Dynamic government performance: honeymoons and crises of confidence

We use a formal theoretical framework to explore the interplay between a government's longevity and its performance. Ministers perform well when their careers are valuable; this is so when the government's duration is expected to be long; the government's survival depends on its popularity; and, finally, that popularity depends on its ministers performance. The feedback loop between performance and longevity means that multiple rational-expectations equilibria can arise: Ministers work hard for a popular government, but divert efforts elsewhere if they believe the government is doomed; these alternatives are both self-fulfilling prophecies. However, the presence of (perhaps small) random events that buffet the performance and popularity of a government is sufficient to pin down a unique equilibrium. We explore the dynamics that arise: A crisis of confidence involving the rapid collapse of a government's performance is sparked when a sequence of negative shocks push the popularity of the government below a unique critical threshold

Long Memory in the Turkish Stock Market Return and Volatility

This paper examines the dual long memory property of the Turkish stock market. The data set consists of daily returns, and long memory tests are carried out both for the returns and volatility. The results indicate that long memory dynamics in the returns and volatility might be modeled by using the ARFIMA-FIGARCH model. The results of the ARFIMAFIGARCH model show strong evidence of long memory in both returns and volatility. The long memory in returns implies that stock prices follow a predictable behavior, which is inconsistent with the efficient market hypothesis. The evidence of long memory in volatility, however, shows that uncertainty or risk is an important determinant of the behavior of daily stock data in the Turkish stock market.ARFIMA, FIGARCH, Long memory, Turkish stock market

Neighbourhood Child Poverty in Sweden

This paper takes a fresh look at child poverty at the neighbourhood level in the three metropolitan regions of Sweden using unique data for 1990, 1996 and 2002. We find that the number of neighbourhoods with high child poverty rates is much larger in 2002 than in 1990, but also that most poor children in the three regions live outside poor neighbourhoods. A disproportionally large fraction of children with backgrounds from low- and middle-income countries live in poor neighbourhoods. Regression analysis shows that high neighbourhood poverty rates are mainly due to parents’ low employment and to low parental education.child poverty, neighbourhood, Sweden

Did the extension of the franchise increase the Liberal vote in Victorian Britain? Evidence from the Second Reform Act

We use evidence from the Second Reform Act, introduced in the United Kingdom in 1867, to analyze the impact on electoral outcomes of extending the vote to the unskilled urban population. By exploiting the sharp change in the electorate caused by franchise extension, we separate the effect of reform from that of underlying constituency level traits correlated with the voting population. Although we find that the franchise affected electoral competition and candidate selection, there is no evidence that relates Liberal electoral support to changes in the franchise rules. Our results are robust to various sources of endogeneity.

The length of ministerial tenure in the UK 1945-1997

We analyse the determinants of ministerial hazard rates in the UK from 1945-1997. We focus on three sets of attributes i) personal characteristics of the minister; ii) political characteristics of the minister and iii) characteristics pertaining to the government in which the minister serves. We find that educational background increases ministers’ capacity to survive, that female ministers have lower hazard rates and older ministers have higher hazard rates. Experienced ministers have higher hazard than newly appointed ministers. Ministerial rank increases a ministers’ capacity to survive, with full cabinet members having the lowest hazard rates in our sample. We use different strategies to controls for the characteristics of the government the ministers serve in. Our results are robust to any of these controls

The Qualities of Leadership:Direction, Communication, and Obfuscation

Party activists wish to (i) advocate the best policy and yet (ii) unify behind a commonparty line. An activist's understanding of his environment is based on the speeches ofparty leaders. A leader's influence, measured by the weight placed on her speech,increases with her judgement on policy (sense of direction) and her ability to conveyideas (clarity of communication). A leader with perfect clarity of communication enjoysgreater influence than one with a perfect sense of direction. Activists can choose howmuch attention to pay to leaders. A necessary condition for a leader to monopolize theagenda is that she is the most coherent communicator. Sometimes leaders attract moreattention by obfuscating their messages. A concern for party unity mitigates thisincentive; when activists emphasize following the party line, they learn more about theirenvironment.

Leading the Party:Coordination, Direction, and Communication

Party activists face a coordination problem: a critical mass (a barrier tocoordination) must advocate a single policy alternative if the party is tosucceed. The need for direction is the degree to which the merits of thealternatives respond to the underlying mood of the party. An individual'sability to assess the mood is his sense of direction. These factors combine toform an index of both the desirability and the feasibility of leadership: wecall this index Michels' Ratio. A sovereign party conference gives way toleadership by an individual or oligarchy if and only if Michels' Ratio issufficiently high. Leadership enhances the clarity of intra-partycommunication, but weakens the response of policy choices to the party'smood.