The optimal size of government

In the economic analysis of the theory of government, two views of government are evident. The Pigovian view sees government as a benevolent actor striving to correct for the inadequacies and excesses of an unrestrained marketplace. The ‘Public Choice’ view of government portrays government as the tool of special interest groups as likely to generate distortions as to correct them. In this paper, a model of government that incorporates both views will be developed and then empirically tested. The model developed assumes that all expenditures by the government are inputs into the private sector production. Treating government expenditures as inputs into the production of private sector output, there is some optimal size of government that maximizes private sector output. The model incorporates a general production function for private sector output. Output is a function of private labor, private capital, and government expenditures. The Pigovian and Public Choice views of government are reflected in the assumed impact of G on the marginal productivities of L and K. The model is tested using United States data and a Cobb-Douglas production function. Estimates indicate that the 1983 level of government expenditures exceeds by 87 percent the level that would maximize private sector output. Reducing government from $ 491 billion to $ 263 billion and shifting the freed labor to the private sector would increase output from $ 1187 billion to $ 1451 billion.     

The 1984 election as Anthony downs and Stanley Kelley might interpret it

This paper is an analysis of two rational choice theories of elections. Anthony Downs and Stanley Kelley's theories yield complementary interpretations of the 1984 U. S. election. Reagan's victory was based on both prospective and retrospective judgments as well as on candidate and policy considerations. Reagan won that element of an incumbent's reelection that is a referendum on his performance as president. However, people also voted on the basis of domestic and foreign policy preferences for the second term. On these issues voters preferred Mondale as much as Reagan. Reagan's victory owed remarkably little to his conservative agenda and to a warm regard for his personal qualities as a leader. His landslide was deceptive. The two Reagan victories were among the weakest of the six landslides of the postwar period by Kelley's test of decisiveness. The Reagan elections have not set the United States on the course of a long-term conservative agenda in either domestic or foreign affairs.     

Workers' compensation: coverage, benefits, and costs, 1985

The 84.3 million workers protected by workers' compensation laws in 1985 represented 87 percent of all wage and salary workers in that year. Both the amount of benefits paid to workers and the cost of the program to employers rose substantially from 1984 to 1985. Benefit payments totaled $22.5 billion-14.1 percent higher than in 1984 and the largest annual increase since 1978-79. About two-thirds of the payments in 1985 were money payments ($15.1 billion) and the remainder ($7.4 billion) went for medical care for disabled workers. Private insurance companies made nearly three-fifths of these payments and State funds and self-insured employers each paid about one-fifth of the total benefit amount in 1985. For the first time since 1978, the annual growth in employer costs exceeded the growth in workers' benefits, resulting in a slight decrease in the loss ratio for 1984-85. Employer costs were up nearly 17 percent from the previous year, reaching an estimated $29.3 billion. Covered payrolls increased by 7 percent in that same period. Total benefit payments as a percent of payroll also increased noticeably in 1985.     

From Voucher Auditing to Junkyard Dogs: The Evolution of Federal Inspectors General

Accountability in American government reaches as far back as the Continental Congress and General Washington's army. This tradition of accountability is carried on today by inspector general offices set up in almost every major department of the federal government. Through their audits and investigations, the inspectors general voice concerns over government internal controls, economy, efficiency, and effectiveness. Since 1981 they claim savings from their work totaling $92 billion.
"Some officials handle large sums of public money; it is therefore necessary to have other officials to receive and examine the accounts. These inspectors must administer no funds themselves. Different cities call them examiners, auditors, scrutineers and public advocates." These are the words of Aristotle in 325 B.C. Today, the United States government has its inspectors general to examine, audit, scrutinize, and advocate.     

Doubling the estimated value of life: Results using new occupational fatality data

Using a new series of data on occupational fatalities compiled by the National Institute for Occupational Safety and Health, the authors reassess value-of-life calculations based on labor market tradeoffs between fatality risks and wages. The new data are less subject to the problems of measurement error that plague previously used measures of risk. They indicate higher risk levels than previously believed and a significantly different composition of risk levels within industries. The more comprehensive risk data yield value-of-life estimates of $5 million or more—at least twice as large as estimates obtained using the Bureau of Labor Statistics risk data employed in previous studies.     

Reciprocity in Sino-American economic relations

He is the author ofChange, Continuity and Commitment: China’s Adaptive Foreign Policy (forthcoming, University Press of America).     

A. Reviews: general

THE HISTORY OF AL‐TABARI (TA'RIKH AL‐RUSUL WA ‘L‐MULÜK). [An annotated translation] (Bibliotheca Persica) (SUNY Series in Near Eastern Studies):

VOLUME XXVII: THE ‘ABBASID REVOLUTION [A.D. 743–750/A.H. 126–132]. Translated and annotated by JOHN ALDEN WILLIAMS. Albany, State University of New York Press, 1985. xiv, 233pp.

VOLUME XXXV: THE CRISIS OF THE ‘ABBASID CALIPHATE: [THE CALIPHATES OF AL‐MUSTA'IN AND AL‐MUTAZZ A.D. 862–869/A.H. 248–255]. Translated and annotated by GEORGE SALIBA. Albany, State University of New York Press, 1985. xii, 187pp.

VOLUME XXXVIII: THE RETURN OF THE CALIPHATE TO BAGHDAD: [THE CALIPHATES OF AL‐MUTADID, AL‐MUKTAFI AND AL‐MUQTADIR A.D. 892–915/A.H. 279–302]. Translated and annotated by FRANZ ROSENTHAL. Albany, State University of New York Press, 1985. xxii, [2], 239pp.

VOLUME XVIII: BETWEEN CIVIL WARS: THE CALIPHATE OF MU'AWIYAH [A.D. 661–680/A.H. 40–60]. Translated and annotated by MICHAEL G. MORONY. Albany, State University of New York Press, 1987. xi, 261pp.

AN INTRODUCTION TO SHI'I ISLAM: THE HISTORY AND DOCTRINES OF TWELVER SHI'ISM. By MOOJAN MOMEN. New Haven & London, Yale University Press, xxii, 397pp.

JEWISH LIFE UNDER ISLAM: JERUSALEM IN THE SIXTEENTH CENTURY. By AMNON COHEN. London, Harvard University Press, 1984.

ISLAMIC ART AND ARCHAEOLOGY: Collected Papers. By RICHARD ETTINGHAUSEN. Prepared and edited by MIRIAM ROSEN AYALON. Berlin, Gebr. Mann Verlag, 1984. 1318pp.

THEMES FROM NORTHERN SUDAN. By AHMED AL‐SHAHI. (Brismes Series No 1.) London, Ithaca Press, 1986 152pp. £15.00.

SYRIA UNDER ASSAD: DOMESTIC CONSTRAINTS AND REGIONAL RISKS. Edited by MOSHE MAOZ and AVNER YASIV. London, Croom Helm, 1986. 273pp., maps, notes. £25.00

THE STRUGGLE FOR THE ARAB WORLD: EGYPT'S NASSER AND THE ARAB LEAGUE. By TAWFIG Y. HASOU. London, Kegan Paul International, 1985. 228pp., appendices, notes, bibliography. £25.00

DESPATCHES FROM DAMASCUS: GILBERT MACKERETH AND BRITISH POLICY IN THE LEVANT, 1933–1939. By MICHAEL G. FRY and ITAMAR RABINOVICH. Jerusalem, University of Southern California and Tel Aviv University, 1985. 225pp.

THE MAKING OF MODERN LEBANON. By HELENA COBBAN. London, Hutchinson, 1985, 248pp., illus., maps, bibliography. £6.95.

THE DEVELOPMENT OF MODERN EDUCATION IN THE GULF. By SHEIKHA AL‐MISNAD. London, Ithaca Press, 1986. 386pp., tables, appendices, bibliography. £24.95.

SAUDI ARABIA: THE CEASELESS QUEST FOR SECURITY. By NADAV SAFRAN. London, Harvard University Press, 1985. 542pp., map, tables, notes, appendices, bibliography. £21.25.

THE MANPOWER IN KUWAIT. By SHAMLAN Y. ALESSA. London, Kegan Paul International, 1981. 140pp., tables, notes, bibliography. £30.00.

OMAN AND MUSCAT: AN EARLY MODERN HISTORY. By PATRICIA RISSO. London, Croom Helm, 1986. 258pp., glossary, maps, notes, bibliography. £19.95.

TUYUR ‘UMAN (Birds of Oman). By MICHAEL GALLAGHER and MARTIN W. WOODCOCK. London, Quartet, 1985. 308pp., coloured illustrations, maps, bibliography. £35.00.