local government structure and public expenditures the law of 1 n postulates a positive relationship betweenthe number of democratically electedrepresentative districts and governmentspending strong support for thisrelationship exists in legislatures in theunited states at both the state andnational level and across countries fewstudies have examined this relationship atthe local level despite the fact that localgovernments operate under constraintssimilar to those faced by representativelegislatures using a sample of georgiacounties we find the number of countycommissioners to be positively correlatedwith county government expenditures indicating support for the law of 1 nat the local level

districting and government overspending theories of government spending driven by a common pool problem in the fiscal revenues pool predict that greater districting of a political jurisdiction raises the scale of government this paper presents evidence on this and related predictions from a cross section of city governments in the united states the main finding is that when other plausible determinants of government spending are controlled for greater districting leads to a considerably greater scale of government activity the results also show that at large electoral systems do not and forms of government that concentrate powers in the office of the executive do break this relationship

political and institutional determinants of fiscal policy in the european community in recent theoretical and empirical research the variation in political and institutional arrangements which may affect the process of national policy formation is examined in order to explain cross country differences with respect to fiscal policies pursued in this paper we build upon this literature and examine whether and how cross country differences in debt accumulation and public sector size of member countries of the european community during the 1980s can be explained we conclude that the growth of government debt is positively related to the frequency of government changes and negatively to sound budgetary procedures in countries with left wing governments the growth of the share of government spending in total output generally tends to be higher

migration diversity and economic growth when migrants move from one country to another they carry a new range of skills and perspectives which nurture technological innovation and stimulate economic growth at the same time increased heterogeneity may undermine social cohesion create coordination and communication barriers and adversely affect economic development in this article we investigate the extent to which cultural diversity affects economic growth and whether this relation depends on the level of development of a country we use novel data on bilateral migration stocks that is the number of people living and working outside the countries of their birth over the period 1960 2010 and compute indices of fractionalization and polarization in so doing we explore the effect of immigration on development through its effect on the composition of the destination country we find that overall both indices have a distinct positive impact on real gdp per capita and that the effect of diversity seems to be more consistent in developing countries

the political economy of government domestic expenditure in the affluent democracies 1960 80 despite the large number of studies of the determination of government expenditure in the affluent democracies most students of the subject admit that we know relatively little about the complex dynamics of spending change using multiple regression analyses of changes in nonmilitary outlays over the years 1960 to 1973 and 1973 to 1980 this study attempts to remedy some of the problems in the literature by providing new tests of several old hypotheses by introducing and testing several relatively new hypotheses and by evaluating such propositions in the context of an integrated theoretical framework and of analyses that span two distinct political economic eras results suggest that the dynamics of domestic expenditure change are partially conditioned by macroeconomic and political environments of particular eras overall the self interests and ideological preferences of policymakers the institutional and extrainstitutional political action of policy relevant groups and needs for state assistance emerge as principal sources of changes in domestic expenditure

a note on fiscal policy under flexible exchange rates abstract the paper studies the effects of fiscal policy under flexible exchange rates the demand for real money balances in terms of the expenditure basket of goods is a function of income in terms of the same basket it turns out that fiscal expansion is expansionary neutral or contractionary in the money wage model depending on whether the income elasticity of the demand for money is smaller than equal to or greater than one the price of domestic goods rises is unchanged or declines in this model depending on whether the income elasticity is smaller than equal to or greater than one

elections coalitions and legislative outcomes predictions of electoral behavior in a multiparty setting should be a function of the voters beliefs about how parties will perform following an election similarly party behavior in a legislature should be a function of electoral promises and rewards we develop a multistage game theoretic model of three party competition under proportional representation the final policy outcome of the game is generated by a noncooperative bargaining game between the parties in the elected legislature this game is essentially defined by the vote shares each party receives in the general election and the parties electoral policy positions at the electoral stage parties and voters are strategic in that they take account of the legislative implications of any electoral outcome we solve for equilibrium electoral positions by the parties and final policy outcomes

an ex ante view of household portfolio choice the role of expected capital gains this paper highlights an issue not previously addressed in portfolio balance modelling the impact of assetspecific expected capital gains on the composition of the household wealth portfolio we extend the brainard tobin portfolio choice model to incorporate the distinction between expected and unexpected capital gains and estimate two versions of the model while our specification is more appealing on a theoretical basis we were unable to distinguish clearly between the ex ante and ex post models given currently available data

the provision of public goods under alternative electoral incentives politicians who care about the spoils of office may underprovide a public good because its benefits cannot be targeted to voters as easily as pork barrel spending we compare a winner take all system where all the spoils go to the winner to a proportional system where the spoils of office are split among candidates proportionally to their share of the vote in a winner take all system the public good is provided less often than in a proportional system when the public good is particularly desirable we then consider the electoral college system and show that it is particularly subject to this inefficiency

ethnic heterogeneity and public goods provision in zambia evidence of a subnational diversity dividend the diversity debit hypothesis that ethnic diversity has a negative impact on social economic and political outcomes has been widely accepted in the literature indeed with respect to public goods provision the focus of this article the conventional wisdom holds that a negative relationship between ethnic heterogeneity and public goods provision is so well established empirically that future research should abandon examination of whether such a relationship exists and focus instead on why it exists that is on the mechanisms underlying a negative relationship this article challenges the conventional wisdom on empirical grounds it demonstrates at the sub national level strong evidence for a diversity dividend that is a positive relationship between ethnic heterogeneity and some measures of public goods provision in particular welfare outcomes related to publicly provided goods and services building on the literature the article draws on new analysis at district level for zambia using a new dataset compiled by the authors from administrative budget and survey data which cover a broader range of public goods outcomes than previous work including information on both budgetary and welfare outcomes the article explores why relationships may differ for sub national budgetary and welfare outcomes considering separate models for each analysis shows results to be robust across a variety of alternative specifications and models given the more nuanced relationship between ethnic diversity and public goods provision documented the article argues that the key task for future work is not to address why the relationship is negative but to study under what conditions such direction holds true and the mechanisms that underlie a diversity dividend it concludes by considering key explanatory hypotheses against the zambian data to identify promising areas for such theory development more broadly while the diversity debit hypothesis highlights the costs of diversity and could be interpreted as providing support for polices that minimize it the findings in this article are consistent with a view that diversity can be good for communities not only for normative reasons but also because under some conditions it can support concrete welfare gains

ethnic enclaves and immigrant labor market outcomes quasi experimental evidence i examine the effects of the ethnic enclave size on labor market outcomes of immigrants i account for ability sorting into enclaves by exploiting a danish spatial dispersal policy under which refugees were randomly dispersed across locations first i find strong evidence that refugees with unfavorable unobserved characteristics self select into ethnic enclaves second a relative standard deviation increase in the ethnic enclave size increases annual earnings by 18 on average irrespective of skill level third further findings are consistent with the explanation that ethnic networks disseminate job information which increases the job worker match quality and thereby the hourly wage rate

ethnic diversity and social capital in indonesia this paper uses the variations of ethnic diversity between districts in indonesia to show that diversity leads to lower social capital outcomes i find that distinguishing between ethnic polarization and fractionalization matters for the results as polarization has a larger negative effect the results cannot entirely be attributed to selection on unobservables and at least part of the relationship should be interpreted as causal finally diversity seems to increase tolerance despite its negative effect on other social capital variables such as trust perceived safety and participation to community activities and voting in elections

effects of government characteristics on fiscal deficits in 18 oecd countries 1961 1994 political economists studying industrialized countries have claimed that certain institutional characteristics of governments such as majority status the number of parties in government and stability affect levels of public deficits they have specifically argued that weak unstable governments produce higher deficits than strong stable ones the author tests the validity of such claims by examining empirical data from 18 organization for economic cooperation and development oecd countries between 1961 and 1994 it is shown that evidence does not support the deficit prone weak governments thesis if anything there is some evidence to suggest that deficits are lower under what political economists call weak unstable governments such as minority governments coalition governments or less durable governments it is further shown that there is extremely limited evidence to support another line of argument that the strength stability of governments does not necessarily create deficits but does affec

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

ethnic diversity social sanctions and public goods in kenya abstract this paper examines ethnic diversity and local public goods in rural western kenya the identification strategy relies on the stable historically determined patterns of ethnic land settlement ethnic diversity is associated with lower primary school funding and worse school facilities and there is suggestive evidence that it leads to poor water well maintenance the theoretical model illustrates how inability to impose social sanctions in diverse communities leads to collective action failures and we find that school committees in diverse areas do impose fewer sanctions on defaulting parents we relate these results to the literature on social capital and economic development and discuss implications for decentralization in less developed countries

history social divisions and public goods in rural india we examine the influence of three historically important sources of social divisions on the availability of public goods in rural india colonial power landowner peasant relations as determined by the land tenure system and social fragmentation based on the hindu caste system and the presence of sizable religious minorities using data on public goods from 1991 we find that regions that were under british colonial power in the pre independence period and those where agrarian power was concentrated in the hands of landlords have lower access to these goods as do areas with high levels of social fragmentation jel h41 p16

political parties and the size of government in multiparty legislatures examining cross country and panel data evidence this article tests the effect of an increase in the number of represented political parties and the size of the majority party on the size of government proxied by central government expenditure as a percentage of gdp in multiparty legislatures the author argues that an increase in the number of represented parties leads to higher central government expenditure conversely as the size of the majority party grows from a bare minimum majority to above the supermajority level it has a nonlinear specifically cube effect on central government expenditure panel data on central government expenditure from 110 countries are used to test these arguments the results corroborate the theoretical claims and are robust in regression models where fixed effects were introduced and endogeneity was corrected finally an increase in the number of represented parties leads to higher government spending on subsidies and transfers but to lower spending on public goods

are two heads better than one monetary policy by committee two experiments were conducted to test the common hypothesis that groups make decisions more slowly than individuals one of these experiments imitates real life monetary policy decisions in both cases the hypothesis is found wanting groups are not slower than individuals in both experiments we also find that group decisions are on average better than individual decisions this holds regardless of whether the groups make decisions by unanimity or majority rule simple mechanical theories of group decisionmaking that the group follows its average player median player or best player do not explain the results group interactions seem to matter

a synthesis of the macroeconomic approaches to exchange rate determination abstract the paper develops a general model with the goods money domestic and foreign bond and labor markets the special assumptions needed to generate the predictions of the different approaches from the model are found it turns out that the assumption of perfect capital mobility essentially generates the monetarist predictions and perfect monetary sterilization by the central bank at a fixed interest rate the predictions of the elasticity absorption approach the approaches turn out to be independent rather than conflicting parts of the general model each approach abstracting from what the other is analyzing this is technically done by dichotomizing the general model the monetarists making the money market equation and the keynesians the goods market and balance payments equations the independent ones while the keynesian monetarist and short term portfolio balance approaches differ in their policy regime assumptions the long run portfolio balance approach differs in its equilibrium condition by constraining the trade balance to equilibrium

ethnic diversity and human capital development in india a disaggregated analysis at the state and district levels abstractthis study contributes to the development literature by providing a new perspective on understanding factors that influence human capital development in india we examine the effects of eth

testing for financial buffer stocks in sectoral portfolio models empirical implementation of the buffer stock money notion tends to concentrate either on the shock absorber aspects or the spillover disequilibrium money aspects but rarely combines both moreover a potential buffer role for nonmoney assets is usually precluded without explicit empirical testing this paper examines the role of financial buffers in an ex ante sectoral model of expenditure and portfolio behavior incorporating both the shock absorber and spillover aspects in terms of cross equation parameter restrictions these are tested for a range of different assets and liabilities using quarterly data for the u k personal sector copyright 1990 by mit press

tribe or nation nation building and public goods in kenya versus tanzania this article examines how government policies affect ethnic relations by comparing outcomes across two nearby districts one in kenya and one in tanzania using colonial era boundary placement as a natural experiment despite similar geography and historical legacies governments in kenya and tanzania have followed radically different language education and local institutional policies with tanzania consistently pursuing more serious nation building the evidence suggests that nation building has allowed diverse communities in rural tanzania to achieve considerably better local public goods outcomes than diverse communities in kenya to illustrate while kenyan communities at mean levels of diversity have 25 percent less local school funding than homogeneous communities on average the comparable figure in the tanzanian district is near zero the kenya tanzania comparison provides empirical evidence that serious reforms can ameliorate social divisions and suggests that nation building should take a place on policy agendas especially in africa

the political economy of benefits and costs a neoclassical approach to distributive politics this essay offers a rational political explanation for the notorious inefficiency of pork barrel projects with an optimization model of legislative behavior and legislative institutions the model emphasizes the economically arbitrary from a welfare point of view importance of the geographic incidence of benefits and costs owing to the geographic basis for political representation we explore the implications of a legislator s objective function and derive conditions under which a representative legislature will select an omnibus of projects each of which exceeds the efficient scale

politics institutions and welfare spending in industrialized democracies 1960 82 electoral turnout as well as left and center governments increase welfare effort that the welfare efforts of governments led by particular types of parties show significant differences and vary notably with the strength of oppositional and junior coalitional parties and that relatively neocorporatist centralized and traditionalistic polities are high on welfare effort overall our findings suggest that contrary to many claims both partisan and nonpartisan facets of democratic politics and political institutions shape contemporary social welfare effort

does the size of the legislature affect the size of government evidence from two natural experiments this paper makes use of regression discontinuity designs to estimate the effect of the number of legislators on the size of government the results indicate a negative effect i e the larger the size of the legislature the smaller is the size of government this runs counter to conventional wisdom one potential explanation is that more legislators can better control a budget maximizing bureaucracy i present evidence that is consistent with the proposed mechanism

ethnic diversity energy poverty and the mediating role of trust evidence from household panel data for australia abstract energy poverty is now a major concern on the public policy agenda in many countries however evidence on the determinants of energy poverty is relatively scant our study contributes to the debate on the determinants of energy poverty by being the first to examine the impact of ethnic diversity on household energy poverty using 12 waves of longitudinal data from the household income and labour dynamics in australia hilda survey we find that in australia ethnic diversity is positively associated with energy poverty our preferred instrumented estimates suggest that a standard deviation increase in ethnic diversity is associated with a 0 103 0 422 standard deviation increase in energy poverty depending on how energy poverty is measured this finding is generally robust to alternative ways of measuring ethnic diversity and energy poverty we identify trust as an important channel through which ethnic diversity operates and point to the need for policies that engender social capital in multicultural societies as a means to harness the benefits of diversity

can good projects succeed in bad communities abstract the lack of social capital is frequently given as an explanation for why communities perform poorly yet to what extent can project design compensate for these community specific constraints i address this question by examining determinants of collective success in a costly problem for developing economies the upkeep of local public goods it is often difficult to obtain reliable outcome measures for comparable collective tasks across well defined communities in order to address this i conducted detailed surveys of community maintained infrastructure projects in northern pakistan the findings show that while community specific constraints do matter their impact can be mitigated by better project design inequality social fragmentation and lack of leadership in the community do have adverse consequences but these can be overcome by changes in project complexity community participation and return distribution moreover the evidence suggests that better design matters even more for communities with poorer attributes the use of community fixed effects and instrumental variables offers a significant improvement in empirical identification over previous studies these results provide evidence that appropriate design can enable projects to succeed even in bad communities

deviations from constituent interests the role of legislative structure and political parties in the states this paper investigates the determinants of state spending over 1960 1990 recent empirical studies suggest that state government expenditure is greater than the electorate desires our main finding is that expenditure was positively related to the number of seats in a state s legislature this is consistent with the hypothesis that logrolling leads representatives to spend more than their constituents would like we also find that political parties do not have a pronounced effect on overall levels of expenditure but do influence the composition of spending in particular democratic control of state government is associated with higher levels of welfare spending

household saving in the united states measurement and behavior official measures of u s personal saving incorporate conceptual errors relating to the measurement of both income and consumption this article identifies the errors computes an adjusted personal saving rate to correct the errors and estimates equations explaining personal saving the estimates support the adjustments and the adjusted series has more pronounced movements than the official series the movements being largely related to changes in income and wealth

trade and the variety of democratic institutions students of comparative politics have long acknowledged the importance of such institutional factors as electoral systems parliamentary versus presidential rule and the strength of parties but they have either regarded the institutions as given or have explained them entirely in domestic terms associating proportional representation for example with the intensity of social cleavages in economically advanced democracies however these institutional aspects can be plausibly linked to dependence on trade proportional representation the parliamentary system strong parties and large electoral districts have survival value for developed democracies exposed to trade that the recently revived agitation for proportional representation in the united kingdom has been cast explicitly in terms of economic necessity and dependence on trade adds force to this argument and suggests the need for further historical research on other cases of institutional adaptation and change

the domestic politics of banking regulation this article seeks to ground financial regulatory choices in domestic politics based on evidence from twenty two industrialized countries we argue that electoral rules specifically the extent to which they are centrifugal or centripetal have a significant effect on whether the banks or their consumers pay for the security of the banking system moreover despite the homogenizing effects of global financial integration the political dynamics generated by these electoral rules continue to shape the nature and extent of prudential regulations that countries adopt in the place of banking cartels

local capture evidence from a central government transfer program in uganda according to official statistics 20 percent of uganda s total public expenditure was spent on education in the mid 1990s most of it on primary education one of the large public programs was a capitation grant to cover schools nonwage expenditures using panel data from a unique survey of primary schools we assess the extent to which the grant actually reached the intended end user schools the survey data reveal that during 1991 1995 the schools on average received only 13 percent of the grants most schools received nothing the bulk of the school grant was captured by local officials and politicians the data also reveal considerable variation in grants received across schools suggesting that rather than being passive recipients of flows from the government schools use their bargaining power to secure greater shares of funding we find that schools in better off communities managed to claim a higher share of their entitlements as a result actual education spending in contrast to budget allocations is regressive similar surveys in other african countries confirm that uganda is not a special case

centripetal and centrifugal incentives in electoral systems this paper investigates how electoral laws affect the position taking incentives of parties and candidates it seeks to extend the finding presented in the classical median voter theorem to a wide class of electoral systems or to show the limits of such extension the factors examined are the district magnitude the electoral formula the number of votes each voter is allowed to cast whether voters can cumulate their votes and whether voters can partially abstain i suggest a crude division of electoral systems into those producing predominantly centripetal incentives and those producing predominantly centrifugal incentives among the factors found to produce centripetal incentives at least in noncumulative systems are the following increases in the number of votes per voter outlawry of partial abstention and decreases in the district magnitude in systems allowing the cumulation of votes matters are a bit different

majoritarian electoral systems and consumer power price level evidence from the oecd countries a straightforward extension of the standard stigler peltzman model of regulation coupled with a taagepera shugart analysis of electoral system effects suggests a that the greater seat vote elasticities of majoritarian electoral systems will tilt policy in favor of consumers while propor tional systems should strengthen producers and b that the pro con sumer bias of majoritarian systems should be manifested in systemati cally lower prices empirical tests controlling for the structural determi nants of national price levels estab lished in the earlier law of one price literature establish majoritarian elec toral systems as a significant and robust predictor lowering national price levels in the mean oecd coun

genetic diversity and the origins of cultural fragmentation despite the importance attributed to the effects of diversity on the stability and prosperity of nations the origins of the uneven distribution of ethnic and cultural fragmentation across countries have been underexplored building on the role of deeply rooted biogeographical forces in comparative development this research empirically demonstrates that genetic diversity predominantly determined during the prehistoric out of africa migration of humans is an underlying cause of various existing manifestations of ethnolinguistic heterogeneity further exploration of this uncharted territory may revolutionize the understanding of the effects of deeply rooted factors on economic development and the composition of human capital across the globe

the effects of foreign disturbances under flexible exchange rates abstract foreign fiscal expansion has a contractionary and monetary expansion an expansionary effect on the small economy in the real wage model the reverse conclusions hold in the money wage model only if the income elasticity of the demand for money is one or greater the same results hold also for the stationay state effects this theory provides an explanation in the policy mix of the united states for the recent lacklustre performance of europe under rational expectations foreign monetary expansion leads to an overshooting appreciation fiscal expansion leading to several possible exchange rate responses the new results are produced by consistently specified money demand and import functions the supply side and the wealth effect

how ethnic diversity affects economic growth summary this paper investigates the empirical relationship between ethnic diversity polarization and economic growth ethnicity is assumed to affect economic growth through a number of possible transmission channels that are generally included in cross country growth regressions this paper provides an extensive empirical analysis shedding light on the various sources through which ethnic diversity and polarization affects economic growth indirectly it advances and empirically establishes the hypothesis that ethnic diversity has a strong direct negative impact on economic growth whereas ethnic polarization has non negligible indirect economic effects through the specified channel variables

political and monetary institutions and public financial policies in the industrial countries institutions and policies vittorio grilli donato masciandaro and guido tabellini why do countries as similar as the industrialized oecd countries go through such different experience in terms of public deficits and debts or in terms of inflation the answer cannot come from macroeconomic policy responses to different disturbances nor from the principles of optimal taxation but rather from politics this article focuses on the role that particular institutions exert in providing constraints and incentives which shape the actions of policymakers the electoral process and political traditions affect the ability of governments to deal with deficits and mounting debts what seems to matter most it is found is the effect of the durability of governments governments with short horizons act myopically and never quite tackle the hard choices such governments typically exist in countries with an electoral system favouring many small political parties central bank independence promotes low inflation with no apparent costs in terms of real economic performance irrespective of the political institutions in fact there is no link between monetary and fiscal discipline these findings carry powerful implications for countries facing high indebtedness or stubborn inflation but also for the construction of the european economic and monetary union

clientelism and voting behavior evidence from a field experiment in benin the author conducted a field experiment in benin to investigate the impact of clientelism on voting behavior in collaboration with four political parties involved in the 2001 presidential elections clientelist and broad public policy platforms were designed and run in twenty randomly selected villages of an average of 756 registered voters using the survey data collected after the elections the author estimated the effect of each type of message by comparing voting behavior in the villages exposed to clientelism or public policy messages treatment groups with voting behavior in the other villages control groups the author found that clientelist messages have positive and significant effect in all regions and for all types of candidates the author also found that public policy messages have a positive and significant effect in the south but a negative and significant effect in the north in addition public policy messages seem to hurt incumbents as well as regional candidates finally the evidence indicates that female voters tend to have stronger preference for public policy platforms than male voters

economic versus cultural differences forms of ethnic diversity and public goods provision groups between group inequality bgi we show that elf cultural fractionalization cf and bgi measure different things and that the choice between them has an important impact on our understanding of which countries are most ethnically diverse furthermore empirical tests reveal that bgi has a large robust and negative relationship with public goods provision whereas cf elf and overall inequality do not diversity is widely held to make governance more difficult such diversity is associated with low production of public goods poor economic growth and high levels of corruption violence and civil conflict but diversity hardly sentences a country to poor political and economic outcomes latvia for example has better governance indicators than brazil and zambia has better governance indicators than nigeria even though these pairs of countries have similar levels of ethnolinguistic fractionalization elf why then do some countries cope more successfully with ethnic diversity than others this article addresses this question by focusing on the

the behavior of u s short term interest rates since october 1979 short term interest rates in the united states have been too high since october 1979 in the sense that both unconditional and conditional forecasts based on an estimated vector autoregression model summarizing the prior experience under predict short term interest rates during this period although a non structural model cannot directly answer the question of why this has been so comparisons of alternative conditional forecasts point to the post october 1979 relationship between the growth of real income and the growth of real money balances as closely connected to the level and pattern of short term interestrates this finding is consistent with the authors earlier conclusion based on analysis of a small structural macroeconometric model that the high average level of interest rates has been due to a combination of slow growth of nominal money supply and continuing price inflation which together have kept real balances small in relation to prevailing levels of economic activity this abstract was borrowed from another version of this item

the determinants of western european government growth 1950 1980 european publics and politicians are concerned about big and growing governments such concern is not ill founded government size measured as the ratio of government expenditures to gross domestic product has marched upwards steadily since 1950 in the 12 european nations examined here the present research represents an initial step toward solving the mystery of why these governments have grown to begin a modest theoretical framework for understanding government growth is advanced next specific hypotheses of growth are fitted into the framework and operationalized for empirical testing finally statistical models to account for public sector expansion in each of the dozen nations over the 1950 1980 period are developed the models suggest that a variety of forces have worked to enlarge european governments with perhaps the most important being pressure for government assistance from groups disadvantaged by sour economic conditions

short versus long coalitions electoral accountability and the size of the public sector this article examines the policy consequences of the number of parties in government we argue that parties externalize costs not borne by their support groups larger parties thus internalize more costs than small parties because they represent more groups this argument implies that the public sector should be larger the more parties there are in the government coalition we test this prediction using yearly time series cross sectional data from 1970 to 1998 in 17 european countries we find that increasing the number of parties in government increases the fraction of gdp accounted for by government spending by close to half a percentage point or more than one billion current dollars in the typical year we find little support for the alternative claim that the number of legislative parties affects the size of the public sector except via the number of parties in government

measuring the average marginal tax rate from the individual income tax the economic effects of taxation depend on the configuration of marginal tax rates we consider here the appropriate measure of a marginal tax rate for the federal individual income tax which has a graduated rate structure and allows for numerous legal and illegal deductions from total income our conclusion is that the explicit marginal rate from the tax schedule is the right concept for many purposes hence we construct approximately weighted averages of these marginal tax rates for 1916 80 when weighted by adjusted gross income the arithmetic average of marginal tax rates is 5 in 1920 2 in 1930 6 in 1940 20 in 1950 23 in 1960 24 in 1970 and 30 in 1980 we also discuss the dispersion of marginal tax rates as well as the behavior of average tax rates and deductions from taxable income one noteworthy result concerns the fraction of adjusted gross income that accrues to families that face a marginal tax rate of at least 35 this fraction quadruples from 1964 to 1980 this abstract was borrowed from another version of this item

money and majorities in the federal republic of germany evidence for a veto players model of government spending i formulate a veto players model of policy making by coalition government in the federal republic of germany the model gives testable predictions about how patterns of federal spending respond to changes in government some of the predictions are consistent with conventional wisdom namely that the spd fdp government decreased spending on right wing items when it came to power in 1969 and the return of cdu fdp coalition in 1982 produced a decline in leftwing spending other predictions are less intuitive for example there is no predicted increase in left wing spending associated with the spdfdp coalition and no increase in right wing spending with the cdu fdp government these predictions and those of competing models are tested using disaggregated budget data from fiscal years 1961 1989 controlling for category specific effects and economic conditions the data support the veto players model and this support is robust to a wide variety of plausible assumptions about the parties spending preferences

savings in new zealand during inflationary times measurement determinants and implications real rates of return predominantly as a result of in model of saving behavior is constructed to test the role creased price inflation and slow rates of economic growth for instance deane 1980 stated that inflation taxation and interest rate variables play in determining saving the estimation results are then the behaviour ofsaven in times of inflation is still one of the unsolved used to identify the implications for future economic mysteries of economics to the surprise of economists in the early growth in new zealand in terms of saving assuming 1970s when inflation was accelerating sharply in most western nations consumers saved a higher than expected percentage of the stressed in the literature their income p 377 that of releasing factors for capital formation