State politics,tuition, and the dynamics of a political budget cycle

This paper attempts to improve the understanding of political budget cycles by first identifying a previously undocumented cycle in tuition and required fees at public four-year institutions of higher education in the United States. I find that tuition and fees are 1.5 % lower during gubernatorial election years than in non-election years. No similar cycle is found in private tuition and fees. Using a newly constructed dataset, I then explore the variation in electoral competition in gubernatorial and state legislative elections within states over time to uncover the underlying electoral incentives creating the cycle. The results suggest that the tuition cycle is not designed to increase the reelection prospects of governors as standard theories would predict. I find that tuition decreases during gubernatorial election years as the reelection prospects of the incumbent governor increases. Instead, the evidence suggests that popular governors use lower tuition as political pork to expand party power in the state by capturing swing districts in concurrent state legislative elections. I find that the magnitude of the cycle increases with the level of competition in state house elections and that the effect is concentrated among those districts held by the opposition party, particularly if those opposition districts are populated with voters likely to be responsive to tuition as a policy lever. These results reveal important dynamics about party competition within states in the United States and suggest that the electoral incentives driving political budget cycles can be complex.     

Communicating total rewards to the generations

This is the first time in American history that four distinct generations have been in the workforce at the same time. Because employers have finite resources with which to compete for talent, they must understand the generations, what matters most to them and what they can do to motivate different generations of workers. Perhaps surprisingly, the author argues that the generations share in most valuing "soft cost" rewards over "hard dollar cost" items. This article advises employers on how to make their company a great place to work for all generations.     

The ethical foundations of constitutional order: A conventionalist perspective

This paper presents a conventionalist or modified contractarian perspective on constitutional and legal theory as a platform from which to address five important questions about the connections between critical morality and constitutional order. It finds that natural law and critical morality are inappropriately linked to constitutions and laws, but that there is nonetheless a clear moral dimension to all law. Furthermore even though law is explained as a function of human agreements, the very process of agreement commits law to an inherent set of standards which distunguish laws based on agreement from those which rest on coercion. These standards are more familiarly known as the principles of the rule of law.     

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Book reviews

     

Audit‐Firm Tenure and the Quality of Financial Reports*

This study examines whether the length of the relationship between a company and an audit firm (audit‐firm tenure) is associated with financial‐reporting quality. Using two proxies for financial‐reporting quality and a sample of Big 6 clients matched on industry and size, we find that relative to medium audit‐firm tenures of four to eight years, short audit‐firm tenures of two to three years are associated with lower‐quality financial reports. In contrast, we find no evidence of reduced financial‐reporting quality for longer audit‐firm tenures of nine or more years. Overall, our results provide empirical evidence pertinent to the recurring debate regarding mandatory audit‐firm rotation — a debate that has, to date, relied on anecdotal evidence and isolated cases.