Policy Networks,Elections, and State Subsidies1

What are the effects of electoral competition on the disbursement of state subsidies in industrialized democracies? I argue that the scope of subsidies, which ranges from economy‐wide to regional and industry‐specific subsidies, is determined by the extent of political (electoral) monopoly conditioned by economic threats from foreign competition. The mechanism through which electoral competition is linked to subsidies is the policy network. I assess this argument by examining thirteen Organization for Economic Cooperation and Development (OECD) countries in the period 1990–1993. The findings offer amendments to models of policy networks and speak to the importance of domestic institutions on factor mobility and trade policy.     

Subsidizing the affluent: the case of medical education.

State and federal funds are important sources of revenue for medical schools, and a strong case can be made for public support for these institutions. Although the federal role is more widely known, the states in fact provide the bulk of direct support for medical training. The nature of aid from the two sources differs in significant ways. Most federal aid supports research or patient care, but much of state aid goes to support unconditional tuition subsidies. The primary beneficiaries of these subsidies are relatively affluent nonminority students who are beginning lucrative careers in the medical field--careers that would be lucrative even if no subsidies were provided. Nor does it appear that general subsidies are needed to attract poor and minority applicants. While targeted loans and scholarships to individuals may be justified, general tuition subsidies are not.     

Public Finance,Governance, and Cash Transfers in Alleviating Poverty and Inequality in Chile

As the Chilean government seeks to reduce poverty and inequality through cash transfers to poor households, local governments are responsible for both identifying the poor and allocating transfers. Until recently, however, evaluating the effectiveness of local governments in enacting these policies has been restricted by data limitations. This paper builds on recent evidence that cash transfers have highly variable impacts on poverty and inequality at the county level. In particular, we explore how local public finance and the strength of the governing mandate influence the efficiency of cash transfers. With a richly specified model, we find that public spending on goods and services, the fraction of available subsidies claimed by the local government, and the share of county land that is zoned for industrial purposes are all correlated with considerable reductions in poverty and inequality. In addition, the strength of the governing mandate weakly influences the efficiency of transfers in reducing poverty, but not inequality. These results demonstrate that a better understanding of such institutions can lead to more efficient targeting for social programs.     

Local interests,central leadership,and the passage of TRA86

The U.S. federalist public economy is an ever-evolving system of financing and expenditure responsibilities between local, state, and federal governments. The past decades have seen a significant centralization of responsibility for the financing of state and local public services through grants-in-aid and federal tax subsidies. This article advances a model of local constituent influence in central government fiscal policies which seeks to explain this trend, and then examines how strong executive branch and congressional leadership might begin to control the local pressures for central government financing. TRA86 is offered as one example in which this leaedership proved effective. The general lesson is that good fiscal policy in federalist public economies requires not only capable local governments, but central government political institutions with the strength to meet national needs as well.     

Affirmative Action and Its Alternatives in Public Universities: What Do We Know?

University administrators have made difficult choices in response to the changing policy context for the use of affirmative action in admissions. This paper synthesizes the empirical literature on affirmative action and evaluates the efficacy of alternative strategies, including top-percent programs, class-based affirmative action, and targeted recruiting. The analyses offer several findings of interest to officials who direct such programs: (1) Affirmative action preferences given by top-tier universities have been large; (2) affirmative action leads minorities to enroll in higher-quality institutions; and (3) affirmative action has mostly positive effects on minority students later in life. The evidence shows a decline in minorities' relative share of enrollment at flagship public universities after affirmative action was eliminated in several states, and the alternative strategies used by these universities have not offset these declines.     

Party subsidies and the freezing of party competition: Do cartel mechanisms work?

The number of countries offering public subsidies to political parties has vastly increased in recent decades, but there have been few attempts to assess how these subsidies affect political competition. Expectations about their likely impact vary widely. Some have described subsidies as key devices used by so-called ‘cartel parties’ to buttress their status and exclude new challengers. Others see subsidies as incentives that encourage new party formation and sustain fledgling parties that otherwise might disappear. The research reported here investigates the circumstances under which subsidies seem more likely to play one or the other of these roles by considering the development of party systems and party subsidies in European democracies. It finds little evidence that subsidies freeze out new parties, but there are signs that certain schemes may encourage party fragmentation.     

“When perhaps the real problem is money itself!”: the practical materiality of Bitcoin

This paper investigates the semiotics of Bitcoin, an electronic cash system that uses decentralized networking to enable irreversible payments. For enthusiasts, Bitcoin provides an alternative to currencies and payment systems that are seen to threaten users' privacy, limit personal liberty, and undermine the value of money through state and corporate oversight. Bitcoin's promise lies in its apparent capacity to resolve these concerns not through regulatory institutions or interpersonal trust, but through its cryptographic protocols. We characterize this semiotics as a “practical materialism” and suggest it replays debates about privacy, labor, and value.     

State Wildlife Policy and Management: The Scope and Bias of Political Conflict

State wildlife policy and management are often characterized by divisive political conflict among competing stakeholders. This conflict is increasingly being resolved through the ballot-initiative process. One important reason the process is being used so often is the way state wildlife policy and management decisions are often made by state wildlife commissions, boards, or councils (the dominant way these decisions are made in the United States). These bodies are often perceived by important stakeholders as biased, exclusive, or unrepresentative of nonconsumptive stakeholder values. As a result, unsatisfied interest groups often try to take decision-making authority away from these institutions and give it to the public through the ballot initiative. Cases and examples from Alaska, Arizona, Colorado, and Idaho are examined in this context. The article finishes by outlining four broad alternatives that may be debated in the future: the no change alternative, the authoritative expert alternative, the structural change alternative, and the stakeholder-based collaborative conservation alternative(s).     

Farmers Stage a Comeback: But Have the Greens Sold Out?

In 2001 farmers in the UK seemed besieged both by domestic crises and international pressures for reductions in agricultural subsidies in order to stop trade distortions which harm developing countries. However, since then cutbacks in EU farm subsidies have failed to materialise and the reformed subsidy system is now given political cover by a new alliance with environmentalists. This follows linkage of increasing proportions of farm subsidies to environmental purposes rather than agricultural production. This article questions whether the reforms will achieve cuts in agricultural overproduction. Moreover, environmentalists who have supported the reforms may be sidelining the interests of developing countries in return for environmental gains which are at best superficial and at worse totally illusory. An alternative environmental strategy is discussed.     

The viability of the thrift industry

Abstract

This paper argues that many widely referenced studies on the cost effectiveness of alternative assistance programs were conducted at a time when rental housing markets were depressed. Recent increases in rent appear to have reduced the apparent cost advantage that demand‐side subsidies hold over supply‐side interventions. In addition, the nonsubsidized poor increasingly must compete for a dwindling supply of low‐cost privately owned housing. Housing vouchers or similar demand subsidies may be appropriate in some contexts, but economic theory and recent empirical analysis suggest that such subsidies are “not the best at all times and under all situations.” Rather, the “best policy” depends on program targeting and the nature and extent of program‐induced price increases and externality effects. Since funding limitations currently block the creation of an entitlement housing assistance program, housing policy must balance the often competing goals of expanding the ability of participating low‐income households to pay for decent housing while at the same time working to limit the adverse effects that rent increases and the loss of low‐cost nonsubsidized stock have on households falling outside of the housing assistance safety net.     

Notes on contributors

This article investigates the political impact of the introduction of state subsidies to political parties. The arguments for and against subsidising political parties are outlined. Different models of party subsidies, and their regulatory frameworks, are discussed. We find little evidence of a cross‐national impact of the introduction of party subsidies. The subsidies cannot explain the decline in party membership. Nor is there evidence to suggest that the subsidies were introduced as a response to membership decline. There is no support for the allegation that party subsidies lead to the petrification of party systems. The subsidies have not meant that other income sources have lost their significance for political parties.     

Pathways of democratisation to human development in post‐communist countries

The article investigates the consequences of post‐Cold War regime transitions on human development in the former Soviet bloc. Relying on a mixed‐methods research strategy that combines econometric and qualitative comparative analysis, it proceeds through three consecutive steps. First, there is a discussion of how democratic institutions may solicit governments’ attention toward social issues. Second, the relationship between democratisation and human development in 21 post‐communist countries is tested. Third, democracy in its core attributes is unpacked, and qualitative comparative analysis (QCA) is used to identify a few alternative institutional configurations favouring human development. The analysis reveals that not only full democracies, but also some hybrid regimes, have been successful in this task.     

The Bush Administration's Proposal for Credit Reform: Background, Analysis, and Policy Issues

Large recent and forecasted federal outlays to cover losses on deposit insurance and federally-assisted credit have increased concern in the executive and legislative branches about potential future liabilities of the federal government. These potential liabilities include federal credit; consequently, this renewed interest in federal credit reform. Credit reform would have to change the budgetary treatment of federal direct loans and federal guaranteed loans. Currently, the unified budget measures the cost of federal credit on a cash flow basis. Critics (including the Bush Administration) maintain that the appropriate budgetary measure of the costs of federal credit is the present value of the subsidies to credit recipients in the fiscal year that the credit is advanced. The Bush Administration's proposal for credit reform is presented in most detail in the Federal Credit Reform Act of 1989 (the Act), which was proposed but not enacted. The Act would have had federal officials estimate credit subsidies based on the equivalent interest rates in private credit markets. These subsidies would have been used to measure the budgetary cost of federal credit and would have required annual appropriations. Two credit revolving funds would have been established in the Treasury to finance credit flows. Many of these credit reform practices were included in the Omnibus Budget Reconciliation Act of 1990 though.     

Breaking the Double Impasse: Securing and Supporting Diverse Housing Tenures in the United States

What might be described as a double impasse characterizes debate on U.S. housing tenure with advocates fighting for rental or ownership housing on one side and Third Way or mixed-tenure solutions on the other. Breaking this impasse requires disengaging from conceptions of an idealized form of tenure and instead advocating making virtually all tenures as secure and supported as possible, so that diverse households are able to live in homes that best fit their changing needs over their life cycles. This essay (a) presents data on the variety of tenures in the United States; (b) conveys a new two-dimensional map of tenure according to their degrees of control and potential for wealth-building; and (c) shows how U.S. institutions shape their risks and subsidies. Most U.S. tenures are at least somewhat risky, including those that receive the greatest federal subsidies. A new housing system is needed to secure and support as many tenures as possible.     

The anatomy of conflict and the politics of identity in two cooperative salmon management regimes

Last in a gauntlet of fisheries, indigenous fisheries were often curtailed due to concerns over the conservation of the salmon run. Cooperative management institutions have emerged recently as alternative management structures, often intended to empower marginalized groups and to distribute decision-making authority. Two case studies are examined where cooperative management approaches have emerged. One considers the tribes of the Puget Sound region in Washington, the other the Native Alaskans in the Kuskokwim River drainage. In both cases, resource-based conflicts provided the impetus for the emergence of cooperative management. However, these regimes have not eliminated conflicts nor have they necessarily reduced their frequency. The results of a comparative analysis of the two case studies indicate that management institutions can be structured to facilitate the emergence of cooperation and to make conflicts more amenable to resolution.     

Does Family‐Friendly Policy Matter? Testing Its Impact on Turnover and Performance

This study investigates the relative effects of four types of family‐friendly policies—child care subsidies, paid leave for family care, telework, and alternative work schedules—on turnover rates and effectiveness in federal agencies. Contemporary social exchange theory predicts that an agency’s average level of satisfaction with a specific family‐friendly policy is negatively associated with turnover in the agency but positively associated with overall performance. This analysis differs from common expectations. Only child care subsidies show a positive, significant influence on reducing turnover. Child care subsidies and alternative work schedules reflect positive and significant influences on agency effectiveness. Ironically, an agency’s average satisfaction with telework arrangements proves to be a significant but negative effect on performance.     

Evaluating the Effects of Universal Place‐Based Scholarships on Student Outcomes: The Buffalo “Say Yes to Education” Program

A growing number of cities and states have been providing large tuition subsidies for residents through initiatives often called “place‐based” or “Promise” scholarship programs. We examine the effects of a prominent last‐dollar, place‐based scholarship program, Say Yes to Education in Buffalo, NY, on college matriculation and persistence. Employing a difference‐in‐differences strategy comparing changes across cohorts of students eligible and ineligible for large college scholarships, we find that scholarship eligibility is associated with an increase of 20 percent in the likelihood of matriculating into college within one year of graduation, and an increase in the likelihood of persistence into a second year of college of nearly 16 percent. Increases in matriculation are largely at four‐year institutions, where most of the additional funding from Say Yes is concentrated, exclusively at in‐state institutions, both public and private, and are largest at colleges with more selective admission rates. Finally, we see the largest increases in matriculation and persistence among students who attend high schools in the middle third of the poverty distribution. These results suggest that the additional aid provided by Say Yes plays an important role in increasing college matriculation and encouraging students to attend more selective schools.     

Quality of Life,Transportation Costs,and Federal Housing Assistance: Leveling the Playing Field

Abstract

Federal housing subsidies are allocated without regard to spatial differences in the cost of living or quality of life. In this article, we calculate housing subsidy payments for participants in the Housing Choice Voucher (HCV) program and demonstrate that these subsidies are significantly related to metropolitan quality-of-life differentials. We then estimate amenity-adjusted subsidies and compare these estimates with data from the U.S. Department of Housing and Urban Development’s Location Affordability Portal. Our analysis yields three insights regarding the relationship between federal housing assistance payments (HAP), metropolitan quality-of-life differentials, and transportation cost burdens. First, HCV HAP show a strong inverse correlation with household transportation expenditures, and this is particularly pronounced for low-income households. Thus, HAP do not address location affordability because those living in high-transportation cost metropolitan areas receive the lowest housing subsidies. Second, we present evidence that HAP are positively related to metropolitan quality-of-life differentials. This suggests that high-amenity metropolitan areas also tend to be the most affordable from a transportation cost perspective. Third, our proposed amenity-adjusted HAP strongly reduce the inverse relationship between HAP and transportation cost burdens.     

The efficiency and distribution of mortgage revenue bond subsidies: The effects of behavioral responses

Mortgage revenue bond (MRB) programs are frequently justified on the basis that they enable low- or moderate-income families to purchase houses that they otherwise could not afford. This article argues that evaluations of MRB programs must include estimates of the responses of buyers and sellers to the subsidies. The empirical evidence indicates that the behavioral responses reduce the efficiency of MRB programs (the amount of the subsidies provided to targeted households) and cause the subsidies to be distributed more inequitably than previous research has shown. The capitalization of 10% to 14% of the value of MRB subsidies diverts some of the program benefits to sellers. Horizontal inequities are created because one group of moderate-income households use the subsidies to purchase more housing services than unsubsidized households with the same incomes.     

Emerging regional security co‐operation in Europe and the Asia Pacific

European and Asian‐Pacific policymakers need to shift from policies based on competition to those based on co‐operation. If European and Asian‐Pacific states are successful in implementing and strengthening new security institutions on the basis of co‐operative behaviour designed to realize absolute gains, then conflict in these two regions may decrease and regional hegemonic competition may not materialize. It is argued that three key factors will determine the viability of any regional security framework. These are reciprocity in security relations, great power support for the security arrangements and reassurance. In this study's comparative evaluation of Europe and the Asia Pacific, the pursuit of absolute gains through a security regime appears to be a better alternative to relative gains strategies which serve to intensify security dilemmas.

In Europe, rules and norms for state behaviour are being extended throughout the continent through the gradual extension of the West European security institutions to Central and East European states. The NACC and the PfP offer to combine the stability of the North Atlantic Alliance with the principles of co‐operative security at a pan‐European level. In the Asia Pacific, the ASEAN Regional Forum represents a positive initial step towards greater security co‐operation among the ASEAN states and their neighbours, and the United States and China need to give the ARF their full support. The difference between the ARF and NACC and the PfP is that the former does not have a history of successful military collaboration behind it, nor a developed security agenda or structure similar to that now supporting the latter two.