Papers by Randall Holcombe
The MIT Press eBooks, May 26, 2006
This paper utilizes principal-agency theory to examine the function of political parties as an in... more This paper utilizes principal-agency theory to examine the function of political parties as an intermediary between voters and legislators. Use of this theory in a set of essays stimulated by the contributions of Douglass C. North and Oliver E. Williamson seems highly appropriate. Transactions costs, information transmission, monitoring problems, and other elements of principal-agency theory often provide the foundation for the work of both North and Williamson. This paper examines the role that political parties play in the principal-agent relationship that exists between voters and their elected representatives. We argue that political parties, seeking to protect their brand-name capital, 1 will monitor legislators and discourage opportunistic behavior by their members. An erosion of party influence, such as has occurred in the United States, weakens the party's ability to monitor the principal-agent relationship between voters and legislators. This causes an increase in special interest legislation and opportunistic behavior by legislators.
The freedom to enter into contracts and to direct the use of economic resources one owns are esse... more The freedom to enter into contracts and to direct the use of economic resources one owns are essential to the operation of a market economy. Allowing employees to form unions to bargain collectively over wages and employment conditions is consistent with economic freedom, and any government intervention preventing unionization would be a violation of economic freedom. Nevertheless, American labor law, especially since the 1930s, has altered the terms and conditions under which unions collectively bargain to heavily favor unions over the firms that hire union labor. Labor law has given unions the power to dictate to employees collective bargaining conditions, and has deprived employees of the right to bargain for themselves regarding their conditions of employment. While unions and economic freedom are conceptually compatible, labor law in the United States, and throughout the world, has restricted the freedom of contract between employees and employers. The effect of unions on growth and prosperity can be examined at two levels. Narrowly, one can examine the effects that union contracts have had on unionized firms and industries. More broadly, one can look at the way that unions have affected labor law. Unions have successfully lobbied to increase the power of unions over firms, which in turn has allowed unions to impose more constraining conditions on
Coordination, Cooperation, and Control, 2020
Coordination, Cooperation, and Control, 2020
Florida’s growth management policies require all of Florida’s local governments to have a local c... more Florida’s growth management policies require all of Florida’s local governments to have a local comprehensive plan that complies with the state’s 1985 Growth Management Act. A required part of every plan is a land use map that shows allowable uses of all land within the jurisdiction. In effect, the land use map creates an urban growth boundary by delineating where growth is allowed. Nevertheless, 28 of Florida’s 67 counties have drawn up an explicit urban growth boundary, which might be viewed as redundant or unnecessary in light of the fact that all allowable land uses are already specified in the required land use map. This Policy Brief reports the results of an empirical study that examined factors that would motivate counties to adopt an urban growth boundary. Three different types of factors were considered when looking at what causes counties to adopt urban growth boundaries. First, population factors that tend to cause growth pressures were considered. Second, differences in ...
Applied Economics Letters, 2017
A substantial literature shows that economic prosperity is dependent on the quality of economic i... more A substantial literature shows that economic prosperity is dependent on the quality of economic institutions. Countries with low-quality institutions remain poor while countries with high-quality institutions prosper. Improvement in institutional quality brings with it economic growth. Poor countries must improve their economic institutions to escape poverty, so if a poor country's institutional structure is unlikely to improve, that suggests dismal prospects for economic growth and an escape from poverty. An examination of institutional quality over 30 years indicates that countries with low-quality institutions have improved their institutional quality, which demonstrates that poor countries are not stuck with low-quality institutions. They can improve their institutions, and consequently, can generate economic growth and escape poverty.
Journal of Institutional Economics, 2015
Some economic analysis concludes that capitalist institutions tend to produce growing income ineq... more Some economic analysis concludes that capitalist institutions tend to produce growing income inequality. Piketty (2014Capital in the Twenty-First Century., Cambridge: Harvard University Press) is a recent example. This paper uses two different datasets on income shares of the top 10% to analyze the effect of market institutions on income inequality. The same empirical specifications give different results for the two datasets. This empirical investigation suggests that whether market institutions generate income inequality is an open question.
Public Choice, 2015
Higher levels of government expenditures and more regulation naturally invite corruption, because... more Higher levels of government expenditures and more regulation naturally invite corruption, because they provide the opportunity for government officials to be paid off for regulatory favors, subsidies, and government contracts. Some countries have relatively large governments but lower levels of corruption. Scandinavian countries offer examples. While institutional differences may explain some of the crosscountry differences in corruption, the most consistent relationship is that high levels of regulation are associated with more corruption. When looking at the effect of the size of government, it is the regulatory state, rather than the productive or redistributive state, that is associated with corruption.
RePEc: Research Papers in Economics, 1993
Legislation would be a Samuelsonian public good if the cost of creating legislation is not a func... more Legislation would be a Samuelsonian public good if the cost of creating legislation is not a function of the number of people covered by the legislation. A straighforward test of Samuelsonian publicness is undertaken by estimating the cost of producing legislation as a function of population and other variables, using cross-sectional data from the states of the United States for the years 1965, 1975, and t985. The empirical results indicate that while legislation does have some degree of publicness, legislation is mostly a private good, and that it has been becoming increasingly less public over time. * The authors gratefully acknowlege the helpful comments of Bruce Benson, Tim Sass, and an anonymous referee of this journal.
RePEc: Research Papers in Economics, 1993
Legislation would be a Samuelsonian public good if the cost of creating legislation is not a func... more Legislation would be a Samuelsonian public good if the cost of creating legislation is not a function of the number of people covered by the legislation. A straighforward test of Samuelsonian publicness is undertaken by estimating the cost of producing legislation as a function of population and other variables, using cross-sectional data from the states of the United States for the years 1965, 1975, and t985. The empirical results indicate that while legislation does have some degree of publicness, legislation is mostly a private good, and that it has been becoming increasingly less public over time. * The authors gratefully acknowlege the helpful comments of Bruce Benson, Tim Sass, and an anonymous referee of this journal.
Information Sources, 1984
The plan of the book 3; Private v. public collective action 4; Public finance in the history of e... more The plan of the book 3; Private v. public collective action 4; Public finance in the history of economic thought 7; Review of some basic microeconomics 10 CHAPTER 2 The Economic Rationale of the Modern State Market failure 23; The allocative role of government 25; The distributive role of government 34; The regulatory role of government 35; The stabilisation role of government 36; Governments and Insurance 37; The modern-day apostles of laissez-faire 37 65
Atlantic Economic Journal, 1995
The cyclical variability of state income and sales taxes is examined for each state by estimating... more The cyclical variability of state income and sales taxes is examined for each state by estimating the degree to which each tax follows the state's overall revenue cycle. Income taxes are found to be consistently more cyclically variable, and less predictable, than sales taxes. Factors explaining differences in cyclical variability across states are then identified in a regression model. States without income taxes have less cyclically variable revenues than states with both income and sales taxes, suggesting that cyclical variability in states without income taxes could not be reduced by broadening the tax base to include an income tax. (JEL H2) One of the problems that has faced state governments is the cyclical variability of state revenues. Revenues tend to move procyclically while the demand for state government programs tends to be countercyclical. While it would be possible for state governments to limit their spending during prosperous years to set aside reserves that could be drawn down during economic downturns, in practice, states have not done this. Thus, the procyclical nature of revenues along with the countercyclical nature of demands for services combine to produce state budget crises during recessions.
THE ADMINISTRATORS AND FACULTY AT MANY UNIVERSITIES view their missions as teaching, research, an... more THE ADMINISTRATORS AND FACULTY AT MANY UNIVERSITIES view their missions as teaching, research, and service, and among a substantial subset, research is the central mission upon which the other two missions are built. Administrators and faculty at research universities view their institutions as more prestigious than universities that focus primarily on teaching, and among research institutions there is also a hierarchy based on the quality of the faculty and the quantity and quality of the research done at the institution. Most people could recite a list of the most prestigious research universities-Chicago, Harvard, MIT, Stanford, and so forth-but quality is difficult to quantify, and people may have a harder time evaluating universities farther down the quality scale without additional information. Nevertheless, a measure of quality might be desirable for many reasons. Students choosing a graduate school could benefit from such an indicator, for example, and university administrators might be interested in some measure of how departments in their institutions compare with those in other universities. In response to the desire for some quantitative ranking of research universities, the National Research Council (NRC) has produced
to monetary theory and business cycle research—later to be renamed macroeconomics—based on the wo... more to monetary theory and business cycle research—later to be renamed macroeconomics—based on the work of Mises and especially Hayek. By 1950, the Keynesian revolution had completely displaced all other approaches to macroeconomics, and with both Mises and Hayek turning their work in other directions, the Austrian School became identified primarily with its claims that central economic planning precluded rational economic calculation. While some work has been done in Austrian macroeconomics since World War II, the bulk of the school’s work has been in microeconomics. The macroeconomics that has been done has not made any significant advances on the Austrian trade cycle theory that the school was best known for in the 1930s. Garrison’s Time and Money remedies that by picking up where Hayek left off, developing a macroeconomic model based on Austrian capital theory that provides significant insights into macroeconomic phenomena. My title here is slightly misleading: how does one count co...
IN RESPONSE TO MY article, “Government: Unnecessary but Inevitable” (2004), Walter Block (2005) o... more IN RESPONSE TO MY article, “Government: Unnecessary but Inevitable” (2004), Walter Block (2005) offers a detailed refutation of my argument on the inevitability of government. I want to respond to some of what Block said because I think that in his zest to show where he thinks I have erred, he has overlooked the larger issue of how one might determine whether government really is inevitable. I will not respond to everything Block said (his comment was longer than my original article!), partly because I agree with much of it and partly because I have already addressed some of the issues he raised in Holcombe (2005),1 but also because much of Block’s questioning of the logic behind my arguments is largely beside the point on this issue.
Econ Journal Watch, 2004
Administrators at many universities are using the National Research Council’s (NRC’s) measure... more Administrators at many universities are using the National Research Council’s (NRC’s) measures of departmental performance to assess the performance of their economics departments. The NRC methodology measures faculty publications, citations, and grants in specific ways, which gives departments an incentive to enhance their performance as measured by the NRC metrics. This affects departmental hiring, promotion, and tenure decisions, and gives faculty an incentive to do the type of research that can produce more publications, citations, and grants as measured by the NRC. The NRC criteria count only a subset of publications, citations, and grants, so using that metric rewards research that the NRC counts over research that produces publications, citations, and grants that the NRC does not count. This favors mainstream work over more heterodox approaches to economics, favors expensive research programs that can be federally funded, and tends to make research departments more homoge...
Uploads
Papers by Randall Holcombe