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Abstract:
In this paper we study the political economy determinants of traffic fines. Speeding tickets are not only determined by the speed of the offender, but by incentives faced by police officers and their vote maximizing principals. Our model predicts that police officers issue higher fines when drivers have a higher opportunity cost of contesting a ticket, and when drivers do not reside in the community where they are stopped. The model also predicts that local officers are more likely to issue a ticket when legal limits prevent the local government from increasing revenues though other instruments such as property taxes. We find support for the hypotheses. The farther the residence of a driver from the municipality where the ticket could be contested, the higher is the likelihood of a fine and the larger its' amount. The probability of a fine issued by a local officer is higher in towns when constraints on increasing property taxes are binding, the property tax base is lower, and the town is less dependent on revenues from tourism. For state troopers, who are not employed by the local, but rather the state government, we do not find evidence that the likelihood of traffic fines varies with town characteristics. Finally, personal characteristics, such as gender and race, are among the determinants of traffic fines.

speeding, traffic fines, local public finance, vote maximizing, revenue maximizing

Abstract:
Americans have been getting fatter since at least the mid 1980s. To better understand this public health problem, much attention has been devoted to determining the underlying cause of increasing body weights in the U.S. We examine the role of relative food prices in determining an individual's body mass index, arguing that as healthful foods become more expensive relative to unhealthful foods, individuals substitute to a less healthful diet. Using data from the National Health Interview Survey (NHIS) for the period 1982-1996, we find that individual BMI measures, as well as the likelihood of being overweight or obese, exhibit a statistically significant positive correlation with the prices of healthful relative to unhealthful foods. These results are robust to endogenizing the relative price measure. While the magnitudes of our estimates suggest that relative price changes can only explain about 1 percent of the growth in BMI and the incidence of being overweight or obese over this period, they do provide some measure of how effective fat taxes would be in controlling the obesity epidemic. Our estimates imply, for example, that a 100 percent tax on unhealthful foods could reduce average BMI by about 1 percent, and the same tax could reduce the incidence of being overweight and the incidence of obesity by 2 percent and 1 percent respectively.

BMI, fat, diet, health, wild cluster bootstrap, fat tax

Abstract:
Many states have passed medical malpractice law reforms in an effort to retain and attract physicians. However, it is unclear what the net public health effect of such reforms is. While reforms are likely to help states retain doctors, they also diminish incentives to provide a high level of health care. We provide empirical evidence that some malpractice reforms have helped states retain doctors while others have not. However, retention of doctors comes at a cost. We show that some malpractice law reforms have lowered the level of care provided, as indicated by an increase in infant mortality. This suggests that some of the tort reforms lead to worsening health outcomes.

Malpractice, Tort Reform, Infant Mortality, Defensive Medicine, Physicians

Abstract:
Laws requiring minors to seek parental consent or to notify a parent prior to obtaining an abortion raise the cost of risky sex for teenagers. Assuming choices to engage in risky sex are made rationally, parental involvement laws should lead to less risky sex among teens, either because of a reduction of sexual activity altogether or because teens will be more fastidious in the use of birth control ex ante. Using gonorrhea rates among older women to control for unobserved heterogeneity across states, our results indicate that the enactment of parental involvement laws significantly reduces risky sexual activity among teenage girls. We estimate reductions in gonorrhea rates of 20% for Hispanics and 12% for whites. Although we find a relatively small reduction in rates for black girls, it is not statistically significant. We speculate that the racial heterogeneity has to do with differences in family structure across races.

Abstract:
Laws requiring minors to seek parental consent or to notify a parent prior to obtaining an abortion raise the cost of risky sex for teenagers. Assuming choices to engage in risky sex are made rationally, parental involvement laws should lead to less risky sex among teens, either because of a reduction of sexual activity altogether or because teens will be more fastidious in the use of birth control ex ante. Using gonorrhea rates among older women to control for unobserved heterogeneity across states, our results indicate that the enactment of parental involvement laws significantly reduces risky sexual activity among teenage girls. We estimate reductions in gonorrhea rates of 20 percent for Hispanics and 12 percent for whites. While we find a relatively small reduction in rates for black girls, it is not statistically significant. We speculate that the racial heterogeneity has to do with differences in family structure across races.

Gonorrhea, Pregnancy, STD, Teenagers, Sex, Abortion, Illegitimacy, Birth Rates

Abstract:
Considerable concern has been expressed in recent years about declines in voter participation rates in the United States and in several other major democratic countries. Some feel low participation rates introduce a "class bias" into the political process and thereby worsen the outcomes from it. Little empirical work exists, however, that measures the effects of lower participation on the welfare of a country. This paper begins to fill this void. It presents cross-national evidence that high levels of democratic participation are associated with more equal distributions of income. The paper's results also imply, however, that this reduction in income inequality comes at a cost. High participation rates are related to larger government sectors which in turn lead to slower economic growth. We also present evidence of the "capture" of government by upper income groups in Latin and Central American countries.

Abstract:
The risk of an unwanted pregnancy represents one of the major costs of sexual activity. When abortion was legalized in a number of states during the late 1960s and early 1970s (and nationally with the 1973 Supreme Court case of Roe v. Wade), this cost was reduced as women gained the option of terminating an unwanted pregnancy. We predict that abortion legalization led to an increase in sexual activity, accompanied by an increase in sexually transmitted diseases. Using CDC data on the incidence of gonorrhea and syphilis by state, we test the hypothesis that judicial and legislative decisions to legalize abortion lead to an increase in sexually transmitted diseases. We find that gonorrhea and syphilis incidences are significantly and positively correlated with abortion legalization. According to our estimates, abortion legalization might account for as much as one third of the average disease incidence.

Abstract:
This paper examines the importance of electoral rules for legislators' behavior. The German electoral system includes a mechanism which assigns whether legislators are elected under the "first-past-the-post" (FPTP), or the proportional representation (PR) electoral rule. Using this institution, we identify the effect of electoral rules on legislators' behavior and disentangle whether so-called pork barrel politics are due to political climate in a country or due to the electoral rule employed. We find significant differences in committee membership, depending on whether the legislator is elected though FPTP or PR. Legislators elected through FPTP system are members of committees that allow them to serve their geographically based constituency. Legislators elected through PR are members of committees that serve the party constituencies, which are not necessarily geographically based.

Abstract:
Traffic accidents are one of the leading causes of injury and death in the U.S. The role of traffic law enforcement in the reduction of accidents has been studied by relatively few papers and with mixed results that may be due to a simultaneity problem. Traffic law enforcement may reduce accidents, but police are also likely to be stricter in accident-prone areas. We use municipal budgetary shortfalls as an instrumental variable to identify the effect of traffic citations on traffic safety and show that budgetary shortfalls lead to more frequent issuance of tickets to drivers. Using a panel of municipalities in Massachusetts, we show that increases in the number of tickets written reduce motor vehicle accidents and accident related injuries. The findings show that failure to control for endogeneity results in a significant underestimation of the positive impact of law enforcement on traffic safety.

traffic accidents, safety, law enforcement, simultaneity

Abstract:
This paper examines the effect of workplace safety regulations on worker safety. Studies in this area must overcome the issue that regulations and worker safety are jointly determined and that regulatory resources are likely to focus on the worst offenders. We examine the effects of regulatory enforcement in the 1990s on occupational death rates by state in major industries, and propose an instrumental variables technique to isolate the causal effect of regulatory enforcement on worker safety. We find that more inspections lead to higher death rates at a statistically significant level. This counter-intuitive result suggests that increased worker safety measures induce riskier behaviors on the part of workers.

OSHA, Safety, Labor Regulation, Offsetting Behavior

Abstract:
This paper examines the importance of electoral rules for legislators' behavior. It uses a quasi-natural experiment that assigns whether legislators are elected under the "first-pass-the-post" (FPTP), or the proportional representation (PR) electoral rule. The experiment is generated by the current German electoral system. This approach can identify the effect of electoral rules on legislators' behavior without being subject to a simultaneous equation bias. This approach can disentangle whether so-called pork barrel politics are due to political climate in a country or due to the electoral rule employed. We find that the FPTP system gives legislators incentives to service their geographically based constituency as evidenced by their committee assignments. Legislators elected through PR seek committees that service the party constituencies, which are not necessarily geographically based.

Abstract:
This paper introduces fiscal policy in a model of sovereign risk spreads ("spreads"). Using panel data from emerging market countries, we find that reductions in public expenditure are a more powerful tool for reducing spreads than increases in revenues. Specifically, cuts in current spending lower spreads by more than cuts in investment spending, and they also lower spreads by more than increases in revenue. We also show that debt-financed current spending increases sovereign risk by more than tax-financed current spending, suggesting that international investors have some preference for the latter. In line with the empirical literature on the determinants of spreads, we find that liquidity and solvency indicators, as well as macroeconomic fundamentals, are also important determinants of spreads.

Fiscal policy, sovereign risk, spreads, bond markets, emerging markets

Abstract:
In the face of rising diabetes rates, many states passed laws requiring health insurance plans to cover medical treatments for the disease. Although supporters of the mandates expect them to improve the health of diabetics, they have the potential to generate a moral hazard to the extent that medical treatments might displace individual behavioral improvements. Another possibility is that the mandates do little to improve insurance coverage for most individuals, as previous research on benefit mandates has suggested that often mandates duplicate what plans already cover. To examine the effects of these mandates, we employ a triple differences methodology comparing the change in the gap in body mass index (BMI) between diabetics and non-diabetics in mandate and non-mandate states. We find that mandates do generate a moral hazard problem with diabetics exhibiting higher BMIs after the adoption of these mandates.

Insurance, Mandates, Obesity, Offsetting Behavior

Abstract:
Theoretically, campaign contribution restrictions can either lead to closer elections or amount to incumbent protection devices. States are a natural laboratory to examine the effect of contribution restrictions on election outcomes. We analyze elections to the state Houses from 1980 to 1999 and determine whether candidates's vote shares are altered by changes in state campaign contribution restrictions. We find that limits on giving lowers future incumbents' vote shares but have little effect on the vote shares of incumbents who passed the campaign finance legislation. Stricter contribution limits also draw more candidates into the race, narrowing the margin of victory and leading to more incumbent defeats.

Campaign Finance, Elections

Abstract:
The health benefits of spas have been hypothesized for centuries. If this hypothesis is correct, spa therapy offers a low cost alternative to more expensive and potentially more invasive medical treatments for ailments such as back pain and arthritis. We use individual-level panel data to isolate the effect of spa therapy on missed work days and hospital visits in Germany. Simple correlations suggest a self-selection bias - spa visits are associated with increased absenteeism and hospitalization. However, when we exploit the longitudinal nature of the data, we find that spa therapy leads to a statistically significant reduction in both absenteeism and hospitalization, though it is not clear if these health benefits justify the cost of spa therapy.

alternative medicine, insurance, hospitalization, medical expenditures

Abstract:
This study estimates the demand curve for prescription drugs among elderly Medicare beneficiaries. In contrast to previous work, the current analysis uses a measure of price rather than insurance status as the key explanatory variable to test for seniors' sensitivity to prescription drug price changes. The estimates show that a one percentage point increase in the coinsurance rate implies a 1.01 percent decrease in the number of prescriptions filled and a 0.69 percent decrease in total drug expenditures. This finding indicates that seniors are far more responsive to prescription drug price changes than suggested by studies that examine younger individuals or those that do not control for self-selection into supplemental insurance plans.

Insurance, Moral Hazard, Medicare, Price Elasticity

Abstract:
The challenge in the campaign contribution literature has been to overcome the simultaneous equation bias that is inherent in the vote-contribution relationship. This paper proposes a new method to overcome this bias. It examines behavior at different points of time and relates it to contributions at different points of time. This method is applied to legislators' voting decisions on financial services regulation. Analyzing this type of legislation is of particular interest because it allows an analysis of the net influence of competing interest group. Consistent with the proposed model's predictions I find evidence that changes in contribution levels determine changes in roll call voting behavior, that contributions from competing groups are partially offsetting, and that junior legislators are more responsive to changes in contribution levels than senior legislators.

Campaign finance, campaign contributions, legislatures

Abstract:
We include insurance for addiction treatment in the standard rational addiction model and show that an increase in the level of insurance for addiction treatment induces a forward-looking individual to consume more of a harmfully addictive good currently. We test this implication using cross-state variation in the adoption of mental health parity mandates. We examine the effects of these mandates on the consumption of alcohol and find that parity legislation leads to a statistically significant increase in alcohol consumption. To account for the possible endogeneity of the adoption of mental health parity mandates, we perform an instrumental variables analysis, and find that the Ordinary Least Squares significantly underestimates the insurance effect on alcohol consumption.

Rational Addiction, Alcohol, Mental Health, Insurance, Parity

Abstract:
The apparent ineffectiveness of incumbent campaign spending in congressional elections is one of the enduring puzzles in the political economy literature. Intuitively, higher spending should translate into more advertising, and more advertising should translate into more votes. Previous work in this area has assumed that advertising prices are uniform across congressional districts, and therefore that campaign spending alone is a good proxy for campaign advertising. However, candidates in different districts face widely different advertising prices. This paper emphasizes the importance of media advertising prices for the analysis of campaign spending and shows that differences in advertising costs are one source of the apparent ineffectiveness of campaign spending. Accounting for the price of advertising, this paper shows that campaign spending is productive for both incumbents and challengers.

campaign finance, elections, campaign advertising, television advertising

Abstract:
Campaign expenditures are not effective in increasing candidates' vote shares if voters do not respond to the advertisement when they believe that campaign expenditures are financed with "tainted money." In this situation, limiting contributions may reduce the number of policy favors that candidates promise to contributors, and thereby increase the effectiveness of campaign spending. Exploiting cross-state variation in campaign finance laws, this paper tests whether campaign expenditures by state House candidates are more productive in increasing vote shares when candidates run in states that limit contributions. The results show that campaign expenditures by incumbents, challengers, and open seat candidates are more productive when candidates run in states with campaign contribution limits, as opposed to in states without limits. Controlling for the endogeneity of incumbent spending, the study shows that in states with contribution limits, incumbent spending and challenger spending are equally productive, and that spending by both candidates is quantitatively important in increasing their vote shares.

Abstract:
Substantial public policy debate centers on campaign finance reform. Campaign resources can provide benefits to constituencies when used to fund the distribution of information, but voters can be harmed if candidates trade policy favors to special interests in exchange for contributions. Unfortunately, because informative field data on this topic are limited, effects of campaign finance strategies on election outcomes and economic welfare remain uninformed by empirical analyses. This paper reports data from experiments designed to shed light on the campaign finance debate. Our experiment derives from a model where power-hungry candidates trade favors for campaign contributions. We find that voters' beliefs respond to advertising in a way that is consistent with theory. In relation to privately financed electoral competitions, in publicly financed campaigns (i) high quality candidates are elected more frequently, and (ii) margins of victory are larger. We also find that caps on private fundraising can improve voter welfare.

voting, campaign finance, experiments, special interests

Abstract:
Most industrialized countries have increased access to abortion over the past 30 years. Economic theory predicts that abortion laws affect sexual behavior since they change the marginal cost of having risky sex. We use gonorrhea incidence as a metric of risky sexual behavior. Using a panel of 41 North American, European and Central Asian countries over the period 1980-2000, we estimate the impact of abortion law reform on risky sex. Compared to the most restrictive legislation that permits abortion only to save the pregnant woman’s life or her physical health, more liberal abortion laws are associated with at least thirty additional gonorrhea cases per 100,000 individuals. The marginal effect of laws which make abortion available on request is larger than the effect of laws which allow abortion on socioeconomic and mental health grounds. Our results are robust against a set of alternative sample constructions and model specifications.

abortion, sex, STD, sexually transmitted diseases, pregnancy

Abstract:
Much work on the apparent ineffectiveness on incumbent spending in congressional elections has hypothesized that the productivity of incumbent spending is low because incumbents operate on the 'flat part' of their election returns function. Differences in campaign spending associated with state campaign finance laws allows for a test of this hypothesis. Exploiting cross-state variation in campaign finance laws, this paper tests whether campaign expenditures by state House candidates are more productive in increasing vote shares when candidates are subject to contribution limits. The results show that campaign expenditures by incumbents and challengers are more productive when candidates run in states with campaign contribution limits, as opposed to in states without limits. Further, in states with contribution limits, incumbent spending and challenger spending are equally productive, and spending by both candidates is quantitatively important in increasing their vote shares.

campaign finance regulation, elections, advertising

Abstract:
This paper investigates the value of political institutions for financial markets, using panel data from emerging market countries. We test the hypothesis that changes in political institutions, such as improvements in democratic rights and increased government accountability, have a direct effect on sovereign interest rate spreads. We find that financial markets value institutions over and above the economic and fiscal outcomes these institutions shape. Democracy and accountability generally lower sovereign spreads, political risk tends to increase them, and financial markets tend to view election years negatively.

Capital markets, Financial sector, Political economy, Governance, Social policy, Emerging markets, Cross country analysis, Economic models

Abstract:
This paper investigates the value of political institutions for financial markets, using panel data from emerging market countries. We test the hypothesis that changes in political institutions, such as improvements in democratic rights and increased government accountability, have a direct effect on sovereign interest rate spreads. We find that financial markets value institutions over and above the economic and fiscal outcomes these institutions shape. Democracy and accountability generally lower sovereign spreads, political risk tends to increase them, and financial markets tend to view election years negatively.

fiscal policy, sovereign risk, spreads, institutions, emerging markets

Abstract:
We examine the effect of deceptive advertising on voting decisions in elections. We model two-candidate elections in which 1) voters are uncertain about candidates' attributes; and 2) candidates can inform voters of their attributes by sending advertisements. We compare political campaigns with truthful advertising to campaigns in which there is a small chance of deceptive advertising. Our theoretical model predicts that informed voters should act on the information contained in the advertisement. Thus, even in deceptive campaigns, informed voters should either vote for the candidate from whom they received an advertisement or abstain from voting; they should never vote for the opposing candidate. We test our model in laboratory elections, and, as predicted, find higher participation among informed voters in elections that allow only for truthful advertisement than in elections that permit deceptive advertising. Contrary to our theoretical predictions, we find substantial differences in voting behavior between truthful and deceptive campaigns. When faced with a small probability of deception, informed voters in deceptive campaigns vote for the candidate who did not send an advertisement, thereby making sub-optimal voting choices. Even when there is only a small chance that an advertisement is deceptive, voters are more likely to elect the candidate who generates less welfare.

voter information, turnout, participation in elections, campaign finance, deceptive advertising

Abstract:
States have soft budget constraints when they can expect a bailout by the federal government in the event of a financial crisis. This gives rise to incentives for unsound state fiscal policy. We test whether states with softer budget constraints have higher debt and deficits, receive more bailouts funds, spend funds less efficiently, and are more likely to allocate funds to programs benefiting special interests. Exogenous variation in soft budget constraints across states and over time allows the identification of budget constraint softness on state fiscal policy. We take advantage of the fact that in Germany, states’ political influence is exogenous because voting weights differ in the upper chamber of the German parliament. The stronger the political influence of states, the softer their budget constraints. We show that states with softer budget constraint have higher deficits and debts, and receive more bailouts funds. Further, overrepresented states are less efficient in spending public funds and are more prone to respond to rent seeking by interest groups.

Abstract:
This paper examines whether campaign contribution limits lead to closer elections and improve challengers' chances of victory, or insulate incumbents from challenge. Empirical work helps to determine which of these theoretical predictions is correct. A good test of these predictions is to test the effect of low contribution limits ($500/individual contributor or less) on the competitiveness of elections, because low limits are most likely to affect the campaigns of incumbents and challengers. States are natural laboratories to examine the consequences of tight contribution limits because state legislative races, unlike Congressional races, have campaign finance limits within a large range, from stringent to non-existent. This paper analyzes state assembly races from 1980 to 2006, and examines whether candidates’ vote shares and election outcomes are altered by changes in state campaign contribution restrictions over time, using five different measures of election competitiveness. The findings are that contribution limits in general lead to more competitive elections, and that this effect is largest for low contribution limits. Relative to races with contribution limits of $2,000 and higher, the tightest limit considered - a $500 cap on contributions by individuals - reduces the average margin of victory of incumbents by 14 percent, increases the likelihood of a close race by over 15 percent, and increases the likelihood of incumbent defeat by 10 percent.

campaign finance limits, elections

Abstract:
The perceived importance of 'special interest group' money in election campaigns motivates widespread use of caps on allowable contributions. We present a bargaining model in which putting a cap that is not too stringent on the size of the contribution a lobby can make improves its bargaining position relative to the politician, thus increasing the payoff from lobbying. Such a cap will therefore increase the equilibrium number of lobbies when lobby formation is endogenous. Caps may then also increase total contributions from all lobbies, increase politically motivated government spending, and lower social welfare. We present empirical evidence from U.S. states consistent with the predictions of the model. We find a positive effect on the number of PACs formed from enacting laws constraining PAC contributions. Moreover, the estimated effect is nonlinear, as predicted by the theoretical model. Very stringent caps reduce the number of PACs, but as the cap increases above a threshold level, the effect becomes positive. Contribution caps in the majority of U.S. states are above this threshold.

Abstract:
We present results from laboratory experimental elections in which voter information is endogenously provided by candidates and voting is voluntary. We also compare advertisements that are costless to voters with those that reduce voter payoffs. We find that informative advertisements increase voter participation and thus informative campaign advertising "turns out" voters. However, the effect of information is less than that found in previous experimental studies where information is exogenously provided by the experimenter. Furthermore, we find that when advertising by winning candidates reduces voter payoffs, informed voters are less likely to participate, thus are "turned off" rather than "turned out." Finally, we discover that candidates tend to overadvertise, and contrary to theoretical predictions, advertise significantly more when voting is voluntary than when it is compulsory.

voter information, turnout, participation in elections, campaign finance, campaign expenditures

Abstract:
Do politicians tend to follow a strategy of ambiguity in their policy positions or a strategy of reputational development to reduce uncertainty about where they stand? Ambiguity could allow a legislator to avoid alienating constituents and to play rival interests off against each other to maximize campaign contributions. Alternatively, reputational clarity could help to reduce uncertainty about a candidate and lead to high campaign contributions from favored interests. We outline a theory that considers conditions under which a politician would and would not prefer reputational development and policy-stance clarity in the context of repeat dealing with special interests. Our proxy for reputational development is the percent of repeat givers to a legislator. Using data on corporate political action committee contributions (PACs) to members of the U.S. House during the seven electoral cycles from 1983/84 to 1995/96, we find that legislators do not appear to follow a strategy of ambiguity and that high reputational development is rewarded with high PAC contributions.

Abstract:
This paper analyzes the effect of public financing on the competitiveness on elections. It shows that states with public financing have more competitive elections in state assembly races than states without. The paper also analyzes the fortunes of those candidates for the Maine House of Representatives who accept public financing in Maine. The results from this analysis show that accepting public financing increases incumbents' vote share by 2 percentage points and challengers' vote share by 3 percentage points.

Public Financing, Elections, campaign contributions, campaign expenditures

Abstract:
Electoral competition is essential to democracy. Yet the incumbency rate in state-house legislative campaigns is nearly 95 percent. This report examines campaign contribution limits and the impact limits can have on electoral competition. The research on which this report is based was inspired by a 2006 U.S. Supreme Court decision that overturned low contribution limits. The data presented here refutes the Court's assumptions that low contribution limits damage challengers and shows that the lowest contribution limits, those set at $500 or below, enhance challengers' ability to campaign against incumbents in state legislative races.

Though public financing systems also increase electoral competition, the Brennan Center's research suggests that incumbents nonetheless continue to opt for public financing systems. Of course, enhanced competition under low limits is only one factor to be considered. Competition, after all, is one key goal in electoral reform, but not the only one. We may wish also to encourage citizen participation and voter engagement. But if we are looking for reasons not to enact low limits, a deleterious impact on competition is not one of them. For this reason, the Supreme Court was wrong in Randall v. Sorrell.

Our joint findings make it plain: low contribution limits and public financing substantially narrow the gap between incumbents and challengers. These reforms can be mutually enhancing as reasonable contribution limits are central to a well-functioning public financing system. Incumbency will continue to provide electoral advantages. However, decreasing the vote margins between votes cast for incumbents and their challengers signals greater electoral competiveness and, as such, strengthens democracy.

contribution limits, public financing, electoral competition, incumbency, challengers

Abstract:
This paper investigates the impact of contribution limits in campaign finance systems on the competitiveness of elections. Theoretically, contribution limits can have different and potentially opposite effects in an election: one effect could be that limits curtail the fundraising ability of incumbents, decreasing their campaign power; another could be that they limit challengers' ability to raise money, exacerbating the structural advantages of incumbents. In this paper, I examine the effect of low contribution limits on the gap in fundraising between incumbents and challengers, and between candidates in open seat races, using data from state house elections over a decade between 1996 and 2006.

Specifically, I consider individual and PAC contribution limits at three levels: (a) $500 and below, (b) $501-$1,000, (c) $1,001-$2,000, all of them evaluated against contribution limits greater than $2,000. The findings are that contribution limits diminish the relative difference in fundraising levels between incumbents and challengers, and increase the share of challenger spending as a percentage of total race spending. For example, $500 limits reduce the fundraising gap between incumbents and challengers by twenty percent. The data also show that limits narrow the contribution gap in open seat races. Individual and PAC contribution limits of $500 and below diminish fundraising gaps between the major party candidates by between twelve and fourteen percent.

campaign finance, contribution limits, campaign contributions

Abstract:
We examine the effect of fiscal policy on sovereign risk spreads and investigate whether the interaction of fiscal variables with political institutions affect financial markets. Using panel data from emerging market countries, we find that revenue-based adjustment lowers spreads more than spending-based adjustment. Financial markets also react to the composition of spending. Cuts in current spending lower spreads more than cuts in investment. We show that debt-financed spending increases sovereign risk, while tax-financed spending lowers spreads, suggesting that international investors prefer the latter. Further, we find evidence that financial markets reaction to fiscal policy depends on political institutions.

Abstract:
Unwanted pregnancy represents a major cost of sexual activity. When abortion was legalized in a number of states in 1969 and 1970 (and nationally in 1973), this cost was reduced. We predict that abortion legalization generated incentives leading to an increase in sexual activity, accompanied by an increase in sexually transmitted diseases (STDs). Using Centers for Disease Control data on the incidence of gonorrhea and syphilis by state, we test the hypothesis that abortion legalization led to an increase in sexually transmitted diseases. We find that gonorrhea and syphilis incidences are significantly and positively correlated with abortion legalization. Further, we find a divergence in STD rates among early legalizing states and late legalizing states starting in 1970 and a subsequent convergence after the Roe v. Wade decision, indicating that the relation between STDs and abortion is causal. Abortion legalization accounts for about one-fourth of the average disease incidence.

Abortion, Sex, Sexual Behavior, STD, Gonorrhea, Syphilis, Disease, Moral Hazard, Roe v. Wade

Abstract:
The challenge in the campaign contribution literature has been to overcome the simultaneous equation bias that is inherent in the vote-contribution relationship. This paper proposes a new method to overcome this bias. It examines behavior at different points of time and relates it to contributions at different points of time. This method is applied to legislators' voting decisions on financial services regulation. Analyzing this type of legislation is of particular interest because it allows an analysis of the net influence of competing interest groups. Consistent with the proposed model's predictions I find evidence that changes in roll call voting behavior, that contributions from competing groups are partially offsetting, and that junior legislators are more responsive to changes in contribution levels than senior legislators.

Abstract:
This paper develops a positive theory of how competition among political pressure groups shapes the organization of Congress and tests the theory using data on political action committees (PACs) in the financial services industries. For the Members of Congress, the first-best way to maximize PAC contributions would be auction their legislative service time for a fee to the highest bidders. Such contracts, however, are considered bribery and are not legally enforceable. The Congressional committee system may arise, we argue, as a second-best solution to mitigate the agency problems when "fee-for-service" contracts are not available. The committee system fosters repeated interactions and long-term relationships between the PACs and the members of the relevant committees. This structure facilitates the development of reputations which can reduce the uncertainty both for the PACs and for the members and thereby increase contributions.We then find supporting evidence in both cross-sectional and time-series contribution patterns. First, on the House Banking Committee, where relationships are high and uncertainty is low, the competing groups specialize their contributions by giving large amounts to different committee members. In contrast, for legislators who are not members of the Banking Committee, where relationships are low and uncertainty is high, the competing PACs simply match each others' low level of contributions. Second, as each member of the House Banking committee develops his reputation through time (hence reduces uncertainty), the sources of PAC contributions for that member become more concentrated in one of the rival groups. We conclude with implications of our theory for the effects of term limits, party discipline, and corruption on the organization of Congress.