Abstracts of published papers for Jac C. Heckelman

CATEGORIES

• Constitutional Convention of 1787
• institutional sclerosis
• economic and democratic freedoms
• convergence
• political business cycles
• probabilistic voting systems
• spatial models of senate elections
• secret ballot elections
• public finance
• surveys of public choice views
• miscellaneous
• books

Other miscellaneous articles

• Crossing the Threshold : An Analysis of IBRD Graduation Policy

  (with Stephen Knack and Halsey Rogers)

  Review of International Organizations 7: 145-176, 2012

  Abstract. According to World Bank policy, countries remain eligible to borrow from the IBRD until they are able to sustain long-term development without further recourse to Bank financing. Graduation from IBRD is not an automatic consequence of reaching a particular income level, but rather is supposed to be based on a determination of whether the country has reached a level of institutional development and capital-market access that enables it to sustain its own development process without recourse to Bank funding. This paper takes a positive approach to IBRD graduation policy, investigating what income and non-income factors appear to have influenced graduation status in recent decades, based on panel data for 1982 through 2009. Explanatory variables include the per- capita income of the country, as well as measures of institutional development and market access that are cited as criteria by the graduation policy, and other plausible explanatory variables that capture the levels of economic development and vulnerability of the country. We find that the observed correlates of graduation status are generally consistent with the stated policy. Countries that are wealthier, more creditworthy, more institutionally developed, and are less vulnerable to trade, financial, and other shocks are more likely to be graduates. Predicted probabilities generated by the model conform closely to the actual graduation and de-graduation experiences of Trinidad and Tobago and Korea, and suggest that Hungary and Latvia may have graduated prematurely - a prediction subsequently borne out by the large loans that they later received from the IBRD in the wake of the global financial crisis.




• Testing For Aggregation Bias in a Non-Linear Framework: Some Monte Carlo Results

  International Journal of Statistics and Economics 8: 1-11, 2012

  Abstract. Researchers modeling the behavior of individual people or firms are often unable to utilize micro-level data because such data are unavailable or unreliable. Faced with this dilemma, researchers often resort to using aggregate-level data. When the individual-level variable of interest is dichotomous, however, the aggregate-level model is subject to a special form of aggregation bias. Kelejian [1994] provides a methodology for testing for the presence of this form of bias. This study uses Monte Carlo analysis to evaluate the usefulness of Kelejian's test. Using 50 units, populated by, 100, 1000 and 10,000 individuals, we find that aggregation bias is almost universally present. Unfortunately, the Kelejian test identifies the bias in fewer than half of the cases.




• Joint Determination of Regulations by the Regulator and the Regulated: Commerical Bank Reserve Requirements, 1875-1979

  (with John Wood)

  Eastern Economic Journal 34: 158-171, 2008

  Abstract. We apply the theory of clubs to bank decisions on choosing membership in the national system and being subject to federal regulations, or remaining outside the system and opting instead for state regulation. Although costs to national membership are typically higher, member banks can use their influence to reduce these costs. This is expected to be more prominent for the larger banks, which retain greater influence on the regulators. Thus, the theory predicts membership depends on costs, which in turn depend on membership. We test these relationships in a system of simultaneous equations for the periods 1875-1913, 1914-1934, and 1935-1980. Our results are consistent with the notion of large bank memberships responding to changes in reserve ratios, and reserve ratios responding to membership rates for large banks. In addition, we find bank sensitivity to national reserve ratios to be lowest when the Fed was given additional discretion in setting reserve ratios post 1935, and federal regulator responsiveness to large bank membership was greatest during this time as well.




• A Rational Choice Model for the Dakota Effect

  PS: Political Science and Politics 41: 677-678, 2008

  Abstract. In a recent issue, Young and Sigelman (2008) present evidence of a "Dakota effect," in which persons born in the Dakotas are disproportionately likely to represent their home state, other states, and also generate government spending directed toward the Dakotas. These authors are unable to explain the causal underpinnings for overrepresentation in Congress or the Dakotan natives' keen ability to direct pork back to these two states. As is now well established, rational choice modeling can be successfully employed to explain every political phenomenon under the sun, as well as some over the sun. As such, a rational choice model will be employed here, and using ficticious data, empirical analysis will be shown to corroborate the model. We believe this to be a major breakthrough.




• Voting on Voting with the Feet: A Cross-County Analysis of the Tennessee Popular Referenda to Secede from the Union

  (with John Dinan)

  Constitutional Political Economy 18: 83-97, 2007

  Abstract. We analyze a unique case of voting on voting with the feet, when Tennessee twice considered secession from the Union in 1861 by popular referenda. The initial votes to hold a convention, and to send disunion delegates to a convention, failed, but after the Confederate states adopted a new constitution and the bombing of Fort Sumter took place, a second set of votes to separate from the union, and to join the confederacy, passed. Regression results support the importance of both economic interests and political tendencies, along with regional differences, in explaining the variation in votes across counties. Class distinctions were not found to be significant.




• The Anti-Tobacco Movement during the Progressive Era: A Case Study of Direct Democracy in Oregon

  (with John Dinan)

  Explorations in Economic History 42: 529-546, 2005

  Abstract. Little attention has been given to the cigarette bans that were enacted by many states in the late-19th and early-20th century. The recent study by Alston et al. (2002) represents the only empirical analysis of this issue. Alston et al., as typical for many other studies of historical regulatory movements, rely on legislative vote outcomes. In this article we examine the only occasion when a cigarette ban was put to a popular vote, in Oregon in 1930, and highlight the benefits of studying direct democratic votes to assess support for regulatory movements. To study the relationship between the anti-cigarette movement and other reform movements of the era, we compare the determinants of support for the cigarette ban with support for an Oregon alcohol prohibition referendum in 1933. Our results suggest that supporters of both reform movements were more likely to be found in counties with higher percentages of women, evangelical Protestants, and rural residents, which contrasts with Alston et al.'s study of state legislative behavior. In addition, greater support for alcohol prohibition in particular was found in counties with a larger percentage of immigrants and, to a lesser extent, more registered Republicans.




• Now More Than Ever, Your Vote Doesn't Matter: A Reconsideration

  The Independent Review 7: 599-601, 2003

  Abstract. Comment and extension on Bohanon and Van Cott article of the same title which appeared in The Independent Review (Spring 2002).




• And a Hockey Game Broke Out: Crime and Punishment in the NHL

  (with Andrew Yates)

  Economic Inquiry 41: 705-712, 2003

  Abstract. We apply the economic theory of crime to the National Hockey League. We analyze a natural experiment in which games during the 1999-2000 season had either one or two referees. We determine the effect of the number of referees on both the number of penalties called and the number of rules infractions committed by players. The results indicate that increasing the number of referees leads to greater enforcement of the rules but does not significantly deter players from committing infractions.




• Rent-Setting in Multiple Winner Rent-Seeking Contests

  (with Andrew Yates)

  European Journal of Political Economy 17: 835-852, 2001

  Abstract. In this paper we analyze a multiple winner rent-seeking contest where the number of winners is set by a self-interested regulator. The winners receive a license to compete in a market. The structure of competition in the market influences the number of winners through the preferences of the regulator. The model implies that Cournot competitors are often better off than firms that are able to collude on output determination.




• Size of the Military Sector and Economic Growth: A Panel Data Analysis of Africa and Latin America

  (with Michael Stroup)

  Journal of Applied Economics 4: 329-360, 2001

  Abstract. We estimate the influence of defense spending and military labor use on economic growth in African and Latin American countries. Our model integrates disparate implications from the defense economics literature into a Barro-style model of economic growth that controls for political and economic institutional variation across countries. Our panel data analysis of 44 countries in Africa and Latin America from 1975 to 1989 also controls for cross-country variation in lost human capital and public sector production inefficiencies. We find empirical evidence that the defense burden on economic growth is non-linear, with low levels of military spending increasing economic growth but higher levels of military spending decreasing growth. We also find evidence that the influence of military labor use on growth is non-linear, and exhibits a greater drag on economic growth in those countries with relatively higher levels of adult male education attainment.



• Federal Reserve Membership and the Banking Act of 1935: An Application to the Theory of Clubs

  (with John Wood)

  Public Choice Interpretations of American Economic History (Jac C. Heckelman, John C. Moorhouse, and Robert Whaples, eds.), Kluwer Academic Press, pp.147-161, 1999

  Abstract. Between 1914 and 1980 state-chartered banks were free to accept or forgo the costs and benefits of Federal Reserve membership. Their decisions were sensitive to changes in the burden of the Fed's reserve requirements caused by fluctuations in interest rates. But large banks were less likely than small banks to change their membership status, especially after the Fed acquired discretion over its reserve requirements in 1935. These choices fall within the theory of clubs and illustrate rent seeking, voting with the feet, and the exploitation of the great by the small. We develop a model of the Fed's determination of the conditions of membership subject to expected bank responses and then formalize the membership decisions of profit-seeking banks taking account of their possible influences on the Fed. In essence, all banks are likely to vote with their feet depending on membership costs, but small banks may free ride on large bank lobbying of the Fed for reduced reserve ratios. This effect should be stronger after the New Deal enhancements of Fed discretionary powers.