Lobbying,political connections and emergency lending by the Federal Reserve

This paper tests whether the political connections of banks were important in explaining participation in the Federal Reserve’s emergency lending programs during the recent financial crisis. Our multivariate tests show that banks that were politically connected—either through lobbying efforts or employment of politically connected individuals—were substantially more likely to participate in the Federal Reserve’s emergency loan programs. In economic terms, participation in these programs was 28–36% more likely for banks that were politically connected than for banks that were not politically connected. In our final set of tests, we attempt to identify a proper explanation for this peculiar relationship. While a broad literature speaks of the moral hazard associated with receiving bailouts, we test whether another type of moral hazard exists in the period preceding the bailout. In particular, we argue that, to the extent that political connections act as synthetic insurance, banks may have engaged in more risky behavior that lead them to the Fed’s emergency lending facilities. Tests seem to confirm this explanation.     

Show Who the Money? Teacher Sorting Patterns and Performance Pay across U.S. School Districts

Pay for performance (PFP) remains one of the most controversial policy debates in the New Public Management reform era. Skepticism about PFP in the public sector is often grounded in theories of public service motivation that suggest a misalignment between PFP's focus on extrinsic market‐based pay incentives and intrinsically motivated government workers. Frequently missing from this analysis, however, is any consideration for whether PFP leads to positive “sorting” effects on the composition of a government agency's workforce through attraction, selection, and attrition processes. Using data from two waves of the Schools and Staffing Survey, the authors examine whether PFP influences the sorting patterns of K–12 public schoolteachers across U.S. school districts. Findings show that, on average, school districts that adopted PFP secured new teacher hires who had graduated from colleges and universities with average SAT scores that were about 30 points higher than the new teacher cohorts hired by districts that did not adopt PFP.     

Quadratic voting as an input to cost-benefit analysis

When agencies regulate, they must calculate the costs and benefits of their regulations. To do this, they must often price non-market goods—for instance, the value of protecting wildlife or the environment. Regulators have typically relied upon contingent valuation surveys to put prices on these types of goods. But contingent valuation surveys are fraught with error and often give rise to implausible valuations that cannot be trusted. Quadratic voting offers a better solution. Agencies should hold quadratic votes over nonmarket goods and use those votes to price the goods at issue.     

Strategic use of evidence in state-level policymaking: matching evidence type to legislative stage

Although interest in research utilization in the policy process has grown, how advocates strategically deploy different types of evidence to influence lawmakers remains not well understood. In this paper, we draw on the Advocacy Coalition Framework and the Narrative Policy Framework to show how various types of evidence—from empirical findings to personal anecdotes—were utilized by advocates during the 2 years leading to the passage of California’s historic 2010 law to extend foster care. The result was a generous and flexible entitlement policy passed with bipartisan support in the context of a recession, a state budget deficit, and an ambivalent governor. We find that leaders of a diverse advocacy coalition strategically showcased different types of evidence at specific moments in the legislative process. Each evidence type can be tied to a specific narrative element and strategy. Advocates first used research evidence to convince lawmakers of the policy’s effectiveness, then used professional expertise and benefit-cost analysis to convince them it would come at an acceptable cost, and finally used personal narratives to motivate them to act. We conclude that though benefit-cost analyses play an integral role in policymaking during a time of austerity, advocacy coalitions may still benefit from personal stories that lend emotional potency and urgency.