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Abstract:
What would happen if the current U.S. campaign finance system, mostly based on private donations, were replaced by a public funding scheme of the same magnitude? It has been argued that public funding would deprive voters of useful information, but this can only be true if private donations are somehow targeted to `better' candidates. Using a survey-based dataset about the effectiveness of state legislators in North Carolina, we ask what voters can learn about the characteristics of a legislator from the amount and pattern of contributions received during the campaign. The total amount that a candidate receives is a positive, but weak, predictor of that candidate's effectiveness. However, the sum of contributions below a given threshold ($2,000) is a positive and strong signal of effectiveness, while the sum of contributions above such threshold is a negative signal of effectiveness. We also find that only contributions from organizations (rather then individuals, parties, or own money) convey a positive signal. In sum, our evidence contradicts the informational argument in favor of private funding when contributions are large or when they come from individuals and parties.

campaign finance, political economy

Abstract:
In this paper, we argue that campaign contributions are not a form of policy-buying, but are rather a form of political participation and consumption. We summarize the data on campaign spending, and show through our descriptive statistics and our econometric analysis that individuals, not special interests, are the main source of campaign contributions. Moreover, we demonstrate that campaign giving is a normal good, dependent upon income, and campaign contributions as a percent of GDP have not risen appreciably in over 100 years - if anything, they have probably fallen. We then show that only one in four studies from the previous literature support the popular notion that contributions buy legislators' votes. Finally, we illustrate that when one controls for unobserved constituent and legislator effects, there is little relationship between money and legislator votes. Thus, the question is not why there is so little money politics, but rather why organized interests give at all. We conclude by offering potential answers to this question.

Campaign Finance, Campaign Contributions, Corporate Political Activity, Political Economy

Abstract:
This paper examines the effects of party control of state governments on the distribution of intergovernmental transfers across counties from 1957 to 1997. We find that the governing parties skew the distribution of funds in favor of areas that provide them with the strongest electoral support. This is borne out in two ways. (i) Counties that traditionally give the highest vote share to the governing party receive larger shares of state transfers to local governments. (ii) When control of the state government changes, the distribution of funds shifts in the direction of the new governing party. We find only weak evidence that parties reward electorally pivotal counties or counties in electorally pivotal legislative districts. Finally, we find that increased spending in a county increases voter turnout in subsequent elections. This suggests that parties have an electoral incentive to skew the distribution of funds to influence future election results, and the mechanism through which this works is "mobilization" rather than "conversion" of voters in a fixed electorate.

Abstract:
This paper examines the effects of party control of state governments on the distribution of intergovernmental transfers across counties from 1957 to 1997. We find that the governing parties skew the distribution of funds in favor of areas that provide them with the strongest electoral support. This is borne out two ways. (1) Counties that traditionally give the highest vote share to the governing party receive larger shares of state transfers to local governments. (2) When control of the state government changes, the distribution of funds shifts in the direction of the new governing party. We find no evidence that parties reward electorally pivotal counties - counties that are near the median of the state or that have relatively high levels of electoral volatility (high swings). Finally, we find that increased spending in a county increases voter turnout in subsequent elections. This suggests that parties have an electoral incentive to skew the distribution of funds to influence future election results, and the mechanism through which this works is "mobilization" rather than "conversion" of voters in a fixed electorate.

Political Economy, Rent-seeking, Political Parties, Intergovernmental Transfers, Voting

Abstract:
We analyze the coverage of U.S. political scandals by U.S. newspapers during the past decade. Using automatic keyword-based searches we collected data on 35 scandals and approximately 200 newspapers. We find that Democratic-leaning newspapers - i.e., those with a higher propensity to endorse Democratic candidates in elections - give relatively more coverage to scandals involving Republican politicians than scandals involving Democratic politicians, while Republican-leaning newspapers tend to do the opposite. This is true even when controlling for the average partisan leanings of readers. In contrast, newspapers appear to cater to the partisan tastes of readers only for local scandals.

Abstract:
We analyze the coverage of U.S. political scandals by U.S. newspapers during the past decade. Using automatic keyword-based searches we collected data on 35 scandals and approximately 200 newspapers. We find that Democratic-leaning newspapers - i.e., those with a higher propensity to endorse Democratic candidates in elections - give relatively more coverage to scandals involving Republican politicians than scandals involving Democratic politicians, while Republican-leaning newspapers tend to do the opposite. This is true even when controlling for the average partisan leanings of readers. In contrast, newspapers appear to cater to the partisan tastes of readers only for local scandals.

political scandals, media bias, United States, newspapers

Abstract:
This paper examines evidence of statistical bias in newspaper reporting on campaign finance. We compile data on all dollar amounts for campaign expenditures, contributions, and receipts reported in the five largest circulation newspapers in the United States from 1996 to 2000. We then compare these figures to the universe of campaign expenditures, contributions and receipts, as recorded by the Federal Election Commission. The figures reported in newspaper accounts exceed the average expenditure and contribution by as much as eight fold. Press reporting also focuses excessively on corporations contributions and soft money, rather than on the more common types of
donors - individual - and types of contributions - hard money. We further find that these biases are reflected in public perceptions of money in elections.

campaign finance, news, media, elections

Abstract:
This paper uses event study methodology to measure whether firms that gave soft money to political parties received excessively high rates of returns from their contributions. We measure the excess returns of firms that gave large amounts of soft money and firms that gave no soft money, and changes in those excess returns around five key events in the approval of the Bi-Partisan Campaign Reform Act: the House of Representatives passes BCRA, the Senate passes BCRA, the President announces his intention to sign BCRA, the Supreme Court hears oral arguments, and the Court announced its decision to uphold the Act. These actions, especially the Court's decision, involved considerable uncertainty, and in some cases went against the conventional wisdom. Other studies have found that stock market prices do respond to surprising political events, such as the death of the powerful Senator Henry Jackson of Washington. We find that the five events surrounding the BCRA had no noticeable effect on the valuation of Fortune 500 firms that gave large amounts of soft money, relative to the firms that gave no soft money.

campaign finance, interest groups, political economy

Abstract:
We study an under-utilized source of data on legislative effectiveness, and exploit its panel structure to uncover several interesting patterns. We find that effectiveness rises sharply with tenure, at least for the first few terms even after controlling for legislators institutional positions, party affiliation, and other factors. Effectiveness never declines with tenure, even out to nine terms. The increase in effectiveness is not simply due to electoral attrition and selective retirement, but appears to be due to learning-by-doing. We also find evidence that a significant amount of "positive sorting" occurs in the legislature, with highly talented legislators moving more quickly into positions of responsibility and power. Finally, effectiveness has a positive impact on incumbents' electoral success, and on the probability of moving to higher office. These findings have important implications for arguments about term limits, the incumbency advantage, and seniority rule.

elections, interest groups, voting, rent-seeking

Abstract:
We study an under-utilized source of data on legislative effectiveness, and exploit its panel structure to uncover several interesting patterns. We find that effectiveness rises sharply with tenure, at least for the first few terms even after controlling for legislators institutional positions, party affiliation, and other factors. Effectiveness never declines with tenure, even out to nine terms. The increase in effectiveness is not simply due to electoral attrition and selective retirement, but appears to be due to learning-by-doing. We also find evidence that a significant amount of "positive sorting" occurs in the legislature, with highly talented legislators moving more quickly into positions of responsibility and power. Finally, effectiveness has a positive impact on incumbents' electoral success, and on the probability of moving to higher office. These findings have important implications for arguments about term limits, the incumbency advantage, and seniority rule.

voting, legislatures, learning-by-doing

Abstract:
We examine the relationship between parliamentary seats and cabinet posts in European governments between 1946 and 2001. Our specification improves on past studies in two respects. First, it derives and uses the voting weights of the underlying coalition formation games. This reduces the measurement error introduced when seat shares are used to proxy for voting weights. Second, the statistical model allows us to nest the predictions of different formal theories of the distribution of posts. We find that for non-formateur parties in the government, there is a linear relationship between their share of the voting weight in parliament and their share of cabinet posts. Additionally, the formateur party receives a substantial "bonus" relative to its voting weight. The latter finding is more consistent with proposal-based bargaining models of coalition formation, and less so with demand-bargaining models.

Voting Weights, Bargaining, Coalitions, Formateur Advantage

Abstract:
We study the agenda-setting political behavior of a large sample of U.S. newspapers during the last decade, and the behavior of smaller samples for longer time periods. Our purpose is to examine the intensity of coverage of economic issues as a function of the underlying economic conditions and the political affiliation of the incumbent president, focusing on unemployment, inflation, the federal budget and the trade deficit. We investigate whether there is any significant correlation between the endorsement policy of newspapers, and the differential coverage of bad/good economic news as a function of the president's political affiliation. We find evidence that newspapers with pro- Democratic endorsement pattern systematically give more coverage to high unemployment when the incumbent president is a Republican than when the president is Democratic, compared to newspapers with pro-Republican endorsement pattern. This result is not driven by the partisanship of readers. There is on the contrary no evidence of a partisan bias - or at least of a bias that is correlated with the endorsement policy - for stories on inflation, budget deficit or trade deficit.

Abstract:
We study the agenda-setting political behavior of a large sample of U.S. newspapers during the last decade, and the behavior of smaller samples for longer time periods. Our purpose is to examine the intensity of coverage of economic issues as a function of the underlying economic conditions and the political affiliation of the incumbent president, focusing on unemployment, inflation, the federal budget and the trade deficit. We investigate whether there is any significant correlation between the endorsement policy of newspapers, and the differential coverage of bad/good economic news as a function of the president's political affiliation. We find evidence that newspapers with pro-Democratic endorsement pattern systematically give more coverage to high unemployment when the incumbent president is a Republican than when the president is Democratic, compared to newspapers with pro-Republican endorsement pattern. This result is not driven by the partisanship of readers. There is on the contrary no evidence of a partisan bias - or at least of a bias that is correlated with the endorsement policy - for stories on inflation, budget deficit or trade deficit.

Abstract:
We formulate and estimate a rigorously justified linear probability model of binary choices over alternatives characterized by unobserved attributes. We apply the model to estimate preferences of congressmen as expressed in their votes on bills. The effective dimension of the attribute space characterizing votes is larger than what has been estimated in recent influential studies of congressional voting by Poole and Rosenthal. Congressmen vote on more than ideology. Issue-specific attributes are an important determinant of congressional voting patterns. The estimated dimension is too large for the median voter model to describe congressional voting.

Abstract:
This paper formulates and estimates a rigorously-justified linear probability model of binary choices over alternatives characterized by unobserved attributes. The model is applied to estimate preferences of congressmen as expressed in their votes on bills. The effective dimension of the attribute space characterizing votes is larger than what has been estimated in recent influential studies of congressional voting by Poole and Rosenthal. Congressmen vote on more than ideology. Issue-specific attributes are an important determinant of congressional voting patterns. The estimated dimension is too large for the median voter model to describe congressional voting.

Abstract:
In this paper we estimate the impact of press coverage on citizen knowledge, politicians' actions, and policy. We find that a poor fit between newspaper markets and political districts reduces press coverage of politics. We use variation in this fit due to redistricting to identify the effects of reduced coverage. Exploring the links in the causal chain of media effects - voter information, politicians' actions and policy - we find statistically significant and substantively important effects. Voters living in areas with less coverage of their U.S. House representative are less likely to recall their representative's name, and less able to describe and rate them. Congressmen who are less covered by the local press work less for their constituencies: they are less likely to stand witness before congressional hearings, to serve on constituency-oriented committees (perhaps), and to vote against the party line. Finally, this congressional behavior affects policy. Federal spending is lower in areas where there is less press coverage of the local members of congress.

Abstract:
This paper tests various hypotheses about distributive politics by studying the distribution of federal spending across U.S. states over the period 1978-2002. We improve on previous work by using survey data to measure the share of voters in each state that are Democrats, Republicans, and independents, or liberals, conservatives and moderates. We find no evidence for the "swing voter" hypothesis { that is, no significant association between the amount of federal funds a state receives and the fraction of independents or moderates in the state. We also find no evidence for the "battleground state" hypothesis - no significant association between the amount of federal funds and the degree of partisan balance in a state. Modest support is found for the \partisan supporters" hypothesis, which conjectures that politicians will favour areas that contain a large percentage of their core supporters.

Abstract:
While it is widely believed by academics, politicians, and the popular press that incumbent congressmen are rewarded by the electorate for bringing federal dollars to their district, the empirical evidence supporting that claim is extremely weak. One explanation for the failure to uncover the expected relationship between federal spending and election outcomes is that incumbents who expect to have difficulty being reelected are likely to exert greater effort in obtaining federal outlays. Since it is generally impossible to adequately measure this effort, the estimated impact of spending is biased downward due to an omitted variable bias. We address this estimation problem using instrumental variables. For each House district, we use spending outside the district but inside the state containing the district, as an instrument for spending in the district. Federal spending is affected by a large number of actors (e.g. governors, senators, mayors, and other House members in the state delegation), leading to positive correlations in federal spending across the House districts within states. However, federal spending outside of a district is unlikely to be strongly correlated with the strength of that district's electoral challenge. Thus, spending in other districts is a plausible instrument. In contrast to previous studies, we find strong evidence that non-transfer federal spending benefits congressional incumbents: an additional $100 per capita in such spending is worth as much as two percent of the popular vote. Additional transfer spending, on the other hand, does not appear to have any electoral effects.

Abstract:
While it is widely believed by academics, politicians and the popular press that incumbent members of Congress are rewarded by the electorate for bringing federal dollars to their district, the empirical evidence supporting that claim is extremely weak. One explanation for the failure to uncover the expected relationship between federal spending and election outcomes is that incumbents who expect to have difficulty being re-elected are likely to exert greater effort in obtaining federal outlays. Since it is generally impossible to adequately measure this effort, the estimated impact of spending is biased downward because of an omitted variable bias. We address this estimation problem using instrumental variables. For each House district, we use spending outside the district but inside the state containing the district as an instrument for spending in the district. Federal spending is affected by a large number of actors (e.g., governors, senators, mayors, and other House members in the state delegation), leading to positive correlations in federal spending across the House districts within states. However, federal spending outside of a district is unlikely to be strongly correlated with the strength of that district's electoral challenge. In contrast to previous studies, we find strong evidence that federal spending benefits congressional incumbents: an additional $100 per capita in spending is worth as much as 2 percent of the popular vote. The only category of federal spending that does not appear to yield electoral rewards is direct transfers to individuals.

Abstract:
We develop a rationale for roll call voting and position-taking in legislatures using a formal model of legislative vote buying and elections. In our model, citizens and an interest group are motivated by policy, while legislators are motivated by holding office. The group may attempt to buy legislators' votes by offering contracts based on their votes. If citizens cannot condition their reelection votes on legislators` roll calls, then in equilibrium the group will buy its ideal policy and most legislators are voted out of office. This is because the group's contract can promise a nonnegligible payment to each legislator only in the event that her vote is pivotal, but also force no legislator to be pivotal. If citizens can condition their votes on legislators' roll calls, then policies are more moderate and more legislators are reelected. Thus an endogenous preference for position-taking arises in a legislature with public roll calls, and both legislators and citizens will prefer such open proceedings ex ante. We explore extensions of the basic model and find some circumstances where the incentives to have open proceedings are weaker.

Abstract:
The author offers insight into the two papers presented.

income inequality

Abstract:
This paper documents and investigates a prominent but little discussed pattern in U.S. politics, which is the decline of third-party electoral support over the past century. We find evidence consistent with the claim that electoral support for third parties - mainly left-wing third parties - declined because the Democratic Party co-opted the left-wing policy position beginning with the passage of the New Deal agenda. We note first that most of the third-party voting in the pre-New-Deal era was for left-wing third parties and that this declined sharply during the 1930s and 1940s. We then show that after the New Deal the Democratic Party's electoral support was higher in areas that had traditionally supported left-wing third parties. Contrary to some claims in the literature, we find little support for the hypothesis that the decline of third-party voting was immediately due to electoral reforms such as the introduction of direct primaries and the Australian ballot, except possibly in the south.

Abstract:
Despite evidence that modern democracies systematically shortchange public investment goods, relatively little theoretical work exists to explain this phenomenon. We build on Baron and Ferejohn's (American Political Science Review, 83(4) (1989) 1181--1206) bargaining model to describe public investments in a setting of budgetary politics. Specifically, we show that underinvestment inherently arises from distributive politics within a majoritarian institution. The inability of current majorities to contract with future ones drives a wedge between spending on consumption today and investing for future consumption. Extensions to the model demonstrate that earmarking future returns to specific players and/or detaching consumption from investment decisions yields more efficient levels of public investment.

Positive political economy, Bargaining models, Public investment, Government budgets, Legislatures