Swampy
How the Flattened Costs of Grassroots Lobbying Affect Legislator Responsiveness
John Cluverius
Political Research Quarterly, forthcoming
Abstract:
Leading theories of grassroots lobbying assert that legislators should respond positively to the volume of grassroots lobbying messages because volume indicates the salience of an issue among constituents. This notion rests on the idea that the costs of producing a large volume of grassroots lobbying signals the value of the information to legislators. Advances in technology and strategy, however, have flattened the costs associated with producing such information — it costs much less to generate one additional e-mail message than before. In this environment, the volume of grassroots lobbying no longer signals the value of the information it contains. Instead, I believe trust becomes the critical factor in evaluating grassroots lobbying. I test this theory using a survey of state legislators. I find that lobbying message volume has no effect on legislator responses to higher salience issues, and a negative effect on lower salience issues.
---------------------
Stimulating the Vote: ARRA Road Spending and Vote Share
Emiliano Huet-Vaughn
University of California Working Paper, December 2016
Abstract:
This paper estimates the impact of public good spending on voting behavior in the United States, using a quasi-experimental design and the distribution of American Recovery and Reinvestment Act (ARRA) road improvement projects across the state of New Jersey. I find an approximate 1.7 percentage point increase in the presidential vote share for the Democratic Party - largely responsible for ARRA’s passage and widely perceived to be the more “tax-and-spend” friendly party - in areas close to highway and bridge improvement expenditures. I find no evidence of an effect on turnout. Results are consistent with two alternative mechanisms: one, a salience mechanism whereby spending and associated “funded-by” signage affect voter underlying political preferences; the other, a possible political multiplier effect through which stimulus spending improves local economic outcomes, making voters more willing to support incumbents. I present evidence at odds with the latter explanation.
---------------------
Political Cycles and Stock Returns
Lubos Pastor & Pietro Veronesi
NBER Working Paper, February 2017
Abstract:
We develop a model of political cycles driven by time-varying risk aversion. Heterogeneous agents make two choices: whether to work in the public or private sector and which of two political parties to vote for. The model implies that when risk aversion is high, agents are more likely to elect the party promising more fiscal redistribution. The model predicts higher average stock market returns under Democratic than Republican presidencies, explaining the well-known “presidential puzzle.” Under sufficient complementarity between the public and private sectors, the model also predicts faster economic growth under Democratic presidencies, which is observed in the data.
---------------------
The personalities of politicians: A big five survey of American legislators
Richard Hanania
Personality and Individual Differences, 1 April 2017, Pages 164–167
Abstract:
This study uses the Big Five framework to investigate personality differences between politicians and the general public and between politicians themselves based on ideology and party identification. A 50-item Big Five questionnaire was taken by 2586 respondents at the Open Psychology data website and 278 American state legislators. The author finds that politicians are more Extraverted, Agreeable, Emotionally Stable, and Conscientious than the general public. At the same time, they are slightly lower on Intellect/Imagination. All results are statistically significant for all traits and both sexes, except with regards to females and Intellect. When comparing politicians to one another and controlling for demographic variables, Republicans score higher on Conscientiousness and lower on Intellect and Agreeableness. These findings hold for a smaller sample when ideology is the dependent variable, although only Intellect/Imagination reaches statistical significance. Conservative ideology is also associated with Emotional Stability. The results show important differences between politicians and the public, and reveal personality differences among elites that are in some ways analogous to the results we find in more representative samples.
---------------------
Ian Cherry, Amanda Rae Heitz & Candace Jens
Tulane University Working Paper, January 2017
Abstract:
A hedged portfolio mimicking the buys and sells of U.S. Senators earns an 8.8% annualized abnormal return before 60 Minutes exposed arguably unethical trading activity by Senators. “Insiders” presented anecdotal evidence that Senators were using non-public information to time trades and prompted the passage of the Stop Trading on Congressional Knowledge (STOCK) Act. We find Senators’ pre-60 Minutes sells were particularly well-timed, occurring four to six weeks before drops in securities’ prices, so Senators avoid 16.77% in annualized abnormal portfolio losses. We find little evidence of outperformance after “Insiders” – returns to the Senator sell portfolios are 24% lower post-60 Minutes.
---------------------
Politically Connected Private Equity and Employment
Mara Faccio & Hung-Chia Hsu
Journal of Finance, forthcoming
Abstract:
We investigate the employment consequences of private equity buyouts. We find evidence of higher job creation, on average, at the establishments operated by targets of politically connected private equity firms than at those operated by targets of nonconnected private equity firms. Consistent with an exchange of favors story, establishments operated by targets of politically connected private equity firms increase employment more during election years and in states with high levels of corruption. In additional analyses we provide evidence of specific benefits experienced by target firms from their political connections. Our results are robust to tests designed to mitigate selection concerns.
---------------------
The role of corporate political strategies in M&As
Ettore Croci et al.
Journal of Corporate Finance, April 2017, Pages 260–287
Abstract:
In line with the view that politics can complicate M&A deals, we find that firms contributing to political action committees or involved in lobbying are less likely to be acquired and their takeover process is lengthier. As we empirically show, this can be explained by the fact that politicians have motives to interfere with the takeover process due to career concerns, in terms of getting re-elected and raising funds for future campaigns. We also document that politically connected target firms command higher takeover premiums from bidders lacking political expertise, consistent with the notion that the market regards target firms' connections, not easily replicable by bidders, as means to enhance growth opportunities of the merged firm.
---------------------
Kings of the Hill? An Examination of Centrist Behavior in the U.S. Senate
Neilan Chaturvedi
Social Science Quarterly, forthcoming
Objectives: Spatial voting literature on Congress indicates that the most powerful members are the ones who sit in the ideological center. This study examines how pivotal voters use that power in their participation in Congress.
Methods: This study examines two modes of congressional participation on two highly salient health-care bills—the filing of amendments and the delivery of floor speeches.
Results: This study finds that pivotal voters shy away from the legislative limelight. Pivotal voters choose to avoid the public eye by rarely proposing amendments or delivering floor speeches on these bills.
Conclusions: While theoretically pivotal, centrists who play the role of pivotal voters are more concerned about their electoral prospects than their legislative prowess and, as a result, defer congressional participation to party and committee leaders so as to avoid the ire of constituents.
---------------------
The Paradox of Community Power: Cultural Processes and Elite Authority in Participatory Governance
Jeremy Levine
Social Forces, March 2017, Pages 1155-1179
Abstract:
From town halls to public forums, disadvantaged neighborhoods appear more “participatory” than ever. Yet increased participation has not necessarily resulted in increased influence. This article, drawing on a four-year ethnographic study of redevelopment politics in Boston, presents an explanation for the decoupling of participation from the promise of democratic decision-making. I find that poor urban residents gain the appearance of power and status by invoking and policing membership in “the community” — a boundary sometimes, though not always, implicitly defined by race. But this appearance of power is largely an illusion. In public meetings, government officials can reinforce their authority and disempower residents by exploiting the fact that the boundary demarcating “the community” lacks a standardized definition. When officials laud “the community” as an abstract ideal rather than a specific group of people, they reduce “the community process” to a bureaucratic procedure. Residents appear empowered, while officials retain ultimate decision-making authority. I use the tools of cultural sociology to make sense of these findings and conclude with implications for the study of participatory governance and urban inequality.
---------------------
Public Sector Personnel Economics: Wages, Promotions, and the Competence-Control Trade-Off
Charles Cameron, John de Figueiredo & David Lewis
Princeton Working Paper, October 2016
Abstract:
We model personnel policies in public agencies, examining how wages and promotion standards can partially offset a fundamental contracting problem: the inability of public sector workers to contract on performance, and the inability of political masters to contract on forbearance from meddling. Despite the dual contracting problem, properly constructed personnel policies can encourage intrinsically motivated public sector employees to invest in expertise, seek promotion, remain in the public sector, and develop policy projects. However, doing so requires internal personnel policies that sort "slackers" from "zealots." Personnel policies that accomplish this task are quite different in agencies where acquired expertise has little value in the private sector, and agencies where acquired expertise commands a premium in the private sector. Finally, even with well-designed personnel policies, there remains an inescapable trade-off between political control and expertise acquisition.
---------------------
Brendan Nyhan
Political Research Quarterly, March 2017, Pages 223-236
Abstract:
When political scandals erupt in the press, we usually blame misconduct by public officials, but these episodes are political events whose occurrence and severity also depend in part on the political and media context. Using data on U.S. governors, I show that several key factors affect the likelihood and intensity that alleged misconduct will be politicized by the opposition and publicized by the press. First, lower approval ratings, which decrease the cost of politicizing and publicizing an allegation, are generally associated with more frequent and intense media scandals. By contrast, competing news events can crowd potential scandals off the news agenda. However, no evidence is found that opposition control of state political institutions leads to more media scandal. These results suggest that the occurrence of media scandal depends more on circumstance than we typically assume.
---------------------
Size, Fungibility, and the Strength of Lobbying Organizations
David Levine & Salvatore Modica
European Journal of Political Economy, forthcoming
Abstract:
How can a small special interest group successfully get an inefficient transfer at the expense of a much larger group with many more resources available for lobbying? We consider a simple model of agenda setting where two groups of different size lobby a politician over a transfer from one group to the other, and the group which sets the agenda can choose the size of the proposed transfer. The groups have resources which are used to pay the politician and to overcome the public goods problem within the group. Our key result is that which group prevails in the agenda setting game depends crucially on whether the transfers can also be used to pay the politician - in which case we say they are fungible. If the transfer is fungible, as in the case of a monetary payment, the smaller group prevails. If the transfer is non-fungible the result depends on whether it is rival or not - civil rights for example are non-rival. In the case of a rival non-fungible transfer depending on circumstances either group may prevail. In the non-rival case the large group prevails. Our results explain the apparent paradox that when it comes to special financial favors small groups seem very effective, but when it comes to large non-financial issues - such as minority rights - large groups are more effective.
---------------------
Corruption and State and Local Government Debt Expansion
Cheol Liu, Tima Moldogaziev & John Mikesell
Public Administration Review, forthcoming
Abstract:
Theories describing rent seeking in the public sector posit a number of negative fiscal outcomes that the choices of corrupt officials may generate. The evidence presented in this article shows that states with greater intensities of public corruption have higher aggregate levels of state and local debt. If corruption in the 10 most corrupt states were only at an average level, their public debt would be 9 percent lower, or about $249.35 per capita, all else being equal. Notably, institutional control measures may not have succeeded in restraining the expansion of state and local public debt in the presence of greater levels of corruption. State and local governments would achieve more efficient levels of fiscal discipline by curbing public sector corruption.
---------------------
Benedict Jimenez
Journal of Public Administration Research and Theory, forthcoming
Abstract:
This study examines the relationship between managerial networking and the fiscal health of city governments in the United States that faced a serious budget crisis during and immediately after the Great Recession. Do public managers’ ties with external stakeholders help improve the fiscal health of these cities? Or do these ties bind city officials to decisions that further exacerbate the fiscal difficulties of their governments? These questions are answered using data from a survey of municipal governments across the United States with a population of 50,000 or more, and financial data from Comprehensive Annual Financial Reports (CAFR) covering more than 200 hundred cities and for three fiscal years. Using instrumental variable regression to address possible common source bias and simultaneous causation, there is strong evidence that an external networking orientation is associated with a decline in city government fiscal health, whether the measure used is perceptual or CAFR-based.