Official act
Which government officials leak unauthorized information to the press in Washington?
Kara Alaimo
Journal of Public Affairs, forthcoming
Abstract:
Every modern president of the United States has been bedeviled by unauthorized leaks of government information to the press. Who is responsible for such leaks? Presidents of the United States have accused civil servants of attempting to undermine them. However, journalists have suggested that the presidents' own political appointees leak more. Using interviews conducted in 2013 with both presidential political appointees and civil servants who worked in public affairs for the U.S. Treasury Department during the administrations of Presidents Barack Obama and George W. Bush, as well as interviews with reporters with whom the Treasury officials interacted frequently, this case study finds that political appointees and civil servants leak unauthorized information that does not serve the president's interests to the press with roughly the same frequency. The findings shed light on behavior that is typically shrouded in secrecy and call into question the effort by modern U.S. presidents to gain greater control of the federal government by hiring record numbers of political appointees.
---------------------
Government Preferences and SEC Enforcement
Jonas Heese
Harvard Working Paper, December 2014
Abstract:
I examine whether political pressure by the government as a response to voters' general interest in protecting employment is reflected in the enforcement actions by the Securities and Exchange Commission (SEC). Using labor intensity as a measure for a firm's contribution to employment, I find that labor-intensive firms are less likely to be subject to an SEC enforcement action. Next, I show that labor-intensive firms are less likely to face an SEC enforcement action in presidential election years if they are located in politically important states. I also find evidence of a lower likelihood of SEC enforcement for labor-intensive firms that are headquartered in districts of senior congressmen that serve on committees that oversee the SEC. All of these results hold after controlling for firms' accounting quality and two alternative explanations for firms' favorable treatment by the SEC, i.e., firms' location and political contributions. These findings suggest that voters' interests drive political pressure on SEC enforcement - independent of firms' lobbying for their special interests.
---------------------
Explaining Explanations: How Legislators Explain their Policy Positions and How Citizens React
Christian Grose, Neil Malhotra & Robert Parks Van Houweling
American Journal of Political Science, forthcoming
Abstract:
Legislators claim that how they explain their votes matters as much as or more than the roll calls themselves. However, few studies have systematically examined legislators' explanations and citizen attitudes in response to these explanations. We theorize that legislators strategically tailor explanations to constituents in order to compensate for policy choices that are incongruent with constituent preferences, and to reinforce policy choices that are congruent. We conduct a within-subjects field experiment using U.S. senators as subjects to test this hypothesis. We then conduct a between-subjects survey experiment of ordinary people to see how they react to the explanatory strategies used by senators in the field experiment. We find that most senators tailor their explanations to their audiences, and that these tailored explanations are effective at currying support - especially among people who disagree with the legislators' roll-call positions.
---------------------
When Talk Isn't Cheap: The Corporate Value of Political Rhetoric
Art Durnev, Larry Fauver & Nandini Gupta
University of Iowa Working Paper, November 2014
Abstract:
Does political rhetoric matter for firms and investors? We conduct a textual analysis of all 388 gubernatorial "State of the state" speeches given between 2002 and 2010 across U.S. states, to examine this question. Political speeches may reduce policy uncertainty (Pastor and Veronesi, 2012), reflect the politician's views regarding the economic future of the state, and contain new information regarding future policies that affect the business environment. Using data on 5,721 firms matched based on their location of their headquarters and main operations, we conduct an event study examining the market reaction to the tone of the State of the state addresses. To examine whether the information has a long-run impact on firms, we also consider changes in firms' investment and employment decisions. Controlling for speech length, firm, and state-level characteristics, the results show a statistically significant and positive association between the level of optimism expressed in a Governor's speech, and the abnormal returns of firms headquartered in that Governor's state. We also find that a more optimistic speech is associated with a statistically significant increase in investment and employment, relative to firm size, whereas a more pessimistic speech is associated with a decline in investment and employment for firms located in that state. To identify the impact of the speech on firms, we show that the results are robust to identifying the geographic focus of firms' operations, using a matched sample of firms located in neighboring states as a control group, and instrumental variables. To identify channels by which the content of the speech may have an impact, we show that firms that obtain state-government contracts, and those that are more dependent on skilled human capital and therefore education spending, significantly increase investments if the budget-related and education-related parts of the speech are more optimistic. We also find that political rhetoric is most informative during uncertain economic conditions, when government policy has had a greater impact. Lastly, we show that institutional characteristics, such as term limits and state-level transparency, affect the response of firms to the speech.
---------------------
Stratford Douglas & Robert Reed
Public Finance Review, forthcoming
Abstract:
This article replicates and analyzes a study by Hoover and Pecorino (H&P) on federal spending in US states. H&P followed on pathbreaking research by Atlas et al. in which evidence was claimed in favor of the "small state effect"; namely, that since every state is represented by two senators, small states have a disproportionate influence on federal spending relative to their population size. Using H&P's data, we both replicate their results and demonstrate strong support for the small-state effect when we formally test their predictions. The contribution of this study is that we demonstrate that this empirical support vanishes when we (i) employ cluster robust standard errors rather than conventional ordinary least squares (OLS) standard errors and (ii) include a variable for population growth as suggested in a recent study by Larcinese, Rizzo, and Testa. We conclude that there is insufficient evidence to support the hypothesis of a "small-state effect."
---------------------
You Get What You Want: A Note on the Economics of Bad News
Jill McCluskey, Johan Swinnen & Thijs Vandemoortele
Information Economics and Policy, March 2015, Pages 1-5
Abstract:
We develop a simple theoretical model that explains the slant towards negative coverage in news media. In a framework where news is informative and consumers are risk averse, diminishing marginal utility implies that information about a negative income shock is more valuable than information about a positive shock, which leads to disproportionate reporting of bad news.
---------------------
In government we trust: The role of fiscal decentralization
Jenny Ligthart & Peter van Oudheusden
European Journal of Political Economy, March 2015, Pages 116-128
Abstract:
This paper looks whether fiscal decentralization is associated with trust of citizens in government related institutions. We expect a positive relationship based on the argument of governments' improved responsiveness to preferences of citizens that is perceived to result from more decentralized fiscal systems. Survey data from up to 42 countries over the period 1994-2007 confirm this positive relationship. It is robust to controlling for unobserved country heterogeneity and a wide array of other explanatory variables that are associated with trust in government related institutions. Moreover, we do not find that the positive association with fiscal decentralization extends to other, non-government related institutions.
---------------------
Return on Political Investment in the American Jobs Creation Act of 2004
Hui Chen, Katherine Gunny & Karthik Ramanna
Harvard Working Paper, December 2014
Abstract:
Prior literature raises a "puzzle" of high rates of return on corporate political investment, but evidence for this puzzle is largely descriptive in nature. We exploit the setting of the American Jobs Creation Act's passage in 2004 to provide more robust estimates of political returns based on instrumentation in a two-stage regression model. We find for the median sample firm that an increase of $1 million in lobbying spending is associated with about $32.35 million in taxes saved. These estimates, while consistent with a high-returns "puzzle," are nearly an order of magnitude lower than those previously reported via descriptive methods.
---------------------
Michael Brady & Daniel Lee
Party Politics, forthcoming
Abstract:
We consider whether the manipulation of committee sizes can serve as a strategic tool of the majority party to further its influence over policy outcomes in the US House. Previous research notes the influence of the majority party's preferences on the composition of committees but takes the size of committees as exogenous. We argue that the determination of sizes is an important first step and potential tool to shape committee composition, given vacancy constraints like the property rights norm. Using assignment and revealed legislator ideology data from the 80th to 111th Congresses, our results support this view of strategic expansion as a majority party strategy particularly for "prestige committees," which are most central to a party's agenda. Expansion indeed results in committees that are ideologically closer to the majority caucus median.
---------------------
It's (Change in) the (Future) Economy, Stupid: Economic Indicators, the Media, and Public Opinion
Stuart Soroka, Dominik Stecula & Christopher Wlezien
American Journal of Political Science, forthcoming
Abstract:
Economic perceptions affect policy preferences and government support. It thus matters that these perceptions are driven by factors other than the economy, including media coverage. We nevertheless know little about how media reflect economic trends, and whether they influence (or are influenced by) public economic perceptions. This article explores the economy, media, and public opinion, focusing in particular on whether media coverage and the public react to changes in or levels of economic activity, and the past, present, or future economy. Analyses rely on content-analytic data drawn from 30,000 news stories over 30 years in the United States. Results indicate that coverage reflects change in the future economy, and that this both influences and is influenced by public evaluations. These patterns make more understandable the somewhat surprising finding of positive coverage and public assessments in the midst of the Great Recession. They also may help explain previous findings in political behavior.
---------------------
Lobbying from Inside the System: Why Local Governments Pay for Representation in the U.S. Congress
Matt Loftis & Jaclyn Kettler
Political Research Quarterly, forthcoming
Abstract:
Why do cities spend scarce resources lobbying the federal government? The hierarchy of U.S. government provides various pathways for local representation. Nevertheless, cities regularly invest in paid representation. This presents a puzzle for American democracy. Why do cities lobby, and do they lobby strategically? We quantify for the first time the extent of this phenomenon and examine its determinants using new data on 498 cities across forty-five states from 1998 to 2008. We find that economic distress pushes cities to lobby, but does not impact expenditures. Cities in competitive congressional districts, and therefore crucial to national politics, spend more on lobbying.
---------------------
Jacob Gersen & Matthew Stephenson
Journal of Legal Analysis, Winter 2014, Pages 185-243
Abstract:
Although ensuring the "accountability" of agents to their principals is widely considered a core objective of institutional design, recent work in political economy has identified and elucidated an important class of situations in which effective accountability mechanisms can decrease, rather than increase, an agent's likelihood of acting in her principal's interests. The problem, which we call "over-accountability," is essentially an information problem: sometimes even a fully rational but imperfectly informed principal (e.g., the citizens) will reward "bad" actions rather than "good" actions by an agent (e.g. the President). In these cases, not only do accountability mechanisms fail to remedy the agency problem inherent in representative government, they actually make the problem worse. This Article offers a conceptual and empirical overview of over-accountability problems, and also considers a range of potential solutions. By surveying both the distortions themselves and a range of possible responses, this article aspires to assist both public law scholars and institutional reformers in producing more effective solutions.
---------------------
Thomas Braendle
Public Choice, January 2015, Pages 1-24
Abstract:
We study the harmonization of the base pay for the Members of the European Parliament (MEPs). Prior to this reform, implemented in 2009, base pay was aligned with that of national parliamentarians, causing large differences in pay between the MEPs representing 27 member states. Based on detailed information on individual MEPs between 2004 and 2011, we find that the reform, which introduced an exceptional base pay increase of 200 % per national delegation on average, has a positive incentive effect on in-office effort proxied by the number of speeches, written declarations and reports drafted. However, more generous remuneration is associated with higher rates of absenteeism. With respect to political selection, we find that higher pay also raises reelection rates. The composition of the pool of MEPs in terms of (ex-ante) quality approximated by formal education, previous political experience in elected office and occupational background is, however, unaffected. If we restrict our attention to newly elected MEPs, a salary increase is related to fewer MEPs with previous political experience at the highest national level.
---------------------
Perceived Motives in the Political Arena
David Doherty
American Politics Research, forthcoming
Abstract:
People care about more than the substance of policy outcomes. They also care about how political decisions are made. In this article, I report findings from national surveys and two survey experiments that shed light on the factors that affect how people attribute motives to politicians. I find that party cues, policy preferences, and other factors affect which motives people see as the most important explanations for a representative's behavior. I also find suggestive evidence that people are not strictly averse to representatives who are motivated by political self-interest. Instead, they appear to be more concerned with the extent to which a representative is motivated by his or her genuinely held preferences and a desire to serve the public. The findings constitute an important step toward understanding how people attribute motives in the political arena and the potential consequences of these judgments about what drives politicians' behavior.
---------------------
Political News with a Personal Touch: How Human Interest Framing Indirectly Affects Policy Attitudes
Mark Boukes et al.
Journalism & Mass Communication Quarterly, forthcoming
Abstract:
Journalists increasingly use personal exemplars in news stories about political issues. This study experimentally investigated how such human interest framing indirectly affects political attitudes via the way people attribute responsibility of an issue. Results show that exposure to human interest-framed television news increased attribution of responsibility to the government for the portrayed problem, which in turn decreased support for the government to cut public spending on this issue. This article explains how and why these findings are in line with exemplification theory but run counter to findings of studies on episodic framing effects.