Control Of Legislature Research Articles

Political Uncertainty and Accounting Conservatism: Evidence from the U.S. Presidential Election Cycle

We hypothesize that political uncertainty leads to higher agency costs between managers and shareholders resulting in an increased demand for accounting conservatism. Exploiting the exogenous variation in political uncertainty induced by the U.S. gubernatorial election cycle, we find that the asymmetric timeliness of news recognition increases with political uncertainty. Our political uncertainty hypothesis operates through three economic channels, namely, political power of the incumbent, industrial exposure to politics, and the alignment of managerial and investor incentives. Accordingly, we find that the political uncertainty effect is more pronounced when the governor has control of legislature and when patronage is weaker, when a firm belongs to an industry that is more exposed to politics, when managers are better disciplined by governance mechanisms and when their reputations are more tied to the firm.

State Parties and Taxes: A Comment on Reed in the Context of Close Legislatures

This note empirically analyzes how partisan control of a state's legislature alters the growth of the state's tax burden. Using two related empirical strategies, one based on instrumental variables using closely controlled legislatures and one based on regression discontinuity, I find large effects of partisan control, between two and four times as large as similar estimates by Reed (2006). Compared to Republican control, Democratic control of the legislature causes tax burden growth of more than a full percent point over a 5-year period, on a mean tax burden of about 10.7 percentage points. This difference is strong evidence for partisan divergence in this context.

The Flow of Environmental Funds: Evidence from American Federalism

We estimate the demand for federal grants-in-aid to the states. Specifically, we analyze the flow of funds from the U.S. Environmental Protection Agency (EPA) to the states as a function of the structure of state political institutions, the political preferences of citizens and elected officials, the state's economic characteristics, and presence of several types of pollutants. We simultaneously model two dependent variables (the flow of EPA funds, and state environmental and natural resource budgets) to identify the independent causation of the two processes. Our results show that the flow of federal funds to states is greater under Democratic control of the state legislature and when the state has pro-environmental members in Congress. State environmental and natural resources spending is greater under Democratic control of the state legislature and when there are more conservation group members in the state. Republican control of the legislature, a larger manufacturing sector, and higher per capita income all lower state spending. For both dependent variables we find a variety of demographic and environmental quality effects. In contrast, we find no direct evidence for either flypaper or crowding out effects between federal funds and state spending.

Preconditions for Successful Implementation of Accrual Accounting in Central Government

A number of national governments, including the UK, have successfully implemented a change to accrual accounting. But the change should not be regarded as an end in itself: it will not solve the problems that arise where inadequate cash accounting systems exist; it will not improve control or management where inadequate control and poor management exist; nor will it improve external audit or the legislature's control over the executive. Before this reform is introduced, cash accounting should be robust, control should be secure, external audit should be functioning well and the legislature should have an ability to call the executive to account. This article sets out preconditions that governments need to meet to ensure that the full benefits of accrual accounting are achieved.

Dissecting the State: The Use of Federal Law to Free State and Local Officials from State Legislatures' Control

This paper explores whether and to what extent federal ought to have power to liberate various institutions that compose a government -- governor, municipalities, counties, school districts, state administrative agencies, etc. -- from state legislature's control. The federal frequently attempts to bestow powers on subdivisions or branches of a state that are inconsistent with state law. For instance, Federal Power Commission might give a license to a city to build a dam, even though state law bars city from such a project. Or Congress might bestow a grant on a county or a state's governor, barring state legislature from appropriating or otherwise controlling grantee's use of grant. In such cases, question arises whether federal can delegate such powers to subdivisions or branches of state even against will of state legislature. Must federal take state or local institution as it finds them, or can Congress expand powers of state and local officials even in teeth of state laws that bar such officials from exercising such powers? This paper offers a two-part answer to this question. First, paper defends traditional view that federal may not bestow powers on non-federal governmental officials when those powers are clearly and expressly barred by state law. The doctrinal basis for this is obscure: neither Hunter v. City of Pittsburgh nor autonomy doctrine clearly supports such a result. However, this paper argues that traditional doctrine, which this paper calls the of state supremacy, makes sense as a matter of sound policy, because state lawmakers are more likely to promote certain efficiencies in designing institutions for local governance that Congress is likely to disregard. Second, paper qualifies principle of state supremacy with a presumption of institutional autonomy: under this presumption, when state law is ambiguous, it ought to be construed to maximize ability of state and local officials to serve as agents of Congress. Such a canon of construction makes sense as a matter of policy, because it encourages useful intra- and intergovernmental competition between various state and local institutions for federal grant revenues and implementing authority. When state legislatures, municipalities, governors, and other non federal institutions compete with each other for federal grants and implementing authority, then Congress can presumptively bypass non-federal officials who fail to implement federal law faithfully and avoid strategic misrepresentations, insuring that state and local officials faithfully adhere to their intergovernmental bargains to carry out schemes of cooperative federalism. Such a presumption is mirror image of federalism promoting canons of construction: it helps protect nationalism through states' political process, insuring that, absent a plain statement from relevant state lawmaker, Congress will continue to have access to services of state and local officials.

Rejoinder

I am grateful to Mr. Brown for quoting enough of my correspondence to necessitate my writing rather little at this point. A great deal of research done on the American states suggests that such variables as party control of legislatures do not explain variations in spending very well. In Britain the assumption is frequently made that each local authority has so many unique features that to attempt to make broad-scale comparisons is either useless or impossible. My article was written to suggest that neither of these notions should be applied uncritically, at least to some services provided by English and Welsh county boroughs.

Some Social and Political Correlates of County Borough Expenditures: A Comment

James E. Alt ('Some Social and Political Correlates of County Borough Expenditures’ in British Journal of Political Science No. I, pp. 49–62) gives as his reasons for choosing to study county boroughs, ‘not only because of the fact that they are urban centres, the uniformity of their electoral procedure, the high level of competition (on terms of contested seats), their financial independence from other local authorities, and their service omnicompetence’. This is a standard explanation for the predominance in research on local government of the county borough to the neglect of other authorities. One positive gain of re-organization may be that future research will give a more rounded picture of local government performance and practice.I am grateful to Mr. Brown for quoting enough of my correspondence to necessitate my writing rather little at this point. A great deal of research done on the American states suggests that such variables as party control of legislatures do not explain variations in spending very well. In Britain the assumption is frequently made that each local authority has so many unique features that to attempt to make broad-scale comparisons is either useless or impossible. My article was written to suggest that neither of these notions should be applied uncritically, at least to some services provided by English and Welsh county boroughs.

The Control of Legislatures over Municipal Property

The Control of Legislatures over Municipal Property