IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v60y1989i3p283-291.html
   My bibliography  Save this article

Earmarking as a deterrent to rent-seeking

Author

Listed:
  • Thomas Wyrick
  • Roger Arnold

Abstract

Statistical analysis tends to support the view that quid-pro-quo fiscal arrangements reduce rent-seeking opportunities and thereby limit campaign spending in gubernatorial races. This investigation has, however, not examined other possible avenues of rent-seeking, nor has it tested the hypothesis that earmarking forces a global reduction in rent-seeking activity. One possibility, already discussed, is that higher taxes may reduce participation in gubernatorial elections but increase the demand for tax advisers. Nor have we considered rent-seeking at different levels within government — within the legislature or the highway bureaucracy, for example. Finally, we have not examined rent-seeking at those critical quasi-constitutional moments when earmarking rules are being established. Because rent-seeking can occur on many different levels, these issues deserve further investigation. Of some interest is the statistical insignificance of several variables commonly thought to contribute to campaign activity, including the income of citizens, and the candidate's political PARTY and TERM of office. Our findings downplay the importance of those variables once the distinction is made between quid-pro-quo and unilateral government transactions. Buchanan's view that rent-seeking tends to increase in direct proportion to government spending gains support here, after controlling for earmarking and other conditions that influence campaign spending. Accordingly, a 1% increase in non-QPQ spending stimulates a 1% increase in campaign activity. The positive coefficient on GOVernment spending and the negative coefficient on TAXes imply that campaign contributions and SPENDing grow in conjunction with larger public deficits — an ominous sign in an age of contribution-maximizing candidates. More optimistically, our empirical results also suggest that earmarking and other quid-pro-quo fiscal arrangements may be among the institutional reforms most effective at limiting growth of the rent-seeking society. Copyright Kluwer Academic Publishers 1989

Suggested Citation

  • Thomas Wyrick & Roger Arnold, 1989. "Earmarking as a deterrent to rent-seeking," Public Choice, Springer, vol. 60(3), pages 283-291, March.
    • Handle: RePEc:kap:pubcho:v:60:y:1989:i:3:p:283-291
    DOI: 10.1007/BF00159398
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF00159398
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF00159398?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Crain, W Mark & Tollison, Robert D, 1977. "Attenuated Property Rights and the Market for Governors," Journal of Law and Economics, University of Chicago Press, vol. 20(1), pages 205-211, April.
    2. Bender, Bruce, 1986. "The Determinants of Relative Political Campaign Expenditures," Economic Inquiry, Western Economic Association International, vol. 24(2), pages 231-256, April.
    3. Dilorenzo, Thomas J., 1984. "The domain of rent-seeking behavior: Private or public choice?," International Review of Law and Economics, Elsevier, vol. 4(2), pages 185-197, December.
    4. William J. Hunter & Charles E. Scott, 1986. "Interstate Differences in Individual Income Taxes," Public Finance Review, , vol. 14(1), pages 69-85, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bos, Dieter, 2000. "Earmarked taxation: welfare versus political support," Journal of Public Economics, Elsevier, vol. 75(3), pages 439-462, March.
    2. Ronald N. Johnson & Gary D. Libecap, 2003. "Transaction Costs and Coalition Stability under Majority Rule," Economic Inquiry, Western Economic Association International, vol. 41(2), pages 193-207, April.
    3. Been-Lon Chen & Shun-Fa Lee, 2009. "General Fund Financing, Earmarking, Economic Stabilization, and Welfare," Public Finance Review, , vol. 37(5), pages 507-538, September.
    4. Neva Novarro, 2004. "Do Policy-Makers Earmark to Constrain their Successors? The Case of Environmental Earmarking," Working Papers 0408, College of the Holy Cross, Department of Economics.
    5. Anesi, Vincent, 2006. "Earmarked taxation and political competition," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 679-701, May.
    6. Dieter Bös, 1999. "Earmarked Taxation: Welfare versus Political Support," CESifo Working Paper Series 207, CESifo.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yogesh Uppal, 2011. "Does legislative turnover adversely affect state expenditure policy? Evidence from Indian state elections," Public Choice, Springer, vol. 147(1), pages 189-207, April.
    2. John Burnett & Chris Paul & Allen Wilhite, 1997. "Political Campaigns as Rent-Seeking Games: Take the Money and Run," Public Finance Review, , vol. 25(5), pages 509-521, September.
    3. Monica P. Escaleras & Peter T. Calcagno, 2009. "Does the Gubernatorial Term Limit Type Affect State Government Expenditures?," Public Finance Review, , vol. 37(5), pages 572-595, September.
    4. Timothy Besley & Anne Case, 2003. "Political Institutions and Policy Choices: Evidence from the United States," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 7-73, March.
    5. Timothy Besley & Anne Case, 1995. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 769-798.
    6. Per G. Fredriksson & Le Wang & Patrick L Warren, 2013. "Party Politics, Governors, and Economic Policy," Southern Economic Journal, John Wiley & Sons, vol. 80(1), pages 106-126, July.
    7. Ernesto Dal Bó & Martín Rossi, 2008. "Term Length and Political Performance," NBER Working Papers 14511, National Bureau of Economic Research, Inc.
    8. Arye Hillman & Dov Samet, 1987. "Dissipation of contestable rents by small numbers of contenders," Public Choice, Springer, vol. 54(1), pages 63-82, January.
    9. Lars P. Feld & Christoph A. Schaltegger, 2004. "Do Large Cabinets Favor Large Governments? Evidence from Swiss Sub-federal Jurisdictions," Marburg Working Papers on Economics 200421, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    10. Joaquín Artés & Enrique Viñuela, 2007. "Campaign spending and office-seeking motivations: an empirical analysis," Public Choice, Springer, vol. 133(1), pages 41-55, October.
    11. Potters, Jan & Sloof, Randolph, 1996. "Interest groups: A survey of empirical models that try to assess their influence," European Journal of Political Economy, Elsevier, vol. 12(3), pages 403-442, November.
    12. Lott, John R, Jr, 2000. "A Simple Explanation for Why Campaign Expenditures Are Increasing: The Government Is Getting Bigger," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 359-393, October.
    13. Klarin, Jonas, 2019. "Term Length and Public Finances: The Case of U.S. Governors," Working Paper Series 2019:5, Uppsala University, Department of Economics.
    14. Jankovic Ivan & Block Walter, 2019. "Private Property Rights, Government Interventionism and Welfare Economics," Review of Economic Perspectives, Sciendo, vol. 19(4), pages 365-397, December.
    15. John Lott, 2006. "Campaign finance reform and electoral competition," Public Choice, Springer, vol. 129(3), pages 263-300, December.
    16. Roger D. Congleton, 2017. "Robert D. Tollison and the economics of politics," Public Choice, Springer, vol. 171(1), pages 23-28, April.
    17. Bryan P. Cutsinger & Alexander Marsella & Yang Zhou, 2022. "Insuring legislative wealth transfers: theory and evidence," Public Choice, Springer, vol. 192(1), pages 127-144, July.
    18. Kevin J. Murphy & Oded Izraeli, 1997. "Interstate Differences in Per Capita State and Local Revenues and The Neighboring State Effect," The Review of Regional Studies, Southern Regional Science Association, vol. 27(2), pages 101-121, Fall.
    19. Daniel J. Smith, 2020. "Turn-taking in office," Constitutional Political Economy, Springer, vol. 31(2), pages 205-226, June.
    20. William Hunter & Charles Scott, 1987. "Statutory changes in state income taxes: An indirect test of fiscal illusion," Public Choice, Springer, vol. 53(1), pages 41-51, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:60:y:1989:i:3:p:283-291. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.