Interest groups seek to influence economic activity through public and private politics. Public politics takes place in the arenas of public institutions, whereas private politics takes place outside public institutions often in the arena of public sentiment. Private politics refers to action by...

This paper provides an empirical test of a theory that relates corporate financial performance (CFP), corporate social performance (CSP), and social pressure from government and social activist for improved social performance. A three-equation structural model is estimated for a large number of...

What do Financial Markets Think of War in Iraq?

This paper provides a theory of firm behavior motivated by moral duty, self-interest, and social pressure. A morally-managed and a self-interested firm compete in a market in which their corporate social performance (CSP) provides product differentiation. In addition to acting as consumers,...

This paper uses daily fund flow data to examine the extent of late trading in the mutual fund industry. Using data from a 10-15 percent subsample of the industry, I find annual long-term shareholder losses due to late trading of about 5 basis points in international equity funds and 0.6 basis...

Policy-making is a dynamic process in which policies can be changed in each period but continue in the absence of new legislation. We study a dynamic legislative bargaining game with an endogenous status quo where in each period a dollar is allocated with a proposal voted against the allocation...

Political economists interested in discerning the effects of election outcomes on the economy have been hampered by the problem that economic outcomes also influence elections. We sidestep these problems by analyzing movements in economic indicators caused by clearly exogenous changes in...

This paper presents a theory of common agency lobbying in which policy-interested lobbies can first influence the choice of a governing coalition and then influence the legislative bargaining over policies. Equilibria can involve active lobbying at both stages of the governing process....

This paper estimates a three-equation structural model based on a theory that relates corporate financial performance (CFP), corporate social performance (CSP), and social pressure. CFP is found to be independent of CSP and decreasing in social pressure, and CSP is independent of CFP and...

This paper presents a dynamic model of election, government formation, and legislation in a parliamentary democracy with proportional representation in which the policy chosen in one period becomes the status quo for the next period. The electorate votes strategically by taking into account the...