Monotone Comparative Statics for Models of Politics

We elucidate a powerful yet simple method for deriving comparative statics conclusions for a wide variety of models: Monotone Comparative Statics ( Milgrom and Shannon 1994 ). Monotone comparative static methods allow researchers to extract robust, substantive empirical implications from formal models that can be tested using ordinal data and simple nonparametric tests. When these methods apply, they can replace a diverse range of more technically difficult mathematics (facilitating richer, more realistic models), assumptions that are hard to understand or justify substantively (highlighting the political intuitions underlying a model's results), and a complicated set of methods for extracting implications from models. We present an accessible introduction to the central monotone comparative statics results and a series of practical tools for using these techniques in applied models (with reference to original sources, when relevant). Throughout we demonstrate the techniques with examples drawn from political science .     

Understanding Interaction Models: Improving Empirical Analyses

William Roberts Clark University of Michigan, Center for Political Studies, ISR 4202 Box 1248, 426 Thompson Street, Ann Arbor, MI 48106-1248 Matt Golder Florida State University, Department of Political Science, 531 Bellamy Building, Tallahassee, FL 32306-2230 e-mail: thomas.brambor{at}nyu.edu e-mail: wrclark{at}umich.edu e-mail: matt.golder{at}nyu.edu (corresponding author) Multiplicative interaction models are common in the quantitativepolitical science literature. This is so for good reason. Institutionalarguments frequently imply that the relationship between politicalinputs and outcomes varies depending on the institutional context.Models of strategic interaction typically produce conditionalhypotheses as well. Although conditional hypotheses are ubiquitousin political science and multiplicative interaction models havebeen found to capture their intuition quite well, a survey ofthe top three political science journals from 1998 to 2002 suggeststhat the execution of these models is often flawed and inferentialerrors are common. We believe that considerable progress inour understanding of the political world can occur if scholarsfollow the simple checklist of dos and don'ts for using multiplicativeinteraction models presented in this article. Only 10% of thearticles in our survey followed the checklist.     

Strategic Interaction and Candidate Competition in U.S. House Elections: Empirical Applications of Probit and Strategic Probit Models

In recent work, Signorino (American Political Science Review93:279–297, 1999; International Interactions 28:93–115,2002) has sought to test statistical models derived from extensive-formgames in the context of international relations research focusingon conflict and interstate bargaining. When two or more actorsinteract with one another under conditions of uncertainty, Signorinodemonstrates that it is necessary to incorporate such strategicinteraction into the underlying model to avoid potential threatsto statistical inference. Outside the realm of internationalrelations research, however, there have been limited applicationsof Signorino's strategic probit model in understanding strategicinteraction. In this article, I present an empirical comparisonof probit and strategic probit models in the context of candidatecompetition in House elections during the 1990s. I show thatincumbent spending deters challenger entry and factors suchas minority party affiliation and redistricting significantlyaffect incumbent career decisions, findings that run counterto those reported in the nonstrategic model. Overall, the resultsillustrate that failing to account for strategic interactioncan lead to biased and inaccurate estimates related to challengerand incumbent entry decisions.     

In Defense of Factions

We model faction formation in a world where party politicians' objective is the development of an informed program of governance. Politicians' preferences reflect their own views and their information that, when aggregated via intraparty deliberations, influences the party manifesto. By joining a faction, a politician increases the influence of its leader on the manifesto, but foregoes his individual bargaining power. For broad model specifications, we find that a faction formation process allows power to be transferred to moderate politicians. This facilitates information sharing, increasing the capacity of the party to attain its objective. These positive welfare effects may hold even when factionalism restricts intraparty dialogue, and hold a fortiori when information is freely exchanged across factions. We conclude that the existence of ideological factions may benefit a party: It provides a means to tie uninformed or extremist politicians to more moderate and informed faction leaders.     

Citizenship Tests: A Comparative, Communitarian Perspective

The history, nature and scope of citizen naturalisation tests are briefly examined in this article, as well as their political and social applications. A comparison of tests from the United States, the United Kingdom, the Netherlands and Germany highlights the ways in which these tests are used as immigration controls rather than as a way to establish preparation for citizenship. The difference in the content of the tests also reveal alternative conceptions of citizenship including authoritarian, liberal and neo-communitarian.     

Negotiating the 1951 Greenland Defense Agreement: Theoretical and Empirical Aspects

Since 1951 a Danish-American defense agreement on Greenland has regulated US military activities there. The article gives a detailed empirical-theoretical analysis of the negotiation of the Agreement under five perspectives: bargaining power, agenda setting, negotiating positions, strategies and outcomes. An important parameter was the fact that negotiations took place in a cooperative setting with a long shadow of the future. This made for a skewed, though regular negotiation process with a give-and-take of positions, counter-positions and concessions. Negotiating strategies varied, with the US side concentrating on an "authority" strategy, while the Danes relied on a mixture of off-setting "moral" and "tied hands" strategies. Although the US got the best outcome, it was not a dictate, because the ground was leveled by the negotiations taking place as part of the build-up of a long-term security relationship and the fact that the United States was the demandeur vis-à-vis Denmark.     

The Brazilian Space Industry: Geostationary Satellite of Defense and Strategic Communication Program

Autonomy in satellite communications is a major defense issue for peripheral countries, a problem increased by the difficulties in investing in the construction, launching, and operation of satellite platforms. Indeed, the objective of the present article is to evaluate the Geostationary Satellite of the Defense and Strategic Communication Program as a starting point for the Brazilian space industry, a subsector of the aerospace industry. Thus, the article evaluates the opportunities this program generates for a dormant sector in the country. The goal-attainment model is used to assess whether the policy attained what it prescribed and the impacts of those achievements. In addition, the side-effects model is applied to verify the opportunities prompted by policies and private sector investments outside the determinations of the main regulations and how they help to strengthen the Brazilian space industry. Finally, the article concludes with a discussion of the current situation of the Brazilian space industry and defends the main argument that the creation of Visiona as an integrator company, responsible for contracting firms to execute the satellite project, is of strategic importance for the Brazilian space industry.     

In Defense of Dwelling in Great Minds

It seems like a small and perhaps shrinking minority of economists know reverence of individual figures. Most economists seem to be without heroes, and sometimes disparage reverence as cultish idolatry. Here I collect from Michael Polanyi’s The Study of Man (1959) a few passages that eloquently suggest that “we need reverence to perceive greatness, even as we need a telescope to observe spiral nebulae.” The selection is made in the defense of seeking out and communing with great minds.     

Comparing Models of Strategic Choice: The Role of Uncertainty and Signaling

e-mail: wand{at}stanford.edu Testing the fit of competing equilibrium solutions to extensiveform games crucially depends on assumptions about the distributionof player types. To illustrate the importance of these assumptionsfor differentiating standard statistical models of strategicchoice, I draw on a game previously analyzed by Lewis and Schultz(2003). The differences that they highlight between a pair ofperfect Bayesian equilibrium and quantal response equilibriummodels are not produced by signaling and updating dynamics asclaimed, but are instead produced by different assumptions aboutthe distribution of player types. The method of analysis developedand the issues raised are applicable to a broad range of structuralmodels of conflict and bargaining.     

Models of Municipal Budget Allocation: Empirical Data from Spanish Municipalities

The present work empirically analyzes diverse budgetary theories (incrementalism, garbage can, rational) in municipal cost programs, paying special attention to the utility of financial information in decision making. The sample analyzed corresponds to a set of Spanish city councils in the period 1996–2004, and the econometric methodology used is a dynamic panel data model. The main conclusion reached is that the budgetary allocation of municipal costs does not follow a random path; incrementalism is of particular importance, together with financial information variables. The utility of budgetary indicators is reflected in the fact that municipal managers adopt rational elements, although incrementalism remains the habitual behavior.     

Statistical Backwards Induction: A Simple Method for Estimating Recursive Strategic Models

Curtis S. Signorino 303 Harkness Hall, Department of Political Science, University of Rochester, Rochester, NY 14627 e-mail: curt.signorino{at}rochester.edu Robert W. Walker Department of Political Science, Center for Applied Statistics, Washington University in Saint Louis, Campus Box 1063, One Brookings Drive, St. Louis, MO 63130 e-mail: rww{at}wustl.edu e-mail: mbas{at}gov.harvard.edu (corresponding author) We present a simple method for estimating regressions basedon recursive extensive-form games. Our procedure, which canbe implemented in most standard statistical packages, involvessequentially estimating standard logits (or probits) in a manneranalogous to backwards induction. We demonstrate that the techniqueproduces consistent parameter estimates and show how to calculateconsistent standard errors. To illustrate the method, we replicateLeblang's (2003) study of speculative attacks by financial marketsand government responses to these attacks. Authors' note: Our thanks to Kevin Clarke, John Londregan, JeffRitter, Ahmer Tarar, and Kuzey Yilmaz for helpful discussionsconcerning this paper. A previous version was presented at the2002 Political Methodology Summer Meeting.     

Federalism at the American Founding: In Defense of the Diamond Theses

Vincent Ostrom's analysis of The Federalist's understandingof federalism fails to consider the historical and theoreticalcontext of The Federalist's arguments. Ostrom takes certainrhetorical devices of The Federalist too much at face value.He correctly sees that the authors of The Federalist view eighteenth-centuryfederalism as bad government. He incorrectly concludes thatsince it is bad government, that understanding could not havebeen the true meaning of federalism. The Federalist understandseighteenth-century federalism to be "the true meaning" of federalismas established by the political discourse of the times. TheConstitution departs radically from eighteenth-century federalism,but The Federalist seeks to conceal how radical the departureis, in part, by offering a looser definition of federalism thatwill allow the Constitution to be characterized as a federalsystem. A consideration of the writings of the opponents tothe Constitution suggests the limited success of this attemptat redefinition.     

A General Empirical Law of Public Budgets: A Comparative Analysis

We examine regularities and differences in public budgeting in comparative perspective. Budgets quantify collective political decisions made in response to incoming information, the preferences of decision makers, and the institutions that structure how decisions are made. We first establish that the distribution of budget changes in many Western democracies follows a non-Gaussian distribution, the power function. This implies that budgets are highly incremental, yet occasionally are punctuated by large changes. This pattern holds regardless of the type of political system—parliamentary or presidential—and for level of government. By studying the power function's exponents we find systematic differences for budgetary increases versus decreases (the former are more punctuated) in most systems, and for levels of government (local governments are less punctuated). Finally, we show that differences among countries in the coefficients of the general budget law correspond to differences in formal institutional structures. While the general form of the law is probably dictated by the fundamental operations of human and organizational information processing, differences in the magnitudes of the law's basic parameters are country- and institution-specific .     

In Arms We Trust: the Economic and Strategic Factors Motivating China-Iran Relations

This article examines contemporary China-Iran relations, focusing on the economic and strategic ties that have helped solidify the relationship since 1979. We begin with an overview of the arms and technology transfers that mark the early years of the relationship, analyzing the benefits each side gained from these transactions. In addition to discussing the short-term financial benefits behind forging stronger ties, we examine how the regional ascent of both states has also presented several long term factors that helped motivate their cooperation. These developments shed light on the important role the U.S. has played, both in terms of where it has tried to intervene and what success it has had influencing the Sino-Iranian relationship.     

Shared Services in Australian Local Government: Rationale, Alternative Models and Empirical Evidence

Widespread enthusiasm amongst Australian policy elites for structural reform in local government has evaporated as disappointing outcomes of council amalgamation programs became evident. As a consequence, emphasis has now shifted towards shared serviced models as a means of enhancing service provision and reducing costs. However, a disturbing feature of the current debate on shared services has been the absence of a well-articulated economic and political rationale for this form of service delivery, a lack of analysis of alternative models of shared service provision and a neglect of available empirical evidence. This article seeks to remedy these deficiencies by considering the analytical foundations of shared local services, conducting a review of alternative models as vehicles for shared services and evaluating available empirical evidence.