Do budget institutions play a role in explaining why government effectiveness is higher in some advanced countries than in others? Employing an original panel dataset that spans four different years (1991, 2003, 2007 and 2012) we find that budget centralization has a negative and significant effect on government effectiveness in OECD countries after accounting for a list of control variables such as GDP per capita and government expenditure in addition to country and year fixed effects. We show that less centralized countries display significant better performance in health and infrastructure but similar effectiveness in tax collections. The negative impact of budget centralization seems to bite especially at the execution stage of the budgeting process, while it is not significant at the formulation and legislation stages. These results survive a list of sensitivity tests.
This paper focuses on the centralization program implemented in Israel in 2004 to analyze whether the administrative subordination of municipalities is an effective policy to deal with problems related to soft-budget constraint of lower level governments. The results consistently show, for different specifications and samples of municipalities, that this program brought a substantial decrease of municipalities' expenditures (mostly because of decreases in salary payments), and an increase of local property tax collection. Our analysis shows that all of the fiscal impact of the program is due to the appointment of an accountant that reports directly to the central government, a relatively mild form of administrative subordination. In contrast, more intrusive forms of subordination, like the central imposition of a recovery program, do not result in any substantial improvement of municipalities' fiscal situation. This leads us to conclude that a mild form of administrative subordination
Previous studies showed that the Israeli Ministry of Finance has greater power than finance ministries in most developed countries. The article describes three modes of policy analysis that are used in the Budget Department or on its behalf: in-house work, interministerial committees, and public committees. An examination of the three modes of policy analysis indicates that the major weakness of policy analysis is more evident in the in-house work of the Budget Department, which does not systematically evaluate the expected effects of policy proposals on benefits and costs. The interministerial committees or the public committees do not work according to a fixed methodology, and the quality of their analytical work is therefore arbitrary, depending on the people heading the committee. A tradition of presenting a menu of alternatives to policymakers has not been found in all three modes of policy analysis that were researched here. In addition, the decision rule according to which the
Unlike the previous literature on mass policy feedback, the present paper argues that a negative message embodied in public policy may foster or dampen political participation depending on social group affiliation. The policy change we use to examine the effect of biased policy (a negative message) on political behavior is the removal of elected mayors that were replaced by an appointed committee in a large number of Arab and Jewish municipalities in Israel which was skewed significantly towards Arab municipalities. We show that Arab voters in intervened municipalities are more likely to show up in the ballot boxes in national elections and they tend to vote more for Arab parties. In contrast, the political participation of Jewish citizens is lower in municipalities with an appointed council without noticeable effect on vote choice.
This study investigates the effect of candidates' expenditure on elections' results focusing on run-off elections' data. Our analysis, based on all run-off municipal elections in Israel between 1993 and 2008, shows that candidates' share of the vote is not substantially affected by their campaign spending. This outcome contradicts recent results showing that, in a developing country where voting is compulsory, campaign expenditures have a significant effect on vote shares. Yet, it is in line with the evidence of earlier studies based on developed countries showing that the effect of campaign spending is limited. This leads us to suggest that campaign spending may be effective in developing countries with consolidating democracies because compulsory voting forces the relative poor population to turn out and vote, and this population is relatively more impressionable by campaign spending on media advertisements.
A large number of studies show that war and terrorism have a significant effect on individuals’ political attitudes. Yet, this extensive literature does not inspect the mechanisms behind this effect. This paper concentrates on one possible mechanism, by differentiating between the human toll of terror and war and the economic costs they cause. For these purposes we focus on the Israeli-Palestinian conflict, and use variation in the level of violence across time and space together with localities’ different exposure to the tourism sector to estimate their respective effects on political attitudes. Our results suggest that whereas fatalities from the conflict make Israelis more willing to grant territorial concessions to the Palestinians, the associated economic costs of conflict do not have a consistent significant effect on individuals’ political attitudes.
This research examines the relationship between positive and negative perceptions of pensions and motivation to engage in the decision process of choosing a private pension plan, as well as satisfaction from the chosen pension plan, among trained economists. A sample of 134 economists completed a self-report survey examining the decision process of different decision contexts in life, including pension decisions. Overall, participants showed low motivation to engage in the process of choosing a private pension plan, compared to their motivation to engage in other decision tasks. However, economists invested more in the decision process and showed greater satisfaction from their decision regarding their pension plan when they had a more positive perception of pensions. This perception is represented by higher subjective likelihood of receiving pension allowances for a long period, and by a profitable view of the balance between current payments and expected incomes from pension saving.
To purchase or authenticate to the full-text of this article, please visit this link: http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9779.2012.01559.x/abst... Byline: MOMI DAHAN(1), MICHEL STRAWCZYNSKI(2) Abstract This paper shows that a policy maker needs only two types of information to set the optimal income tax rate at the top: a measure of labor supply elasticity and the shape of skills distribution. We find that the asymptotic tax rate is not affected by the degree of inequality aversion as long as the marginal utility of consumption converges to zero. By using empirically plausible estimates for the compensated labor supply elasticity and the shape of skills distribution, we find that the optimal marginal tax rate at the top should be between 33% and 60%, which is in line with the existing rates in the real world. Author Affiliation: (1)Hebrew University of Jerusalem, School of Public Policy (2)Hebrew University of Jerusalem, School of Public Policy Article Note: Momi Dahan
This paper uses the unique social structure of Arab communities to examine the effect of social identity on voter turnout. We f?rst show that voters are more likely to vote for a candidate who shares their social group (signified by last name) as compared to other candidates. Using last name as a measure of group affiliation, an inverted U-shaped relationship between group size and voter turnout has been found (borderline significant) which is consistent with theoretical models that reconcile the paradox of voting by incorporating group behavior.
We use two separate quasi-natural experiments to explore the relative importance of information and administrative costs in explaining non-take-up of water subsidy. The first “experiment” shows that the take-up rate of a household with lower administrative costs is not significantly different from otherwise identical households. In contrast, using the same program, the second “experiment” reveals that the take-up rate of a household that is more likely to be informed is substantially higher compared to otherwise identical households. These findings support the idea that information plays a major role in explaining non-take-up of water subsidy.
This paper exploits a quasi-natural experiment to study the effect of social benefits level on take-up rates. We find that households who are eligible for double benefits (twins) have much higher take-up rate - up to double - as compared to a control group of households. Our estimated effect of benefits level is much higher relative to the standard cross section estimates. This finding is less exposed to a selection bias that might plague much of the previous research on the link between benefits level and take-up. It provides strong empirical support for the level of benefits as a key factor in determining take-up rates.(This abstract was borrowed from another version of this item.)