Explaining public education expenditure in OECD nations

Abstract. This article seeks to explain cross-sectional variation in public education expenditure levels and change since 1960. Five possible explanations are located: the incremental push of programme inertia, demographic and related pressures, economic resource growth, the impact of party and the cultural impact of Roman Catholicism. A multivariate analysis demonstrates that educational expenditure is an arena in which monocausal explanations are wholly inappropriate. With the exception of programme inertia, each of the explanations is seen to have an important bearing on this aspect of the people's welfare.     

Incremental and cyclical developments in public expenditure in West Germany

Abstract. The 'cyclical' effect covered in this paper deals with the development of public expenditure in West Germany in combination with the timing of elections. The underlying hypotheses on the cyclical development of certain expenditures are based on the 'New Political Economy' literature. This approach is then contrasted with the theory of budgetary incrementalism, an alternative mode of explanation of public sector growth. The data are tested to see whether a cyclical or linear model is more appropriate for describing public expenditure developments.     

Peacock and Wiseman on the growth of public expenditure

This is a new initiative forPublic Choice. From time to time, the Editors will offer a point of view on a topical issue in public choice. The intent of Editor's Notes is to stimulate discussion and possibly research on such controversial and timely issues. The authors gratefully acknowledge financial support from the Lynde and Harry Bradley Foundation.     

Tax revolts,direct democracy and representation: populist politics in the US and Canada

ABSTRACT

This paper examines ideological foundations of the ‘tax revolt’ theme in American and Canadian conservative politics, through an examination of two of its most notable expressions. One was the use of direct democracy in California in the late 1970s and early 1980s to reduce property taxes. The other was the Reform Party of Canada’s blending of appeals for more extensive direct democracy and lower taxes from the late 1980s through 2000. Each of these relied on a critique of ‘representational failure’ in their respective political orders. The popularity of direct democracy across North America has been aided by the right-populist analogy between a market that enables consumer sovereignty and direct democratic instruments that facilitate end runs around legislatures – the sites of representational failure – to allow unmediated registration of the people’s low tax, anti-statist will. Employing analytical methods and theoretical perspectives developed by Michael Freeden and Michael Saward, I identify shared and distinctive conceptual and strategic/rhetorical elements in the two cases, and suggest ways of developing a ‘hybrid’ approach to the study of populisms.     

Tax and expenditure limitations and the fiscal relationships between state and local governments

This paper uses comprehensive data on state and local tax and spending limitations for forty-nine states between 1976 and 1990 to estimate the effects of these limits on the fiscal relationships between state and local government. Results indicate that tax and spending limits on local governments are only partially effective in reducing revenues because political agents bypass limitations by transferring revenue reliance to unconstrained revenue sources, or because unconstrained levels of government take on additional revenue responsibilities. In particular, the empirical analysis demonstrates that binding local government fiscal constraints are associated with reductions in local revenues and increases in state aid to local governments. In contrast, state government limitations are related to reductions in both state and local own source revenues.     

Tax and direct expenditures: Perspectives on prepayment proposals

Abstract

If the government were committed to replenishing the inventory of project‐based assisted housing units when losses occurred, owners’ prepayment rights, with prepayment penalties, would be a desirable feature of the program. Additional unsub‐sidized housing units would be created every time a prepayment occurred, the freed‐up subsidies and insurance commitments would support a replacement low‐income unit, and prepayment penalty income could be used to offset mortgage insurance losses and thereby reduce the cost of mortgage insurance.

Under the much less than ideal conditions now prevailing, with no replacement project‐based housing available and no buy out arrangements in place, federal policy must attempt to limit prepayment by the owners of subsidized projects over the next few years.

An approach to establishing a “maximum price” that the government should be prepared to pay to induce each prepayment‐eligible building owner not to prepay is presented.     

The effects of state R&D tax credits in stimulating private R&D expenditure: A cross‐state empirical analysis

This is a cross‐state empirical study which examines the effects of state research and development (R&D) tax credits on private R&D expenditure in the states. Other explanatory variables include federal R&D subsidies, public services in higher education and R&D‐targeted programs as well as other control variables. The statistical result shows that the establishment of state R&D credit programs is effective in stimulating more industrial R&D expenditure. In addition, state services in higher education and R&D‐targeted programs also matter in private decision of R&D investment. This policy assessment sends a positive message to state policymakers because it shows the great potential in using R&D policy instruments to promote innovation‐based economic development. © 2005 by the Association for Public Policy Analysis and Management     

Effects of the IMF and World Bank on public expenditure accountability in Jamaica

This article analyses the positive and negative effects of IMF stabilization programmes and World Bank structural adjustment programmes on the accountability of public expenditure management in Jamaica in the period 1980–1992. Particular attention is given to the negative accountability effects of IMF budget deficit reduction targets imposed on a Government uncommitted to meeting such targets. Many of the arguments presented in this article relate to expenditure accountability problems more generally and it cannot be proved that IMF conditionality was the sole cause of these problems. It is argued, however, that IMF conditionality contributed. This argument is based on a large number of semi-structured interviews conducted in 1993 with Jamaican bureaucrats, politicians, donors, academics and private sector representatives, many of whom were involved in Jamaica's budget formulation process, and on analysis of the existing literature and data. The conclusion reached is that donor-guided reform programmes have complex and often conflicting impacts on the accountability of the Government's budgetary practices. A major question that arises is the relative importance that donors such as the IMF place on budget conditionality as against accountability. The conclusion based on the Jamaican experience is that the IMF placed greater emphasis on the former. © 1998 John Wiley & Sons, Ltd.     

公共行政视野中的公平与效率

行政学中如何评价公平与效率成为一个至关重要的问题。如何实现二者在现代政府管理中的完美结合 ,提升政府竞争力 ,为我国政府行政体制改革提供理论支持具有重要的现实意义。     

The efficiency and distribution of mortgage revenue bond subsidies: The effects of behavioral responses

Mortgage revenue bond (MRB) programs are frequently justified on the basis that they enable low- or moderate-income families to purchase houses that they otherwise could not afford. This article argues that evaluations of MRB programs must include estimates of the responses of buyers and sellers to the subsidies. The empirical evidence indicates that the behavioral responses reduce the efficiency of MRB programs (the amount of the subsidies provided to targeted households) and cause the subsidies to be distributed more inequitably than previous research has shown. The capitalization of 10% to 14% of the value of MRB subsidies diverts some of the program benefits to sellers. Horizontal inequities are created because one group of moderate-income households use the subsidies to purchase more housing services than unsubsidized households with the same incomes.     

Caregiver credits in France, Germany, and Sweden: lessons for the United States

Recently, analysts in the United States (US) have proposed adopting caregiver credits, or pension credits, provided to individuals for time spent out of the workforce while caring for dependent children and sick or elderly relatives. The primary objective of these credits, used in almost all public pension systems in the European Union, is to improve the adequacy of old-age benefits for women whose gaps in workforce participation typically lead to fewer years of contributions, lower lifetime average earnings, and consequently lower pensions. This article examines caregiver credits in the context of future reforms to the US Social Security system, with attention given to the adequacy of current spouse and survivor benefits and how changing marital patterns and family structures have increased the risk of old-age poverty among certain groups of women. It then analyzes caregiver credit programs in selected countries, with particular focus on design, administration, and cost.     

The ethical poverty of cost-benefit methods: Autonomy,efficiency and public policy choice

The principle of efficiency holds as the basic standard of market decision-making. Routinely however, it has been applied as a standard of judgement to public choices as well. This essay proceeds on the basis of four assumptions. First, that efficiency, outside the market context, has two manifestations (Cost-Effectiveness Analysis and Cost-Benefit Methods) which are made distinct by one's concentration on judging the most cost-effective means to policy ends otherwise arrived at, and the other's use of efficiency to judge both the means and end of policy choice. Second, that although efficiency is a fit primary decision standard within a competitive market a principle with more distinctly moral weight is needed to judge ends outside of markets. Third, that one possible source of this moral weight is individual autonomy or freedom that is a fit ethical principle upon which to set the ends of public policy. Fourth, that the use of cost-benefit methods rather than cost-effectiveness analysis implies that it can satisfy the requirements of both efficiency and autonomy. If the efficient policy choice also provided protection of individual autonomy then cost-benefit methods could be used for the analysis of public policy ends, but if it fails to have a deeper moral justification then the role of efficiency in the public sector must be limited only to its judgement of cost-effective means to policy ends arrived at by a non-efficiency standard. I will argue that the autonomy of individual choice in a market is a thin and morally impoverished ethical standard of judgement that adds no additional moral weight to market efficiency for the judgements of policy ends. This conclusion limits efficiency to the consideration of public means alone, eliminating cost-benefit methods as a fit approach to policy analysis while simultaneously promoting cost-effectiveness analysis and the search for an independent moral standard for the assessment of public ends.This essay was originally prepared for the 1989 meeting of the APSA in Atlanta and I wish to thank all those who read and commented on my work at that time. In addition, I would like to thank those who participated in its evolution to this form: Douglas MacLean, Mark Sagoff, Brian Barry, Alan Donagan, Russell Hardin, Maurice Wade, Andy Gold, Thomas Reilly, Diana Evans, an anonymous reviewer at Policy Sciences and its two editors, William Ascher and G. Brewer.     

Self-interest,public interest,and public health

Although the activities of physicians, as represented by the AMA, have long been viewed from a self-interest perspective by economists, public-health processes have not been subjected to such an examination. But just as the conduct of ostensibly charitable hospitals cannot be examined independently of the interests of the physicians who staff them, so too, we think, the conduct of public-health bureaus should not be examined in isolation from the interests of the medical community that they represent. An interest-group interpretation of public health would look to the ways in which public-health processes increase the aggregate demand for medical services, thereby generating quasirents for specialized input suppliers. We have explored in preliminary fashion some ways in which public-health agencies may advance the collective interests of physicians, though we would be the first to acknowledge that much work remains to be done on this topic.We are grateful to the Lynde and Harry Bradley Foundation for financial support.     

Tax Expenditure Budgets, Budget Policy, and Tax Policy: Confusion in the States

A tax expenditure budget should contribute to efficient and effective public decisions by quantifying the division in the tax structure between provisions that represent revenue policy (distribute the cost of government according to the legislated tax base) and parts that represent budget policy (substitute for direct spending). For this transparency to have the desired impact, however, the tax expenditure budget process and the direct expenditure process must be properly integrated and the tax expenditure budget must make an accurate division between the parts of the tax structure. A review of the 33 states with tax expenditure systems shows many weaknesses in application of the concept and poor linkage to the direct spending budget system. Their most significant flaw is in dividing the tax structure into normal and preference elements; states need greater attention to defining their basic tax structure if they are to have a meaningful tax expenditure budget.     

The Egyptian public sector: The control structure and efficiency considerations

The Egyptian public sector is labouring under a mass of legal controls which are proving an obstacle to its efficient running. A variety of government agencies, as well as the Board of Directors and the General Assembly, are burdening each company with regulations and demands for information. The little latitude thus allowed company managers in deciding upon such essential problems as finance, the size of the labour force and the price of output has had severe effects in decreasing the efficiency of each company and of the sector as a whole. Some dynamic company managers are trying to find a way around the system, but this is having negative efficiency and welfare effects. Examples of the negative effects of the mass of controls on problems such as finance and pricing are given in the article. Attempts at forming joint ventures, in order to escape the oppression of belonging to the state, have been made by some companies, but these have met with union opposition in some cases although the state seems to encourage the reduction in investment outlay which this policy might have. The article develops the analysis of the politico administrative framework of economic activity presented by Ayubi (1982).     

Richard Musgrave,public finance,and public choice

Review Article

Richard Musgrave, public finance, and public choice     

The comparative endurance and efficiency of religion: a public choice perspective

Public Choice - All of the major religious confessions existing today have outlasted every single secular ruling regime known in human history. That observation poses an interesting puzzle for...