This paper utilizes principal-agency theory to examine the function of political parties as an in... more This paper utilizes principal-agency theory to examine the function of political parties as an intermediary between voters and legislators. Use of this theory in a set of essays stimulated by the contributions of Douglass C. North and Oliver E. Williamson seems highly appropriate. Transactions costs, information transmission, monitoring problems, and other elements of principal-agency theory often provide the foundation for the work of both North and Williamson. This paper examines the role that political parties play in the principal-agent relationship that exists between voters and their elected representatives. We argue that political parties, seeking to protect their brand-name capital, 1 will monitor legislators and discourage opportunistic behavior by their members. An erosion of party influence, such as has occurred in the United States, weakens the party's ability to monitor the principal-agent relationship between voters and legislators. This causes an increase in special interest legislation and opportunistic behavior by legislators.
Florida’s growth management policies require all of Florida’s local governments to have a local c... more Florida’s growth management policies require all of Florida’s local governments to have a local comprehensive plan that complies with the state’s 1985 Growth Management Act. A required part of every plan is a land use map that shows allowable uses of all land within the jurisdiction. In effect, the land use map creates an urban growth boundary by delineating where growth is allowed. Nevertheless, 28 of Florida’s 67 counties have drawn up an explicit urban growth boundary, which might be viewed as redundant or unnecessary in light of the fact that all allowable land uses are already specified in the required land use map. This Policy Brief reports the results of an empirical study that examined factors that would motivate counties to adopt an urban growth boundary. Three different types of factors were considered when looking at what causes counties to adopt urban growth boundaries. First, population factors that tend to cause growth pressures were considered. Second, differences in ...
Some economic analysis concludes that capitalist institutions tend to produce growing income ineq... more Some economic analysis concludes that capitalist institutions tend to produce growing income inequality. Piketty (2014Capital in the Twenty-First Century., Cambridge: Harvard University Press) is a recent example. This paper uses two different datasets on income shares of the top 10% to analyze the effect of market institutions on income inequality. The same empirical specifications give different results for the two datasets. This empirical investigation suggests that whether market institutions generate income inequality is an open question.
to monetary theory and business cycle research—later to be renamed macroeconomics—based on the wo... more to monetary theory and business cycle research—later to be renamed macroeconomics—based on the work of Mises and especially Hayek. By 1950, the Keynesian revolution had completely displaced all other approaches to macroeconomics, and with both Mises and Hayek turning their work in other directions, the Austrian School became identified primarily with its claims that central economic planning precluded rational economic calculation. While some work has been done in Austrian macroeconomics since World War II, the bulk of the school’s work has been in microeconomics. The macroeconomics that has been done has not made any significant advances on the Austrian trade cycle theory that the school was best known for in the 1930s. Garrison’s Time and Money remedies that by picking up where Hayek left off, developing a macroeconomic model based on Austrian capital theory that provides significant insights into macroeconomic phenomena. My title here is slightly misleading: how does one count co...
IN RESPONSE TO MY article, “Government: Unnecessary but Inevitable” (2004), Walter Block (2005) o... more IN RESPONSE TO MY article, “Government: Unnecessary but Inevitable” (2004), Walter Block (2005) offers a detailed refutation of my argument on the inevitability of government. I want to respond to some of what Block said because I think that in his zest to show where he thinks I have erred, he has overlooked the larger issue of how one might determine whether government really is inevitable. I will not respond to everything Block said (his comment was longer than my original article!), partly because I agree with much of it and partly because I have already addressed some of the issues he raised in Holcombe (2005),1 but also because much of Block’s questioning of the logic behind my arguments is largely beside the point on this issue.
Administrators at many universities are using the National Research Council’s (NRC’s) measure... more Administrators at many universities are using the National Research Council’s (NRC’s) measures of departmental performance to assess the performance of their economics departments. The NRC methodology measures faculty publications, citations, and grants in specific ways, which gives departments an incentive to enhance their performance as measured by the NRC metrics. This affects departmental hiring, promotion, and tenure decisions, and gives faculty an incentive to do the type of research that can produce more publications, citations, and grants as measured by the NRC. The NRC criteria count only a subset of publications, citations, and grants, so using that metric rewards research that the NRC counts over research that produces publications, citations, and grants that the NRC does not count. This favors mainstream work over more heterodox approaches to economics, favors expensive research programs that can be federally funded, and tends to make research departments more homoge...
This paper utilizes principal-agency theory to examine the function of political parties as an in... more This paper utilizes principal-agency theory to examine the function of political parties as an intermediary between voters and legislators. Use of this theory in a set of essays stimulated by the contributions of Douglass C. North and Oliver E. Williamson seems highly appropriate. Transactions costs, information transmission, monitoring problems, and other elements of principal-agency theory often provide the foundation for the work of both North and Williamson. This paper examines the role that political parties play in the principal-agent relationship that exists between voters and their elected representatives. We argue that political parties, seeking to protect their brand-name capital, 1 will monitor legislators and discourage opportunistic behavior by their members. An erosion of party influence, such as has occurred in the United States, weakens the party's ability to monitor the principal-agent relationship between voters and legislators. This causes an increase in special interest legislation and opportunistic behavior by legislators.
Florida’s growth management policies require all of Florida’s local governments to have a local c... more Florida’s growth management policies require all of Florida’s local governments to have a local comprehensive plan that complies with the state’s 1985 Growth Management Act. A required part of every plan is a land use map that shows allowable uses of all land within the jurisdiction. In effect, the land use map creates an urban growth boundary by delineating where growth is allowed. Nevertheless, 28 of Florida’s 67 counties have drawn up an explicit urban growth boundary, which might be viewed as redundant or unnecessary in light of the fact that all allowable land uses are already specified in the required land use map. This Policy Brief reports the results of an empirical study that examined factors that would motivate counties to adopt an urban growth boundary. Three different types of factors were considered when looking at what causes counties to adopt urban growth boundaries. First, population factors that tend to cause growth pressures were considered. Second, differences in ...
Some economic analysis concludes that capitalist institutions tend to produce growing income ineq... more Some economic analysis concludes that capitalist institutions tend to produce growing income inequality. Piketty (2014Capital in the Twenty-First Century., Cambridge: Harvard University Press) is a recent example. This paper uses two different datasets on income shares of the top 10% to analyze the effect of market institutions on income inequality. The same empirical specifications give different results for the two datasets. This empirical investigation suggests that whether market institutions generate income inequality is an open question.
to monetary theory and business cycle research—later to be renamed macroeconomics—based on the wo... more to monetary theory and business cycle research—later to be renamed macroeconomics—based on the work of Mises and especially Hayek. By 1950, the Keynesian revolution had completely displaced all other approaches to macroeconomics, and with both Mises and Hayek turning their work in other directions, the Austrian School became identified primarily with its claims that central economic planning precluded rational economic calculation. While some work has been done in Austrian macroeconomics since World War II, the bulk of the school’s work has been in microeconomics. The macroeconomics that has been done has not made any significant advances on the Austrian trade cycle theory that the school was best known for in the 1930s. Garrison’s Time and Money remedies that by picking up where Hayek left off, developing a macroeconomic model based on Austrian capital theory that provides significant insights into macroeconomic phenomena. My title here is slightly misleading: how does one count co...
IN RESPONSE TO MY article, “Government: Unnecessary but Inevitable” (2004), Walter Block (2005) o... more IN RESPONSE TO MY article, “Government: Unnecessary but Inevitable” (2004), Walter Block (2005) offers a detailed refutation of my argument on the inevitability of government. I want to respond to some of what Block said because I think that in his zest to show where he thinks I have erred, he has overlooked the larger issue of how one might determine whether government really is inevitable. I will not respond to everything Block said (his comment was longer than my original article!), partly because I agree with much of it and partly because I have already addressed some of the issues he raised in Holcombe (2005),1 but also because much of Block’s questioning of the logic behind my arguments is largely beside the point on this issue.
Administrators at many universities are using the National Research Council’s (NRC’s) measure... more Administrators at many universities are using the National Research Council’s (NRC’s) measures of departmental performance to assess the performance of their economics departments. The NRC methodology measures faculty publications, citations, and grants in specific ways, which gives departments an incentive to enhance their performance as measured by the NRC metrics. This affects departmental hiring, promotion, and tenure decisions, and gives faculty an incentive to do the type of research that can produce more publications, citations, and grants as measured by the NRC. The NRC criteria count only a subset of publications, citations, and grants, so using that metric rewards research that the NRC counts over research that produces publications, citations, and grants that the NRC does not count. This favors mainstream work over more heterodox approaches to economics, favors expensive research programs that can be federally funded, and tends to make research departments more homoge...
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Papers by Randall Holcombe