Does inequality cause inflation?: The political economy of inflation,taxation and government debt

Public Choice - A democratic society in which the distribution of wealth is unequal elects political parties that are likely to represent the interests of poor people. It is in the interests of the...     

On democracy and debt

As we explained there is really little a priori reasoning for a clear prediction that authoritarian regimes will incur more foreign debt. In fact, some other empirical literature reveals that such regimes will face a higher supply price for such debt. Anderson presents a study of a single year using an admittedly crude measure of authoritarianism that finds that such regimes do issue more debt.This study provides a fuller examination of the empirical relationship between foreign debt and the nature of the polity's regime. Utilizing a continuous democracy variable and a continuous political liberty variable, it tests the relationship between debt and political variables. It finds little empirical support for the thesis that democracy or autocracy influence foreign debt levels. Generally the continuous variables are not significant if we use a linear in the logs specification. While a linear specification obtains results more consistent with the idea that level of democracy decreases debt, it also obtains results even less favorable to the idea that extreme forms of autocracy increase debt.     

Political institutions and debt crises

This paper shows that political institutions matter in explaining defaults on external and domestic debt obligations. We explore a large number of political and macroeconomic variables using a non-parametric technique to predict safety from default. The advantage of this technique is that it is able to identify patterns in the data that are not captured in standard probit analysis. We find that political factors matter, and do so in different ways for democratic and non-democratic regimes, and for domestic and external debt. In democracies, a parliamentary system or sufficient checks and balances almost guarantee the absence of default on external debt when economic fundamentals or liquidity are sufficiently strong. In dictatorships, high stability and tenure play a similar role for default on domestic debt.     

Just and honest government

This article addresses the ways in which the United Kingdom has sought to apply principles such as ethics and values as the foundation of a strong public sector, the evolution of values, specifically the tensions between old and new values, and the ethical challenges brought about by the new public administration and management. Copyright © 1998 John Wiley & Sons, Ltd.     

Initiatives and government expenditures

This paper demonstrates that provisions for initiatives have important effects on government spending. Provisions for initiatives encourage legislatures to approve any proposal which might attract substantial popular support. If these proposals are more likely to advocate increases than reductions in expenditures, the presence of initiative provisions will increase total expenditures. Direct government expenditures per capita are significantly higher in both states and municipalities which permit initiatives.The Project in State and Local Government Finance of the National Bureau of Economic Research supported the research presented in this paper. Only I am responsible for the content.     

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.     

Gifts and government largess

He also serves as a Senior Fellow at the Hudson Institute. His books include Social Science Theory: Structure and Application, The Broken Apple: New York City in the 1980s,and Military Doctrine and the American Character: Reflections on Airland Battle,published by Transaction.     

Liberal government and authoritarianism

This paper examines the intelligibility of authoritarian measures within Foucauldian analyses of the liberal government of the state. Such measures are understood as following from a liberal understanding of the task of government itself. This understanding rests on a distinction between the legal and political order (of 'the state') and a 'liberal police' of what is exterior to it, classically conceived as 'civil society'. The relation between these two aspects is conceived as a series of 'foldings' between the two sides of a liberal governing, which turn the injunction to govern through freedom into a set of binding obligations potentially or actually enforceable by coercive or sovereign instruments. The paper places this perspective within aspects of the genealogies of economy, poverty, welfare and police and discusses the trajectories of such foldings in the present.     

中央与地方利益均衡分析

利益是人类生活的永恒话题。我国中央与地方关系的核心内容就是中央与地方的利益关系。在中央与地方的“利益博弈”中,中央过分集权会严重限制地方的积极性,影响公共利益的整体实现;而理性的地方政府不顾一切地追逐本地区经济利益的最大化,累积到一定程度,最终又会引发“公用地”的灾难。要解决这一两难问题,必须从制度上明确中央与地方各自的职权范围,逐步健全法律制度的有力制约,同时建立一套政府系统内部有效的治理制度,规范政府权力的正确行使,实现中央与地方利益的制度均衡     

Neighborhood government

Advocacy of neighborhood government should be based on a careful assessment of possible dangers and deficiencies, as well as merits. The obstacles to increasing neighborhood power include the costs of community organizing in terms of time and effort, community conflict, city-neighborhood conflict, and general political conflict. To persuade individuals to engage in collective action, it is necessary that the rewards of such action be greater than the personal costs. Serious participation is likely to occur only when neighborhood government programs offer visible rewards and work to solve concrete problems. There is a specific awareness that many unions and politicians will fight neighborhood government and that they have the power to damage or destroy it. There is also the sense that, whereas there has been success in developing community structures, it has been difficult to move government toward decentralization, toward more flexible administrative procedures.To appear in a forthcoming book,The City in the Seventies (edited by Robert K. Yin), to be published by F. E. Peacock Publishers, Inc.     

Habit formation, strategic extremism, and debt policy

We suggest a probabilistic voting model where voters’ preferences for alternative public goods display habit formation. Current policies determine habit levels and in turn the future preferences of the voters. This allows the incumbent to act strategically in order to influence the probability of reelection. Comparing to a benchmark case of a certain reelection, we demonstrate that the incumbent’s optimal policy features both a more polarized allocation between the alternative public goods and a debt bias.     

Emerging cohort trends in housing debt and home equity

Abstract

Financial and market conditions in the 1990s caused a sharp increase in the housing debt (in constant dollars) of households now approaching or just past normal retirement age. Households now in middle age have also set new records for housing debt and will likely continue to carry high housing debt when they reach old age in 10 or 20 years.

In the future, this housing debt burden is likely to lead to financial and housing adjustments that suggest a qualitative change in behavior when these households reach the later stages of their working life. Many will need to work longer to service housing debt. When facing a life‐cycle downturn in annual income, households will be increasingly motivated to tap into their home equity, both by borrowing, for those who stay in their homes, or by downsizing and liquidating some equity, for those who choose to move.     

Fiscal decentralization and government size

Numerous studies have attempted to model the possible factors contributing to universal growth in public sectors. This paper analyzes one device that appears capable of controlling some of that growth: fiscal decentralization. The results reported here also support the use of monopoly government assumptions in models of public policy     

Adversarial legalism and American government

Compared to other economically advanced democracies, the United States is uniquely prone to adversarial, legalistic modes of policy formulation and implementation, shaped by the prospect of judicial review. While adversarial legalism facilitates the expression of justice-claims and challenges to official dogma, its costs are often neglected or minimized. A survey of existing research, together with a case study of environmental regulation in the Port of Oakland, indicates the extent to which adversarial legalism causes (or threatens) enormous dispute-resolving costs and procedural delays, which in turn distort policy outcomes. Adversarial legalism, moreover, has increased in recent decades, as Americans have attempted to implement the ambitious, socially transformative policies of activist government through political structures, forms of legislation, and legal procedures that reflect deep suspicion of governmental authority.