The effect of predatory rent-seeking on household saving and portfolio choices: A cross section analysis

The existence of predatory behavior, when measured by the number of lawyers per capita and the crime rate, seems to have an impact on saving and investment behavior in U.S. households. Where the risk of redistribution are lowest, the incentives to save are higher and, a fortiriori, the willingness to invest in highly vulnerable financial instruments is enhanced. Either because of low saving rates or because of disintermediation, households in states where the risks of redistribution are greater avoid accumulating financial assets.Recent years have seen a considerable decline in the U.S. saving rate. There is also evidence of large differences in saving rates from one country to another, with U.S. households among the lowest savers. Yet not all of these variations have been explained satisfactorily in empirical studies based on conventional theory. Perhaps one explanation which has been inadequately studied is the reduced expected retirement time horizon whether it be due to objective conditions such as retirement age and life expectancy or to uncertainty. Some reasons for myopic planning horizons are macroeconomic instability (McCauley and Zimer, 1989), the possibility of nuclear war (Slemrod, 1982, 1986 and 1989); Henderschott and Peek, 1985 and 1987); and the fear of socio-political conflict (Stewart and Venieris, 1985). I have suggested and tested here yet another factor: the fear of future redistribution. Using differences in interest income across U.S. states, this paper shows that fear of redistribution does seem to have a large influence on saving behavior.     

Economic Interdependence and the Balance of Power

To account for variance in great powers responses to threats and the implications for the peacefulness of the international system since the late nineteenth century, this article elucidates a theory which refines and synthesizes economic liberal perspectives and realist balance of power theory. I argue that different patterns and levels of economic interdependence in the great power system generate societal-based economic constraints on, or incentives for, state leaders of status quo powers hoping to mobilize economic resources and political support to oppose perceived threats. This mobilization process influences strongly the preferences of status quo powers, other states beliefs about those preferences, and the interpretation of signals in balance of power politics. In this way, economic ties influence the strategies great powers pursue. Firm balancing policies conducive to peace in the international system are most likely, I then hypothesize, when there are extensive economic ties among status quo powers and few or no such links between them and perceived threatening powers. When economic interdependence is not significant between status quo powers or if status quo powers have strong economic links with threatening powers, weaker balancing postures and conciliatory policies by status quo powers, and aggression by aspiring revisionist powers, are more likely. I then illustrate how these hypotheses explain the development of the Franco-Russian alliance of the 1890s and its effectiveness as a deterrent of Germany up to 1905, British ambivalence toward Germany from 1906 to the First World War, the weakness of British, French, Soviet, and American behavior toward Germany in the 1930s and World War II, and the American and European responses to the Soviet threat, including the NATO alliance, and the "long peace" of the post-1945 era.     

Justice,Fairness, and World Ownership

It is a central tenet of most contemporarytheories of justice that the badly-off have aright to some of the resources of the well-off.In this paper, I take as my starting point twoprinciples of justice, to wit, the principle ofsufficiency, whereby individuals have a rightto the material resources they need in order tolead a decent life, and the principle ofautonomy, whereby once everybody has such alife, individuals should be allowed to pursuetheir conception of the good, and to enjoy thefruits of their labour in pursuit of suchconception. I also endorse the value offairness, whereby the right person orinstitution makes the decision as to whether tobring about justice.I show that justice and fairness can besatisfied only if we all enjoy a combination ofprivate and collective rights over the world.In making that case, I shall argue that the setof ownership rights I advocate differs fromreadily available conceptions of restrictedprivate ownership in two important respects.First, it is such that in some circumstances,two individuals or more can have control rightsover the same property at the same time, not,as is standardly the case in legal systems, bycontracting with one another (through gifts andjoint purchase), but simply on grounds ofjustice. Second, it allows that, if necessary,property-owners be expropriated from theirproperty without compensation.     

CHILD SUPPORT IN THE UNITED STATES

This article reports on the results of a telephone survey conducted with a random sample of households screened for eligibility to receive child support in the state of Colorado. Despite the recent enactment of ambitious child legislation at the state and federal levels, the accounts of 731 custodial parents reveal a massive level of unmet need, with child support problems being most extreme for those never married to the chilďs other parent. These mothers typically lack an order establishing a legal obligation to pay child support and have incomes that fall below the poverty level. Overall, women of Colorado with child support orders received only about half of the support they were due, and 73 per cent of all women due support reported that they had experienced problems in collecting support either currently or in the past. The average amount of back due child support owed to the 60 per cent of women in the sample who reported an arrearage was $12,000. Analysis revealed that payment behaviour tracked with the length of time since separation with payment patterns worsening over time and irregular visitation and/or the presence of problems around child access. Female obligors exhibited the same payment patterns as their male counterparts but were more apt to maintain visitation. The article documents the dramatic, negative economic consequences of irregular or missing child support payments for custodial parents, and discusses the additional legal and financial commitments needed to improve the situation. The efficacy of private child support transfers to achieve an adequate standard of living for all children is called into question.