Pricing Outputs: A Case Study in Law Enforcement

This paper discusses the advantages and limitations of economic evaluation as a measurement methodology within the Australian government's outcome and output framework including preliminary benefit–cost analysis of Australian Federal Police investigations. The results suggest that the Australian Federal Police is returning over $5 to the community for every dollar invested in fraud and drug investigations. It is concluded that benefit–cost analysis is a useful tool for comparing the price of an output to the value of an outcome. The method has limitations. Not all outcomes will admit of easy assessment and the information may be difficult to collect. However, the use of surrogate measures and extrapolation of results may overcome most of these limitations.     

Municipal Capital Spending during the "Boom"

This article analyzes municipal governments, capital spending, and revenue-raising decisions between 1993 and 2000, an era of unprecedented economic growth. It finds that, as anticipated, greater-than-expected revenues allowed many cities to advance projects from their capital improvement plans to their capital budgets. Moreover, the article concludes that growth in cities' own-source-revenue-generating capacity and transfers from carryover or ending balances from earlier years, rather than debt issuances and intergovernmental aid, seem to be the most important fuel for the remarkable growth rate in capital spending.     

Tax Expenditure Budgets, Budget Policy, and Tax Policy: Confusion in the States

A tax expenditure budget should contribute to efficient and effective public decisions by quantifying the division in the tax structure between provisions that represent revenue policy (distribute the cost of government according to the legislated tax base) and parts that represent budget policy (substitute for direct spending). For this transparency to have the desired impact, however, the tax expenditure budget process and the direct expenditure process must be properly integrated and the tax expenditure budget must make an accurate division between the parts of the tax structure. A review of the 33 states with tax expenditure systems shows many weaknesses in application of the concept and poor linkage to the direct spending budget system. Their most significant flaw is in dividing the tax structure into normal and preference elements; states need greater attention to defining their basic tax structure if they are to have a meaningful tax expenditure budget.     

Tullock's rent-seeking contest with a minimum expenditure requirement

We consider a rent-seeking contest of the kind introduced by Tullock (1980) in which two players compete for a monopoly rent. We extend the contest by requiring that if a player puts forward an effort, his expenditures must be larger than or equal to some minimum level. We show that, depending on the model parameters, the number of Nash equilibria of the extended model can be zero, one, two or four. Furthermore, it turns out that the extent of rent dissipation in a Nash equilibrium of the extended model can be larger than, equal to, or smaller than the extent of rent dissipation in the unique Nash equilibrium of the original model.     

The prohibition-repeal amendments: A natural experiment in interest group influence

The pattern of state support for Prohibition (18th Amendment, 1919) and Repeal (21st Amendment, 1933) is analyzed and compared. This comparison is important because Prohibition is the only amendment ever to be repealed. The main thesis is that there was no wholesale change in preferences of citizens. Instead, producer interests failed to mobilize effectively in 1919, and the coupling of moral and economic arguments that worked in 1919 broke apart in 1933. Regression analysis is conducted on state legislatures (for Prohibition) and state referenda on convention delegates (for Repeal), so states are observations in the cross-sectional regression analysis. The results broadly support the main thesis.