David M. Primo

Estimating the Impact of State Policies and Institutions with Mixed-Level Data

Researchers are often interested in the effects of state policies and institutions on individual behavior or other outcomes in sub-state-level observational units, such as election results in state legislative districts. In this article, we examine the issue of clustered data in state and local politics research and the analytical problems it can cause. Standard estimation methods applied in most regression models do not properly account for the clustering of observations within states, leading analysts to overstate the statistical significance of coefficient estimates, especially of state-level factors. We discuss the theory behind two approaches for dealing with clustering—clustered standard errors and multilevel modeling—and argue that calculating clustered standard errors is a more straightforward and practical approach, especially when working with large datasets or many cross-level interactions. We demonstrate the relevance of this topic by replicating a recent study of the effects of state post-registration laws on voter turnout (Wolfinger, Highton, and Mullin 2005).

Corporate PAC Campaign Contributions in Perspective

There is a vast empirical literature on the allocation of corporate PAC contributions in Congressional elections and the influence that these contributions have on the policy-making process. The attention given to PAC contributions is far in excess of their actual importance. Corporate PAC contributions account for about 10% of Congressional campaign spending and major corporations allocate far more money to lobbying or philanthropy than their affiliated PACs make in contributions.

Stop Us Before We Spend Again: Institutional Constraints on Government Spending

A distributive politics model establishes that the presence of exogenously enforceable spending limits reduces spending and that the effect of executive veto authority is contingent on whether spending is capped and whether the chief executive is a liberal or conservative. Surprisingly, when spending limits are in place, governments with conservative executives spend more than those with more liberal chief executives. Limits are welfare improving, as is the executive veto when it leads to the building of override coalitions. Using 32 years of US state budget data, this paper also establishes empirically that strict balanced budget rules constrain spending and also lead to less pronounced short-term responses to fluctuations in a states economy. Party variables like divided government and party control of state legislatures tend to have little or no direct effect, with political institutions and economic indicators explaining much of the variation in state spending.

Distributive Politics and the Law of 1/n*

Distributive politics models often predict that legislators will demand inefficiently large projects, with inefficiency increasing in the number of districts, and that this will translate into larger projects and higher spending. The relationship between efficiency and legislature size is often referred to as the “law of 1/n”(Weingast, Shepsle, and Johnsen 1981). We demonstrate that the “law of 1/n” result with respect to project sizes and total spending is dependent on several factors, including the type of good being provided, the costs of raising revenue, and whether the local government has to share in the projects cost with the central government. In general, the “law of 1/n” need not hold for total government spending, and in fact a “reverse law of 1/n” often holds. In light of our theoretical findings, we reassess the empirical literature on this topic. The results have implications for a wide variety of applications in American and comparative politics.

Modernizing Political Science: A Model-Based Approach

Although the use of models has come to dominate much of the scientific study of politics, the discipline’s understanding of the role or function that models play in the scientific enterprise has not kept pace. We argue that models should be assessed for their usefulness for a particular purpose, not solely for the accuracy of their predictions. We provide a typology of the uses to which models may be put, and show how these uses are obscured by the field’s emphasis on model testing. Our approach highlights the centrality of models in scientific reasoning, avoids the logical inconsistencies of current practice, and offers political scientists a new way of thinking about the relationship between the natural world and the models with which we are so familiar.

The Effect of Initiatives on Local Government Spending

Tools of direct democracy, such as the citizen initiative, are available at both the state and local levels in the United States, yet models of the process typically do not consider these institutions in tandem. In this article, I develop a model of local fiscal policy that incorporates the impact of a statewide as well as a local initiative process. I posit that the statewide initiative process leads to lower levels of state spending, additional spending mandates on the local level, and reduced deadweight costs of taxation, with these three factors leading to an increase in local spending. I then show that the ability of interest groups to secure particularistic spending through the local initiative has a similarly pro-spending impact. Subsequently, I explore data from the year 2000 in over 600 cities with a population greater than 25,000 and find that the spending-enhancing effects of the local initiative are strong when signature requirements are low, leading to a 12—14 percent increase in spending compared to local governments without such an initiative process in place.

Bankruptcy Law and Entrepreneurship

We explore the link between bankruptcy laws and entrepreneurship in the U.S states. Using two measures of entrepreneurship capturing alternative conceptions of this phenomenon, we find that bankruptcy laws more favorable to debtors lead to increased levels of self-employment in some cases, though the effect is non-monotonic in the level of assets protected by the law. Counter to the conventional wisdom, however, more generous laws are linked to lower levels of “innovative” entrepreneurship. The paper concludes by suggesting why developing more refined measures of entrepreneurship is necessary to better understand the impact of public policies on this most vital of human activities.We explore the link between bankruptcy laws and entrepreneurship in the U.S states. Using two measures of entrepreneurship capturing alternative conceptions of this phenomenon, we find that bankruptcy laws more favorable to debtors lead to increased levels of self-employment in some cases, though the effect is non-monotonic in the level of assets protected by the law. Counter to the conventional wisdom, however, more generous laws are linked to lower levels of “innovative” entrepreneurship. The paper concludes by suggesting why developing more refined measures of entrepreneurship is necessary to better understand the impact of public policies on this most vital of human activities.

Policy dynamics and electoral uncertainty in the appointments process

By incorporating electoral uncertainty and policy dynamics into three two-period models of the appointments process, we show that gridlock may not always occur under divided government, contrary to the findings of static one-shot appointments models. In these cases, contrary to the ally principle familiar to students of bureaucratic politics, the president or the confirmer is willing to move the court away from his or her ideal point as a way to insulate against worse outcomes in period two. By demonstrating how a simple set of changes to a workhorse model can change equilibrium outcomes significantly, this paper provides a foundation for reconsidering the static approach to studying political appointments.

Budgetary Reform and Formal Modeling: A Comment on Gabel and Hager

In a recent article, Gabel and Hager argue that the line-itemveto and the balanced budget amendment promote (BBA) and mayincrease pork-barrel spending. In their discussion of thebalanced budget amendment, Gabel and Hager present one exampleto support their claim. I demonstrate that the effect of a BBAin their model is highly contingent on parameter values, andthat their results hold only for a specific set of parametervalues. Further, in a generalized model where the balancedbudget amendment is crafted endogenously, the BBA that isenacted has the effect of either decreasing spending orkeeping it constant.