Group size and the free-rider hypothesis: A re-examination of old evidence from churches: Comment

Public Choice - This paper comments on a recent study by Lipford (1995) which rejects the hypothesis of free ridership. This paper contends that Lipford's analysis suffers from two serious...     

Group size and the free-rider hypothesis: An examination of new evidence from churches

Conventional economic wisdom maintains that expansion of group size exacerbates group members' free riding tendencies. Nevertheless, experimental studies attempting to account for the effects of group size on free riding have failed to support a pure “numbers effect.” This study corroborates these experimental findings by examining contributions of church members from congregations of three prominent U.S. Protestant denominations. As a whole, these results show that, for congregations ranging from 7 members to 3,294 members, per member contributions do not decline with increased membership. The free-rider problem does not appear to be exacerbated by increases in group size.     

On “Group size and the free-rider hypothesis: Another hypothesis.” by Jody W. Lipford: Comment

This paper develops a positive approach to grant design when the central government and a lobby of local governments are the main agents. It develops the hypothesis that the regressivity or progressivity of per capita grants regarding community size is,ceteris paribus, related to the structure of the lobbying activities of local governments and is independent of hypothetical economies or diseconomies of scale in the production of local public goods. An encompassing lobby organisation using a “one mayor one vote” system of representation supports the regressivity of per capita grants while under “proportional” representation the lobby will support a design of per capita grants which is progressive towards community size. An empirical analysis of lump-sum grants in Portugal supports the politico-economic hypothesis and rejects the hypothesis that economies of scale is the main explanatory cause for the observed regressivity of per capita grants.     

Determinants of government size: evidence from China

This paper investigates the determinants of government size at the provincial level in China. We employ the panel data model as a platform for empirical analysis and control for endogeneity in the study. Our study shows that openness to trade and foreign direct investment (FDI) may curtail government expansion, and that the provincial-level public sector is characterized by economies of scale. This study also documents that Wagner’s law does not hold true for China. Moreover, both expenditure decentralization and revenue decentralization contribute to the expansion of China’s government.     

SSI eligibility and participation among the oldest old: evidence from the AHEAD

The proportion of elderly SSI recipients aged 70 or older has been growing in recent years, perhaps because of rising life expectancies overall and a higher incidence of poverty among the oldest old. In 1999, 84 percent of all elderly SSI recipients were 70 or older. This article examines Supplemental Security Income (SSI) eligibility and participation among the oldest old. The analysis was based on 1993 data from the Study of Assets and Health Dynamics Among the Oldest Old that were used to build a detailed SSI eligibility model to identify individuals who meet the federal criteria for SSI income and resource eligibility. The participation rate among those eligible for federal SSI benefits is 53.9 percent, which is generally consistent with the findings of other studies. Furthermore, eligible participants would receive a significantly higher federal SSI benefit than eligible nonparticipants. Correspondingly, eligible participants have significantly lower incomes and assets than eligible nonparticipants. An econometric model is used to estimate the influence of various demographic, financial, and health care use characteristics on the probability of SSI participation among eligible individuals and couples. The model corrects for measurement error in calculated benefits and for misclassifying someone as ineligible. The empirical results show that the effect of higher SSI benefits on the probability of participation is substantial--a $100 increase in benefits would increase the probability of participating for an average eligible unit by 15 percentage points. Many of the demographic, financial, and health care use variables also are important predictors of SSI participation among the oldest old. The eligibility and participation models are also used to simulate the effect of increasing the SSI unearned income disregard from $20 to $125. Those made eligible by this policy change would receive a very low federal SSI benefit on average, suggesting that they are on the margin of eligibility under the original program rules. The simulated participation rate is 48.8 percent--5 percentage points lower than under the original program rules--reflecting the low benefit that new eligibles would receive. Only 36 percent of those made eligible by the new program rules are predicted to participate. These SSI eligibility and participation models are potentially useful tools for policy analysis. It is fairly straightforward to use these models to change a feature of SSI eligibility, reestimate the group of eligible individuals and couples, and predict participation among those who are eligible under the simulated program rules. New eligibles can be compared with those eligible under original program rules. New participants can be compared with old participants. Although these models focus only on individuals aged 70 or older, this type of analysis can be helpful in estimating the potential distributional effects of proposed SSI policy changes.     

Institutions and the convergence hypothesis: The cross-national evidence

DeLong and others have shown that cross-country convergence in per capita incomes is limited to samples of currently-industrialized nations, or universal-literacy nations. In particular, income dispersion has failed to decline in groups of ex ante rich nations. This study finds strong convergence in per capita incomes among nations with institutions (namely secure property rights) conducive to saving, investing, and producing. Incomes are shown to converge even within ex ante rich samples when measures of institutional quality are held constant.     

Democratization and the size of government: evidence from the long 19th century

We study the consequences of franchise extension and ballot reform for the size of government in Western Europe between 1820 and 1913. We find that franchise extension exhibits a U-shaped association with revenue per capita and a positive association with spending per capita. Instrumental variables estimates, however, suggest that the U-shaped relationship may be non-causal and our fixed effects estimates point to substantial cross-country heterogeneity. Further, we find that the secret ballot did not matter for tax revenues per capita but might have expanded the size of government relative to GDP.     

Urban amenities,demand revelation,and the free-rider problem: A partial solution

This paper suggests a practical mechanism to mitigate problems of demand revelation and free riding that arise when efforts are made to create urban amenities such as parks or nature preserves through voluntary private purchase. Building on the work of earlier writers, the model provides a potential way to increase voluntary donations for local public goods, holding constant the incentive to free ride, while simultaneously introducing a mechanism — the refundable trust — that reduces the incentive to free ride. A case involving implementation of this mechanism is described.     

Political Scepticism: A Reply to the Critics

In a previous article in this journal ( Bufacchi, 2001 ) I argued that political scepticism is a defining characteristic of liberal democracy. I have been criticised for inadequately distinguishing political scepticism from fallibilism (Festenstein, 2001) and for failing to appreciate the role of moral autonomy within liberal democracy (Hyland, this issue). In this article I respond to my critics, first by clarifying the difference between political scepticism and fallibilism, and secondly by suggesting that political scepticism is a necessary condition for moral autonomy.     

Defending the Articles of Confederation: A Reply to Dougherty

This reply addresses the issues raised byDougherty in response to my 1999 article in this journal. Ialso develop a new graphical model of the optimal collectionrate under the Articles, where states made contributions, andcontrast it to the revenue potential from direct taxation. Ibelieve that despite Dougherty's criticisms, my argumentremains valid. While the Articles were not perfect in anabsolute sense, that when more properly viewed in acomparative manner, that the system of state contributions forraising revenue under the Articles was (and still is) superiorto a system of direct federal taxation.     

Relationships between government size and economic growth: Japan's government reforms and evidence from OECD

This paper examines the relationship between government size and economic growth of 21 industrialized countries. Government size is measured by government final consumption expenditures and transfer payments. The relationship between government consumption is expected to increase GDP growth for developing countries, and reduce it for industrialized countries. Government consumption can contribute to increased economic growth. However, government consumption is likely to expand beyond an efficient level in industrialized countries. In contrast, transfer payments, and social welfare programs are likely to reduce economic growth for most countries. These programs reduce work incentives and encourage tax avoidance activities. Work disincentives and tax avoidance reduce economic growth. These expected relationships are consistent with economic performance and government size for the countries considered here. Inefficiency and excessive government growth are checked by voter feedback as tax burdens exceed the associated benefits. Unfortunately, government program costs and benefits are asymmetrically distributed. The resulting tendency is to expand government programs, particularly programs that benefit a majority of voters at the expense of a minority. This tendency becomes even more acute as the tax system becomes more progressive (i.e., tax burdens become concentrated. Reductions in government size are more likely with stagnant or declining economic growth, and in government programs whose costs are widely shared, compared to programs with widely shared benefits and narrowly shared costs.     

Case Studies and EU Politics: A Reply to Miklin

A recent article in West European Politics by Eric Miklin attempted to shed light on the decision-making process in the European Union. The argument presented was that individual ministerial ideological preferences can affect a government's bargaining position in the Council of the European Union. Miklin proposes that under certain conditions national ministers may enjoy substantial freedom. This brief reply identifies three main problems with Miklin's approach: a case selection bias, ministerial autonomy, and an examination of where decisions are made.     

Mueller on European Federation: A Reply from the Perspective of Australian Federalism

Dennis Mueller has recently made a significant contribution tounderstanding issues of federalism and confederalism in theEuropean Union – from a particular public choice point of view. Hefurnishes an important and provocative discussion of therelationship between the decision-making rules embodied in aconstitutional convention (or other means of drafting a form ofunion for constituent states) and the decision-making rules whichwill be contained in the constitution which is the outcome of thatconvention. However, Mueller's veiled preference for a certainideal form of federalism for Europe tends to reduce the parametersof his discussion, and gives his article an unrealistic and narrowfocus, despite its ambitious scope. The present article exploressome of the latent complexities in the public choice analysis anddesign of European integration, particularly by drawing on thewider experience of working federations and theory of federalism,using the unique and synthesizing Australian experience as a pointof departure. It argues that Mueller's analysis is biased towardsthe reduction of decision-making costs of European governance, andthus undervalues the external costs that may be imposed throughexcessive central government.     

The effect of legislature size on public spending: evidence from a regression discontinuity design

What is the effect of legislature size on public spending? An answer to this question is provided by Weingast et al. (J Polit Econ 89(4):642–664, 1981), whose “law of 1/n” posits that an increase in the number of elected representatives always leads to an increase in public spending. Because elected politicians regard the tax base as a common pool from which they can finance specific projects for their constituencies, and these specific constituencies internalize the full benefits of the projects, but only bear a fraction of the costs (projects are financed from the common tax base), fiscal inefficiency will increase with the number of representatives. In this paper, I test the validity of the “law of 1/n” using a dataset of 9325 German municipalities between 2008 and 2010. Through the application of a regression discontinuity design, many of the methodological pitfalls of previous studies can be avoided and a valid estimation of the causal effect of legislature size on public spending for German municipalities can be determined. The results do not corroborate the positive findings of previous studies, which generally supported the implications of the “law of 1/n”. For the years 2008–2010, I find a negative effect of legislature size on public spending in German municipal councils.