ALBERT

Notizen: Abstract A growing theoretical literature on optimal taxation predicts that governments will set the tax rates on money holdings and on more traditional tax bases to minimize the deadweight losses of collecting government revenue. Under the presumption that relative collection costs and tax bases have not changed significantly over time, the empirical time-series seigniorage literature has focused on the theory's tax smoothing implication, finding only weak support. We show that changes in collections costs and tax bases played an important role in the determination of tax composition and find stronger support for tax smoothing when this is taken into account.

Notizen: Abstract A model of voting behavior is developed that predicts that individuals vote if the absolute value of voting for or against a referendum exceeds the cost of voting. The results obtained from examining voting on city-county consolidation referenda and in New York state (1) provide support for the relatively untested prediction that turnout rises as the absolute value of the mean gains resulting from an electoral outcome increase and (2) augment the evidence that turnout rises as the probability of altering an electoral outcome increases and falls as the cost of voting rises.

Notizen: Abstract Between 1950 and 1980 the number of school districts fell from 83,642 to 15,987. Data for the fifty states for 1950, 1960, 1970, and 1980 are used to identify the factors that contributed to this decline. The focus is on the tradeoff between cost savings through scale economies (a few large districts) and a diverse population's demand for choice in public schooling (many small districts). We find that much of the decline in the number of school districts has resulted from: 1) the decline in the farm population and increase in population density, which has made it easier to take advantage of scale economies; 2) the growing importance of state aid, which reduces quality variation among districts within a state; and 3) the increase in the fraction of teachers that belong to the National Education Association teacher's union, which may reflect increased political influence used to lower the costs of organizing. Several states have laws that require school district and county (or state) boundaries to coincide. In the last section of the paper we estimate the costs of these laws. First, we compare the predicted number of districts, using the regression results in the earlier section of the paper, to the actual number in these states. Then we estimate a demand equation that is used to generate the dollar amount of the cost due to diminished interjurisdictional competition.

Notizen: Conclusion In this paper, we have provided some support for several hypotheses about the determinants of which governors get reelected. The benefit from being a member of a particular party varies from state to state and from year to year. Personal characteristics such as age are also important. The logits give some support to the importance of coalition formation; reelection is easier in states with low voter turnout and in farm states. The paper is most concerned with the connection between the economic performance and the electoral success of incumbent candidates for governor, and we find support for a model of electoral acountability, in which governors are powerful in state governments and state governments have the ability to differentially tax fixed factors relative to neighboring states. This paper raises some important issues regarding the measurement of variables in political economy, which have wide applicability to other studies in the economics of politics. Peltzman (1988) finds that the difference between the growth rate in state personal income and the national growth rate over a one to four year period prior to the election does not affect gubernatorial electoral outcomes. Concurrently, we find that the current year's growth rate in state personal income and its difference from the national growth rate are not significantly related to electoral success but that the average deviation from predicted state personal income during the governor's tenure in office is significantly related to the odds of getting reelected. That is, the data reject simplistic views of voter behavior and support a sophisticated model of voter behavior. Similarly, Peltzman (1988) has greater success using more sophisticated, cumulative measures of national economic performance. This suggests that great care must sometimes be taken to create variables that are capable of giving our economic models a fair hearing. Voting studies often find that only current period effects matter, which is attributed either to voter myopia or — and this is the more popular explanation nowadays — to the confinement of effects by rational expectations to current period, ‘white noise’ effects. The specifications in these voter studies ignore the cumulative information generated in political economy. Both our results and Peltzman's (1988) results suggest that variables that reflect this cumulative information may be more successful than variables that are based only on the current year.

Notizen: Abstract We attempt to explain why some constitutents are well informed and others are poorly informed about the positions taken by their U.S. Senators. The acquisition of political information is modeled in a Bayesian framework. A constituent with virtually no information about a candidate assigns him an average position on a liberal/conservative spectrum. As more political information is acquired with more political involvement, the constituent shifts her prior toward the politician's actual position and thus has a smaller error in assessing positions taken by her representative. In the Bayesian framework, voters make larger errors in evaluating the records of party mavericks than of typical party members. The model is tested using data from the 1982 American National Election Study. Data on the respondent's perceived ideology of their Senators and their socioeconomic characteristics are combined with information on the Senators' actual ideology, length of time in the Senate, political party, and candidacy for re-election in 1982. The empirical analysis provides support for our predictions.