State university boards of trustees: A principal-agent perspective

This paper extends the economic theory of organizations by examining the structure of boards of trustees in public university settings. A major implication of the analysis is that the structure of the board of trustees reflects the costs to politicians of allowing internal agent shirking. Empirical evidence supports this hypothesis and indicates that a system method of governing versus individual board governance of universities is linked to the influence of educators in the political process.     

Tax enforcement: A public choice perspective

Federal income tax inforcement varies greatly across individual states. While it is not known if this interstate variation enhances efficiency, anecdotal evidence suggests it does not. In this paper we apply the Weingast/Moran model to the treasury and explore the relationship between the legislature and the IRS. Specifically, we model IRS audit rates by state as a function of both political and efficiency considerations. We find that the interstate differences in enforcement is influenced by efficiency considerations but also the IRS shifts enforcement away from states represented by legislators who sit on committees with oversight responsibility for the IRS.     

Empirical evidence on a special-interest-group perspective to antitrust

Public Choice - While the antitrust laws claim to serve the public interest, they are as susceptible to the influence of special-interest groups as are any public policies. This paper extends the...     

Staff growth in international organizations: A principal-agent problem? An empirical analysis

The analysis covers 27 international organizations in the years 1950–2001. From the first to the last year, staff increased at a compound average rate of 3.2% per annum, while the number of member states rose by only 2.5%. The pooled analysis of 817 observations (including task proxies and organization dummies) reveals that (i) the elasticity of staff to membership is much larger than unity (1.36), (ii) United Nations organizations have significantly more staff, (iii) international organizations in the United States and Switzerland have significantly less staff, (iv) heterogeneity in terms of per capita income limits the size of an international organization and that (v) its staff is larger if its membership comprises many industrial or (former) communist countries. In a reduced sample, the financing share of the largest contributor in combination with the party or programmatic orientation of its government has a significantly negative effect on staff because the size of the largest financing share determines the incentive to monitor. U.S. exit from an international organization reduces its staff significantly. Most of these results depend on the condition that the non-stationary component of staff size is not taken account of by time dummies or trends.     

Performance Funding in Federal Agencies: A Case Study of a Federal Job Training Program

Our case study highlights important details that enter into developing performance contingent budgeting schemes—details that do not emerge in more general discussions of the subject—and shows how the handling of these details can be crucial to these schemes' success. We study a federal job training program that gives state and local decision makers discretion over the program's operation, but through performance funding holds them accountable for achieving specific objectives. We find that states' modifications to the scheme's construction produced over time highly individualized performance funding schemes that likely varied in their effectiveness.     

Foreign-Trade Agreements: A New Federal Partner?

The North American Free Trade Agreement (NAFTA) and the GeneralAgreement on Tariffs and Trade (GATT) shift power away fromstate and local government in the federal system. They imposenew rules on the exercise of state and local powers over procurementand the regulation of food, environmental, health, product andservice standards, investments, services, financial services,economic development, and land transportation. States will haveto comply with various reporting and registration requirements,and may be subject to stricter nondiscrimination obligationstoward imported goods and services than under the commerce clauseof the U.S. Constitution. State and local governments will bejudged by international panels, whose judgments the United Statesmust enforce or suffer trade sanctions from aggrieved tradingpartners. Yet, states have not strongly opposed NAFTA and GATT.The greatest state opposition has been to automatic preemption,which the Clinton administration promised to avoid as much aspossible. Nevertheless, increased power over federalism hasmoved to the executive branch, business, and trade-dispute panels,with less power for state and local governments.     

The potential for work enforcement: A study of WIN

Given the impediments around them, can welfare recipients be required to work? Most analysts have answered no. They say the recipients are usually kept from employment by socioeconomic barriers, such as insufficient jobs, and the disincentives to work inherent in welfare. Studies of recent AFDC work programs make them look promising but do not directly address the potential for work enforcement. This article, a cross-sectional study of state WIN programs in 1979, suggests that work requirements could raise work levels substantially despite the impediments. But requirements probably do not improve the quality of jobs recipients are able to get. Therefore, enforcement serves the goal of integration, but to achieve greater economic equality will require additional reforms.     

Practical Imagination: A Possible Future for Federal Budgeting

To develop a federal budget process that delivers better fiscal outcomes for the nation consistently over an extended period would require new information and analysis, applying these to decisions through properly designed procedures, and strengthening the institutions that support wise fiscal choices. Changes in each of these process components intended to contribute to good fiscal outcomes are described, and obstacles to their adoption and use are noted. Such reforms could yield budgets that deploy public resources today to carry out strategies promising to increase the nation's ability to survive inevitable social and fiscal shocks and to take advantage of expected and unexpected opportunities for its citizens to thrive, grow, and fulfill their dreams.     

A principal-agent approach to a self-administered organization with an elected principal

We consider a self-administered organization characterized by a principal elected by the agents of the organization. Conditions are established under which self-administration leads to either stronger or weaker incentives in comparison to an organization which only pursues exogenous objectives. While the output of the organization is controlled by the effort of the agents and by nature, the pay-off of the principal also includes rents from office. Generally, two different contractual regimes can be observed: either a hard regime with strong incentives and low fixed payments, or a soft regime with weak incentives and high fixed payments.     

Non-Majoritarian Democracy: A Comparison of Federal and Consociational Theories

In an earlier attempt to compare federalism and consociationalism,I found that, both conceptually and empirically, they do notcoincide but that they do overlap to a significant extent. Inthis second comparison, my point of departure is that both conceptsentail a rejection of majoritarian democracy. Eight characteristicsof non-majoritarian democracy—or consensus democracy—canbe identified: (1) executive power sharing, (2) balanced executive-legislativerelations, (3) strong bicameralism, (4) multiparty system, (5)multi-dimensional party system, (6) proportional representation,(7) federalism and decentralization, and (8) a written constitutionand minority veto. Consociational theorists tend to emphasizethe non-majoritarian attributes of power sharing, proportionalrepresentation, and multi-partyism, whereas federal theoristsstress the non-majoritarian characteristics of strong bicameralismand rigid constitutions, in addition to federalism itself. Asimilar pattern is revealed by a factor analysis of these variablesin twenty-two democratic regimes. Although consociationalismand federalism are non-majoritarian in nature, they representclearly different dimensions of non-majoritarianism.     

The Evolution of Federal Spending Controls: A Brief Overview

This article reviews spending controls in the federal government over the past two decades. During this period, federal spending has grown significantly, despite budgetary controls. The article discusses various Impoundment Control acts throughout this time period with a focus on the Gramm-Rudman-Hollings Act of 1985 and the budget reforms of the 1990s. The article also gives an overview of whether current spending and deficit control procedures are inadequate and, if so, what stronger measures may be adopted.     

Electoral formulas: A macroscopic perspective

The paper offers a macroscopic view of the legislative electoral formulas in force in 166 sovereign countries, whether democratic or not. The purpose is to determine which formulas are the most widespread, and whether the prevalence of a formula is correlated with geographical, historical, economic, and political factors. While plurality and PR systems are equally frequent, the former tend to be found in more populated countries. PR prevails in Europe and South America, and among the most democratic countries, while the plurality rule is more typical of Asia, Africa, and North America, and is especially popular among former British colonies. Large countries are more likely to opt for single–member districts. No significant correlation emerges between the level of economic development or French colonial background and any electoral formula. The study suggests that the selection of an electoral system is not merely the outcome of party interest, but is also strongly influenced by ideas about what is good, just, or efficient.