Randall W. Bennett

On the Political Economy of State Highway Expenditures: Some Evidence of the Relative Performance of Alternative Public Choice Models

This paper explores the extent to which the public demand for roads and/or power of special interest groups determines road expenditures at the state level using an extension of the methodology developed in Congleton and Shughart (1990). Reduced form models of median voter demand, special interest group equilibria, and a combined model are estimated using cross-sectional state data from the United States. We generally find support for the hypothesis that voting matters. The pure median voter models have a better fit than the pure special interest group models. Moreover, in our combined model, we find that variables from the median-voter model can not be dropped without significantly reducing the combined models fit.

Savings and loan and finance industry PAC contributions to incumbent members of the House Banking Committee

This paper examines the relationship between campaign contributions from savings and loan and finance industry PACs and membership on the House Banking Committee. The distinguishing features of this paper are that we focus on campaign contributions at an industry level, and we use regression analysis to determine whether membership on the House Banking Committee, the committee with oversight responsibility for the savings and loan industry, influences the level of contributions received by an individual legislator. We find that members of the House Banking Committee do receive significantly greater contributions from the savings and loan and finance PACs than do other members of Congress and that being chairman of the House Banking Committee also pays a dividend.

Economic performance and U.S. Senate elections, 1958-1986*

SummaryDespite the use of several alternative estimation model specifications, no relationship was found between state economic performance and U.S. senatorial votes. On the other hand, a significantly positive relation was found between election year national real per capita income growth and the vote share of candidates of the incumbent presidents party. Both of these results are broadly consistent with earlier findings for other state level elections. Upon further examination we find this effect to be operative only in the negative sense that the presidential partys senatorial vote share declines when economic performance is poor, but is not positively associated with above average economic performance. Further, the vote share of incumbent candidates, independent of party affiliation, is found to be lower in slow growth pre-election years than in years of above average growth. The estimate of the difference is such as to suggest a large and direct impact of national economic performance on votes for incumbent candidates themselves, independent of effects acting through party affiliation. Such an effect, despite its intuitive plausibility, has been sought (and found) in one previous study — Adams and Kenny. Since the high growth and the low growth sample means differ by about three percent, the 4 to 6 percent difference in vote plurality associated with incumbent candidacy in good versus poor performance periods translates into about the same impact as that operating through presidential party affiliation. Taking these effects together one may surmise than an incumbent senator of the presidents party may rightly fear a pre-election recession.

Politics and the rescue of insolvent savings and loans before 1989

ConclusionThe results presented in this paper are consistent with those predicted by public choice economists who believe that regulatory agencies represent the interests of their controlling congressional committees. Membership on committees is not random; congressmen seek committee assignments where they can represent the interests of their constituency. Congressmen from states where financial institutions are significant will seek membership on their respective banking committees. Once on those committees, congressmen will seek to protect and promote their own constituency. In the case of the savings and loan industry, insolvent savings and loans received benefits from staying in operation. These savings and loans gained another chance to gamble for resurrection. Being shut-down or placed in a management consignment program did not give this option. The results presented in our paper indicate that participation in one of the rescue programs is not random. Savings and loans in states with political power (representation on the Senate banking committee) are less likely to be resolved.

Taxation, License Fees, and New Car Registrations

The structure of taxes and license fees on motor vehicles varies widely across the states. In 1997, automobile owners in 12 states and the District of Columbia paid only a fixed license fee independent of the age or value of the vehicle. But statewide license fees in 15 states declined as the value of the car declined, and fees in 6 states declined as the age of the car increased. Furthermore, local personal property taxes based on value applied to automobiles in 17 states. Taxes and license fees based on age or value raise the user cost of newer automobiles compared to older cars. Therefore, people are expected to substitute older model cars for new cars. The authors test this hypothesis by estimating a regression with the ratio of new car registrations to total registered automobiles as the dependent variable, using cross-sectional data for 1997 car registrations. The empirical results confirm their hypothesis.

The Importance of Committee Assignment: Health Care Industry Political Action Committee Contributions and the House of Representatives

This paper examines the relationship between political action committee (PAC) contributions from four sectors of the health care industry and committee membership in the House of Representatives over three election cycles, 1998-2002. The hypothesis tested is that members of the House who serve on committees with oversight responsibility for the health care industry are more likely to receive contributions from health care industry PACs than members of the House who do not serve on these committees. We find mixed support for the hypothesis.