vote buying with multiple distributive goods within the rich literature on distributive politics models of vote buying treat the distributive logic of different particularistic incentives as theoretically similar this article relaxes that a

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

economic reform and public opinion in peru 1990 1995 even if they are confident that prosperity lies just over the horizon politicians who embark on promarket reforms know they are in for some stormy weather how will they fare in voters eyes once the pain is felt will voters inevitably turn against politicians who impose painful measures without an electoral mandate to do so the story of economic reform and public opinion in peru under alberto fujimori 1990 1995 poses just these questions the author uses monthly public opinion polls and monthly economic data to analyze the impact of economic changes during fujimori s reform program on opinions of the reforms and the president the author finds that limenos withdrew support from the program and the president when employment fell and inflation rose responses consistent with the findings of the economic voting literature but when real wages fell they became optimistic about the future and more likely to support reforms and the government

how efficient is the voting market it is by now well established that good macroeconomic conditions benefit the incumbent president and his congressional party confreres at the polls this result is not unanimous see for example stigler or arcelus and meltzer2 and may not be universal 3 however the basic results in kramer 4 the progenitor of the modern literature on the effect of economic conditions on elections seem to have stood the test of time the broad consensus of this literature is that voters in presidential and congressional elections 1 reward income growth and punish unemployment and inflation 2 probably give greater weight to income growth than to unemployment and inflation and 3 myopically ignore any information beyond the recent past say prior to the election year 5 so far however the data have outrun interpretation while economic conditions seem to matter we do not know why they matter or how plausibly to characterize the process by which voters translate information about economic conditions into voting decisions this article tries to fill that gap though it extends the empirical literature to gubernatorial elections its main con

bank liquidity and stability in an overlapping generations model in an infinitely repeated version of the diamond and dybvig 1983 model intergenerational transfers enable a bank to achieve interest rate smoothing and to provide depositors with liquidity insurance without diamond and dybvig s assumption of no side trades the bank is subject to runs that may result from either excessive withdrawals or the lack of new deposits the latter cause which cannot occur in diamond and dybvig s one generation model implies that suspension of convertibility may not prevent bank runs government intervention may be necessary to maintain bank stability article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

mass organization and the durability of competitive authoritarian regimes evidence from venezuela many studies highlight the critical roles of political parties in enhancing autocratic durability mainly emphasizing mechanisms related to elite cohesion the role of a mass party organization in stabilizing autocracies though well recognized has received relatively less emphasis this article argues that the import of mass organization on autocratic durability is likely to vary with autocratic regime type and be greatest in competitive authoritarian regimes i then exploit unusual survey data and an original data set containing information on 18 037 regime affiliated communal councils to examine the effects of a regime affiliated mass organization on the incumbent vote in venezuela the formation of communal councils exerted a large effect on incumbent support but the strength of this effect varied depending on whether councils were located in communities receiving high levels of material resources these findings suggest that mass organization can greatly enhance competitive authoritarian durabilit

swallowing the bitter pill sources of popular support for neoliberal reform in latin america what accounts for the surprisingly widespread popular approval that painful neoliberal reforms elicited in several latin american countries this article compares the explanatory power of two rival hypotheses which draw on conventional rational choice and psychological decision theory the compensation hypothesis claims that governments can engineer support for costly reforms by compensating the losers through targeted social benefits the rescue hypothesis questions this claim and maintains that draconian adjustment only finds support if it promises to revert a deep crisis and avert further losses data from argentina bolivia brazil mexico peru and venezuela suggest that the rescue hypothesis accounts much better for the initial endorsement of neoliberal shock programs immediately after their enactment when these shock programs bring about economic stabilization and recovery targeted social benefits help consolidate support for neoliberalism which a statistical analysis of the impact of social s

neoliberalism and lower class voting behavior in peru it is often assumed that lower classes will resist market oriented neoliberal reforms that impose economic austerity on popular sectors and exacerbate social inequalities however the peruvian cas

the political economy of expenditures by the peruvian social fund foncodes 1991 95 the peruvian social fund foncodes was created by president alberto fujimori in 1991 with the stated objectives of generating employment alleviating poverty and improving access to social services this article uses province level data on monthly expenditures socioeconomic indicators and electoral outcomes to analyze political influences on the timing and geographic distribution of foncodes expenditures between 1991 and 1995 i reach three main conclusions first these expenditures increased significantly before national elections second foncodes projects were directed at provinces in which the marginal political effect of expenditures was likely to be largest third these projects favored the poorest provinces which suggests that the program also had a redistributive function the results are robust to a large number of specifications and controls the peruvian data support predictions made in the literature on political business cycles as well as the literature on political influences on the allocation of discretionary funds

the political costs of taxes and government spending the marginal political costs of different types of taxes and government spending as well as voter preferences over different fiscal variables are examined using two different specifications for political cost one based on the probability of incumbent defeat and the other based on the incumbent s percentage of the vote models associated with these two specifications in which voting behaviour depends on disaggregated taxes and government expenditures are estimated using clata from canadian provincial elections the empirical results which indicate that different types of taxes and expenditures have quite different marginal political costs have important implications for models that incorporate voter pref erences

the macroeconomics of populism in latin america by populism this paper refers to an economic approach that emphasizes growth and income redistribution and deemphasizes the risks of inflation and deficit finance external constraints and the reaction of economic agents to aggressive nonmarket policies it analyzes two instances of populism chile under allende and peru under garcia these experiences are described in detail not as a righteous assertion of conservative economics but as a warning that populist policies ultimately fail and always at a frightening cost to the groups they were supposed to benefit this paper explores the question of whether some variant of populist policies could succeed it suggests that populist policies could succeed if they stayed clear of foreign exchange constraints emphasized reactivation for a brief initial period and then shifted to growth policies most important expansionary policies must reflect awareness of capacity constraints and must rely for financing on an extremely orthodox fiscal policy and rigorous tax adminsitration the paper concludes by warning that imf style policies unconcerned with growth of social progress may establish financial stability in the short run but inevitably open the door to yet another round of destructive reaction in the form of populist policies

what drives the swing voter in africa what makes african voters up for grabs existing approaches to the swing voter have several liabilities this article introduces a new measure enabling a more comprehensive assessment of swing voting including the differentiation between clientelistic and collective goods motivations the issue of swing voting is then brought to an environment where voters are rarely considered persuadable africa using a count model estimation technique and original survey data from ghana s critical 2008 elections the analysis challenges the near consensus in african politics on clientelism as the only electoral strategy when voters perceive politicians as providing collective developmental goods the efficacy of clientelism as a tool to win over voters is reduced many persuadable voters can also be won over by both clientelistic and collective goods thus contradicting the literature presenting these as mutually exclusive finally the analysis shows that incumbents do better when they provide collective goods even in highly clientelistic environments

does delegation of fiscal policy to an independent agency make a difference evidence from intergovernmental transfers in india abstract one area of fiscal policy in which several countries have delegated responsibility to an independent agency is the distribution of national resource transfers across regional and local governments such delegation is expected to promote equity and efficiency and mitigate distortions created by political incentives this paper tests whether delegation to an independent agency indeed makes a difference by contrasting the impact of partisan politics on two types of fiscal transfers to states in the indian federation over a period of time 1972 1995 the pattern of evidence shows that while the transfers that are determined by the central political executive are indeed distributed to favor particular states that are politically important for the central ruling party the transfers that are delegated to an independent agency serve to constrain such partisan impact

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

the structural adjustment of politics in africa abstract it has long been recognized that the structural adjustment programs currently being proposed by the world bank and the international monetary fund in africa have important political consequences however there has been almost no attention devoted to what structural adjustment if implemented means for the way that politics is actually carried out in african nations the failure to examine the long term consequences of economic reform for politics is particularly surprising given that the major instruments of structural adjustment public sector reform devaluation elimination of marketing boards threaten to change not only the constituencies that african leaders look to for support but the way in which leaders relate to their supporters in the countries south of the sahara the paper examines how structural adjustment if actually implemented would affect politics in african countries the paper finds that structural adjustment makes the political climate much riskier for leaders while weakening the central apparatus of the state on which rulers have long relied to stay in power the implications of the analysis for donors are also discussed

monetary policy under alternative bank market structures abstract the purpose of this paper is to derive and compare the short run effects of monetary policy under both perfectly and imperfectly competitive banking markets within the context of a general equilibrium framework which emphasizes the demands for and supplies of financial assets it is demonstrated that the structure of banking markets can have a bearing on the appropriate choice of policy targets and instruments specifically the federal funds rate is shown to be a potentially ineffective target instrument for policy under a competitive banking system although it can be used to produce conventional short run effects when banking markets are imperfect in contrast the level of currency and unborrowed reserves can be utilized as an effective target instrument under either form of bank market structure

equilibrium political budget cycles political business cycle theories generally rely on nominal rigidities and voter myopia this paper offers an equilibrium theory that preserves some basic insights from earlier models though with significant refinements the political budget cycle emphasized here is in fiscal policy rather than output and inflation it arises via a multidimensional signal process one can consider the welfare implications of proposals to mitigate the cycle and the effects of altering the electoral structure copyright 1990 by american economic association

local inequality and project choice theory and evidence from ecuador this paper provides evidence consistent with elite capture of social fund investment projects in ecuador exploiting a unique combination of data sets on village level income distributions social fund project administration and province level electoral results we test a simple model of project choice when local political power is unequally distributed in accordance with the predictions of the model poorer villages are more likely to receive projects that provide excludable private goods to the poor such as latrines controlling for poverty more unequal communities are less likely to receive such projects consistent with the hypothesis of elite capture these results are sensitive to the specific measures of inequality and elite power used in the empirical analysis and are strongest for expenditure shares at the top of the distribution

chaos sunspots and automatic stabilizers abstract we consider a real business cycle model with an externality in production depending on parameter values the model has sunspot equilibria cyclical and chaotic equilibria and equilibria with deterministic or stochastic regime switching we study the implications of this model environment for automatic stabilizer tax systems stabilization is desirable because the efficient allocations are characterized by constant employment and output growth we identify an automatic stabilizer income tax subsidy schedule with two properties i it specifies the tax rate to be an increasing function of aggregate employment and ii earnings are subsidized when aggregate employment is at its efficient level the first feature eliminates inefficient fluctuating equilibria while the second induces agents to internalize the externality

are rules based government programs shielded from special interest politics evidence from revenue sharing transfers in brazil abstract manipulation of government finances for the benefit of narrowly defined groups is usually thought to be limited to the part of the budget over which politicians exercise discretion in the short run such as earmarks analyzing a revenue sharing program between the central and local governments in brazil that uses an allocation formula based on local population estimates i document two main results first that the population estimates entering the formula were manipulated and second that this manipulation was political in nature consistent with swing voter targeting by the right wing central government i find that municipalities with roughly equal right wing and non right wing vote shares benefited relative to opposition or conservative core support municipalities these findings suggest that the exclusive focus on discretionary transfers in the extant empirical literature on special interest politics may understate the true scope of tactical redistribution that is going on under programmatic disguise

bank collapse and depression the recurrent banking panics of the 19th century and the great depression of the 1930s are widely viewed as failures of our economic system a simple version of samuelson s overlapping generations model is used to generate such failures of walrasian equilibrium the spontaneous panics generated involve a collapse of bank credit causing in turn a drop in investment demand the model suggests that both the recent technological advances in the intermediation industry and the current move towards deregulation of that industry are ominous developments

public opinion and market reforms the limits of economic voting the broadly held view that promarket reforms are good for most people is in conflict with the equally broadly held view that in democracies reforms will generate widespread resistance resistance is expected because reforms typically produce economic downturns at least over the short term under normal circumstances we expect citizens to withdraw support from governments during periods of economic decline if citizens withdraw support then governments worried about the next election may abandon reforms but our expectations should be different of new democracies pursuing promarket reforms citizens may believe governments when they claim that things have to get worse before they get better or that economic stagnation is the fault of the past model research in poland peru and mexico reported in this special issue supports these expectations hence under democracy there is more scope for support of painful reforms than frequently acknowledged

does political competition lessen ethnic discrimination evidence from sri lanka abstract the impact of political competition on ethnic discrimination remains largely unexplored to address this gap this paper explores the relationship between the level of political competition and the probability of receiving government transfers among ethnic minorities in sri lanka in the run up to the national elections of 2000 the paper shows that making politicians dependent on the votes of members of ethnic groups other their own can encourage moderation in discriminatory practices towards ethnic minorities specifically we find that political competition positively influenced the distribution of government food stamps among sri lankan tamils who otherwise are less likely to receive food stamps relative to the sinhalese majority the negative impact of political competition on discrimination is higher when minorities form part of swing constituencies than when they form part of the base support for political parties lessons learnt here suggest that having built in incentives in the design of the electoral process for intergroup bargaining and cooperation in countries with ethnically heterogeneous societies can be an effective restraint on ethnic discrimination this is consistent with other research that considers political institutions to be a key lever for making ethnically divided societies more inclusive

active intermediation in a monetary overlapping generations economy abstract this paper establishes that the profit seeking activities of private intermediaries can ensure pareto efficiency in the standard pure exchange monetary overlapping generations economy without the need for government monetary or fiscal policy intervention moreover these profit seeking activities are shown to rule out all aperiodic and k periodic cycles for k greater than 2 contrary to much recent work on intermediation the profit opportunities that arise for intermediaries in this context are not due to assumed frictions or asymmetric information rather they are due to the dynamic open ended structure of the economy which permits debt roll over

the allocation and impact of social funds between 1992 and 1998 the peruvian social fund foncodes spent about us 570 million funding microprojects throughout the country many of these projects involved constructing and renovating school

voter buying shaping the electorate through clientelism studies of clientelism typically assume that political machines distribute rewards to persuade or mobilize the existing electorate we argue that rewards not only influence actions of the electorate but can also shape its composition across the world machines employ voter buying to import outsiders into their districts voter buying demonstrates how clientelism can underpin electoral fraud and it offers an explanation of why machines deliver rewards when they cannot monitor vote choices our analyses suggest that voter buying dramatically influences municipal elections in brazil a regression discontinuity design suggests that voter audits which undermined voter buying decreased the electorate by 12 percentage points and reduced the likelihood of mayoral reelection by 18 percentage points consistent with voter buying these effects are significantly greater in municipalities with large voter inflows and where neighboring municipalities had large voter outflows findings are robust to an alternative research design using a different data set

multiple equilibria in dynamic rational expectations models a critical review abstract multiple equilibria are a ubiquitous feature of dynamic rational expectations models researchers have been divided on the implications of this phenomenon some have viewed this as a reflection of reality and a possible explanation of a wide range of economic phenomena others have suggested various selection criteria for choosing one among the many equilibria this paper reviews the major selection criteria that have been proposed and through application to three well known models shows under what circumstances one might expect them to choose the same or different equilibria in addition this paper proposes a new criteria based on the limit of finite horizon equilibria and investigates its relation to the other criteria

incorporating marginal citizens and voters the conditional electoral effects of targeted social assistance in latin america in this article we study how social assistance shapes election results across latin america case studies in several countries have found electoral effects yet it remains unclear whether and how effects vary cross nationally and whether electoral effects are due to mobilization or persuasion we theorize that programs mobilize non voters and convert the opposition simultaneously but that the effects vary based on country level political and programmatic differences using 2012 americasbarometer data we develop a unified cross national model that confirms that public assistance makes recipients more likely to turn out and once at the polls to vote for the incumbent compulsory voting laws and program politicization magnify the electoral effects of social assistance but effects do not vary by presidential ideology or program conditionalities these findings are consistent with the perspective that latin american voters are boundedly rational retrospective agents whose behavioral choices depend on t

distributive politics and conditional cash transfers the case of brazil s bolsa familia summary brazilian politicians have long relied on pork and clientelism to win political support and recent literature suggests that little has changed however researchers have yet to systematically investigate whether political criteria influence the distribution of funds through bolsa familia this is especially surprising given the program s prominence in the international community in this paper i examine whether political criteria explain the federal government s distribution of bolsa familia i find little evidence that political criteria explain the difference between the number of poor families that live in a municipality and the number of families that receive support i conclude by discussing the broader significance of this large programmatic policy to brazil s political development

the road to power partisan loyalty and the centralized provision of local infrastructure this paper sets out a simple dynamic probabilistic voting model in which a government allocates a fixed budget across electoral districts that differ in their loyalties to the ruling party the model predicts that the geographic pattern of spending depends on the way the government balances long run machine politics considerations and the more immediate concern to win over swing voters empirical results obtained from a panel of electoral districts in quebec provide robust evidence that districts which display loyalty to the incumbent government receive disproportionately more spending especially close to an election at odds with the standard swing voter view

the political economy of fertilizer subsidy programs in africa evidence from zambia fertilizer subsidy programs have re emerged as popular policy tools in sub saharan africa despite a burgeoning body of literature on program impacts the political economy of the programs remains poorly understood in particular there is a dearth of empirical evidence to support or refute the conventional wisdoms that governments systematically target subsidized inputs to certain areas based on past voting patterns and that fertilizer subsidies win votes this article discusses the theoretical links between government targeting of subsidized fertilizer and voter behavior then uses panel data from zambia to empirically test these conventional wisdoms results suggest that zambia s movement for multi party democracy governments targeted more subsidized fertilizer to households in areas where it had strong support in the previous presidential election however contrary to conventional wisdom marginal changes in the scale or coverage of the fertilizer subsidy program had no statistically significant effect on the share or number of votes won by incumbent presidents

first mover advantage and the speed of competitive entry 1887 1986 abstract this paper examines historical changes in the duration of the interval between the commercial introduction of a new product and the time when entry by later competitors begins a priori reasons are examined why the duration of this interval in the u s economy may either expand or contract data for 46 major product innovations however show a systematic tendency for the interval identified above to contract over the last century the average time span was almost 33 years at the turn of the century and has declined to 3 4 years for innovations in 1967 86 empirical evidence suggests this change resulted largely from a lowering of absolute cost advantages of first movers through easier transfer of knowledge and skills across firms and was also facilitated by the growth of markets

distributive politics in a multiparty system the conditional cash transfer program in turkey what are the dynamics of distributive politics in a setting of multiparty competition existing studies on the allocation of resources across multiple electoral districts focus primarily on a setting of two party competition and consider only the core versus swing district hypotheses this framework does not correspond to the actual electoral setting in many countries and ignores valuable information furnished by a context of multiparty competition compared with two party elections multiparty elections provide more information about the underlying distribution of the ideological preferences of voters in a district this information could be utilized by the incumbent party to maximize electoral returns in this article i argue that a setting of multiparty competition presents incentives to the incumbent party to channel disproportionately more resources to districts with an ideologically close challenger systematic evidence from the conditional cash transfer program spending in 878 districts of turkey

banking recession depression and government expenditure we examine public good expenditure given a stylized business cycle this cycle exhibits three characteristics a a full employment path b occasional drops from that path followed by reconvergence and c sustained underemployment following a large drop a banking system modeled using samuelson s overlapping generations approach propagates shocks two sources of shocks are treated anticipated future shocks to technology and inherent instability of the banking system both of which precipitate shocks to demand we conclude that under gross substitutes the government acting as competitive purchasing agent follows countercyclical policy

government subsidies and presidential election outcomes evidence for a developing country summary we explore the effects of government subsidies on presidential elections in chile in 1989 99 we use a panel with three periods the elections of 1989 1993 and 1999 and 229 counties we correct for the potential simultaneity problem deriving from the fact that an incumbent facing a difficult political scenario might react by increasing subsidies to improve his her electoral performance our results indicate that the greater the coverage of these types of programs i e the percentage of people receiving subsidies the higher the votes for the incumbent