African Union defense demand and spatial spillovers

The study of the determinants of African defense demand is of enhanced importance because of unique security challenges, growing defense spending, and changing African Union (AU) integration. From a political geographical vantage, this study presents the first analysis of AU members' demand for defense spending, which accounts not only for members' relative locations, but also for political considerations (e.g., state failure, coups, and armed conflicts). Our analysis marries the economics of alliances with spatial considerations that include members' contiguity, between-member distance, and contiguous threats. Given two-way causal concerns, we employ an appropriate defense demand estimator (i.e., two-step generalized method of moments) correcting for the endogeneity between a member's defense spending and that of the other allies. Evidence of defense free riding or relying on the defense spending of other AU members characterizes contiguous and nearby AU countries during 2002–2019. Defense spending is an income normal good, which generally increases with armed conflict. UN and non-UN peacekeeping troop contributions provide some free-riding opportunities within the AU. Given regional differences in armed conflicts and coups, the determinants of African defense demand are influenced by regional divisions.     

Cold War,Public Opinion,and Foreign Policy Spending Decisions: Dynamic Representation by Congress and the President

Conventional wisdom before the Vietnam War held that public opinion exerted no influence on U.S. foreign policy decisions. Scholars working in Vietnam's aftermath found episodic influence of public opinion on foreign policy, but missing in our understanding were longitudinal examinations of public opinion's influence on foreign policy. A number of post-Vietnam scholars subsequently revealed a long-term relationship between public opinion and defense spending. This study extends that work by analyzing responsiveness to public opinion in different foreign policy arenas by different government institutions, and by accounting for a critical variable not relevant in most previous studies: the end of the cold war. We construct a model explaining the influences of public opinion and the cold war on spending proposals for defense and foreign economic aid by the presidency, the House of Representatives and the Senate. Both public opinion and the end of the cold war exert direct influence on defense spending proposals by the presidency, while the Senate and the House respond primarily to public opinion inputs and the partisan composition of the Senate. In the case of foreign economic aid, the cold war's end gives occasion for increasing spending proposals, contrary to the public's expectation that the end of the cold war minimized the need for the U.S. to provide foreign economic assistance.     

The Spending-Service Connection

This research tests the relationship between state and local spending for health and hospitals, a set of health service measures, and three final policy outcomes—low birthweight infants, infant mortality, and child deaths. The analysis includes several proxies for service demand—state resources, percentage of single-teen births, and percentage of the population without health insurance. The multiple regression equations also incorporate a measure of federal spending on health and an indicator of state spending for Medicaid. This first stage of the analysis can account for only a limited amount of variation in per capita state and local health and hospital spending. Health expenditures, however, are prominently related to health workers per 10,000 population, while hospital spending buys hospital beds. The final step in the analysis uses path models. The results show that neither spending nor the intermediate-level health outputs (including a measure of prenatal care) are significantly related to the final three outcome variables. Single-teen births is the dominant influence in the final equations.     

A Defense Renaissance? The Canadian Conservative Government and the Military

Conservative Party leader Stephen Harper campaigned in 2006 that, if elected, his government would make major improvements to Canada’s military. Emphasizing the decline that had befallen the once proud institution under the Liberals, Harper spoke of the spending increases and new capabilities that would result if his party emerged victorious in the upcoming vote. Seven years later, and two years after the prime minister was finally rewarded with a majority government, it seems like an opportune time to examine the Harper defense record. The article will show that defense spending has increased and a string of new equipment projects have been announced. However, the article will also reveal that the spending increases are almost certainly over, while few of the capital programs are actually progressing. Thus, the Harper defense record is ambiguous, and does not constitute the dramatic change that was promised.     

URBAN RIOTS AND THE GROWTH OF STATE WELFARE EXPENDITURES

This article examines the relationship between urban riots and increases in state welfare spending in the 1960s. It finds little evidence of a direct relationship between rioting and state welfare spending increases from own funds; but it does provide evidence that state welfare spending increases from federal funds were related to the level of urban rioting. Possible explanations for this pattern of findings are discussed and directions for further research are suggested.     

WHAT DO BUSINESS CLIMATE INDEXES TEACH US ABOUT STATE POLICY AND ECONOMIC GROWTH?*

ABSTRACT State business climate indexes capture state policies that might affect economic growth. State rankings in these indexes vary wildly, raising questions about what the indexes measure and which policies are important for growth. Indexes focused on productivity do not predict economic growth, while indexes emphasizing taxes and costs predict growth of employment, wages, and output. Analysis of sub‐indexes of the tax‐and‐cost‐related indexes points to two policy factors associated with faster growth: less spending on welfare and transfer payments; and more uniform and simpler corporate tax structures. But factors beyond the control of policy have a stronger relationship with economic growth.     

Saints, Stalwarts, and Slackers: State Financial Contributions to Welfare Reform

Considerable literature finds that spending levels are important predictors of poverty rates, both in the American states and in western European nations. Those jurisdictions with the most generous support programs generally have lower poverty rates. This article examines state Temporary Assistance for Needy Families (TANF) spending levels in relation to national norms, the spending ability of the state as predicted by their total taxable revenue base, and the state's poverty rate. The analysis shows enormous variation in state per capita TANF spending, with many states spending far less than the national mean and their fiscal capacity. Most of the low-spending states have the fiscal ability to fund more vigorous programs but at optimal levels; some would still fall below the national mean. In return for improved funding, these states would be candidates for increased federal assistance. A few states with a high poverty rate and usually with large numbers of poor citizens are generous spenders, indicating that funding is one component of effective programs.     

State Support for Higher Education: A Political Economy Approach

This research examines state support for higher education by first ascertaining the amount supplied and demanded of this service. The approach assumes that supply and demand occur simultaneously, and that each is affected by higher education spending policies among the states. We argue that enrollment is the most satisfactory proxy for both supply and demand. State policy is measured as expenditure effort. We estimate three time-series equations using two-stage least squares regression with data for the years 1986–95. In the final equation, supply/demand (enrollment) emerges as the strongest predictor of state spending effort. Commitment to higher education (effort) is also especially sensitive to variations in the number of employees (per student). Employee costs clearly are a major factor in fueling increases in state higher education spending effort. State per capita income exerts a negative effect on the final dependent variable. Poor states exert greater financial effort in support of their colleges and universities than do more affluent states.     

The Tortoise or the Hare? Incrementalism,Punctuations, and Their Consequences

In this article, we contrast the long‐term consequences of incrementalism and punctuated equilibrium. We test what the impact of each of these types of policy change is on long‐term budgetary outcomes for the American states. Policy scholars have applied both theoretical approaches to the study of budgetary spending as an extension of policymaking. Given the two contrasting paradigms of policy change, we develop the following line of inquiry: Does punctuated equilibrium create a different budget in the long term than incrementalism? We address this question through an analysis of American state budgets because the U.S. states provide a rich variation in both budgetary outcomes and political institutions. We use budget data from all American states across all government functions for the period between 1984 and 2009. We find that, first, state budgets and budget functions vary in their degree of punctuation and, second, the degree of punctuation in a state's budget function corresponds to smaller long‐term growth. Additionally, the kind of spending matters: allocational budget categories are more likely to exhibit punctuations.     

STATE REVENUE ELASTICITY AND EXPENDITURE GROWTH

Recent analyses and theories of public choice suggest faster public sector expansion in states with highly elastic revenue structures. This paper estimates the contribution of elasticity of tax revenues to the growth of expenditures in the 50 American states since 1960, based on elasticity measures for state revenue sources compiled by the Advisory Commission on Intergovernmental Relations, an index of state tax structural change, and controls for federal aid to states, population increase, and per capita growth in real income. Results for 1960-1970 show a small positive relationship between revenue elasticity and expenditure growth, but this becomes weak and negative for 1970-1976. Spending has increased most in states with the least elastic revenue sources; these states have made considerable changes in tax laws, while states with elastic revenue sources have been more likely to cut taxes than to increase spending. Federal aid, rather than tax elasticity, is the best predictor of state expenditure growth, while legislative changes in tax structure have enabled states to keep pace with rising demand for revenue due to growth in population and real income.     

SERVICE NEEDS AND MUNICIPAL EXPENDITURES*

The difficulties involved in assessing the meaning of municipal expenditures are examined in view of the fact that dependency upon municipal services varies among and within jurisdictions. A cross-sectional analysis of spending in the five largest cities in Connecticut illustrates how considerations of human needs can affect the interpretation of spending (although they do not alter legal obligations or the financial reality of fiscal conditions). The possibilities and limitations associated with this approach to municipal expenditures are conveyed in terms of questions of public policy.     

Effects of U.S. States' Social Welfare Systems on Population Health

Social scientists have studied the welfare state extensively. Many studies seek to understand the determinants of the welfare state; however, a few have explored the social consequences of social welfare systems, especially on health outcomes of the population. Even though cross-national comparative studies support the thesis that the welfare state regime type, which represents different levels of commitment on social welfare, is closely linked to population health, there is little research to support this argument at a sub-national level. To fill the gap, this study explores the effects of the U.S. states' social welfare systems on health using age-adjusted mortality rates as a proxy for population health. By operationalizing social welfare systems as three dimensions—public expenditures, tax structures, and welfare program rules—we find that more generous education spending, progressive tax systems, and more lenient welfare program rules help to improve population health. The model corrects for first-order serial correlation using Prais-Winsten regression methods and is estimated with state and year-fixed effects.     

Federal Aid and Rural County Highway Spending: A Review of the 1980

The Reagan/Bush Administrations cut back federal support for state and local governments during the 1980s, causing total real resources available to finance local roads and bridges to increase very slowly between 1977 and 1989. The effect of federal aid on spending for infrastructure has been subject to debate for many years. Some studies have indicated that federal aid is stimulative, while others report that federal aid substitutes for local resources. This article examines the effect of state and federal aid on county highway spending. The analysis demonstrates that, in 1987, federal aid was stimulative but state aid was not. In light of changes brought about by the Surface Transportation Efficiency Act of 1991 (ISTEA), we can expect federal aid to have a stronger relationship with local highway spending.     

THE DEBT/TAX CHOICE IN THE FINANCING OF STATE AND LOCAL CAPITAL EXPENDITURES*

ABSTRACT. State and local governments commonly finance investment in public capital by issuing bonds and by using current revenues. This paper presents a model of state and local governments' reliance on borrowing in which the optimal share of debt in the financing of capital investment depends on the relative costs of tax and debt finance. Equations are derived and estimated for spending on public capital and the share of debt in the financing of that spending. The results reveal that the level of private incomes plays an important role in both the capital investment and financial decisions of the jurisdiction. Even after controlling for Sunbelt-Snowbelt differences in incomes, grants, outstanding debt and certain demographic factors, the results indicate that state and local governments located in the Snowbelt rely more heavily on bond issues to finance capital investment. Finally, the estimated invariance of the level of state and local capital investment to the share of debt in the financing of the investment suggests that investment decisions are not greatly affected by factors influencing the willingness to issue bonds.     

Unions,Parties, and the Politics of State Government Legacy Cost

Many American state governments have made extensive promises to pay for employees’ health care and other benefits in retirement. Currently estimated at over $1 trillion in unfunded liabilities, these other postemployment benefits (OPEB) are creating a major fiscal problem for state governments. In this article, we examine the politics of OPEB. We seek to explain the variation in the generosity of OPEB across U.S. states. We argue that party competition theories do not adequately explain the outcomes we observe. Instead, we draw on the emerging Schattschneiderian approach to the politics of public policy to show that public union strength conditions a party's incentives to represent unions’ interests. In states where public sector unions are strong, unions can find their way into either party's coalition. We find that Republicans are more responsive to public union interests than either their ideological brand or prior research would suggest. It is only in states where public employees are weak that Republicans can act unilaterally and enact their preference for less government spending. To test our theories, we carry out an empirical analysis using a newly assembled data set of per capita OPEB liabilities across 49 states.     

Sorcery and Sovereignty: Bodin’s Political Economy of the Occult

ABSTRACT

While much has been written on Six Books on the Commonwealth and his Demonmania, scholarship on Jean Bodin generally treats these as two separate areas of inquiry. Moreover, discussions of Bodin’s economic writing, especially his Reply to Malestroit are nearly universally lacking in these discussions. In this paper, I analyze all three of these works together, arguing that Bodin’s political economic perspectives on money, population, and the state form the ground for his interest in witches, sorcery, and the occult. By highlighting the historical context of rising mercantilism and the widespread peasant rebellions that contested it, I argue that Bodin’s maintains a unified and coherent philosophy across his political, economic, theological, and demonological works. This materialist reinterpretation of Bodin argues that his philosophy chiefly concerns a defense of mercantile state wealth accumulation, in which witch hunting plays a crucial role of population discipline and reproductive pronatalism.     

John Marshall,McCulloch v. Maryland,and the Concept of Constitutional Sovereignty

Scholars have long debated John Marshall's intent in his famous opinion in the case of McCulloch v. Maryland (1819). Despite long-standing disagreement concerning the character of Marshall's nationalism and federalism, interpretations of the opinion typically rely on an incomplete picture of the case. This analysis revisits McCulloch to illustrate his support for national and state sovereignty as defined in the Constitution. It then moves beyond the opinion itself to examine Marshall's defense of McCulloch in a series of newspaper essays he authored in the aftermath of the case. Situated alongside the McCulloch opinion, these essays show that Marshall was as much concerned with defending the sovereignty of the Constitution as he was with adjudicating political authority between national and state governments.     

Arms Racing in ‘Space’: Spatial Modelling of Military Spending around the World

This paper builds on previous research into determinants of military spending by examining global and local spatial effects. Other research has examined the effects of regional differences and neighbours' spending levels with standard econometric techniques. This paper uses spatial econometrics to gain a better understanding of the influence of location and distance on levels of defence spending. I find that a spatial lag specification provides much more robust evidence of arms racing and security dilemma dynamics than previous studies. These basic dynamics have been difficult to detect empirically without the context and nuance introduced by spatial modelling. The paper represents a first cut at the topic, but two specific findings emerge. First, globally there is positive spatial correlation (nearby states have similar levels of spending). This conforms to arms racing and security dilemma expectations. And, second, locally there is variation in the patterns of spatial clustering across broad international regions (e.g. Europe, Asia etc.). The second finding supports previous research suggesting important qualitative regional variation in patterns of defence spending and international conflict. The models also confirm the effects of political regime type and interstate war on defence spending, and are robust to the inclusion of a temporally lagged dependent variable.     

Feature Review

Abstract

The emergence of the Tea Party has set off a new round of speculation on the “future” of the conservative movement. This essay discusses two issues, defense spending and immigration, on which the Tea Party may fuse a conservative-libertarian approach that might distinguish it from earlier conservative political movements. The essay notes that the twenty-first century has a developing school of conservative thought that can provide the intellectual groundwork for such a political combination between conservatives and libertarians. This school opposes both mainstream liberalism and mainstream conservatism and attempts to rework the conservative tradition to face contemporary challenges.     

TOTAL FACTOR PRODUCTIVITY GROWTH IN MANUFACTURING FURTHER EVIDENCE FROM THE STATES*

In this paper, we first develop a measure of total factor productivity (TFP) growth and summarize a source-of-growth analysis for the manufacturing sector of 48 states. As have others, we find little association between TFP growth differentials and output growth differentials for census regions. At the staterather than the regional level, however, we find a positive association between TFP growth and output growth. We use cross-sectional data to estimate the determinants of the variation in TFP growth. Two results emerge that are important for regional policy and for understanding national productivity trends. First, state investments in education and in transportation infrastructure may affect TFP growth. Second, energy price increases in the early 1970s had no differential effects on productivity growth across states. We also explore the determinants of manufacturing output growth and find that TFP growth, demand growth, wage growth, wage levels, and state corporate income tax rates are significant.