Endogenous Federal Grants and Crowd-out of State Government Spending: Theory and Evidence from the Federal Highway Aid Program

2002 ◽  
Vol 92 (1) ◽  
pp. 71-92 ◽  
Author(s):  
Brian Knight

Contrary to simple theoretical predictions, existing evidence suggests that federal grants do not crowd out state government spending. A legislative bargaining model with endogenous grants documents a positive correlation between grant receipts and preferences for public goods; this correlation has likely biased existing work against measuring crowd-out. To correct for such endogeneity, the model motivates instruments based on the political power of state congressional delegations. Exploiting this exogenous variation in grants, the instrumental variables estimator reports crowd-out that is statistically and economically significant. This endogeneity may explain the flypaper effect, a nonequivalence between grant receipts and private income.

2016 ◽  
Vol 16 (3) ◽  
pp. 1501-1538
Author(s):  
Yasushi Asako ◽  
Tetsuya Matsubayashi ◽  
Michiko Ueda

Abstract What are the fiscal consequences of legislative term limits? To answer this question, we first develop a legislative bargaining model that describes negotiations over the allocation of distributive projects among legislators with different levels of seniority. Building on several predictions from the model, we develop two hypotheses for empirical testing. First, the adoption of term limits that results in a larger reduction in the variance of seniority within a legislature increases the amount of government spending. Second, legislatures that adopt stricter term limits increase the amount of government spending, while legislatures that adopt moderate term limits show no change in the amount. We provide evidence for these hypotheses using panel data for 49 US state legislatures between 1980 and 2010.


2011 ◽  
pp. 66-77
Author(s):  
O. Vasilieva

Does resource abundance positively affect human capital accumulation? Or, alternatively, does it «crowd out» the human capital leading to the deterioration of economic growth? The paper gives an overview of the relevant literature and discusses both theoretical and empirical results obtained regarding the connection between human capital accumulation and resource abundance. It shows that despite some theoretical predictions about the harmful effect of resource abundance on human capital accumulation, unambiguous evidence of such impact that would be robust with respect to the change of resource abundance parameter has not been obtained yet.


2020 ◽  
Vol 20 (2020) (2) ◽  
pp. 359-394
Author(s):  
Jurij Perovšek

For Slovenes in the Kingdom of the Serbs, Croats and Slovenes the year 1919 represented the final step to a new political beginning. With the end of the united all-Slovene liberal party organisation and the formation of separate liberal parties, the political party life faced a new era. Similar development was showing also in the Marxist camp. The Catholic camp was united. For the first time, Slovenes from all political camps took part in the state government politics and parliament work. They faced the diminishing of the independence, which was gained in the State of Slovenes, Croats and Serbs, and the mutual fight for its preservation or abolition. This was the beginning of national-political separations in the later Yugoslav state. The year 1919 was characterized also by the establishment of the Slovene university and early occurrences of social discontent. A declaration about the new historical phenomenon – Bolshevism, had to be made. While the region of Prekmurje was integrated to the new state, the questions of the Western border and the situation with Carinthia were not resolved. For the Slovene history, the year 1919 presents a multi-transitional year.


2020 ◽  
Vol 2 (5(74)) ◽  
pp. 72-75
Author(s):  
A.B. Shumilina ◽  
O.A. Artyuhin ◽  
A.A. Krickaya

The article examines the peculiarities of the organization of local government in modern Russia, explores the peculiarities of its interaction with the state government, identifies the essential characteristics of local government, defines its role in the system of political governance and public power


2009 ◽  
Vol 11 (04) ◽  
pp. 407-417 ◽  
Author(s):  
HUIBIN YAN

Solution uniqueness is an important property for a bargaining model. Rubinstein's (1982) seminal 2-person alternating-offer bargaining game has a unique Subgame Perfect Equilibrium outcome. Is it possible to obtain uniqueness results in the much enlarged setting of multilateral bargaining with a characteristic function? This paper investigates a random-proposer model first studied in Okada (1993) in which each period players have equal probabilities of being selected to make a proposal and bargaining ends after one coalition forms. Focusing on transferable utility environments and Stationary Subgame Perfect Equilibria (SSPE), we find ex ante SSPE payoff uniqueness for symmetric and convex characteristic functions, considerably expanding the conditions under which this model is known to exhibit SSPE payoff uniqueness. Our model includes as a special case a variant of the legislative bargaining model in Baron and Ferejohn (1989), and our results imply (unrestricted) SSPE payoff uniqueness in this case.


2019 ◽  
Vol 11 (02) ◽  
Author(s):  
Monika Srivastava

India is a labour surplus country with 47 million unemployed below the age of 24 years and 12-13 million youths joining the labour market every year. To avoid the growing unemployment, India strongly needs labour intensive and labour friendly industries. Labour being in the concurrent list of the constitution, both central and state government legislate on it. But the State Governments have limited space to enact labour laws to address their own requirements-promoting investment and employment generation. Labour law reform is currently on the political agenda in India, particularly in the wake of the election of the new Modijee led government at the centre. The first set of initiatives, announced in October 2014, were the “unified labour and industrial portal” and “labour inspection scheme”. Our constitution has many articles directed toward their interests for eg. Article 23 forbids forced labour, 24 forbids child labour (in factories, mines and other hazardous occupations) below age of 14 years. Further, Article 43A was inserted by 42nd amendment – directing state to take steps to ensure worker’s participation in management of industries. (Gandhi ji said that employers are trustees of interests of workers and they must ensure their welfare.) India is expected to generate 51 million jobs till 2019, it is imperative to streamline all laws, to facilitate manufacturing sector in India so as economy could absorb new human resource inflow.


1999 ◽  
Vol 31 (124) ◽  
pp. 505-512 ◽  
Author(s):  
Gerard O’Brien

Few commentators would dispute that, as regards historical records, 1922 was a year of destruction and displacement. Months before the conflagration in the Four Courts annihilated a broad cross-section of official records the departing representatives of the crown régime had turned their attention to those most recently in use. Nobody really knows how much of this material was deliberately burnt in Dublin Castle in the days preceding the takeover by Free State troops on 16 January 1922. It is all but certain that at least some intelligence files were destroyed: these would no doubt have identified informants, double agents, serving intelligence officers (whether English or Irish), and the more discreet crown servants. Certainly the new custodians were greeted by empty cupboards and bare shelves. Legends, which may or may not have been founded in reality, grew of the extent of the destruction and, by implication, of the scale of the guilty secrets thus concealed forever.But the incoming officials were in no doubt, either, that much had been simply removed, whether to the Irish Office in London or to some other safe place. Assurances were offered to the Free State government by the departing Castle official A. W. Cope ‘that the only papers we are removing from the Castle to London are confidential papers relating to the political movement in this country. The removal of the papers will not hamper the future administration.’ Should any person apply for the return of papers seized in police raids during the conflict, their requests would be considered. Cope was being less than candid. During March an Irish Office official noted in an unmistakably complaining tone that the office was having to accommodate ‘a number of files belonging to the Crimes Special Department of the R.I.C. and an Irish Secret Service organisation. Some of the matter in these files is highly secret.’ The material occupied one hundred deed-boxes, half-a-dozen large packing cases, a couple of six-foot-high cupboards, along with thirty-eight card-index trays (‘twelve of them in cabinets’).


2012 ◽  
Vol 4 (2) ◽  
pp. 46-68 ◽  
Author(s):  
Jeffrey Clemens ◽  
Stephen Miran

Balanced budget requirements lead to substantial pro-cyclicality in state government spending, with the stringency of a state's rules driving the pace at which it must adjust to shocks. We show that fiscal institutions can generate natural experiments in deficit-financed spending that are informative regarding fiscal stabilization policy. Alternative sources of variation in subnational fiscal policy often implicitly involve “windfall” financing, which precludes any effect of future debt or taxation on current consumption and investment. Consistent with a role for these “Ricardian” effects, our estimates are smaller than those in related studies, implying an on-impact multiplier below 1. (JEL C51, E32, E62, H72)


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