The relationship between congressional spending and tenure with an application to term limits

Whether term limits would increase or decrease federal spending depends on the reason for the causal relationship between tenure and spending. We investigate this subject by empirically studying congressional spending and tenure for all United States House and Senate members who entered Congress between the 94th and 102nd Congresses (1975–1992). As our measure of congressional spending we use the National Taxpayers Union's Congressional Spending Scores. Our study finds that a statistically significant relationship exists between congressional spending and tenure for some groups of congressmen. We then test three hypotheses relating tenure and spending. No single hypothesis is consistent with all of our empirical results. Nevertheless, the small sizes of the empirical effects estimated in this study suggest that term limits would have an inconsequential impact on the level of federal spending – at least via the “moral hazard” mechanisms described in this paper.     

Legislative production and public spending in France

Public Choice - The aim of this article is to help explain the history of the public spending-to-GDP ratio in France by examining the production of laws and regulations. It empirically finds a...     

Contribution limits and the effectiveness of campaign spending

Much work on the apparent ineffectiveness on incumbent spending in congressional elections has hypothesized that the productivity of incumbent spending is low because incumbents operate on the “flat part” of their election returns function. Differences in campaign spending associated with state campaign finance laws allows for a test of this hypothesis because restrictions on campaign contributions tend to reduce campaign spending. Exploiting cross-state variation in campaign finance laws, this study tests whether campaign expenditures by state House candidates are more productive when candidates are subject to contribution limits. The results show that campaign expenditures by incumbents and challengers are more productive when candidates run in states with campaign contribution limits, as opposed to in states without limits. In states with contribution limits, incumbent spending and challenger spending are equally productive, and spending by both candidates is quantitatively important in increasing their vote shares.     

Self-imposed term limits

In “Reconciling voters' behavior with legislative term limits,” Dick and Lott argue that since more senior representatives are better at rent-seeking, there is an inefficient tendency to re-elect incumbents. In their model, term limits are preferred collectively by constituencies, even though no constituency would independently oust its incumbent representative. However, many term limits are unilaterally self-imposed (in particular the 22nd amendment limiting presidents' terms to two), and their model cannot explain these limits. In this comment, I suggest that term limits may be self-imposed by risk-averse voters, who prefer cycling between left and right wing candidates to a once-and-for-all election that imposes a candidate of a single ideology on the entre electorate. The market failure that makes term limits helpful is that out of power minorities cannot bribe the median voter.     

An empirical test of why incumbents adopt campaign spending limits

Archival data on annual budgets of the Communist party shed light on how this cornerstone Soviet institution was maintained and on the party-state relationships in a one-party polity. The party depended on subsidies from the state budget until the mid-1950s and became largely self-financed afterwards. The costs of maintaining the party were significant compared to other branches of government. We consider three models of the party – “party-agent”, “party-ruler” and “party-political club” – to study the evolution of the party’s institutional role and find that by the 1950s, the party transforms from an economic agent of the state into an increasingly autonomous institution.     

Predicting the institutional effects of term limits

In this paper we develop a model to predict the seniority turnover, and transition consequences of term limit reforms for any institution with a regularized procedure for rotating membership. With this model we can predict the number of members who will be serving in their last term at any given time once an institution reaches a stable state under term limit reforms. For example, our results show that for the U.S. Senate current term limit proposals will result in a substantial increase in the number of “lame duck” members and a significant reduction in average seniority. We make no claims as to the public policy effects of term limit proposals. However, our model can be used to design a proposal that will maximize any benefits or minimize any public policy effects found to be associated with term limit reforms.     

Strategic institutional choice: Voters, states, and congressional term limits

States’ choices on term limits are quantified as a multiple-categorical variable capturing variation in the type of limits passed. Measures of relative political influence in Congress explain much of this variation. Using 1992 data on the American states, the model controls for unobserved heterogeneity due to voter access to direct democracy in some states. At 2002 values for congressional tenure and federal spending, the model predicts approximately eight to ten additional states would choose to limit their own members’ terms but cannot under a Supreme Court ruling. We discuss implications for institutional federalism and the potential passage of similar political institutions across the states.     

Disposable income,unemployment, inflation and state spending in a dynamic political-economic model

This paper formulates a medium-term macroeconomic model of disposable income, unemployment, inflation and state spending, proposes a theory of qualitative choice to explain electoral popularity in terms of these variables and develops three approaches to the formulation of political-economic policy. The first approach is static, sets the tax rate to reconcile the interests of various pressure groups and yields a political trade-off between the private and public sector. The second approach relies on maximizing the probability of winning the next election and gives rise to a political business cycle unless the electorate votes strategically. The implications of crowding out of private investment under alternative monetary rules, autonomous behaviour of the state bureaucracy and tax-indexation for the political business cycle are also examined. The third approach analyzes the objective of maximizing the uninterrupted length in office. It yields a short-run political cycle superimposed on a longer cycle.     

State budget periodicity: An analysis of the determinants and the effect on state spending

Much of the public budgeting literature focuses on the institutional rules of budgeting and how those rules affect process and outcomes. This study focuses on a particularly rudimentary rule of budgeting: the length of the budget period. State budgets are dictated (constitutionally or statutorily) to recur over one-or two-year intervals. Statistical analysis of the determinants of state budget periodicity shows that the more states spend, ceteris paribus, the more likely they are to budget annually. I hypothesize that budget periodicity has the opposite effect on spending: Biennial budget states spend more, ceteris paribus, than annual budget states spend. Ordinary least squares analysis does not support the hypothesis, but with instrumental variable methods, biennial budgeting exhibits a positive and statistically significant effect on state spending.     

Term limits and electoral competitiveness: Evidence from California's state legislative races

California's legislative term limits have dramatically reduced campaign expenditures. Real expenditures during the three general elections after the term limits initiative passed in 1990 were lower than in even 1976. This drop has occurred at the same time that races have become closer contests and more candidates are running for office. By any measure, term limits have coincided with large changes in the level of political competition, even before term limits have forcibly removed a single politician from office. The changes are so large that more incumbents are being defeated, races are closer, more candidates are running, and fewer single candidate races than occur at any other time during our sample period from 1976 to 1994.     

Terrorism and pork-barrel spending

The horrifying, tragic events of 9/11 made Americans aware of their vulnerability to terrorist attacks and triggered the creation of the Department of Homeland Security along with a substantial increase in federal spending to both thwart terrorist attacks and to increase our ability to respond to such emergencies. Much of this large increase in spending was in the form of direct transfers to states and cities through several grant programs. Homeland Security grants may be used for protection against terrorist activities, thereby enhancing public interests, or as wealth transfers to state and local governments, enhancing the reelection efforts of incumbents, and thus, private interests. Using 2004 per capita Homeland Security grant funding to states and their cities, we find that the funding formula used for some of the grant programs, which allocates almost 40% of the funds in some grant programs through a minimum percent to each state with the rest allocated based on population, means that per capita funding is related to electoral votes per capita, i.e., to the politics of Presidential re-election. However, the funding in other grant programs is also related to some of the dangers and vulnerabilities faced by states and their cities. Some of the variation in per capita grant allocations is also explained by the amount of airport traffic in the state and the state's population density, which are variables closely linked to the state's vulnerability to attack. Per capita Homeland Security grant allocations, however, do not seem to be related to the closeness of the 2000 presidential race.     

Elections and government spending

It is widely believed that electoral pressures cause legislators to favor government spending programs. This electoral theory of spending is shown to encompass two core hypotheses: (1) the electoral consequences hypothesis, which states that support for spending programs improves the representative's electoral showing; and (2) the legislator insecurity hypothesis, which states that greater electoral insecurity leads representatives to be more in favor of spending programs. A test of these ideas using spending scores for U.S. representatives in 1986 finds that neither hypothesis is supported by the data.     

Welfare state structures and the structure of welfare state support: Attitudes towards social spending in Canada, 1993–2000

Abstract.  The comparative welfare state literature contends that different welfare state structures engender different structures of welfare state support. The argument is that social welfare regimes that distribute their benefits selectively tend to produce patterns of support graduated by the likelihood of accessing these selective (or 'targeted') social benefits, especially as indexed by social class. Where benefits are universally distributed, by contrast, support is expected to be more consensual and to cut across class and related cleavages. This article empirically tests this 'interest-based' account and extends it by adding a 'values-based' component. The authors find that the impact of both interests and values – specifically, orientations toward the capitalist system – on welfare state support is conditional on welfare state structures. It is argued that these results help to resolve a paradox in the comparative welfare state literature: strong evidence for differentiation in social welfare support by program type, but weak evidence for differentiation in class effects by program type. Data for the analysis come from the Canadian Election Studies of 1993, 1997 and 2000.     

Explaining welfare spending

Welfare expenditures are difficult to explain within a pure public choice-framework. In this article, I shall argue that the difficulties may be resolved by assuming that the main purpose of welfare schemes is to provide the electorate — in their capacity of different risk categories — with insurance against various social risks, rather than to redistribute economic resources towards weak and destitute groups in society. This solution not only explains the scope of existing welfare arrangements, but may also hold the key to an explanation as to how public welfare policies change and evolve across time.     

Poverty spending and the poverty gap

This paper examines two questions basic to welfare policy: (1) whether the amount of poverty-related transfers is sufficient to fill the poverty gap, and (2) which families actually get benefits and how much of their income deficit is filled by those benefits. Transfers are sufficient: the post-Social Security poverty gap is $74 billion while poverty-related programs total $198 billion. Further, 86% of current income-conditioned benefits go to the pretransfer poor and 89% of those are used to alleviate poverty (fill the poverty gap). Thus, if a substantial fraction of total Federal and State expenditures on poverty-related programs could be targeted more toward the poor, the poverty gap can be eliminated. The current programs, however, would have to be changed substantially to achieve the necessary retargeting.     

Party system nationalisation and social spending

Party systems diverge in their levels of nationalisation. While in some countries parties obtain similar levels of electoral support in all districts, in others parties get very asymmetric electoral shares across districts. The distributive consequences of this have been seldom studied. The argument tested here is that when political parties have nationalised electorates they have stronger incentives to provide social policies that spread benefits all over the territory. This argument is tested in 22 OECD democracies for the period 1980?2006. The results show that, regardless of the electoral system in place, there is a positive relation between party system nationalisation and social spending.     

Distributive spending and presidential partisan politics

Public Choice - Do Republican and Democratic presidents vary in their geographic allocations of federal spending? Recent scholarship suggests that US presidents provide more federal outlays to...