John Londregan

REDISTRIBUTIVE POLITICS AND ECONOMIC EFFICIENCY

The political process often compensates the losers from technical change or international competition in an economically inefficient way, namely by subsidizing or protecting declining industries instead of encouraging the movement of resources to other more productive uses. We find that a dynamic inconsistency in the game of redistributive politics contributes to this outcome. To achieve economically efficient outcomes, it is necessary that those making economically inefficient choices not be given offsetting transfers. But the political process distributes income on the basis of political characteristics, which are in general different from the economic characteristics that are rewarded by the market. We identify circumstances in which the inefficient choosers have desirable political characteristics and are therefore immune from threats of having to face the economic consequences of their choices.

Fiscal federalism and redistributive politics

Abstract We consider the interaction between redistributive politics at central and local levels in a federal system, and characterize the factors influencing success in redistributive politics in both federal and unitary systems. We examine how the political characteristics of different states and groups give them better or worse outcomes in a federal system as opposed to a unitary system. We examine possibilities of multiple equilibria with divided government between the two layers. We analyze the choice between block grants and matching grants. We also examine the impact of federalism on the incentives for geographic mobility.

Comparing Committee and Floor Preferences

We propose a statistical model which permits us to test whether congressional committees are preference outliers. Unlike previous tests, our model acknowledges that each representatives policy preferences are unique and that a comparison of committee and floor preferences must account for this heterogeneity. We apply our model to the House of Representatives over the period 1951 to 1984 and identify many more committee outliers than previous research.

Entry and Exit over the Industry Life Cycle

This article presents a theoretical model of the rivalry between two firms in a market that undergoes a life cycle of growth and eventual decline. Firms in this market have the option of exit and reentry. In the equilibrium for the growth phase, high entry costs can act like high exit costs, thereby conveying a commitment advantage. For some parameter configurations, this advantage is sufficient to enable a high cost firm to preempt its lower cost rival. During the decline phase, the smaller duopolist is able to outlast its rival, provided that the smaller firms reentry costs are positive.

Political Power and the Credibility of Government Debt

Abstract If political power and motives to invest in government bonds are positively correlated across voting groups, then a self-selection equilibrium can arise where the governments promise to repay its debt is credible. We illustrate this using a formal model where the alternative use of wealth is to acquire human capital. Journal of Economic Literature Classification Numbers: D72, E60, H63.

Ethnicity and Leadership Succession in Africa

This analysis uses cross-national data to test hypotheses from the literature on ethnicity in African politics. The first hypothesis is that, all else being equal, the larger the population share of the leaders ethnic group, the lower the probability that the leader loses power. We reject this hypothesis and show that leaders from larger ethnic groups run relatively greater risks of losing power than those from smaller ethnic groups. Nor do leaders from smaller ethnic groups resort more to nonconstitutional means of leadership change. We also show that African leaders are disproportionately likely to be replaced by leaders from their own ethnic group.

STRATEGIES FOR MODELING EXHAUSTIBLE RESOURCE SUPPLY

The feature that distinguishes markets for exhaustible resources from markets for other resources is that a nonrenewable stock is being discovered, produced, traded, and consumed. Hence, the characterization of this stock or resource base and the factors determining the rate and extent of exploration and exploitation are fundamental to modeling exhaustible resource markets. Our purpose in this chapter is to present alternative strategies that may be employed in providing such a characterization. Thus, rather than cataloging what is known about the supply of various exhaustible resources, we focus on practical methods for modeling the supply of exhaustible resources. Other chapters in this volume address exploration for and extraction of exhaustible resources at a theoretical level. Accordingly, we focus on assessing the extent to which theory has been used and found to be a satisfactory foundation for modeling resource supply 1. As this focus on applied modeling of the supply of depletable resources suggests, we do not discuss the preferences that impel demand for these resources nor do we consider research concerned with characterizing intermediate production or the potential for substitution between depletable and renewable resources. We discuss issues that arise in estimation of cost functions for exhaustible resources in Section 2. In Section 3 we discuss computational equilibrium models. We then turn to econometric models of exhaustible resource supply in Section 4.

The 1992, 1994 and 1996 elections: A comment and a forecast

A model of the two-way relationship between elections and the economy, previously estimated on historical data for 1916–1988, is applied to the United States elections of 1992, 1994, and 1996. The 1992 result was a surprise to the model since the economy had performed reasonably well that election year. The midterm elections of 1994 were accurately forecast. The Republicans took control of Congress not because of unusual circumstances but because of a normal midterm cycle. President Clintons chances in 1996 look dim given the current modest growth rate and an electoral bias favoring Republican presidential candidates. But an alternative model, keyed more to the voters choosing Clinton to balance the Republican Congress, gives him a reasonable chance of reelection.