We discuss the implications of these explanations for understanding how interest communities are constructed. The behavior of government agencies reflects democratic principles of equal treatment and efficiency as well as the more studied principle of responsiveness to elected political principals. The variance in IRS enforcement actions against individual and corporate taxpayers across states and time can be explained by measures reflecting equal treatment of taxpayers, enforcement efficiency, and responsiveness to elected officials. The odds of corporate versus individual audits increase with increased Democratic control over Congress and change with different presidential administrations, but not with changes in state-level partisanship. The odds also respond significantly to changes in the composition of the taxpaying district and revenue base, suggesting IRS responsiveness to equity and efficiency.
Similar theories inform market-based approaches to public service delivery more generally.
As market exposure increases, rates of productivity, capitalization, and profitability will increase significantly. As price controls grow broader and more stringent, rates of capitalization and productivity will increase, but profitability rates will be significantly lower. As market exposure increases, and whenever performance measures are publicly reported, service quality will increase. As price controls become broader and more stringent, service quality will decrease significantly.