Arthur T. Denzau

Legislators and Interest Groups: How Unorganized Interests Get Represented

This paper derives a supply price for public policy using a constrained maximization model. In the model, three sets of agents each have preferences over outcomes: organized interest groups offer campaign contributions to improve their own wealth, voters offer votes to obtain outcomes closer to their most preferred outcomes, and legislators seek both campaign contributions and votes to obtain reelection. A given legislators supply price for policy is shown to depend on the productivity of his effort, as determined by committee assignments, priority and ability, and by the preferences of his unorganized constituency in the home district. Two extreme assumptions about the effectiveness of campaign spending in eliciting votes are used to illustrate the comparative statics properties of the model. The prediction of the model is that interest groups will, in general, seek out legislators whose voters are indifferent to the policy the interest group seeks. Thus, voters who do have preferences over policy are in effect represented, even though they are not organized.

Gatekeeping and Monopoly Power of Committees: An Analysis of Sincere and Sophisticated Behavior

By modeling sophisticated forms of committee behavior-sophistication with full information and expected utility maximization with incomplete information-this article more fully conveys the nature and importance of committee power than does previous work based on sincere committee behavior. Under the germaneness rule, for example, sophisticated committee behavior greatly expands the set of structure-induced equilibrium points. Under the closed rule, as another example, sophisticated committee behavior, based on compromise and a careful crafting of bills, moves legislative outcomes closer to the committees preferred outcomes. Incomplete information and risk aversion lead committee members to behave more cautiously, thereby introducing more inertia into the legislative process and expanding equilibrium sets.

We voted for this?: Institutions and educational spending

Abstract This paper examines two institutional factors that influenced school spending in Missouri during the 1970s. First, the retirement of a bond issue is usually accompanied by an increase in the operating tax rate (which requires voter approval). The retirement of a bond issue does not reduce, but apparently obscures, the cost of a tax increase. In addition, a change in assessment practices in 1975 allowed some districts to increase their effective operating rates without voter approval. Each of these factors led to substantial tax increases in the affected districts.

Determinants of local school spending: Some consistent estimates

ConclusionThe traditional median voter model predicts that median income and taxprice are the primary determinants of local school spending levels. It further implies that lump-sum grants wills be utilized like private income, and thus income and grant coefficients should be the same. Our comprehensive search technique shows that, excluding equalized assessed value, these predictions hold up quite well over 2048 specifications. Income and taxprice elasticities are reasonable and tightly distributed, with income and blockgrant effects of the same general size. As note above, any hint of flypaper effect is completely dependent on the inclusion of equalized assessed value in the regression equation. Since the state of New York has annual district level tax levy elections, it would be hard to rationalize bureaucratic power or agenda control as capable of producing flypaper-type effects, so this absence is not surprising. Future research should (1) Investigate the specification sensitivity of flypaper effects with other datasets and wealth variables; and (2) Examine election and tax rules for the possibility of budget-maximizing actions by school officials. Finally, the consistently positive effects of private schooling, % nonwhite and % in poverty, suggest that future work should attempt to model non-linear income effects.

Constitutional change and agenda control

The state of positive modeling of constitutional choices is not much beyond where Buchanan and Tullock (1962) left it over twenty years ago. Since there has been substantial progress in the study of postconstitutional or ordinary policy decisionmaking, this paper reports an attempt to use these public choice ideas to shed light on the questions of constitutional choice. In particular, I try to see how outcomes in the constitutional arena may differ from those in the policy arena, and then use this insight to analyze the calling of constitutional conventions.

Bayesian estimation of proportions with a cross-entropy prior

This paper suggests estimators of the frequencies (N8) or proportions {N8/N) of N distinguishable objects contained in S categories; given various types of information, We consider information in the form of exact constraints on the N8, sample frequencies, and frequencies of related data, The analysis uses Bayesian methods, where the prior distribution is assumed to be a function of the cross-entropy between the N8 and a reference distribution, We show the relationship between our estimator and the log-linear and logit models and also present a sampling experiment to compare our proposed estimator with the iterated proportional fitting estimator.

Tax systems and tax shares

ConclusionsHow can one use the results derived in Sections 3 and 4? The type of use one can make in theoretical voting analysis was suggested in Section 4 already. Comparative statics results on how desired budget levels vary with tax system parameters (such as number of exemptions, size of tax credits, etc.) can be obtained, as well as for varying the tax system used. For empirical work, the application requires some further discussion.Consider a public jurisdiction financing a public good, x, using some tax system. Suppose that individual demand is given by The relevant price needed is the taxprice, which can be found by deriving the associated taxshare system and then using τ(i)p(x) as the taxprice for voter i. The lump-sum component of the taxshare system is subtracted from income to yield the appropriate adjusted income term. This leaves a demand equation of the form: The new taxprice and adjusted income variables can now be measured and used in the empirical analysis. Use of the theoretically correct price and income variables should lead to better estimates of price and income elasticities.More interestingly, one can ask questions about constitutional choices, as suggested by Buchanan (1967: Part II). For example, for a given society, what tax system (and marginal parameters) will imply the largest public sector? Can one make any generalizations about efficient characteristics of the resulting post-constitutional outcomes? Further, how do considerations of excess burden affect such results?9