Government growth and private contributions to charity

We exploit the time-series properties of charitable giving to provide additional insights into the relationship between charitable contributions and government spending. Cointegration tests reveal a significant long-run relationship between several categories of charitable giving and government spending. Granger causality tests provide evidence on the short-run giving and spending relationship. Evidence suggests that charitable contributions to education respond quite differently to state and local government education expenditures versus federal government expenditures. We argue that the government spending and charitable giving relationship depends on the source of government revenue, how this revenue is used, and the rational ignorance of private donors.     

The Indiana Toll Road Lease as an Intergenerational Cash Transfer

In a recent incarnation of the public–private partnership, state or city governments agree to lease revenue‐producing assets to a private operator for a lengthy period, up to 99 years. The government receives an up‐front payment, allowing it to collect many years of future revenue at once. This article evaluates the distributional consequences across time of one asset lease, the Indiana Toll Road. The analysis finds that the majority of benefits, in the form of road construction, are enjoyed in the early part of the lease, while the bulk of the costs fall late in the lease, raising important questions about intergenerational fairness.     

Out of tune or well tempered? How competition agencies direct the orchestrating state

This article analyzes the impact competition agencies have on the orchestrating role of states in domestic private regulation. I argue that these agencies can significantly affect interactions in the governance triangle through the way they apply a “logic of the market” to evaluate agreements between firms. The regulatory framework of European Union competition law has increasingly constrained the ability of firms to take into account broader interests when making agreements to foster social objectives. This logic of the market clashes with the ever‐increasing emphasis governments place on enabling firms to enter into such agreements. I analyze this tension through a case study of a pact of Dutch retailers to collectively introduce higher animal welfare standards for poultry. Using regulatory network analysis I trace the governance interactions between the governance triangle on the one hand (government, non‐governmental organizations, and firms), and the Dutch competition authority, Autoriteit Consument en Markt (ACM) and the European Commission on the other hand. Attempts by the Dutch government to instruct the ACM to be more lenient toward private regulation were blocked twice by the European Commission. As a result, the Dutch government abandoned private regulation as the preferred mode and proposed a bottom‐up process that would generate public regulation as a way to avoid conflict with competition policy. I argue that paradoxically enough the intervention of these non‐majoritarian competition agencies against the “will” of the governance triangle has potentially increased the effectiveness and legitimacy of orchestration processes.     

Revenue Strategy on the Gold Coast: The Case of Stamford, Connecticut

This study investigates the effects of federal policy and budgetchanges during the Reagan years as well as the revenue strategiesof governmental and private, nonprofit agencies in Stamford,Connecticut. Systematic examination of agency budgets and interviewswith agency directors in 1982 found widespread anxiety aboutpossible revenue decline, but few departures from traditionalrevenue strategies. In Stamford, federal changes produced revenueproblems for only a few agencies, most of which went about "businessas usual" and did not experience a budget crisis. This situationremained unchanged in late 1985.     

Charitable giving in the German welfare state: fiscal incentives and crowding out

There are two ways that government activities influence private charitable giving: (1) government spending on the provision of public goods may cause crowding out of private charitable contributions; and (2) tax incentives may boost private charitable giving. From a sample of German income tax returns, we estimate the elasticity of charitable giving relative to tax incentives, income, and government spending. Using censored quantile regression analysis, we derive results for different points of the underlying distribution of charitable giving. Evaluating overall treasury efficiency, the tax deductibility of charitable donations fosters enough private giving to offset foregone tax revenues.     

How to pay for the peace? A theoretical framework with references to African countries

This paper analyses a simple game-theoretic model to highlight the choice of the government between raising its defence expenditures or giving away some “gifts” to his opponents, as a means to defend his position in power. If the government is a Cournot-Nash player, then there is no gift in equilibrium, and any increase in the budget will lead to more inefficient defence expenditures. However, if the government is a Stackelberg-leader, then he will use the “gift” as a tool in his policy for staying in power.     

Government Support Programs and Private Investments in PPP Markets

ABSTRACT:

Public-private partnerships (PPPs) have become an important tool for investing in and developing public infrastructure and services. However, many developing countries have failed to attract sufficient private investment from the PPP market. This article uses data from 4,484 PPP projects across 130 developing countries to investigate if and how distinct types of government support can attract more private investment. Results showed that capital, revenue, and in-kind subsidies directly provided from governments attract more private capital, while indirect supports through government guarantee policies do not. The institutional quality of a country enhances the positive relationship between direct government support and private PPP investments. Further, risk allocation plays a mediating role between government supports and private investment.     

Regulatory Agencies—The Challenges of Balancing Agency Autonomy and Political Control

In this article we focus on the dynamic interplay between increase in autonomy of regulatory agencies and political control of those agencies. The general research issues are the weak empirical foundations of regulatory reforms, the complex trade‐off between political control and agency autonomy, the dual process of deregulation and reregulation, the problems of role‐specialization and coordination, and the questions of “smart practice” in regulatory policy and practice. The theoretical basis is agency theories and a broad institutional approach that blend national political strategies, historical‐cultural context, and external pressures to understand regulatory agencies and regulatory reform. This approach is contrasted with a practitioner model of agencies. Empirically the article is based on regulatory reform in Norway, giving a brief introduction to the reform and agency context followed by an analysis of the radical regulatory reform policy introduced recently by the current Norwegian government. We illustrate how regulatory reforms and agencies work in practice by focusing on two specific cases on homeland security and telecommunications.     

Governed interdependence: Rethinking the government‐business relationship in East Asia

Analyses of East Asia's high‐performance economies have highlighted the advantages of a coordinated approach to market failures. With states dominating the process, both public and private agencies are increasingly involved. The recent literature sees public‐private cooperation as a limit to state capacity and thus a challenge to statism. Within an institutionalist framework, this paper proposes a fresh view of the government‐business relationship which avoids the statist premise of domination, but without relying on ‘weak state’ arguments. Through an examination of key organizational features of state and industry in Korea, Taiwan, and Japan, the paper proposes a theory of ‘governed interdependence’ in which both state and capital are taken seriously; where both strong state and strong industry go hand‐in‐hand; and where the capacities of both are mutually enhanced. The article identifies four principal types of government‐industry cooperation in the East Asian experience — some apparently ‘state‐led’, others apparently ‘business‐led’ — all of which can be accommodated by the theory.     

Monitoring across Sectors: Examining the Effect of Nonprofit and For‐Profit Contractor Ownership on Performance Monitoring in State and Local Contracts

What is the effect of contractors' nonprofit and for‐profit ownership on the scope and nature of performance measurement used by government agencies? Quantitative and qualitative data were generated through semistructured interviews administered to a sample of state and local public agencies and private contractors across five jurisdictions. The findings of this study suggest that monitoring officers working with nonprofit rather than for‐profit contractors are more likely to rely on qualitative performance data and examine equitable access to services, contractors' reputation, and compliance with industry rules and regulations. Although organizational ownership may not be well understood by practitioners, performance appears to be conceptualized differently across sectors. The author calls for a better understanding of the impact of the identified differences in performance measurement on the effectiveness of contract monitoring.     

Revenue-sharing voucher program (RSVP)

There has been a significant shift in government towards decentralized power and responsibility as exemplified by the State and Local Assistance Act. The trend occurs at a time when society faces the double challenge of encouraging more and better informed, public participation in decision-making, and also improving the efficiency in governmental delivery of services. A proposal is made to use general revenue sharing moneys to meet this dual challenge through a revenue sharing voucher program (RSVP). The program entails turning back to citizens the incoming funds in the form of vouchers to be allocated by them to various local government agencies. The implications for the City of Seattle are discussed as an example of the operation and the tradeoffs involved.     

Local government grants and income tax revenue: Redistributive politics in Norway 1900–1990

An important aspect of the welfare state is public provision of private goods, primarily education and health care. In Norway the provision of these services has been organized through the local public sector. The development of the welfare state has to a large extent been the development of welfare communes. The important revenue sources of the local and county governments, grants and income tax revenue, have been controlled nationally, and the paper addresses the determinants of these revenues during 1900–1990. The approach combines a demand model of local public services emphasizing price and income-elasticities with a political economy model of central government ideology and strength. The decision making is understood as bargaining between the government and interest groups, and the political structure consequently is of importance for the policy outcome. The analysis shows how politics matter, and the results indicate that a minority coalition government implies 30% more grant and income tax revenue to local and county governments than one party majority in the long run.     

When Governments Regulate Governments

This article advances a political theory of regulation that accounts for the choices of regulators and regulated entities when both are governments. Leading theories of regulation assume that governments regulate profit‐maximizing firms: Governments set rules, to which firms respond rationally in ways that constrain their behavior. But often the entities that governments regulate are other governments. We argue that government agencies and private firms often face different compliance costs, and that agencies have greater incentives than firms to appeal regulations through political channels. Simultaneously, the typical enforcement instruments that regulators use to influence firm behavior may be less effective against governments. Our empirical subjects are public and private entities’ compliance with the U.S. Clean Air Act and Safe Drinking Water Act. We find that, compared with private firms, governments violate these laws significantly more frequently and are less likely to be penalized for violations.     

Top‐Down Self‐Organization: State Logics,Substitutional Delegation,and Private Governance in Russia

This study investigates the counterintuitive emergence of self‐regulation in the Russian construction sector. Despite its proclivity for centralizing political authority, the government acted as the catalyst for the delegation of regulatory powers to private industry groups. The article argues that a factor little considered in extant literature—namely, a weak and corrupt bureaucracy—is key to explaining why the normally control‐oriented executive branch began to promote private governance despite industry's preference for continued state regulation. The article's signal contribution is to theoretically explain and empirically demonstrate how a government's prior inability to establish intrastate control over an ineffective and bribable public bureaucracy creates incentives for political authorities to search for alternative means for policy implementation outside of existing state agencies. These findings are important for understanding the impetus and logic behind particular regulatory shifts in countries where the state apparatus is both deficient and corrupt.     

Contractualism, Democracy and Ethics

Contractualism, as concept and practice, may be defined in different ways (Yeatman 1995, 1998). In this article I am concerned with contracting out or outsourcing as it is otherwise known. That is, I focus upon the process whereby functions undertaken formerly by government are now performed by private or voluntary organisations in a contractual relationship with public service departments and agencies. Whereas departments and agencies once provided a full panoply of services directly, government purchasers now select providers by tendering competitively for an expanding range of employment, education, health, social welfare and local government services. Contractualism, then, involves the recon-figuation of public service provision to favour quasi-commercial rather than bureaucratic forms.     

Second‐Order Devolution or Local Activism? Local Air Agencies Revisited

In response to calls from previous scholarship for further bottom‐up examination of local government roles in environmental policy, the authors revisit local air agencies to examine two separate phenomena occurring in environmental federalism: one from the top down (second‐order devolution) and one from the bottom up (local activism). Using survey data from local air agencies on devolved authorities to set air quality standards and to enforce federal and/or state standards, the authors identify three different types of local agencies: state administrative subunits (only enforcement authority), fully devolved agencies (authority to both set and enforce standards), and activist agencies (neither authority). Further findings indicate that state administrative subunits and fully devolved agencies are likely functions of second‐order devolution, while activist agencies are likely functions of local activism. Conclusions suggest that both top‐down and bottom‐up approaches to environmental federalism are shaping local government roles in environmental management.     

Public subsidies and charitable giving: Crowding out,crowding in,or both?

Abstract Whether government subsidies to nonprofit organizations leverage (crowd in) private donations, or rather crowd them out has been actively debated for some time. A third hypothesis, explored theoretically and tested empirically in this paper, is that the two phenomena are actually not inconsistent with one another: At low levels of subsidies, government support may stimulate private giving, whereas at high levels it could have just the opposite effect. The model presented is based on this idea, which yields implications relevant to nonprofit management and public policy, and tests it with data on symphony orchestras. The conclusion is that the maximization of private donations and total “unearned” revenues are not compatible goals. Further, nonprofits that suffer from short‐term liquidity problems or managerial shortsightedness may face a “subsidy trap,” in which they are forced to rely on suboptimal levels of subsidies in terms of maximizing the firm's revenues. © 2000 by the Association for Public Policy Analysis and Management.     

Putting the Brakes on the Rush to Spend Down End‐of‐Year Balances: Carryover Money in Oklahoma State Agencies

End‐of‐the‐year spending sprees by government agencies are viewed generally as an example of government wastefulness. Agency personnel, however, rationalize the practice as a means for protecting their budgets from inexpedient cuts. In Oklahoma, a policy has been adopted that allows agencies to carry over and reprogram year‐end surpluses as long as the reprogrammed funds are spent within 16.5 months of the end of the fiscal year. Using agency theory as a theoretical lens, we show that this policy restructures the contract between the principal (legislature) and its agents (state agencies) so that their interests are better aligned, regarding end‐of‐the‐year surpluses.     

Taxes, Subsidies, and Listeners Like You: Public Policy and Contributions to Public Radio

Public radio in the United States receives both direct and indirect government funding. Direct subsidies come in the form of lump-sum and matching grants, while indirect subsidies proceed from tax revenues forgone on tax-deductible private donations. Each of these sources of government money affects charitable giving to public radio. This article estimates both of these effects, using data on 91 public radio stations in the United States during 1995. Data analysis shows that public funding to stations has a positive impact on private giving, but this impact rapidly decreases as the level of government subsidies increases. The analysis also indicates that increases in state tax rates correspond with significantly higher donation levels. This article explores the implications of these and other findings for policy makers, public administrators, and nonprofit managers.     

How Credible Is the Evidence,and Does It Matter? An Analysis of the Program Assessment Rating Tool

This research empirically assesses the quality of evidence that agencies provided to the Office of Management and Budget in the application of the Program Assessment Rating Tool (PART), introduced in 2002 to more rigorously, systematically, and transparently assess public program effectiveness and hold agencies accountable for results by tying them to the executive budget formulation process and program funding. Evidence submitted by 95 programs administered by the U.S. Department of Health and Human Services for the PART assessment is analyzed using measures that capture the quality of evidence and methods used by programs and information on characteristics of agencies that might relate to program results and government funding decisions. The study finds that of those programs offering some evidence, most was internal and qualitative, and about half did not assess how their performance compared to other government or private programs with similar objectives. Programs were least likely to provide externally generated evidence of their performance relative to long‐term and annual performance goals. Importantly, overall PART and results scores were (statistically) significantly lower for programs that failed to provide quantitative evidence and did not use long‐term measures, baseline measures or targets, or independent evaluations. Although the PART program results ratings and overall PART scores had no discernible consequences for program funding over time, the PART assessments appeared to take seriously the evaluation of evidence quality, a positive step forward in recent efforts to base policy decisions on more rigorous evidence.