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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]

The goal of this paper is to propose a comparison of four multi-winner voting rules, k-Plurality, k-Negative Plurality, k-Borda, and Bloc. These four election methods are extensions of usual scoring rules designed for electing a single winner and are compared on the basis of two criteria. The first comparison is based on the Condorcet committee efficiency which is defined as the conditional probability for a peculiar voting rule to select the Condorcet committee, provided that such a committee exists. The second comparison is based on the likelihood of two paradoxes of committee elections: the Prior Successor Paradox and the Leaving Member Paradox, which occur when a member of an elected committee exits. Aside from these two extensions, this paper is one of the very rare contributions giving exact results under the Impartial Anonymous Culture (IAC) condition for the case of four candidates. [ABSTRACT FROM AUTHOR]

This paper provides a theoretical explanation as to why breakthrough innovations seem to be possible only within capitalist economies (Kornai in Dynamism, rivalry, and the surplus economy: Two essays on the nature of capitalism, Oxford University Press, Oxford, 2013). Specifically, our theory explains why disruptive innovations are discovered and financed by large numbers of independently owned small firms in capitalist economies rather than in socialist economies where state ownership is the only option. The key is that the ownership structure of the firm affects the ex-post selection of worthwhile discoveries, which determines the fate of disruptive innovation. Our paper also contributes to empirical work on disruptive innovation, which is missing in the literature. We use new molecular entities (NMEs) in the pharmaceutical industry as a proxy for disruptive innovation. Although pharmaceutical companies are often very large, their R&D projects greatly depend on forming alliances with much smaller independent firms. We find that the number of NMEs discovered by pharmaceutical companies is positively and significantly associated with the number of R&D alliances in which they participate. Our theory is supported by the empirical findings. [ABSTRACT FROM AUTHOR]

More than 40 years ago, János Kornai introduced his famous supermarket metaphor. Socioeconomic systems cannot be constructed from purposely selected features, similar to customers in a supermarket, who can freely put into their shopping trolley whatever they like. Systems constitute an organic whole. They contain good and bad features in fixed proportions. After 1990, Kornai and most Western commentators expected that as market integration and private property expand, China would eventually turn into a liberal democracy. Prior to the worldwide fall of communism, Kornai had three primary criteria to determine whether a country was socialist or capitalist; later he amended this with six secondary ones. The present paper introduces into this list an additional 11 criteria—i.e. 20 quantifiable metrics altogether. Kornai was among the very first to recognize that with President Xi Jinping taking charge, China made a U-turn. While capitalist elements remain strong, in the final analysis, the country is on its way back to where it was before 1978. [ABSTRACT FROM AUTHOR]

In this paper, I argue that the principal message of Janos Kornai's work was to underscore that the dysfunctional properties of socialism are endemic and systemic, and cannot be "reformed". In a sense, Kornai's role was similar to the French Encyclopedists in preparing the ground for France's 1789 revolution. Kornai's intellectual contribution was to formulate a revolutionary discourse emphasizing the sterility of half-measure, cosmetic changes, and reform packages. His conclusion was based on two foundations: (1) the unity or what Kornai calls the 'coherence' of socialism as a system, and (2) rejection of market socialism as hopelessly confused. Accordingly, reforms would introduce inconsistencies at best, without solving socialism's chronic problems. Moreover, the inconsistences of the half-measures would erode socialist systems, inevitably leading to revolution. This paper will examine Kornai's two tenets of revolutionary discourse and his final conclusion in light of Hungarian economic reforms that started on January 1, 1968. [ABSTRACT FROM AUTHOR]

In 1996, Felsenthal and Machover proposed a bargaining procedure for a valuable payoff in cooperative and simple games. They proved that the value underlying their bargaining scheme was the Shapley value by showing that it verifies the axioms that Shapley proposed for characterizing his value. They remarked that a direct proof of the result involves rather formidable combinatorial difficulties, but that it has some independent interest. In this paper, we prove such a combinatorial result and obtain a formula for the Shapley value that has a great potential to be extended to more general classes of games. [ABSTRACT FROM AUTHOR]

Presents a bibliography of works in non-market decision making from 1966 to 1967.

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]

While it has been argued that the cyclicality of government spending likely depends on the intensities of political pressure to increase expenditure, in economic upturns and downturns, it is important to explore the determinants of changes in the strengths of those pressures. This paper is the first (to our knowledge) to focus on the relevance of systematic changes in voter awareness of government spending. Predictions of the impact of changes in awareness are tested with reference to 23 OECD donor countries' foreign aid expenditures over the 1999–2015 period. The evidence offers insights into the discretion governments exercise when "fiscal illusion" increases and into the policy implications of systematic changes in voter awareness (in "good" times and in "bad"). [ABSTRACT FROM AUTHOR]

This paper contrasts different interpretations of the creation of the Bank of France. I argue that the Bank of France was the product of rent-seeking behavior rather than the pursuit of public interest, as is commonly supposed. I explain how the changing institutional constraints faced by both politicians and bankers can account for changes in France's monetary constitution. The creation of the Bank in 1800 followed the fall of the Directory and the establishment of Napoléon's autocratic regime. I argue that as parliamentarism and the separation of powers were weakened by Napoléon, the cost of establishing and maintaining a monopoly privilege in banking evaporated and the creation of the Bank of France became more likely. [ABSTRACT FROM AUTHOR]

Causal inference and American political development (APD) are widely separated and (to some) fundamentally incompatible tendencies within political science. In this paper, we explore points of connection between those two perspectives, while also highlighting differences that are not so easily bridged. We stress that both causal inference and APD are centrally interested in questions of causation, but they approach causation with very different ontological and epistemological commitments. We emphasize how the sort of detailed, contextualized, and often qualitative knowledge privileged by APD can promote credible causal (and descriptive) inferences, but also that scholars of causal inference can benefit from alternate conceptions of causality embraced by APD work. We illustrate with two empirical examples from our own research: devising weights for quota-sampled opinion polls and estimating the political effects of the Tennessee Valley Authority. We conclude that bringing APD and causal inference together on more equal terms may require a broader perspective on causation than is typical of scholarship in the causal-inference tradition. [ABSTRACT FROM AUTHOR]

This paper provides an explanation for the lack of profit-maximizing local governments and for the historically widespread use of more or less representative forms of town and city governance. The analytical part of the paper suggests that profit-maximizing governments suffer from a 'proprietor's dilemma,' which can be reduced by including a representative council with veto power over new taxes. Limited but costly mobility plays a role in the analysis, as does the fact that residents often make investments in a town that are difficult to relocate once made. [ABSTRACT FROM AUTHOR]

This introductory essay summarizes the contents of the papers presented at a conference in honor of Gebhard Kirchgässner entitled “(Macro-)Economic Policy and Public Choice” which are published in this special issue. In addition to this brief overview on the contributions, this essay relates them to the scientific works of Gebhard Kirchgässner after locating the latter within the realm of Public Choice analysis. [ABSTRACT FROM AUTHOR]

An introduction to the journal is presented in which the author presents a brief profile of economist Robert D. Tollison and discuses his career, including his contribution to the study of public choice, industrial organization and the economics of sports and religion.

From 1939 to 1968 Florida used a unique referendum system to set property tax rates for public school operating expenditures at the median millage rate selected by voters. These referendums revealed the entire distribution of voter preferences, which is not possible in the standard up or down referendum. We are the first to use the Florida referendum data. The form of the ballot played an important role in how people voted. Voting machine elections were much more likely than paper ballots to result in rejections of the recommendations of school boards, and produced much greater dispersion of expressed preferences. [ABSTRACT FROM AUTHOR]

I examine how the structure of corrupt exchanges between voters and politicians—an important-yet-underexplored form of informal institutions—shapes voters' electoral behavior toward corruption. I argue that when voters have a clear idea of whom to bribe to secure desired services and how much they need to offer, they are less likely to engage in corruption voting and hold corrupt incumbents electorally accountable for their malfeasance. Utilizing the World Business Environment Survey on corruption predictability and the Asian Barometer survey on voters' electoral behaviors, I report empirical evidence that institutionalized corruption promotes greater electoral tolerance of corrupt politicians in Asian democracies. The results hold against a number of robustness checks. The paper thus furthers our understanding of the effect of informal political institutions on corruption voting as well as Asia's corruption exceptionalism. [ABSTRACT FROM AUTHOR]

Politics, like any social system, involves selection mechanisms. This paper presents a model of politics as an evolutionary process. Our model yields three main results. First, the political process selects for efficient policies in the long run. We call that attribute asymptotic efficiency. Second, bargaining amongst interest groups bounds the inefficiencies that can exist in the short run. Potential inefficiency declines when organizing interest groups becomes less costly. Finally, policies that appear to be inefficient in a static analysis can be efficient once economists consider the dynamic nature of political decisions. We argue that viewing the political process as a selection mechanism allows political economists to use efficiency as a criterion for positive economic analysis. In our approach, applied political economy involves looking for relevant costs that make the policy efficient. However, our approach does not rob political economists of the ability to make meaningful normative statements; it only constrains the type of statements made. [ABSTRACT FROM AUTHOR]

This paper examines state interest in the nine bases of congressional seat apportionment considered for the House of Representatives as part of the Fourteenth Amendment to the US Constitution. We ask, what if voters preferred apportionments that delivered larger vote shares to their state? We then show that among all states, one basis of apportionment was a weak Condorcet winner, while the others were in a vote cycle. In both chambers of Congress, however, pure majority voting created orderings of the nine bases and a different Condorcet winner. Ironically, Congress did not select either Condorcet winner. Instead, a population-based apportionment was reported out of committee and passed both chambers as a consequence of agenda control and lack of pairwise voting. Our analysis provides an example of how agenda setting with incomplete information unintentionally can produce undesirable outcomes for a legislature. [ABSTRACT FROM AUTHOR]

Prior empirical research on rent seeking has focused on estimating its effects on overall macroeconomic performance, with few studies attentive to income distribution. This paper expands on existing research by evaluating rent seeking's effects on Gini coefficients, and income shares at the US state and county levels. We explore county-level panel data from the Census of Employment & Wages, adopting the percentages of workers employed in legal services and local government as proxies for rent seeking. We find that the estimated effects of rent seeking on the income distribution are significant and positive at all levels of analysis. However, rent seeking's impact on the distribution of income is much more prominent at the state than at the county level. The results also suggest that the effect of rent seeking on the income distribution works by different mechanisms at the county level than it does at the state level. [ABSTRACT FROM AUTHOR]

A voting rule that permits some voters to favor a candidate by revealing only the initial segment of their sincere rankings is said to be vulnerable to the truncation paradox. In this paper, we consider four models for counting truncated ballots, optimistic, pessimistic (the most common), averaged, and round-down. Under the impartial anonymous culture assumption, the choice of model generally has a real impact on truncation-paradox vulnerability, but exceptions exist. When the election is decided by a one-shot scoring rule, the optimistic model is invulnerable to the truncation paradox, but all other models are vulnerable. We identify new voting rules immune to the truncation paradox, such as the Modified Borda Count. To obtain a more complete picture of the impact of processing model, we assess the likelihood of the truncation paradox in three-candidate elections with large electorates, focusing not only on one-shot scoring rules but also scoring rules with one-by-one or below-average elimination. Our assessment confirms that the processing model for truncated ballots may really matter. [ABSTRACT FROM AUTHOR]

This paper explores the relation between campaign spending and votes, in France, relying on political financing reforms as a quasi-natural experiment to assess if and how spending affects votes, for both incumbent and challenger candidates in multiparty legislative elections. The French reforms were adopted in the mid-1990s, modifying the fundraising rules in three important ways: (1) spending limits were reduced, (2) legal entities no longer were allowed to fund candidates, and (3) the maximal amount of candidates' personal campaign spending reimbursed by the State was raised. We study observations on two consecutive legislative elections, one before and one after the reforms. The difference in campaign expenses across elections turns out to be strongly affected by the reforms: candidates from the extreme parties (far left and far right) increased their expenditures substantially, while the candidates fielded by moderate parties reduced them considerably. Focusing on politicians running in both elections, we estimate the impact of spending using first-difference panel data methods and TSLS. Our instrumental variables for the difference in spending are constructed from the regulatory reforms. We find that spending by incumbents did not have statistically significant effects on their vote shares. Spending by challengers is statistically significant but the impact nevertheless is economically small. [ABSTRACT FROM AUTHOR]

A variety of complementarities and overlaps exist between the psychological strand of behavioral economics and the subjectivist strand of Virginia Political Economy. This paper provides an overview of those commonalities and places them in a common information processing framework. The framework can account for systematic mistakes, framing effects, subjectivity, individual variety, and several issues in constitutional political economy. It also reveals many commonalities between these two quite different approaches to human behavior. [ABSTRACT FROM AUTHOR]

Past research largely has ignored the effects of political parties on states’ default risks. This paper addresses that question by analyzing the response of credit spreads to weekly polling data from 17 gubernatorial elections between 2009 and 2012, during the 6 months prior to Election Day. The findings are that political affiliation has a significant effect on states’ default risks. The estimated effect of electing a Republican governor is a 6% reduction in the credit spread of the state. The effect prevails regardless of the party in control of the state legislature, and it is larger when gubernatorial elections are contested closely. Set in the context of case law, the paper links higher tax levels to greater credit risk. Moreover, an analysis of the candidates’ campaign promises suggests that stronger positions against tax increases are associated with less default risks. The results of the paper are therefore consistent with the empirical evidence suggesting that Republicans prefer lower taxes. [ABSTRACT FROM AUTHOR]

This paper provides a rigorous theoretical and empirical analysis of the effect of logrolling between interest groups on social welfare in a non-democratic political system. In particular, we focus on China, where bureaucratic interest groups are separate vertical organizations reaching down from Beijing to the provinces and cities. The key question in this paper is: what are the effects of the logrolling of parochial interest groups on state policies and social welfare in autocracies? We address this question both theoretically and empirically. The theory predicts a specific distortion in resource allocation because of logrolling, while the empirical results confirm the theoretical prediction. We find policy outcomes under logrolling are characterized by excessive spending on all the interest groups’ preferred goods and insufficient spending on public goods. We test the existence of logrolling between the Ministry of Civil Affairs and Ministry of Health in China. Our result shows logrolling between the two ministries lead to inefficiencies in social security and health care policies. [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]

In campaigns, candidates often avoid taking positions on issues, concealing the policy preferences that would guide them if elected. This paper describes a novel explanation for ambiguity in political campaigns. It develops a model of candidate competition in which policy-motivated candidates can choose whether or not to announce their policy preferences to voters. It applies Eyster and Rabin's (Econometrica 73(5):1623-1672, 2005) concept of cursed equilibrium, which allows for varying degrees of understanding of the connection between type (policy preference) and strategy (whether to announce). If voters updated according to Bayes' rule, they would understand that candidates who do not announce positions are strategically concealing an unpopular policy preference. In equilibrium, only the most extreme candidates, those located furthest from the median voter's position, would choose to take no position. However, if voters do not sufficiently appreciate the informational content of a non-announcement, unraveling will not occur and both extremists and more moderate candidates will not announce positions. [ABSTRACT FROM AUTHOR]

A sizeable literature studies strategic interactions between governments. In this paper, we ask whether, in the presence of direct democratic institutions, voters' actions in vetoing a decision or inaugurating a policy by a binding initiative in their jurisdiction have spillover effects on the actions of voters in neighboring jurisdictions. We collect (and make available) data on 3300 initiatives in German towns from 2002 to 2014 and match these to panel data on the towns' sociodemographic and fiscal characteristics. We apply an instrumental variables approach and find that a jurisdiction's probability of hosting an initiative is positively driven by the neighbors' direct democratic activity. The size of the estimated average effect peaks around a 20 km neighborhood-where a standard deviation change of neighbors' activity increases the probability of hosting an initiative by 5 percentage points-then gradually declines and fades away after around 60 km. This effect is driven by spillovers in similar policy areas and by successful initiatives, and is stronger in towns with relatively more information flows (measured by newspaper consumption and commuter flows). [ABSTRACT FROM AUTHOR]

This paper uses inter-country panel data from 1990 through 2010 to examine how the occurrence of natural disasters affects corruption within the public sector. For a closer analysis, disaster is classified into various categories, including general floods, other floods, tropical storms, other storms, earthquakes, volcanic eruptions, and landslides. Furthermore, this paper explores whether natural disasters have different impacts on corruption levels in developed and developing countries. The study reveals a number of novel findings. (1) Natural disasters that cause substantial damage increase public sector corruption in both developing and developed countries. (2) Natural disasters have a greater impact on public sector corruption in developed countries than in developing countries. (3) In developed countries, natural disaster frequency has a significant impact on the level of corruption. Hence, foreseeable disasters increase corruption in general. In developed countries, an incentive may exist to live within disaster-prone areas because of the potential for disaster compensation payments. [ABSTRACT FROM AUTHOR]

While Buchanan is best known for the economics of politics and constitutions, his seminal contributions to this field are but one branch of his more underlying methodology and approach to doing social science. Buchanan's fundamental project was to re-orient economics and social science toward an analysis of symbiotic exchange (catallactics) rather than of antiseptic allocation (optimization). The most definite statement of this contribution lies in Buchanan's 1963 presidential address to the Southern Economic Association, "What should economists do?" which was later expanded into a book of the same title. This paper seeks to draw attention to several of Buchanan's more recent but lesser known articles where he fully develops this theme. He calls on economists to rediscover Adam Smith's "elementary notion" about the division of labor and the extent of the market, and he professes the notion of "generalized increasing returns" as a mechanism for economists to rediscover their Scottish Enlightenment roots within the neoclassical framework. In this same vein, we also discuss how Buchanan's rediscovery might apply to two prominent and ongoing twenty-first century issues, trade restrictions and populism. [ABSTRACT FROM AUTHOR]

This paper investigates the historical relationship between the emergence of public choice theory in the 1960s and the problem of racial discrimination. Drawing upon archival research, I argue that foundational public choice scholars brought together four distinct strains of anti-discriminatory theory to grapple with the challenges posed by segregationist public policy instruments during the Civil Rights era. They include (1) the treatment of racial discrimination as regulatory capture, which is typified in the work of Frank Knight and W. H. Hutt; (2) the treatment of discrimination as an efficiency problem, building upon the closely related Chicago school insights of Gary Becker and Milton Friedman; (3) the treatment of discrimination as a constitutional problem, as seen in extensions of the framework of James M. Buchanan and Gordon Tullock; and (4) historical analysis of discriminatory institutions, also as seen in the work of Tullock. Together, the four components provided the basis of a comprehensive economic critique of discrimination that has since been neglected in the literature on the history of economic thought, and that offers far-reaching insights into the academic literature on race and the continued problem of discriminatory institutions. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to show that, at the very beginning of his career, Buchanan was interested in concrete issues related to the economic situation in the South rather than with abstract and philosophical works in public finance. We examine the published and unpublished articles, reviews and replies that Buchanan wrote between 1949 and 1952 on federalism. By putting what Buchanan wrote in the intellectual, academic and political context of the period, we put forward four factors which we believe are important to understand Buchanan's ideas. First, Buchanan defended the intervention of the federal government to redistribute, in the form of equalizing grants, income from rich to poor regions. Second, as a consequence, for Buchanan, such redistribution was an ethical necessity that should precede any consideration of efficiency. Even more important, fiscal justice was a precondition without which a competitive or free market system could not function properly. Third, at least during that period, Buchanan appears to have been interested primarily in practical, concrete problems, rather than in pure and abstract questions. Finally, a fourth and crucial point is that Buchanan insisted on the need for federal government intervention to industrialize the South, a stance that stands in stark contrast to policies the Nashville Agrarians defended. [ABSTRACT FROM AUTHOR]

The "protection-for-sale" motive introduced by Grossman and Helpman (Am Econ Rev 84: 833–850, 1994) has been adopted widely in the literature, but only a few papers test the theory empirically. To provide empirical evidence for the protection-for-sale theory, we proceed in three steps. First, we argue that among all existing theories, only the mechanism in the protection-for-sale theory depends on the government's political strength. Second, we develop a theoretical model to rationalize the connection between political strength and import tariffs. Our extended protection-for-sale model predicts that a government with greater political power generally imposes higher tariffs. Third, we propose that political strength can be proxied by the share of legislative seats held by the governing party or coalition. We test the model prediction using panel data covering 95 product categories and 105 countries, from 1996 to 2014. Our estimates provide support the protection-for-sale theory. The estimated effects of political strength on tariffs are larger in small and democratic countries. [ABSTRACT FROM AUTHOR]

We use the predatory theory of the state to explain China's violent assimilationist campaign targeting the Uyghurs, a predominantly Muslim minority group in China that constitutes a population majority in the Xinjiang Uyghur Autonomous Region. Our analysis suggests that growing political centralization under the leadership of President Xi Jinping, combined with technological changes that reduced the costs of implementing predatory policing in Xinjiang and elevated the perceived economic benefits from integration, contributed to the choice of destructive cultural assimilation rather than respect for the rights and autonomy of Uyghurs in Xinjiang. While the economics literature sometimes describes the political economy of China's growth miracle as the byproduct of a constrained Leviathan, the present paper shows that a predatory theory of the state is more useful for understanding how a cultural genocide can occur alongside economic growth. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of international state-building efforts on economic development in Somalia. Owing to non-existent or poor-quality national income accounts, we use satellite data capturing nightlight emissions to measure economic activity. Using the synthetic control method, we find that the establishment of the Transitional Federal Government in 2004 was associated with economic stagnation relative to the preceding years, when Somalia did not have a formal central government. The result remains whether we enter the total lights emitted from the country or the distribution of lights across the country. Our empirical findings are consistent with the idea that the exogenously imposed Transitional Federal Government destabilized the nation by creating inconsistencies with the informal institutions that had led to development during Somalia's statelessness. [ABSTRACT FROM AUTHOR]

This paper explores whether rules-based allocation is an effective tool for restraining political favoritism. We exploit a policy shift in distributing state lottery revenues to Israeli municipalities from discretion-based to rules-based allocation to estimate the extent of political favoritism. By comparing the likelihood of receiving grants by two types of localities before and after a policy reform, our approach offers a complementary empirical strategy for studying political favoritism that can be used even in the absence of exogenous variation in political connections; it likewise may reveal the overall impact of multiple political interests and social affiliations on favoritism. We find that political favoritism toward Jewish (versus Arab) and affluent (versus less affluent) municipalities diminished significantly after the reform but has not yet disappeared along the ethnic dimension. Our results suggest that adopting rules-based allocation might be effective in coping with political favoritism. [ABSTRACT FROM AUTHOR]

Pure-strategy Nash equilibria almost never exist in spatial majority voting games when the number of positional dimensions is at least two, as the majority core is typically empty when more than one positional dimension is modeled. In the general setting of proper spatial voting games, we study the existence of equilibrium when one candidate has a valence advantage over the other. When we consider such games, a valence equilibrium can exist that is not in the core, and a point in the core need not be a valence equilibrium. In this paper, we characterize the entire set of valence equilibria for any proper spatial voting game. We complement the analysis by deriving a simple inequality that is both necessary and sufficient for the existence of a valence equilibrium. The inequality refers to the radius of a new concept, the b-yolk, and we prove that a b-yolk always exists in a spatial voting game. [ABSTRACT FROM AUTHOR]

In this paper, we argue that the welfare state is an outcome of modern mass (total) warfare. The total war economy requires the participation of all citizens, erasing the differences between the military and citizens. Consequently, the war economy benefits from succoring the civilian population. The total war effect explains why a predatory state undertakes welfare programs, one of the contributions of the present paper. While the welfare state is closely related to total warfare, social welfare is not. Fraternal social welfare organizations in the United States predate the New Deal and the rise of welfare state. Similarly, the French welfare system was born as citizen welfare and not as state welfare. In fact, welfare programs were initiated in 1871 during the Paris Commune by workers under the name of la sociale and were recreated as self-managed citizen groups in 1945 before being displaced by government welfare programs. A second contribution of this paper is to explore the re-appropriation effect, or the way self-managed citizen welfare was transformed into a welfare state through a three-stage reform process manifesting itself in 1946, 1967 and 1996. [ABSTRACT FROM AUTHOR]

Political regimes are stable most years, but sometimes they jump. The stable years are periods of political status-quo equilibrium. To break a status quo requires a triggering event. The paper is an attempt to identify and classify what close observers at the time thought were the triggering events in a sample of 262 larger regime changes between 1960 and 2015 in 170 countries. The sample consists of all changes in the Polity index with a numerical rating above 3 (i.e. of 4 or more). The source for the triggering events is country-relevant articles in The Economist. Triggering events are classified in a (2 × 2) table with four cells: domestic political (DP), domestic economic (DE), external political (XP), and external economic (XE), which remains empty. By far the most common is DP, but the domestic political events prove to be very different. Thus, most jumps are exogenous in the perspective of development. [ABSTRACT FROM AUTHOR]

A half century after he developed it, Gordon Tullock's idea of rent seeking is more relevant than ever. Though the concept has gained widespread acceptance among academics, it has yet to make an impression on public discourse. But with favoritism, corruption, and the power of special interests in the headlines, the idea deserves broader attention. In this special issue of Public Choice we commemorate Tullock's insight. Contributors examine the making of this classic piece and its effect on economic theory, empirical analysis, and economic teaching. Original papers also develop new insights into questions of development, the control of violence, corruption, culture, equity, regulation, rent extraction, the Political Coase Theorem, and more. [ABSTRACT FROM AUTHOR]

Some 30 years ago Gordon Tullock, in his capacity as Editor of Public Choice, made a pointed effort to motivate researchers to measure and quantify resource investments in rent-seeking activities. Despite Tullock's identification of this aspect of rent-seeking as a significant gap in the literature and call to arms, this remains an under-studied topic of importance. Why is this? In our opinion, the answer is that, for a variety of reasons, measuring rent-seeking turns out to be very difficult. In this paper we identify and discuss several of the difficulties, both theoretical and empirical, although we concede that our treatment surely is not exhaustive. [ABSTRACT FROM AUTHOR]