Parties, governments and pollsters: A new form of patronage?

In its first term, the Howard government hired Australasian Research Strategies (ARS), headed by pollster Mark Textor, to conduct market research for several Commonwealth departments and agencies. This was, the Labor Opposition claimed, a case of the Liberals handing jobs to their 'mates'. Textor played a key role in the Liberals' 1996 and 1998 federal election campaigns. However, Labor's attack rings hollow since in the 1980s the Hawke government similarly contracted Rod Cameron's ANOP to conduct opinion research for Commonwealth departments and agencies. At the time Cameron was Labor's strategic pollster and centrally involved in planning Labor election campaigns. On both sides of Australian politics, governments have begun to channel patronage towards their party's pollsters. In this research note, we suggest that this development cannot be explained as 'jobs for the boys'. Instead, this new form of patronage has its roots in the vital role that pollsters now play in guiding election campaigns, and in the commercial reality that Australian politics provides too little work to sustain specialist political pollsters. Parties in government now appear to utilise incumbency to sustain an ongoing relationship with the commercial polling organisations like ANOP and ARS to whom they will entrust much of the planning of their campaign for re-election.

Optimal Climate Change Policies When Governments Cannot Commit

This paper examines the optimal design of climate change policies in the context where governments want to encourage the private sector to undertake significant immediate investment in developing cleaner technologies, but the carbon taxes and other environmental policies that could in principle stimulate such investment will be imposed over a very long future. The conventional claim by environmental economists is that environmental policies alone are sufficient to induce firms to undertake optimal investment. However this argument requires governments to be able to commit to these future taxes, and it is far from clear that governments have this degree of commitment. We assume instead that governments cannot commit, and so both they and the private sector have to contemplate the possibility of there being governments in power in the future that give different (relative) weights to the environment. We show that this lack of commitment has a significant asymmetric effect. Compared to the situation where governments can commit it increases the incentive of the current government to have the investment undertaken, but reduces the incentive of the private sector to invest. Consequently governments may need to use additional policy instruments – such as R&D subsidies – to stimulate the required investment.

Rules vs. political discretion: evidence from constitutionally guaranteed transfers to local governments in Brazil

Can rules be used to shield public resources from political interference? The Brazilian constitution and national tax code stipulate that revenue sharing transfers to municipal governments be determined by the size of counties in terms of estimated population. In this paper I document that the population estimates which went into the transfer allocation formula for the year 1991 were manipulated, resulting in significant transfer differentials over the entire 1990's. I test whether conditional on county characteristics that might account for the manipulation, center-local party alignment, party popularity and the extent of interparty fragmentation at the county level are correlated with estimated populations in 1991. Results suggest that revenue sharing transfers were targeted at right-wing national deputies in electorally fragmented counties as well as aligned local executives.

On Globalization and the Growth of Governments

This paper investigates the relationship between trade openness and the size of government, both theoretically and empirically. We show that openness can increase the size of governments through two channels: (1) a terms of trade externality, whereby trade lowers the domestic cost of taxation and (2) the demand for insurance, whereby trade raises risk and public transfers. We provide a unified framework for studying and testing these two mechanisms. First, we show how their relative strength depends on a key parameter, the elasticity of substitution between domestic and foreign goods. Second, while the terms of trade externality leads to inefficiently large governments, the increase in public spending due to the demand for insurance is optimal. We show that large volumes of trade may result in welfare losses if the terms of trade externality is strong enough while small volumes of trade are always beneficial. Third, we provide new evidence on the positive association between openness and the size of government and test whether it is consistent with the terms of trade externality or the demand for insurance. Our findings suggest that the positive relationship is remarkably robust and that the terms of trade externality may be the driving force behind it, thus raising warnings that globalization may have led to inefficiently large governments.

Report on the Community Development Block Grant Program administered by the Southern Iowa Council of Governments (Council) for the period October 1, 2003 through September 30, 2007

Report on the Community Development Block Grant Program administered by the Southern Iowa Council of Governments (Council) for the period October 1, 2003 through September 30, 2007

Report on the Community Development Block Grant and Home Investment Partnerships Programs administered by the Region XII Council of Governments for the period July 1, 2005 through November 21, 2008

Report on the Community Development Block Grant and Home Investment Partnerships Programs administered by the Region XII Council of Governments for the period July 1, 2005 through November 21, 2008

Report on the Chariton Valley Planning & Development Council of Governments for the period July 1, 2007 through August 31, 2010

Report on the Chariton Valley Planning & Development Council of Governments for the period July 1, 2007 through August 31, 2010

Audit report on the Chariton Valley Planning & Development Council of Governments in Centerville, Iowa for the years ended June 30, 2011, 2010, 2009 and 2008

Audit report on the Chariton Valley Planning & Development Council of Governments in Centerville, Iowa for the years ended June 30, 2011, 2010, 2009 and 2008

Audit report on the Chariton Valley Planning & Development Council of Governments in Centerville, Iowa for the year ended June 30, 2012

Audit report on the Chariton Valley Planning & Development Council of Governments in Centerville, Iowa for the year ended June 30, 2012

Managing the crises : how did local governments react to the financial crisis in 2008 and what explains the differences ? The case of Swiss municipalities

Swiss municipalities are, to a large extent, responsible for their financial resources. Since these resources primarily depend on income and property taxes from individuals and enterprises, municipality budgets are likely to be directly affected by the current crisis in the financial sector and the economy. This article investigates how municipalities perceived this threat and how they reacted to it. In a nationwide survey conducted at the end of 2009 in all 2596 Swiss municipalities, we asked local secretaries which measures had been launched in order to cope with expected losses in tax income and a possible increase in welfare spending. Did the municipalities rely on Keynesian measures increasing public spending and accepting greater deficits, or did they try to avoid further deficits by using austerity measures and a withdrawal of planned investments? Our results show that only a few municipalities - mainly the bigger ones - expected to be greatly affected by the crisis. Their reactions, however, did not reveal any clear patterns that theory would lead one to expect. Preferences for austerity measures and deficit spending become visible but many municipalities took measures from both theories. The strongest explanatory factors for determining how/why municipalities react are: the municipality's level of affectedness followed by whether or not the municipality belongs to the French-speaking part of the country. Size also has an impact, whereas the strength of the Social Democrat party is negligible. Explaining what kind of measures municipalities are likely to take is more difficult. However, the more a municipality is affected, the more likely it is to stick to austerity measures.

EU-15 sovereign governments’ cost of borrowing after seven years of monetary union

Yield spreads over 10-year German government securities of the EU-15 countries converged dramatically in the seven years after the beginning of Monetary Integration. In this paper, we investigate the relative influence of systemic and idiosyncratic risk factors on their behaviour. Our conclusions suggest that in EMU-countries the relative importance of domestic risk factors (both credit and liquidity risk factors) is higher than that of international factors, which appear to play a secondary but significant role in non-EMU countries.