The political determination of intergovernmental grants in Australia

Intergovernmental grants have been conventionally explained on the basis of either equity/efficiency and/or institutional considerations. This paper seeks to model Australian intergovernmental grants by including both traditional public finance variables and public choice influences; that is, grants are used by federal government politicians to purchase political capital, thereby enhancing their own chances of reelection. The models employed in this paper are tested for six Australian states for the period 1981–82 to 1991–92 using unsystematic grant transfers. The results provide support for these public choice considerations, and highlight the importance of incorporating institutional factors and controlling for misspecification in the error structure in estimates of this type.     

A political theory of intergovernmental grants

This paper formulates a political theory of intergovernmental grants. A model of vote-maximizing federal politicians is developed. Grants are assumed to buy the support of state voters and the ‘political capital or resources’ of state politicians and interest groups which can be used to further increase the support of state voters for the federal politician. The model is tested for 49 states. Similarity of party affiliation between federal and state politicians and the size of the Democrat majority in the state legislature increases the per capita dollar amount of grants made to a state. Likewise, increases in both the size of the state bureaucracy and union membership lead to greater grants for a state. Over time, the importance of interest groups (bureaucracy and unions) has increased relative to political groups (state politicians).     

The political economy of intergovernmental grants: Evidence from a maturing democracy

We evaluate the impact of political forces in the allocation of intergovernmental grants in Portugal, as it matured from a young to an established democracy. Using a large and unexplored dataset we show that political variables condition the granting system, and that their importance changed over time. While tactical manipulation in the distribution of grants among municipalities seems to exist only in the early years of democracy, opportunistic effects are stronger in the latter years. We argue that the latter effect is due to a change in the political environment and to the electorate’s lack of information on intergovernmental grants.     

Granting votes: exposing the political bias of intergovernmental grants using the within-between specification for panel data

The history of political theory can shed light on the question of what political contexts are and are not appropriate for Quadratic Voting (QV), and the methods by which extra votes might be distributed when QV is appropriate. Ancient Greek and contemporary political thought draws attention to the connections between the assumed equality of moral worth among citizens and systems of voting, and to the relationship between equality or inequality of standing to the bases of dessert and the fair distribution of political influence in a democratic state. These matters in turn bear directly on democratic legitimacy, and thus on the stability of the social order. Some issues that must be decided in a democratic community concern common interests. Common-interest issues, based on widely held conceptions of equal moral worth, are not appropriately determined by preference intensity, and thus are inappropriate for a QV voting system. Real-money versions of QV risk undermining respect for law and democratic legitimacy. The costs of system-threatening civil conflict attendant upon loss of legitimacy outweighs any efficiency gains within the system. Token-currency versions of QV, which do not threaten democratic legitimacy, are a more plausible option for the application of QV to political issues in which correlating unequal influence with preference intensity does not conflict with assumptions of equal moral worth.     

Revealed political favoritism: evidence from the allocation of state lottery grants in Israel

Public Choice - A variety of complementarities and overlaps exist between the psychological strand of behavioral economics and the subjectivist strand of Virginia Political Economy. This paper...     

Behavioral economics and public choice: introduction to a special issue

We provide an introduction to a special issue on behavioral economics and public choice.

     

Public choice in local judicial systems

For their contributions to earlier drafts, acknowledgements are extended to Webb Smathers, Ron Faas, Rod Ziemer and other reviewers.     

Perestroika and public choice: The economics of autocratic succession in a rent-seeking society

An earlier version of this paper was presented at the Public Choice Society Meetings, Tucson, AZ, March 1990, and at the Austrian Economics Colloquium at New York University, September 1990. We would like to thank the participants at our session, and those at the Colloquium, for their comments and criticisms. In addition, Hal Hochman, Israel Kirzner, Mario Rizzo, Charles Rowley, Robert Tollison, Gordon Tullock, and an anonymous referee provided useful comments and criticisms. The usual caveat applies.     

Public choice in a local government setting

From its beginnings, public choice has always had a substantial component devoted to federalism and local government decision-making. The DeVoe Moore Center at Florida State University has made the study of local government within a public choice framework a core component of its mission. The Center held a conference February 17?C19, 2011, on public choice in a local government setting. This special issue of Public Choice contains the papers presented at that conference.     

The lightship in economics

What role does government play in the provision of public goods? Economists have used the lighthouse as an empirical example to illustrate the extent to which the private provision of public goods is possible. This inquiry, however, has neglected the private provision of lightships. We investigate the private operation of the world’s first modern lightship, established in 1731 on the banks of the Thames estuary going in and out of London. First, we show that the Nore lightship was able to operate profitably and without government enforcement in the collection of payments for lighting services. Second, we show how private efforts to build lightships were crowded out by Trinity House, the public authority responsible for establishing and maintaining lighthouses in England and Wales. By including lightships into the broader lighthouse market, we argue that the provision of lighting services exemplifies not a market failure, but a government failure.     

The economics of the women's movement

In recent years, the political process has seemed to become increasingly favorable to issues involving women, as shown by the relatively large number of states which have passed the Equal Rights Amendment. The economic theory of politics would imply that this result would occur if the interests of women in removing labor force sex discrimination had increased. We argue that most sex descrimination in hiring and pay of women is in the form of statistical discrimination where sex is used as a proxy for labor force attachment. If this is so, then, on net, sex discrimination in employment practices would pay in the sense that the gainers from such behavior would gain more than the losers would lose. Married women would share in such gains since they would be compensated for their lower earnings by the higher earnings of their husbands. Single women, however, would receive no such compensation. We therefore hypothesize that the recent increase in legislation benefitting women is related to marriage rates, not to female labor force participation. Using votes in the state legislatures on the ERA as a measure of success by state of the women's movement, we find that our results do hold — number of single women is significant in explaining such voting but female labor force participation is not significant.     

The public choice of educational choice

The very small literature explaining (i) how citizens have voted in two California voucher referenda, (ii) how legislators have voted on voucher bills in the State of Florida and the US Congress, and (iii) the variation across states in charter school provisions is summarized. New empirical evidence documenting the cross-state variation in the success of voucher referenda and voucher bills is examined. Voucher bill characteristics and state characteristics play important roles. Voucher bills have been passed only in the more conservative Republican states, and almost all of the successful voucher programs have been targeted at large, struggling school districts.