Kevin B. Grier

An empirical analysis of cross-national economic growth, 1951–1980

Abstract Using pooled cross-section/time-series data on 113 countries, we investigate empirical regularities in post-war economic growth. We find that coefficient values vary widely across identifiable groups of countries, with evidence supporting the convergence hypothesis apparent only in the OECD country sample. Among other results, we find that the growth of government consumption is significantly negatively correlated with the economic growth in three of four subsamples, including the OECD, and that political repression is negatively correlated with growth in Africa and Central and South America.

The Determinants of Industry Political Activity, 1978–1986.

While the allocation of interest group monies to specific politicians has been extensively studied, little is known about the factors that determine of the overall level of political activity across groups. We study total contributions by corporate political action committees at the industry level. We create a large data set on industry political activity, covering 124 industries across five election cycles from 1978 to 1986 and sketch out a simple benefit-cost model to predict total corporate PAC contributions in each industry. The few previous studies of this phenomenon use relatively small samples and employ statistical techniques that are either biased or impose untested restrictions. The selectivity-corrected regression technique used here solves these problems. We find that industries with greater potential benefits from government assistance contribute systematically more but that the ability to realize these benefits is constrained by collective action problems facing firms in each industry.

On inflation and inflation uncertainty in the G7 countries

Abstract The relationship between inflation and inflation uncertainty is investigated in the G7 countries from 1948 to 1993. GARCH models are used to generate a measure of inflation uncertainty and then Granger methods are employed to test the causality between average inflation and inflation uncertainty. In all G7 countries, inflation significantly raises inflation uncertainty as predicted by Friedman and Ball. Weaker evidence is found that inflation uncertainty Granger-causes inflation. In three countries (US, UK and Germany) increased inflation uncertainty lowers inflation while in two countries (Japan and France) increased inflation uncertainty raises inflation.

Comparing Interest Group PAC Contributions to House and Senate Incumbents, 1980-1986

Most work on the allocation patterns of campaign contributions by interest groups focuses on the relative productivity of legislators effort in serving each group. Short time-series and cross-sectional studies of PAC activity have been done for the House of Representatives and the Senate separately, but no study has used (1) longer time series data or (2) made explicit comparisons among interest group (corporations, unions, and trade associations) activities, considering (3) differences in the time series pattern of groups across the two chambers. We integrate all three perspectives here, using data covering the 1980-1986 election cycles. The results represent preliminary estimates of the dollar value to interest groups of the personal and institutional characteristics of legislators, where these characteristics are allowed for the first time to vary across chambers.

On the (Mis)measurement of Legislator Ideology and Shirking

In this paper, we show that current statistical measures of legislators shirking are implicitly based on the electoral concept of a unique majority rule equilibrium point in the policy space where elections are contested. We note that such equilibria do not exist generically and present statistical results showing that cross-sectional regressions where legislators voting indices are predicted by district average demograhic and economic data are mis-specified. We also discuss a weaker equilibrium construct, the uncovered set, and present statistical evidence showing that differences in voting behavior between Senators from the same state are positively related to the heterogeneity of the electorate. We argue that current evidence alleged to show shirking by Senators is equally consistent with Senators who perfectly represent an idiosyncratic constituency that cannot be represented by district average data.

The impact of legislator attributes on interest-group campaign contributions

Legislators possess political assets that economic interest groups may find valuable in pursuing their goals. This paper examines the effect these legislative assets have on the campaign contributions made by two large and easily identifiable interest groups: corporations and labor unions. Committee assignment, voting record, and electoral security are significant predictors of both corporate and union contributions to House incumbents, while party affiliation and years in office also influence the behavior of union political action committees.

The Industrial Organization of Corporate Political Participation

The study of industrial organization and regulation has been transformed over the past twenty years by the recognition that firms have incentives, and may possess the ability, to influence policies designed to regulate their activities. The basic paradigm of industrial organization, and the basis for regulatory and antitrust policy in the U.S., asserts market structure determines conduct, and that conduct determines performance. If public policy were exogenously formulated and implemented, optimal performance (productive and allocative efficiency, full employment, etc.) could be obtained by appropriate antitrust policy to affect industry structure and appropriate regulation to deter anticompetitive conduct. But policy is not exogenous. Neither the formulation nor implementation of antitrust or regulation is insulated from attempts by those affected to influence policy to their benefit. Further, there are important reasons to expect industry structure to determine the conduct of the firm not just in the market but also in the political process. Structure determines conduct and performance, but not only through the traditionally emphasized routes of pricing and output decisions. Structure may also affect performance by advantaging certain firms, or certain industries, in political competition. The resulting regulatory regime may well create and protect systematic differences in economic performance by restricting, rather than facilitating, normal market processes. Surprisingly little is known about the implications of industry structure for success in politi-

Inflation, inflation uncertainty, and relative price dispersion: Evidence from bivariate GARCH-M models

Abstract One potential real effect of inflation is its influence on the dispersion of relative prices in the economy. Menu cost models generally imply that higher trend inflation will increase price dispersion. In contrast, signal extraction models predict that increased inflation uncertainty will raise relative price dispersion. Existing empirical studies do not distinguish between these separate hypotheses. We constuct a bivariate GARCH-M model of inflation and relative price dispersion to test these differing explanations in a single model and find that inflation uncertainty dominates trend inflation as a predictor of relative price dispersion.

Campaign spending and Senate elections, 1978–84

9. ConclusionsThis paper uses a sample of recent Senate election results and estimates vote equations that show challenger spending hurts, and incumbent spending helps, incumbent re-election. While both types of spending have diminishing returns, the effects are asymmetrical. Challenger spending is more productive at lower levels of spending, but incumbents can spend greater amounts more profitably than can challengers. These results can explain why Senate incumbents spend money, why they typically outspend their challenger, and why incumbents who can outspend their challenger would tend to be against spending limits or public financing.However, the results do not explain why incumbent spending does not “work” in House election equations. Jacobson and others have run countless linear and quadratic specifications that persistently show perverse effects for incumbent spending. These results are not affected by the procedural problem of logging observations that have a value of zero, and pose a genuine puzzle. There are other empirical results suggesting the idea that there are basic differences in the nature of elections between the House and Senate. For example, Grier and Carlson (1988) find that state-level economic conditions have a strong effect on individual Senate elections, while Owens and Olson (1980) find that district-level economic conditions have no effect on House elections. Since I show that there are a significant number of elections where incumbent spending does matter, and that simultaneity bias may not be a tenable explanation for results where incumbent expenditures do not matter, it may be time to take a new look at the House data or to develop a testable theory that can explain persistant empirical differences in the determinants of elections in the House and Senate.

The rookie draft and competitive balance: The case of professional football

Abstract This paper presents some empirical evidence on the issue of whether the rookie draft in professional football promotes competitive balance in the winning records of National Football League teams. The results suggest that the rookie draft is a balancing institution, and that the ability to use the draft to improve winning performance varies across teams.