A Treatise on the Family. G. S. Becker. Cambridge, MA: Harvard University Press. 1981. Gary Becker is one of the most famous and influential economists of the second half of the 20th century, a fervent contributor to and expounder of the University of Chicago free-market philosophy, and winner of the 1992 Nobel Prize in economics. Although any book with the word "treatise" in its title is clearly intended to have an impact, one coming from someone as brilliant and controversial as Becker certainly had such a lofty goal. It has received many article-length reviews in several disciplines (Ben-Porath, 1982; Bergmann, 1995; Foster, 1993; Hannan, 1982), which is one measure of its scholarly importance, and yet its impact is, I think, less than it may have initially appeared, especially for scholars with substantive interests in the family. This book is, its title notwithstanding, more about economics and the economic approach to behavior than about the family. In the first sentence of the preface, Becker writes "In this book, I develop an economic or rational choice approach to the family." Lest anyone accuse him of focusing on traditional (i.e., material) economics topics, such as family income, poverty, and labor supply, he immediately emphasizes that those topics are not his focus. "My intent is more ambitious: to analyze marriage, births, divorce, division of labor in households, prestige, and other non-material behavior with the tools and framework developed for material behavior." Indeed, the book includes chapters on many of these issues. One chapter examines the principles of the efficient division of labor in households, three analyze marriage and divorce, three analyze various child-related issues (fertility and intergenerational mobility), and others focus on broader family issues, such as intrafamily resource allocation. His analysis is not, he believes, constrained by time or place. His intention is "to present a comprehensive analysis that is applicable, at least in part, to families in the past as well as the present, in primitive as well as modern societies, and in Eastern as well as Western cultures." His tone is profoundly conservative and utterly skeptical of any constructive role for government programs. There is a clear sense of how much better things were in the old days of a genderbased division of labor and low market-work rates for married women. Indeed, Becker is ready and able to show in Chapter 2 that such a state of affairs was efficient and induced not by market or societal discrimination (although he allows that it might exist) but by small underlying household productivity differences that arise primarily from what he refers to as "complementarities" between caring for young children while carrying another to term. Most family scholars would probably find that an unconvincingly simple explanation for a profound and complex phenomenon. What, then, is the salient contribution of Treatise on the Family? It is not literally the idea that economics could be applied to the nonmarket sector and to family life because Becker had already established that with considerable success and influence. At its core, microeconomics is simple, characterized by a belief in the importance of prices and markets, the role of self-interested or rational behavior, and, somewhat less centrally, the stability of preferences. It was Becker's singular and invaluable contribution to appreciate that the behaviors potentially amenable to the economic approach were not limited to phenomenon with explicit monetary prices and formal markets. Indeed, during the late 1950s and throughout the 1960s, he did undeniably important and pioneering work extending the domain of economics to such topics as labor market discrimination, fertility, crime, human capital, household production, and the allocation of time. Nor is Becker's contribution the detailed analyses themselves. Many of them are, frankly, odd, idiosyncratic, and off-putting. …

A Treatise on the Family

Trust: The Social Virtues and the Creation of Prosperity

Over the past few years, there has been a steadily increasing interest on the part of economists in happiness research. We argue that reported subjective well-being is a satisfactory empirical approximation to individual utility and that happiness research is able to contribute important insights for economics. We report how the economic variables income, unemployment and inflation affect happiness as well as how institutional factors, in particular the type of democracy and the extent of government decentralization, systematically influence how satisfied individuals are with their life. We discuss some of the consequences for economic policy and for economic theory.

What Can Economists Learn from Happiness Research

List of Figures ix List of Tables xi Preface and Acknowledgments xiii Introduction 1 PART I: VETO PLAYERS THEORY 17 One: Individual Veto Players 19 Two: Collective Veto Players 38 PART II: VETO PLAYERS AND INSTITUTIONAL ANALYSIS 65 Three: Regimes: Nondemocratic, Presidential, and Parliamentary 67 Four: Governments and Parliaments 91 Five: Referendums 116 Six: Federalism, Bicameralism, and Qualified Majorities 136 PART III: POLICY EFFECTS OF VETO PLAYERS 161 Seven: Legislation 165 Eight: Macroeconomic Policies 187 PART IV: SYSTEMIC EFFECTS OF VETO PLAYERS 207 Nine: Government Stability 209 Ten: Judiciary and Bureaucracies 222 Eleven: Veto Players Analysis of European Union Institutions 248 Conclusion 283 Bibliography 291 Index 309

Veto Players: How Political Institutions Work

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The Theory of Industrial Organization

This paper uses recent regulations that have required some companies to increase the number of outside directors on their boards to generate estimates of the effect of board independence on performance that are largely free from endogeneity problems. Our main finding is that the effectiveness of outside directors depends on the cost of acquiring information about the firm: when the cost of acquiring information is low, performance increases when outsiders are added to the board, and when the cost of information is high, performance worsens when outsiders are added to the board. The estimates provide some of the cleanest estimates to date that board independence matters, and the finding that board effectiveness depends on information cost supports a nascent theoretical literature emphasizing information asymmetry. We also find that firms compose their boards as if they understand that outsider effectiveness varies with information costs.

When Are Outside Directors Effective

https://weblaw.usc.edu/centers/class/class-workshops/cleo-working-papers/documents/C07_13_paper.pdf

When are outside directors effective

In 23 American states, citizens can initiate and approve laws by popular vote; in the other 27 states, laws can be proposed only by elected representatives. This paper compares the fiscal behavior of state and local governments over the last 30 years under these two institutional arrangements. The main finding is that spending is significantly lower, on the order of 4 percent, in states with voter initiatives than in pure representative states. It is also found that local spending is higher and state spending is lower in initiative states. On the revenue side, initiative states rely less on broad-based taxes and more on charges tied to services. Taken together, the evidence indicates that the initiative leads to a reduction in the overall size of the government sector and suggests that it causes a decline in the level of redistributional activity.

Fiscal Effects of the Voter Initiative: Evidence from the Last 30 Years

This article examines the stock market response to acquisition announcements during and immediately after the conglomerate merger wave of the late 1960s. The main finding is that acquirer shareholders benefited from diversification acquisitions, which implies that diversification was not driven by managerial objectives. It is also shown that the market responded positively to bidders who retained the management of target companies and negatively to bidders who replaced target management. This is consistent with the hypothesis that the market favored acquisitions intended to exploit managerial synergies. It suggests that the market disliked takeovers that were motivated to discipline target management. Evidence on buyer and target price-earnings ratios is presented that is inconsistent with the conjecture that conglomerates were able to mislead investors by earnings-per-share manipulation.

Takeover Motives during the Conglomerate Merger Wave

The purpose of this essay is to describe the practice and theory of the increasingly important political phenomenon of direct democracy and the main lessons from the scholarly literature. Many questions remain to be answered, but the emerging view is that direct democracy works--allowing the general public to participate in lawmaking often seems to improve the performance of government.

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John G. Matsusaka

Papers

When Are Outside Directors Effective

When are outside directors effective

Fiscal Effects of the Voter Initiative: Evidence from the Last 30 Years

Takeover Motives during the Conglomerate Merger Wave

Direct Democracy Works