The tax-spend debate: Time series evidence from state budgets

This paper examines the temporal relationship between revenues and expenditures for the forty-eight contiguous states over an annual period 1942 to 1992. Using an error-correction model, we find that the tax-spend hypothesis is supported for twenty-four states. The spend-tax hypothesis is valid for eight states while the fiscal synchronization hypothesis is supported for eleven states. The remaining five states failed the diagnostic tests for error-correction modeling.     

Rent-seeking in natural resource quota allocations

This paper examines the incentives for rent-seeking in the allocation of natural resource quotas to competing user groups by political bodies. The political body has discretion in making the allocation, and competing user groups rent-seek to influence the allocation. We investigate ways in which the governmental body can affect the behavior of the players by setting the ground rules for the competition. A political body can affect an allocatively (Pareto) efficient outcome by choosing an appropriate default (pre rent-seeking) policy. Surprisingly, an allocatively efficient default policy is unlikely to minimize social costs. However, winner-take-all default policies are likely to maximize, not minimize, rent-seeking. A competitive post-allocation market reduces rent-seeking, but is not, either itself or in combination with an efficient default policy, capable of minimizing social costs. However, forcing winners in political redistributions to fully compensate losers both lowers the rent-seeking levels relative to a potential compensation criterion and, when used together with an efficient default policy, is capable of obtaining the first-best solution of an allocatively efficient allocation with zero rent-seeking.     

On the Nature of Tolerance: Dichotomous or Continuous?*

The purpose of this article is to reconsider the claim made recently by Mondak and Sanders that political tolerance ought to be thought to be a dichotomous rather than continuous variable. Using data from both Russia and the United States, I demonstrate that those Mondak and Sanders regard as uniquely tolerant are most likely no more than people who were given insufficient opportunity to express their intolerance. Even if such a phenomenon of “absolute tolerance” exists (all ideas expressed in all ways are to be tolerated), it is sufficiently rare that few practical implications are indicated for those doing empirical work on political tolerance and intolerance. * I appreciate the valuable comments of Jeffcry Mondak on an earlier version of this paper.     

Hedonic Estimation and Policy Significance of the Impact of HOPE VI on Neighborhood Property Values

HOPE VI was designed as a program to revitalize distressed public housing. This study uses hedonic methods to test whether projects that are rebuilt with HOPE VI funds have a positive effect on surrounding property values. Comparisons are made between HOPE VI and other types of public housing programs using data on property values by census block groups from the 2000 census. We find that HOPE VI had a statistically significant positive impact on surrounding property values on the order of 8–10% for every quarter‐mile closer that a housing unit was located to the development. Other public housing developments were found to have little if any effect on property values.     

An Evaluation of Private Sector Provision of Public Infrastructure in Australian Local Government

Private sector provision of public infrastructure in Australia at all levels of government, including local government, has steadily increased over the past twenty years. Nevertheless, this method of providing public infrastructure remains controversial. This article seeks to provide a critical review of the arguments surrounding private sector provision of infrastructure in Australian local government. It examines both the case for private sector provision of municipal infrastructure in Australia and the major arguments advanced against this approach to infrastructure development. Given the conceptual argumentation and empirical evidence on private municipal infrastructure provision, it is argued that policy makers should employ a nuanced performance evaluation framework to assess the benefits and weaknesses of private provision on the basis of the specific type of infrastructure in question and the kind of services it provides rather than simply endorse carte blanche privatization.