Proposed fiscal year 1997 budgets for social and behavioral science research

COSSA is the advocate in Washington for the social and behavioral sciences. He also chairs the Coalition for National Science Funding. He has testified before Congress many times and has written and spoken extensively on legislative-executive relations, the federal budget process and science policy, particularly as it affects the social and behavioral sciences. This report was prepared by the author with the assistance of the COSSA staff.     

(Non)equivalence in a federalism: Dual tax shares, flypaper effects and Leviathan

Among the best-known theorems of fiscal federalism is the presumed allocative and distributive equivalence between a lump-sum grant to a collectivity and a set of lump sum grants to the members of a collectivity. Interestingly, the simple elegance of the theorem is at odds with observed behavior. Grants to governments produce greater public spending than does tax reduction. Explanations of this "flypaper effect" range from misspecified econometric modeling to presumed behavior based on fiscal illusion. In this paper we show that theoretical equivalence exists in a model that recognizes only one tax share, the citizen voter's local tax share. When the model is expanded to include voters' federal tax shares as well as local taxes, non-equivalence and the flypaper effect become the rule, not the exception.     

Insurgency, counterinsurgency, and the rational peasant

Many rational choice treatments of guerrilla insurgency have focused on the strategic calculus by which government and insurgent elites use the tactical weapons of coercion and benefits to win the support of nonelites. This paper uses Frohlich and Oppenheimer's model of the rational tax payer/tax evader to develop a model of the decision calculus by which nonelites respond to the tactical behavior of elites and thereby choose between supporting the incumbent regime, its insurgent opposition or neither. This model is then used to assess the likely impact of various insurgent and counterinsurgent tactics on nonelite support and loyalty.     

The public demand for smoking bans

Smoking bans are gaining widespread support in the United States and other countries. While supporters argue that bans are necessary to resolve market failures associated with negative externalities, the Coase Theorem predicts that, under various conditions, private markets internalize negative externalities. We examine the smoking issue within the framework of the Coase Theorem and hypothesize that smoking bans misallocate air space resources shared by smokers and nonsmokers. Because smoking bans shift ownership of scarce resources, they are also hypothesized to transfer income from one party (smokers) to another party (nonsmokers). Supporting evidence for these hypotheses is provided by an examination of a comprehensive smoking ban imposed in San Luis Obispo, CA.     

The political economy of central bank intervention

This paper analyzes an exchange rate policy game between a central bank and rational speculators under symmetric information. The central bank tries to counteract shocks to the exchange rate by means of sterilized intervention working through the expectations channel. Private speculators resist being fooled. They anticipate the interventions. An “intervention bias” results with an inefficiently high equilibrium volume of intervention which does not reduce the impact of shocks to the exchange rate. The model implies that the more independent the central bank the smaller and the more consistent the intervention efforts. An empirical illustration lends some support to the model.     

CEOs, POLICIES AND PUBLIC BODIES

Abstract: The literature on statutory authorities has concentrated largely upon matters of structure and administrative arrangements. One significant dimension which has received scant treatment is the idiosyncratic role of chief executive officers in such organisations and their ability to capture both the agency and policy-direction, often in ways immune from government control. This article mainly examines one example from the Northern Territory, the Darwin Trade Development Zone, but evidence is included to support the contention that similar processes occur in other statutory authorities both locally and elsewhere in Australia. It is argued that structural reforms cannot by themselves remedy the gap between expectation and policy-delivery. Avenues for reform are discussed, including the more orthodox accountability linkages, and the conclusions drawn argue for greater attention to be given to the appropriateness of chief executive appointments within a context of more disciplined and coherent policy-direction.