American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Distinguished Lecture on Economics in Government—What We Don't Know Could Hurt Us: Some Reflections on the Measurement of Economic Activity Katharine G.Abraham 3 18 The routine production of U.S. economic statistics dates back to the early part of the twentieth century. But in recent decades, as services output has continued to expand a system of economic statistics that had been designed during the manufacturing era began to seem increasingly outdated. Over the past decade, the statistical agencies have done yeoman work to expand the availability and quality of service sector statistics, but the task is far from completed. Moreover, the traditional accounting framework for economic statistics has focused almost exclusively on market transactions. Looking ahead, more comprehensive measurement of productive activities, however they may be organized, must be a priority. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=1&issue_date=Summer 2005 10.1257/089533005774357833 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Eight Questions about Corruption JakobSvensson 19 42 This paper will discuss eight frequently asked questions about public corruption: (1) What is corruption? (2) Which countries are the most corrupt? (3) What are the common characteristics of countries with high corruption? (4) What is the magnitude of corruption? (5) Do higher wages for bureaucrats reduce corruption? (6) Can competition reduce corruption? (7) Why have there been so few (recent) successful attempts to fight corruption? (8) Does corruption adversely affect growth? http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=2&issue_date=Summer 2005 10.1257/089533005774357860 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Political Selection TimothyBesley 43 60 Almost every major episode of economic change over the past 200 years of political history has been associated with key personalities coming to power with a commitment to these changes. But if such dynamic leaders are so important, then we need to understand how they come to hold the reins of power. This outcome could be viewed as largely the product of random events colored by idiosyncratic personalities and chance encounters. However, at least some role must be given to the underlying institutional structure, which has a more systematic influence on who rises to the top. Thus, it is essential to understand how political selection works. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=3&issue_date=Summer 2005 10.1257/089533005774357761 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Law, Endowments and Property Rights RossLevine 61 88 While scholars have hypothesized about the sources of variation in property rights for over 2500 years, it is only very recently that researchers have begun to test these theories empirically. This paper reviews both the theory and empirical evidence supporting and refuting the law and endowment views of property rights. The law view holds that historically determined differences in national legal traditions continue to shape cross-country differences in property rights. The endowment view argues that during European colonization, differences in climate, crops, the indigenous population, and the disease environment influenced long-run property rights. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=4&issue_date=Summer 2005 10.1257/089533005774357842 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article The Constitutional Dilemma of Economic Liberty Barry R.Weingast 89 108 This paper studies the problem of self-enforcing constitutions, addressing the question, how do some constitutions provide incentives for political officials to abide by the constraints announced in the constitution? To understand the mechanisms underlying successful constitutions, the paper begins by exploring a simple society facing the dilemma of policing the government: a sovereign, who controls the government, and two citizens. It then moves to a discussion of how constitutions are often formed out of crises, with some more detailed discussion of two main examples: England?s Glorious Revolution of 1688 and the U.S. Constitution. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=5&issue_date=Summer 2005 10.1257/089533005774357815 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Adam Smith's Theory of Moral Sentiments: On Morals and Why They Matter to a Liberal Society of Free People and Free Markets JerryEvensky 109 130 This essay describes Smith's analysis of ethics in his Theory of Moral Sentiments: the interaction of our nature and our nurturing that makes common civic ethics possible and the dynamic interaction of individuals and extant societal constructions that can lead to ever more mature systems of civic ethics and thus toward those conditions necessary for a constructive, sustainable liberal system. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=6&issue_date=Summer 2005 10.1257/089533005774357806 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Adam Smith, Behavioral Economist NavaAshraf Colin F.Camerer GeorgeLoewenstein 131 145 Adam Smith's psychological perspective in The Theory of Moral Sentiments is remarkably similar to "dual-process" frameworks advanced by psychologists, neuroscientists, and more recently by behavioral economists, based on behavioral data and detailed observations of brain functioning. It also anticipates a wide range of insights regarding phenomena such as loss aversion, willpower, and fairness that have been the focus of modern behavioral economics. This essay draws attention to some of these connections. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=7&issue_date=Summer 2005 10.1257/089533005774357897 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Affirmative Action and Its Mythology Roland G.FryerJr. Glenn C.Loury 147 162 For more than three decades, critics and supporters of affirmative action have fought for the moral high ground through ballot initiatives and lawsuits, in state legislatures, and in varied courts of public opinion. The goal of this paper is to show the clarifying power of economic reasoning to dispel some myths and misconceptions in the racial affirmative action debates. We enumerate seven commonly held (but mistaken) views one often encounters in the folklore about affirmative action (affirmative action may involve goals and timelines, but definitely not quotas, e.g.). Simple economic arguments reveal these seven views to be more myth than fact. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=8&issue_date=Summer 2005 10.1257/089533005774357888 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Dividend Taxation and Corporate Governance RandallMorck BernardYeung 163 180 In 2003, the United States enacted a tax reform that reduced, but did not eliminate, individual dividend income taxes. Cutting the dividend tax deprives corporate insiders of a justification for retaining earnings to build unprofitable corporate empires. But not eliminating it entirely preserves an advantage for institutional investors, who can put pressure on underperforming managers. This balance is broadly appropriate in the United States—whose large companies are freestanding and widely held. In addition, preserving the existing tax on intercorporate dividends, in place since the Roosevelt era, discourages the pyramidal corporate groups commonplace in other countries, and preserves America's large corporate sector of free-standing widely held firms. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=9&issue_date=Summer 2005 10.1257/089533005774357752 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Steven D. Levitt: 2003 John Bates Clark Medalist James M.Poterba 181 198 Steve's Clark Medal citation mentions his path-breaking contributions to the economics of crime and to the political economy of campaign finance. This paper describes Steve's research in each of these areas, as well as his contributions on a range of other topics. It identifies the substantive themes as well as the methodological patterns that run through Steve's research, and it describes the economic issues that have been informed by his analysis. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=10&issue_date=Summer 2005 10.1257/089533005774357798 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article History Lessons: The End of American Exceptionalism? Mobility in the United States Since 1850 Joseph P.Ferrie 199 215 New longitudinal data on individuals linked across nineteenth century U.S. censuses document the geographic and occupational mobility of more than 75,000 Americans from the 1850s to the 1920s. Together with longitudinal data for more recent years, these data make possible for the first time systematic comparisons of mobility over the last 150 years of American economic development, as well as cross-national comparisons for the nineteenth century. The U.S. was a substantially more mobile economy than Britain between 1850 and 1880. But both intergenerational occupational mobility and geographic mobility have declined in the U.S. since the beginning of the twentieth century, leaving much less apparent two aspects of the "American Exceptionalism" noted by nineteenth century observers. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=11&issue_date=Summer 2005 10.1257/089533005774357824 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Policy Watch: Reform of the U.S. Postal Service R. RichardGeddes 217 232 The author first reviews the current structure and regulation of the U.S. Postal Service. He then discusses the changing size and composition of the U.S. mail stream. Many other countries have already undertaken comprehensive postal reform, including both privatization and demonopolization, and the author discusses what lessons their experience can provide. He concludes by evaluating current reform proposals in the United States. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=12&issue_date=Summer 2005 10.1257/089533005774357879 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Recommendations for Further Reading TimothyTaylor 233 240 http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=13&issue_date=Summer 2005 10.1257/089533005774357770 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Comments 241 245 http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=14&issue_date=Summer 2005 10.1257/089533005774357789 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 19 3 Summer 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=19&issue=3&issue_date=Summer 2005 Journal Article Notes 247 250 http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=19&issue=3&article=15&issue_date=Summer 2005 10.1257/089533005774357851 ssinfo> Journal Article Recommendations for Further Reading BernardSaffran 263 270 http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=18&issue=2&article=15&issue_date=Spring 2004 10.1257/0895330041371295 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 18 2 Spring 2004 http://www.aeaweb.