Parliamentary Pork

1
Parliamentary Pork

• Members of Parliament as Optimising Agents
• Eric Crampton
• University of Canterbury
• eric.crampton_at_canterbury.ac.nz
• http//www.econ.canterbury.ac.nz/eric

2
Public Choice

• Incentives matter, even in non-market
  decision-making.
• When government is comprised of optimising
  agents, policy recommendations need consider
  incentive compatibility
• More generally, we can use economic tools to
  analyse political decisions

3
Pork-barrel incentives

• When costs are spread across the country, each
  constituency will lobby for projects where the
  benefits to the constituency outweigh the
  districts share of the costs.

4
Pork-barrel incentives

• When costs are spread across the country, each
  constituency will lobby for projects where the
  benefits to the constituency outweigh the
  districts share of the costs.
• Inefficiency is proportionate to the number of
  constituencies.

5
Electoral systems

• In First-Past-the-Post systems, constituencies
  are arrayed geographically we expect
  geographically-distributed pork.
• Where parties are weak, we expect universalism in
  pork distribution where strong, strategic.

6
Party strength

• American case studies tend to find universalist
  norms in distribution the Presidential system
  promotes weaker parties.
• Parliamentary systems bring stronger parties
  universalism within the governing party, or
  strategic allocation by Cabinet?

7
Canadian pork

• Smart and Milligan distribution of regional
  development grants in Atlantic Canada and Quebec
  target strategic districts.

8
HRDC Job Creation Grants

• The Transitional Jobs Fund
• Initiated in 1996 as a three-year, 300 million
  program targeting job creation in high
  unemployment regions (gt12).
• The Canada Jobs Fund
• Continued the TJF into 1999 and 2000 with annual
  funding of 110 million and with a lower
  unemployment restriction (gt10), reflecting
  overall declines in the unemployment rate.

9
The biggest scandal in Canadian history

• The Prime Ministers office pressured HRDC to
  award grants to ineligible firms funds also went
  to firms in which the PM had a financial
  interest.
• In Quebec, grant applications were approved by
  Liberal aides rather than HRDC officials.
• Several companies (gt50) granted funds quickly
  went bankrupt, the funds disappearing

10
The Auditor Generals Report

• lack of adherence to program terms and
  conditions, inadequate project selection
  processes, breaches of authority, and inadequate
  monitoring
• project approvals were not based on the
  procedures established for decision making
• Regional HRDC offices had broad discretion in
  determining eligibility and applied inconsistent
  interpretations of guidelines unreliable
  measures of unemployment often were used.

11
HRDC Grants results

• Overall, spending was targeted to the benefit of
  the governing Liberals.
• Benefits to some Liberals were offset by lower
  allocations to others.

12
HRDC Grants Results

• In Western Canada, funding skewed toward
  Liberal-held ridings, especially those held by
  Cabinet Ministers and those in narrowly-won
  seats.
• Opposition ridings won by narrow margins received
  little funding shadow cabinet ministers received
  less than backbenchers.

13
HRDC

• Eastern Canada Cabinet Ministers do well
  Liberal backbenchers and Opposition shadow
  cabinets do not.
• Quebec separatist-held districts do well.
• Overall allocations consistent with strategic
  targeting of ridings by the Liberals.

14
Pork and incentives

• Canadian evidence suggests pork is allocated
  strategically and geographically in strong party,
  FPTP, Parliamentary systems
• Others find spending is targeted demographically
  in PR systems.
• Does the electoral system cause this, or does
  something else cause both?

15
Distributive Politics -- MMP

• Stratmann and Baur (2002)
• MMP allows clean tests of electoral effects.
• Committee selection as observable variable.

16
Distributive Politics MMP in NZ

• New Zealand adopted MMP in 1996, modelling its
  system on Germanys.
• We should similarly expect that MPs elected via
  the differing systems should face incentives
  similar to those faced by members of the
  Bundestag

17
Classification

• List
• Maori, Health, Social Services, Education,
  Primary Resources
• District
• Local Government Environment
• Rural districts Primary Resources, Health,
  Education
• Maori (Maori), Social Services (non-rural)

18
Classification

• Neutral
• Business, Commerce, Finance and Expenditure,
  Foreign Affairs, Defence and Trade, Government
  Administration, Justice and Electoral, Officers
  of Parliament, Privileges, Regulations Review,
  Standing Orders, Transport and Industrial
  Relations

19
District and List MPs

• We examine committee membership subsequent to the
  1996 2005 elections
• 80 MP-observations on district committees
• 121 MP-observations on list committees
• 133 MP-observations on neutral committees
• 40 of MPs sit on both list and district
  committees.

20
Committee choice
21
Committee choice

• District MPs sitting on district committees but
  not list committees won the previous election by
  an average margin of victory of 15
• District MPs sitting on both 21.

22
Incentives under MMP

• Our results are in line with those found by
  Stratmann and Baur electoral incentives matter
  in MPs committee choices.