bluuebunny/crossref_metadata_2025 huggingface dataset:
The Fiscal State, the Market, and the Individual Moral Capacity in the Secularized Society
Authors: Gorini Stefano
Published: December 2019

This essay is an attempt to construct a philosophically correct relationship between economics and ethics, by contrasting it with the philosophically wrong conventional wisdom, and based on objective notions of the common good social justice, and to draw some implications concerning the role of morality in the working of the political economy of the fiscal state and of the market in contemporary liberal capitalist and secularized societies. The basic claim identifies individual moral capacity in the individual's possession of moral values defined as principles giving an absolute meaning to human life, and identifies furthermore the only absolute meaning of human life compatible with the secular-scientific worldview, intrinsically devoid of any such meaning, in individual liberty-independence defined as the personal experience of selfconsciousness. The secularization of Western culture has displaced non-secular values without replacing them, making liberal capitalist societies into societies without values. The individual's awareness of individual liberty-independence as the only public moral value is a necessary condition for ensuring the safeguarding of this unique secular ethical principle in the working of the political economy and liberal political institutions of secularized societies. If this individual moral capacity is shared by too few people, or too weak, then no system of rules, and of management of government power and market forces, however perfect, will ever suffice for the purpose.
Tax Performance and Taxable Capacity: Analysis for Selected States of India
Authors: Coondoo Dipankor , Majumder Amita , Mukherjee Robin , Neogi Chiranjib
Published: December 2019

In a federal form of government structure, the state-level governments generally receive supplementary budgetary resources from the central/federal government as support for the formers’ public expenditure activities. Such devolution of funds from the centre to the states takes the form of share of the revenue raised by central taxes and grants-in-aid. It is felt that such resource transfers should be made according to a policy based on the criteria of equity and efficiency. Formally, these criteria are defined with reference to individual state’s tax revenue collection relative to its taxable capacity. Formulation of a concrete transfer policy, however, crucially requires measures of individual state’s taxable capacity. Given an appropriate definition of a state’s taxable capacity, measurement of taxable capacity of states involves both conceptual and econometric issues. This paper proposes an econometric approach to the measurement of taxable capacity, which is similar to estimating a frontier production function using panel data. To illustrate the proposed method, it is applied to the panel data on annual state tax revenue and related variables of some selected Indian states for the period 1986-87 to 1996-97 and the relative taxable capacity and tax efforts of the states are compared.
A Note on the Relation between Government Expenditure and Receipts in Italy: A Quarterly Analysis
Authors: Tagliabue Giovanna
Published: December 2019

A precise knowledge of the relation between government expenditure and revenues may be useful to control budget deficits because, if there is interdependence, raising taxes to reduce deficits may lead directly to more spending. An effective manipulation of central government spending and tax revenues requires information on the direction of causality between these economic variables.

The purpose of this paper is to investigate the relationship between government expenditure and receipts based on quarterly data, using the structural cointegration approach of Pesaran and Pesaran [1997]. In the results presented below, the structural cointegration approach provides evidence of a long and short-run equilibrium between government spending and receipts, supporting the assumption that the Italian Government’s expenditure is a sort of automatic stabiliser as opposed to Wagner’s Law.
The Shadow Economy of Italy and other OECD Countries: What Do We Know?
Authors: Dell’Anno Roberto , Schneider Friedrich
Published: December 2019

Various methods to estimate the size of the shadow economy are discussed and the results of the shadow economy of 21 OECD countries are presented. Then the specific case of Italy is investigated and the aim of this section is to produce an estimate of the Italian shadow economy with the MIMIC (Multiple Indicators and Multiple Causes) method. The procedure to obtain the underground economy as a share of official GDP is presented. The paper ends with some general conclusions about the reliability of the model approach and the efficacy of economic policies to reduce the shadow economy.
The Increasing Difficulty of Reversing Government Growth: A Prisoners’ Dilemma that Gets Worse with Time
Authors: Clark Jeff R. , Lee Dwight R.
Published: December 2019

Special interest groups possess political influence exceeding their size and influence government’s expansion beyond efficiency limits. T h e prisoners’ dilemma illustrates that although it is in the interest of each group to capture maximum government benefits, when all do, all groups are worse off collectively. T h e result is a government that is too large, with gains to each group worth less than their costs. Further gains could be derived if all groups reduce their demands on government. However, securing agreement on such reform is difficult. Unilaterally reducing demands on government means individuals pay for benefits of others without receiving anything in return. Standard discussions of reducing the size of government by overcoming prisoners’ dilemma incentives understate the degree of difficulty involved. We demonstrate that once groups choose noncooperation, they develop skills, which build up over time, thereby enlarging the payoff to the chosen path. As the damage from political rent seeking increases, the motivation for reform declines. However, beyond some point, even with the skill set that has evolved, individual gains from rent seeking are worth less than the costs of the rent-seeking privileges of others. Thus, the prospect of imposing generalized limits on political privileges improves, even though they impose short-run costs.
Government Spending and Coalition Parties in Italy (1960–1993): A Cointegration-Based Approach
Authors: Fiorino Nadia , Triacca Umberto
Published: December 2019

This note attempts to test the relation between the parties that take part in coalition governments and specific spending programs in Italy from 1960 to 1993. In doing so, we: 1) build a voting power index to describe the relative position of political parties in government and 2) analyze the long-term relationship between expenditure by functions and political parties. Data indicate that the Christian Democratic party was the leading party. It adopted long run policies; nevertheless, it did not refer to specific items of public expenditure. T h e three smaller parties (the Liberal, the Republican and the Social Democratic) did not have enough strength to pursue spending programs in the long run. Finally, the analysis shows that the Socialists tried to find a key role in the political framework by swinging from a long-term opposition to the policy formation in the Senate to short-term agreements on spending policies in the Chamber of Deputies.
Public Deficits and Surpluses in Federated States: A Review of the Public Choice Empirical Literature
Authors: Imbeau Louis M.
Published: December 2019

Abstract The purpose of this paper is to review the empirical public choice literature explaining deficits levels in federated states. First, I describe theoretical constructs, showing how new theories have developed by releasing one of the basic Ricardo-Barro assumptions.
Empirical results bearing on die federated states of Australia, Canada, Germany, Switzerland, and the United States are then reviewed to assess which hypothesis, in which setting, is confirmed by systematic observation. On the whole, this literature shows that economic cycles have an impact
on budget balances. It also shows that deficits are higher in election years in German Länder, Canadian provinces, and American states, but not in Australian states nor in Swiss cantons. In addition, the literature tends to support the hypothesis that the stringency of budgetary rules
is related to higher budget balances in Canada, Switzerland, and in the United States. Finally, government fragmentation has no impact on the budget balances of federated states and parties of the left do not have higher deficits than parties of the right, except in Switzerland where empirical
evidence is mixed. Rather, parties of the center or of the right do have higher deficits in German Länder and in Canadian provinces. In the concluding section, I discuss two issues: the impact of rules, and the partisan cycle hypothesis.
Mcgee, R. W., 2004, The Philosophy of Taxation and Public Finance
Authors: Wagner Richard E.
Published: December 2019

Abstract Mcgee, R. W., 2004, The Philosophy of Taxation and Public Finance, Boston, Kluwer Academic Publishers, US$115, pp.viii+313, ISBN 1-4020-7716-5.
Public Deficits and Surpluses in Federated States: A Review of the Public Choice Empirical Literature
Authors: Imbeau Louis M.
Published: December 2019

The purpose of this paper is to review the empirical public choice literature explaining deficits levels in federated states. First, I describe theoretical constructs, showing how new theories have developed by releasing one of the basic Ricardo-Barro assumptions. Empirical results bearing on the federated states of Australia, Canada, Germany, Switzerland, and the United States are then reviewed to assess which hypothesis, in which setting, is confirmed by systematic observation. On the whole, this literature shows that economic cycles have an impact on budget balances. It also shows that deficits are higher in election years in German Lander, Canadian provinces, and American states, but not in Australian states nor in Swiss cantons. In addition, the literature tends to support the hypothesis that the stringency of budgetary rules is related to higher budget balances in Canada, Switzerland, and in the United States. Finally, government fragmentation has no impact on the budget balances of federated states and parties of the left do not have higher deficits than parties of the right, except in Switzerland where empirical evidence is mixed. Rather, parties of the center or of the right do have higher deficits in German Lander and in Canadian provinces. In the concluding section, I discuss two issues: the impact of rules, and the partisan cycle hypothesis.
Can Public Choice Theory Explain the U.S. Budget Surpluses of the 1990s?
Authors: Sobel Russell S.
Published: December 2019

Rapid U.S. federal expenditure growth and budget deficits became commonplace during the second half of the twentieth century. Public choice models explained this by continual special interest group pressure for spending, rationally ignorant voters, and shortsighted politicians finding deficit financing attractive. However, the late 1990s saw budget surpluses and a slowdown in government expenditure growth. This paper uses public choice theory to explain this turn of events. I find that a slowdown in U.S. interest group activity growth is responsible for this shift.
Incumbent Spending in Gubernatorial Elections: An Investigation of Primary Type and Candidate Deviation
Authors: Calcagno Peter T. , Westley Christopher
Published: December 2019

In the public choice literature, it has been shown that (i) candidates deviate from their median voter based upon the primary election type, and (ii) incumbents that deviate from the median voter will pay for deviating with higher campaign expenditures. This paper examines the relationship between gubernatorial incumbent campaign spending and the degree of openness of political primaries in the United States to examine if the type of primary system influences campaign spending. The authors find that incumbent candidates who face a more open primary will deviate less and therefore spend less to win elections.
Continental Public Finance: Mapping and Recovering a Tradition
Authors: Backhaus Jürgen G. , Wagner Richard E.
Published: December 2019

This essay surveys some general features of continental public finance analysis, emphasizing its distinctiveness from Anglo-Saxon public economic theory. Starting from the cameralist origins of public finance, we examine the science-of-state approach, the catallactical approach to public finance associated with Knut Wicksel, the Italian fiscal scholarship, and the fiscal sociology. The purpose of this essay is to introduce the reader to a tradition in public finance analysis that, while having experienced a diminished presence in contemporary textbook treatments, nonetheless offers high potential value for fiscal scholarship.
Inequality in Fact and as a Norm: The Use and Abuse of Indian History from Mill to Sen*
Authors: Mehta Nimai M.
Published: December 2019

I employ two texts to illustrate the manner in which Indian history has been used, and abused, to evaluate inequality, both as a norm and as fact. The first, is the pivotal role played by James Mill's History in abusing the fact of caste divisions. The second, is Sen's revisionist, and ultimately misleading use in The Argumentative Indian of a normative lens of equality - to filter out the constitutive role of caste in Indian history and culture. Mill's highly prejudicial and uninformed views on caste and economic progress have been uncritically adopted by Sen and other liberal scholars, with illiberal consequence for the Indian economy and polity.
Finite–Lived Politicians and Yardstick Competition
Authors: Reulier Emmanuelle , Rocaboy Yvon
Published: December 2019

The introduction of finite-lived politicians within a life cycle model raises the well-known 'last period problem'. An opportunistic incumbent, who is serving his/her last term, will not be penalized for introducing higher taxes. In this and other respects, tax competition is often considered as a yardstick. Changes in the tax rate within a given jurisdiction are influenced by the tax rate changes in neighboring jurisdictions. Combining these two notions yields the conclusion that a leviathan politician in office may not be contained if the incumbent in the neighboring jurisdiction is holding office for the last time. In this paper we challenge that conclusion. We show that the efficiency of yardstick competition in restraining opportunistic political behavior depends upon the number of competing jurisdictions and the way in which these jurisdictions are spatially organized.
Property Rules, Liability Rules and Externalities
Authors: Nicita Antonio , Rizzolli Matteo
Published: December 2019

In this paper we argue that traditional explanations of the dichotomisation of property rules and liability rules are somehow misleading, since they tend to neglect the evolutionary complementarity between die two rules in a world of incomplete property rights characterised by sizeable ex-ante transaction costs in rights’ definition. When rights are a complete bundle of well-defined uses, the application of a property rule reaffirms and reinforces the correlation between rights and duties. In a world of incomplete rights, externalities over undefined uses call for a court intervention aimed at defining a new property right through either a property rule or a liability rule. Independently of whether new rights are created by property or liability rules, die nature and die extent of future externalities over conflicting undefined uses could generate new processes of rights’ definition. The emergence of an externality always implies an evolutionary complementarity between property rules and liability rules whose boundaries actually depend, in alternative legal systems, on die degree of incompleteness of original rights.
Constituency Size and the Growth of Public Expenditures: The Case of the United Kingdom
Authors: Ford George S. , Thornton Mark , Ulrich Marc
Published: December 2019

The growth of government has long been a core issue of public economics with a vast array of hypotheses offered and empirical investigations conducted. One key element of this quest, with respect to democratic governments, has been the size of the legislature which is seen increasing, decreasing, or neutral with respect to the growth of government. We argue that the inconclusive empirical results are the result of a misspecification and that instead of legislature size, it is constituency size that matters and that the larger the constituency size, the more government grows because of poorer representation. We test this hypothesis using the case of the United Kingdom over the 20th century and find that constituency size is positively related to the growth of government.
Katrina and the Social Organization of Disaster Recovery: Dissolving a Theoretical Antinomy
Authors: Wagner Richard E.
Published: December 2019

This paper explores the social organization of disaster recovery, using Hurricane Katrina to supply context for the theoretical effort. That effort distinguishes two contrasting models of political economy. The conventional model treats the state as a unitary actor that stands outside the economy and uses policy instruments to shift society to a different equilibrium. The alternative model treats the state as comprised of numerous loosely connected actors that operate inside the economy, with policy measures emerging out of interaction among differing desires and beliefs held by the various participants. This alternative model presents a different understanding of state policy, both in ordinary times and in the extraordinary times represented by natural disaster.
Three Protagonists of Public Intervention in the Economy of Italy (1900-1937): Giovanni Montemartini, Francesco Saverio Nitti and Alberto Beneduce
Authors: Pitzalis Andrea
Published: December 2019

The purpose of this paper is to evaluate the theoretical approaches and the practical realizations connected with the public intervention in the Italian economy of the early 20th century through the study of personalities such as Giovanni Montemartini, Francesco Saverio Nitti and Alberto Beneduce. They are among the greatest theorists and direct protagonists of the economic intervention in Italy in the last century and contributed to confer to it a cultural dignity.
The Allocation of the Income Tax among Different Levels of Government: a Theoretical Solution
Authors: Ponzano Ferruccio
Published: December 2019

The aim of this paper is to show how two competitive governments can simultaneously choose their income taxes. There are two tiers of government in competition. The problem is analysed using the Leviathan hypothesis and the theory of incomplete contracts. We assume that a government includes its re-election in its utility function and study the allocation of the income tax rates between the two tiers, free from any regulatory constraint. We show that the governments are interested in meeting the re-election constraint, but this common interest does not generate an egalitarian allocation of the tax revenues.
Remembering Richard Musgrave
Authors: Oates Wallace E.
Published: December 2019

Richard Musgrave was a giant in the field of public finance: an integrating force who shaped the field and pulled it together in die context of modern economic theory. His great treatise, The Theory of Public Finance [1959], provided the basic source in public finance for students and scholars over several decades. In addition, Musgrave played a central role in promoting research and debate in the field through his organizational efforts on an international scale and through his careful and kind nurturing of younger scholars.
Tax Smoothing in the Presence of the Maastricht Constraint
Authors: Duffy David
Published: December 2019

A sample of European Union countries are examined for evidence of tax smoothing over the period 1970-2005. Two testing procedures are applied to a single sample of countries to assess the consistency of evidence across testing methods. This study includes the application of a new data set to the tax smoothing question which provides an estimate of the temporary component of public expenditure. This study also argues that the application of the constraints imposed on fiscal policy in the Maastricht Treaty will affect the conduct of a tax smoothing policy. The effects of the Maastricht Treaty on tax smoothing behaviour are investigated.
The Political Economy of FEMA: Did Reorganization Matter?
Authors: Sobel Russell S. , Coyne Christopher J. , Leeson Peter T.
Published: December 2019

This paper investigates the political economy of FEMA after its post-9/11 merger with the Department of Homeland Security. Using panel data for the post-DHS merger but pre-Katrina period, we examine how FEMA's much-debated reorganization has impacted the strong political influences on disaster declaration and relief spending that existed before FEMA's reorganization. We find that although politically-important states for the president continue to have a higher rate of disaster declaration, disaster expenditures are no longer higher in states with congressional representation on FEMA oversight committees. These results suggest that reorganization has reduced some of the political pressures within FEMA.
How Regional Policies Can Affect Growth: A Macroeconometric Model for the Southern Italian Regions
Authors: Pellegrini Guido , Rossi Stefania P. S. , Tarola Ornella
Published: December 2019

Can regional policies accelerate the convergence path of dualistic economic growth in a single country, offsetting market failures and making growth transmission channels more efficient? A structural dynamic econometric model has been set up in order to account for these changes. Three are the main sources of growth playing a role in this context: the ‘neighbourhood’ effect, the interaction between the economic environment and the agents’ expectations, and the policy impact on economic take-off. The evidence shows that policies strongly boost economic growth of a local area and narrow the gap between the regions of a dual economy.
Political Economy and Natural Hazards Mitigation: State Incentives for Tornado Shelters
Authors: Sutter Daniel , Stephenson Eric
Published: December 2019

Hurricane Katrina has spurred public choice economists’ interest in the political economy of natural hazards. We provide a case study in the political economy of hazards mitigation from tornado shelters in Oklahoma. We analyze the determinants of support for a referendum for a tax exemption for tornado shelters, and then the number of shelters enrolled for the exemption. Generally the determinants of support for the referendum are consistent with the determinants of subsequent shelter installation. Particularly, greater tornado risk increase both support for the referendum and installation, which suggests that individuals do not ignore a low probability natural hazard risk either as voters or consumers.
Backward–Looking and Forward–Looking NDC Pension Schemes
Authors: Gronchi Sandro , Gismondi Fulvio
Published: December 2019

In order to spread notional capital accrued at retirement by members of a cohort over their own life expectancy, pay-as-you-go notional-defined-contribution (payg-ndc) scheme uses multipliers (different by retirement age) called conversion coefficients. These are backward-looking (b.l.) in that they relay on survival rates observed for previous cohorts in the past. Under increasing longevity, b.l. coefficients undervalue life expectancies, thus preventing full implementation of actuarial fairness (benefits equivalent to contributions) which is the main objective of ndc scheme. They also engender chronic deficits.

Forward-looking (f.l.) coefficients, relaying on forecast survival rates can improve actuarial fairness. Nevertheless, they face a rather serious political difficulty in that forecasting tools are fallible. This explains why switching to f.l. coefficients is unable to gain social consensus. Apart from this, the paper shows that f.l. coefficients produce ‘overshooting’. In fact, they generate chronic surpluses. The paper also shows that frontloading pension profile helps sustainability because it reduces both surpluses and deficits generated, respectively, by f.l. and b.l. coefficients.
Distributional and Encompassing Coalitions in the Olsonian Theory of Interest Groups: A Strategy–Shift Effect Analysis
Authors: Batinti Alberto
Published: December 2019

This paper shows that, in an Olsonian framework, the activity of encompassing groups respect to distributional coalitions has been understated in the literature. We derive this conclusion analyzing first of all the evolution of the Olsonian thought, then some of the theoretical findings that weaken die extreme dilemmatic vision of a collective action problem. Then we present a simple model of strategy choice, where distributional coalitions temporarily become encompassing groups or are ‘locked’ in a distributional strategy, unless a change in both the share of total wealth and members’ number occurs. Some implications and explanations in terms of political reform success and stickiness follow.
Wilhelm Roepke's Focus on the Municipality
Authors: Backhaus Ursula
Published: December 2019

To Wihelm Roepke [1899-1966], small circles are important for a humane economy and society. At die local level, the economic, social, and cultural interaction of people prevents the loss of traditions and civic values, and is an antidote to alienation from work, boredom, loneliness, crime, neglect of children, and other dangers of a modern mass society. Roepke's call for decentralization applies to the state aggregate level as well. While he is an advocate of decentralized architectural design of municipalities in order to fight pitfalls of modern mass society, he is also an advocate of decentralization in the design of economic policies in order to prevent political dictatorship. An example of his decentralized proposals are the German deficit-based recovery policies, which were designed under his guidance in the Brauns Commission [1930-1931]. In contrast to what Keynes had suggested, these policies have been designed as municipal policies, and not as centralized (aggregate) state policies.
Explaining Growth of Public Revenue: An Empirical Investigation of Canadian Provinces
Authors: Tellier Geneviève
Published: December 2019

This paper looks at the determinants of public revenues. We conducted a cross-sectional time series empirical analysis to explain revenue variations observed in the ten Canadian provinces over the period 1967-2003. We tested whether party ideology, elections, globalization, the demographic structure of the population, the public debt, federal transfers and the tax burden influenced the size of provincial revenues. The findings support several hypotheses. Our results also show that the influence of some factors was not stable during the entire period.
What Determines Excise Tax Rates?
Authors: Bielinska-Kwapisz Agnieszka
Published: December 2019

We estimate the determinants of state excise tax rates on beer, cigarettes, and gasoline using a panel data set from US 48 contiguous states from 1982 to 2003. State excise tax rates currently vary a great deal and we assess empirically economic and political factors that affect the level of these tax rates. We incorporate both horizontal competition and vertical competition. Our results show that the most important factor determining the level of cigarette and gasoline tax rates is the horizontal competition between neighboring states and that vertical competition exists in case of beer and cigarette taxation.
The Impact of Campaign Spending on Winning Open–Seat Elections to the U.S. House of Representatives
Authors: Duquette Christopher , Caudill Steven B. , Mixon Franklin G.
Published: December 2019

The current study uses a large panel data set of open-seat races in die U.S. House of Representatives over the period 1990-2008 to explore the relationship between relative campaign spending and victory/defeat - the salient issue in political contests - in open-seat congressional races. According to maximum likelihood estimates, for Republican candidates, the probability of winning an open-seat election (wherein total campaign spending by both major political parties is $2.5 million) rises by 0.130 if that candidate increases, ceteris paribus, his or her campaign spending advantage from $0.25 million to $0.5 million, and again by 0.243 if the campaign spending advantage rises from $0.5 million to $1.0 million. Our results also indicate tJiat the national tide favoring Republicans in 1994 was clearly stronger than the national tide favoring Democrats in 2006. Finally, presidential coattails, political party influence, and candidates’ prior experience in elective office are all important in explaining wins/losses in open-seat election contests.
Local Fiscal Behavior Under Subnational Provisions
Authors: Hou Yilin
Published: December 2019

This study examines fiscal policy interactions between state and local governments. Research in this area has been increasing but remains inadequate, especially on local policy options during economic downturns. State governments oversee local finances, also provide financial assistance; localities are expected to adopt counter-cyclical fiscal policies (CCFP). There has been an increasing literature on CCFP at the state level, but little on the local level. This paper uses U.S. county data for empirical analysis and attempts to move closer to consensus on the determinants of local savings and their effects on outlays. I find no evidence that localities smooth across boom-bust cycles; i.e., they do not save for revenue shortfalls. I find that state fiscal institutions cast real impact on local finance. These shed light on local policy making, also add to existing evidence for subnational policy design.
Rent-seeking Behaviour, Externalities and Decentralization
Authors: Fiorillo Fabio , Sacchi Agnese
Published: December 2019

The paper analyzes local public goods provision with positive inter-jurisdictional spillovers and preferences heterogeneity, comparing decentralized and centralized systems under a political economy approach. As in the recent theory of fiscal federalism, we consider the rent-seeking behaviour of policy-makers. Given this framework, the convenience of decentralization depends on the interactions among these factors: the gain of internalizing externalities and the distribution of preferences of citizens and decision-makers within the national territory. The assumption of rent-seeking governments with their preferences and own objective functions to maximize can produce, in certain instances, a rather different view of the properties of decentralization.
A Preliminary Contemporary Panel Data Analysis of the Consumption Impact of Cigarette Taxation
Authors: Cebula Richard J.
Published: December 2019

The adverse health effects from cigarette smoking account for an estimated 400,000 deaths annually in the U.S. Given this circumstance, the present study has two objectives. First, using a panel data set for a very recent time frame, it seeks to investigate the impact of federal plus state cigarette excise taxes (along with the influence of other factors) on the aggregate consumption of cigarettes. The study adopts a five-year state-level panel data series spanning the period 2002 through 2006. Consistent with certain previous studies, the estimates in this study find that the higher the cigarette excise tax, the lower the aggregate volume of cigarettes consumed. However, this outcome does not address the practical problem of the substitution of high nicotine cigarettes for low nicotine cigarettes in light of a significant cigarette tax hike. This circumstance leads to the second objective of this study, namely, to formally propose a general form/template for a cigarette excise tax that is tied directly to each cigarette brand’s nicotine and tar content.
Public Protection versus Public Choice: An Analysis of Merger Enforcement Behavior by State Attorneys General
Authors: Dove John A.
Published: December 2019

A large body of literature has emerged regarding the proper role and scope of state level merger oversight and enforcement in the U.S., handled by each states respective attorney general (AG). Much of it suggests that due to the set of incentives and constraints that state AGs face, state level enforcement has become much more politicized and arbitrary as compared to federal enforcement. Although numerous studies have provided ample anecdotal evidence, none of these studies have formally tested what actually impacts state merger reviews. Therefore, by employing a dataset of state merger review cases between 1998 and 2010 this paper attempts to empirically test and examine the political incentives surrounding a state AGs decision to review a potential merger. Overall, I do find evidence that electoral aspirations and campaign contributions have a relatively limited but robust impact, while cases involving Fortune 500 companies, as well as multiple states pursuing die same case have a much more profound impact on a state AG’s decision to scrutinize a merger.
Tales of Expansionary Fiscal Contractions in Two European Countries: Hindsight and Foresight
Authors: Considine John , Duffy David
Published: December 2019

It is ironic that the potential expansionary effects of fiscal contractions have become known as non-Keynesian effects. This paper highlights the fact that Keynes and his contemporaries were aware of such potential perverse effects. It is clear that the important indirect effects of budgetary policy via expectation were known in the 1930s. Moreover, the economists of the time recognised the possibilities before they occurred. This paper supplements the existing research on the Expansionary Fiscal Contraction hypothesis by comparing the political and economic environments of two periods in economic history, Britain in 1930-1931 and Ireland 1986-1987, and the accompanying economic thought.
Public Spending and Budget Cycles in the Italian Regions: an Empirical Analysis
Authors: Galli Emma , Villani Marianicola
Published: December 2019

This paper focuses on the issue of the electoral and ideological cycles in local government budget for the Italian regions over the period 1996-2006. We verify these hypotheses for the following budgetary variables: total expenditures, administration, health, housing, culture and education, viability and transport and social services. The effect of the upcoming election on the government spending inclinations turns out to be relevant only for total expenditure. The ideology does not play a systematic role in spending decisions (with the exception of health) while sharing a common ideology between the national and regional governments affects public spending.
Inter–Jurisdictional Cost–Sharing of Public Spending
Authors: Giuranno Michele G.
Published: December 2019

This paper deals with the issue of how two geographically separate jurisdictions should share the cost of a centralized and uniformly provided public good. The key assumption is that jurisdictional representatives make decisions by bargaining in die centralised legislature. Results suggest that jurisdictions may reach a mutually beneficial agreement by equalising the net welfare gain produced by the provision of die public good, rather than the public good cost. The model identifies the efficiency and redistributive implications of such an agreement.
On the Development of the Theory of Fiscal Federalism: An Essay in the History of (Recent) Economic Thought
Authors: Oates Wallace E.
Published: December 2019

This paper explores the origins and evolution of the theory of fiscal federalism. A relatively recent sub-field of public finance, fiscal federalism addresses the economics of multilevel government including the economic roles of different levels of government and the fiscal instruments they employ. Its evolution has been influenced both by some real-world financial crises and by the application of new analytical approaches in the discipline of economics.
Determinants of Immigration Policy: An Empirical Study of US Legislative Voting
Authors: Banaian King , Bodvarsson Örn B. , Lowenberg Anton D.
Published: December 2019

Immigration policy is supplied endogenously through a political process that weighs the impacts of immigration on factor owners, together with other interests, in determining policy outcomes. The relative significance of constituent interests and legislator ideology in shaping policy is tested by identifying the correlates of congressional voting on immigration legislation in the United States. Conservative lawmakers are found to generally support stricter immigration controls. Legislators representing border states and urban areas favor looser restrictions, possibly reflecting the political influence of recent immigrants. There is evidence that immigration reform is a normal good and that substitutability between native and immigrant labor promotes tighter immigration restrictions.
Towards a Social Philosophy for the Twenty First Century: Critical Reflections on an Unpublished Essay by Richard Goodwin
Authors: Di Matteo Massimo
Published: December 2019

Through a critical discussion of a un unpublished essay by Richard Goodwin (found in the Goodwin Archive in die university of Siena) this paper presents a social philosophy for the XXI century of an evolutionary type. A comparison with another leading figure of evolutionary thought, namely von Hayek, is carried out in order to find similarities as well differences. As a byproduct die paper explores the changes of the political ideas of a great economist as shaped by the terrible events of die XX century.
The Logic of Party Coalitions with Political Activism
Authors: Giuranno Michele G.
Published: December 2019

This paper considers an electoral equilibrium between two party coalitions. Each coalition is composed of two factions called activists and opportunists. Activists are interested in announcing a policy as close as possible to their ideal policy and are ready to contribute with vital electoral resources to die one’s own party coalition. Opportunists are interested only in winning elections and need the activists’ contributions to enhance their party valence. Thus, the two factions of each coalition negotiate on both policy platform and activists' contributions. Results show that, in equilibrium, the marginal rates of substitution between policy position and activists’ contributions must be the same for the two negotiating factions inside party coalitions. Furthermore, greater activism inside parties leads to policy divergence.
Terrorism: Rationality, Externalities, and Policy
Authors: Sandler Todd , Gaibulloev Khusrav
Published: December 2019

This article provides a selective overview of the economic study of terrorism. After defining key terms - terrorists’ rationality, domestic and transnational terrorism, and counterterrorism measures, we present two models of terrorists’ behavior. The first model depicts a choice-theoretic model of how terrorist groups allocate their resources among attack modes or target types. The second model is a strategic analysis involving the terrorist group and a targeted government. Extensions to these base models are then discussed. The latter part of the article investigates the dilemma that terrorism poses to liberal democracies. We conclude by examining myriad externalities associated with counterterrorism measures.
A Theory of the Dynamics of Entangled Political Economy with Application to the Federal Reserve
Authors: Salter Alexander William
Published: December 2019

This paper develops the theory of entangled political economy by outlining a process by which the political-economic order can become increasingly entangled. The theory posits that a Big Player polity organization, a key feature of which is a lack of a hard budget constraint, exports this feature to the economy organizations it oversees. The channel through which it does so is the repeated interactions of economy and polity organizations' agents during times of crisis. The actions of the Federal Reserve, in particular its bailing out of large financial houses in the latter part of die 20th century and the most recent financial crisis, are used as a historical illustration of this theory. The paper also discusses die possibility of constitutional craftsmanship as a solution to the undesirable consequences that accompany increased economy-polity entanglement.
A Panel Data Study of the Effects of Economic Freedom, Regulatory Quality, and Taxation on the Growth Rate of Per Capita Real GDP
Authors: Cebula Richard J. , Foley Maggie
Published: December 2019

This study empirically investigates three hypotheses. The first is that higher levels of economic freedom in an economy promote a higher growth rate of economic activity and hence yield a higher growth rate of per capita real GDP in that economy. The second hypothesis is that higher quality government regulation leads to a more efficient economic system, in large part by interfering less with market functioning and in part by not adding unnecessarily to the cost of conducting business in the marketplace, and thereby leads to a higher per capita real GDP growth rate. The third hypothesis is that the higher the taxation level/burden relative to GDP in an economy, the lower the growth rate of private sector spending and hence the lower the growth rate of per capita real GDP in that economy. Using a panel dataset for OECD nations over the 2003 through 2006 period, fixed effects PLS estimations find compelling evidence in support of all three of these hypotheses.
The Cost of Collectivizing Moral Goods
Authors: Yoon Yong J.
Published: December 2019

The post-financial crisis years are characterized by growing criticism of market organization. Michael Sandel, for example, criticizes die expansion of market for moral goods, e.g., blood, sex, health, education, and transplantable human organs. Collectivization, the social structure distinguishable from the market or central planning agency, becomes a relevant question. Based on the analytical framework of polycentric political order, we show that collectivization can be costly from overspending. The cost is measured by the excess burden in a skeletal model. This cost, however, disappears for the pure Samuelsonian public goods.
Public Finance without Taxation: Free–Riding as Institutional Artifact
Authors: Wagner Richard E.
Published: December 2019

Expositions of the theory of public finance mostly assume that taxation is necessary to finance public goods because free riding prevents their provision through market arrangements. Free riding, however, is an artifact of the assumption that state is the only social option to market. Once it is recognized that civil society contains a rich array of institutions and practices that channel personal interaction, free riding recedes in significance and perhaps even disappears. Free riding is a product of a particular model of public goods and is not a universal quality of societal living together. In this respect, there is a deep similarity between cities and such entities as hotels and malls which supply public goods without taxation. This paper places the social organization of shared consumption on center stage in the theory of public finance, thereby relegating taxation to side show status.
The Python That Eats Itself By The Tail: A Self–Contradictory Theory of Capitalism
Authors: de Jasay Anthony
Published: December 2019

The driving idea behind Mr. Piketty's successful book, Capital in the Twenty First Century, is very simple, but not good. Mr. Piketty's stress that capital nust be valued at market prices. Valuing capital at present value would, at first sight, release the model from its baneful link between output and the increment of capital. The return on capital may or may not be greater than the growth rate.
Growth in One (Short) Lesson
Authors: Beraldo Sergio , Colombatto Enrico , Filoso Valerio , Stimolo Marco
Published: December 2019

This paper argues that the economic theorizing about growth leads to one simple conclusion: the key notion is innovation and the history of growth can be aptly synthesized as the history of successful innovation. Innovation includes technological progress and entrepreneurship, which in turn depend on tolerance, interaction, and - more generally - a favourable institutional environment. Besides the importance a community assigns to credibility and reputation and from a public policy perspective we emphasize the role of both contract enforcement and protection of property rights as necessary, even though not sufficient, conditions for growth.
On James Buchanan's Public Choice Enterprise
Authors: Forte Francesco
Published: December 2019

James Buchanan came to Italy in 1955 as Fulbright visiting professor until July 1956 and made his research at the library of the Bank of Italy. He visited the University of Pavia, a quite famous center for public finance studies, still directed by Benvenuto Griziotti. On that occasion I became acquainted with professor Buchanan and our longlasting friendship started soon. On his itinerary from the political economy perspective to public choice that James Buchanan did undertake, after the Italian 1955-56 visit, he has written: «After Italy I was prepared, intellectually, psychologically and emotionally to join in an entrepreneurial venture with my Virginia colleague Warren Nutter, a venture aimed at bringing renewed emphasis to ‘political economy’ in a classical sense. And from these beginnings, the more directed research spin-off into the ‘economics of politics’ initiated jointly with my colleague Gordon Tullock, now seems a natural progression»
Efficiency and Integrity Issues in Public Procurement Performance
Authors: Rizzo Ilde
Published: December 2019

The paper offers an overview of some theoretical and empirical issues underlying the performance of public works contracts and outlines the connections between efficiency and integrity. It is stressed that performance strongly depends on the rules governing the various phases of the contract: because of the specific features of public works, the efficiency of open procedures to select the contractor is questioned and the relevance of the implementation phase for the outcome of public procurement is emphasized. Looking at the Italian case, some examples of empirical investigation on the performance of these contracts are provided and a discussion of the existing rules is offered. Costs overruns and delays, characterizing most public works contracts, are ‘red flags’ of poor performance and suggest that more attention should be given to the execution phase. A policy implication stemming from the analysis is that in Italy incentive schemes for procurement officers, to make them outcome-oriented rather than procedure-oriented, are needed: more discretion and responsibilities would call for adequate rewards and would require effective ex-post monitoring systems, also through benchmarking analyses. In this direction, standard costs need to be taken into consideration and implemented and, at the same time, a careful use of transparency is advocated to enhance accountability and to promote the integrity of public action.