer effects in science evidence from the dismissal of scientists in nazi germany this paper analyses peer effects among university scientists specifically it investigates whether the quality and the number of peers affect the productivity of researchers in physics chemistry and mathematics the usual endogeneity problems related to estimating peer effects are addressed by using the dismissal of scientists by the nazi government in 1933 as a source of exogenous variation in the peer group of scientists staying in germany to investigate localized peer effects i construct a new panel data set covering the universe of scientists at the german universities from 1925 to 1938 from historical sources i find no evidence for peer effects at the local level even very high quality scientists do not affect the productivity of their local peers

do institutions affect citizens selection into politics traditional political economy has paid primary attention to the structuring of the principal agent relationship between citizens and politicians and the role of competition and institutions in disciplining political agents however as the electoral control of politicians and the credibility of policy commitments are limited this perspective needs to be complemented with an economics of political selection that takes into account the quality of those elected to political office we review the emerging literature which investigates institutional conditions that impact the selection of politicians we discuss pay in politics electoral rules institutions enhancing transparency in politics and institutions which govern dual office holding in different branches of government we argue that further comparative analyses are essential in order to gain an improved understanding of the impact that institutions have on political outcomes not only via the channel of accountability but also via the channel of selection

elections and political risk new evidence from the 2008 taiwanese presidential election abstract we examine the effects of party platforms on the economic opportunities of firms using a unique data set from a political prediction market in taiwan a country with two dominant parties whose political cleavage derives mainly from a single issue the one china principle we find that during the 2008 presidential campaign the share price of taiwanese firms with investments in the mainland responded strongly and positively to a positive electoral outlook for the kmt the party which advocates lifting caps on cross strait investment in mainland china the response is strongest for those firms who have already hit their caps

impacts of trade liberalizations under the uruguay round on the world sugar market the impacts of the uruguay round policy provisions on the world sugar market show that these policies will stabilize the world sugar price at slightly higher levels than in the baseline global sugar consumption will increase as a result of the income growth caused by the uruguay round economic resources will be allocated more efficiently among the sugar industries of the various countries however the impacts on the sugar industries in countries with strong producer supports will be rather small because the negotiation process of the uruguay round has accommodated the changes in sugar policies already implemented by individual countries in the past few years low cost sugar producing countries will benefit from the higher world sugar price and consumers in countries with protected markets will benefit from lower domestic prices

measuring technical efficiency and productivity growth a comparison of sfa and dea on norwegian grain production data this article compares data envelopment analysis and stochastic frontier analysis to assess efficiency and productivity growth of norwegian grain producers previous studies have dealt with either one of them and less of both for the assessment of productivity growth or regress malmquist productivity indices are derived from both approaches the data cover a 10 year period we find consistency between the approaches to the extent that 1 there are potentials for efficiency improvements but the magnitudes depends on the model applied and by segmentation of the data set 2 there has been a productivity improvement in the sector on average in the interval 30 38 in the period studied and 3 technical change has had the greatest impact on productivity indicating that producers have a tendency to catch up with the front runners in general policy makers are warned not to be indifferent with respect to the approach used for efficiency and productivity measurement as these may give different results

revolving door lobbyists we study how ex government ocials benet from the personal connections acquired during public service lobbyists with experience in the oce of a us senator suer a 24 drop in generated revenue when that senator leaves oce the eect is immediate discontinuous around the exit period and long lasting consistent with the notion that lobbyists sell access to powerful politicians the drop in revenue is increasing in the committee assignments power held by the exiting politician

event studies in economics and finance the event study is an important research tool in economics and finance the goal of an event study is to measure the effects of an economic event on the value of firms event study methods exploit the fact that given rationality in the marketplace the effects of an event will be reflected immediately in security prices thus the impact can be measured by examining security prices surrounding the event in this paper event study methods are described including some of the potential complications an example is included to illustrate the approach

industry input in policy making evidence from medicare in setting prices for physician services medicare solicits input from a committee that evaluates proposals from industry the committee itself comprises members from industry we investigate whether this arrangement leads to regulatory capture with prices biased toward industry interests we find that increasing a measure of affiliation between the committee and proposers by one standard deviation increases prices by 10 we then evaluate whether employing a biased committee as an intermediary may nonetheless be desirable if greater affiliation allows the committee to extract information needed for regulation we find industry proposers more affiliated with the committee produce less hard evidence in their proposals however on soft information we find evidence of a trade off private insurers set prices that more closely track medicare prices generated under higher affiliation