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If at First You Don't Succeed: Budgeting by a Sequence of Referenda

Ladha, Krishna and Romer, Thomas and Rosenthal, Howard (1982) If at First You Don't Succeed: Budgeting by a Sequence of Referenda. Social Science Working Paper, 449. California Institute of Technology , Pasadena, CA. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20170926-163411819

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Abstract

An econometric model, based on the Romer-Rosenthal model of agenda control by budget-maximizing bureaucracies is used to analyze the budgetary and voting outcomes of referenda in a cross-section of Oregon school districts. In addition to estimates of the effects of agenda control, the model permits estimation of the spending effects of voter failure to perceive the .availability of lump-sum intergovernmental grants. Budgets are set via referenda. In the event of a failed referendum, a limited number of additional votes may be taken. The model permits estimation of the degree to which the agenda setter (e.g., the school superintendent) learns about voter preferences from the outcomes of failed referenda. The endogenous variables in the model are the budget proposals and voting outcomes of each referendum in the sequence of referenda held in each school district. The effects of proposals on voting behavior and the effects of learning appear via structural parameters in the error structure. The model is estimated by non-linear maximum likelihood. The results (1) support the theoretical model of agenda control and the effect of the setter's proposals on voting behavior; (2) indicate that voter failure to perceive state grants leads to important increases in spending; (3) fail to indicate any learning by the setter.


Item Type:Report or Paper (Working Paper)
Additional Information:Prepared for presentation at the NBER Conference on Incentive Effects of Government Spending, Cambridge, Massachusetts, November 5-6, 1982. This research was supported by NSF Grant SES79-17576. Published as Romer, Thomas, ed., Howard Rosenthal, and Krishna Ladha, "If at First You Don't Succeed: Budgeting by a Sequence of Referenda," in H. Hanusch ed., Public Finance and the Quest for Efficiency. Detroit, Wayne State University Press, pp. 87-108.
Group:Social Science Working Papers
Funders:
Funding AgencyGrant Number
NSFSES-7917576
Record Number:CaltechAUTHORS:20170926-163411819
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20170926-163411819
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81864
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:04 Oct 2017 19:50
Last Modified:04 Oct 2017 19:50

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