Government 'strength' and budget deficits in advanced democracies

Abstract. Roubini and Sachs provided the first systematic test of the idea that political structure the size, composition, diversity, and/or stability of a governing cabinet - is related to budget deficits. In this paper, we take issue with several of Roubini and Sachs' choices concerning data and operationalization, and argue that their approach cannot offer clear conclusions about the relationship between national political structure and budget deficits. We test the 'strength of government' hypothesis using central government finance data on 16 countries, 1959–1990. We measure deficits in a way that maximizes comparability across countries but avoids the potential problems of standardizing by GDP. We examine carefully the definition and measurement of 'strength of government', in light of recent theoretical and empirical work in comparative politics. We perform pooled time-series regression analysis of deficit change in 16 OECD countries for the period 1959–1990. We argue that while structural differences between governments may have little impact on deficits during good economic times, they may become especially noticeable and influential during periods when governments struggle to cope with severe economic problems.     

Rent-seeking,political influence and inequality: A simple analytical example

A simple model allowing an analysis of the interaction between economic policy decisions and rent-seeking by private agents competing for political influence, is developed. Rent-seeking may be of the directly unproductive type, requiring resources that are withdrawn from productive activities, or it may manifest itself as income transfers (corruption) to political decisionmakers. In the political-economic equilibrium of the model the extent of rent-seeking, economic policy decisions, income inequality, etc. are endogenously determined.     

The influence of state-level economic conditions on the 1992 U.S. presidential election

Evidence is found that state-level economic conditions played a significant role in the defeat of George Bush in the 1992 U.S. presidential election. Evidence is also found which indicates that the entrance of Ross Perot into the race as an independent candidate was not instrumental in the Bush loss.     

Heterogenous demand for public goods: Behavior in the voluntary contributions mechanism

Numerous laboratory experiments have investigated the performance of several processes for providing public goods through voluntary contributions. This research has been able to identify features of the institution or environment which are reliably likely to produce outcomes “close” to the free riding outcome or “substantially” greater than the pessimistic prediction of standard models. One such feature is the “marginal per-capita return” (MPCR) from the public good. Various authors have altered MPCR between groups or for an entire group at the same time. The experiments reported here address a different question, “What would happen if, within a group, some persons faced a ‘high’ MPCR while others faced a ‘low’ MPCR?”     

THE ROLE OF INFORMATION TECHNOLOGY IN REGULATORY REFORM: THE CASE OF ELS

Abstract: The effects of the Electronic Lodgment Service on relations between tax agents and the Australian Taxation Office provide evidence for both the value and limitations of integrating information technology innovation with regulatory reform strategy. IT innovations such as ELS can promote cooperative regulation. The limitations of this achievement are largely limitations of regulatory context and strategy.     

THE WELFARE COSTS OF SUPPLY RESTRICTIONS IN THE GENERAL PRACTICE LABOUR MARKET

Abstract: This paper examines policy arguments for further restricting supply to the Australian General Practice profession by immigration and medical school policies. It uses economic analysis to assess the costs and benefits of supply restrictions. The effects of Medicare and GP income-targeting on policy design are analysed. Restrictions are shown to impose net costs on the community as a whole and on government. Even with Medicare subsidies, the inefficiency costs of the current health system are minimised with liberal policies for accepting foreign- trained GPs.     

A comparative modeling of tax reform before and after the legislative process

This research modeled the extent to which the normative goals of equity and efficiency are embodied in three seminal tax reform proposals (Bradley-Gephardt, Kemp-Kasten, and the Treasury Department proposals) relative to the extant regime. The Tax Reform Act of 1986 (TRA86) is also modeled in the same manner. The objective of this study is to compare the equity and efficiency of the initial proposals with that of the final tax reform law. This before and after analysis is designed to ascertain the degree to which the legislative process undermined the normative goals of the tax reform movement. The National Tax Model was applied to model each regime and to measure the distributional and redistributional effects on tax burdens and wage efficiency costs associated with each system across ten income classes. The reform models, including TRA86, are shown as superior to the pre-reform system with respect to the normative criteria. The legislative process did not substantially compromise the goals as reflected in the seminal reform proposals in the development of a more politically acceptable tax reform law. This exercise demonstrates that it is possible for sound legislation to survive a political process that frequently permits the sacrificing of normative goals in favor of special interests.Financial support provided by the Arthur Young Foundation Tax Research Grant Program and The Ralph E. Kent Fund. The helpful suggestions of Jim Curtis were sincerely appreciated.     

Government policy and citizen passion: A study of issue publics in contemporary America

This article describes the findings of a program of research exploring the cognitive and behavioral consequences of passionate concern about government policy issues. American citizens vary a great deal in terms of the personal importance they attach to their attitudes on particular policy issues. Citizens whose policy attitudes are especially important to them are likely to think frequently about those attitudes, to perceive competing candidates as being relatively polarized on the issue, and to form presidential candidate preferences on the basis of those attitudes. Also, policy attitudes that citizens consider personally important are highly resistant to change and are therefore especially stable over long periods of time. The American public appears to be structured into many small issue publics, each composed of citizens who are passionately concerned about a single issue. Most Americans fall into very few issue publics, the particular ones being determined by each individual's unique self-interests, social identifications, and cherished values. The implications of these findings for the workings of democracies are discussed.