Parties,divided government,and infrastructure expenditures: Evidence from U.S. states

This paper examines the impact of parties and divided government on infrastructure expenditures for transportation, education, and social services in U.S. states. As infrastructure expenditures are considered a bi-partisan priority, we hypothesize that divided governments expand infrastructure spending compared to governments under true Democratic or Republican control. We test this hypothesis using U.S. state-level data over the period 1970 to 2008 and find that divided governments indeed increase expenditures for these budget categories. Specifically, divided governments spend more on transportation than unified Democratic governments, and more on education and social services than unified Republican governments. The effect is most pronounced for the core infrastructure of transportation and even stronger when only looking at capital outlays instead of total expenditures.     

Politicians, deficits, and monetary policy in the U.S. revisited

This paper reconsiders the evidence regarding the existence of executive and congressional influences on monetary policy in the U.S. Results regarding the source of the federal deficit (cyclical or structural) provide evidence that structural deficits occurring under Democratic presidential administrations have a significant impact on money growth rates, but those occurring under their Republican counterparts may not. Although the evidence regarding cyclical deficits is statistically weaker, their more limited influence on monetary growth rates appears to be similar regardless of whether they occur under Democratic or Republican presidents. This contrasts with previous research which suggests that cyclical deficits influence monetary growth rates under Democratic administrations while structural deficits generated a similar monetary response regardless of which party held the presidency.     

LOCAL BENEFIT-SEEKING IN THE LEGISLATURE: AN INVESTIGATION OF CONGRESSIONAL STAFFING DECISIONS*

In prior work, I proposed a prisoner's dilemma theory for the partisan pattern that political ticket splitting has taken in the United States: where Republicans, since 1932, have done consistently better in races for the White House than in contests for Congressional seats. The theory relies on the key assumption that Democratic legislative representatives are more willing to engage in local benefit-seeking. By examining the personal staffing decisions made by members of the House this paper provides some empirical support for such an assumption. Relative to their Republican counterparts, Democratic legislators both hire more personal staff and allocate a higher percentage of the staff hired to district rather than Washington offices.     

Is it the economic policy,stupid? Economic policy,political parties & the gubernatorial incumbent advantage

Incumbent politicians have a well-known advantage in seeking re-election. Using the Economic Freedom of North America dataset, we examine how changes in economic policy during an incumbent governor's tenure influence the probability of losing their re-election bid. Put simply, does economic policy matter for the incumbent advantage? The results suggest that a decrease in economic freedom increases the probability of an incumbent loss, regardless of the governor's party. A decomposition analysis indicates that these results are primarily driven by the government spending sub-index. Furthermore, a more granular analysis suggests that: (1) increases in government consumption spending and government employment are associated with a lower probability of re-election among Democratic incumbent governors, but a higher probability among Republicans; (2) increases in transfer payments relative to personal income reduce the likelihood of re-election, regardless of party; and (3) among Republican incumbents, increases of income taxation and of top marginal tax rates are associated with a higher and lower, respectively, probability of losing re-election. Finally, controlling for a variety of demographic, political and socioeconomic factors, we find that high unemployment increases the probability that an incumbent loses re-election, while increasing net population migration reduces it.     

The influence of money and the rate of interest on the rate of inflation in a financially repressed economy: the case of Turkey

In this paper we discuss a recent paper by Stephen E. Haynes in which he relates electoral cycles in political support to electoral cycles in economic variables. Haynes finds that the cycle in support for Republican presidents is explained by the cycle in economic variables, whereas the cycle in support for Democratic presidents is not. In our opinion this shortcoming is due to his specification of the popularity function. Haynes estimates a popularity function which incorporates the notion that voters reward the incumbent for favourable outcomes (score hypothesis). Our popularity function combines the score hypothesis and the notion that voters cast their ballots for the party that best fits the current economic situation (issue hypothesis). We show that the electoral cycle in popularity of both Republican and Democratic presidents is explained very well by the cycle in economic variables.     

Presidential party affiliation and electoral cycles in the U.S. economy: Evidence from party changes in adjacent terms

Unique evidence presented in this study challenges previous findings about presidential politics and business cycles. Prior studies find strong evidence for a Democratic economic growth advantage of about 1.8% per year over the course of a term but only weak evidence for a pre- election surge in growth for incumbent Presidents of either party. This study finds a much smaller Democratic advantage and strong evidence for a pre-election growth surge for Republican Presidents relative to Democratic Presidents. The novelty of these results is attributable to the use of repeated party-change reversals in adjacent terms for identification in place of binary changes in isolated terms separated by as much as a half-century in prior studies. We find a strongly partisan Federal Reserve effect on growth as well. Results are insensitive to an extensive battery of robustness checks.     

Does Partisan Heritage Matter? The Case of the Federal Reserve

Received evidence suggests that changes in appointer- and overseer-preferencesinfluence monetary policy (i.e., partisan heritage matters).Evidence presented here, on the other hand, is consistent withchanges in the cost of pursuing a common preference influencingpolicy. I draw this evidence from a panel of Federal Open MarketCommittee (FOMC) votes and find support for the following conclusions:(1) Federal Reserve Board (FRB) governors who were nominatedand confirmed by the same party (Republican or Democrat) prefersignificantly looser policy than do other FOMC members. (2)Monetary policy is significantly looser when either party controlsthe oversight mechanism (i.e., the presidency and Senate) thanwhen control is split. (3) Oversight acts less forcefully ondistrict bank presidents than on FRB governors. In short, thepresent evidence suggests that political agents from both partiesprefer loose money and pursue this preference more efficientlywhen their parties are aligned.     

Mortgage market credit conditions and U.S. Presidential elections

Voters punish incumbent Presidential candidates for contractions in the county-level supply of mortgage credit during market-wide contractions of credit, but do not reward them for expansions in mortgage credit supply in boom times. Our primary focus is the Presidential election of 2008, which followed an unprecedented swing from very generous mortgage underwriting standards to a severe contraction of mortgage credit. Voters responded to the credit crunch by shifting their support away from the Republican Presidential candidate in 2008. That shift was large and particularly pronounced in states that typically vote Republican, and in swing states. Without it McCain would have received half the votes needed in nine crucial swing states to reverse the outcome of the election. We extend our analysis to the Presidential elections from 1996 to 2012 and find that voters only react to contractions, not expansions, of credit, and reactions are similar for Democratic and Republican incumbent parties.     

Identity and environmentalism: the influence of community characteristics

This paper examines the influence of community characteristics on self-proclaimed environmentalism. We find that the composition of a community affects the likelihood that a person claims to be a strong environmentalist even after controlling for individual political leaning, socio-economic characteristics, and pro-environment behaviors. Individuals are more likely to claim to be strong environmentalists if they live in areas where a larger share of the population has post-graduate degrees, if they live in heavily Democratic areas, or if they live in heavily Republican areas. These community effects occur only when individuals are predisposed to take on an environmental identity.     

Determinants of County-Level Voting Patterns In the 2012 and 2016 Presidential Elections

ABSTRACT

County-level data are used to estimate the incumbent-party share of the two-party vote in the 2012 and the 2016 U.S. Presidential elections. Using a ‘seemingly unrelated estimation’ procedure the regression results for the two elections show that there were some clear differences in the size of marginal effects for several key covariates. For example, income inequality, the size of the black male and black female populations, the size of the Hispanic male population and percent of the population with a college degree all had significantly larger coefficients in 2016 than in 2012, producing a larger marginal effect in favour of the Democratic candidate’s vote share. On the other hand, counties with increased poverty rates and counties located on the periphery of urban centres had a significantly larger marginal effect favouring the Republican’s vote share in 2016 compared to 2012. Finally, the regression results show that the effects of third-party vote shares, though not statistically different across the two elections, had a positive impact on the Democratic vote share in both elections.     

Do house prices affect campaign contributions?

Individual campaign contributions are the largest source of financing for U.S. presidential and congressional candidates, though the body of research examining why people give remains small. To help understand these decisions, we estimate the causal impact of house prices on donations across campaigns and parties using an instrumental variables strategy. Our results indicate that an increase in house prices increases ZIP code-level donations to Democratic presidential and congressional candidates, with minuscule or no effect for Republican candidates. The effects in areas with a greater proportion of renters are larger than areas with more homeowners. Since this population is likely to experience higher rents as a result of house price increases, this suggests that pleas for policy may inspire giving. Further, areas with the highest fraction of college educated residents also see the largest effects, when compared to less-educated areas, suggesting a wealth effect exists as well.     

Choosing Among Regulatory Options in the United States Telecommunications Industry

We examine the determinants of the choice between rate-of-return regulation and incentive regulation in the United States telecommunications industry. We find that a state is more likely to select incentive regulation in any year: (1) when it has employed incentive regulation in the past; (2) when the Republican party controls both the executive and the legislative branches of the state government, but the Democratic party has controlled these branches historically; and (3) as the firms earnings under rate-of-return regulation increase toward the industry average. We also find that appointed regulators are more likely than their elected counterparts to revert to rate-of-return regulation.     

THE ROLE OF CRIMINAL SANCTIONS IN ANTITRUST ENFORCEMENT

Recently enacted sentencing guidelines were designed to reduce disparity and to increase the average sanction for white-collar offenders. Whether these outcomes will be achieved, however, depends on how closely judges adhere to the new guidelines. We cannot yet determine how the guidelines will be implemented but can learn much about judicial behavior by studying past sentencing practice.
This paper examines sentences imposed on criminal antitrust offenders from 1955 to 1980. Judges are appointed for life and ostensibly are "independent" of the political process. The data suggest, however, that judges do not operate in apolitical vacuum. When Congress increased the status of antitrust violations from misdemeanor to felony in 1974, judges responded by doling out higher penalties–even for offenders not subject to new higher statutory maximums. In addition, the paper shows that Republican judges tend to impose harsher antitrust penalties than do Democratic judges, and that sentencing behavior apparently is influenced by a judge's prospect of promotion to a higher court position. These findings have important policy implications both for the judicial selection process and for ensuring that the judicial branch follows congressional wishes.     

The dependence structure of income distribution

This article investigates the dependence structure of income distribution in the US by providing two approaches – one regression-based and the other copula-based – to reveal new information about income dependence. The system of Seemingly Unrelated Regressions (SUR) is estimated for both quintile income shares and mean income growth by controlling for macroeconomic variables, and Kendall's tau statistics are derived for income dependence. Results from less restrictive copula models corroborate the regression-based results. However, income growth models do not support the common claim that the rich are getting richer while the poor are getting poorer. Income dependence patterns do not appear to be affected by business cycles, but Democratic and Republican presidential administrations have drastically different income dependence results.     

The role of party politics in medical malpractice tort reforms

The U.S. tort system has experienced various reforms over the last three decades. While there is an extensive literature on the consequences of these reforms, very little is known about their determinants. In this study, we investigate the role of party politics in the reform process across U.S. states. In order to test whether any party effect goes beyond voter preferences, we apply the idea behind regression discontinuity studies based on close electoral outcomes to semi-parametric proportional hazards models. We find that in states with close election outcomes, a narrow Republican majority in the lower house is associated with a 50 to 150% higher risk of tort reform enactment compared to a narrow Democratic majority. Our results indicate that party politics plays a role in tort reforms over and above potential underlying preferences in the constituency.     

The colonial origins of fiscal capacity: Evidence from patronage governors

We combine historical personnel data from the British colonial administration with modern public finance data to study the impact of colonial governors on fiscal capacity. Exploiting rule-based variation in the allocation of governors connected to their superior at the time of appointment, we find that modern-day countries exposed to more patronage governors exhibit lower fiscal capacity today. These negative effects are persistent over time and driven by indirect taxes that patronage governors disproportionately controlled in the colonial period. The results thus provide evidence for a public finance channel through which the effects of patronage appointments extend beyond decolonization.     

Duplication or experimentation: how local governors make policies under new administrative circumstances

This article shows that turnover of local governors increases the similarity of fiscal policies using the data of 320 prefectural-level cities from 2005 to 2012 in China. More generally, local governors duplicate successful experience rather than explore policies accommodating the specificity of their ruling areas when they are faced with new administrative circumstances. The structure and effects of the network resulting from the imitation of policies could be an important research topic in the future.     

Central bank independence,inflation and political instability in developing countries

We test whether political instability affects central bank independence in developing countries. Both a legal measure and the turnover tate of central bank governors are used as proxies for central bank independence and the frequency of government transfers is used to proxy political instability. Only the number of coups affects the turnover rate of central bank governors. We also find that both the turnover rate of central bank governors and political instability affect the rate of inflation.     

Economic insecurity,racial anxiety,and right-wing populism

This paper studies the roles of economic insecurity (EI) and attitudes to racial inequality as predictors of voting patterns in the 2016 US election. Using data from the 2016 Voter Survey, we show that both perceptions of EI and concerns over anti-White discrimination are significant correlates of Republican support. Effect sizes on racial attitudes are much larger than those found on EI, although the effects of insecurity become larger when accounting for both short-term and long-term economic stress. We also show there is very little heterogeneity in the effects of insecurity across racial groups—both Whites and minorities are more likely to vote Republican when experiencing short-term insecurity. Our results suggest that policies that mitigate micro-level economic risk may lessen support for populist political candidates.     

地方官员更替与经济增长

改革开放以来,中国的省长、省委书记更替成为一种常态,现有文献忽视了其对辖区经济增长的影响,本文对此进行了探讨。在理论上,我们讨论了多种地方官员更替影响短期经济增长的机制,强调省长、省委书记更替会对辖区经济增长带来短期的负面影响。在实证上,我们采用1979—2006年间我国29个省区的官员更替样本进行检验。结果发现,省长省委书记更替对辖区经济增长有显著的负面影响;这种影响的程度因地方官员更替频率、更替的地方官员的年龄等因素的不同而不同;地方官员更替主要影响辖区的短期经济增长波动,并非长期经济增长趋势。本文的发现是稳健的,能够增进对如何现实省区经济平稳增长的理解。