Surprise party

Alesina’s (Quarterly Journal of Economics 102, 651–678, 1987) influential model of presidential elections with ideologically motivated parties attributes higher growth and lower unemployment under Democratic presidents to the surprise inflation a Democratic victory entails. In contrast to the published literature, we test this hypothesis using calculations of presidential election surprises consistent with the assumption of rational economic actors. We confront the econometric complications attending a time-series approach taking into account economic growth dynamics. We ultimately fail to confirm the hypothesis that the level of uncertainty associated with presidential election results has an effect on economic outcomes.     

Caremark Compliance for the Next Twenty‐Five Years

One of the most influential cases in corporate governance is In re Caremark International Inc. Derivative Litigation (Caremark). In 1996, Caremark imposed a novel duty on boards of directors to make a good faith attempt to implement and exercise oversight over obligations leading to liability. Breach of this minimal duty has been difficult for plaintiffs to plead and prove, and the case law is littered with dismissed Caremark lawsuits. As Caremark's reign reaches a quarter‐century, however, its duties are primed to evolve. Two cases, Marchand v. Barnhill and In re Clovis Oncology, Inc. Derivative Litigation, took the rare step of allowing Caremark claims to survive motions to dismiss. These cases signal a new understanding of Caremark obligating boards not merely to attempt oversight, but to ensure proactively that such oversight is effective. This subtle but significant change in board duties is one to which the academic literature should respond. This article first reviews the Marchand and Clovis cases and argues that these cases hold significance for the future of Caremark claims. Second, this article studies client advisories from law firms and other sources that evaluate the Clovis and Marchand cases. It finds that while these advisories offer useful tactical responses, they lack strategic advice that would benefit boards over the long term. Filling the gap, this article presents long‐term strategic advice for boards not only to meet Caremark duties but also to thrive as exemplars of good governance and ethical leadership for the next twenty‐five years.     

Post-Keynesian Public Budgeting & Finance: Assessing Contributions From Modern Monetary Theory

While Modern Monetary Theory (MMT) offers contributions that are worthy of serious consideration, some additional theory-building and synthesis with existing theory may be in order to tie MMT into the established budgeting literature. MMT focuses primarily on monetarily sovereign governments. These are governments that face extremely “soft” budget constraints insofar as they: issue and regulate the value of their own currencies, possess central banks that function as the fiscal agents of their government treasuries, are able to issue sovereign debt denominated in their domestic currency, and operate in a system of freely-floating currency exchange rates, with a minimum of currency and capital controls. National governments that are sovereign according to these criteria are able to make all debt service payments as they come due, virtually without regard to their level of outstanding debt; they cannot be forced to default against their will. They are also macroeconomically-autonomous. It is the collective position of the symposium papers that these conditions describe, in precise terms, the fiscal position of the U.S. federal government. As such, the existence of an ultra-soft U.S. government budget constraint is grounded in the extremely favorable conditions of money and credit that the federal government is subject to, and which in fact it has created and nurtured for itself since the Second World War. An important implication is that the federal level budgeting literature cannot ignore the macroeconomics and the administration of a sovereign currency regime, nor the monetary economics that ungirds it, without sustaining charges of unrealism.     

Can budget ambiguity crowd out intrinsic motivation? Longitudinal evidence from federal executive departments

While some scholars have assessed how various features of organizational structure shape intrinsic motivation, the role of budgets and, in particular, programme funding has been overlooked. To address this gap in the literature, we examine how programme funding decisions impact employee motivation. Referencing previous work, we hypothesize that funding choices that emphasize some programmes over others signal clearer organizational goals for employees, thereby increasing intrinsic motivation. In contrast, departments that do not use their budgets to signal clear goals can run the risk of reducing their employees’ intrinsic motivation. We empirically investigate this hypothesis within the context of the US Federal executive departments, constructing a longitudinal dataset (2010–15) from multiple sources. Findings support our hypothesis. Employees in departments that more evenly fund their programmes report lower levels of intrinsic motivation.     

American citizenship and expatriatism: identity and politics outside the state

This article seeks to interrogate the concept of global citizenship through the disruptive lens of the American expatriate. The goal of this inquiry is to use empirical research done on American expatriates, including the results of a survey conducted by the authors, to better understand issues of citizenship and politics amongst American expatriates. The theoretical literature on citizenship and transnationalism argues that immigrants and expatriates help challenge the hegemony of the nation-state, a claim that can be tested by investigating how expatriates view their own experiences. By juxtaposing the empirical work of researchers focused on American expats with the theoretical work of citizenship and globalization theorists, we find that political affinity and national identity continue to matter for those living outside the USA, but within a larger global context. Thus, if the path envisioned by those who embrace globalization is to be followed, how might concepts of citizenship and national policy towards their citizens need to change?     

The police,crime, and economic theory: A replication and extension

Based on insights garnered from rational choice theory, Loftin and McDowall hypothesize that there is likely to be a reciprocal relationship, over time, within jurisdictions between police force strength and crime. Contrary to expectations, their ARIMA analyses of the association between total police force employment and the total crime rate for Detriot during the period of 1926 to 1977 produce null findings. As a result, they conclude that rational choice models are too simplistic to explain the relationship between the agency size and crime. It is our contention that this conclusion might be premature. We suggest that a failure to disaggregate total police force employment into its component sectors may be masking substantial reciprocal effects. The present investigation employs ARIMA techniques to model the reciprocal relationship between total, patrol, and detective police employment and total, property, and personal, robbery crimes in Milwaukee for the years 1930 to 1987. Consistent with previous research we report null findings between total police employment and total crime rates. However, the findings also reveal significant reciprocal relationships between the disaggregated measures of police size and crime. The implications of these results for rational choice theory are discussed.