efficient mechanisms for bilateral trading we consider bargaining problems between one buyer and one seller for a single object the seller s valuation and the buyer s valuation for the object are assumed to be independent random variables and each individual s valuation is unknown to the other we characterize the set of allocation mechanisms that are bayesian incentive compatible and individually rational and show the general impossibility of ex post efficient mechanisms without outside subsidies for a wide class of problems we show how to compute mechanisms that maximize expected total gains from trade and mechanisms that can maximize a broker s expected profit journal of economic literature classification number 026

commodity price shocks and civil conflict evidence from colombia how do income shocks aect armed con ict theory suggests two op posite eects if labor is used to appropriate resources violently higher wages may lower con ict by reducing labor supplied to appropriation this is the opportunity cost eect alternatively a rise in contestable income may increase violence by raising gains from appropriation this is the rapacity eect our paper exploits exogenous price shocks in inter national commodity markets and a rich dataset on civil war in colombia to assess how dierent income shocks aect con ict we examine changes in the price of agricultural goods which are labor intensive and natural resources which are capital intensive we focus on coee and oil the two largest exports we nd that a sharp fall in coee prices in the 1990s increased violence dierentially in regions growing more coee by lower ing wages and the opportunity cost of joining armed groups in contrast a rise in oil prices increased violence dierentially in the oil region by in creasing municipal revenue siphoned through rapacity this pattern holds in several other agricultural and natural resource sectors providing robust evidence that price shocks aect con ict in opposite directions depending on the factor intensity of the commodity

household survey data and pricing policies in developing countries in recent years household survey data from developing countries have increasingly become available and have been increasingly used to cast light on important questions of policy the reform of prices whether agricultural prices consumer taxes subsidies or tariffs has consequences for individual welfare and for government revenues and these can be investigated empirically with household survey data the gainers and losers from price changes can be identified and the magnitudes of their gains and losses measured nonparametric estimation techniques provide a straightforward and convenient way of displaying this information the procedure is illustrated for the effects of rice pricing in thailand using data from more than five thousand rural households estimates of the revenue effects of price reforms are harder to obtain because they require estimates of supply and demand elasticities estimates that are not easily obtained for many developing countries a procedure is presented for estimating price elasticities of demand from spatial price variation as recorded in household survey data the main innovations lie in the appropriate treatment of quality variations and measurement error applications of the procedure in cote d ivoire indonesia and morocco are reviewed

antebellum tariff politics regional coalitions and shifting economic interests abstract throughout u s history import tariffs have been put on a sustained downward path in only two instances from the early 1830s until the civil war and from the mid 1930s to the present this paper analyzes the political economy of tariff reductions in the antebellum period tariff politics was highly sectional the north supported high tariffs the south favored low tariffs and the west was a swing region in the 1820s a coalition between the north and west raised tariffs by exchanging votes on import duties for spending on internal improvements president andrew jackson delinked these issues by vetoing several internal improvements bills the nullification crisis led to the compromise tariff of 1833 which phased out tariffs above 20 percent over a 9 year period by this time transportation improvements gave the west access to foreign markets giving the region a stake with the south in maintaining a low tariff equilibrium thus the west s changing position on trade policy helps explain the

a general equilibrium model of congressional voting in this paper we specify a model in which congressmen constituents and campaign contributors simultaneously decide on behavior constituents and contributors desire to influence the voting behavior of congressmen congressmen on the other hand want to be elected and vote accordingly we empirically test this model using roll call voting on eight bills dealing with economic regulation and find support for the model our results indicate that part of the voting behavior of congressmen may be explained by noneconomic factors we also find that unions and businesses as campaign contributors are sometimes influential unions are more often influential than is business ideological factors are also important in explaining voting

the inconsistency of land values land rents and capitalization formulas this paper examines relationships that exist between farm income land values and capital asset pricing theory using two commonly referenced data sets it is shown that land prices and land rents do not have the same time series representations a necessary condition for the simple capital asset pricing theory to hold this suggests that a fundamental rethinking of the way in which land prices are viewed and modeled is needed more complex models that allow for rational bubbles risk aversion and future shifts in government policy or commodity prices may be required

reciprocity and resistance to comprehensive reform comprehensive reforms often fail despite being beneficial to society politicians may block comprehensive reforms in an attempt to form vote trading coalitions in which they benefit from a piecemeal reform at the expense of others because formal commitment devices for vote trading are frequently missing trust and reciprocity among legislators can play an important role for vote trading we investigate in a laboratory experiment whether legislators will impede comprehensive reforms in an attempt to form vote trading coalitions even if formal commitment devices for vote trading after reform failure are missing we find that open ballots allow for vote trading without commitment based on trust and reciprocity in turn legislators frequently reject efficient comprehensive reforms in such institutions

resistance to reform status quo bias in the presence of individual specific uncertainty comment why do governments so often fail to adopt policies which economists consider to be efficiency enhancing our answer to this question relies on uncertainty regarding the distribution of gains and losses from reform we show that there is a bias towards the status quo and hence against efficiency enhancing reforms whenever some of the individual gainers and losers from reform cannot be identified beforehand there are reforms which once adopted will receive adequate political support but would have failed to carry the day ex ante the argument does not rely on risk aversion irrationality or hysteresis due to sunk costs jel d72 f13 why do governments so often fail to adopt policies that economists consider to be efficiency enhancing this is one of the fundamental questions of political economy the answer usually relies on what may be

the law of 1 n revisited distributive politics legislature size and the costs of collective action the foundational model of distributive politics predicts a positive relationship between the number of legislative districts and the level of inefficiency of projects approved by the legislature weingast shepsle and johnsen s law of 1 n this relationship has been tested extensively in the empirical literature with mixed results this article presents a model wherein passing the omnibus legislation typical of distributive politics is a costly process the model predicts a nonlinear relationship between legislature size and spending as increasing the size of the legislature also increases the costs of collective action results from an empirical exercise based on u s state legislatures 1962 2014 are consistent with the proposed model showing a 1 n effect which diminishes at the margin as the legislature s size increases especially in the lower chamber

the effects of logrolling on congressional voting the theoretical public choice literature suggests that vote trading is an important determinant of congressional voting behavior yet empirical voting models do not allow for vote trading these models recognize that observed ideology may influence legislative behavior but do not correct for unobserved ideology this study devises new tests for logrolling and ideology the empirical model controls for logroll agreements and unobserved ideological interest via the correlation of unobserved variables the results reflect the presence of vote trading coalitions on some votes but not on others the results cast doubt on the importance of personal ideological interests of legislators copyright 1992 by american economic association

the pre programme earnings dip and the determinants of participation in a social programme implications for simple programme evaluation strategies the key to estimating the impact of a programme is constructing the counterfactual outcome representing what would have happened in its absence this problem becomes more complicated when agents such as individuals firms or local governments self select into the programme rather than being exogenously assigned to it this paper uses data from a major social experiment to identify what would have happened to the earnings of self selected participants in a job training programme had they not participated in it we investigate the implications of these earnings patterns for the validity of widely used before after and difference in differences estimators

instability of collective decisions testing for cyclical majorities the issues of cyclical majorities and instability of collective choices have been in the fore front in the discussion of social choice mechanisms cycling lack of equilibria and so called chaos theorems have been prevalent in the public choice literature whether cycling actually occurs in processes that are decided by majority rule has been a long standing question however cycling has not been made quantifiable nor has it been clear how one would determine empirically whether majorities are cyclical in this paper cycling has been given an empirical meaning this paper provides a method to test for cyclical majorities and applies it to decisions made in the us congress the test results indicate stability and the presence of persistent winners and losers in congress

lobbying and agricultural trade policy in the united states the authors study whether political campaign contributions influence agricultural protection in the united states in the manner suggested by the political economy model of grossman and helpman 1994 this is the first attempt to test this model using agricultural data the authors test the model using a detailed cross sectional data set of agricultural protection subsidies and political action committee pac contributions in the late 1990s the model is qualitatively affirmed by the data they make a novel attempt to solve a puzzle about the model s quantitative implications also found in recent studies this solution makes the simple model consistent with the complicated decisionmaking process in real world government the results imply the underpinnings of a political economy equilibrium that will be hard to dislodge

quinoa quandary cultural tastes and nutrition in peru abstract using a model of household food demand that incorporates regional preferences tastes for culturally appropriate food i investigate whether tastes for quinoa in the puno region of peru reduced household nutrition intakes when quinoa prices dramatically increased between 2004 and 2012 adapting a model from atkin 2013 and utilizing data from a national peruvian household survey enaho i am able to deconstruct regional changes in household nutrition over time into several general equilibrium effects in particular i isolate the effect of regional tastes for quinoa on nutrition outcomes this effect is identified by an exogenous spike in quinoa prices driven by international demand for quinoa while i find evidence that regional tastes for quinoa do exist in the puno region these tastes do not have a statistically significant impact on nutrition outcomes my results lend support to the conjecture that tastes for culturally appropriate food do not meaningfully affect household nutrition if the food in question is a sufficiently small component of a household s overall diet

why are stabilizations delayed when a stabilization has significant distributional implications e g tax increases to eliminate a large budget deficit socioeconomic groups may attempt to shift the burden of stabilization onto other groups the process leading to stabilization becomes a war of attrition each group attempting to wait the others out and stabilization occurring only when one group concedes and bears a disproportionate share of the burden the authors solve for the expected time of stabilization in a model of rational delay and relate it to several political and economic variables they motivate this approach and its results by comparison to historical and current episodes copyright 1991 by american economic association

congressional voting on term limits between 1990 and 1995 twenty three states unilaterally imposedterm limits on their own delegations tocongress in 1995 the house ofrepresentatives defeated a constitutionalamendment that would have limited the termsfor all of congress only weeks later thesupreme court struck down the individualstate laws in 1997 the house againbrought the issue to a vote which alsofailed this paper models congressionalvoting on term limits with a simple gamewithin an interest group theory withlegislators as imperfect agents ofconstituents the game foremost predictsthat members from term limited states wouldbe more likely to support term limits inthe first vote but no more likely on thesecond vote the empirical section employsprobit multinomial logit and orderedprobit maximum likelihood estimations toconfirm the stated hypotheses among otherresults in particular both the joint andconditional probability of a yea on thefirst vote and a subsequent nay on thesecond vote is higher for members fromstates that had unilaterally self imposedterm limits the results are robust tomodel specification estimator andalternative sampling implications areproposed in the concluding comments

term limits causes and consequences this paper consults multiple literatures to specify andevaluate the economic rationales for term limitation particularly on congress i first consider theories that aroseto explain among related issues why individual states mightunilaterally self impose term limits on their own delegationsto congress next i consider two main lines of argument foruniversal limits both of which begin with the empiricalphenomenon of high and rising congressional tenure first supporters of term limits argue that higher tenure biaseslegislatures toward inefficiency big government highspending second higher tenure creates inefficient anti competitive conditions in the legislative election market term limitation would remedy these inefficiencies by virtue ofdecreasing average tenure these claims are then evaluated inlight of the evidence amassed in the literature based on theliterature reviewed this paper finds that while term limitswill reduce average tenure there is no evidence to suggestthat term limits will affect the underlying causes of theseinefficiencies further research on a more general reform which would strike deeper at these underlying causes isimplied

taxes torts and the toxics release inventory congressional voting on instruments to control pollution i introduction governments can choose from a wide variety of policy instruments to control pollution including tax and subsidy schemes marketable permits information provision programs liability systems with well defined property rights and command and control selection of emission standards or technologies economists throughout the 1980s devoted significant effort to modeling the relative merits of these instruments the question of why politicians would prefer one manner of controlling pollution over another also attracted attention starting with buchanan and tullock s 1975 positive theory of externality control in which polluters find direct regulatory controls on emissions more profitable than pollution taxes theories of instrument selection have been developed in which politicians choose policies based on the relative costs and benefits to shareholders workers and environmentalists are affected by the constraints imposed by political institutions and are driven to select the most efficient policy instrument to achieve a given level of redistribution 1 to date however there have been few empirical tests of what drives instrument selection in environmental policy there is a large empirical literature devoted to explaining the level of support for environmental programs in congress most articles focus on the degree to which a legislator s stand on a given environmental bill can be explained by narrow district interests generally the material interests of constituents or by ideology either constituents or the member s own policy preferences studies of voting on environmental legislation by ackerman and hassler 1981 crandall 1983 pashigian 1985 and yandle 1989 offer evidence that legislators actions are in part explained by the district or state level impacts of proposed legislation on their constituents kalt and zupan 1984 find that after controlling for constituents material self interest in proposed strip mining legislation the ideology of constituents and the personal ideologies of their representatives influence voting on this aspect of environmental preservation as grier 1993 demonstrates debate over the general role of the legislator s specific ideology in voting continues in studying votes in the house and senate on the proposed size of the superfund during debate over the program s renewal hird 1993 concludes that congressional voting on superfund is found to represent legislator s environmental and liberal ideologies as much as if not more than narrowly defined self interest he links the importance of ideology to voting on superfund in part to the bill s symbolic environmental appeal in environmental legislation the final impact of a bill on industry and the environment often depends on issues resolved through technical amendments downs s theory of rational ignorance and arnold s theory of the degree to which constituents will link congressional actions with real world outcomes predict that members of congress may be less constrained by general constituent interests on amendment votes since these votes are less likely to be covered in the media than are final legislative votes as denzau and munger 1986 and grier and munger 1991 note groups with specific interests such as affected industries may find it less costly to persuade a member of congress to vote their way on a measure if the representative s constituents are supportive of or indifferent to the measure in the case of technical amendments affected parties may be more influential than on highly visible votes because the lack of media coverage translates into a lower probability that the vote will become a major campaign issue in future elections this implies that voting on the instruments to control pollution will be driven in part by the specific district level costs and benefits of these measures while voting on the final passage of a bill will be more driven by general constituent interests

the long run labor market consequences of civil war evidence from the shining path in peru abstractthis study exploits district level variation in the timing and intensity of civil war violence to investigate whether early life exposure to civil wars affects labor market outcomes later in life in particular we examine the impacts of armed conflict in peru a country that experienced the actions of a tenacious brutally effective war machine the shining path between 1980 and 1995 this study finds that the most sensitive period to early life exposure to civil war violence is the first 36 months of life a 1 standard deviation increase in civil war exposure leads to a 5 fall in adult monthly earnings 3 5 reduction in the probability of working in formal jobs and 6 reduction in the probability of working in large firms substantial heterogeneity in the earnings impacts emerges when considering variation in the type of civil war violence overall forced disappearances emerge as the most hurtful measure of violence in the long run sexual violations disproportionately affected the wages of

the effects of congressional appropriation committee membership on the distribution of federal research funding to universities i introduction in 1994 members of the republican party pledged to seek legislation to impose term limits on members of congress this pledge stemmed from the popular belief that senior members of congress tend to promote personal interests or are more influenced by lobbying efforts that may not be representative of their constituents today term limits continue to be discussed but have not been enacted instead many members have focused their energies toward minimizing the time spent on any particular committee of congress believing that tenure on a committee is a more serious concern than simple tenure in congress implicit in these concerns is the issue whether as incumbent politicians plan to retire they will behave differently and if so whether tenure on a congressional committee exacerbates this behavior this article explores the role of membership on the appropriations committee on the distribution of federal research funding to universities specifically it explores whether funding is diverted to these universities because politicians use their position on a committee to promote personal or constituent interests previous research on shirking compares the voting records of politicians on certain issues with demographic and economic characteristics of the politicians constituents this article explores the issue of shirking differently i explore how membership on congressional appropriations committees affects the distribution of federal research funding to universities i look at two types of relationships between the members and the universities first i consider the relationship between members and the universities that are located in the members districts states in the case of senators second i examine the relationship between members and their undergraduate alma mater i use district representa tion to proxy favoritism that reflects a politician s constituents given that in most instances an alma mater affiliation is not the same as district representation i use alma mater affiliation to proxy favoritism that reflects the politician s personal interests federal research funding accounts for more than 60 of research funding received by research universities previous research has shown a positive impact of federal funding on research outcomes see adams and griliches 1998 arora and gambardella 1997 connolly 1997 payne and siow 2002 and payne 2001 except for payne and siow 2002 however these articles do not consider that political diversion of funds may promote or detract from research productivity as with any other federal program this article concentrates on the impact of membership on the house and senate appropriations committees because they wield the greatest power in the allocation of funding 1 using a panel data set spanning 26 years i explore how changes in the composition of the appropriations committees affects the distribution of research funding after controlling for the heterogeneity that exists across different universities the results suggest that both district representation and alma mater affiliation matter thus there is evidence of shirking for personal interests and evidence of members representing their constituents with respect to the representation of one s constituents the strongest results suggest that public universities benefit from representation on both the senate and house committees private universities however only benefit from representation in the senate with respect to alma mater affiliations the results suggest again that public universities benefit from representation on both the senate and house committees private universities also benefit from representation on both the senate and house committees the results also suggest that the tenure of the member on the committee matters as does whether the member is a part of the majority party in power in the congressional chamber

what do campaign contributions buy deciphering causal effects of money and votes in the 1987 1988 election cycle political action committees pacs spent 176 6 million on candidates who competed for a seat in the house of representatives what do pacs buy when contributing this money if campaign contributions are rational allocations of a contributor s income campaign expenditures could increase both the probability that the contributor s preferred candidate is elected and the likelihood that if elected the candidate will vote in the interest of the contributor most studies do not find that incumbents expenditures have a significant positive effect on the number of votes incumbents receive 11 14 15 17 29 the evidence that contributions influence congressional votes is mixed most studies find weak or no support for this hypothesis for example kau rubin and keenan 17 find that contributions from businesses mattered in only two of the eight votes they analyzed others argue that campaign expenditures play no important role in the voting decision of congressmen 5 9 12 31 the lack of finding of significant effects of money on votes has been explained with the need for better models to explain campaign contributions 5 however the theoretical developments of for example ben zion and eyton 4 bental and ben zion 3 and baron 2 have not been incorporated in the empirical analysis of the effect of campaign contributions on the voting behavior of legislators empirical models that test this relationship must allow for the endogeneity of campaign contributions for the dichotomous nature of the dependent vote variable and the nonnegativity constraint of campaign contributions most empirical work in this area utilize models that do not incorporate these restrictions in this study i plan to incorporate these aspects of the data generating process into a more detailed model of the effects of campaign contributions on congressional votes of all the reported empirical studies on this issue only chappell 5 uses a model which can properly assess the impact of money on votes chappell finds that campaign contributions do not affect votes in congress when his more detailed econometric technique is used the best test of the theory results if votes have a clear economic payoff to contributors benefits of the votes are concentrated and costs are

retrospectives cost benefit analysis and the classical creed cost bene t analysis provides the dominant economic approach with whicheconomists talk to each other to government bureaucrats and to the general laityabout the desirability of public programs and investment projects cost bene tstudies have pushed economic thinking into public debates and reciprocally havebrought an uncommon level of public scrutiny to the technical deliberations ofeconomists precisely because cost bene t analysis addresses serious real world decisions this widely used and frequently abused tool of applied economics has had a bumpyhistory last year newspaper headlines across the country announced that apentagon investigation had found systematic manipulation of net bene t estimatesat the army corps of engineers for example grunwald 2000 the corps hasbeen the political godfather of cost bene t analysis in the united states but ithas also long been suspected of an institutional bias in favor of projects that canadd signi cantly to its own budget allocations re ecting on the early record of

poverty traps and nonlinear income dynamics with measurement error and individual heterogeneity theories of poverty traps stand in sharp contrast to the view that anybody can make it through hard work and thrift however empirical detection of poverty traps is complicated by the lack of long panels measurement error and attrition this paper shows how dynamic pseudo panel methods can overcome these difficulties allowing estimation of non linear income dynamics and testing for the presence of poverty traps the paper explicitly allows for individual heterogeneity in income dynamics to account for the possibility that particular groups of individuals may face traps even if the average individual does not these methods are used to examine the evidence for a poverty trap in labor earnings income and expenditure in mexico and are compared to panel data estimates from a short rotating panel the results do find evidence of nonlinearities in household income dynamics and demonstrate large bias in the panel data estimates nevertheless even after allowing for heterogeneity and accounting for measurement error the paper finds no evidence of the existence of a poverty trap for any group in the sample

understanding farmland price changes this paper develops a structural model of land prices which includes the multidimensional effects of inflation on capital erosion savings return erosion and real debt reduction as well as the effect of changes in the opportunity cost of capital the results show that inflation and changes in the real returns on capital are major explanatory factors in farmland price swings in addition to returns to farming additionally the effects of credit market constraints and expectations schemes are considered explicitly in the analytical model

labor income and risky investments can part time farmers compete abstract in the developed countries a majority of farm households receive at least as much income from nonfarm sources as from the farm such part time farms have survived inspite of lower returns than full time farms this paper considers when lower returns to part time farming could be compensated by risk reduction due to diversification of income sources the paper uses a dynamic portfolio choice model with labor income the model and results could be applied in other contexts as well

the cotton influence index an examination of u s cotton subsidies given the lack of a bill or amendment specific to cotton we introduce a cotton influence index to capture legislators influence in championing the cause of the cotton growers during the hearings of the farm security and rural investment act of 2002 regression analyses reveal a relationship between cotton influence index and campaign contributions cotton farmland party affiliation and ideology tobit analysis indicates a significant relationship between different actions and participations by representatives to advance the interest of cotton that is components of this index and their future cotton political action committees pacs contributions to them copyright 2006 oxford university press

the relationship between congressional spending and tenure with an application to term limits whether term limits would increase or decrease federal spending depends on the reason for the causal relationship between tenure and spending we investigate this subject by empirically studying congressional spending and tenure for all united states house and senate members who entered congress between the 94th and 102nd congresses 1975 1992 as our measure of congressional spending we use the national taxpayers union s congressional spending scores our study finds that a statistically significant relationship exists between congressional spending and tenure for some groups of congressmen we then test three hypotheses relating tenure and spending no single hypothesis is consistent with all of our empirical results nevertheless the small sizes of the empirical effects estimated in this study suggest that term limits would have an inconsequential impact on the level of federal spending at least via the moral hazard mechanisms described in this paper

overcoming incentive constraints by linking decisions consider a bayesian collective decision problem in which the preferences of agents are private information we provide a general demonstration that the utility costs associated with incentive constraints become negligible when the decision problem is linked with a large number of independent copies of itself this is established by defining a mechanism in which agents must budget their representations of preferences so that the frequency of preferences across problems mirrors the underlying distribution of preferences and then arguing that agents incentives are to satisfy their budget by being as truthful as possible we also show that all equilibria of the linking mechanisms converge to the target utility levels the mechanisms do not require transferable utility or interpersonal comparisons of utility and are immune to manipulations by coalitions

logrolling in the u s congress i introduction a long standing question in political science is whether exchange occurs in legislatures as it is expected in any economy where the intensity of demand varies the issue was originally raised by buchanan and tullock 1962 and expanded by coleman 1966 and mueller 1967 the subsequent literature has produced numerous models of vote trading haefele 1971 riker and brams 1973 koford 1982a much of the work suggests that vote trading leads to chaotic results see for example riker and brams 1973 kramer 1977 and mckelvey 1976 currently vote trading s quantitative importance and optimality are unknown references to logrolling go back to the early literature in political science bentley 1907 refers to it and since then scholars such as mayhew 1966 and ferejohn 1974 have provided primarily anecdotal evidence for logrolling the economic analysis of logrolling has mostly been theoretical and little work has been done to assess the qualitative and quantitative importance of vote trading in legislatures however much might be learned from such analysis given the apparent puzzle that for most roll calls votes on parts of bills only a minority of districts stand to gain yet such proposals get passed until recently vote trading has not been identified empirically stratmann 1992 is the only paper that identifies vote trades statistically and it looks only at vote trades among agricultural interests however it would be interesting to know whether logrolling is prevalent in circumstances other than farm commodity programs we need to identify logrolling coalitions to assess how widespread logrolling agreements are we expect them to be common if the intensity of demand for legislation varies related to the issue of vote trading is the question of what factors determine congressional voting behavior major elements in a legislator s voting decision are constituency interests ideology party and perhaps vote trading one segment of the literature on congressional voting has focused on the role of political parties as an important force determining a legislator s voting decision some authors have argued that parties provide an organizational framework within which logrolling will happen see for example fiorina 1974 koford 1987 weingast and marshall 1988 johnson and stratmann 1992 alternatively lindsay and maloney 1988 suggest that party discipline forces a legislator to vote for or against a piece of legislation the latter view implies that on some issues party affiliation forces the legislator to vote against constituency interests 1 whether party affiliation is a signal to constituencies of one s overall propensity to vote on bills or a means to build coalitions or whether both elements are important is an unresolved question voting along party lines can be due to party loyalty or party pressure promoting the interests of one s constituency or logrolling within the party to answer questions about voting along party lines and about vote trading and coalitions within a quantitative framework one has to distinguish empirically between party loyalty and logrolling coalitions that are organized within a party empirical studies have typically included a party dummy variable in regression equations however if logrolling coalitions are organized within a party such a dummy variable will measure both potential party loyalty or potential party discipline and membership in a logrolling coalition this paper uses a different approach to separate the logrolling variable from the party loyalty variable and so distinguishes between voting for a proposal because of membership in a log rolling coalition organized by a party and because of potential party discipline this paper analyzes a broad range of votes where logrolling has been reported the analysis spans two congresses 1959 to 1962 and examines trades between interests favoring subsidies for city interests labor interests and farm interests

the political economy of the fair labor standards act of 1938 this paper examines the congressional passage of the american minimum wage law the fair labor standards act of 1938 voting on the act is modeled as a function of the concentration of the constituencies for minimum wage legislation north south differentials and legislator ideology it is shown that the house radically altered the final content of the bill abandoning a proposed wages and hours board with discretionary powers to determine minimum wages in favor of a flat rate following the objections of several interest groups north south divisions over the bill had little influence over congressional voting and the influence of constituent groups increased relative to legislators ideology as the bill became an important election issue

logrolling under fragmented authoritarianism theory and evidence from china this paper provides a rigorous theoretical and empirical analysis of the effect of logrolling between interest groups on social welfare in a non democratic political system in particular we focus on china where bureaucratic interest groups are separate vertical organizations reaching down from beijing to the provinces and cities the key question in this paper is what are the effects of the logrolling of parochial interest groups on state policies and social welfare in autocracies we address this question both theoretically and empirically the theory predicts a specific distortion in resource allocation because of logrolling while the empirical results confirm the theoretical prediction we find policy outcomes under logrolling are characterized by excessive spending on all the interest groups preferred goods and insufficient spending on public goods we test the existence of logrolling between the ministry of civil affairs and ministry of health in china our result shows logrolling between the two ministries lead to inefficiencies in social security and health care policies

imperfect information and the meltzer richard hypothesis standard majority voting models predict that redistribution is positively linked to the mean to median income ratio but empirical evidence is mixed this paper shows that the different empirical reactions to rising mean to median income ratios can be rationalized in a simple romer roberts meltzer richard framework with imperfect information in such a model it is important to consider the source of rising mean to median ratios income growth of the poor can lead to less redistribution as more agents perceive themselves to be rich which tends to reduce the support for redistribution an empirical application reveals that the model can explain a substantial part of the first reagan tax cut

the impacts of business cycles on returns to farmland investments expected performance and valuation of investments in farmland are examined in relation to prevailing business cycle conditions over a period that includes both the 1970s farm boom and 1980s farm recession information on risk premia in debt equity and land markets are shown to significantly affect conditional expected returns to farmland and consequently farmland values further conditional expected land returns diverge significantly in some years from returns conditionally required on the basis of systematic risk overall implications are that expected land returns are dependent not only on local sector conditions but also on time varying macroeconomic conditions related to business cycles

legislative voting and the economic theory of politics empirical studies of legislative voting have multiplied since the mid 1970s early work 13 distinguished two modes of representation delegates who vote as voters want and trustees who use their own judgment more recently researchers have considered only delegates claiming that legislators who use their own ideology are shirking following principal agent theory representatives are conceived as conduits through which citizens transmit and express interests empirical work on this question however has found that the legislator s ideology explains more variation in vote choices than is explained by measures of constituent interest the seeming contradiction has led some 9 10 17 to reject the economic theory of legislator behavior as erroneous the truth is that no such theory has ever been fairly stated much less tested estimating equations have been ad hoc and the usual approach to measuring ideology has imposed correlation between the equation error and an explanatory variable 8 in both cases the result is

agenda control and reciprocity in sequential voting decisions we study how reciprocity affects the extent to which a chair can exploit her control over an agenda if a committee votes sequentially on a known series of binary proposals we show in a parsimonious laboratory experiment that committee members form vote trading coalitions favoring early proposals not only when the sequence of proposals is exogenously given but also when a chair controls the sequence of proposals vote trading occurs even though chairs manipulate the agenda in their favor punishment for chairs exploiting agenda control is weak as chairs reciprocate support by others more frequently than nonchairs jel c92 d71 d72

political interaction in the senate estimating a political spatial weights matrix and an application to lobbying behavior many motivations exist that cause legislators to behave strategically when voting these include logrolling towing the party line or political favor trading however it has proven difficult in the existing literature to uncover the magnitude of the interaction among politicians this paper takes a spatial approach to the problem using a spatial autoregressive model to not only uncover the magnitude of interactions but also the direction of the interactions in contrast to most applications of spatial econometrics i allow the elements of the spatial weights matrix to be estimated as parameters the political spatial weights matrix is calculated for 96 senators in the 110th u s congress furthermore in a marginal effects simulation i calculate the overall effect on voting from flipping a senator s vote allowing flipped votes to have a cascading effect i apply these measures to study political fundraising mildly suggesting that political interest groups direct donations to senators with the most influence

rice prices and income distribution in thailand a non parametric analysis rice is a staple crop in thailand significantly entering both household production and consumption this paper examines the effect of rice prices on the distribution of real income across households taking into account household characteristics and geographical location the data set is a large scale survey of 11 893 households simple nonparametric techniques for regression and density estimation are used these methods depend on few assumptions and generate flexible graphical results that are directly informative about the problem at hand the main results are that higher rice prices should benefit all rural households but the largest benefits accrue to rural households in the middle of the income distribution copyright 1989 by royal economic society

farmers welfare and changing food prices nonparametric evidence from rice in madagascar this paper uses nonparametric density estimation and kernel smoothing techniques to examine the instantaneous distributional implications of rice price changes in madagascar while many farmers do not participate in product markets as either buyers or sellers and net sales or marketable surplus are fairly small for many others the roughly one third of rice farmers who fall below the poverty line face significant negative first order welfare effects from increases in the mean or variance of rice prices conversely the first order gains from rice price increases are highly concentrated among the largest rice farmers and particular regions in madagascar

foods and fads the welfare impacts of rising quinoa prices in peru abstract riding on a wave of interest in superfoods in rich countries quinoa went in less than a decade from being largely unknown outside of south america to being an upper class staple in the united states the united kingdom and elsewhere as a result concerned commentators suggested that the rising international demand for quinoa which tripled prices might have substantially harmed peruvian quinoa consumers we study the impacts of rising quinoa prices on the welfare of peruvian households our analysis suggests these fears are unwarranted a descriptive analysis shows that quinoa is a small part

what should government do problems of social cost externalities and all that public choice as a field introduced the framework for a methodical economic analysis of political markets the output of these markets of course is reflected by the role that government plays that is specifically true with respect to the organization of economic activity gordon tullock has studied a myriad of aspects of this topic for more than half a century we examine his answers to the question of what should government do and how they have influenced and are still impacting the discussion on the proper role of government in the economy

free trade fair trade strategic trade and protectionism in the u s congress 1987 88 what conditions led the one hundredth congress of the united states to enact fair trade and strategic trade policies into law during 1987 88 political partisanship is an important force with democrats supporting and republicans opposing all types of trade intervention otherwise the coalitions of support for and opposition to the various trade policies differ particularly in the senate in that body international business is associated with support for fair trade policies and with opposition to classical protectionism while domestic u s business is associated with support for classical protectionism liberalism is strongly associated with support for fair and strategic trade policies but is not associated with classical protectionism in the house of representatives the long standing protectionist coalition remains an influence few forces in support of free trade remain in u s politics changing international market conditions rapidly affect the making of u s trade policy

centralized vote trading this paper presents a model of centralized vote trading in a legislature in this model legislators trade only with party leaders who set prices at which they will buy needed vote changes and sell promises to pass or defeat particular bills each legislator trades away votes on bills of little concern to him and of high concern to leaders and purchases promises from the leaders to pass or defeat particular bills of high concern to the legislator relative to the price the leguslator must pay

testing political economy models of reform in the laboratory a fast growing theoretical literature on the political economy of reform has provided a sizable collection of models that have deepened our understanding concerning how distributional conflict manifests itself in the political process and can prevent efficiency enhancing economic reform from taking place see e g allan drazen 2000 ch 10 13 for an insightful review unfortunately systematic empirical work that provides direct tests of the validity and significance of the mechanisms articulated in these models has been limited as torsten persson and guido tabellini 2000 p 481 note in their evaluation of the larger political economy literature the gap between theory and evidence is a final weakness of the existing literature w hen there is empirical work its ties to the underlying theory are often loose and are not tied well to the extensive form games or theoretical predictions in theoretical work ideally we would like more empirical work derived from theory as opposed to informed by theory one reason for the lack of such empirical studies is that most of these often gametheoretic models explain policy outcomes as a result of strategic interaction of forward looking agents direct tests of these models using field data are subject to the same difficulties that researchers have faced when testing gametheoretic models in other areas such as industrial organization since qualitative features of the equilibria often depend sensitively on the specific assumptions of the game structure see richard schmalensee 1988 pp 675 76 gilles saint paul 2000 in addition the politicaleconomy literature of reform explains policy outcomes using political variables such as the distribution of voters preferences and the nature of political institutions see e g drazen 2000 stephan haggard 2000 the time variation of these variables is often limited leading to a classic identification problem and making direct tests of theoretical models difficult saint paul 2000 laboratory studies allow the researcher to manipulate explanatory variables of a theory as treatment variables so such studies should be helpful in partially overcoming these difficulties and can complement field empirical work on reform the study of reform also poses new challenges to experimental economists and a dialogue between political economists and experimental economists can enable both sides to capture gains from trade this paper aims to illustrate this using an experimental study of the model in the influential paper by raquel fernandez and dani rodrik 1991

implications of higher global food prices for poverty in low income countries in many poor countries the recent increases in prices of staple foods raise the real incomes of those selling food many of whom are relatively poor while hurting net food consumers many of whom are also relatively poor the impacts on poverty will certainly be very diverse but the average impact on poverty depends upon the balance between these two effects and can only be determined by looking at real world data results using household data for ten observations on nine low income countries show that the short run impacts of higher staple food prices on poverty differ considerably by commodity and by country but that poverty increases are much more frequent and larger than poverty reductions the recent large increases in food prices appear likely to raise overall poverty in low income countries substantially

mechanisms for efficient voting with private information about preferences we experimentally study behavior in a simple voting game where players have private information about their preferences with random matching subjects overwhelmingly follow the dominant strategy to exaggerate their preferences which leads to ineciency we analyze an exogenous linking mechanism suggested by jackson and sonnenschein 2007 as well as repeated interaction in dierent settings which could allow endogenous linking mechanisms to evolve we find that applying the exogenous mechanism captures nearly all achievable eciency gains whereas repeated interaction leads to significant gains in truthful representation and eciency only in

communication in intergroup conflicts abstract numerous studies suggest that communication may be a universal means to mitigate collective action problems in this study we challenge this view and show that the communication structure crucially determines whether communication mitigates or intensifies rent seeking for pure public goods we observe the effect of different communication structures in the context of a finitely repeated intergroup contest and demonstrate that conflict expenditures are significantly higher if communication is restricted to one s own group as compared to a situation with no communication however expenditures are significantly lower if open communication within one s own group and between rivaling groups is allowed we show that under open communication intergroup conflicts are avoided by groups taking turns in winning the contest our results do not only qualify the role of communication for collective action but may also provide insights on how to mitigate the destructive nature of intergroup conflict and group rent seeking

commodity price shocks and child outcomes the 1990 cocoa crisis in cote d ivoire abstract we look at the drastic cut of the administered cocoa producer price in 1990 cote d ivoire and study to which extent cocoa producers children suffered from this severe aggregate shock in terms of school enrollment labor height stature and morbidity using precrisis 1985 88 and postcrisis 1993 data we propose a difference in difference strategy to identify the causal effect of the cocoa shock on child outcomes whereby we compare children of cocoa producing households and children of other farmers living in the same district or the same village this causal effect is shown to be rather strong for the four child outcomes we examine hence human capital investments are definitely procyclical in this context we also provide evidence of gender bias against young girls with respect to education and health care we finally argue that the difference in difference variations can be interpreted as private income effects likely to derive from tight liquidity constraints

earnings mobility and measurement error a pseudo panel approach the degree of mobility in incomes is often seen as an important measure of the equality of opportunity in a society and of the flexibility and freedom of its labor market but estimation of mobility using panel data is biased by the presence of measurement error and non random attrition from the panel this paper shows that dynamic pseudo panel methods can be used to consistently estimate measures of absolute and conditional mobility in the presence of non classical measurement errors these methods are applied to data on earnings from a mexican quarterly rotating panel absolute mobility in earnings is found to be very low in mexico suggesting that the high level of inequality found in the cross section will persist over time however the paper finds conditional mobility to be high so that households are able to recover quickly from earnings shocks these findings suggest a role for policies which address underlying inequalities in earnings opportunities

polarizing information and support for reform abstract we examine whether political polarization is an obstacle to common value reforms we conduct experiments in two ideologically polarized countries the united states and egypt subjects vote between enacting a reform which yields higher expected financial payoffs than the costs of implementation for all but has indirect differential benefits for supporters of only one group of voters versus not enacting the reform and everyone receiving lower payoffs we find that when the groups are polarized ideologically subjects are less likely to vote for reform when informed that another political group would differentially benefit and more likely to support reform should their own group benefit more when subjects are told that one group will differentially benefit from reform they are significantly more likely to explain their vote as being influenced by their own group membership in contrast we find that when subjects are organized into nonpolarized groups group membership predicts reform support less and when there are no differential benefits for a particular group the effect of membership on support is significantly reduced hence we find that the effect of polarization on support for common value reform is contingent on the existence of indirect differential benefits and the degree of ideological polarization of the groups who receive those benefits