{"title":"Skimming the achieved? Quantifying the fiscal incentives of the German fiscal equalization scheme and its reforms since 1970","authors":"Yannick Bury, Lars P. Feld, Heiko T. Burret","doi":"10.1007/s10101-024-00316-w","DOIUrl":"https://doi.org/10.1007/s10101-024-00316-w","url":null,"abstract":"<p>Marginal rates of contribution (MRC), i.e., the rates at which additional revenues are skimmed via larger contributions or lower transfer receipts, quantify the incentives of a fiscal equalization scheme. This paper is the first to calculate marginal rates of contribution for the Laender (states) in the German fiscal equalization scheme for each of the 51 years since its establishment in 1970 and over five major reforms, taking into account all relevant revenues. Our results show that MRC have been at a consistently high level. Until 2019 the scheme induced an almost full skimming of additional tax revenues of recipient states. With the system’s latest reform in 2020, MRC increased further. Recipient states now face an over-skimming of additional tax revenues and, thus, massive fiscal disincentives to maintain their own tax base. While these findings have been widely expected, comprehensive evidence has been missing so far.</p>","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"24 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2024-08-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142185294","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Predicting satisfaction with democracy in Germany using local economic conditions, social capital, and individual characteristics","authors":"Tim Friehe, Christian Pfeifer","doi":"10.1007/s10101-024-00315-x","DOIUrl":"https://doi.org/10.1007/s10101-024-00315-x","url":null,"abstract":"<p>This paper explores the empirical relationship between local economic conditions, social capital, and individual characteristics on the one hand and satisfaction with democracy on the other hand, using detailed information from the German Socio-Economic Panel. In contrast to previous literature, we focus on economic conditions at the <i>state</i> level instead of the <i>national</i> one. We find that local economic conditions, proxies of social capital, and individual characteristics (e.g., risk attitude, reciprocity, past unemployment experience) are important correlates of satisfaction with democracy and that some heterogeneity between genders, West and East Germany, and people with and without college degree exists in the data.</p>","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"180 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2024-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142224271","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Environmental policy implementation, gender, and corruption","authors":"Nabamita Dutta, Saibal Kar, Israt Jahan","doi":"10.1007/s10101-024-00314-y","DOIUrl":"https://doi.org/10.1007/s10101-024-00314-y","url":null,"abstract":"<p>Beneficial influence of female representation in implementing environment-friendly policies have been documented in recent studies. However, presence of factors such as corruption and bureaucratic red tapes, known to hinder development initiatives, raises question about whether women legislators can achieve the desired level of success with environmental policies. Based on our empirical analysis using cross-sectional data for 83 countries, we find evidence that the positive impact of women in parliament on climate change policy outcomes is <i>significant and most effective</i> for countries with low levels of corruption. Depending on the model specification used, ranging from instrumental variable regressions to inclusion of controls to mitigate omitted variable bias, and matching models, we do find that the beneficial impact of women in parliament becomes insignificant and eventually might become negative with rising corruption. Thus, while women might be able to successfully propose a bill for and turn-into-law, environment-friendly policies in countries with low levels of corruption, the effort is nullified and might be reversed in case of countries with high corruption. We illustrate that the results are sensitive to model selection, and choice of controls.</p>","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"181 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2024-06-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141252115","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Preferences for social insurance: the role of job security and risk propensity","authors":"Mauricio Bugarin, Yasushi Hazama","doi":"10.1007/s10101-024-00313-z","DOIUrl":"https://doi.org/10.1007/s10101-024-00313-z","url":null,"abstract":"<p>In a 2003 article, Karl Moene (University of Oslo) and Michael Wallerstein (Yale University) demonstrated that wealthier citizens tend to support higher spending in social policies directed at the unemployed, while preferring lower spending in policies aimed at the employed. This paper reveals that these findings hinge on two key assumptions: that citizens have a coefficient of relative risk aversion (CRRA) greater than one, and that all citizens face an equal probability of job loss—a presumption which is not necessarily realistic. By incorporating the observation that job security tends to correlate positively with income, we demonstrate that affluent individuals may still advocate for reduced spending in unemployment policies, even when their CRRA exceeds one. Moreover, a significant shift in the distribution of job security—such as during an abrupt economic crisis—might engender greater societal support for these policies, contrary to their previous research. Finally, empirical data from recent Brazilian history provide analytical support for the theoretical assertions presented herein.</p>","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"40 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2024-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141252277","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Can public efficiency increase tax morale? Evidence from 18 Latin American countries","authors":"Víctor Mauricio Castañeda-Rodríguez, Gaetano Lisi","doi":"10.1007/s10101-024-00312-0","DOIUrl":"https://doi.org/10.1007/s10101-024-00312-0","url":null,"abstract":"<p>By increasing trust in institutions, public efficiency could be a further key determinant of tax morale. Public efficiency is closely related to the concept of productive public spending, while total public spending also depends on government ideology. In a society where public efficiency and tax morale are high, a virtuous “tax circle” can be triggered since government can increase both tax revenues and productive public spending. Using the Latinobarometer wave (which includes 20,204 interviewees from 18 Latin American countries), the empirical analysis finds that public efficiency would have to increase significantly before its marginal effect on tax morale becomes positive. Hence, the virtuous “tax circle” can trigger in the long term. However, the cross-sectional analysis cannot highlight the potentially significant role of ideological motives, so robustness checks are performed to show that our results are neither driven by such motives nor by the multilevel structure of the dataset or by the sample distribution.</p>","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"31 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2024-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140888789","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Ideological ambiguity and political spectrum","authors":"Hector Galindo-Silva","doi":"10.1007/s10101-024-00310-2","DOIUrl":"https://doi.org/10.1007/s10101-024-00310-2","url":null,"abstract":"<p>This study examines the relationship between ambiguity and the ideological positioning of political parties across the political spectrum. We identify a strong non-monotonic (inverted U-shaped) relationship between party ideology and ambiguity within a sample of 202 European political parties. This pattern is observed across all ideological dimensions covered in the data. To explain this pattern, we argue that centrist parties are perceived as less risky by voters compared to extremist parties, giving them an advantage in employing ambiguity to attract more voters at a lower cost. We support our explanation with additional evidence from electoral outcomes and economic indicators in the respective party countries.</p>","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"67 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2024-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140204432","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Legislative redistricting and the partisan distribution of transportation expenditure","authors":"Walter Melnik","doi":"10.1007/s10101-024-00308-w","DOIUrl":"https://doi.org/10.1007/s10101-024-00308-w","url":null,"abstract":"<p>I show that a state representative’s political party determines transportation expenditure in the area she represents. Previous studies of this topic consider party changes through election outcomes, which may be correlated with unobservable determinants of expenditure. To overcome this issue, I identify my estimates using Ohio’s 2012 state legislative redistricting, which moved many geographic areas into districts with opposite party incumbents. The Republican party controlled the state legislature and governorship over the period I study. I find that areas moving from governing party Republican to minority party Democratic districts received $3.4M (0.18 standard deviations) less annual highway construction funding than areas remaining in Republican districts. Areas moving from a Democratic to a Republican district, on the other hand, experienced no increase in expenditure—the negative effect of moving to a different representative’s district appears to outweigh the positive effect of a majority party representative. Descriptive evidence suggests that changing representative’s party through redistricting had a different effect on construction funding than changing through an election, underlining the importance of my identification strategy.</p>","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"16 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2024-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139764612","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Political and non-political side activities in an agency framework","authors":"Anthony M. Marino","doi":"10.1007/s10101-023-00307-3","DOIUrl":"https://doi.org/10.1007/s10101-023-00307-3","url":null,"abstract":"<p>This paper studies side activities, including political activities, in the context of a hidden action agency problem. Given increases in the number of employees working from home and increases in managerial political engagement, such activities have become more prevalent. We examine the impact of these activities on the optimal contact, the agent’s welfare, the firm’s profit, and total welfare. For the case of political activities, we study the impact of external negative and positive feedback as the result of these activities on the optimal contract and all equilibrium variables. We ask whether the firm should encourage or discourage these activities.</p>","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"9 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2024-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139589230","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Daniel Bruno Davis, Ronald U. Mendoza, Jurel K. Yap
{"title":"Corruption risk and political dynasties: exploring the links using public procurement data in the Philippines","authors":"Daniel Bruno Davis, Ronald U. Mendoza, Jurel K. Yap","doi":"10.1007/s10101-023-00306-4","DOIUrl":"https://doi.org/10.1007/s10101-023-00306-4","url":null,"abstract":"<p>Corruption plays a central role in underdevelopment in the Philippines, yet there is no reliable, non-aggregate, and periodic measurement for corruption in the country. This study demonstrates the use of statistical techniques to synthesize information from public procurement contracts into one indicator to measure corruption risk for each province in the Philippines from 2004 to 2018. The results show corruption risk decreased from the 2004 term to 2013, and increased to an all-time high in 2016. Regression analysis also shows that two measures of political power concentration among clans—a Hirschman–Herfindahl Index applied to the political sphere (Political HHI), and the Size of the Largest Dynasty per Province—is significantly and positively linked to the corruption risk indicator at least at the 5% significance level. This result coheres with emerging literature on political dynasties, suggesting that these debilitate checks and balances and increase the risk of impunity and malgovernance at the local level, particularly in the Philippines. This study highlights the importance of studying corruption vis-à-vis the evolving issue of political dynasties amassing power, and provides further evidence that reforms are required in this area to promote development in democracies.</p>","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"11 1","pages":""},"PeriodicalIF":0.9,"publicationDate":"2023-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139080253","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Central-local collaborative environmental governance and firm-level environmental performance: the role of firm ownership","authors":"Shanshan Wu, C. James Hueng","doi":"10.1007/s10101-023-00305-5","DOIUrl":"https://doi.org/10.1007/s10101-023-00305-5","url":null,"abstract":"Using a unique dataset of publicly listed companies in China, we show that the collaborative environmental governance between the central and local governments reduces the effect of local enforcement of regulations on firms’ environmentally responsible behaviors. This is consistent with the fact that the Chinese central government uses a command-and-control type of regulations under which the local governments bear the full cost of enforcing the regulations. The local governments do not have the incentive to override the central supervision and therefore, simply lower their standard of enforcement and comply with the central supervision. However, this finding mainly reflects the results from the state-owned enterprises. For the private firms, the central supervision instead strengthens the impact of local enforcement. The heterogeneous results can be explained by the fact that the private firms are more financially constrained compared to the state-owned enterprises. They have the incentives to avoid the costs of complying with the regulations by paying a fine or colluding with the local regulators. The central supervision reduces the asymmetric information and increases the non-compliant firms’ chance to get caught for violations or collusion. This explains why once the central government intervenes, those private firms have to improve their environmentally responsible behaviors.","PeriodicalId":46302,"journal":{"name":"Economics of Governance","volume":"231 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136078623","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}