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J. Lawrence Broz Professor and Department Chair Department of Political Science University of California, San Diego |
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Political Messagiung and the Formation of Voter Beliefs (with T. Renee Bowen, Santiago Cantillo, Yung-Chun Chen and Masha Titova), in preparation, March 2025. "Voting" to Audit the Fed (with William Roberts Clark). April 2, 2018. Abstract: Federal Reserve independence is a chimera. We derive and test predictions about when members of Congress will support legislation to curtail the Fed’s powers and independence. We posit that members of Congress have partisan monetary policy preferences (Democrats like loose policy, Republicans like tight policy) and will support such legislation when the Fed pursues policies that are in tension with their own party preferences. We model the Fed as a strategic agent of Congress with hawkish preferences of its own that are closer to Republicans than to Democrats. We make predictions about the propensity of members of Congress to co-sponsor attacks on the Fed based on whether members are naïve or sophisticated with respect to the Fed’s partisan bias. If members of Congress are naïve and do not anticipate that the Fed can adjust its policy to influence presidential electoral outcomes, then the propensity to threaten to audit the Fed should be based strictly on partisan identity: Naïve Democrats (Republicans) should always respond to increases in the Federal Funds Rate by increasing (decreasing) their propensity to co-sponsor attacks. However, if members of Congress are sophisticated and understand that the Fed acts strategically to aid in the election or re-election of Republican presidential candidates, then the relationship between the Federal Funds rate and the tendency to threaten the Fed should be moderated by both the electoral calendar and the party of the president: Republicans (Democrats) won’t attack (reward) the Fed when it loosens policy late in the term of a Republican president because they understand the Fed is actively engaged in aiding the electoral efforts of Republican presidential candidates. Our results suggest that House Democrats are sophisticated partisans, Senate Democrats are naïve partisans, and the behavior of Republicans in both chambers is inconsistent with the partisan model.
The Federal Reserve's Coalition in Congress. January 16, 2015 Abstract: The Federal Reserve’s coalition in Congress changes over time with the mandate the Federal Reserve (Fed) is pursuing. When the Fed is fighting inflation, the Right supports it while the Left attacks it. When the Fed’s focus shifts to reviving employment, the coalitions reverse and the Left supports the Fed while the Right attacks it. I analyze a new dataset of all congressional legislative proposals since 1973 that would reduce the Fed’s political independence from Congress. I find that cosponsors of these “anti-Fed” proposals move from left to right as the Fed’s priority shifts from price stability to full employment. I also examine roll-call voting on an anti-Fed proposal that was approved in the House in 2012. Voting patterns on this “Audit the Fed” proposal reveal that the Fed’s congressional coalition is now solidly left-wing, with attacks emanating from the Right. This reflects a combination of macroeconomic conditions – reducing unemployment has been the Fed’s priority during the Great Recession – and the Right’s antipathy to the Fed’s support of foreign central banks during the financial crisis.
Central Bank Support Coalitions. First Draft: September 27, 2014 Abstract: The Federal Reserve’s ideological "support coalition" in Congress is not constant but changes over time with the mandate that it is pursuing. When the Federal Reserve (Fed) is fighting inflation, the Right supports it and the Left attacks it. But when the Fed’s primary focus shifts to recession and high unemployment, the coalitions reverse and the Left supports the Fed while the Right attacks it. A second complementary influence involves the Fed’s foreign operations. I argue that the Fed’s massive support for foreign central banks during the recent crisis further alienated the Right for “anti-globalization” reasons, compounding the ideological effect arising from the Fed’s focus on unemployment. I evaluate these arguments in two ways. First, I analyze all congressional proposals since 1973 to increase oversight of the Fed to see if opponents (identified as proposal sponsors and co-sponsors), move from Left to Right as the Fed moves from fighting inflation to fighting unemployment. The results strongly support this conditional conjecture. Second, I examine roll-call voting on Ron Paul’s 2012 “Audit the Fed” bill, finding that the Fed’s congressional support coalition is now solidly left-wing, with attacks emanating from the Right. This is due to a combination of monetary conditions – reducing unemployment is the Fed’s current priority – and the Right’s antipathy to the Fed’s global activities.
Abstract: Gasoline taxes vary widely among industrialized countries, as does support for the United Nations' effort to curtail the use of fossil fuels to address the climate change problem. We argue that malapportionment of the electoral system affects both the rate at which governments tax gasoline and the extent to which governments participate in global efforts to ameliorate climate change. Malapportionment results in a "rural bias" such that the political system disproportionately represents rural voters. Since rural voters in industrialized countries rely more heavily on fossil fuels than urban voters, our prediction is that malapportioned political systems will have lower gasoline taxes, and less commitment to climate change amelioration, than systems with equitable representation of constituents. Furthermore, it is unlikely that malapportionment is an endogenous variable, correlated with the error term in our models, because levels of malapportionment were established at the founding of nations in most cases--sometimes centuries before the introduction of gasoline taxes and awareness of global warming. We find that malapportionment is negatively related to both gasoline taxes and support for the Kyoto Protocol to the United Nations Framework Convention on Climate Change (where "support" is measured as the duration of the spell between the signing of the Protocol and ratification by the domestic legislature).
The Political Economy of IMF Voting Power and Quotas (with Brock Blomberg). March 2012
Abstract: We explore the governance structure of the International Monetary Fund, wherein voting power is explicitly tied to the size of member countries' financial contributions, known as quotas. By virtue of their large quotas, rich countries have the preponderance of voting power while developing countries are left to complain about a democratic deficit that leaves them with little influence over the IMF's policies and programs. We develop a model that recognizes the bifurcation of members into industrial-country creditors and developing-country borrowers and treats the IMF as an international government that provides collective insurance against balance-of-payments shocks. We show that when the rate at which the IMF taxes an economy (via quotas) to fund this co-insurance scheme has an impact on voting power, there is an incentive for rich countries to support subsidizing the risks of poor countries, even when the poor have substantial political power. To test the model, we estimate the covariates of actual IMF quotas (and quota shares) over time, giving attention to the role of cross-country inequality and the political ideology of domestic governments. As our model implies a conditional relationship between inequality and conservatism, we include an interaction term. We find that the impact of inequality is positive, as expected, and that this effect is smaller for conservative governments. |
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Email: jlbroz@ucsd.edu |
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