Officeholders
The Value of the Revolving Door: Political Appointees and the Stock Market
Simon Luechinger & Christoph Moser
Journal of Public Economics, forthcoming
Abstract:
We analyze stock market reactions to announcements of political appointments from the private sector and corporate appointments of former government officials. Using unique data on corporate affiliations and announcements of all Senate-confirmed U.S. Defense Department appointees of six administrations, we find positive abnormal returns for political appointments. These estimates are not driven by important observations, volatile stocks, industry-wide developments or the omission of further commonly used return predictors. Placebo events for close competitors and alternative dates yield no effects. Effects are larger for top government positions and less anticipated announcements. We also find positive abnormal returns for corporate appointments and positive effects of political connections on procurement volume. Our results suggest that concerns over conflicts of interest created by the revolving door seem justified, even in a country with strong institutions.
----------------------
Too Close for Comfort? Geographic Propinquity to Political Power and Stock Returns
Christos Pantzalis & Jung Chul Park
Journal of Banking & Finance, November 2014, Pages 57-78
Abstract:
We show that firm headquarters' geographic proximity to political power centers (state capitals) is associated with higher abnormal returns. Consistent with the notion that this effect is rooted in social network links, we find it is more pronounced in communities with high levels of sociability and political values' homophily, and that it dissipates when firms move their headquarters to another state. Finally, in line with the view that investors perceive such networks to be associated with political risk, we find that this effect is particularly strong when there are substantial levels of corruption, dependency on government spending, and politicians' turnover.
----------------------
David Broockman & Daniel Butler
University of California Working Paper, September 2014
Abstract:
Politicians have been depicted as, alternatively, strongly constrained by public opinion, able to shape public opinion if they persuasively appeal to citizens' values, or relatively unconstrained by public opinion and able to shape it merely by announcing their positions. We conduct unique field experiments in cooperation with legislators to explore how constituents react when legislators take positions they oppose. For the experiments, state legislators sent their constituents official communications with randomly assigned content. In some letters, the representatives took positions on salient issues these constituents opposed, sometimes supported by extensive arguments but sometimes minimally justified. Results from an ostensibly unrelated telephone survey show that citizens often adopted their representatives' issue positions even when representatives offered little justification. Moreover, citizens did not evaluate their representatives more negatively when representatives took positions citizens opposed. These findings suggest politicians can enjoy broad latitude to shape public opinion.
----------------------
Alex Ruder
Quarterly Journal of Political Science, Summer 2014, Pages 301-335
Abstract:
A lack of direct electoral checks on government bureaucrats challenges norms of democratic accountability. One proposed solution is to increase the president's control over federal agencies. It is, however, an open question as to whether voters will attribute responsibility to the president even when in charge of agencies. A key empirical challenge has been that presidential control is not randomly assigned across agencies. To overcome this issue, I compare two agencies that enforce the same policy but differ in insulation from presidential control. I examine a large, unique dataset of news coverage, showing that news coverage of the presidentially-controlled agency features more politicized content that ties the agency to the president. I then demonstrate experimentally that this political content increases attribution of control to the president. The results support theories that claim agency design moderates voter attribution of responsibility to the president. This paper broadly adds to the literature on institutional design and the determinants of agency discretion.
----------------------
Stéphane Lavertu
Regulation & Governance, forthcoming
Abstract:
Legislators are thought to delegate policymaking authority to administrative actors either to avoid blame for controversial policy or to secure policy outcomes. This study tests these competing perspectives and establishes that public attention to policymaking is a powerful predictor of the extent to which significant United States statutes delegate authority to the executive branch. Consistent with the policy-concerns perspective, by one calculation statutes dealing with high-attention issues entail 48 percent fewer delegating provisions than statutes dealing with low-attention issues - a far stronger relationship than is typically found in the delegation literature. As per the blame-avoidance perspective, a number of additional analyses yield results consistent with the notion that fears about future public attention motivate statutory delegation if legislative conflict is sufficiently great. Overall, however, the results suggest that conflict typically is not sufficiently great and that legislators are generally more inclined to limit statutory delegation when the public is paying attention.
----------------------
The two faces of congressional roll-call voting
Stephen Jessee & Sean Theriault
Party Politics, forthcoming
Abstract:
Most analyses of congressional voting, whether theoretical or empirical, treat all roll-call votes in the same way. We argue that such approaches mask considerable variation in voting behaviour across different types of votes. In examining all roll-call votes in the U.S. House of Representatives from the 93rd to the 110th Congresses (1973-2008), we find that the forces affecting legislators' voting on procedural and final passage matters have exhibited important changes over time, with differences between these two vote types becoming larger, particularly in recent congresses. These trends have important implications not only on how we study congressional voting behaviour, but also in how we evaluate representation and polarization in the modern Congress.
----------------------
Jaclyn Cameron & Nick Geidner
Journal of Broadcasting & Electronic Media, Summer 2014, Pages 400-419
Abstract:
The use of second screens to dual-view television and social media is exponentially increasing. As a result, television producers are increasingly augmenting television content with social media comments from viewers, which may serve as a type of real-time public opinion indicator. The current research effort utilizes two experimental studies to explore the effects of this new media production practice on viewer's attitudes and opinions. In these studies, a Twitter feed was integrated in to entertainment (Study 1) and political (Study 2) television broadcasts and manipulated to convey either positive or negative opinions of the content. Participants' opinions were found to conform to the majority opinion presented in the manipulated Twitter feed in nearly all of the analyses. Implications for dual viewing and second screen use are discussed in light of findings.
----------------------
Politicians, Bureaucrats and Targeted Redistribution
Ruben Enikolopov
Journal of Public Economics, forthcoming
Abstract:
The paper argues that for political reasons elected politicians are more likely to be engaged in targeted redistribution than appointed bureaucrats. It uses the example of patronage jobs in the U.S. local governments to provide empirical support for this claim. It shows that the number of public employees is higher for elected chief executives. This difference is stronger in public services with bigger private-public wage differential and it increases during election years. It also finds that the number of public employees increases with the age of bureaucrats while there is no such relationship in the case of politicians, which is consistent with younger bureaucrats having stronger career concerns.
----------------------
The Structure of Political Institutions and Effectiveness of Corporate Political Lobbying
Seong-Jin Choi, Nan Jia & Jiangyong Lu
Organization Science, forthcoming
Abstract:
This paper investigates how the structure of political institutions influences the effectiveness of corporate political lobbying by shaping the "veto points" and "entry points" that lobbying firms encounter and require, respectively, when attempting to influence public policies; in so doing, this study deepens our understanding of the strategic implications of institutional environments. Using large-sample and cross-country firm-level data, we find that the influence of firms' lobbying activities on public policies is weakened when there are tighter constraints generated as a result of greater political (partisan) competition and more subnational government tiers. We find that the negative association between the effectiveness of lobbying and political (partisan) competition is particularly pronounced in countries with lower electoral accountability and that the negative association between the effectiveness of lobbying and subnational government tiers is particularly pronounced in more centralized political systems.
----------------------
Sunsets and Federal Lawmaking: Evidence from the 110th Congress
Frank Fagan & Fırat Bilgel
International Review of Law and Economics, March 2015, Pages 1-6
Abstract:
We test the hypothesis that the choice to include a sunset provision increases the likelihood that a bill becomes law. We develop a model where the legislator's knowledge of the increase in passage probability from including a sunset provision influences the legislator's choice to do so. Because legislators may either include a sunset provision to increase passage probability, or observe low passage probability and respond with a sunset provision, the choice to include a sunset provision is endogenous. Consequently, the causal effect of temporary enactment is identified by using the legislator's number of offspring as a source of exogenous variation in the choice to include a sunset provision. Employing recursive bivariate probit, we find that the average causal effect of including a sunset provision is sixty percent. We also find that the average causal effect of including sunset provisions in bills that already include them is about twenty percent.
----------------------
Jerry Ellig & Christopher Conover
Public Choice, forthcoming
Abstract:
Elected leaders delegate rulemaking to federal agencies, then seek to influence rulemaking via top-down directives and statutory deadlines. This paper documents an unintended consequence of these control strategies: they reduce regulatory agencies' ability and incentive to conduct high-quality economic analysis to inform their decisions. Using scoring data that measure the quality of regulatory impact analysis, we find that hastily-adopted "interim final" regulations reflecting signature policy priorities of the two most recent presidential administrations were accompanied by significantly lower-quality economic analysis. Interim final homeland security regulations adopted during the G.W. Bush administration and interim final regulations implementing the Affordable Care Act in the Obama administration were accompanied by less thorough analysis than other "economically significant" regulations (regulations with benefits, costs, or other economic impacts exceeding $100 million annually). The lower quality analysis apparently stems from the confluence of presidential priorities and very tight statutory deadlines associated with interim final regulations, rather than either factor alone.
----------------------
Raphaël Levy
Journal of Public Economics, forthcoming
Abstract:
We consider a political agency model where voters learn information about some policy-relevant variable, which they can ignore when it impedes their desire to hold optimistic beliefs. Voters' excessive tendency to sustain optimism may result in inefficient political decision-making because political courage does not pay off when voters have poor information. However, voters infer information from policies and incentives to ignore bad news decrease when policy-making is more efficient. This generates multiple equilibria: an equilibrium where voters face up to the reality and politicians have political support to implement optimal policies, and another where they shy away from reforms to cater to the electorate's demand for soothing policies.
----------------------
Incumbent-Quality Advantage and Counterfactual Electoral Stagnation in the US Senate
Ivan Pastine, Tuvana Pastine & Paul Redmond
Politics, forthcoming
Abstract:
This article examines the extent to which electoral selection based on candidate quality alone can account for the pattern of re-election rates in the US Senate. In the absence of officeholder benefits, electoral selection is simulated using observed dropout rates from 1946 to 2010. This provides a benchmark for the re-election rate that would be generated by incumbent quality advantage alone. The simulation delivers a re-election rate that is almost identical to the observed rate prior to 1980, at around 78 per cent. In the later subsample, quality-based selection generates a re-election rate that is seven percentage points lower than observed. The divergence in the re-election rates in the later subsample is consistent with the findings of vote margin studies that indicate rising incumbency advantage due to officeholder benefits. In addition, it is found here that the quality-based selection first-term re-election rate is significantly lower than the observed first-term re-election rate. This result supports sophomore surge vote margin studies of officeholder benefits.
----------------------
The Decline of Daily Newspapers and the Third-Person Effect
Martin Johnson, Kirby Goidel & Michael Climek
Social Science Quarterly, forthcoming
Objective: In this article, we investigate the third-person effect within the context of the decision by the New Orleans Times-Picayune in September 2012 to end daily print circulation in favor of a three-day-per-week publication schedule and online news offerings.
Methods: We utilize original survey data based on 1,043 telephone interviews with respondents living in the greater New Orleans area, including 530 landline respondents selected via random digit dialing and 513 respondents randomly selected from available cellular telephone blocks.
Results: We find evidence of a third-person effect on judgments about changes at The Times-Picayune. New Orleans area residents worry that the decline of information will negatively affect the ability of others to keep up with the news. We also show that the effects are contingent upon physical location. The greater the distance from New Orleans, the more pronounced concerns are about the effect of the loss of this daily information source on others in the community.
Conclusions: To date, third-person effects have generally been studied within the context of enduring and established forms of communication, especially those viewed as having potential negative effects - politically biased messages, other forms of propaganda, and communication that could harm reputations. In this article, we extend this work to show third-person effects persist within the context of declining news coverage.
----------------------
Raymond James Pingree, Dominique Brossard & Douglas McLeod
Mass Communication and Society, September/October 2014, Pages 615-638
Abstract:
A frequent critique of contemporary journalism is that journalists rarely adjudicate factual disputes when covering politics; however, very little research has been done on the effects of such passive journalism on audiences. This study tests effects of active adjudication versus "he said/she said" journalism on a variety of outcomes, finding that adjudication can correct factual beliefs, increase perceived news quality, satisfy perceived informational needs, and increase the likelihood of future news use. However, for readers who were less interested in the issues under dispute, adjudication also reduced epistemic political efficacy, which is confidence in one's ability to find the truth in politics.
----------------------
Wealth, Officeholding, and Elite Demand for Slavery in Antebellum Georgia
Jason Poulos
University of California Working Paper, August 2014
Abstract:
This paper uses the first large-scale land lottery in US history to identify the effects of randomly-induced wealth on officeholding and the ideology of politicians. First, I link records from the 1805 Georgia land lottery to a roster of state politicians and estimate the effect of winning a lottery prize on ex-post officeholding. Lottery winners are 1.2% more likely to hold office compared to lottery losers (N = 21,612; p < 0.001). The treatment effect is larger for lottery winners who received higher-valued land lots. Second, I restrict the sample to members of the Georgia Assembly and measure support for slavery using roll call votes. Winning a lottery prize increases support for slavery by 7%, although this effect may be due to chance (N = 174; p = 0.220). The results demonstrate that wealth has a robust effect on officeholding, but does not significantly effect the ideology of politicians.