Lobbying and lending by banks around the financial crisis by

Despite the unprecedented levels of liquidity provided by the Federal Reserve to banks during the 2007–2008 financial crisis, lending by banks slowed dramatically during and after that global episode. In this study, we propose that, given capital constraints, the lobbying expenditures by banks to combat Dodd-Frank might have crowded out lending activity. A variety of univariate and multivariate tests show that while lending by banks fell significantly around the financial crisis, lobbying rose dramatically. Our results also show that bank lobbying and lending are imperfect substitutes during non-crisis periods. Such substitutability likely is explained by the value perceived in the political connections gained through lobbying, such as the ability to influence regulation, preferential treatment on supervisory or enforcement decisions, and protection against adverse shocks in the form of government bailouts.

     

Deficit by Design

This paper focuses on the distinguishing concern of the discourse of democratic deficit: namely, that there appear to be some striking discrepancies between democratic norms and institutional practice. I argue in this paper that the problem of democratic deficit is in fact the normal condition of the institutions of representative government. Indeed, early arguments in favour of representative government insist that it departs from and is superior to democracy itself. If representative government provides the predominant modern understanding of democracy, then democratic deficit is an integral part of its design.     

Regulation by litigation

We believe that careful application of the logic of economics and public choice shines important light on regulation through litigation and can explain at least partly why regulators choose the litigation route, when they choose it, and how the choice may or may not achieve broad goals of efficiency and fairness. We present three case studies: heavy‐duty diesel engines, silica and asbestos, and the tobacco industry's Master Settlement Agreement (MSA).     

Voting by proxy

I introduce voting by proxy for constructing and operating legislatures, and then compare it to direct representation, plurality, and single transferable vote (STV), which voting by proxy most closely resembles. When each voter uses voting by proxy to select his proxy among given legislators and elections are costless, voting by proxy maximizes the legislature's representation of the voting population. When each voter uses preferential voting by proxy, selecting a proxy during the vote count as well as a proxy in the legislature, and some ancillary rules are followed, I find that voting by proxy dominates STV and offers favorable tradeoffs against plurality. It improves representation and constituent service; eliminates gerrymandering; improves voter turnout; ranks the legislature's representatives by the proxies they hold rather than seniority; creates tighter representative-constituent links that lead to better informed voters, reducing the influence of special interests; and eliminates primary and runoff elections. Extra costs associated with its relative complexity or better representation can be made small.     

Regulation by generalization

Both criminal and regulatory laws have traditionally been skeptical of what Jeremy Bentham referred to as evidentiary offenses – the prohibition (or regulation) of some activity not because it is wrong, but because it probabilistically (but not universally) indicates that a real wrong has occurred. From Bentham to the present, courts and theorists have worried about this form of regulation, believing that certainly in the criminal law context, but even with respect to regulation, it is wrong to impose sanctions on a “Where there’s smoke there’s fire” theory of governmental intervention. Yet, although this kind punishment by proxy continues to be held in disrepute both in courts and in the published work, we argue that this distaste is unwarranted. Regulating – even through the criminal law – by regulating intrinsically innocent activities that probabilistically, but not inexorably, indicate not‐so‐innocent activities is no different from the vast number of other probabilistic elements that pervade the regulatory process. Once we recognize the frequency with which we accept probabilistic but not certain burdens of proof, probabilistic but not certain substantive rules, and probabilistic but not certain pieces of evidence, we can see that defining offenses and regulatory targets in terms of non‐wrongful behavior that is evidence of wrongful behavior is neither surprising nor inadvisable.     

Financial Reporting by Australian Nonprofit Organisations: Dilemmas Posed by Government Funders

Nonprofit organisations comprise a growing and important sector of the Australian economy. This sector is being used by governments to an increasing extent for the delivery of services. The most common manner in which nonprofit organisations are funded by government is through the provision of grants, contracts or service agreements. Nonprofits discharge their accountability for these funds through reporting guidelines issued by the government funders. This article examines the financial accountability requirements of government funders, in one jurisdiction in Australia to support the central argument that the emphasis on ‘upward and external’ accountabilities serve as a functional and control tool on the sector. This emphasis detracts from the development of the ‘downward and internal’ mechanisms of accountability which are the essential building blocks for the strategic development of the capacity of the sector to respond to calls for greater accountability.     

Management by groping along

Public managers do and should grope along. They need to have a clear sense of mission for their agency. But they will never know precisely how to realize these purposes. Every new management task confronts even the most experienced manager with a new organizational, political, and cultural situation. Consequently, the public manager cannot develop the perfect plan from the beginning. Rather, he or she must experiment with various initiatives, trying to determine what works and what does not. Meanwhile, the successes that result from some of these initiatives move the manager closer to his goal, create new capabilities for his organization, and help motivate his staff by demonstrating that they can be successful. There are thousands of management principles, and it is never obvious which ones apply in a particular managerial situation. Thus, every public manager must grope along.