IS THE BUDGET DEFICIT “TOO LARGE”?: SOME FURTHER EVIDENCE

The size of the federal budget deficit has alarmed politicians and the general public both. Following recent work, we examine the long-run solvency of the U.S. government by testing for cointegration of federal expenditures and revenues. We include a break term in the cointegrating recession for 1981 to capture a shift in the fiscal process in the first Reagan administration. Tests show the break to be significant; and with the break, in contrast to earlier work, expenditures and revenues are cointegrated with a coefficient of one. Thus, we find the deficit to be stationary and so potentially sustainable.     

Naturally Occurring Retirement Community-Supportive Service Program: an example of devolution

Devolution is defined as the transfer of power or authority from a central government to a local government. This article addresses federal policies on housing for the elderly and the devolution of funding for federal senior housing and describes two aspects of devolution of federal housing policy for the elderly. One, it points out the decreasing interest in senior housing by federal authorities as indicated by the decreased amount of funds allocated for this purpose. Two, it emphasizes the need for supportive, assistive services for residents of senior housing and how federal funds have not addressed this need adequately or sufficiently. As a consequence, there have emerged Naturally Occurring Retirement Communities (NORCs) in New York State, a housing arrangement that provides supportive and health services to all eligible residents. The article concludes with a discussion of policy implications and the need for additional research before replicating this model.     

THE EFFECT OF CONCEALED WEAPONS LAWS: AN EXTREME BOUND ANALYSIS

Lott and Mustard [1997] provide evidence that enactment of concealed handgun ("right-to-carry") laws deters violent crime and induces substitution into property crime. A critique by Black and Nagin [1998] questions the particular model specification used in the empirical analysis. In this paper, we estimate the "model uncertainty" surrounding the model specified by Lott and Mustard using an extreme bound analysis (Leamer [1983]). We find that the deterrence results are robust enough to make them difficult to dismiss as unfounded, particularly those findings about the change in violent crime trends. The substitution effects are not robust with respect to different model specifications. (JEL K42)     

Naturally Occurring Retirement Community-Supportive Service Program

Summary

Devolution is defined as the transfer of power or authority from a central government to a local government. This article addresses federal policies on housing for the elderly and the devolution of funding for federal senior housing and describes two aspects of devolution of federal housing policy for the elderly. One, it points out the decreasing interest in senior housing by federal authorities as indicated by the decreased amount of funds allocated for this purpose. Two, it emphasizes the need for supportive, assistive services for residents of senior housing and how federal funds have not addressed this need adequately or sufficiently. As a consequence, there have emerged Naturally Occurring Retirement Communities (NORCs) in New York State, a housing arrangement that provides supportive and health services to all eligible residents. The article concludes with a discussion of policy implications and the need for additional research before replicating this model.     

THE STATE OF THE FEDERAL BUDGET AND THE STATE OF THE ECONOMY: FURTHER EVIDENCE

Simultaneous monetary and fiscal policy reaction functions are derived and estimated for the 1969:2–1984.3 period. The results suggest that the Reagan administration has abandoned fiscal policy as a stabilization tool. Furthermore, although the average money growth rate declined in the Reagan administration, variation in the rate of money growth indicates that monetary policy has been used to combat unemployment. Finally, monetary and fiscal policies were not coordinated during this period. Rather, monetary and fiscal policy appear to be set by a Nash equilibrium in a non-cooperative game. In a Nash equilibrium, the policy chosen by each authority maximizes its payoff, given the policy choice of the other authority.     

ELECTORAL CYCLES AND THE EARNINGS OF FEDERAL BUREAUCRATS

This paper analyzes the relationship between the timing of federal elections and the pay raises received by civilian employees of the federal government. The theoretical framework discusses how electoral wage cycles are generated as a result of optimizing behavior on the part of voters, bureaucrats, and the government. The empirical analysis uses a time series of wage rates for the twenty-eight largest federal agencies over the period 1961–1978. The study indicates that pay hikes during the Presidential election year are significantly greater (about 2 to 3 percent higher) than bureaucratic pay raises in other years.     

THE LEGISLATIVE HISTORY OF THE SHERMAN ACT RE-EXAMINED

According to Robert Bork's influential analysis, the Sherman Act was expressly instituted by the 51st Congress to advance consumer welfare, but has often been misinterpreted by federal courts handing down anticonsumer decisions. This paper suggests that the political coalition backing the 1890 antitrust statute sought multiple social ends and did not faithfully seek to impose economic efficiency. The key evidence includes historical economic trends, congressional debate, the legislative agenda of Senator John Sherman, and the political conflict generated by the most contentious (and most electorally important) issue of the 51st Congress: the highly protectionist McKinley Tariff Act.     

The "albatross" of immigration reform: temporary worker policy in the United States

The author examines the history of U.S. labor and immigration policies, paying particular attention to the evolution of the temporary worker policy. Complications in the immigration reform process caused by efforts to admit more temporary workers are discussed. The position of the Reagan administration, Senate and House consideration of immigration and temporary worker bills, and the political controversies surrounding this issue are reviewed. The author points out that it was not until the major temporary worker proposals were finally removed from the Simpson-Rodino Act that passage of legislation was achieved, and he anticipates that efforts will eventually be made to revive temporary worker policy and thereby rekindle the debate     

International guidelines and the inclusion of disabled people. The Ugandan story

Uganda has made much progress towards including disabled people in its mainstream development, particularly in the political agenda. The exact process by which this has been achieved and the relationship between this and international guidelines and legislation are not known. This study undertakes to examine this from two specific perspectives: (1) How do international documents relevant to disabled people relate to national legislation in Uganda? (2) What can this comparison, together with the perceptions of stakeholders, tell us about how the legislation and services could improve? International legislation and Ugandan legislation is reviewed and compared. Data from 5 semi‐structured key informant interviews and 6 focus group discussions involving a total of 38 people are collected and analysed. The themes arising from the data are related to the documents, legislation, policies and other relevant literature. The results examine the barriers to service provision; the role of change; the importance of representation; policy and legislation issues; and the effects of devolution. Five specific findings relate to how legislation and services can improve: more resources to increase access for disabled people; strong leadership and collaboration between Disabled People’s Organisations (DPOs) funding bodies and governments; awareness raising and training; representation from all impairment groups; and raising the profile of disabled people through further legislation.     

Coordinated Service Delivery and Children's Well-Being

ABSTRACT

Interagency collaborations are uniquely suited to meeting the increased needs of communities in today's environment of reduced federal funding and devolution of services to the state and local levels (Gore, 1993). In Texas, interagency collaborations take place through Community Resource Coordination Groups (CRCGs), which were created by the Texas Legislature to coordinate local service delivery for children and their families who often “fall through the cracks” due to having multiple needs. This article presents an evaluation of CRCG operations, with a focus on identified best practices, related obstacles, and suggestions for improvement. The researchers visited CRCG sites, and conducted semi-structured face-to-face interviews, as well as a mail survey, with CRCG staff. Overall, CRCGs appear to effectively enhance the delivery of coordinated services in an effort to meet the multiple needs of the children and families that they serve. Recommendations for policy and practice are discussed, such as spearheading community action structures (Poole, 1997) that may help CRCGs more effectively meet the needs of their respective local communities.     

Municipal Law Enforcement Policy on Illegal Immigration Stops: Do Social Factors Determine How Aggressively Local Police Respond to Unauthorized Immigrants?

The devolution of immigration law has increased local police involvement in the enforcement of federal immigration law. But only some departments have responded by implementing policies that restrict their officers' involvement in order to protect residents from overzealous policing. We test theories of economic and ethnic threat to explore the structural characteristics of cities that explain this variation. Multiple regression results show that the most unequal cities that have large Hispanic populations are less likely to have a policy. Hispanic white segregation and high unemployment also reduce the likelihood of policy implementation. We discuss theoretical and policy implications.     

The impact of Labour on policies for children and young people in Wales

This contribution outlines the importance of devolution for policy initiatives relevant to Welsh children and young people including some of the issues that existed prior to devolution regarding appropriate policies for Wales. It goes on to consider the reality of the devolution settlement in relation to legislative powers, giving examples such as the Children's Commissioner for Wales and secondary legislation such as prohibiting the physical chastisement of children by childminders. It also considers the approach of the Welsh Assembly Government to matters such as partnership working, transparency, openness and implementing the United Nations Convention on the Rights of the Child. It concludes with a focus on the challenge of implementing the pioneering policy aspirations. Copyright © 2003 John Wiley & Sons, Ltd.     

THE EFFECT OF STATE SECURITIES STATUTES ON TENDER OFFER ACTIVITY

The Williams Act passed in 1968, established Federal regulation of cash tender offers. Despite the additional constraints on tender offers provided by this federal legislation, thirty-six states have enacted more stringent securities laws since then. This paper briefly investigates the motivation for the state statutes, and then empirically tests the deterrent effects of these laws on tender offer activity for firms headquartered in the states affected. The evidence indicates that the presence of state statutes does deter tender offers, and that the recently enacted SEC tender offer rules will, ceteris paribus, decrease the total number of offers made by 8%.     

The capitalization of knowledge

Conclusion The United States economic crisis of the past decade has precipitated a debate over future economic strategy. The alternative positions are whether it is better to try to save old industries or develop new ones. Nevertheless, worker control of firms through Employee Stock Ownership Plans (ESOP's) and state government investment in new high-tech companies have one thing in common. They both represent a turn toward the microeconomic level of firms in influencing economic policy rather than the traditional macroeconomic level of monetary or fiscal policy.However the Reagan administration continued the federal tradition established during the Roosevelt era of influencing the economy on the macroeconomic level. This squelched the move toward a microeconomic industrial policy that was emerging toward the end of the Carter administration. Responsibility for industrial policy, never explicitly assumed by the federal government, is currently being assumed by state governments. Support for science, a responsibility the federal government assumed during the post-war era, is currently being undertaken by the states to address economic development needs.During the Reagan era, as the federal government continued to focus on macroeconomic policies, state governments created microeconomic policies designed to renew regional industrial infrastructures. The various state government initiatives oriented toward developing new technology for civilian purposes assumed responsibility for industrial and science policy. It is noteworthy that these programs for shaping the relations among science, technology, and economic development have been supported by governors and legislators across the political spectrum. Perhaps ironically, a national consensus on industrial and science policy has been achieved, but implementation has been largely limited to the regional level. Given the broad base of support for state science/ industry initiatives it is reasonable to predict that it will become national policy in some form as a new generation takes political leadership on the federal level in the post-Reagan era. Perhaps in the future we shall see a reprise of what happened during the depression when the Roosevelt administration inaugurated, on a larger scale, programs that Wisconsin and New York had pioneered during the Progressive era.     

Welfare Reform on American Indian Reservations

Abstract

In this article we document trends in welfare caseloads and some initial experiences of service providers and welfare recipients on reservations within Arizona under Temporary Assistance for Needy Families (TANF). We document the issues and concerns of state and tribal service providers as they implement the legislation on reservations that are often geographically isolated and which lack infrastructure, jobs, childcare and transportation. We also record experiences of women with children on reservations with the 1996 federal welfare legislation. These families experience similar barriers when trying to move from welfare to work as do their counterparts across the country; however, these barriers are magnified on reservations. The welfare recipients' barriers include: a shortage of employment opportunities on reservations; a lack of transportation and childcare facilities; low levels of education and job experience; and, individual and family problems. Poor families in Indian communities face additional barriers to employment because of their geographic isolation, lack of access to basic necessities (like telephones), as well as stereotypes and discrimination by employers due to ethnicity or personal/family histories.     

THE EFFECT OF HOUSING WEALTH LOSSES ON SPENDING IN THE GREAT RECESSION

We use panel data on a complete inventory of household spending and assets to estimate the spending response to the sharp and largely unexpected declines in house values that occurred in the Great Recession. Our study complements the existing literature on this topic by relying exclusively on longitudinal micro data on both household wealth and expenditure. Our data span the period 2002–2012, allowing us to separate trends in spending from innovations in response to unexpected wealth changes. We find the marginal propensity to consume out of an unexpected housing wealth change to be 6 cents per dollar among older American households. (JEL D12, D14, E21)     

THE EFFECT OF NONCONTRIBUTORY PENSIONS ON SAVING IN MEXICO

This paper examines the effects of noncontributory pension programs at the federal and state levels on Mexican households' saving patterns using micro data from the Mexican Income and Expenditure Survey. We find that the federal program curtails saving among households whose oldest member is either 18–54 or 65–69 years old, possibly through anticipation effects, a decrease in the longevity risk faced by households, and a redistribution of income between households of different generations. Specifically, these households appear to be reallocating income away from saving into human capital investments, like education and health. Generally, state programs have neither significant effects on household saving, nor does the combination of federal and state programs. Finally, with a few exceptions, noncontributory pensions have no significant impact on the saving of households with members 70 years of age or older—individuals eligible for those pensions, plausibly because of their dissaving stage in the lifecycle. (JEL D14, J26, O12, H55)     

CIVIL ASSET FORFEITURE,CRIME, AND POLICE INCENTIVES: EVIDENCE FROM THE COMPREHENSIVE CRIME CONTROL ACT OF 1984

The 1984 federal Comprehensive Crime Control Act (CCCA) included a provision that permitted local law enforcement agencies to acquire up to 80% of the proceeds derived from civil asset forfeitures obtained in joint operations with federal authorities. We investigate how this rule governing forfeited assets influenced crime and police incentives by taking advantage of pre‐existing differences in state‐level civil asset forfeiture law and the timing of the CCCA. We find that after the CCCA was enacted crime fell about 17% in places where the federal law allowed police to retain more of their seized assets than state law previously allowed. (JEL K42, K15, H76)     

CARBON GEOGRAPHY: THE POLITICAL ECONOMY OF CONGRESSIONAL SUPPORT FOR LEGISLATION INTENDED TO MITIGATE GREENHOUSE GAS PRODUCTION

Over the last 5 years, the U.S. Congress has voted on several pieces of legislation intended to sharply reduce the nation's greenhouse gas emissions. Given that climate change is a world public bad, standard economic logic would predict that the United States would “free ride” and wait for other nations to reduce their emissions. Within the Congress, there are clear patterns to who votes in favor of mitigating greenhouse gas emissions. This paper presents a political economy analysis of the determinants of “pro‐green” votes on such legislation. Conservatives consistently vote against such legislation. Controlling for a representative's ideology, representatives from richer districts and districts with a lower per‐capita carbon dioxide footprint are more likely to vote in favor of climate change mitigation legislation. Representatives from districts where industrial emissions represent a larger share of greenhouse gas emissions are more likely to vote no. (JEL Q54, Q58, R50)     

Intergovernmental Relations

The relationships between federal, state, and local governments have been in varying degrees of dynamic tension since the founding of this country. Concern with the care of dependent or needy populations has reflected this tension. The original sovereignty enjoyed by the 13 colonies following the Revolutionary War was challenged over time by the evolving power of the federal government. This evolution resulted from federal legislative actions, the initiatives and vetoes of presidents, court decisions, and constitutional amendments. The crisis of the Great Depression of the 1930s can be viewed as the beginning of modern federalism, with the emergence of an increasingly strong, more dominant federal government. Within 35 years of this crisis, a significant challenge to this growth was expressed through the resurgence of political support for limiting the role of the federal government, and for the return of power to the states. The net results of this challenge seemed unclear at the close of the Reagan presidency.