Explaining Regional and Local Government: An Empirical Test of the Decentralization Theorem

Decentralization of policy provision is omnipresent yet we are not able to sufficiently account for the extent of this phenomenon. The decentralization theorem explains the decentralization of policy provision as a trade‐off between heterogenous preferences, interjurisdictional spillovers (externalities), and economies of scale. Empirical tests of the theorem have been hampered by a measurement problem on the independent as well as on the dependent variable. This article tackles these problems by using a new data set that combines a measure of externalities and scale effects of policies obtained from an expert survey with the actual provision of policies across governmental tiers in 40 countries. The analyses provide an empirical test of the decentralization theorem by showing that decentralization of policy provision is to a large extent determined by functional characteristics of policies and heterogenous preferences but other country‐specific variables, such as democracy, economic development, and European subsidies, also matter.     

Do parties matter in internationalised policy areas? The impact of political parties on environmental policy outputs in 18 OECD countries, 1970–2000

This article analyses the extent to which national policies in the highly internationalised environmental sector are influenced by the policy preferences of political parties. The focus is on policy outputs rather than environmental performance as the central indicator of policy change. Based on a discussion of the relevant theoretical literature competing hypotheses are presented. For an empirical test, a dataset is used that includes information on the number of environmental policies adopted in 18 OECD countries at four points in time between 1970 and 2000. The results show that not only international integration, economic development and problem pressure, but also aspects of party politics, influence the number of policies adopted. The number of environmental measures increases if the governmental parties adopt more pro‐environmentalist policy positions. This effect remains robust even when controlling for the institutional strength of governments, the left‐right position of parties in government, the inclusion of an ecological or left‐libertarian party inside the (coalition) government, and the presence of a portfolio that deals exclusively with environmental issues.     

Preferences,beliefs, and values in negotiations concerning aid to Nicaragua

The paper argues that in the context of public choice for non-market goods, two assumptions of the simple model of the rational economic actor may not hold. The assumptions are that there is a direct connection between choice and outcome, and that preferences are not affected by the act of making a choice. Consequently, to understand people's preferences for public goods, it is important to measure their beliefs and values separately rather than simply to observe their choice behavior or to ask them what they would be willing to pay for the public good. In an example study, people's preferences for U.S. policies toward Nicaragua were measured and further analyzed into their beliefs about the effects of those policies on Nicaraguan outcomes, and their evaluations of the Nicaraguan outcomes. It was shown that the process of making a two-person choice changed the preferences, and that the separate measures or beliefs and values gave insight into the process of the change that would not have been available had only the preferences been measured. Implications for the contingent valuation method are explored and an alternative approach is proposed.     

A Decision Theoretic Model of Public Opinion: Guns, Butter, and European Common Defense

Why do individuals support the public policies they do? We argue that individuals can have quite sophisticated policy preferences and that not correctly modeling those preferences can lead to critically misspecified empirical models. To substantiate this position we derive and test a decision‐theoretic model that relies upon three critical assumptions: (1) policies affect the provision of multiple goods about which individuals care; (2) individuals have diminishing returns to scale in those goods; and (3) preferences over at least some subset of those goods are correlated. Using this model, we demonstrate that arbitrarily small secondary policy effects can confound predictions over primary policy effects. Thus, not considering even arbitrarily small policy effects can cause one to conclude that evidence is consistent with one's theory when in fact it is inconsistent or vice versa. Testing this theory on support for forming a European common defense, we find evidence consistent with our model.     

The abilities and decisions of regular and irregular voters in American presidential elections

While most of the voter turnout literature focuses on the differences between voters and nonvoters, scant attention has been paid to what separates regular voters from the “irregular voters” who move in and out of the electorate. This article shows that citizens who regularly vote will be more knowledgeable and involved in the political system than voters who turnout irregularly. In addition, the article supports the existing claim that it is easier for voters to understand social policies than economic policies. These two principles lead to the hypothesis that economic and social policy preferences will predict the decisions of regular voters while the decisions of irregular voters will be predicted by social policy preferences but not economic preferences. American National Election Studies data from 1988 to 2008 provide support for these hypotheses. Though poor economic conditions may bring irregular voters out to the polls, their ballots are cast for candidates with similar social policy preferences, not necessarily similar economic stances.     

The policy implementation process

There is an implicit assumption in most policy studies that once a policy has been formulated the policy will be implemented. This assumption is invalid for policies formulated in many Third World nations and for types of policies in Western societies. Third World governments tend to formulate broad, sweeping policies, and governmental bureaucracies often lack the capacity for implementation. Interest groups, opposition parties, and affected individuals and groups often attempt to influence the implementation of policy rather than the formulation of policy.A model of the policy implementation process is presented. Policy implementation is seen as a tension generating force in society. Tensions are generated between and within four components of the implementing process: idealized policy, implementing organization, target group, and environmental factors. The tensions result in transaction patterns which may or may not match the expectations of outcome of the policy formulators. The transaction patterns may become crystallized into institutions. Both the transaction patterns and the institutions may generate tensions which, by feedback to the policymakers and implementors, may support or reject further implementation of the policy.By application of the model, policymakers can attempt to minimize disruptive tensions which can result in the failure of policy outcomes to match policy expectations.     

The State as Architect of Political Order: Policy Dynamics in German Health Care

The focus of this article is on the state as an actor that can create, rearrange or even destroy established structures of interest representation. Through small, often almost overlooked, and sometimes even failed interventions, governmental policies create a legacy that can serve as a springboard for further political action. This policy dynamic is triggered by “architectural” activities of the state, aiming at the structure of the interest group system. This kind of policy bears the potential not only to manipulate the structure, but also the preferences and strategies of interest groups so as to overcome their veto-power. The case of German health care reform policies since the late 1970s is used to illustrate how suck a kind of governmental “design” has exerted a decisive impact on the structure of the policy field, culminating in an unexpected legislative success for the federal government.¹     

Political participation and procedural utility: An empirical study

Abstract.  Democracy can be characterized by policy outcomes as well as governmental processes. In this article, it is argued that people have preferences about both aspects and that they derive utility from the processes involved in decision making over and above the utility gained from outcomes. The authors study political participation possibilities as an important source of procedural utility. To distinguish between outcome and process utility, they take advantage of the fact that nationals can participate in political decision making, while foreigners are excluded and thus cannot enjoy the respective procedural utility. Utility is assumed to be measurable by individually reported subjective well-being. As an additional indicator for procedural utility, reported belief in political influence is analyzed.     

Responsiveness without Representation: Evidence from Minimum Wage Laws in U.S. States

How well does public policy represent mass preferences in U.S. states? Current approaches provide an incomplete account of statehouse democracy because they fail to compare preferences and policies on meaningful scales. Here, we overcome this problem by generating estimates of Americans' preferences on the minimum wage and compare them to observed policies both within and across states. Because we measure both preferences and policies on the same scale (U.S. dollars), we can quantify both the association of policy outcomes with preferences across states (responsiveness) and their deviation within states (bias). We demonstrate that while minimum wages respond to corresponding preferences across states, policy outcomes are more conservative than preferences in each state, with the average policy bias amounting to about two dollars. We also show that policy bias is substantially smaller in states with access to direct democratic institutions.     

Government transparency and policymaking

We argue that making lawmakers more accountable to the public by making it easier to identify their policy choices can have negative consequences. Specifically, we analyze a model of political agency with a single lawmaker and a representative voter. In our model, the lawmaker has better information than the voter about the appropriateness of alternative policy courses. In addition, the voter is uncertain about the incumbent's policy preferences – specifically, the voter is worried the incumbent is an ideologue. Our model suggests that when lawmakers expect their policy choices to be widely publicized, for those lawmakers sufficiently concerned about reelection, the desire to select policies that lead the public to believe they are unbiased will trump the incentive to select those policies that are best for their constituents. Hence, lawmakers who would do the right thing behind close doors may no longer do so when policy is determined in the open.     

Nonseparable Preferences, Measurement Error, and Unstable Survey Responses

A person has nonseparable preferences when her preference onan issue depends on the outcome of other issues. A model ofsurvey responses in which preferences are measured with errorimplies that responses will change depending on the order ofquestions and vary over time when respondents have nonseparablepreferences. Results from two survey experiments confirm thatchanges in survey responses due to question order are explainedby nonseparable preferences but not by the respondent's levelof political information, partisanship, or ideology.     

Changing classes,changing preferences: how social class mobility affects economic preferences

Abstract

While many studies have identified an association between social class and economic preferences, we know little about the implications of changes in class location for these preferences. This article assesses how social class and intra-generational class mobility affect economic preferences drawing on longitudinal data from the British Household Panel Survey. In doing so, the article adopts a post-industrial perspective that considers horizontal and vertical class divisions. Even when time-invariant characteristics of individuals are kept constant (through fixed-effects estimation), it is found that both vertical and horizontal class location explain economic preferences. Thus, these estimations suggest that social class moulds preferences, even when accounting for factors that can lead to selection into classes. Moreover, people who change classes hold different economic preferences than their peers in the class of origin, but do not completely assimilate into their class of destination. This implies that growing intra-generational class mobility could undermine the class basis of political conflict.     

Taking Threat Seriously: Prejudice,Principle, and Attitudes Toward Racial Policies

Drawing from group theories of race-related attitudes and electoral politics, we develop and test how anxiety influences the relative weight of prejudice as a determinant of individuals’ support for racial policies. We hypothesize that prejudice will more strongly influence the racial policy preferences of people who are feeling anxious than it will for people who are not. Using an experimental design we manipulate subjects’ levels of threat and find significant treatment effects, as hypothesized. We find that individuals’ racial policy attitudes are partially conditional on their affective states: individuals who feel anxious report less support for racial policies than those individuals who do not feel anxious, even when this threat is stimulated by non-racial content. More broadly, we conclude that affect is central to a better understanding of individuals’ political attitudes and behaviors.     

Do Voters’ Coalition Preferences Affect Government Formation?

Studies on coalition formation assume that political parties have two major goals: they aim to maximise office and policy payoffs. This paper shows that decision-making in the government formation game is also determined by the voters’ coalition preferences. Since the coalition formation process is not a one-shot game, parties have to take the coalition preferences of the electorate into account when they evaluate the utility of potential coalitions. If parties fail to comply with the coalition preferences of voters, they are likely to be penalised in future elections. The argument is tested by an analysis of government formation in the 16 German states between 1990 and 2009. The results support the argument: the formation of coalitions – at least in the German states – is not only determined by office- and policy-seeking behaviour of political parties, but also by the preferences of voters regarding their preferred outcome of the coalition game.     

Does Enhanced Veto Authority Centralize Government?

Previous theoretical and empirical research findsenhanced veto authority has little systematic effecton level of spending. This paper takes a new tact,examining the effect of veto power on thecentralization of governmental services. It proposesand tests a model of federalism in which differenttypes of veto authority lead to differing degrees ofcentralization when the executive and legislature havedisparate preferences over the level of governmentthat should provide services. Empirical resultsindicate governors in the United States use enhancedveto authority to centralize state and localgovernment spending.     

Pleasing the Principal: U.S. Influence in World Bank Policymaking

How do policies in international organizations reflect the preferences of powerful institutional stakeholders? Using an underutilized data set on the conditions associated with World Bank loans, we find that borrower countries that vote with the United States at the United Nations are required to enact fewer domestic policy reforms, and on fewer and softer issue areas. Though U.S. preferences permeate World Bank decision making, we do not find evidence that borrower countries trade favors in exchange for active U.S. intervention on their behalf. Instead, we propose that U.S. influence operates indirectly when World Bank staff—consciously or unconsciously—design programs that are compatible with U.S. preferences. Our study provides novel evidence of World Bank conditionality and shows that politicized policies can result even from autonomous bureaucracies.     

Accepting Authoritative Decisions: Humans as Wary Cooperators

Why are people more willing to accept some governmental decisions than others? In this article, we present results from a series of original experiments showing that people's reactions to a given outcome are heavily influenced by the procedure employed to produce the outcome. We find that subjects react much less favorably when a decision maker intentionally keeps a large payoff, thereby leaving the subject with a small payoff, than when that same payoff results from a procedure based on chance or on desert. Moreover, subjects react less favorably to outcomes rendered by decision makers who want to be decision makers than they do to identical outcomes selected by reluctant decision makers. Our results are consistent with increasingly prominent theories of behavior emphasizing people's aversion to being played for a “sucker,” an attitude that makes perfect sense if people's main goal is not to acquire as many tangible goods as possible but to make sure they are a valued part of a viable group composed of cooperative individuals.     

The Application of Game-Theory in the Study of Hierarchical Decision-Making*

The article discusses hierarchical decision-making within a rational-choice framework. The interaction between Superior and Subordinate is assumed to be influenced by three types of uncertainty regarding preferences, choice and ‘what happened’. A game-theoretical analysis indicates that the Control Game may represent the decision situation of the superior and the subordinate actors, particularly when modelled as a one-shot game with simultaneous moves. As this game has no Nash-equilibrium, it is difficult to predict an outcome. A rather tentative empirical testing is performed. Using data from the budgetary process in the city of Oslo, it seems that the agencies do not exploit strategic opportunities to increase spending. This supports the theoretical presumption that it is rational bureaucratic self-interest to comply with superior preferences, even under a non-controlled decision situation.     

A framework for the comparative analysis of church–state relations in Europe

This article analyses how the policies specified in EU directives are transposed by EU member states. In contrast to existing transposition studies it develops a policy-specific approach to explain how directives are transposed by national actors. In this approach the outcome of transposition depends on the institutional arena in which decision-making takes place and the interests of the domestic actors involved. These institutional arenas can vary from parliament to national ministries and agencies. Domestic actors are taken as policy-specific veto players. Their preferences may lead to two different responses to the requirements of a directive. First, they can transpose a directive literally, keeping deviations to a minimum. Second, domestic actors can adopt a non-literal interpretation of the directive, leading to more substantial deviations within the boundaries allowed by the European Commission. These responses are illustrated by two cases of transposition of EU directives, the tobacco products directive and the animal trade directive. The case analysis shows that the policy-specific approach proposed in this article helps in understanding transposition. It clarifies how the ambitions formulated in Brussels are transformed by national administrations into policies.     

The Power of Money: Global Capital and Policy Choices in Developing Countries

Extant studies of the impact that international phenomena have on policy choices, and those focused on the political economy of exchange-rate regimes in particular, are incomplete because they do not consider the effect that reliance on global capital has on the policy preferences of domestic groups. Consequently, they cannot explain why some newly emerging market countries pursue fixed exchange regimes under political and economic conditions—such as recently completed elections, uncompetitive export sectors, and poor national economic performance—in which others have altered their policies. I argue that reliance on different types of foreign capital generates distinct capital-specific policy preferences. Furthermore, rather than simply mimicking the preferences of foreign investors, domestic groups are likely to promote policies that reduce their capital-specific risks and vulnerabilities. Panel logit models of exchange-rate regimes in emerging market countries from 1973 through 2000 demonstrate that higher levels of democracy bolster these effects .