The Quality of Management and Government Performance: An Empirical Analysis of the American States

Government performance is an enduring concern for students of public management, public administration, and political science. Government's administrative arrangements and managerial behavior can profoundly influence programmatic content, activities, and outcomes; therefore, considering public management's effects is necessary for a true understanding of public policy and government performance. This article uses data from the Maxwell School's Government Performance Project to examine the relationship between state governments' managerial capacity and a measure of government performance (specifically, state policy priorities). We find that state management capacity has direct effects on state policy commitments: States possessing higher levels of management capacity tend to favor programmatic areas that distribute societal benefits widely (that is, collective benefits) as opposed to narrowly (that is, particularized benefits). Our analysis demonstrates that public interest group activity, government ideology, and citizen ideology each have significant, predictable effects on state policy commitments. Thus, our findings place managerial capacity alongside other more commonly studied state characteristics as an important influence on government activities.     

Preferential Policies and the Blurring of Ethnic Boundaries: the Case of Aboriginal Australians in the 1980s

I argue against the commonly held view that ethnically based preferential policies consistently lead to the construction of well-defined boundaries between collectivities. Using a statistical study of Australia as a case, I demonstrate that preferential programs, under certain conditions, may blur the boundaries between groups. This trend is reflected in the growing number of individuals in the early 1980s who chose to claim an Aboriginal identity in Australian states that increasingly recognized indigenous land claims.
In order to account for the sometimes-divergent effect of ethnically based preferential policies on the divisions between ethnic groups, I focus on the key factor of security. I contend that programs that favor dominant ethnic groups tend to increase the feelings of vulnerability among weaker collectivities and encourage inter-group polarization. In contrast, preferential policies for subordinate groups offer reassurances to previously threatened communities and frequently encourage the crossing of ethnic boundaries.     

Local Transportation Sales Taxes: California's Experiment in Transportation Finance

Over the last 25 years, voters in 20 California counties approved “local transportation sales taxes” to pay for transportation projects. A growing source of revenue, they generate roughly $2.5 billion per year. Four features explain their popularity: they require direct voter approval; funds are raised and spent within the counties that enact them, so voters experience benefits directly; most automatically expire; and they usually specify the improvements to be financed. These taxes are an important revenue source, but tend to favor capital investments over operations and maintenance. They have enhanced local governments' decision‐making authority, but may have made regional transportation planning in multicounty regions more difficult to achieve.     

Policy innovation in local jurisdictions: Testing for neighborhood influence in school choice policies

Before making difficult decisions, individuals tend to collect information on decision makers in reference groups. With respect to policy innovations in a decentralized public sector, this may give rise to positive neighborhood influence on adoption decisions. In this paper, U.S. school district data are used to show that decision makers indeed are heavily affected by decision makers in reference groups. The policy innovation under consideration is inter-district public school choice. The results suggest that if a given district's neighbors' expected benefits from adopting school choice policies increase, this substantially increases the original district's probability of adoption. The paper thus supports the view that the diffusion of policy innovations is stimulated by horizontal interaction among local governments.     

DEREGULATION: THE PRINCIPAL INCONCLUSIVE ARGUMENTS1

The authors suggest that most arguments in favor of deregulation are really double-edged swords which render the debate over deregulation inconclusive at best. They challenge the following positions as inconclusive: (1) that deregulation per se is good; (2) that it protects rights; (3) that deregulation removes uncertainties concerning the marketplace; (4) that it reduces “nitpicking” and coercive regulation; (5) that deregulation promotes greater productivity and efficiency; (6) that it combats inflation; (7) that regulations often cannot be justified by benefits over costs; and (8) there are serious problems of attaining optimum levels of regulation. Special interest groups in favor of deregulation are seen to bear a remarkable resemblance to groups opposed to deregulation.     

Identity and redistribution

This paper models the interaction between individuals’ identity choices and redistribution. Both redistributive policies and identity choices are endogenous, and there might be multiple equilibria. The model is applied to ethnicity and social class. In an equilibrium with high taxes, the poor identify as poor and favor high taxes. In an equilibrium with low taxes, at least some of the poor identify with their ethnic group and favor low taxes. The model predicts that redistribution is highest when society is ethnically homogeneous, but the effect of ethnic diversity on redistribution is not necessarily monotonic.     

Interest groups and policymaking in the American states

States in which candidates endorsed by liberal interest groups are more successful at the election polls tend to have higher Aid to Families with Dependent Children (AFDC) benefits and to enact more consumer protection legislation. In addition, states where interest-group-endorsed candidates are more successful at the polls tend to spend more on highways.     

Trust,regulation, and redistribution why some governments overregulate and under-redistribute

For many social scientists, government intervention is linked to low levels of social trust and corruption, while others associate it with high trust and low corruption. We aim to reconcile these contrasting views by distinguishing the opposing effects of trust on two alternative types of government intervention: regulation and redistribution. We argue that distrusting individuals demand more governmental regulation (H1) but less government redistribution (H2), and this could be one of the mechanisms explaining why countries with low levels of trust tend to both overregulate and under-redistribute. And the effects of trust on policy preferences are conditional on the quality of institutions. The higher the level of quality of government in a particular region, the more high-trusting individuals will like government redistribution and dislike government regulation that restricts the operations of free markets (H3). We test these hypotheses with data from the latest round of the European Quality of Government Index (EQI) survey, which covers 77,000 individuals from 185 regions of 21 EU member states.     

Trust in government and welfare regimes: Attitudes to redistribution and financial cheating in the USA and Norway

Abstract. Claims have been made that national institutions influence public preferences, as well as structuring patterns of social division. This article analyses attitudes to redistribution and financial cheating in Norway and the USA. On the aggregate level the results show that there are striking differences between the two countries regarding attitudes to redistribution and confidence in the state, while similar attitude patterns are found regarding cheating with taxes and benefits. Results endorse arguments emphasising that the design and scope of welfare state policies shape and determine their own legitimacy. There is less support for political trust arguments, which emphasise that the efficacy of political decision–making institutions promotes beliefs about trust in the state and views on government responsibilities. Similarly, arguments proposing that advanced welfare statism has undesirable effects on civic morality, such as cheating on taxes and benefits, are not supported empirically. Finally, while conflicts over redistribution are similarly structured in the USA and Norway, divisions over financial cheating are less clear–cut and vary cross–nationally.     

Proportional representation under three voting procedures: An Israeli study

This paper attempts to evaluate, by means of a public opinion survey, the likely effects on the Israeli political system of replacing the extant electoral procedure of proportional SV (where every voter can vote just for one party) with either proportional AV (where voters can vote in favor of as many parties as they like), or proportional CAD (where voters can vote in favor, as well as against, as many parties as they wish). It also shows how the results of proportional AV and CAD enables one to measure the extent of affinity or rivalry existing between individual parties or party bloes. The main results are: (1) These three alternative proportional representation schemes would have considerably different effects in terms of the number and type of parties gaining representation, as well as in terms of governmental coalitions. (2) The extent of affinity (or rivalry) existing between blocs of parties is usually not symmetrical—one bloc can approve (or disapprove) of another bloc significantly more than vice versa. (3) Voters tend to vote sincerely (rather than strategically) under the proportional SV procedure. Theoretical issues and practical implications of these procedures are discussed.     

Is a Fixer-Upper Actually a Downer? Homeownership,Gender, Work on the Home,and Subjective Well-being

This article investigates whether homeownership provides psychological benefits, particularly as mediated through the act of working on the dwelling. It examines whether work on the home potentially increases subjective well-being (SWB) for home occupants because such work improves the dwelling or because the work is fulfilling and promotes feelings of mastery and control. It also investigates whether homeowners are more likely to perform such work compared with renters. The article finds that homeownership is associated with somewhat elevated life satisfaction, but that homeowners tend to experience less intense positive affect than renters. Homeowners spend much more time working on the home than renters. Strong links between work on the home and life satisfaction are not found, but certain types of home work activities—such as interior or exterior decoration and repairs and yard work—tend to be experienced as psychologically meaningful. Gender also plays a role in the division of home labor and the psychological costs and benefits of homeownership and work on the home. Women are much more likely than men to clean the interiors of dwellings, an activity associated with poor affect. Men perform more of most of the other types of work on the home; in homeowning households these burdens tend to balance each other out, but in renting households there tends to be a dramatic disparity in terms of work on the home, raising concerns about gender inequity.     

Who Benefits from Targeted Property Tax Relief? Evidence from Virginia Elections

This study examines the market impact of targeted property tax relief, which is critical for understanding who exactly benefits from a widely used local policy. Specifically, we investigate this in the context of two statewide ballot measures in Virginia that provided property tax relief or heightened expectations for future relief intended to aid disabled veterans and seniors, respectively. Using residential multiple listing service microdata from Virginia, results from a regression discontinuity analysis show that once the 2010 tax relief measures passed on Election Day, property values rose sharply in response to the sudden increase in demand for homeownership among the targeted groups. We find that senior preferred housing and properties within areas with higher proportions of seniors and veterans experienced the highest price appreciation, while areas with fewer veterans or seniors saw little impact. The findings suggest that this type of policy provides an immediate benefit to current homeowners, thereby offsetting benefits for subsequent homeowners within the targeted groups. This effect represents an unintended consequence of targeted property tax relief as a policy tool more generally, as immediate capitalization into home prices subsequently increases the cost of housing for many individuals the relief was intended to help.     

Free riding in voluntary environmental programs: The case of the U.S. EPA WasteWise program

Voluntary Environmental Programs (VPs) involving industry and regulatory agencies have emerged as the promise of the future in environmental policy circles. Although the number of these agreements is increasing in OECD countries, there are still concerns about their effectiveness; in particular that “free-riding” behavior may be difficult to avoid within VPs. Free riding occurs when one firm benefits from the actions of another without sharing the costs. Free-riding behavior may undermine the credibility of VPs and therefore their viability. Our paper focuses on understanding the factors that favor or hamper free-riding behavior in VPs. Our analysis is based on the case of the WasteWise program that was established by the U.S. Environmental Protection Agency to reduce municipal solid waste.     

Using data for couples to project the distributional effects of changes in Social Security policy

Under Social Security program rules, the aged receive Social Security benefits either as retired workers, spouses, divorced spouses, or widow(er)s. Retired-worker benefits are paid to workers who have 40 quarters of coverage over their lives. Auxiliary benefits are paid to spouses, divorced spouses, and widow(er)s of retired workers. Spouse benefits are computed using the earnings history of the current spouse for individuals who are married when they apply for benefits. Divorced spouse and widow(er) benefits are computed using the earnings history of the ex-spouse or deceased spouse with the highest PIA. A large number of retired women are entitled to auxiliary benefits. Some women receive only auxiliary benefits, while the majority of women have their retired-worker benefit supplemented by auxiliary benefits. Because the level of Social Security benefits can reflect the relative lifetime earnings of both spouses, as a couple, using individual data to estimate Social Security benefits will tend to underestimate actual benefits, particularly for women. However, detailed data for couples are often difficult to obtain. There is currently no known single data source that includes both marital and earnings history information. As a result, many researchers resort to estimating Social Security benefits using individual data or aggregate data, such as the average earnings of men and women. The Social Security Administration's Office of Research, Evaluation, and Statistics, with substantial assistance from the Brookings Institution, the Urban Institute, and the RAND Corporation, is developing a model that overcomes this problem by using the marital and earnings histories of both marital partners to estimate Social Security benefits. The Modeling Income in the Near Term (MINT) model projects retirement income (Social Security benefits, pension income, asset income, and earnings of working beneficiaries) from 1997 through 2031 for current and future Social Security beneficiaries using a unique data source--the Survey of Income and Program Participation (SIPP)--matched to Social Security Administration records. Using MINT data, this article establishes the importance of using data for couples rather than individuals by examining the impact of changing Social Security benefits to reflect 40 years of lifetime earnings rather than the 35 years required under current law. We compare the effect of this policy change on married women by estimating their benefits with data for couples and with individual data. Results indicate that: Using individual data overestimates the projected reduction in retirement benefits brought about by the policy change and makes the effects on women look more severe than they actually are. Because older birth cohorts are more likely than younger cohorts to receive auxiliary benefits based on their husbands' average lifetime earnings, the bias created by using individual data is projected to be much larger for older cohorts than for younger cohorts. This article emphasizes the importance of using data for couples to estimate Social Security benefits, particularly for women. Although our focus is on married women, using data for couples is just as important for calculating the retirement benefits of divorced and widowed individuals. For individuals who are divorced or widowed at retirement, their Social Security benefits are based on their own earnings history, as well as the earnings histories of each of their previous spouses.     

Congressional Politics of International Financial Rescues

In the 1990s, the American executive organized financial rescues for Mexico and several Asian economies. These rescues were controversial in Congress, where members voted repeatedly to reduce or eliminate the executive's freedom to engage in them. I analyze these roll calls with an eye toward explaining who opposes and who supports international financial rescues. I argue that the interests of private actors (district constituencies and interest groups) have an important effect on member voting. Following Stolper-Samuelson reasoning, I find that a member is significantly more likely to favor (oppose) rescues as the proportion of high-skilled (low-skilled) workers in a district increases. In addition, I find that campaign contributions from international banks increase the probability that a member will vote in favor of rescues. Overall, the findings suggest that the distributional effects of rescues find expression in Congress and constrain U.S. international financial policymaking.     

Firm size and regulatory compliance costs: The case of workers' compensation insurance

This paper examines the relative costs of workers' compensation insurance across firm-size groups, with particular focus on administrative scale economies (“compliance effects”) and biases in rate-setting (“enforcement effects”). Analyzing data on premiums and losses from the insurance industry, the authors find that the costs of insurance per dollar of loss are relatively high for very small firms. These higher costs reflect certain fixed administrative costs insurance companies must bear, but for extremely small firms these higher costs tend to be mitigated by an “enforcement” bias in state rate-setting outcomes. Due to imperfect experience-rating of insurance premiums, middle-sized firms—which have the highest losses—pay less per dollar of loss than either the smallest or largest firms. Indeed, it appears that large firms purchasing commercial workers' compensation insurance subsidize other size groups.     

The political economy of targeting

One of the most widely used method of targeting is to reduce welfare benefits as income rises. Although the need for such targeting is clear enough, it also entails two important difficulties. Firstly, the prospect for the recipients of losing part of their benefits if they were to earn more can be a deterrent to work harder. Secondly, by reducing the number of recipients, targeting reduces the political support for taxation and redistribution. The purpose of this paper is to study the voting equilibrium of the degree of targeting and the level of taxation in an economy where labour supply is variable. The analysis reveals that targeting may be fatal for redistribution even though it rejects strictly less than the richest half of the population, and that it is not possible for a coalition of the extremes to form and reject the middle income group from the welfare system. Moreover, because targeting affects labour supply, we find that Pareto improvements are possible when targeting is either “too low” or “too high”. We also find that voting simultaneously over taxation and targeting is favourable to the poor in the sense that they can converge to their most-preferred policy by successively forming a majority coalition with the rich to increase targeting and with the middle to increase taxation.     

Projections of economic well-being for Social Security beneficiaries in 2022 and 2062

Policymakers considering potential changes to the Social Security program need to be able to assess how such changes would affect the economic well-being of future retirees. The first step to understanding these effects is to determine the well-being of future retirees under the current Social Security system. To this end, this article projects the retiree populations aged 62 or older in 2022 and 2062 using the Social Security Administration's MINT (Modeling Income in the Near Term) model and assesses their well-being. Because no one measure can fully capture whether future retirees will have adequate resources to meet their needs, we employ several indicators to assess retirement prospects. In addition, because current-law Social Security promises cannot be financed from current-law taxes, we project an alternative 2062 baseline that adjusts Social Security benefits downward to reflect the amounts that current-law taxes can support. Our results illustrate the importance of using several measures when assessing the well-being of future Social Security beneficiaries. When using absolute measures, retirement well-being will improve for Social Security beneficiaries in 2062 compared with those in 2022. Median per capita income of Social Security beneficiaries is projected to increase by a third (in real terms) between 2022 and 2062, with a corresponding decline in projected poverty rates. In addition, median financial wealth will increase between 2022 and 2062. Relative measures of well-being, however, suggest a decline in well-being between Social Security beneficiaries in 2022 and those in 2062. The share of beneficiaries who have low income relative to their peers, measured as the share whose income-to-needs ratio is less than half of the median ratio, will increase over time. In addition, income replacement rates are projected to fall between 2022 and 2062, indicating a decline in how well-being during retirement compares with that during the working years. And although median financial wealth will increase between 2022 and 2062, it will actually fall relative to economy-wide average wages. Projected improvements over time would lessen, and declines would be exacerbated, if instead of assuming the payment of currently scheduled Social Security benefits we assumed that benefits would be reduced according to what is payable under current-law taxes. Regardless of which measure of well-being is used, certain groups fare worse than others, including beneficiaries who never married, nonwhites, beneficiaries without a high school degree, and those with fewer years of labor force experience and low lifetime earnings. These vulnerable groups are likely to be more dependent on Social Security benefits for their retirement income. As a result, they fare particularly poorly under the assumption that Social Security benefits are reduced to reflect what is payable under current-law taxes.