What makes community reinvestment act agreements work? A study of lender responses

Abstract

One response to the incentives provided by the Community Reinvestment Act of 1977 (CRA) has been for lenders and community groups to enter into CRA agreements, which involve pledges to provide prescribed levels of service to targeted neighborhoods. This article examines whether lenders actually change their behavior after entering into these agreements.

Using data on CRA agreements and on mortgage lending, we find that institutions increase their lending activity with each year an agreement is in force and that increased lending persists after an agreement expires. Additional analysis shows that agreements that include provisions for mortgage counseling and technical assistance are associated with increased targeted lending. By contrast, agreements with provisions requiring small business counseling and technical assistance and periodic meetings by review committees are associated with somewhat depressed lending levels. Further research is needed to draw definitive implications from this second set of results.     

From confrontation to collaboration? Banks,community groups,and the implementation of community reinvestment agreements

Abstract

Banks and other depository institutions have signed more than 300 community reinvestment agreements valued at $350 billion in the two decades since the passage of the Community Reinvestment Act (CRA). This article examines the effectiveness of negotiating CRA agreements in Chicago, Cleveland, Pittsburgh, and New Jersey. After describing the agreements and the procedures by which they are enforced, the article looks at their impact and discusses several factors that could limit implementation of CRA agreements in the future.

The findings suggest that CRA agreements are more effective in some areas than others. They seem most consistently successful in meeting their goals for mortgages, investments in low‐income housing tax credits, grant giving to community‐based organizations, and in opening (and keeping open) inner‐city bank branches. The future of CRA agreements is clouded by several factors, most notably the restructuring and consolidation of the financial service sector.     

Conflict,choice or geography? Explaining patterns of democracy in continental Europe

The ‘character’ of democracy is regularly summarised using political‐institutional measures of, for instance, ‘consensus’ or ‘majoritarian’ democracy. Yet, there is little quantitative‐comparative research on the origins of such configurations. Drawing on literature on endogenous institutions and constitutional design, this article proposes a model for the explanation of empirical patterns of democracy. Using a novel database of 26 continental (neighbouring) European democracies and Bayesian spatial modelling, the results indicate that while today's empirical patterns of democracy in terms of proportional power diffusion can be traced back to waves of democratisation rather than historical partisan power configurations, decentral power diffusion can partially be explained by socio‐structural factors, and spatial dependencies exist for all variants of power diffusion.     

Public subsidies and charitable giving: Crowding out,crowding in,or both?

Abstract Whether government subsidies to nonprofit organizations leverage (crowd in) private donations, or rather crowd them out has been actively debated for some time. A third hypothesis, explored theoretically and tested empirically in this paper, is that the two phenomena are actually not inconsistent with one another: At low levels of subsidies, government support may stimulate private giving, whereas at high levels it could have just the opposite effect. The model presented is based on this idea, which yields implications relevant to nonprofit management and public policy, and tests it with data on symphony orchestras. The conclusion is that the maximization of private donations and total “unearned” revenues are not compatible goals. Further, nonprofits that suffer from short‐term liquidity problems or managerial shortsightedness may face a “subsidy trap,” in which they are forced to rely on suboptimal levels of subsidies in terms of maximizing the firm's revenues. © 2000 by the Association for Public Policy Analysis and Management.     

Cohesion in the European community: Illusion or reality?

The EC's regional policy is faced with the issue of the impact of market integration on the goals of economic and social cohesion in the Community. There are two major approaches in the literature in predicting the consequences of market integration on cohesion. The first approach stresses the divergence of levels of development while the second predicts that a gradual reduction of disparities will take place. To test these two hypotheses an analysis of regional and national level data covering the first nine member states of the Community over a 40‐year period is conducted. The results demonstrate that there has been a constant and significant convergence in levels of economic and social cohesion in the Community and within nation states during the last 40 years.     

Party,policy – or both? Partisan-biased processing of policy arguments in direct democracy

How do party cues and policy information affect citizens’ political opinions? In direct democratic settings, this question is particularly relevant. Direct democratic campaigns are information-rich events which offer citizens the opportunity to learn detailed information about a policy. At the same time parties try to influence citizens’ decision procedure by publishing their own positions on the issue. The current debate on whether “party” or “policy” has more impact on political opinions has not yet yielded conclusive results. We examine the effect of policy arguments and party cues on vote intention in two Swiss referendum votes using panel survey data. To the simple dichotomous question of “party cues or policy information” we add an additional twist in asking how party cues affect the processing of policy information through processes of motivated reasoning. We find first that both, policy arguments and party cues, have an independent effect on vote intention. However, in a second part of the analysis, we find strong evidence for partisan-biased processing of policy arguments – that is, voters tend to align their arguments with their preferred party’s position. Our conclusions with regard to the democratic quality of these vote decisions are therefore ambivalent.     

To Scrutinise or Not to Scrutinise? Explaining Variation in EU-Related Activities in National Parliaments

There is an on-going debate in the literature as to whether national parliaments can and do play an active role in EU policy-making. The main reason for persistent disagreement is the lack of comparative empirical data on parliamentary behaviour in EU affairs. The article aims to contribute to this debate by presenting the first comparative quantitative data on European affairs activities of national parliaments and by explaining the empirical variation. The development of a unique dataset including all 27 national parliaments allows a series of explanatory variables to be tested for the level of parliamentary activity at both the committee and the plenary levels. The analysis shows that institutional strength in EU affairs plays an important role. Overall, however, EU activities can be better explained with a mix of institutional capacities and motivational incentives. The specific combinations vary for different types of activities.     

Moderate,extreme, or both? How voters respond to ideologically unpredictable candidates

Candidates and parties often face a choice between endorsing policies that appeal to their core constituencies or generate support from more diverse groups of voters. While the latter strategy may make overtures to a wider set of citizens, existing literature says little about how the overall mix of issue positions affects electoral support. We argue that candidates who endorse diverse sets of policy positions appear unpredictable to voters and incur subsequent electoral penalties. Using data from the 2006 congressional elections, we find that ideological predictability substantially increases electoral support at both the individual and aggregate levels and that voters perceive greater ideological congruence from more predictable candidates. Our results have important implications for candidate and party strategies and suggest that voters are responsive to the mean and the variance of candidates’ policy stances.     

Transformation or Bureaucratization? The changing role of community representation in local strategic partnerships in England

Abstract

The debate about the need to build social capital and to engage local communities in public policy has become a central issue in many advanced liberal societies and developing countries. In many countries new forms of governance have emerged out of a growing realization that representative democracy by itself is no longer sufficient. One of the most significant public policy trends in the United Kingdom has been the involvement of community organizations and their members in the delivery of national policy, mediated through local systems of governance and management. One such policy area is urban regeneration. Central Government now requires local authorities in England to set up Local Strategic Partnerships (LSPs) to bring together stakeholders who can prepare Community Strategies and deliver social and economic programmes which target areas of deprivation. This paper reviews the key institutional processes which must be addressed, such as representation, accountability and transformation. It then investigates three very different examples of LSPs based on interviews with key representatives. The paper concludes that political commitments to community engagement in civil society are always mediated through existing institutional arrangements. Thus attempts to change deep-seated political structures and power relationships require a commitment to increase representation as well as to transform the practices and repertoires of deliberation and action.     

‘Left behind’ people,or places? The role of local economies in perceived community representation

Modern economics attributes importance to spatial inequality: yet in studying discontent with politics, existing research has mostly neglected local contexts and attitudes people hold about them. I use British Election Study data to investigate the factors leading people to believe their community is ignored by the political process. Firstly, real economic contexts play a role, since residents of low-income communities tend to take more negative views about how well their community is represented. Secondly, negative perceptions of the local economy are associated with more negative views of community representation, whereas equivalent ‘egotropic’ measures of people's personal economic situation have no such effect. Thirdly, I observe a ‘grievance’ effect wherein people are particularly negative about community representation when they believe that the national economy is more successful than that of one's local community.     

Should I stay or should I go? Explaining variation in nonstate actor advocacy over time in global governance

The past decades have been characterized by a growing number of nonstate actors (NSAs) involved in global governance. However, despite this growth, only a small number of NSAs have been able to maintain a prolonged global presence over a substantial period of time. To explain why some NSAs are more active, we rely on resource dependence theory. We demonstrate that sustained advocacy over time can be explained by a density dependence mechanism, namely the more NSAs mobilize, the lower the chance that individual NSAs will prolong their global advocacy efforts. Analysis of data stemming from a unique data set of 5,627 NSAs active at the global climate conferences demonstrates that much advocacy in this field is indeed of an incidental nature, namely a large number of groups attend once and never return.     

Keynes,Friedman, or Monnet? Explaining parliamentary voting behaviour on fiscal aid for euro area member states

This article investigates the determinants of parliamentary support for international fiscal aid. Departing from the literature on presidential systems, it analyses an exemplary case of a parliamentary system, Germany. Two theoretical accounts are distinguished. The first perceives MPs as policy-seekers and focuses on the positioning of government and opposition parties and individual MPs on an economic left?right and a pro- versus anti-EU dimension. The second regards MPs as vote-seekers and presumes an electoral district connection. The statistical analysis of a new data-set containing information on 17 Bundestag roll-call votes from 2009 to 2015 finds support for the first account: voting in favour of fiscal aid measures is mainly driven by government membership and EU support. By contrast, neither economic ideologies, nor district or mandate characteristics influence support for fiscal aid. The article contributes to a growing literature on the domestic politics of international political economy.     

German gays go green? Voting behaviour of lesbians,gays, and bisexuals in the 2021 German federal election

Previous analyses have shown the existence of a sexuality gap in voting behaviour between those who identify as lesbian, gay, or bisexual (LGB), and those who identify as heterosexual (Hertzog 1996). On the basis of these findings, it is generally assumed that LGBs vote primarily for liberal and left-wing parties because they are most likely to represent the group's interests in the political space. Using the 2021 German federal election as a case study, this article provides substantial findings, showing that, when controlled for the ideological proximity between voters and parties, sexuality affects in several ways how LGBs identify with and vote for parties in Germany. Positive effects can be demonstrated for the Greens, the Left, and – in contrast to previous assumptions – the far-right AfD. This is the first study to examine systematically the voting behaviour of LGBs and heterosexuals in Germany.     

Mission or Empire,Word or Sword? The Human Capital Legacy in Postcolonial Democratic Development

Why are some former colonies more democratic than others? The British Empire has been singled out in the debates on colonialism for its benign influence on democracy. Much of this scholarship has focused on colonialism's institutional legacies; has neglected to distinguish among the actors associated with colonialism; and has been nation‐state focused. Our subnational approach allows us to isolate the democracy effects of key actors operating in colonial domains—Christian missionaries—from those of colonial powers. Missionaries influenced democracy by promoting education; education promoted social inclusivity and spurred social reform movements. To make our case, we constructed colonial and postcolonial period district datasets of India and conducted panel analysis of literacy and democracy variations backed by case studies. The findings challenge the conventional wisdom of the centrality of the effects of British institutions on democracy, instead also highlighting the missionaries’ human capital legacies.     

Citizenship in the Faroe Islands: Participant,Parochial or Colonial?

This article analyses citizenship and political culture in the Faroe Islands based on a quantitative survey carried out in summer 2004. Located theoretically in the tradition of Scandinavian citizenship investigations and its predecessors in the 'civic culture' tradition of Almond and Verba, four areas of citizenship are analysed: political engagement, democratic participation, political efficacy and democratic identity. The main hypothesis is that the character of citizenship in the Faroe Islands is very similar to that found in the Scandinavian countries in general. While most of the results found confirm this hypothesis, there are a number of special features that demand alternative explanations. Thus, the fact that the Faroese score much below the Scandinavian average concerning 'postmodern' forms of political participation like political consumption or boycott of goods, and that gender differences are bigger than in other Scandinavian countries when it comes to female representation in the Faroese parliament and in government, seems better explained by the relative remoteness of the islands from the Scandinavian political and cultural mainstream (the parochialism hypothesis). Also the fact that the Faroese are much less confident in speaking at public meetings, sending letters to newspapers or complaining to authorities than, for example, Danes in general calls for an alternative explanation. As these features go together with much less knowledge about and confidence in the Danish parliament ('Folketinget') and a lower level of efficacy towards the parliament than among Danes in general, the most likely explanation seem to be found in the way in which Danish supremacy has affected political culture in the Faroe Islands (the colonialism hypothesis).     

Is the causal relation between foreign direct investment,trade, and economic growth complement or substitute? The case of African countries

This study examines causal nexus between foreign direct investment (FDI) and economic growth for 25 African countries within a model that also takes into consideration trade openness using more recent panel data set over the period 1980–2018. We used panel bootstrapping cointegration techniques that account for cross‐sectional dependence to test whether there is a long‐run cointegration relationship or not. The Granger causality approach is employed to conduct predictive analysis among the panel series. Our findings indicate the presence of a long‐run equilibrium nexus between the variables, and we found a bidirectional causality between foreign direct investment, trade openness, and economic growth. This study provides an insight for governments and policymakers in this region to restructure FDI and trade policies in such a way that its positive spillover would spread across the rural areas and local firms, thereby leading to an all‐inclusive sustainable economic growth and development of African countries in the long run.     

To Engage or Not to Engage? Explaining the Logic of the US’s China Strategy in the Post-Cold War Era

The United States’ (US) changing policy towards China has become one of the most attractive issues in contemporary international politics. To explore the reasons underlying these changes, existing studies adopt four schools of explanation, i.e., status competition, institutional competition, failure of engagement, and domestic factors. Each school provides valuable theoretical insights. However, existing studies have obvious problems with single attribution and, thus, fail to formulate a causal mechanism explaining the long-term trajectory of the US’s China strategy. By recategorizing America’s unilateral perception of China as reformist, revolutionary, status quo and positionalist, which extends beyond the revisionist-status quo dichotomy, this article develops a systemic explanatory model and process tracing of the transition of US’s China policy during the post-Cold War period to explain the theoretical logic underlying the changes. This article argues that the positional change and the US’s unilateral perception of China are the two main factors triggering changes in the US’s China strategy. China’s foreign behavior, as the intervening variable, strengthens or weakens the government’s perception of China and, thus, determines the US’s strategic choices, i.e., whether to pursue a policy of containment, competition, precaution, congagement, engagement, or accommodation. Four comparative case studies are presented to demonstrate how this article’s explanatory model can be applied.

     

To vote or to abstain? An experimental test of rational calculus in first past the post and PR elections

We test the rational choice model of turnout in the lab. We performed laboratory experiments in which participants had to decide whether to vote or not in a number of first past the post and proportional representation elections. We test the predictions of rational choice theory from three different angles:(i) First, we compare aggregate turnout with the Nash equilibrium predictions.(ii) Second, we compare individual decisions with those derived from a rational calculus and count the number of decisions which are consistent with the rational recommendation, and.(iii) Third, we determine, still at the individual level, whether, at the margin, people are more likely to vote as the expected payoff increases.The overwhelming thrust of the evidence is inconsistent with the rational calculus paradigm.