legislative district configurations and fiscal policy in american states in accordance with the median voter theorem the median legislator is decisive in representative democracy if the preferences of the median legislator differ from the preferences of the median voter in the polity fiscal policy choices will predictably diverge from those favored by the median voter this paper seeks to identify the median district and therein the preferences driving the median legislator in american state legislatures using economic characteristics of constituents we find substantial differences between the median district and the statewide median as the income of the median district rises above the median income of the polity government expenditures increase in addition the degree to which income is skewed across legislative districts affects spending for redistribution programs finally we find that direct democracy procedures which allow the statewide median voter to check legislative decisions limit the impact of differences between the district and polity medians

voter turnout and fiscal policy abstract in this paper we examine whether shocks in voting costs can impact elected representatives quality defined as the capacity to fund projects at the lowest cost using data on french municipalities and local variations in seasonal infections incidence as a shock on voting cost we estimate that higher incidence lowers voter turnout increases subsidies obtained by a municipality decreases harmful financial decisions and increases the municipality s investment in infrastructure we present a model where these predictions would hold in particular for municipalities with a high base level of turnout

the retrenchment hypothesis and the extension of the franchise in england and wales does an extension of the voting franchise always increase public spending or can it be a source of retrenchment we study this question in the context of public spending on health related urban amenities in a panel of municipal boroughs from england and wales in 1868 1871 and 1886 we find evidence of a u shaped relationship between spending on urban amenities and the extension of the local voting franchise our model of taxpayer democracy suggests that the retrenchment effect was related to enfranchisement of the middle class through nation wide reforms and that these reforms might have been pareto inferior in the average borough

feed in tariffs for promotion of energy storage technologies faster market integration of new energy technologies can be achieved by use of proper support mechanisms that will create favourable market conditions for such technologies the best examples of support mechanisms presented in the last two decades have been the various schemes for the promotion of renewable energy sources res in the eu the most successful supporting schemes are feed in tariffs which have significantly increased utilisation of renewable energy sources in germany spain portugal denmark and many other eu countries despite the successful feed in tariffs for res promotion in many cases res penetration is limited by power system requirements linked to the intermittency of res sources and technical capabilities of grids these problems can be solved by implementation of energy storage technologies like reversible or pumped hydro hydrogen batteries or any other technology that can be used for balancing or dump load in this paper feed in tariffs for various energy storage technologies are discussed along with a proposal for their application in more appropriate regions after successful application on islands and outermost regions energy storage tariffs should be also applied in mainland power systems increased use of energy storage could optimise existing assets on the market

women s suffrage political responsiveness and child survival in american history women s choices appear to emphasize child welfare more than those of men this paper presents new evidence on how suffrage rights for american women helped children to benefit from the scientific breakthroughs of the bacteriological revolution consistent with standard models of electoral competition suffrage laws were followed by immediate shifts in legislative behavior and large sudden increases in local public health spending this growth in public health spending fueled large scale door to door hygiene campaigns and child mortality declined by 8 15 or 20 000 annual child deaths nationwide as cause specific reductions occurred exclusively among infectious childhood killers sensitive to hygienic conditions

compulsory voting turnout and government spending evidence from austria abstract we study a unique quasi experiment in austria where compulsory voting laws are changed across austria s nine states at different times analyzing state and national elections from 1949 to 2010 we show that compulsory voting laws with weakly enforced fines increase turnout by roughly 10 percentage points however we find no evidence that this change in turnout affected government spending patterns in levels or composition or electoral outcomes individual level data on turnout and political preferences suggest that these results occur because the impacts of compulsory voting on turnout are larger among those who are non partisan who have low interest in politics and who are uninformed

pressure groups and redistribution abstract the simple pressure group model of political redistribution can predict more with less restrictive assumptions instead of ready made pressure groups composed of individuals who vote their pocketbooks we posit heterogeneous agents each of whom decides which group to join and how much effort to expend on political activity our model then examines social affinity conditions that foster pressure group formation political sympathies based on social affinity imply testable effects of growth rate and income distribution on progressive transfers effects that prove substantial in pooled time series cross section regressions for 13 oecd countries 1960 1981

equal votes equal money court ordered redistricting and the distribution ofpublic expenditures in the american states a study of the effects of legislative re districting in the states during the 1960 s also contains data file

making the case for grid connected photovoltaics in brazil abstract in the developed world grid connected photovoltaics pvs are the fastest growing segment of the energy market from 1999 to 2009 this industry had a 42 compound annual growth rate from 2009 to 2013 it is expected to grow to 45 and in 2013 the achievement of grid parity when the cost of solar electricity becomes competitive with conventional retail including taxes and charges grid supplied electricity is expected in many places worldwide grid connected pv is usually perceived as an energy technology for developed countries whereas isolated stand alone pv is considered as more suited for applications in developing nations where so many individuals still lack access to electricity this rationale is based on the still high costs of pv when compared with conventional electricity we make the case for grid connected pv generation in brazil showing that with the declining costs of pv and the rising prices of conventional electricity urban populations in brazil will also enjoy grid parity in the present decade we argue that governments in developing nations should act promptly and establish the mandates and necessary conditions for their energy industry to accumulate experience in grid connected pv and make the most of this benign technology in the near future

an interest group model of direct income redistribution an interest group model of the determinants of policies which directly re distribute income to low income persons is developed and tested the model assum es that altruistic taxpayers nonaltruistic taxpayers and needy beneficiaries f orm separate interest groups from which politicians seek support benefit levels depend on variables such as taxpayer income and the price of benefits but unlike median voter models the model also implies a role for interest group strengt h and competition between political parties the author uses latent variable met hods and data on the aid to families with dependent children program to demonstr ate empirical support forthe model copyright 1986 by mit press

a distributional theory of government growth this article presents a closed form solution for time consistent taxation and public spending in a dynamic game between government and median voter extending meltzer and richard s static analysis of government size the article offers a theory of growth of government at low stages of economic development the median voter identified as a relatively poor worker prefers to have no or only small redistributive taxation in order to foster savings through this channel he expects improvements of his labor productivity and wage at higher stages of development however when capital is relatively abundant and prospects of further labor productivity gains through capital accumulation are smaller the incentive to tax and redistribute income rises yet in line with previous work on growth and infrastructure spending the median voter prefers a constant share of productive public spending at all times hence government growth is solely driven by an expanding welfare state

the political economy of financial systems evidence from suffrage reforms in the last two centuries initially voting rights were limited to wealthy elites providing political support for stock markets the franchise expansion induces the median voter to provide political support for banking development as this new electorate has lower financial holdings and benefits less from the uncertainty and financial returns from stock markets our panel data evidence covering 1830 1999 shows that tighter restrictions on the voting franchise induce a greater stock market development whereas a broader voting franchise is more conducive towards the banking sector consistent with perotti and von thadden 2006 our results are robust to controlling for other political determinants and endogeneity

electoral competition in heterogeneous districts this paper considers a model of elections in which parties compete simultaneously for multiple districts i show that if districts are heterogeneous then a unique two party equilibrium exists under plurality rule in which further entry is deterred the equilibrium requires that parties choose noncentrist policy platforms and not converge to the ideal policy of the median voter these characteristics are consistent with empirical observation in contrast to those of single district models necessary and sufficient conditions for the existence of the equilibrium are then characterized and related to duverger s law the existence of multiple party equilibria in this environment is also considered

the economic effects of democratic participation abstract considerable concern has been expressed in recent years about declines in voter participation rates in the united states and in several other major democratic countries some feel low participation rates introduce a class bias into the political process and thereby worsen the outcomes from it little empirical work exists however that measures the effects of lower participation on the welfare of a country this paper begins to fill this void it presents cross national evidence that high levels of democratic participation are associated with more equal distributions of income the paper s results also imply however that this reduction in income inequality comes at a cost high participation rates are related to larger government sectors which in turn lead to slower economic growth we also present evidence of the capture of government by upper income groups in latin and central american countries

women prefer larger governments female labor supply and public spending the increase in income per capita is accompanied in virtually all countries by two changes in the structure of the economy an increase in the share of government spending in gdp and an increase in female labor force participation this paper suggests that these two changes are not just overlapping in time they are causally related this paper develops a growth model with endogenous fertility labor force participation and government size that illustrates this causal link economic development is accompanied by an increase in the female market wage thus increasing the opportunity cost of staying at home if government spending decreases the time cost of performing household chores including but not limited to child rearing and child care it makes sense for women to enter the labor market and demand higher government spending financed by increased taxation as women make the decision to work outside the home they increase their demand for services typically provided by the government such as education and health care which in turn decrease the cost of home and family activities that are overwhelmingly performed by women using a wide cross section of data for developed and developing countries we show that higher rates of female participation in the labor market are indeed positively associated with larger governments furthermore we investigate the causal link between the two variables using as instrumental variables for female labor force participation newly collected data on the relative price of home appliances as well as the fertility rate we find evidence of a causal link between female labor force participation and government size a 10 percent rise in female participation in the labor market leads to a 7 to 8 percent rise in government size this effect is robust to the country sample time period and a set of controls in the spirit of rodrik 1998

short and long run elasticities in energy demand a cointegration approach abstract short and long run energy demand elasticities are estimated on danish annual data for 1948 1990 energy consumption the real price of energy and real gdp appear to be non stationary variables cointegration and error correction methods are therefore applied all estimated parameters have the expected signs and magnitudes and no evidence is found of a structural break in energy demand caused by the increases in real energy prices since 1973 74

social mobility and the demand for public consumption expenditures the collective choice of public consumption expenditure is reconsidered when voters are socially mobile in accordance with previous work on social mobility and political economics the analysis concerns a class of mobility processes that induce mappings from initial income to expected future income that are monotonically increasing and concave the paper abstracts from the explicitly redistributive role of government and concentrates on public consumption which is modeled as a classical public good in equilibrium provision is sensitive to the degree of social mobility theoretically linking social mobility to public consumption further empirical puzzles about the impact of voting franchise extensions on the growth of government spending are addressed within the context of social mobility

relying on the private sector the income distribution and public investments in the poor abstract what drives governments with similar revenues to provide very different amounts of goods with private sector substitutes education is a prime example i use exogenous shocks to brazilian municipalities revenue during 1995 2008 generated by non linearities in federal transfer laws to demonstrate two things first municipalities with higher income inequality or higher median income allocate less of a revenue shock to education and are less likely to expand public school enrollment they are more likely to invest in public infrastructure that is broadly enjoyed like parks and roads or to save the shock second i find no evidence that the quality of public education suffers as a result if anything unequal and high income areas are more likely to improve public school inputs and test scores following a revenue shock given their heavy use of private education i further provide evidence that an increase in public sector revenue lowers private school enrollment

the evolution of modern educational systems technical vs general education distributional conflict and growth abstract we study the evolution of an educational system founded on a hierarchical differentiation between vocational and general education with vocational playing an inferior role in the society the dynamics are best summarized by the ratio of the fraction of the population in vocational to that in general education which we interpret as a measure of the degree of stratification of the society we show that this ratio first rises and then declines with the level of development displaying an inverted u shape which reflects the complex interaction between economic and political forces including aggregate income growth wealth inequality and political participation

why did the elites extend the suffrage democracy and the scope of government with an application to britain s age of reform a new rationale is presented for why an elite may want to expand the franchise even in the absence of threats to the established order expanding the franchise can turn politicians away from particularistic politics based on ad personam redistribution within the elite and foster competition based on programs with diffuse benefits if these programs are valuable a majority of the elite votes in favor of an extension of the franchise despite the absence of a threat from the disenfranchised we argue that the evolution of public spending and of political competition in nineteenth century britain is consistent with our model i introduction at the beginning of the nineteenth century in most countries narrow elites had a disproportionate influence on public affairs even in england where parliament was an influential institution suffrage was mostly the privilege of the wealthy and some members of parliament were elected in boroughs with as few as 100 voters while cities such as manchester did not have any representative a century later most western countries had universal male suffrage with female suffrage to arrive shortly thereafter what brought about this democratic revolution in many cases the elites were forced out of power after violent revolutions however there are important examples such as england where democratization took the form of gradual extensions of the suffrage and these were accompanied by little overt violence it is the peculiar pride of england that the record of social and political reform is to be found on the statute book not in the annals of revolution cheyney 1931 p vii such peaceful democratizations are difficult to rationalize within the benchmark political economic models in those models extending the franchise dilutes the elite s power to influence policy and results

the influence of distributed generation penetration levels on energy markets planning of national energy policies brings new dilemmas with the introduction of distributed generators dg economic theory suggests that a perfectly competitive market would lead to efficient pricing in the absence of competition regulators play a fundamental role in attracting reasonably priced finance in order to maintain refurbish and increase the infrastructure and provide services at a reasonable cost energy market price equilibrium is mainly dependent on suppliers generators energy sources and demand represented by conventional utility grid users its behavior is similar to that of other commodities as generation becomes less centralized with the increasing economic viability of renewable energy sources new suppliers are being connected to the grid such evolution means the transition from a monopolistic market to a broader and more open environment with an increasing number of competitors we make use of variational inequalities to model a hypothetical dg market in different scenarios from monopoly to oligopoly to open market such an approach enables different equilibrium outcomes due to different dg penetration levels based on these findings we argue that energy policies for such markets must be developed according to each specific stage of the grid s lifecycle we show how energy policies and market regulations may affect such a transition which may be catastrophic if not managed properly and which is dependent on the energy mix

high penetration wind generation impacts on spot prices in the australian national electricity market this paper explores wind power integration issues for the south australian sa region of the australian national electricity market nem by assessing the interaction of regional wind generation electricity demand and spot prices over 2 recent years of market operation sa s wind energy penetration has recently surpassed 20 and it has only a limited interconnection with other regions of the nem as such it represents an interesting example of high wind penetration in a gross wholesale pool market electricity industry our findings suggest that while electricity demand continues to have the greatest influence on spot prices in sa wind generation levels have become a significant secondary influence and there is an inverse relationship between wind generation and price no clear relationship between wind generation and demand has been identified although some periods of extremely high demand may coincide with lower wind generation periods of high wind output are associated with generally lower market prices and also appear to contribute to extreme negative price events the results highlight the importance of electricity market and renewable policy design in facilitating economically efficient high wind penetrations

the aging population and the size of the welfare state is there a puzzle abstract razin sadka and swagel razin asaf efraim sadka and phillip swagel 2002 the aging population and the size of the welfare state the journal of political economy vol 110 no 4 pp 900 918 unveil a puzzling fact the welfare state appears to be shrinking even as the dependency ratio rises while they formulate an elegant political economy model to explain the coexistence of an aging population and declining transfers the resolution of the puzzle turns out to be much simpler labor tax rates and per capita transfers are negatively correlated with the dependency ratio in advanced economies only because this measure includes children as well as retirees both labor tax rates and per capita transfers in advanced economies are in fact historically positively correlated with the ratio of retirees to the working age population and negatively correlated with the ratio of children to the working age population increasing the number of retirees shifts preferences toward higher taxes and transfers by increasing the fraction of the population that receives transfers in contrast workers with more children prefer to spend more of their lifetime income while raising dependents so they prefer smaller public pension systems these results suggest that fiscal leakage from workers to retirees is not required to explain the broad trends in the transfer policies of advanced economies

endogenous enfranchisement when groups preferences conflict in their seminal paper aumann kurz and neyman found the surprising result that the choice of levels of public goods in a democracy is not affected by the distribution of voting rights this implies that groups of individuals may not value the franchise this conclusion however does not correspond to what we commonly observe we propose a new model to address the question of enfranchisement the main feature of our model is that it takes into account natural affinities such as religion or class that may exist between voters this allows us to show that while individuals may not value the vote they nonetheless value the franchise we also show that in the presence of nonconvexities it is more likely that the group in power will grant the franchise when preferences are severely opposed

economic performance and policies for grid connected residential solar photovoltaic systems in brazil abstract we analyze the economic competitiveness of grid connected distributed solar photovoltaic generation through small scale rooftop installations in five brazilian state capitals the locations represent a comprehensive set of the two essential parameters for the economic viability of pv solar irradiation and local electricity tariffs levelized electricity costs lec for pv generation and net present values npv for a specific pv system are presented the analysis comprises three different interest rate scenarios reflecting different conditions for capital acquisition to finance the generators subsidized mature market and country specific risk adjusted interest in the npv analysis revenue flow is modeled by the sale of pv electricity at current residential tariffs assuming net metering using subsidized interest rates the analysis shows that solar pv electricity is already competitive in brazil while in the country specific risk adjusted rate the declining but still high capital costs of pv make it economically unfeasible at a mature market interest rate pv competitiveness is largely dependent on the residential tariff economic competitiveness in this scenario is given for locations with high residential tariffs we demonstrate the high potential of distributed generation with photovoltaic installations in brazil and show that under certain conditions grid connected pv can be economically competitive in a developing country

is the median voter decisive evidence from referenda voting patterns abstract this paper examines whether the voter with the median income is decisive in local spending decisions previous tests have relied on cross sectional data while we make use of a pair of california referenda to estimate a first difference specification the referenda proposed to lower the required vote share for passing local educational bonding initiatives from 67 to 50 and 67 to 55 respectively we find that voters rationally consider future public service decisions when deciding how to vote on voting rules however the empirical evidence strongly suggests that an income percentile below the median is decisive for majority voting rules especially in communities that have a large share of high income voters with attributes that suggest low demand for public services based on a model that explicitly recognizes that each community contains voters with both high and low demand for public school spending we also find that an increase in the share of low demand voters is associated with a lower decisive voter income percentile for the high demand group this two type model implies that our low demand types individuals over age 45 with no children have demands that are 45 lower than other voters collectively these findings are consistent with high income voters with weak preferences for public educational services voting with the poor against increases in public spending on education

entrepreneurship social mobility and income redistribution in south india development economists have been preoccupied with the problem of increasing the size of the gnp pie to the relative neglect of its distribution despite the recent disenchantment with the viewpoint that all classes share in the benefits of industrial growth empirical data on the distribution of income business opportunity and economic power are in short supply many of the studies on entrepreneurship and economic development when they are not apologetics for ruthless capitalist exploitation as paul baran suggests extol the achievements of the capitalist entrepreneur without examining class origins and monopoly advantage joseph schumpeter sees entrepreneurs irrespective of class origin as heroic figures with the dream and will to found a private kingdom to conquer adversity to achieve success for its own sake and to experience the joy of creation for gustav papanek 1967 the private entrepreneur who is frugal diligent far sighted remarkably able and willing to take political risks is in large part responsible for the success of pakistan in achieving rapid industrialization

the effect of the expansion of the voting franchise on the size of government this paper examines the claim that expansion of the voting franchise has been an important factor in the growth of government state government spending and state and local spending are explained using a panel of 46 states for 1950 88 elimination of poll taxes and literacy tests led to higher turnout particularly among the poor and a poorer pivotal voter as predicted we find that these changes a fall in the income of voters relative to state income and the ouster of republicans from state government led to a sharp rise in welfare spending but no change in other spending

efficient pricing and investment in electricity markets with intermittent resources facing growing technological and environmental challenges the electricity industry needs effective pricing mechanism to promote efficient risk management and investment decisions in a restructured electricity market with competitive wholesale prices and traditionally regulated retail rates however there are technical and institutional barriers that prevent dynamic pricing with price responsive demand in regions with limited energy storage capacity intermittent renewable resources present special challenges this could adversely affect the effectiveness of public policies causing inefficient investments in energy technologies in this paper we present an updated economic model of pricing and investment in restructured electricity market and use the model in a simulation study for an initial assessment of renewable energy strategy and alternative pricing mechanisms a key objective of the study is to shed light on the policy issues so that effective decisions can be made to improve efficiency

on the faustian dynamics of policy and political power this paper examines the faustian dynamics of policy and power we posit a general class of dy namic games in which current policies affect the future distribution of political power resulting in the following faustian trade off if the current ruler chooses his preferred policy he then sacrifices future political power yet if he wants to preserve his future power he must sacrifice his present policy objec tives the trade off comes from the fact that the current political ruler pivotal voter cannot uncouple the direct effect of his policy from its indirect effect on future power a policy endogenous pe equilibrium describes this endogenous transfer of power and the resulting evolution of policy and political power over time we show that the faustian trade off in a pe equilibrium is decomposed into two basic rationales the political preservation effect induces more tempered policy choices than if one s policy choice did not affect one s political fortunes however the reformation effect induces more aggressive policies in order to exploit the productivity gains from policies chosen by even more aggressive successors we distinguish between political systems that give rise to monotone faustian dynamics political power that progressively evolves towards more fiscally liberal types of leaders and cyclical faustian dynamics political power that oscillates between liberal and conservative types of leaders in each case we show that the faustian trade off moderates the choices of each type of leader

voting technology political responsiveness and infant health evidence from brazil this paper studies the introduction of electronic voting technology in brazilian elections estimates exploiting a regression discontinuity design indicate that electronic voting reduced residual error ridden and uncounted votes and promoted a large de facto enfranchisement of mainly less educated citizens estimates exploiting the unique pattern of the technology s phase in across states over time suggest that as predicted by political economy models it shifted government spending toward health care which is particularly beneficial to the poor positive effects on both the utilization of health services prenatal visits and newborn health low weight births are also found for less educated mothers but not for the more educated

energy transition and path creation for natural gas in the brazilian electricity mix abstract emerging economies will account for more than 90 of net energy demand growth to 2035 although there is international consent about the need for reducing green house gas ghg emissions reduction targets have been left to governments responsibility such opening lead to different energy policies and approaches among countries specially comparing developing economies to developed ones technology development and new reserves found have set natural gas as the lead resource for transitioning energy mixes to lower carbon levels however hydropower has been the main source for the brazilian electricity grid and increasing dispatch of natural gas in fact increases ghg which has been the core of current brazilian energy policies we estimated future brazilian market shares of hydro thermal wind and nuclear power through historical data analysis of power dispatch and installed capacity the findings propose that current brazilian administration is creating a new technological path which will lead far from the desired ghg targets if actual growth rate of thermal power continues by the year 2022 thermal plants will be major suppliers of the brazilian electricity grid leaving hydro with the second largest market share furthermore we propose several approaches for increasing adoption of renewable distributed generation and the development of other market niches for natural gas in brazil as alternative paths

estimation of short run and long run elasticities of energy demand from panel data using shrinkage estimators this article discusses the problem of obtaining short run and long run elasticities of energy demand for each of 49 states in the united states using data for 21 years estimation using the time series data by each state gave several wrong signs for the coefficients estimation using pooled data was not valid because the hypothesis of homogeneity of the coefficients was rejected shrinkage estimators gave more reasonable results the article presents in a unified framework the classical empirical bayes and bayes approaches for deriving these estimators

stock ownership and congressional elections the political economy of the mutual fund revolution we find that higher stock ownership rates are linked to an upward shift in the republican share of the house popular vote since the late 1980s consistent with theories that property interests affect voting to proxy for discontinuous stock ownership rates we use equity mutual fund costs which have fallen are negatively correlated with stock ownership rates and the republican vote share in the long run and help explain short run changes along with midterm elections economic conditions and presidential popularity findings suggest that the major parties shares of the house popular vote will fluctuate around 50 until other factors trigger a political realignment jel d72 g11

nonmonotonic demand for income redistribution benefits the case of afdc two different motives are often advanced to explain taxpayer nonrecipient support for income redistribution programs the first motive is the result of interdependent utilities between nonrecipients and the recipients of redistribution program benefits the source of this interdependence could be taxpayer altruism alternatively redistribution might be seen as one way to alleviate the potential for crime or social unrest recent theoretical analyses have suggested a second motiveincome redistribution programs act as protection against the possibility of unforseen loss in personal income 5 6 21 32 researchers using panel data find widespread random and temporary movements in individual income poverty and welfare program use that would seem to suggest a potentially significant insurance demand for redistribution programs 2 the results from one study for example indicate that while four to five percent of the total u s population could be classified as persistent recipients of welfare program benefits between 1969 and 1978 receiving program benefits in at least five of those years over one quarter of the u s population participated in welfare programs at least once over this same ten year period 9 74 in the past researchers estimating nonrecipient support for income transfer programs have considered only one of these two motives while ignoring the other 3 this paper extends the examination of the demand for income redistribution by integrating the public good and social insurance demand motives into one model the first part of the paper sets up the individual s decision model for income redistribution one consequence of interacting the public good and social insurance motives into one model is that support for higher benefit payments is expected to come from the tails of the income distribution low income individuals both recipients and nonrecipients benefit directly from the reduced risk of income randomness while high income

municipal housekeeping the impact of women s suffrage on public education gains in 20th century real wages and reductions in the black white wage gap have been linked to the midcentury ascent of school quality with a new data set uniquely appropriate to identifying the impact of female voter enfranchisement on education spending we attribute up to one third of the 1920 40 rise in public school expenditures to the nineteenth amendment yet the continued disenfranchisement of black southerners meant white school gains far outpaced those for blacks as a result women s suffrage exacerbated racial inequality in education expenditures and substantially delayed relative gains in black human capital observed later in the century

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

can mandated political representation increase policy influence for disadvantaged minorities theory and evidence from india accountable governments often fail to reflect the interests of disadvantaged minorities this paper exploits the institutional features of political reservation as practiced in indian states to examine the role of mandated political representation in providing disadvantaged groups influence over policy making ifind that political reservation has increased transfers to groups which benefit from the mandate this finding also suggests that complete policy commitment may be absent in democracies as is found in this case jel d72 d78 hl 1 h50

radio s impact on public spending if informed voters receive favorable policies then the invention of a new mass medium may affect government policies since it affects who is informed and who is not these ideas are developed in a voting model the model forms the basis for an empirical investigation of a major new deal relief program implemented in the middle of the expansion period of radio the main empirical finding is that u s counties with many radio listeners received more relief funds more funds were allocated to poor counties with high unemployment but controlling for these and other variables the effects of radio are large and highly significant

political competition policy and growth theory and evidence from the us this paper develops a simple model to analyse how a lack of political competition may lead to policies that hinder economic growth we test the predictions of the model on panel data for the us states in these data we find robust evidence that lack of political competition in a state is associated with anti growth policies higher taxes lower capital spending and a reduced likelihood of using right to work laws we also document a strong link between low political competition and low income growth

the line item veto and public sector budgets evidence from the states abstract the paper examines the claim that gubernatorial line item veto power reduces state spending analysis of a rich set of state budget data indicates that long run budgets are not altered by an item veto and that in the short run the item veto s potency is contingent upon the political setting in certain circumstances governors with political incentives to use an item veto alter spending and revenues in a statistically significant and quantitatively important fashion these results suggest that state budgets have not been importantly altered as a result of the existence of the line item veto and shed doubt on the use of the line item veto to reduce federal government spending

does restricting choice in referenda enable governments to spend more if school boards represent the preferences of the median voter referendums to approve school expenditures should not constrain school expenditures if school boards would choose expenditures larger than the median voter s preference referendums that restrict voters to approving or disapproving a school board s recommended expenditure level will result in expenditures larger than the median voter would prefer however florida used a unique referendum system which guaranteed the median voter s most preferred outcome using florida education expenditures as a benchmark the evidence suggests that spending was slightly higher in restricted choice referendum states than in florida

voting suffrage and the political budget cycle evidence from the london metropolitan boroughs 1902 1937 we study the opportunistic political budget cycle in the london metropolitan boroughs between 1902 and 1937 under two different suffrage regimes taxpayer suffrage 1902 1914 and universal suffrage 1921 1937 we argue and find supporting evidence that the political budget cycle operates differently under the two types of suffrage taxpayer suffrage where the right to vote and the obligation to pay local taxes are linked encourages demands for retrenchment and the political budget cycle manifests itself in election year tax cuts and savings on administration costs universal suffrage where all adult residents can vote irrespective of their taxpayer status creates demands for productive public services and the political budget cycle manifests itself in election year hikes in capital spending and a reduction in current spending

property rights and competing for the affections of demos the impact of the 1867 reform act on stock prices the 1867 reform act in britain extended the electoral franchise to the skilled but propertyless urban working classes using stock market data and exploiting the fact that foreign and domestic equities traded simultaneously on the london market this paper finds that investors in british firms reacted negatively to the passage of this act we suggest that this finding is consistent with investors foreseeing future alterations of property rights arising from the pressure that the large newly enfranchised group would bring to bear on government policy we also suggest that our findings appear to be more consistent with the tory political competition explanation for the act rather than the whig threat of revolution explanation

the volatility of median and supermajoritarian pivots in the u s congress and the effects of party polarization krehbiel s pivotal politics 1998 seminal work on pivotal politics in the us congress emphasizes the importance of supermajoritarian rules and veto players in determining what bills can pass we illustrate empirically that the volatility of the pivot points has increased markedly since the mid 1970s and we link changes in pivot volatility to the degree of party polarization in general median and supermajority pivots shift considerably more than the overall mean and when politics is polarized the congressional median and supermajority pivots can change dramatically when a shift in control occurs the relative volatility of median and supermajoritarian pivots varies with the degree of polarization and the extent to which there is continuity in party control we develop a theoretical model to explain the nature of these relationships

expressive voting and government redistribution testing tullock s charity of the uncharitable models of expressive voting postulate that voters will consume ideological stances on issues by voting for them even when they are against the voter s own narrow selfinterest if the probability of being a decisive voter is low when a voter is unlikely to sway the outcome the odds that avoter will incur any real personal cost a higher tax burden for example from her own expressive vote is small we testand find support for tullock s straightforward empiricalimplication of this model that government welfare transfer payments are inversely related to the probability of being thedecisive voter

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

women s suffrage and the growth of the welfare state in this paper we test the hypothesis that extensions of the voting franchise to include lower income people lead to growth in government especially growth in redistribution expenditures the empirical analysis takes advantage of the natural experiment provided by switzerland s extension of the franchise to women in 1971 women s suffrage represents an institutional change with potentially significant implications for the positioning of the decisive voter for various reasons the decisive voter is more likely to favor increases in governmental social welfare spending following the enfranchisement of women evidence indicates that this extension of voting rights increased swiss social welfare spending by 28 and increased the overall size of the swiss government

does liberte egalite a survey of the empirical links between democracy and inequality with some evidence on the transition economies the effect of the distribution of political rights on income inequality has been studied both theoretically and empirically the authors review the existing literature and in particular the available empirical evidence the literature suggests that formal exclusion from the political process through restrictions on the voting franchise appears to have caused a high degree of economic inequality and democratization in the form of franchise expansion has typically led to an expansion in redistribution at least in the small sample of episodes studied in a less pronounced way albeit more emphatically compared with the ambiguous results of earlier research recent evidence indicates an inverse relationship between other measures of democracy based on civil liberties and political rights and inequality the transition experience of eastern european countries however seems to some extent go against these conclusions this opens possible new vistas for research namely the need to incorporate the length of democratic experience and the role played by ideology and social values

does political knowledge increase turnout evidence from the 1997 british general election a number of recent formal models predict a positive effect of political knowledge on turnout both information acquisition and turnout however are likely to be determined by a similar set of variables rendering hard the identification of a causal link in empirical investigations available empirical regularities should therefore be interpreted as mere correlations i address this problem by using an intrumental variables approach where the instruments are represented by various proxies of information supply on mass media using survey data from the 1997 british general election study i show that political knowledge has a sizeable influence on the probability of voting and that mass media play an important role in influencing political participation

women prefer larger governments growth structural transformation and government size i introduction in developing and developed economies alike growth of income per capita is generally accompanied by a rise in the share of government expenditure in gross domestic product gdp as well as an increase in the participation of women in the labor force we argue that these phenomena are causally related propose a model that motivates that relation and provide evidence in its support the share of total government spending in gdp has increased by 10 in organization for economic cooperation and development oecd countries in the last two decades alone see world bank 2001 and this rise comes in the wake of significant secular increases in government spending in the 20th century 1 apace with this rise in the government s share of gdp female labor force participation has also risen from 28 to 41 in the same countries and the same period 2 as for the long run goldin 1995 reports an increase in female labor force participation in the united states between 1900 and 1980 from 3 1 to 50 of the labor force 3 while according to tanzi and schuknecht 2000 the share of government spending rose in the same period from 8 to 30 figure 1 plots the change in government size as a share of gdp versus the change in female labor force participation from 1972 to 1999 for a sample of selected countries the twin increases in female labor force participation and government size are not a coincidence they are causally related the mechanism at work is twofold as wages rise with development and women choose to work more hours in the market they increase their demand for services that tend to be provided by the government including education healthcare care for the elderly and the unemployed the additional provision of government services further encourages female labor market participation as it decreases the time necessary to perform those home and family activities whose burden falls disproportionately on women 4 this circle of causation leads to higher female participation and larger governments our growth model extends galor and weil 1996 in addition to female participation in market activities fertility and output government size is also endogenously determined the rise in hourly wages that accompanies development and capital accumulation leads to an increase in female labor force participation as the opportunity cost of caring for the children increases in our model government spending decreases the time cost of performing household chores one obvious connection is the provision of extra school hours and child care which decrease the time cost of child rearing as couples women in particular participate more in market activities they choose higher government spending to compensate for time spent in the market under certain conditions which we make explicit they also choose higher tax rates with the result that female labor force participation and government size increase apace 5 as female labor force participation leads to a larger government the total cost of raising children is reduced for two reasons the total time at home decreases and the time cost per child also falls as public spending partly substitutes for home production of child care education and other activities 6 the decision to work outside the home is likely to lead women to demand wider and better provision of the public services that alleviate their unequal burden as caregiver at home in addition the role of women as insurer of family risks may lead to a demand for more government intervention as women become less present at home there is an additional mechanism through the composition of the public labor force government jobs in teaching and health which are a large portion of total public jobs tend to be filled mostly by women 7 our model draws on the solid literature on growth fertility and female labor force participation which is supported by microevidence

the dynamics of state policy liberalism 1936 2014 applying a dynamic latent variable model to data on 148 policies collected over eight decades 1936 2014 we produce the first yearly measure of the policy liberalism of u s states our dynamic measure of state policy liberalism marks an important advance over existing measures almost all of which are purely cross sectional and thus cannot be used to study policy change we find that in the aggregate the policy liberalism of u s states steadily increased between the 1930s and 1970s and then largely plateaued the policy liberalism of most states has remained stable in relative terms though several states have shifted considerably over time we also find surprisingly little evidence of multidimensionality in state policy outputs our new estimates of state policy liberalism have broad application to the study of political development representation accountability and other important issues in political science abstract from author

how to get the snowball rolling and extend the franchise voting on the great reform act of 1832 this paper suggests a new approach to analyzing the causes of franchise extension based on a new dataset it provides a detailed econometric study of the great reform act of 1832 in the united kingdom the analysis yields four main results first modernization theory receives limited support second the reform enjoyed some measure of popular support third the threat of revolution had an asymmetric impact on the voting behavior of the pro reform whigs and the anti reform tories while the threat might have convinced reluctant reformers among the whig politicians and among their patrons to support the bill it seems to have hardened the resistance to reform among the tories fourth ideology played a critical role nevertheless it also appears that self interest and political expedience explained the votes of many members of parliament

poverty and the political economy of public education spending evidence from brazil a large body of literature has emphasized the elite capture of democratic institutions as the explanation for the low levels of spending on public education in many low income democracies this paper provides an alternative to that longstanding hypothesis motivated by new cross country facts and evidence from brazilian municipalities we hypothesize that many democratic developing countries might invest less in public education spending because poor decisive voters prefer the government to allocate resources elsewhere one possible explanation is that low income voters could instead favor redistributive programs that increase their incomes in the short run such as cash transfers to test for this possibility we design and implement an experimental survey and an incentivized choice experiment in brazil the findings from both interventions support our hypothesis

political and economic inequities and the shaping of institutions and redistribution this article studies the joint effect of political and economic inequalities on redistributive taxation and institutional quality the theoretical model suggests that income inequality coupled with political bias in favor of the rich decreases redistribution and lowers institutional quality the effect of the former is to increase productive investment and the effect of the latter is to decrease it with resulting ambiguous implications for economic growth testing these predictions empirically in a panel of countries we find that inequality has a negative effect on both institutional quality and redistribution

political influence economic interests and endogenous tax structure in a computable equilibrium framework with application to the united states 1973 and 1983 we consider the properties of a computable equilibrium model ofa competitive political economy in which the economic interestsof groups of voters and their effective influence on equilibriumpolicy outcomes can be explicitely distinguished and computed the model incorporates an amended version of the gemtap taxmodel calibrated to data for the united states for 1973 and1983 emphasis is placed on how the aggregation of gemtaphouseholds into homogeneous groups affects the numericalrepresentation of interests and influence for representativemembers of each group

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

the effects of grants in aid on state and local expenditures abstract this paper develops econometric methods to estimate the effect of the piecewise linear budget constraints created by grant formulas in which the subsidy rate is not constant over expenditures e g closed end grants the methods are applied to the afdc program the results show that because of the kinked nature of the grant formula 1 the present federal formula actually increases cross state inequality in afdc benefits 2 several subsidy rates in the formula actually reduce benefits and 3 the so called flypaper effect disappears

the size and composition of government expenditure abstract this paper tests several leading hypotheses on determinants of government expenditure the purpose is to avoid omitted variables bias by testing the prominent theories in a comprehensive specification to identify persistent puzzles for the current set of theories and to explore those puzzles in greater depth by looking at the composition of government expenditure and the level of government at which it takes place as well as its magnitude using government financial statistics data from the imf covering over 100 countries from 1970 2000 i look at cross sectional and inter temporal variation in government expenditure and both individual categories of expenditure such as defense education health care and different levels of government central and local among other results i find a new explanation for wagner s law widespread evidence that preference heterogeneity leads to decentralization rather than outright decreases in expenditures that a great deal of the expenditure associated with increased trade openness is not in categories that explicitly insure for risk and evidence that both political access and income inequality affect the extent of social insurance

why do developing countries tax so little the power to tax is taken for granted in a great deal of mainstream public finance in considering limits to taxation traditional research in the field focuses on limits imposed by incentive constraints which are tied to asymmetric information or to politics and political institutions the limits to taxation are rarely tied to the administrative capacity of the state but incentive constraints alone cannot explain the vast differences in the levels of taxation that we see across the world and across time low income countries typically collect taxes of between 10 to 20 percent of gdp while the average for high income countries is more like 40 percent in essence our view on these patterns is similar to that taken by joseph schumpeter 1918 almost a century ago when he noted the fiscal history of a people is above all an essential part of its general history an enormous influence on the fate of nations emanates from the economic bleeding which the needs of the state necessitates and from the use to which the results are put in order to understand taxation economic development and the relationships between them we need to think about the forces that drive the development process poor countries

political control and public sector savings evidence from the states the right to access and ultimately spend public sector savings is determined by the party which can control the politicaloutcome this implies that anticipatedfuture changes in the state s controllingpolitical party may systematicallyadversely affect current savings extendingthe life cycle permanent income model ishow that a representative legislator willopt to forgo current saving in favor ofspending when his prospects for futurepolitical control diminish estimating apanel data model of 39 states from1973 1995 i find that an actual futurechange in the controlling party of astate s lower house significantly reducescurrent saving

political economy of the inequality in school spending abstract this paper employs data from 45 states between 1972 and 1992 to investigate the basic forces affecting school resource inequality within a state we consider a wide range of determinants of inequality including voter preferences the tax and political structure within the state and the legal standing of education within the state constitution we find that state constitutional language regarding equity affects the degree of school spending equality in the state as does the political environment in the state and factors associated with the benefits and costs of tiebout sorting into school districts

the political class and redistributive policies we study the eect of the composition of the political class on the size of government first we use a citizen candidate model to show that the extension of surage may be inconsequential for government spending when there are pre existing stricter requirements for holding oce we then test this prediction empirically using data from the 13 u s original colonies we nd that the extension of the franchise did not aect government spending or the composition of the political class however the subsequent elimination of economic qualications to hold oce increased government spending and enriched the class heterogeneity

why and how to regulate power exchanges in the eu market integration context abstract the european union eu market integration is leading to increasingly monopolistic electricity market infrastructures which has opened a debate on the regulation of these so called power exchanges in this paper we start by stating that there are two types of power exchanges in europe i e merchant and cost of service regulated power exchanges we then discuss how regulation can be used to better align their incentives with the main power exchange tasks we conclude that adopting the cost of service regulated model for all power exchanges in europe could be counterproductive in the current context but that regulation can help ensure that the benefits of the eu market integration materialize promising regulatory actions include tempering the reinforced market power of power exchanges and quality of service regulation for the ongoing cooperation among power exchanges to organize trade across borders

interest groups and the size of government the results of the previous section estimates of a three equation model from 23 observations must obviously be regarded as tentative the consistent positive relationship between number of interest groups and size of government observed with changing sets of included independent variables changing samples of nations and treating the number of interest groups as either exogenous or codetermined does imply rather unequivocally that interest groups are able to influence public policies in such a manner as to lead to increased government size beyond helping to reinforce this conclusion the results of the previous section should be regarded as first steps in the development of a model of the polity that can explain participation in the political process by interest groups and citizens as well as the size of government

evidence on electoral accountability in the u s senate are unfaithful agents really punished many have questioned whether voters are able to hold incumbent officials electorally accountable through a retrospective voting strategy we examine u s senate elections from 1962 to 1990 in forty one states explaining which incumbents ran for reelection and their success in seeking reelection we find that an incumbent s deviation from her state party platform decreases the probability that she will run for reelection and win if she runs furthermore the electoral mechanism is found to be more efficient when voters are better informed finally we find that our divergent party platform model provides a better fit than the median voter model

electricity spot price dynamics beyond financial models we reveal properties of electricity spot prices that cannot be captured by the statistical models commonly used to model financial asset prices that are increasingly used to model electricity prices using more than eight years of half hourly spot price data from the new zealand electricity market we find that the half hourly trading periods fall naturally into five groups corresponding to the overnight off peak the morning peak daytime off peak evening peak and evening off peak the prices in different trading periods within each group are highly correlated with each other yet the correlations between prices in different groups are lower models adopted from the modeling of security prices that are currently applied to electricity spot prices are incapable of capturing this behavior we use a periodic autoregression to model prices instead showing that shocks in the peak periods are larger and less persistent than those in off peak periods and that they often reappear in the following peak period in contrast shocks in the off peak periods are smaller more persistent and die out perhaps temporarily during the peak periods current approaches to modeling spot prices cannot capture this behavior either

the fragile politics of addiction suppose the optimizing consumer only has local information then what obviously there will be a random element of consumption the link between the frequency distribution of consumption by person and preference surface is worked out under convex preferences there will be a unimodal distribution and conversely a local optimizing theory of addictive behavior is developed from nonconvex preferences the resulting bimodal distribution of consumption implies a nonrobust outcome for median voter politics such a local optimizing model of addiction is compared with globally optimizing models of addiction

valuing the vote the redistribution of voting rights and state funds following the voting rights act of 1965 the voting rights act of 1965 called one of the most effective pieces of civil rights legislation in u s history generated dramatic increases in black voter registration across the south we ask whether the increase in black voting rights was accompanied by an increase in blacks share of public spending we exploit a key provision of the act removal of literacy tests at registration for identification employing a triple difference framework over a 20 year period we find that counties with higher black population shares in former literacy test states saw greater increases in both voter turnout and state transfers than comparison counties in non literacy test states a finding that is consistent with models of distributive politics jel codes d72 h7 i2 j15 n32 copyright 2014 oxford university press

spending biased legislators discipline through disagreement this paper studies politicians who have a present bias for spending they want to increase current spending and procrastinate spending cuts we argue that legislators bias is more severe in economies with low institutional quality we show that disagreement in legislatures leads to policy persistence and that this attenuates the temptation to overspend depending on the environment legislators decisions to be fiscally responsible may either complement or substitute other legislator s decisions in economies with weak institutions politicians actions are strategic complements thus institutional changes that induce fiscal responsibility are desirable they generate a positive responsibility multiplier and reduce inefficient spending however in economies with better institutions the same institutional change would induce some legislators to free ride on others responsibility and may lead to more inefficient spending