Joseph P. McGarrity

The Effect of Macroeconomic Fluctuations on the Electoral Fortunes of House Incumbents

The effect of macroeconomic fluctuations on House elections is a long debated, but still unresolved, issue. We argue that return rates are theoretically superior to vote shares as measures of electoral acountability and that incumbents, not candidates of the presidents party, are the legislators voters hold responsible. We develop and test an incumbent accountability model using incumbent return rates in the U.S. House from 1916 to 1994, finding a strongly significant effect of both income growth and the misery index. However, the data reject both our pure incumbency model and the traditional presidential party model, indicating that both factors are relevant to voters.

Presidential Party, Incumbency, and the Effects of Economic Fluctuations on House Elections, 1916–1996

There is little professional consensusregarding the effect of economic conditionson House Elections. We argue that recentwork still uses the paradigm of Party toorganize their data and tests. Given thatrecent developments in the theory ofcongress emphasize the paradigm ofIncumbency, we investigate the empiricalrelevance of that competing paradigm. Weshow that (1) Incumbency matters in a purePresidential Party Model of HouseElections, (2) Presidential Party mattersin a pure Incumbency Model, (3) Once bothParty and Incumbency are accounted for,economic conditions exert a highlysignificant and temporally stable influenceon House elections, (4) Return Rates aremore affected by economic fluctuations thanare Vote Shares, and (5) Not allPresidential Party incumbents face the samedegree of electoral accountability foreconomic fluctuations.

A Test of the Structure of PAC Contracts: An Analysis of House Gun Control Votes in the 1980s

We examine roll call votes on gun control in the U.S. House of Representatives during the 1980s to determine whether political action committees (PACs) make spot market purchases, prepay for votes in the prior election cycle, or make long-term investments. Previous tests generally employ PAC contributions from only one cycle, which could impose the wrong structure on contracts between PACs and politicians, causing researchers to misestimate a contribution’s impact. We find that money from more than one election cycle influences roll call votes, which suggests that PAC expenditures are not simple spot market or one-period prepayment contracts. Most remarkably, we find that the National Rifle Association buys votes with contributions from three election cycles.

Data errors in small data sets can determine empirical findings

This paper provides an example of a model that yields widely divergent estimates when different stock market indexes are used to calculate two independent variables in Romers [1990] model. Her model sought to explain consumer durable good production before the Great Crash (31 observations). She used the Cowles Commissions Series P Stock Price Index to calculate two independent variables. However, when this paper uses the S&P Index to calculate these variables, its estimates completely contradict Romers findings. It discovered that one incorrect monthly observation in the S&P Index is responsible for this difference. It also found that robustness techniques serve to limit the impact of the errant observation, illustrating the importance of using robustness techniques in small data sets.

Do Several Winning Coalitions Exist in a State for Senators of the Same Party? Evidence from an Event Study

We argue that U.S. senators from the same state and in the same party form different winning coalitions. We also develop a theory that stipulates that parties encourage these senators to form very distinct constituency coalitions. Parties use committee assignments as a carrot to give these senators an incentive to represent different groups. In our empirical analysis, we find that there are fewer overlapping committee assignments among senators in the same state when they are from the same party. We also consider the case of John Heinz and Arlen Specter, both Pennsylvania Republicans. When John Heinz died in a plane crash, Political Action Committees (PACs) that bought influence from Specter but not Heinz now had the possibility that the new senator replacing Heinz would include them in his resource constituency. The resulting competition by the new Pennsylvania senator and Specter for campaign resources would lower the price these firms had to pay for representation, thus improving their expected future earnings.

Supply shocks and menu costs

Purpose - The purpose of this paper is to examine how firms respond to adverse supply shocks. Design/methodology/approach - This paper examines a supply shock within the framework of Mankiws Menu Cost Model. Findings - The analysis in this paper illustrates that the type of adverse shock is important. An immediate increase in the money supply may work well in response to a negative aggregate demand shock, but be counter-productive in response to a negative supply shock. This paper finds that output will decrease when the Federal Reserve increases the money supply in response to an adverse supply shock. Practical implications - The implication is that when the Federal Reserve first spots a negative supply shock (such as an increase in oil prices), it should not immediately respond with an increase in the money supply. Doing so might cause a recession. Originality/value - When there is a negative supply shock, conventional wisdom holds that an increase in money supply can offset the decrease in output that would occur without a policy response. That is, increases in money supply have the exact opposite influence that most economists often suppose.

The House's policy reversal on gun control: Agency discretion and the durability of interest group deals

Purpose - This paper aims to examine why a legislature would repeal an interest group deal. Findings - This paper finds that changes in the democratic party leadership may be responsible for the Houses policy reversal on gun control. Practical implications - These findings suggest that in a principal–agent relationship, the agent has some discretion. In this case, the principal (elected members of a party in the US House) hires an agent (its leadership) to organize their teamwork to produce legislative output. The leadership has some discretion in making interest group deals. Originality/value - The paper shows how changes in leadership reduce the durability of interest group deals.

Vote share and return rates: A comparison of two measures of election outcomes

This paper compares two measures of House election outcomes: return rates and vote share for presidential party incumbents. It is found that these election variables move independently from each other. The empirical work discovers that the relationship between return rates and vote share varies as vote share increases and as time progresses. It reports that economic variables explain movement in return rates independent of vote share, but economic variables cannot explain variation in vote share independent of return rates. These results suggest return rates are more sensitive to economic fluctuations than vote share. This paper also finds that the magnitude of the response to changes in economic variables differs across these two election result terms.