Does the Feldstein–Horioka puzzle exist among South Asian countries? A regime‐switching approach

A plethora of literature has been undertaken to study the validity of the Feldstein–Horioka (FH) puzzle. However, divergent views continue to persist in the FH puzzle literature. This study explores the empirical validity of the FH puzzle in the case of South Asian countries using annual data from 1960 to 2017. Both panel data approach and Markov‐switching regression approach are used to empirically analyze the FH puzzle. The results of the cointegration test confirm the long‐run relationships between saving and investment in the selected South Asian countries. The results of Markov‐switching regression confirm that the saving‐retention coefficient has shifted from high to low values and also from low to high values. Thus, the FH puzzle exists for a particular time period and mostly depends on the regime shifts in the South Asian countries. The results of panel fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) methods also confirm that FH puzzle holds for the South Asian countries. Therefore, the study suggests that any saving promotion policies are desirable for enhancing investment among the South Asian regions.     

Gründe für wechselndes Wahlverhalten: Helfen neue Instrumente Licht in das Dunkel zu bringen?

Attempts to analyze the reasons for vote switching between consecutive elections have been in general quite disappointing. On the one hand, this result may be attributed to idiosyncrasies of vote switching; on the other hand, it may be a product of not fully adequate research strategies. This paper explores the second possibility. First, we suggest to study switchers not as a whole, but to distinguish different groups of switchers according to the political relevance of the different kinds of switching. Secondly, we discuss whether the analysis of switching could benefit from the use of panel data instead of cross-sectional data: the operationalization of switching by panel data should be superior to the widely used recall method. The hypotheses derived in the theoretical discussion receive strong support from empirical evidence from the German general election of 1998: both the differentiated measurement of switchers and the use of panel data enhance analysis of switching based on cleavage theory and the Michigan model. More generally, we conclude that our understanding of this dynamic element in electoral politics depends on the methodological adequacy of research.     

Terrorized economies

In this paper we estimate the macroeconomic consequences of terrorism using panel data for 147 countries for the period 1968–2002. The results reveal that the potential gains to a country from reducing terrorism are quite large, although the specific estimates depend on a country's population, base level of output, and investment. We present estimates of the impact of terrorism on GDP, GDP growth, investment, consumer spending, and tourism. These estimates of the marginal impact of terrorism provide a threshold against which a country's expenditures on anti-terrorism can be weighed.     

Institutional quality and economic growth: Evidence from South-Asian countries

The current study investigates the relationship between institutional quality and economic growth, focusing on South-Asian countries entailing Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka, from 2002 to 2018. The data are analysed using the dynamic heterogeneous panel (panel autoregressive distributed lag [ARDL] model) approach, specifically the dynamic fixed effect (DFE), mean group (MG), and pooled mean group (PMG). Based on the findings, the three governance indicators, namely corruption control, accountability, and the rule of law, positively and significantly affect economic growth. All the nations have consistent long-run estimates but varied short-run estimates and adjustment speed for the long-term equilibrium. This is due to governance volatility that is evident in all the nations. This article offers both practical and theoretical contributions. This article contributes to the institutional quality and economic growth literature from a theoretical perspective from the South-Asian perspective. From a practical perspective, the study findings are significant for policymakers, particularly those from the countries that demonstrate major fiscal and external imbalance due to war and terrorism, low oil prices and weak trade. Hence, there is a pressing need to address economic growth issues instigated by the policymakers' negligence to ensure appropriate governance and macroeconomic management. Regulators can improve economic growth through national and regional image building by developing a stable economic and political landscape and maintaining macroeconomic stability by improving the institutional quality indicators. There is evidence that institutional quality improvement leads to better economic growth.     

Comparable Preference Estimates across Time and Institutions for the Court, Congress, and Presidency

Empirically oriented scholars often struggle with how to measure preferences across time and institutional contexts. This article characterizes these difficulties and provides a measurement approach that incorporates information that bridges time and institutions in a Bayesian Markov Chain Monte Carlo approach to ideal point measurement. The resulting preference estimates for presidents, senators, representatives, and Supreme Court justices are comparable across time and institutions. These estimates are useful in a variety of important research projects, including research on statutory interpretation, executive influence on the Supreme Court, and Senate influence on court appointments.     

What tips the scales? Disentangling the mechanisms underlying post-electoral gains and losses in democratic support

Prior research has shown that winning or losing elections matters. To account for this pattern, it is argued that winners can expect their preferred policies to be implemented and experience the psychological gratification of winning, whereas losers have to accept disliked policies in addition to the psychological distress of losing. In an attempt to better understand the mechanisms underlying the dynamics of winners' and losers' democratic support after elections, this study aims to separate the influence of policy performance and psychological gratification. Using panel data from the 2017 German federal election, we show that policy congruence with the government increases voters' democratic support whether they voted for the government or not, suggesting that policy congruence is more important than winning the government in securing losers' democratic support. We find no independent effect of psychological gratification; however, the evidence suggests that winning the government affected voters’ democratic support independent of the two tested mechanisms.     

Party nationalization in a multilevel context: Where's the variance?

We use estimates of variance in district-level electoral data as a way to identify multiple dimensions of the nationalization of party support, including “static nationalization” and “dynamic nationalization.” The multilevel model we use—also described as a random coefficient, mixed, growth curve, and hierarchical model—yields estimates of a party's mean national trajectory of electoral support (fixed effects), as well as estimates of variability around the mean trajectory parameters (random effects). Using a general model, we present a two-step approach to first identify electoral variability and then account for it. We develop the model, apply it to three political parties, demonstrate its behavior under controlled conditions using data we create, and demonstrate its application for explanatory purposes.     

Reciprocal causation in a model of the vote: Replication and extension

Page and Jones, and others, have argued that recursive models of the vote fail to take account of the inherent complexity of the decision processes involved and that estimates from these models are prone to errors, which result in understatement of the amount of policy voting. They propose a causal structure, in which reciprocal influences are modeled explicitly, and estimate its parameters with partially independent samples from two presidential elections. Their model, however, is restricted to presidential contests and omits economic issues. Similarly, the literature on economic voting has ignored the presence of potential reciprocal influences on economic policy attitudes. This paper develops a novel measure of economic issue preferences, modifies the earlier model to include both economic and social issues, and tests the model on data from an independent sample of voters in the 1978 congressional elections. Estimates from the elaborated model generally comport well with the results obtained by Page and Jones, and the findings show a higher degree of economic issue voting than most previous studies.     

Robust Estimation and Outlier Detection for Overdispersed Multinomial Models of Count Data

We develop a robust estimator—the hyperbolic tangent (tanh) estimator—for overdispersed multinomial regression models of count data. The tanh estimator provides accurate estimates and reliable inferences even when the specified model is not good for as much as half of the data. Seriously ill-fitted counts—outliers—are identified as part of the estimation. A Monte Carlo sampling experiment shows that the tanh estimator produces good results at practical sample sizes even when ten percent of the data are generated by a significantly different process. The experiment shows that, with contaminated data, estimation fails using four other estimators: the nonrobust maximum likelihood estimator, the additive logistic model and two SUR models. Using the tanh estimator to analyze data from Florida for the 2000 presidential election matches well-known features of the election that the other four estimators fail to capture. In an analysis of data from the 1993 Polish parliamentary election, the tanh estimator gives sharper inferences than does a previously proposed heteroskedastic SUR model .     

Empirical examination of public debt sustainability in African economies: A panel data analysis

This study intends to investigate public debt sustainability across 29 Sub-Sahara African (SSA) economies, employing various econometric specifications, for the sampled years 1996–2020. The study employs Bohn's (Are stationarity and cointegration restrictions really necessary for the intertemporal budget constraint? Journal of monetary Economics, 54(7), pp.1837–1847.) framework of sustainability as the baseline model to assess public debt sustainability across the sampled Sub-Sahara African economies. As additional tests of public debt sustainability in order to support the baseline findings, the study also employs panel unit root and timeseries unit tests. The baseline findings from the OLS, panel quantile and instrumental panel quantile regressions show that public debt is sustainable across the panel of SSA economies. The positive and statistically significant response of primary balance under the Bohn's framework of sustainability manifest that the intertemporal budget constraint is not violated in the sampled economies. The consistency in the estimates under the OLS, panel quantile and instrumental panel quantile regressions also show that the estimates are robust throughout the estimation process. Also, utilizing the panel unit root test for public debt sustainability, the findings show that public debt is stationary over the sampled years which implies that intertemporal budget constraint holds and that public debt is sustainable across the sampled SSA economies. However, the timeseries analysis indicate that although majority of the SSA economies have sustainable public debt ratios, four countries namely Uganda, Sudan, Togo and Cote d'Ivoire have unsustainable public debt ratios. The study has important policy implications in terms of prudent public debt management and fiscal management for the sampled SSA economies.     

Is the causal relation between foreign direct investment,trade, and economic growth complement or substitute? The case of African countries

This study examines causal nexus between foreign direct investment (FDI) and economic growth for 25 African countries within a model that also takes into consideration trade openness using more recent panel data set over the period 1980–2018. We used panel bootstrapping cointegration techniques that account for cross‐sectional dependence to test whether there is a long‐run cointegration relationship or not. The Granger causality approach is employed to conduct predictive analysis among the panel series. Our findings indicate the presence of a long‐run equilibrium nexus between the variables, and we found a bidirectional causality between foreign direct investment, trade openness, and economic growth. This study provides an insight for governments and policymakers in this region to restructure FDI and trade policies in such a way that its positive spillover would spread across the rural areas and local firms, thereby leading to an all‐inclusive sustainable economic growth and development of African countries in the long run.     

Die Zentralisierung der Staatstätigkeit in einer Referendumsdemokratie: Evidenz aus der Schweiz

Previous theoretical and empirical research has shown that policymakers have incentives to centralize government activities in order to weaken the competitive pressure of fiscal federalism. We argue that referendums reduce the possibilities for collusion among representatives and the ability of higher level policy-makers to attract additional responsibilities. Empirical results from panel data for Swiss cantons between 1980 to 1998 support this hypothesis. The centralization of government activity, measured by budgetary outcomes, is significantly reduced by a fiscal referendum. This holds in the case of public revenue and its components, but also for public expenditure, in particular public education spending.     

Correcting for Survey Misreports Using Auxiliary Information with an Application to Estimating Turnout

Misreporting is a problem that plagues researchers who use survey data. In this article, we develop a parametric model that corrects for misclassified binary responses using information on the misreporting patterns obtained from auxiliary data sources. The model is implemented within the Bayesian framework via Markov Chain Monte Carlo (MCMC) methods and can be easily extended to address other problems exhibited by survey data, such as missing response and/or covariate values. While the model is fully general, we illustrate its application in the context of estimating models of turnout using data from the American National Elections Studies.     

Fiscal Capacity, Fiscal Need, and Fiscal Comfort among U.S. States: New Evidence

During its lifetime, the U.S. Advisory Commission on IntergovernmentalRelations periodically published estimates of each state's relativefiscal capacity. This research note provides new estimates updatedto fiscal year 1994, the latest year for which all requisiteunderlying data are available. We find that dispersion in capacitynarrowed from 1987 to 1994, largely because the capacities ofCalifornia and the Northeast states, historically enjoying amplecapacity, fell relative to the national average. We also findthat these states generally experienced an increase in relativefiscal need, further narrowing interstate dispersion in fiscalcomfort (capacity relative to need). We conclude with evidencesuggesting that states with low fiscal comfort generally preferrelatively low levels of state and local public services.     

Leveraging trade opportunities with non-traditional partners: the Malaysia–GCC perspective

Abstract

This paper examines the impact of economic factors on bilateral trade flows between Malaysia and the GCC through estimations of panel data using a gravity model. In particular, the paper compares the determinants of bilateral trade and trade potentials between Malaysia and two regions, the non-traditional Gulf alliance and the traditional ASEAN counterpart, to provide insights for leveraging opportunities through trade with the former. The gravity estimates imply the importance of size effects, similarities in GDP and differences in factor endowments as drivers of trade flows between Malaysia and the GCC, underlying the fact that inter-industry trade dominates these flows. The opposite holds in the case for the Malaysia–ASEAN trade. Though export potentials for industrial products per se appear exhausted in trade with both regions, the Gulf region provides opportunities for Malaysia to export quantity-based final (end-use) products and to diversify its exporting strategy away from quality-based parts and components.     

Another look at the evidence for rational partisan cycles

In presenting evidence in favor of rational partisan cycles, where electoral victories by leftist parties are expected to create temporary expansions and electoral victories by rightist parties are expected to create temporary recessions, Alesina, Cohen, and Roubini (1999) rely upon autoregressive time series intervention regressions. These regressions, however, are not consistent with their model. In this paper, a model is derived which is consistent with the intervention approach in its reduced-form. The differences between the models are highlighted and new empirical estimates are presented on a panel of seven OECD nations, which generally does not support the rational partisan cycle implications.     

Does the median voter model explain the size of government?: Evidence from the states

Despite an attempt by its own authors, it is difficult to argue that the influential model of the size of government developed by Meltzer and Richard (1981) has had convincing empirical backing. In this paper, we adapt that model to a model of state government size. The main testable hypothesis is that as income inequality grows, government size (as measured by the percentage of income devoted to government redistribution) grows. We test the model using panel data from the US states from 1979–1991. In contrast to the results found by Meltzer and Richard (1983), we find little evidence to support the model. The results are robust to several model specifications and estimation techniques.     

Efficiency,Incentives, and Transformational Leadership: Understanding Collaboration Preferences in the Public Sector

In the public sector, participant attitudes are an important determinant of the success of inter-organizational collaboration initiatives. In this study, a model of employee willingness to collaborate is proposed in which the influence of transformational leadership is determined in part by the performance orientation of the organizational context in which it is enacted. The theoretical model is tested empirically using survey data collected from public employees in South Korea and regression-based Monte Carlo simulation. The analysis suggests that the effect of transformational leadership is amplified by an organization’s emphasis on internal efficiency and its use of performance-based incentives, factors that themselves have independent positive and negative effects, respectively, on attitudes about collaboration. This study links transformational leadership to an increasingly necessary process in the public sector and highlights its context-dependent influence. Implications of the findings are discussed, including the notion that the efficacy of tactics adopted to support inter-organizational collaboration may be a function of their consistency with the realities of established organizational policies and processes.     

How to estimate the policy preferences of party supporters: Disaggregating data from voting advice applications versus modeling survey responses

Valid and reliable estimates of the policy preferences of political parties' supporters are essential for the study of political representation. However, such estimates are not directly available from standard surveys of public opinion, which are typically representative by design only at the national level and rarely ask questions about public support for specific policies. In this article, we explore the possibility to use data from voting advice applications (VAA) to estimate the policy preferences of party supporters. To do that, first, we identify 10 questions on preferences towards issues of public policy that were asked around the same time and with similar wording in traditional surveys of public opinion and in VAAs fielded in Germany and in the Netherlands. Then we compare the VAA data disaggregated by political affiliation of the respondents to the survey data adjusted via multilevel regression modeling with poststratification (MRP). We find strong positive correlations between the estimates derived from both methods, especially after weighting the VAA data. Yet, point estimates are not always very close, and the match is sensitive to the treatment of neutral and ‘don't know’ answers. Overall, our results bode well for the validity of using VAA data in empirical research on political representation.     

Economic voting in Spain: A 2000 panel test

Considerable research shows the economy matters for voters. But that view has come under attack, with revisionists arguing that it matters little. This dissenting view fits the Spanish case well, where reigning research finds virtually no economic voting exists. We argue against the revisionist view, suggesting that conclusion stems largely from methodological limitations in its supporting cross-sectional survey analyses. Given the causality question these analyses raise, particularly in the context of likely endogeneity, a panel analysis is called for. We examine the most recent available panel survey, from the 2000 general election, estimating fully specified multinomial logit models. We find strong economic effects. Spain appears, after all, to have an electorate capable of holding the government economically accountable, at least in this instance.