An Economic Theory of Political Action in a Democracy
01 Apr 1957-Journal of Political Economy (The University of Chicago Press)-Vol. 65, Iss: 2, pp 135-150
TL;DR: For example, this article argued that the private sector is a self-regulating mechanism and that any government action beyond maintenance of law and order is "interference" with it rather than an intrinsic part of it.
Abstract: IN SPITE of the tremendous importance of government decisions in every phase of economic life, economic theorists have never successfully integrated government with private decision-makers in a single general equilibrium theory. Instead they have treated government action as an exogenous variable, determined by political considerations that lie outside the purview of economics. This view is really a carry-over from the classical premise that the private sector is a self-regulating mechanism and that any government action beyond maintenance of law and order is "interference" with it rather than an intrinsic part of it.2 However, in at least two fields of economic theory, the centrality of government action has forced economists to formulate rules that indicate how government "should" make decisions. Thus in the field of public finance, Hugh Dalton states:
Citations
More filters
TL;DR: The use of spatial ideas to interpret party competition is a universal phenomenon of modern politics as discussed by the authors, and most spatial interpretations of party competition have a very poor fit with the evidence about how large-scale electorates and political leaders actually respond to politics.
Abstract: The use of spatial ideas to interpret party competition is a universal phenomenon of modern politics. Such ideas are the common coin of political journalists and have extraordinary influence in the thought of political activists. Especially widespread is the conception of a liberal-conservative dimension on which parties maneuver for the support of a public that is itself distributed from left to right. This conception goes back at least to French revolutionary times and has recently gained new interest for an academic audience through its ingenious formalization by Downs and others. However, most spatial interpretations of party competition have a very poor fit with the evidence about how large-scale electorates and political leaders actually respond to politics. Indeed, the findings on this point are clear enough so that spatial ideas about party competition ought to be modified by empirical observation. I will review here evidence that the “space” in which American parties contend for electoral support is very unlike a single ideological dimension, and I will offer some suggestions toward revision of the prevailing spatial model.
1,501 citations
TL;DR: In this article, balanced budget redistribution between socioeconomic groups is modeled as the outcome of electoral competition between two political parties, and a sufficient condition for existence is given, requiring that there be enough heterogeneity with respect to party preferences in the electorate.
Abstract: This paper models balanced-budget redistribution between socio-economic groups as the outcome of electoral competition between two political parties. Equilibrium is unique in the present model, and a sufficient condition for existence is given, requiring that there be enough ‘stochastic heterogeneity’ with respect to party preferences in the electorate. The validity of Hotelling's ‘principle of minimum differentiation’, and of ‘Director's Law’, are examined under alternative hypotheses concerning administrative costs of redistributions, and voter's possibilities both of abstaining from voting and of becoming campaign activists for one of the parties. The policy strategy of expected-plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality. Incomes are fixed and known, so lump-sum taxation is feasible. However, constraints on tax/transfer differentiation between individuals are permitted in the analysis.
1,486 citations
TL;DR: This article was originally presented as the President's address at the meeting of the Society for the Study of Public Choice at the Hilton Hotel, Phoenix, Arizona, March 30, 1984.
Abstract: This article was originally presented as the President's address at the meeting of the Society for the Study of Public Choice at the Hilton Hotel, Phoenix, pcs. Arizona, March 30, 1984. I thank the National Science Foundation for support (Grant ¹ SES 83-09829), and William Erickson-Blomqvist, Roy Gardner, Robert Herzberg, Larry Kiser, Vincent Ostrom, Roger Parks, Paul Sabatier, Reinhard Celty, Kenneth Shepsli and York for Wilburn comments on the article at the stage of its preparation.
802 citations
Posted Content•
TL;DR: This article reviewed existing empirical evidence on the relationship between institutional rules, political representation and public policy outcomes and developed some new directions for research, presenting a small number of novel exploratory results.
Abstract: A rich array of institutional diversity makes the United States an excellent place to study the relationship between political institutions and public policy outcomes. This Paper has three main aims. First, it reviews existing empirical evidence on the relationship between institutional rules, political representation and policy outcomes. It aims to place the literature into a broader context of theoretical and empirical work in the field of political economy. Second, it develops a parallel empirical analysis that updates studies in the literature and re-examines some of the claims made, in a setting unified both in terms of policy outcomes and the period under study. Third, the paper develops some new directions for research, presenting a small number of novel exploratory results.
796 citations
Cites background or methods from "An Economic Theory of Political Act..."
...…(most often single-peakedness) imply that the median voter’s preferred point is a Condorcet winner,5 and (ii) the observation due to Anthony Downs (1957) that two parties who care only about winning would pick out the Condorcet winner if they could commit to policies during 5A Condorcet…...
[...]
...The motivation comes from two key contributions — (i) the observation (most often attributed to Duncan Black (1987)) that restrictions on preferences (most often single-peakedness) imply that the median voter’s preferred point is a Condorcet winner,5 and (ii) the observation due to Anthony Downs (1957) that two parties who care only about winning would pick out the Condorcet winner if they could commit to policies during 5A Condorcet winner is a policy that would beat all others in binary comparisons based on majority rule....
[...]
...These can be described both in terms of setting party platforms as in the classical Downsian approach (Downs (1957)) or in terms of candidate choices as in the citizen-candidate approach of Martin Osborne and Al Slivinsky (1996) and Besley and Coate (1997)....
[...]
...The history of campaign finance reform, details of the current laws and innovations in the states is provided in Anthony Corrado, Thomas Mann, Daniel Ortiz, Trevor Potter and Frank Sorauf (1997)....
[...]
TL;DR: The authors show that there is no relationship between globalization and the level of labor-market risks (in terms of employment and wages), whereas the uncertainty and dislocations caused by deindustrialization have spurred electoral demands for welfare state compensation and risk sharing.
Abstract: An influential line of argument holds that globalization causes economic uncertainty and spurs popular demands for compensatory welfare state spending. This article argues that the relationship between globalization and welfare state expansion is spurious and that the engine of welfare state expansion since the 1960s has been deindustrialization. Based on cross-sectional-time-series data for fifteen OECD countries, the authors show that there is no relationship between globalization and the level of labor-market risks (in terms of employment and wages), whereas the uncertainty and dislocations caused by deindustrialization have spurred electoral demands for welfare state compensation and risk sharing. Yet, while differential rates of deindustri-alization explain differences in the overall size of the welfare state, its particular character—in terms of the share of direct government provision and the equality of transfer payments—is shaped by government partisanship. The argument has implications for the study and the future of the welfare state that are very different from those suggested in the globalization literature.
771 citations