two party competition with persistent policies abstract when campaigning for reelection incumbent parties promises to voters are constrained by their records in office while opposition parties can use their time away from power to develop new platforms in this paper i introduce incumbent policy persistence in a dynamic game of electoral competition between two policy motivated parties and characterise the long run outcomes of its markov perfect equilibria incumbents reduced policy flexibility leads to alternation in power and policy dynamics that converge to alternations at policies equally preferred by the median voter convergence of policies towards the median is a robust equilibrium outcome while convergence to the median is not while alternations far from the median are never limits of equilibrium dynamics alternations close to the median can be reached only if policy dynamics start exactly there i show that these results are robust to voters being forward looking and to limited policy commitment by parties

the impact of campaign expenditures on political competition in the french legislative elections of 1993 we use regression analysis to estimate the effect that campaign money had on the votes of challengers and incumbents in the 1993 elections to the french legislative assembly incumbent candidates can at best expect to win 1 01 of the popular vote for each extra franc they spend per registered voter in their district challengers can expect to win at least twice as much as this simulations show that if campaign spending ceilings were halved incumbents would have gained an extra ten percent of the popular vote over their closest challenging rivals the regression analysis also suggests that voters react negatively to candidates who rely heavily on their own money for their outlays and reward candidates who rely on contributions from private individuals these results suggest that campaign spending ceilings may inhibit political competition and that voters may resist a candidate who relies on narrow sources of funding

party system institutionalization and government formation in new democracies party systems provide the essential structure of the coalition bargaining environment stability in party systems ensures the presence of regularities that can be observed in government formation but most empirical research focuses on established democracies in new democracies party systems are less institutionalized which means that interactions between parties can be unpredictable and has significant implications for coalition formation this article presents the first study of coalition formation in new democracies that employs an empirical design comparable to that of the leading research on western europe the author uses a new data set of potential coalitions in central and eastern europe to examine three explanations for government formation that arise when party systems are weakly institutionalized the results show first that incumbency is a disadvantage for governments in new democracies when formation occurs postelection this disadvantage is due to high levels of electoral volatility caused by policy failure and clientelistic practices incumbents are advantaged when formation takes place midterm as weak party system institutionalization leads to an inchoate pattern of interaction between opposition parties which therefore fail to provide a viable alternative second the presence of former dominant parties influences government formation by stifling the development of programmatic competition instead programmatic competition is subjugated to contestation based on historical enmities and third established parties collude to exclude new parties from coalition formation a possible indicator that a party system is becoming more institutionalized the article provides new insights into the importance of routinized and stable political practices and institutions

candidate reputations and the incumbency effect abstract a major shortcoming of the classical median voter model is that its central prediction convergence of platforms to the median voter s ideal is seldom observed one reason is that the classical model neglects the importance of voter expectations as a determinant of votes here we associate voters expectations about candidates with past as well as current candidate pronouncements and assume that incumbents whose actions are consistent with their reputations are perceived as less risky than challengers in equilibrium candidates choose distinct platforms typically neither adopts the median voter s ideal point either candidate may win depending on how well the incumbent s reputation reflects current voter tastes and how relatively risky the electorate perceives the challenger to be

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

estimating the effect of campaign spending on senate election outcomes using instrumental variables o examine the traditional view that challenger spending is more effective than incumbent spending 7 i reestimate the effects of spending using instrumental variables that affect a candidate s ability to raise campaign funds such as candidate wealth levels hhen the endogeneity of candidate spending levels is properly taken into account the marginal effects of incumbent and challenger spending are roughly equal in contrast to previous research showing that because of higher marginal returns to challenger spending the incumbent s spending advantage cannot explain high incumbent reelection rates this article shows that in an average senate election the incumbent s spending advantage yields a 6 increase in the incumbent s vote share that incumbent spending wins elections has direct implications regarding the consequences of campaign finance reform my findings imply that equalizing spending levels may significantly increase incumbent defeat rates and caps on candidate spending may improve the chances of challengers in american congressional elections incumbents routinely win reelection even in the 1994 republican landslide change in the partisan makeup of congress occurred mainly through open seats switching from the democrats to the republicans a common explanation for high congressional reelection rates is the large campaign spending advantage enjoyed by incumbents it is widely believed that challenger spending is very important but there is surprisingly little evidence in the academic literature that incumbent campaign spending has an important effect on congressional election outcomes in light of the substantial effort incumbents devote to fundraising as well as some nagging methodological questions about existing academic studies the effect of incumbent spending on election outcomes remains an unresolved issue accurately measuring how incumbent spending leads to votes is of obvious importance politicians want to win elections and so if money matters then this will influence their behavior if campaign spending effects are trivial then concerns about politicians being

missed opportunities the wto trade policy review for the east african community the east african community eac comprising kenya tanzania and uganda came into force on 7 july 2000 with a common external tariff cet established in january 2005 this trade policy review tpr of the eac is timely as all three countries had implemented significant trade liberalisation since the late 1980s while the cet represented an asymmetric change kenya and tanzania essentially reduced tariffs whereas uganda increased tariffs the tpr provides considerable information on the cet and on trade and related policies in each of the member countries however the eac and the tpr missed a number of opportunities the eac included no coordinated export promotion or investment provisions while the tpr says little on the potential for intra regional trade and nor does it address the position of the eac in the economic partnership agreements epas being negotiated with the eu this review concentrates on these omissions to explore the implications of the eac for developments in trade policy in the region

decentralisation and accountability in infrastructure delivery in developing countries many developing countries are experimenting with decentralisation of public service delivery to elected local governments instead of bureaucrats appointed by a central government we study the resulting implications in a theoretical model in which the central government is uninformed about local need and unable to monitor service allocations bureaucrats charge bribes for services as monopoly providers resulting in underprovision of services especially for the poor local governments are directly responsive to their citizens needs but may be subject to capture by elites effects of decentralisation on service volumes efficiency and equity are analysed under different financing arrangements for local governments the theme of the 2004 world development report is summarised by its opening paragraph too often services fail poor people in access in quantity in quality but the fact that there are strong examples where services do work means governments and citizens can do better how by putting poor people at the center of service provision by enabling them to monitor and discipline service providers by amplifying their voice in policymaking and by strengthening the incentives for providers to serve the poor problems of accountability associated with traditional modes of delivery involving centralised bureaucracies include cost padding service diversion limited responsiveness to local needs limited access and high prices charged especially to the poor 1 many developing countries have thus begun to experiment with initiatives to increase accountability of service providers by providing greater control rights to citizen groups these include decentralisation of service delivery to local governments community participation direct transfers to households and contracting out delivery to private providers and ngos the programmes include a wide range of infrastructure services water sanitation electricity telecommunications roads and social services education health and welfare programmes countries where such trends have gathered

capture and governance at local and national levels 135 despite the importance of this issue not much systematic research appears to have been devoted to assessing the relative susceptibility of national and local governments to interestgroup capture here we describe a model of two party electoral competition with probabilistic voting behavior and lobbying by specialinterest groups based on david baron 1994 and gene grossman and elhanan helpman 1996 that helps identify determinants of relative capture at different levels of government these include relative levels of voter awareness and interest group cohesiveness electoral uncertainty electoral competition heterogeneity of districts with respect to inequality and the electoral system while some of these uphold the traditional madisonian presumption others are likely to create a tendency for lower capture at the local level so the net effect is theoretically ambiguous this suggests that the extent of relative capture may be context specific and needs to be assessed empirically

capture and ideology in the economic theory of politics the economic theory of regulation long ago put public interest theories of politics to rest these theories have correctly been viewed as normative wishings rather than explanations of real world phenomena they have been replaced by models of political behavior that are consistent with the rest of microeconomics anthony downs 1957 james buchanan and gordon tullock 1965 george stigler 1971 sam peltzman 1976 recently however debate has arisen over whether some version of a public interest theory of regulation will have to be readmitted to our thinking about actions and results in the political arena what is at issue is the empirical importance of the altruistic publicly interested goals of rational actors in determining legislative and regulatory outcomes james kau and paul rubin 1979 kalt 1981 peltzman 1982 this study assesses the nature and significance of publicly interested objectives in a particular instance of economic policymaking u s senate voting on coal strip mining regulations the existence of such objectives is of course no contradiction of the economic view of human behavior kenneth arrow 1972 gary becker 1974 and may well be rooted in genetic biological history becker 1976 jack hirshleifer 1978 generally however individuals altruistic publicly interested goals have been given little attention this reflects the judgment that such goals are so empirically unimportant as to allow the use of occam s razor in positive models or well founded apprehensions that these goals are unusually difficult to identify measure and analyze notwithstanding the latter problem we find that approaches which confine themselves to a view of political actors as narrowly egocentric maximizers explain and predict legislative outcomes poorly the tracking and dissecting of the determinants of voting on coal strip mining policy suggest that the economic theory of politics has been prematurely closed to a broader conception of political behavior

a statistical model for multiparty electoral data we propose an internally consistent and comprehensive statistical model for analyzing multiparty district level aggregate election data this model can be used to explain or predict how the geographic distribution of electoral results depends upon economic conditions neighborhood ethnic compositions campaign spending and other features of the election campaign or characteristics of the aggregate areas we also provide several new graphical representations for help in data exploration model evaluation and substantive interpretation although the model applies more generally we use it to help resolve an important controversy over the size of and trend in the electoral advantage of incumbency in great britain contrary to previous analyses which are all based on measures now known to be biased we demonstrate that the incumbency advantage is small but politically meaningful we also find that it differs substantially across the parties about half a percent for the conservatives 1 for the labor party and 3 for the liberal party and its successors also contrary to previous research we show that these effects have not grown in recent years finally we are able to estimate from which party each party s incumbency advantage is predominantly drawn

openness and wage inequality in developing countries the latin american challenge to east asian conventional wisdom the experience of east asia in the 1960s and 1970s supports the theory that greater openness to trade tends to narrow the wage gap between skilled and unskilled workers in developing countries in latin america since the mid 1980s however increased openness has widened wage differentials this conflict of evidence is probably not the result of differences between east asia and latin america instead the conflict is probably the result of differences between the 1960s and the 1980s specifically the entry of china into the world market and perhaps the advent of new technology biased against unskilled workers

competition policy for elections do campaign contribution limits matter this paper examines whether campaign contribution restrictions have consequences for election outcomes states are a natural laboratory to examine this issue we analyze elections to assemblies from 1980 to 2001 and determine whether candidates vote shares are altered by changes in state campaign contribution restrictions we find that limits on giving narrow the margin of victory of the winning candidate limits lead to closer elections for future incumbents but have less effect on the margin of victory of incumbents who passed the campaign finance legislation we also find some evidence that contribution limits increase the number of candidates in the race

constituent interest vs legislator ideology the role of political opportunity cost this paper applies the economic model of legislative voting to the automobile industry domestic content vote in the u s house of representatives in 1982 we consider constituent interests for and against the ml and compare the predictive powers of alternative indicators of ideological preferences we also examine the role of political opportunity cost and find that lame ducks were significantly less likely to vote for the bill than were returnees to congress given the political advantages of voting for the bill this is consistent with the view that legislators were influenced by the case for freer trade

industrialisation and the factor content of latin american exports of manufactures this article shows that latin american exports of manufactures that grow consistently over time arise from both traditional as well as policy induced sources of comparative advantage case studies for argentina colombia and venezuela show that manufactures originally developed for the domestic market were exported with consistent growth rates and came to represent an important proportion of total manufacturing exports the study also shows that inter country differences in the factor content of these exports reflect both differences in original resource endowments as well as the effects of industrialisation policy

closeness expenditures and turnout in the 1982 u s house elections students of elections have repeatedly found that the closeness of an election is modestly correlated with turnout this may be due to a direct response of instrumentally motivated voters but recent theoretical work casts doubt on the adequacy of this explanation another possibility is that elite actors respond to closeness with greater effort at mobilization we explore the latter possibility by using fec and state data on campaign expenditures in house senate and gubernatorial races our results indicate that closeness has an effect at both the mass and elite levels we also provide quantitative estimates of the effect of senate and gubernatorial expenditure on house turnout

money and votes reconsidered congressional elections 1972 1982 the evolution of congressional campaign finance over the past decade is characterized by steady growth in campaign spending and other notable changes in campaign finance practices the main purpose of the research reported here was to determine whether these changes have altered the effects of campaign spending on election outcomes this required reexamination of auxiliary questions concerning how sending effects operate and can be measured it also required facing the limits of what analysis of aggregate campaign spending data can tell us about money in elections replication of ols and 2sls analyses of campaign spending effects produced solidly consistent results over the six congressional elections held between 1972 and 1982 taken at face value the evidence is overwhelming that the challenger s level of spending has a strong impact on the vote whereas that of the incumbent has virtually no impact at all but the evidence remains open to doubt on two grounds one is the probable inadequacy of the 2sls model or perhaps any possible model leaving the issue of simultaneity bias unsettled if bias remains the estimates exaggerate the electoral effects of the challenger s campaign expenditures the issue cannot be resolved with more of the same data but rather requires data of a different sort surveys taken over the course of a sample of campaigns would do the trick meanwhile i think it would be foolish to make policy on the assumption that bias is in fact substantial the greatest likelihood remains that restrictions on campaign money will have the general effect of hurting challengers jacobson 1979 the other doubtful albeit equally stable finding is that incumbents do not gain votes by spending in campaigns no incumbent seems to believe it and there is at least circumstantial evidence from for example the 1982 elections that their skepticism is quite justified if so the problem lies in the limits of what aggregate data of the kind analyzed here can tell us few incumbents do not spend heavily when they are strongly challenged if both candidates spend beyond the point needed to become thoroughly familiar to voters then the substance of the campaigns the contents of campaign messages become the dominant factors incumbents may need to spend money in order to change the message as new circumstances arise to frame new issues that would help them most or damage them least to win the battle of establishing the real issues like nonincumbents sitting members may sometimes need to spend beyond a certain threshold to remain competitive but nearly all of them do so when the necessity arises so aggregate spending data are largely uninformative how the money is spent rather than how much is what matters the two most notable developments in congressional campaign finance have opposing implications national party organizations particularly the republican have assumed an increasingly important role in financing campaigns greater central control leads to a more efficient distribution of the party s collective campaign resources which among other things promises to raise the overall level of electoral competition it also leads to more coordinated campaigning with greater emphasis on national themes and programs thus it should foster more cooperation and loyalty among fellow partisans in congress but pacs have also grown in numbers and in financial importance because most concentrate on gaining access to incumbents they do little to make elections more competitive because they usually pursue narrowly defined interests their influence fragments the congress and weakens party coalitions in this and other ways parties and pacs are natural rivals the most consequential decisions taken in the next round in campaign finance policy will be those which affect the relative importance of parties and pacs see u s congress 1984 for comments on this and other current campaign finance issues

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

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

trade policy in burundi reform without political stability this paper evaluates burundi s progress with trade policy reform by comparing earlier analyses of burundi s trade policies undertaken in the 1980s with that of the wto s recent trade policy review since the mid 1980s burundi has been trying to reform its trade and macroeconomic policies against the background of continuous socio political tensions and periodic outbreaks of violent tribal conflict a then and now comparison allows us to assess both the extent of the trade reforms and of the economic return to those reforms it is evident that there has been a significant rationalisation and simplification of trade policy burundi has eliminated most quantitative import restrictions and reduced the average level and range of its tariffs the scope for allocative distortions undesirable redistributive effects and for impediments to investment and growth has been substantially reduced however a return to reform in terms of export growth or diversification and of overall economic growth is not discernible yet this is unsurprising given the scale of the economic disruption sustained socio political stability among other things will be required to induce the investment in human and physical capital needed for a positive return to trade policy reform

equilibria in campaign spending games theory and data we present a formal game theoretic model to explain the simultaneity problem that makes it difficult to obtain unbiased estimates of the effects of both incumbent and challenger spending in u s house elections the model predicts a particular form of correlation between the expected closeness of the race and the level of spending by both candidates which implies that the simultaneity problem should not be present in close races and should be progressively more severe in the range of safe races that are empirically observed this is confirmed by comparing simple ols regression of races that are expected to be close with races that are not using house incumbent races spanning two decades

decentralizing antipoverty program delivery in developing countries we study the effects on accountability in government service delivery of decentralizing administration of an antipoverty program while governments at both central and local levels are vulnerable to antipoor policy biases owing to political capture centralized delivery systems are additionally prone to bureaucratic corruption owing to problems in monitoring bureaucratic performance decentralizing the delivery system promotes cost effectiveness and improves intraregional targeting at low program scales but interregional targeting may deteriorate as central grants to high poverty regions shrink owing to high capture of local governments by local elites in such regions

do special economic zones induce developmental spillovers evidence from india s states abstract do special economic zones induce local development research drawing on the case of china s special economic zones suggests that subnational polities can target the location of export zones in order to catalyze local and regional socioeconomic development since 2006 a number of indian states have pushed forward similar zones in the face of accusations of land grabbing arguing that the zones will be engines for improvement in exports employment and infrastructure i argue that local development spillovers are an important albeit previously understudied dimension by which to evaluate the effects of special economic zones i then present the first systematic analysis of the developmental effects of india s sezs leveraging an original dataset on their locations together with 2001 and 2011 census data containing a host of social and economic developmental variables the findings show these sezs have failed to bring about local socioeconomic development to explain this absence of developmental spillovers i provide a theoretical framework based on the crucial role of political economy incentive structures facing local politicians i outline the mechanism through which indian state politicians use state owned development corporations for rent capture undermining the potential effectiveness of sezs and leading to their developmental failures the combination of available means for extracting rents and the limited political constraints on such rent extraction leads to a lack of developmental spillovers this framework can also help to explain the difference in the effects of sezs in india and in china these findings have theoretical importance for understanding the conditions under which subnational polities can use export zones and other export policies to catalyze development and practical implications for understanding the mixed pattern of sez success across the world

campaign spending with office seeking politicians rational voters and multiple lobbies abstract i introduce a microfounded model of campaign finance with office seeking politicians a continuum of voters and a large number of heterogeneous lobbies lobbies make contributions to politicians according to a common agency framework politicians use contributions to finance their electoral expenditures voters are not fooled by electoral expenditures they are influenced in a way that is consistent with the equilibrium behavior of lobbies and politicians the model is used to i determine the relation between campaign spending and the deviation from the median voter s preferred policy ii show the informational value of lobbies contributions iii evaluate the welfare implications of restricting campaign spending and iv interpret the empirical finding that campaign expenditures have a very low effect on election outcome although in equilibrium advertising provides voters with useful information under reasonable parameter values a ban on campaign contributions makes the median voter better off journal of economic literature classification numbers d72 d82 m37

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

a critical review and an extension of the political shirking literature after substituting actual and real changes for proposed and nominal changes in budgetary and employment levels it is clear that the size and scope of the federal leviathon had not been reduced over 1982 83 it is also clear that the agencies which witnessed real budget cuts over this period were of minor importance in terms of the total u s budget future research on why only small agencies receive real budget cuts will provide us with a better understanding of the budgetary process

presidential campaign expenditures evidence on allocations and effects this paper analyzes the impact of presidential campaign spending on election results analyses of expenditures and voting are often plagued by simultaneity between campaign spending and expected vote share however game theoretic models of resource allocation decisions made by a central actor i e a presidential campaign suggest that candidates will spend more in close races and in races likely to be pivotal we provide empirical support for this theory using federal communications commission data from the 1972 presidential election we find that expenditures were higher in states where the election was expected to be closer and in states likely to be pivotal we use these two factors as instruments in a two stage least squares model to estimate the effect of spending on votes we find that contrary to previous theory and research presidential campaign spending significantly increases a candidate s vote share

does legislative turnover adversely affect state expenditure policy evidence from indian state elections the effect of legislative turnover on the size and composition of government expenditures in indian states over the 1980 2000 period is examined the paper finds that excessive turnover in indian state elections results in inefficient government expenditure policy first the higher the turnover the larger the government size second excessive turnover affects the allocative efficiency of government expenditures by skewing the composition of government spending toward pure consumption and away from more productive investment expenditures third the effect of turnover on fiscal policy is not linear public consumption expenditure is convex in turnover while public investment expenditure is concave in turnover

narrow and broad perspectives on trade policy and trade costs how to facilitate trade in madagascar madagascar is a high trade cost and relatively closed economy the wto s latest trade policy review tpr for the country like all tprs concentrates on border sources of trade costs those induced by trade policy instruments such as tariffs or implicit taxes imposed by slow and costly customs procedures or trade documentation requirements this narrow focus for trade policy and facilitation misses the substantive within and beyond the border sources of trade costs experienced by traders in a country like madagascar this paper illustrates the nature and significance of a narrow and broad view of trade costs and trade facilitation for this relatively remote and internally land locked economy

economic populism partial deregulation of transport fuels and electoral outcomes in india abstract the indian political class is known to employ populist albeit economically unsustainable measures to replace intrinsic valence especially shortly prior to election windows such measures include loan waivers interest rate concessions provision of free electricity for agriculturists etc the union government s leverage to maneuver and to micro manage retail fuel prices within partially deregulated environments is hypothesized to provide incumbents with an advantage over rival contestants in the electoral process this paper analyzes the evolution in the retail prices of diesel and petrol gasoline and the transfer of such evolution into the inflation index of the all commodity basket it is observed that when international benchmark prices are relatively low and domestic inflation is moderate the transfer occurs within about 42 weeks during periods of high oil prices frequently above usd 100 a barrel and high inflation higher than 5 00 5 50 prices of petroleum distillates tend to feed into overall inflation more rapidly within about 34 40 weeks the study covering a total of 82 elections for the central and state provincial governments during the period 2000 to 2013 concludes that even as patterns of manipulation of prices are apparent ceteris paribus such leverage does not necessarily seem to translate into favorable electoral outcomes this conclusion reiterates observations that economic im prudence may not necessarily determine electoral outcomes and that the basis for electoral choices made by the indian voter consumer remains subjective

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

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

openness and wage inequality in developing countries the experience of east asia in the 1960s and 1970s supports the theory that greater openness to trade tends to narrow the wage gap between skilled and unskilled workers in developing countries in latin america since the mid 1980s however increased openness has widened wage differentials this conflict of evidence is probably not the result of differences between east asia and latin america instead the conflict is probably the result of differences between the 1960s and the 1980s specifically the entry of china into the world market and perhaps the advent of new technology biased against unskilled workers

the influence of ideology on congressional voting i introduction the question of what determines congressional voting on legislation has inspired a number of recent empirical analyses all are in agreement that congressional voting on specific bills is correlated with the economic self interest of the representative s constituents and a measure of the representative s ideology as indicated by his broader voting record however the interpretation of the empirical results regarding the influence of ideology has generated more debate than consensus in the current literature kau and rubin 1979 find evidence that a congressman s ideology influences his voting but also find evidence for an alternative but not mutually exclusive hypothesis that a congressman s rating by ideological groups reflects membership in a logrolling coalition kalt and zupan 1984 argue that although a representative s votes are likely to reflect the economic interests and the ideology of his constituents the weak incentive for the constituent principal to monitor the voting behavior of his representative agent gives the representative the opportunity to shirk or vote according to his personal ideology rather than his constituents both nelson and silberberg 1987 and mcarthur and marks 1988 find that the degree of shirking increases as the opportunity cost of shirking decreases in contrast to the above findings peltzman 1984 argues that ideological voting by congressmen need not necessarily reflect shirking but instead may be a way for the representative to cheaply provide his constituents with information about his general position on issues what appears to be shirking allowed by an imperfect principal agent relationship may instead be signaling designed to at least partially overcome the imperfect nature of the relationship lott 1987 extends peltzman s signaling argument by hypothesizing that if politicians are viewed by constituents as search goods rather than experience goods then they will have an incentive to establish a political brand name by establishing a consistent ideological voting record dougan and munger s 1989 approach is similar to lott s they argue that politicians with strongly held views that match those of their constituents make ideal representatives because they are less likely to vote against their constituents interests when pressured by special interest groups an incumbent therefore has an incentive to invest in reputational capital by maintaining the consistency over time of his broader voting record because this reputational capital generates quasi rents in electoral competition with candidates who possess less of it neither lott nor dougan and munger find evidence of shirking in their analyses of congressmen s broader voting records as measured by ideological groups ratings dougan and munger also develop a variable intensity of commitment version of the reputational capital hypothesis this version contends that voters with unambiguously liberal or conservative ideologies may prefer a candidate whose voting record indicates that his views are more extreme than their own such a zealous candidate voters believe is even less likely to be influenced by special interest groups a congressman serving an unambiguously liberal or conservative constituency therefore has an incentive to establish and maintain an extremely ideological overall voting record in contrast a congressman serving a constituency with centrist ideological preferences has an incentive to establish an overall voting record that matches his constituency s ideological leanings the systematic deviation of a congressman s voting record from his constituents preferences when near either extreme of the ideological spectrum is not inconsistent with a faithful principal agent relationship one cannot help but be struck by the observation that those researchers finding evidence consistent with shirking studied voting on specific legislation whereas those researchers finding no evidence of shirking studied representatives broader voting records as measured by ideological ratings

trade liberalisation in brazil creating or exporting jobs using the growth accounting and factor content approaches this article looks at the impact of trade liberalisation on the structure and level of employment in brazil over the 1990 97 period the results support the argument that trade liberalisation in developing countries have a negative short term impact on employment relatively small in brazil s case which tends to be outweighed in the long run by a more labour intensive output mix

negative campaigning in a probabilistic voting model this paper extends the small existing theoretical literature on negative campaigning building on work by harrington and hess games econ behav 17 209 229 1996 while their analysis explores the determinants of negative campaign spending using a classic spatial voting model this paper relies instead on a probabilistic voting model extending the use of this popular model to a new setting the main lesson of the analysis is that negative campaign spending is higher for the relatively more centrist candidate the more extreme candidate in the electoral contest devotes by contrast comparatively more of her funds to positive campaign spending this result which at first appears unrelated to the main findings of harrington and hess games econ behav 17 209 229 1996 and chakrabarti scottish j polit econ 54 136 149 2007 actually can be viewed as aligning with their conclusions although the underlying mechanics are very different the paper also offers an empirical test of this prediction

money and votes a simultaneous equation model this paper has specified and estimated a model of the interaction between money and voting in american politics convincingly establishing the identification of a system of equations can be difficult even when theory provides a guide in the study of money in politics however no theoretical perspective has been established in the literature to make the case for identification as unambiguous as possible this paper has done two things first the specification was based in part on theory which has formally been developed elsewhere and which satisfactorily describes data at the economic interest group level welch 1980 second part of the question of identification revolves around the relationship between party strength and socioeconomic variables because there are questions as to the best measurement of party strength results based on two measures were presented for a number of reasons the presidential vote was the preferred measure this study draws four conclusions first money influenced voting in u s house elections in 1972 although its effect was small second patterns of total contributions to a u s house candidate are consistent with the hypothesis that a majority of dollars come from contributors who prefer to support likely winners third the total contributions made to a candidate are a positive function of the district s median years of schooling completed and the gini coefficient total contributions made to a democratic candidate are also a positive function of the median income finally had house campaigns been financed in the early 1970s even to the point of giving each major party candidate 150 000 in 1978 dollars few elections would have been changed it is also worth mentioning some of the things about the financing of political campaigns that we still do not know the above conclusions involve only elections to the u s house there are good reasons for suspecting that money is more influential in u s senate elections ols statistics support this belief and the greater visibility of those races help justify it although money has little effect on house elections we do not know whether contributions affect legislative voting in the house representatives apparently believe that expenditure influences their reelection chances given the complexity of the process it should be no surprise that this belief conflicts with our findings acting on this belief a representative s vote may very well be influenced by the sources of his contributions either directly or indirectly through the giving of access to contributors finally we should be reminded that the above model is static while the electoral process is dynamic the amount contributed to a candidate is affected by his probability of winning in the previous time period e g week month and in turn affects that probability in the following time period as usual what we know is overshadowed by what we do not know the above questions are both interesting in their own right and of interest to policy making

campaign spending limits incumbent spending and election outcomes abstract we study the impact of campaign spending limits for candidates in canadian federal elections we first demonstrate that spending limits are binding mostly for incumbent candidates we then use this information to produce endogeneity corrected estimates for the impact of incumbent spending on electoral vote shares furthermore we examine the impact of spending limits on broader measures of electoral outcomes finding that larger limits lead to less close elections fewer candidates and lower voter turnout

interest groups campaign contributions and probabilistic voting this essay develops a simple model to analyze the impact of campaign contributions on electoral policy decisions of candidates for office interest groups here are firms that select contributions under the assumption that candidates policies and opposing groups donations remain unaltered candidates however recognize that their policy choices affect contributions campaign contributions are used by candidates to affect policy oriented voters perceptions of candidates positions in this framework the introduction of campaign contributions may affect candidates electoral policies and if they do then they benefit surely exactly one of the two interest groups

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

votes or money theory and evidence from the us congress abstract this paper investigates the relationship between the size of interest groups in terms of voter representation and the interest group s campaign contributions to politicians we uncover a robust hump shaped relationship between the voting share of an interest group and its contributions to a legislator this pattern is rationalized in a simultaneous bilateral bargaining model where the larger size of an interest group affects the amount of surplus to be split with the politician thereby increasing contributions but is also correlated with the strength of direct voter support the group can offer instead of monetary funds thereby decreasing contributions the model yields simple structural equations that we estimate at the district level employing data on individual and pac donations and local employment by sector this procedure yields estimates of electoral uncertainty and politicians effectiveness as perceived by the interest groups our approach also implicitly delivers a novel method for estimating the impact of campaign spending on election outcomes we find that an additional vote costs a politician on average 145

sources of inefficiency in a representative democracy a dynamic analysis this paper studies the efficiency of policy choice in representative democracies it extends the citizen candidate model of democratic policy making to a dynamic environment equilibrium policy choices are shown to be efficient in the sense that in each period conditional on future policies being selected through the democratic process there exists no alternative current policy choices which can raise the expected utilities of all citizens however policies that would be declared efficient by standard economic criteria are not necessarily adopted in political equilibrium the paper argues that these divergencies are legitimately viewed as politicalfailures

electoral cycles in electricity losses in india abstract a third of electricity in india is lost each year where losses refer to power that is supplied but not billed utilizing data from the power corporation of uttar pradesh india s most populous state we study the politics of electricity losses examining annual data over four decades we document that up s electricity losses tend to increase in periods immediately prior to state assembly elections drawing upon geographically disaggregated data for the period 2000 09 we observe higher line losses just prior to the 2002 and 2007 state elections our analysis shows that the incumbent party was more likely to retain the assembly seat as line losses in the locality increased we interpret these results as corroboration that political parties deliberately redirect electricity to flat rate and unbilled users in a context of chronically inadequate supply political factors appear to affect line losses in ways that technical and economic factors alone cannot explain

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

how do senators vote disentangling the role of voter preferences party affiliation and senate ideology this paper develops a methodology for consistently estimating the relative weights in senator utility functions despite the fact that senator ideologies are unobserved the empirical results suggest that voter preferences are assigned only one quarter of the weight in senator utility functions the national party line also has some influence but the senator s own ideology is the primary determinant of roll call voting patterns these results cast doubt on the empirical relevance of the median voter theorem estimation of the model requires only roll call voting data making it widely applicable copyright 1996 by american economic association

effective protection policy appraisal and trade policy reform when the effective protection concept was rst developed it was widely regarded as a key widely used especially in the context of policy reform and policy appraisal in developing countries this paper re appraises tmeasure of the structure of protection and became widely deployed it was however subject to a he concept reviews the extent of its application and discusses the factors behind its longevity as an investigative tool the theoretical critique on the grounds that it was essentially a partial equilibrium measure which could not be easily embedded ipaper concludes that the measure still has a role to play in evaluating the structure of protection n a general equilibrium framework notwithstanding this critique the concept has continued to be

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

explaining the oil advantage effects of natural resource wealth on incumbent reelection in iran why does natural resource wealth prolong incumbency using evidence from parliamentary elections in the islamic republic of iran the author shows that natural resource revenues boost incumbent reelection rates because they are used to provide public or private goods to constituents which incentivizes voters to reelect incumbents over challengers to test this hypothesis the author employs originally assembled data on five parliamentary elections in iran 1992 2008 in longitudinal hierarchical regression analyses at the district and province levels by leveraging iran s mixed member electoral system he shows that the resource incumbency mechanism works primarily in single member districts with little evidence of an incumbency advantage for politicians in resource rich multimember districts building on the rentier theory of natural resource wealth the results suggest that voting for the incumbent is attributable to patronage and public goods distribution the findings offer new insights into the understudied context of iranian legislative elections illustrate the mechanisms driving the relationship between resource wealth and incumbency advantage at the subnational level in a nondemocratic setting and highlight the mediating effects of electoral institutions on the resource incumbency relationship

political competition with campaign contributions and informative advertising this paper presents a theory of political competition with campaign contributions and informative political advertising policy motivated parties compete by selecting candidates and interest groups provide contributions to enhance the electoral prospects of like minded candidates contributions are used to finance advertising campaigns that provide voters with information about candidates ideologies voters update their beliefs rationally given the information they have received the paper uses the theory to analyze the welfare economics of contribution limits such limits are shown to redistribute welfare from ordinary citizens to members of interest groups jel d72 h40

campaign advertising and voter welfare this paper investigates the role of campaign advertising and the opportunity of legal restrictions on it an electoral race is modeled as a signalling game with three classes of players many voters two candidates and one interest group the group has non verifiable insider information on the candidates quality and on the basis of this information offers a contribution to each candidate in exchange for a favorable policy position candidates spend the contributions they receive on non directly informative advertising this paper shows that 1 a separating equilibrium exists in which the group contributes to a candidate only if the insider information about that candidate is positive 2 although voters are fully rational a ban on campaign advertising can be welfare improving and 3 split contributions may arise in equilibrium and if they arise too often they are detrimental to voters

fiscal dependence on trade taxes and trade policy reform the article focuses on fiscal implications of structural adjustment loans sals from an a priori standpoint and by reference to the experience of five countries three of these countries have had revenue enhancement after trade policy reforms and the other two cases experienced revenue depletion the central point which emerges from the study is that it is not clear that trade liberalisation leads to fiscal enhancement or fiscal depletion both a priori the orising and country analyses demonstrate that a range of outcomes is possible depending upon initial conditions and the components of any reform package

policy appraisal and the structure of protection in a low income developing country problems of measurement and evaluation in burundi the article provides estimates of the structure of nominal and effective tariffs and the tariff equivalents of a set of quantitative import restrictions for burundi a low income data deficient developing country it carefully indicates the assumptions and limitations of the analysis the overall conclusion of the article is that not much significance can be attached to the estimates in a cardinal sense nevertheless recommendations about altering the structure of relative incentives can be justified where these are directed at increasing transparency and uniformity

the swing voter s curse the authors analyze two candidate elections in which some voters are uncertain about the realization of a state variable that affects the utility of all voters they demonstrate the existence of a swing voter s curse less informed indifferent voters strictly prefer to abstain rather than vote for either candidate even when voting is costless the swing voter s curse leads to the equilibrium result that a substantial fraction of the electorate will abstain even though all abstainers strictly prefer voting for one candidate over voting for another copyright 1996 by american economic association

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

do voters affect or elect policies evidence from the u s house there are two fundamentally different views of the role of elections in policy formation in one view voters can affect candidates policy choices competition for votes induces politicians to move toward the center in this view elections have the effect of bringing about some degree of policy compromise in the alternative view voters merely elect policies politicians cannot make credible promises to moderate their policies and elections are merely a means to decide which one of two opposing policy views will be implemented we assess which of these contrasting perspectives is more empirically relevant for the u s house focusing on elections decided by a narrow margin allows us to generate quasi experimental estimates of the impact of a randomized change in electoral strength on subsequent representatives roll call voting records we find that voters merely elect policies the degree of electoral strength has no effect on a legislator s voting behavior for example a large exogenous increase in electoral strength for the democratic party in a district does not result in shifting both parties nominees to the left politicians inability to credibly commit to a compromise appears to dominate any competition induced convergence in policy

political market characteristics and the provision of educational infrastructure in north india in this paper we are concerned with the provision of schools in rural north india particularly with whether such provision is determined by the demographic and economic characteristics of the region or whether local democracy also plays a role we find that the probability that a governing party loses an election has a positive effect on the provision of schooling infrastructure while the margin of victory of the governing party has a negative effect political reservation for members of the scheduled castes scs has a positive effect on schooling infrastructure in villages with a large sc population but a negative effect overall

service induced campaign contributions and the electoral equilibrium candidates for office are modeled as promising services such as support for legislation and intervention in the bureaucracy to interest groups in exchange for campaign contributions an electoral equilibrium is characterized in which candidates choose service contribution offers and interest groups choose whether to contribute the model provides several explanations of congressional incumbents success in over 90 percent of their reelection contests a recognition advantage a high personal valuation of the office a lower cost of providing services and policy alignment with high demand interest groups the model yields predictions that are consistent with empirical findings on the relation between campaign contributions and election outcomes

elections economic outcomes and policy choices in canada 1870 2015 in this paper we examine the relationship between economic and electoral outcomes in canada since confederation 1867 and the role that economic policy has played in influencing this relationship

the runner up effect exploiting regression discontinuity designs in brazilian indian and canadian first past the post elections we document that second place candidates are substantially more likely than close third place candidates to run in and win subsequent elections since both candidates lost the election and had similar electoral performance this is the effect of being labeled the runner up selection into candidacy is unlikely to explain the effect on winning subsequent elections and we find no effect of finishing in third place versus fourth place we develop a simple model of strategic coordination by voters that rationalizes the results and provides further predictions that are supported by the data