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This special issue brings together the papers presented and discussed at the Harold A. Black Academic Conference hosted by the Probasco Distinguished Chair of Free Enterprise at the University of Tennessee, Chattanooga, the Haslam College of Business at the University of Tennessee, Knoxville, and the Political Economy Research Institute at Middle Tennessee State University. Dr. Black is an emeritus professor of finance at the Haslam College of Business at the University of Tennessee, Knoxville, and has had a distinguished career advancing our understanding of race and discrimination in banking and finance. More specifically, throughout his career, Dr. Black undertook in-depth empirical studies that examined the institutional details of statistically observed disparate outcomes in banking and finance to determine whether these outcomes were attributable to discrimination or could be explained by non-discriminatory factors. In some instances, Dr. Black found that addressing disparate outcomes with inappropriate policies could result in perverse consequences that harmed the intended beneficiaries. This introduction explores the relationship between Harold Black's work, the papers in this special issue examining, building on, and extending Harold Black's work, and public choice economics. [ABSTRACT FROM AUTHOR]

Despite Gordon Tullock's famous effort to motivate researchers to quantify investments in rent seeking, the empirical measurement of rent-seeking activity remains under-studied. This paper proposes a new estimate of rent seeking by comparing the industrial composition of MSAs that contain a state capital with those of a comparable synthetic match. Each of these synthetic matches are constructed as a weighted average of all MSAs that do not contain a state capital, where the weights are chosen via entropy balancing. This paper offers the first panel estimate of rent seeking in the United States by state and year for the years 2004–2020. We also provide the first industry-specific measures of rent seeking, in addition to aggregate indexes of traditional, in-kind, indirect, and total rent seeking. All measures of rent seeking described in this paper have been made publicly available. [ABSTRACT FROM AUTHOR]

Dr. Harold Black has made a career of investigating the effects of different rules and institutional arrangements on the extent to which market participants in finance can exercise a taste for discrimination. This paper considers the nature of Black's contributions, and reviews some particulars of his voluminous published research, focusing especially on his work on the number of "overages" charged by banks, and the differences in the effects of the race of bank owners, as explained by the race of customers. The paper concludes by connecting Dr. Black's work to his "origin story," which helps explain his consistent focus on careful empirical distinctions rather than preconceptions and biases. [ABSTRACT FROM AUTHOR]

The 2019 local election in Hungary accelerated the trend of centralization, marked by a simultaneous reduction in available local funds and an increase in discretionary transfers to local governments. This paper, utilizing a dataset encompassing all over 3000 municipalities from 2015 to 2020, employs fixed-effect estimations and a regression discontinuity design to explore how election outcomes influenced central decisions on intergovernmental transfers. Generally, larger municipalities are more susceptible to political influence, particularly in the allocation of discretionary grants, whereas smaller settlements appear less affected by political shifts. Changes in political alignment triggered a rewarding policy for municipalities that remained or converted to aligned status, resulting in an additional 86.4% and 65.2% of discretionary funds, respectively, relative to those converting to or remaining unaligned. Our research establishes that political influence in intergovernmental transfers has intensified since 2019, offering valuable insights for the upcoming 2024 election. [ABSTRACT FROM AUTHOR]

This paper endogenizes pro-entrepreneurship policies in a model where voters choose the strength of these policies and entrepreneurs generate social returns which benefit the median voter. In the model, incumbent firms who are harmed by the greater competition that this policy promotes can push back in two ways: via corruption and persuasion. Specifically, they can bribe elected politicians to break their campaign promises; and they can allocate some of their rents to corporate social responsibility (CSR) initiatives that also benefit voters. The model predicts that corruption which weakens pro-entrepreneurship policy can be completely neutralized by a forward-looking median voter—without removing the incentive among incumbent firms to bribe politicians. In this way, endogenizing entrepreneurship policy can destroy any relationship between corruption and entrepreneurship. Corporate social responsibility initiatives modify this prediction, which provides a novel rationale for CSR that appears to be new to the literature as well. [ABSTRACT FROM AUTHOR]

This paper aims to evaluate the impact of a policy that targets criminal infiltration in local governments on the provision of local public goods in Italian municipalities. Building on the theoretical framework proposed by Dal Bò (American Political Science Review 100:41–53, 2006), we use a sufficient statistic approach to describe the dynamic behaviour of local public goods when stricter law enforcement weakens criminal pressure groups. Utilizing data on the local public finances of Italian municipalities spanning from 2004 to 2015, our findings reveal that, after the dismissal of infiltrated governments, the targeted municipalities devote a larger share of resources to public goods, with an estimated increase of approximately 3.9 percentage points. Notably, this effect seems to be driven by an increase in investment of approximately 3 percentage points. Overall, our results suggest that policies targeting the problem of criminal infiltration in local governments can improve socioeconomic conditions and the well-being of local communities, by increasing investments in economically and socially relevant public goods. [ABSTRACT FROM AUTHOR]

After World War II, the quest for rights began to address the interests of particular groups, including minorities, children, women, animals, the environment, and workers. Many groups, however, continued or started to rely on the market, or private collective action, to further their interests. This paper offers a model to explain the choice between market and political action. Benefits achieved through collective action are a club good whose benefits are enjoyed and costs are borne by the group. Rights are a public good which benefits the whole class of people who qualify while its costs are borne only by the fighters, which invites free riding. Therefore, rights are more costly to achieve, but their benefits are higher because they are harder to undo and may facilitate further action; so they are chosen if their benefit/cost ratio is higher than that of collective action. The history of the American labor, black freedom, and women's movements, and their intersections, provides a good fit for the model's predictions. [ABSTRACT FROM AUTHOR]

Perhaps the most important element of James Buchanan's contribution to constitutional economics is his differentiation between pre- and post-constitutional levels of decision-making. At first glance, a tension may appear between those two levels of analysis. In one, the rules by which we live are up for debate, allowing us to exercise our creative and imaginative capabilities in constitutional construction. In the other, the rules are viewed as fixed, and we are left simply to treat them as constraints. This paper explores three key elements of Buchanan's thought that allow him to navigate successfully between the two levels. The first is the importance of "the relatively absolute absolute", a concept learned from his mentor, Frank Knight. The second is Buchanan's approach to "truth judgments" in politics, and their status in our political discussions. Third, we draw on Buchanan's insights in his 1959 paper "Positive Economics, Welfare Economics, and Political Economy" to show how political economists should participate in this decision-making process—not as expert philosopher-kings, but as co-equals with their fellow citizens. Finally, we illustrate Buchanan's system of thought in action by presenting two case studies: Virginia education policy in the wake of Brown v. Board of Education, and the 1928 Supreme Court ruling in Miller v. Schoene. [ABSTRACT FROM AUTHOR]

This paper investigates Gordon Tullock's unpublished manuscripts that proposed a public choice interpretation of American slavery. Drafted in response to Conrad and Meyer's seminal 1958 article on the economics of slavery, Tullock's writings influenced the early debate over slavery through his University of Virginia colleague John E. Moes. This paper uses Tullock's surviving writings to map out his theory of slavery and situate it in the broader economic analysis of the institution and identify the links between the economics of slavery and the public choice research tradition. [ABSTRACT FROM AUTHOR]

Recent empirical literature studied the correlation between fiscal disparities and corruption, assuming that corruption is responsible for variations in tax bases (incomes), but few studies test whether local fiscal disparities may be responsible for variations in the level of corruption. Through a laboratory experiment, this paper aims to investigate the effect of fiscal disparities on local administrators' corruption detection by local voters, and the effect of simple or complex equalization formulas on corruption detection. We provide clear experimental evidence of an inverse correlation between fiscal disparity and corruption detection, and a positive effect of fiscal equalization on citizens' ability to detect corruption, the last depending on the equalization formula adopted. We demonstrate that equalization may be useful to improve the process by which subnational voters evaluate potentially corrupt governments and that the simple equalization formula, namely revenue equalization, is more effective than the complex one, namely full equalization of fiscal capacities and costs of provision of local public goods. [ABSTRACT FROM AUTHOR]

In this paper, we compare deterrence, settlement, and litigation spending under adversarial and inquisitorial systems. We present a basic litigation model with three sequential stages—care, settlement, litigation—and we test the predictions on experimental data. In line with our theoretical expectations, we find that, compared with the adversarial system, the inquisitorial system is associated with lower litigation spending, lower rates of cases settled, and tends to strengthen deterrence. [ABSTRACT FROM AUTHOR]

This paper draws on the work of Michel Foucault and Friedrich Hayek to understand threats to personal and enterprise freedom, arising from public health governance. Whereas public choice theory examines the incentives these institutions provide to agents, the analysis here understands those incentives as framed by discursive social constructions that affect the identity, power, and positionality of different actors. It shows how overlapping discourses of scientific rationalism may generate a 'road to serfdom' narrowing freedom of action and expression across an expanding terrain. As such, the paper contributes to the growing literature emphasising the importance of narratives, stories and metaphors as shaping political economic action in ways feeding through to outcomes and institutions. [ABSTRACT FROM AUTHOR]

This paper evaluates the extent to which public interest or public choice rationales explain timber industry regulation in the Pacific Northwest. Two key regulations are examined: the listing of the Northern Spotted Owl (NSO) under the Endangered Species Act (ESA) in 1990, and the implementation of the Northwest Forest Plan (NWFP) in 1994. Support for the public interest theory of regulation relies on the assumption that (A) demand for environmental protection is driven by local populations directly impacted by regulation, (B) declining timber production is driven by technological factors unrelated to environmental policy, and (C) prevention of logging under timber regulations is effective at supporting ecological diversity and endangered populations. I argue there is little evidence to support any of these propositions. In contrast, evidence suggests that various interest groups benefitted significantly from the reduction in federal timber output resulting from environmental regulation, including owners of private timberlands—particularly institutional investors such as timberland investment management organizations (TIMOs) and timberland real-estate investment trusts (REITs)—and Southern timber producers, suggesting a "bootleggers and Baptists" explanation that fits within the public choice framework. Finally, I argue that even if one accepts the public interest rationale for timber regulation, regulation of the timber industry suffers from both knowledge and incentive problems that make it unlikely to succeed. [ABSTRACT FROM AUTHOR]

Despite recognition that government officials have politically motivated incentives to pursue new infrastructure construction at the expense of infrastructure upkeep, no prior research directly addresses how political incentives affect road maintenance separate from road construction. This paper investigates how local political incentives affect local road maintenance using unique data on completed road maintenance projects and difference-in-differences which leverages exogenous timing of mayoral elections. Since residents complain about damaged roads and can also be frustrated by travel delays caused by road maintenance, it is theoretically ambiguous how elected officials manipulate road maintenance, assuming they do so for political purposes. We show local election cycles shift road maintenance timing and location. We provide evidence that maintenance follows different patterns in mayoral election years and that maintenance is shifted around sub-city geographic units based on those units' political similarity of registered voters. A mayoral election costs $90,623 in additional road-related costs, translating to $28,093,182 per election for large cities. [ABSTRACT FROM AUTHOR]

It is well known that the racial composition of a neighborhood influences who chooses to live there. Less established is whether the political party mix of the neighborhood influences neighborhood choice. In this paper, we study racial and political neighborhood sorting, their interaction, and how they are changing over time. Our methodology involves the estimation of a conditional logit model with data on hundreds of thousands of homebuyers whose race and political affiliation are known. The neighborhood choices of homeowners categorized by race and party are explained by a typology that defines neighborhoods by their dominance of a particular party and race/ethnicity. We find that both Democrats and Republicans prefer living in a neighborhood that matches their race and political party, but both show an increased willingness to live in a non-matched neighborhood over the past decade. Our results are encouraging, suggesting that both political and racial/ethnicity neighborhood segregation may subside in the future. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the relationship between the level of democracy and fiscal-policy response to the economic crisis induced by the COVID-19 pandemic. We use a novel cross-country panel dataset of fiscal-policy responses with time variation. Our results suggest that more democratic countries adopted substantially larger fiscal-policy packages (in % GDP), and the gap regarding the size of packages between more democratic and less democratic countries widened over time. Our analysis of the components of fiscal policy shows that democracies, in particular, provide larger packages that benefit the broad public. Furthermore, our system-equations estimations suggest that the relation of democracy level with the fiscal-policy response is established through democracy's relation with inclusive institutions, represented by the parliamentary system, and corruption. [ABSTRACT FROM AUTHOR]

In the wake of the 2008 Great Recession, a section of the Dodd–Frank Act (DFA) ostensibly provided greater protection to low-income borrowers by capping bank charges on small dollar mortgages (defined here as less than $100,000) and requiring more bank oversight by outside auditors. Previous research has shown that both actions had the perverse consequence of reducing the availability of mortgage credit to low-income borrowers. Building on these findings, we investigate the following question: Did the decline in access to credit lead to a decrease in demand for homes in high poverty census tracts, and a corresponding decline in property values in these areas? Using an OLS regression model of home values and census tract data in Forsyth County, North Carolina from 2007 to 2020, we calculate that nominal home values dropped by over 40% in the county's lowest income census tracts after the institution of the DFA, relative to the rest of the county. Our paper offers evidence that DFA has harmed those that the Act was intended to help. [ABSTRACT FROM AUTHOR]

This paper explores how cultural values associated with individualism versus collectivism affect attitudes toward racial tolerance. Individualism refers to social norms and cultural values that support individual rights and self-determination. Therefore, individualism is inherently egalitarian and should transcend racial identities, fostering attitudes of racial tolerance. To empirically examine the correlation between values associated with individualism and attitudes favoring racial tolerance, individual-level data from the Integrated Values Surveys is collected across multiple countries and over a span of time (1981–2021). The results indicate a positive association between individualism and racially tolerant attitudes. Furthermore, this conclusion remains robust after controlling for demographic and socio-economic variables such as income, education, religious affiliation and attendance, social trust, as well as country and time fixed effects. The within-country analysis enables the isolation of the impact of individualism from other potential confounding factors. [ABSTRACT FROM AUTHOR]

The Americans with Disabilities Act (ADA) of 1990 requires employers and universities to provide accommodations to employees and students with disabilities. Previous research on the ADA has focused primarily on labor market outcomes. Yet, little is known about how the ADA affected the educational attainment of people with disabilities. This paper fills this gap by examining the effect of the ADA on the decision-making of disabled Americans regarding post-secondary education. Using data from the CPS, we implement difference-in-differences and synthetic difference-in-differences empirical approaches to estimate this causal effect. We find that the ADA substantially negatively impacted post-secondary educational attainment, which is the opposite of its intended objective. [ABSTRACT FROM AUTHOR]

Prior to the introduction of rent seeking into public choice, the research program was focused primarily on collective decision-making. The incorporation of rent-seeking into public choice shifted the emphasis of the research program toward analyzing causes of government failure. Although Gordon Tullock's 1967 article clearly lays out the concept of rent-seeking, the transformation of the public choice research program by the theory of rent-seeking did not occur until after the publication of Anne Krueger's 1974 article on the rent-seeking society. This paper explains why Krueger's presentation of the paper at the Public Choice Center at Virginia Tech was instrumental in this transformative shift in the public choice research program. [ABSTRACT FROM AUTHOR]

Should economic policy be guided by rules? In this paper, we take the perspective of the Freiburg School and trace its argument for rule-based Ordnungspolitik back to the roots of the concept. In doing so, will not offer a comprehensive review of the literature, but argue closely along the works of Walter Eucken, whose contributions are central to understanding the founding generation of the Freiburg School. We argue that not having rules is costly and therefore that the main thrust of the Freiburg approach remains valid. Good empirical arguments can be found for pursuing a rule-based Ordnungspolitik in order to avoid the costs of discretionary policymaking. Furthermore, we argue that reliance on stable rules does not incapacitate democratic decision-making. Rules rely on democratic support, and rule-based Ordnungspolitik also leaves substantial material scope for discretionary democratic decision-making. [ABSTRACT FROM AUTHOR]

The paper asks whether Walter Eucken, the founder of German ordoliberalism, should be considered to be a proponent of authoritarian liberalism. That term originally refers to a proposal for economic liberalization advanced by Carl Schmitt in 1932. Authoritarian liberalism also could be taken to mean that Eucken favors the rule of law and economic freedoms, but rejects democratic decision making. Both possible meanings are considered. We show that Eucken is not a representative of authoritarian liberalism in either sense of the term. While Eucken and Schmitt offer similar descriptions of the entanglement of state and economy in Weimar Germany, their proposed solutions are rather different. With regard to the second meaning, we argue that Eucken's critique of democracy refers to two universally recognized problems of democratic decision making, namely interest group influence and the tyranny of the majority. [ABSTRACT FROM AUTHOR]

In the aftermath of the Eurozone crisis, a battle of ideas emerged over whether ordoliberalism is part of the cause or the solution of economic problems in Europe. While German ordoliberals argued that their policy proposals were largely ignored before, during and after the crisis, critics saw too much ordoliberal influence, especially in form of austerity policies. We argue that neither view is entirely correct. Instead, we observe that the battle of ideas is largely independent of the countries' actual responses to the Eurozone crisis: pragmatic self-interest on behalf of governments rather than their ideological convictions played a crucial role in political reactions. We explain this dynamic game-theoretically and highlight a number of reasons for the decoupling of the political-pragmatic debate from the ideological-academic discourse. In addition, we argue that ordoliberals themselves contributed to the ideological misuse of their own program: the ordoliberal Freiburg School ceased to be an active research program and instead grew to resemble a tradition which all too often disregarded the international academic discourse, in particular in macroeconomics. As a result, ordoliberal thinking was abused by its proponents and critics alike to emphasize their preconceived Weltanschauung (worldview). We end our paper with some thoughts on how a contemporary ordoliberalism can be constructively used to react to some of the challenges of the ongoing Eurozone crisis. [ABSTRACT FROM AUTHOR]

This paper takes a closer look at how the relation between liberalism and democracy has been addressed by different strands of the liberal tradition. Its purpose is to argue in support of two claims. Firstly, the claim that discourse on what the two ideals are about, and how they are related to one another, has been impaired by a failure to pay due attention to the distinction between the question of legitimacy and the question of institutional expediency. Secondly, the claim that, when the noted distinction is taken into account, the two ideals can be shown to complement each other in their outlook at how social and political life should be organized. [ABSTRACT FROM AUTHOR]

Gordon Tullock's "Welfare Costs of Tariffs, Monopolies, and Theft" is by now widely regarded to be a classic work in public choice. However, like many "classic papers," it was not always so highly regarded. It was rejected at several journals before finding its way to print and arguably took two or three decades to be fully appreciated. This paper discusses developments in the public choice and rent seeking literatures that helped bring Tullock's paper to its status as a classic work in political economy. [ABSTRACT FROM AUTHOR]

Since its publication in 1971, George J. Stigler's "Theory of Economic Regulation" (1971), secured its place as the dominant theory of the causes and consequences of regulation in economics. The article was cited by the economic Nobel prize committee as one of the reasons Stigler received the prize in 1982. In his article, Stigler (1971) frames the conversation regarding the "Theory of Economic Regulation" around an analysis of the political demand for and supply of regulation. Following the 50th anniversary of the 1971 paper, the contributors to this special issue evaluate the impact of his "Theory of Economic Regulation", apply it to other policy questions, and summarize the literature produced in response to his original insight. [ABSTRACT FROM AUTHOR]

Previous research has shown that corruption risks may distort market incentives in high-risk contexts. However, there is a dearth of evidence on the potential impact of corruption in settings characterized by low corruption and high-quality institutions. Against that background, this paper delves deeper into the alleged consequences of corruption by examining the link between corruption risks in public procurement and the profitability of firms in the Swedish construction industry. We introduce a novel measure of corruption risk based on the share of single bidder contracts that a firm has won. Validity analysis confirms that our measure is correlated with an alternative corruption measure and local tender winners. Our results reveal that firms that win many single bidder contracts have higher profitability than other firms in the sector: 10 percentage points higher single bidding rate firms have a 0.2–0.6-percentage-point higher sales margin. The findings underscore that public procurement corruption risks distort markets and economic incentives, and that this risk is present even in low-corruption contexts such as in Sweden. [ABSTRACT FROM AUTHOR]

It is well documented that the public is often poorly informed about the economy. In the domain of fiscal policy, this may make voters susceptible to favour spending, while underestimating its costs (fiscal illusion). While politicians may have more information to judge the need for prudent economic policies, voters may be less inclined to support prudent fiscal policy if they do not believe that these politicians act in their best interest—an idea that in recent decades has become more prevalent. Using a novel dataset from the Netherlands, this paper examines whether strong populist ideas lead to more expansionary fiscal preferences, thereby reinforcing the risk of fiscal illusion. The findings indicate that respondents' populist attitudes significantly predict their fiscal preferences. Additionally, higher literacy and information provision contribute to more prudent fiscal preferences. However, the impact of literacy is conditioned by the level of populist sentiment. Poorly literate respondents show higher support for tax relief only when holding strong populist attitudes, not when expressing lower levels of populist sentiment. [ABSTRACT FROM AUTHOR]

This paper studies the succession of power between emperor and crown prince in imperial China as a political game. We begin by developing a model of the succession game that defines the probability of a crown prince being deposed as a function of the strength of the ruling emperor. The model predicts an inverted U-shaped relationship between the probability of crown prince-deposition and the strength of the ruler. We then test the model's implication against the historical evidence. We find that from the Western Han Dynasty to the Ming Dynasty (206 BC–1644 AD), the power of crown princes first increased, then fluctuated and finally decreased. This trend was linearly correlated to changes in relative imperial power. [ABSTRACT FROM AUTHOR]

In recent years, we have learned much about how police, defendants, and prosecutors are affected by different policies. At the same time, economic theory is being forgotten or disregarded. Even more so today, economists and political scientists treat "the enforcement apparatus of police, courts, prosecutors, and legislature as a philosopher-king, with imperfect knowledge but only the best of motives" (Friedman Law's order: What economics has to do with law and why it matters. Princeton University Press, Princeton, 2001). This special issue contains a sampling of papers at the intersection of criminal justice and public choice. Our introduction discusses the recent literature on criminal justice and calls for a multifaceted empirical approach that incorporates the insights of public choice theory. [ABSTRACT FROM AUTHOR]

Law enforcement institutions are tasked with a complicated undertaking that involves maintaining community safety and, at times, making arrests while exercising care in their interaction with private citizens. Errors may have dramatic consequences for civilians, police and the criminal justice system. Given limited observability of law enforcement agents' behavior, one way to mitigate the principal-agent problem is to rely on signals from civilians via complaints. At the same time, civilian complaints may result in reputational and financial losses for the criminal justice institutions. This paper empirically investigates one way in which criminal justice institutions respond to civilian complaints. Namely, criminal prosecutors can upcharge a defendant who files a civil complaint against law enforcement. By upcharging, the prosecutor can increase the likelihood that a defendant will accept a plea deal, thus preventing the defendant from seeking monetary damages in civil court (Heck vs. Humphrey, 1994). Using data on citizen complaints and criminal charge outcomes from Cook County (Illinois), we find a strong causal link between a citizen filing a complaint and the total number of charges filed. [ABSTRACT FROM AUTHOR]

A lack of information about electoral candidates leads to a ballot order effect that increases the chances of candidates in the top electoral list positions winning voters' support. The ballot order effect is confounded by the effect of ranking and the effect of attention, which work in the same direction. We exploit a variation in ballot layout (the quasi-random location of the break between the first and second sides of the ballot) in the 2006, 2010, 2013, and 2017 Czech parliamentary open list proportional representation elections to disentangle these effects and identify the effect of attention. We show that being listed on the reverse side of the ballot paper decreases electoral support—measured by number of preferential votes received—by at least 40%. Focusing on preferential votes allows us to filter out the effect of political party preference. [ABSTRACT FROM AUTHOR]

Monetary policy and institutions are far from exempt from political influences. In this paper, we analyze monetary institutions not as being run by either benevolent technocrats or a wealth-maximizing Leviathan, but as the outcome of competition between interest groups trying to capture wealth transfers. We argue that while interest groups gaining from specific monetary policies and institutions can easily identify themselves, losers often cannot. As a result, losers have a more difficult time fighting back, and both the organization of money production and monetary policy are shaped by political competition between rent-seekers. We use our framework to analyze modern developments in monetary policies and institutions, namely (1) the Fed's reaction to the 2007 financial crisis, (2) the Fed's reaction to the COVID crisis, and (3) the establishment and development of the euro. [ABSTRACT FROM AUTHOR]

Numerous cities around the world have tried to internalize externality costs from road traffic by instituting charges for entering their city centers. The revenues collected from these charges are often redistributed to improve conditions for motorists, cyclists, pedestrians, and public transport. At the same time, many schemes allow for exemption of cleaner vehicles, which potentially reduces revenue collection. This paper assesses the effect of exempting electric vehicles from urban toll ring charges on the charge that is levied on conventional car drivers. Using panel data of Norwegian cities that have urban toll rings, I exploit regional variation in electric car adaption and find that owners of conventional cars pay 3.3 NOK (0.36 USD) more per passage due to the exemption. Moreover, I find that local governments that are fragmented or have a left-wing majority increase toll charges more due to the loss in revenue. As the majority of electric vehicle owners have above-average incomes, the exemption implies a distributional effect in which low-income groups pay the largest portion of the increased toll price. [ABSTRACT FROM AUTHOR]

This paper provides a framework for understanding optimal lockdowns and makes three contributions. First, it theoretically analyzes lockdown policies and argues that policy makers systematically enact too strict lockdowns because their incentives are misaligned with achieving desired ends and they cannot adapt to changing circumstances. Second, it provides a benchmark to determine how strongly policy makers in different locations should respond to COVID-19. Finally, it provides a framework for understanding how, when, and why lockdown policy is expected to change. [ABSTRACT FROM AUTHOR]

In an attempt to contribute to the literature on how and why confidence in market participants and in the government shape the demand for market regulation, this paper contrasts two interpretations. The interpretation implicit in the empirical literature supposes that people trade off market failures for government failures. The paper argues that implicit in the broader public choice literature there is an alternative that emphasizes the nirvana fallacy and leads to the conclusion that people's views on markets and government in general is a determinant of the effect of trust on the demand for regulation. The paper applies a meta-regression analysis to examine the results of country-level regressions with different survey waves of the Integrated Values Surveys. It shows that the effect of the two kinds of trust are asymmetric and that the negative effect of the confidence in companies on the demand for government regulation is larger in countries that score higher on individualism. [ABSTRACT FROM AUTHOR]

This paper examines the political economy of epidemic disease. First, it outlines the incentive and information problems facing policymakers in responding to a new epidemic. Second, it considers the existence of a tradeoff between public health and freedom. Informed by a survey of the history of public health and an analysis of the response to Covid-19, it presents evidence that such a tradeoff can obtain in the short run but that, in the long run, the negative relationship is reversed and the trade-off disappears. [ABSTRACT FROM AUTHOR]

I investigate the impact of voter turnout on top marginal tax rates in OECD countries between 1974 and 2013. I find that higher turnout leads to higher taxes for top earners, a result broadly consistent with the median voter theorem. Using novel survey data, I confirm that individuals in all but the wealthiest income bracket prefer higher taxes on the rich more than they prefer greater government spending in the economy. In line with these preferences, I find that turnout has a significantly negative effect on top income shares but no effect on the size of government or on public welfare expenditure. An instrumental variables approach confirms my findings. Overall, the paper is the first of its kind to link turnout to measures of redistribution that affect top earners and to preferences for redistribution. [ABSTRACT FROM AUTHOR]

This paper relies on an incidence of environmental disaster to examine the specific objective of a regulatory agency. Leveraging the Tennessee Valley Authority's Kingston Fossil Plant coal ash spill of 2008 as a natural experiment, I compare the public interest theory of regulation—maximization of net social benefits—with public choice theory, which here is the maximization of net political support. I estimate the effect of the environmental disaster on Clean Water Act monitoring in Tennessee to test one posited objective against the other. I find that regulated facilities proximate to the spill are subject to closer state-administered monitoring after the spill than regulated facilities away from the spill, even though the additional wastewater inspections do not produce positive marginal benefits for controlling coal ash. Additionally, the difference in monitoring soon normalizes to pre-spill levels, consistent with the public's interest in the event. The empirical results supply evidence that the studied regulatory agency maximizes net political support. [ABSTRACT FROM AUTHOR]

Over the last four decades, banking crises around the globe have become longer. Along with the unprecedented government responses to the Great Recession of 2007–2008, protracted financial crises have led scholars to ask whether political decisions were somehow to blame. Despite growing concerns, little attention has been paid to the political and institutional determinants of financial crisis duration. This paper considers the role of these factors in determining the duration of systemic banking, currency, sovereign debt, and twin or triple coinciding crises. Relying on an extensive database of 125 countries observed over the 1976–2017 period and estimating a discrete-time duration model, we find that the electoral cycle, political ideology, majority governments, institutional quality, and central bank independence matter. This study shows that the duration dynamics of financial crises are idiosyncratic and must be examined individually. Finally, allowing for more flexible duration dependence patterns, we observe that the durations of both banking and twin or triple coinciding crises follow a nonmonotonic cubic model, while the probability of debt crisis ending declines monotonically over time. [ABSTRACT FROM AUTHOR]

A tradition in political economy holds that constitutions should be designed under the assumption that politicians are knaves. A criticism of this position says that a constitution so designed will cause political actors to behave worse than they otherwise would. Designing a constitution for knaves creates knaves. I critique this argument in the current paper. I advance two claims. First, all constitutions create knaves, because the activity of politics itself creates knaves. Second, knavish constitutions better cultivate virtue when compared to constitutions that lack knavish constraints and guardrails. Put together, the two arguments imply the criticism has it exactly backwards: if you want virtuous politicians, design constitutions under the assumption that they are knaves. [ABSTRACT FROM AUTHOR]

Preference approval voting (PAV) and fallback voting (FV) are two voting rules that combine approval and preferences, first introduced by Brams and Sanver (in: Brams, Gehrlein and Roberts (eds) The mathematics of preference, choice and order, Springer, Berlin, 2009). Under PAV, voters rank the candidates and indicate which ones they approve of; with FV, they rank only those candidates they approve of. In this paper, we further develop the work of Brams and Sanver (2009) by exploring some other normative properties of FV and PAV. We show among other things that FV and PAV satisfy and fail the same criteria; they possess two properties that AV does not: Pareto optimality and the fact of always electing the absolute Condorcet winner when he exists. To provide a practical comparison, we evaluate the probabilities of satisfying the Condorcet majority criteria for three-candidate elections and a considerably large electorate, examining FV and PAV alongside other voting rules. Our findings indicate that PAV outperforms the Borda rule in this regard. Furthermore, we observe that in terms of agreement, FV and PAV align more closely with scoring rules than with approval voting. Our analysis is performed under the impartial anonymous culture assumption. [ABSTRACT FROM AUTHOR]

The extent of voluntary cooperation in the presence of externalities is shown as an equilibrium outcome in the supply and demand framework. The analysis uses familiar ingredients to provide a new way of understanding the results of the extensive literature beginning with Buchanan, Coase, Ostrom, Shapley, Telser, Tullock, and Williamson showing that a Pigouvian tax is not the only alternative to independently acting individuals who are coordinated merely through distorted market prices. Voluntary cooperation transforms the character of the costs resulting from externalities and may have a far different incidence than Pigouvian taxes and subsidies do. The paper discusses applications including forest management, volume discounts, residential associations, energy policy, the scope of planning of household activities, and the role of workplaces in preventing infectious disease. [ABSTRACT FROM AUTHOR]

This paper examines the effect of having a state religion on fiscal capacity. Our analysis extends the legitimization argument, which postulates that a state religion legitimizes the revenue-raising motives of the state. We then argue that the effect reduces the incentive of the state to invest in fiscal capacity. First, we build a simple theoretical model to highlight our central idea and derive our testable hypothesis. The model shows that in the presence of a legitimization effect, countries with a state religion face weaker incentives to invest in fiscal capacity, as they can raise revenue by exploiting the legitimizing power of the church. Next, we test the hypothesis in a potential outcomes model, which models the selection on observables using both recent and historical data. We show, always following our theoretical model, that countries with a state religion have lower fiscal capacity. [ABSTRACT FROM AUTHOR]

In this paper we examine three forms of regret in relation to the UK's hugely significant referendum on EU membership that was held in June 2016. They are: (i) whether 'leave' voters at the referendum subsequently regretted their choice (in the light of the result), (ii) whether non-voters regretted their decisions to abstain (essentially supporting 'remain') and (iii) whether individuals were more likely to indicate that it is everyone's duty to vote following the referendum. We find evidence in favor of all three types of regret. In particular, leave voters and non-voters were significantly more likely to indicate that they would vote to remain given a chance to do so again; moreover, the probability of an individual stating that it was everyone's duty to vote in a general election increased significantly in 2017 (compared to 2015). The implications of the findings are discussed in the context of the referendum's outcome. [ABSTRACT FROM AUTHOR]

Vote buying is a form of political clientelism involving pre-electoral transfers of money or material benefits from candidates to voters. Despite the presence of secret ballots, vote buying remains a pervasive phenomenon during elections in developing countries. While prior literature has focused on how vote buying is enforced by parties and political candidates and which types of voters are most likely targeted, we know much less about the behavioral spillover effects of vote buying on citizens' demand for redistribution and contributions to the provision of public goods. In this paper, we provide evidence on how vote buying causally affects voters' candidate choice, support for redistribution, and public goods provision. Using data from a laboratory experiment in Kenya, we find that vote buying is a double-edged sword for candidates using clientelist strategies: it attracts votes from those who were offered money and accepted it, but it also leads to negative reactions from those who rejected the offer as well as those who were not offered money. In line with its effect on voting behavior, vote buying has negative effects on subjects' evaluations of the vote-buying candidate. Vote buying significantly reduces individuals' stated preferences for more government spending on police and law enforcement—yet, surprisingly, not on other welfare areas such as unemployment benefits or health. We also find that open ballots—but not vote-buying campaigns—reduce individuals' willingness to contribute to public goods provisions. [ABSTRACT FROM AUTHOR]

In the midst of a health crisis, a drug in development and candidate for COVID-19 contagious disease was granted orphan-drug designation (ODD). This decision by the US Food and Drug Administration was immediately denounced as an abuse of the Orphan Drug Act (ODA). This paper outlines how this decision may be considered as the result of a complex case of capture along the regulatory process. Therefore, a case study of the remdesivir episode is conducted, combining the definition of a framework for the analysis of capture and the identification of stylized facts marking the trajectory of a repositioned drug and candidate for COVID-19. In doing so, arguments are put forward to show to what extent this granting of ODD can be described as the result of a series of captures, a case of weak capture however that calls for an amendment of the ODA to preclude drugs for contagious and communicable epidemic diseases from obtaining orphan status in the first place. [ABSTRACT FROM AUTHOR]

An editorial is presented which addresses the life of the late European public-choice scholar Heinrich W. Ursprung, and it mentions his Swiss upbringing and his former role as the president of the European Public Choice Society. Political competition and policy modeling in a democracy are examined, along with politicians, environmentalists, and political discretion. Collaborative relationships and independence are also assessed.

This paper presents evidence that greater representation encourages electoral participation. I exploit an electoral reform in 2015 Chile that changed the extent to which each district is represented in the national congress, differentially across districts. Using voter participation in the first round of 2017's election, which included votes for president and both chambers of congress, I find that voter participation rose (or fell less) in districts where congressional representation increased. A placebo test using participation in the second round of the presidential election, which did not select the legislative branch, shows no effect of the change in parliamentary representation. [ABSTRACT FROM AUTHOR]

In 594 BCE, the Athenian lawgiver Solon, called upon to resolve a deepening social crisis, introduced a new constitution and mandated that in civil conflicts, no citizen is to remain apathetic and must take sides. Because the law seemed to support strife, it presents a puzzle. The paper offers a political economy rationale for Solon's law against neutrality, modeling social conflict as a rent-seeking competition. We divide society into three groups, a hereditary aristocracy, which monopolized power before the Solonian constitution, a rival wealth-based commercial elite, called the new Solonian elite, and the poor, who are enfranchised only partly. We then identify the conditions under which the third group is better off by allying with one of the other groups, protecting the Solonian constitution. In our framework, Solon's ban on neutrality is an attempt to change the payoffs from violent redistributions of rents, so that conflict is avoided. Accordingly, the ban should not only impede excessive rent seeking, but also prevent the exclusion of any social group. [ABSTRACT FROM AUTHOR]