Public Choice最新文献

We examine the effect of regional favoritism on the access of firms to credit. Using firm-level data on a large sample of 29,000 firms covering 47 countries, we investigate the hypothesis that firms in the birth regions of national political leaders have better access to credit. Our evidence suggests that firms located in birth regions of political leaders are less likely to be credit constrained. We further find that firms in leader regions feel less discouraged in applying for loans and also get preferential lending from banks.

I explore a previously neglected mechanism of mass mobilization in autocracies. Revolutionary leaders may deliberately provoke punishment from the incumbent regime to signal their political conviction and thus encourage citizens to identify with and support the revolutionary movement. I model the interplay of repression, criticism, and revolutionary actions as a dynamic game with incomplete information about the leader’s type. The role of the revolutionary leader is to enable people to identify with the movement by credibly embodying political change. From the incumbent’s perspective, repression turns out to be a double-edged sword. On the one hand, a severe punishment of critics increases citizens’ cost of participating in revolutionary actions. On the other hand, harsh repressions may simultaneously establish a trustworthy leader whom people want to follow in order to replace the current political regime. My results thus help explain a stylized fact, namely that revolutionary leaders sometimes need to fail before they can succeed.

Standard economic theory suggests that government is a cheaper way to internalize prevention externalities than private entities. This paper argues that this view depends on unexamined assumptions about transaction costs and the costs of improving state capacity. Public and private entities might be cheaper ways to internalize prevention externalities depending on differences in transaction costs, state capacity, and the willingness to improve public health. The 1878 yellow fever epidemic throughout the lower Mississippi Valley—one of the worst epidemiological disasters in the United States during the nineteenth century—provides ample context to examine this argument. Primary responses include municipal quarantine, flight from towns and cities, and the formation of refugee camps. Whereas municipal governments cheaply provided some quarantine services, individuals and private actors cheaply fled from infected areas and governed refugee camps. Responses in Memphis, one of the worst affected areas, further demonstrate that differences in these costs influence prevention externalities and how public and private entities respond to complex disease problems.

In this paper, we evaluate the effect of international terrorism on the civil liberties of the targeted states from 1972 through 2018, using a cross-country dataset. To deal with the problem of selection and control for the pre-attack dynamics, we use a potential outcomes framework to uncover the effect of the treatment on the outcome variable over time. In democracies, civil liberties are restricted after an international terrorist attack. The identified impact of international terrorism on civil liberties suggests an extended “state of emergency” period, as explained by the significant negative initial response, 1–8 years after an international attack occurs. Contrarily, we provide evidence for increased respect for civil liberties 2–10 years after an international attack occurs in authoritarian settings. The estimated effect appears to be non-negligible and robust across various specifications.

How can people who do not rely on effective government institutions establish property rights, enforce agreements, and facilitate social and economic exchange? Scholars of public choice have long studied anarchic settings to understand foundational questions of political economy, such as the viability and robustness of self-enforcing exchange, the emergence of coercive power, and the Madisonian challenge of self-enforcing constraints. Recent work turns this conceptual, theoretical, and empirical work to the topic of the underground economy and criminal governance. Because of its illicit nature, people involved in criminal activity cannot rely on legitimate, state-based legal institutions. In this absence, a wide range of criminal governance institutions and organizations have emerged to facilitate illicit activity. Based on studies of California prison gangs, I show how classic public choice approaches explain why incarcerated people need extralegal governance, survey some of the internal governance solutions they rely on, and demonstrate how and why they govern, not only themselves, but thousands of people inside and outside of prison.

Private infrastructure investment is profitable only if followed by a sufficiently high price, but pricing may be subject to regulation. We study markets where regulation is determined by elected policymakers. If price regulation is subject to manipulation then private investors may delay investment fearing an electoral pressure on future prices, leading to a holdup inefficiency. This could possibly be alleviated by regulatory independence, where policymakers can no longer influence the prices. However, to encourage investment the policymakers may install regulation that serves the interests of the infrastructure owners (“regulatory capture”) and lead to inefficient pricing. Regulatory independence can then be detrimental as it may entrench this capture. Whether inefficiencies can be moderated by creating regulatory independence therefore depends on the policymakers’ objectives. We provide experimental evidence for such capture entrenchment and detrimental effects of regulatory independence that therefore arise. Even without independence, the uninformed voters do not provide sufficient pressure to remove these effects. On the other hand, we observe that regulatory independence does reduce holdup inefficiency when policymakers align with the public interest.

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

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.

Historically and currently, federal policies governing American Indian country do not typically resemble policies that economists think would stimulate economic and cultural prosperity. This special issue employs Public Choice and New Institutional Economics to analyze the origins and consequences of these policies. This approach, which emphasizes rent seeking, government failure, and formal and informal institutions offers new insights into the understanding of persistent barriers to prosperity and sovereignty in Indian country and what changes might be necessary to break down the obstacles.

Natural disasters and related prevention policies can affect voter decisions. In this study, we analyze how the occurrence of natural disasters changes voter behavior in municipal elections and how prevention policies can mitigate the impact of such catastrophic events on budget accounts and might potentially be rewarded by citizens in upcoming elections. We exploit original data on French municipalities where incumbents sought re-election between 2008 and 2020. To estimate the probability of re-election at the municipal level in the event of a natural disaster we apply a Heckman model based strategy to avoid selection bias. We find that the occurrence of a natural disaster significantly decreases the chances of re-election of incumbent mayors. However, although we show that natural hazard prevention plans can mitigate the impact of catastrophic events on budget accounts, they are not rewarded by citizens in upcoming elections. The myopia hypothesis is confirmed by our findings: voters reward incumbents for delivering investment spending or decreasing debt but not for investing in disaster preparedness.