Knowledge that Transforms

This paper investigates the interaction between bidding for procurementprograms and fractional buys. This problem is analyzed from the standpoint of a cost-minimizing procuring agent. It is shown that underimperfect competition, a multiple-source purchase is generally preferred to a single-source contract. Similarly, the author demonstrates that a (strictly) intermediate cost sharing arrangement, i.e., an incentive contract, dominates either the cost-plus or the firm-fixed price arrangements.

In representative democracies, such as the United States, legislatures provide the transmission mechanism through which pressure from private interests becomes public policy. Considerable attention has been given in the literature to explanations of the relevant forces that appear to be driving the legislative process. For example, much research has focused on the relative impact of economic vs. ideological influences on congressional voting behavior. In this approach, the way that legislators vote on proposed legislation is modeled as a function of the preferences of various economic and ideological interests groups, including the legislator's own preferences for wealth and ideology (James Kau and Paul Rubin, 1979; Joseph Kalt and Mark Zupan, 1984; Sam Peltzman, 1985). Missing from this approach is the idea that when legislatures are the transmission mechanism, they are costly and imperfect organizations for generating political influence (Gary Becker, 1983). As such, rules and institutions will emerge that are related to problems of internal control within the organization of a legislature. In this paper, we focus on the role of floor voting from the standpoint of legislator organization and control. We seek to expand the interpretation of the meaning of floor voting activity by examining the timing, sequence, and outcomes of such votes. Specifically, we look at final floor voting in the U.S. Congress. The patterns described in the analysis below suggest that a broader analytical perspective on the economic function of floor voting is required. The findings also suggest that to identify more precisely the forces that are driving legislator voting behavior, it is important to recognize the role of legislative transactional costs and institutional constraints. In Section I, the conceptual framework for the empirical results is discussed in more detail. The purpose is not to develop a fullblown theory of legislative organization, rather, it is to focus the reader's attention on several hypotheses about the function of final floor voting as a device for controlling legislator behavior within the legislature. Empirical results, including an explanation of the timing and sequence of final votes on bills, are reported in Section II. The data for these tests are drawn from legislative activities in the U.S. House of Representatives during the 96th and 98th Congresses. Some concluding remarks are offered in Section III.

Discussions about the antipoverty effects of economic growth in the United States have largely been predicated on John Kennedy's metaphor that a rising tide lifts all boats. But the magnitude of these effects has been a subject of debate since the inception of the War on Poverty (see Lowell Gallaway, 1965, and Henry Aaron, 1967). This debate has public policy as well as academic implications-the greater the antipoverty effectiveness of growth, the less the need for special programs or income supplements during economic expansions. Elsewhere, we have shown that increased real income need not be associated with a decline in poverty (see our 1984 and 1985 papers). In fact, poverty rates did not fall from 1982 to 1983, even though real median income increased. And in 1984 the official poverty rate was about the same as it was in 1967, while real median family income was 7.1 percent above its 1967 level.' If a rising tide was lifting all boats, the tide was late in many harbors. In this paper we examine the relationship between macroeconomic conditions and poverty. Section I argues that several factors now limit the effectiveness of growth in reducing poverty. Section II differentiates the effects of secular economic growth from those of cyclical recoveries. The next section presents our interpretation of the data, followed by a brief conclusion. We show that growth had a large antipoverty effect through the early 1970's, but that the more recent experience has been different because growth rates have slowed and inequality has increased.

In a recent article, Cotton Lindsay and Bernard Feigenbaum (1984) present and test a model of rationing by waiting lists. Its novel feature is the recognition that being on some types of waiting list involves no opportunity cost and that consumers' surplus cannot be dissipated by waiters undertaking costly activities that will help secure the good or service in question. In this sense, time does not act as a price although it imposes costs. Although Lindsay's earlier version (1980) of this model has already been misinterpreted by some commentators,1 its heart is a waiting list that is equilibrated by attacking the assumption that the demand curve remains unchanged throughout the wait. Waiting time matters because the value of the good or service decays the longer it is delivered after order day. While not wishing to take issue with this insight, there are a number of points that need to be borne in mind when assessing the significance of the model, especially in relation to the authors' application to Britain's National Health Service (NHS).

Female-headed families have among the highest poverty rates of any major demographic group in the United States. The purpose of this paperis to investigate empirically the effectiveness of current child-support enforcement policies and to determine their role in reducing poverty and welfare dependency. A special supplement to the April 1982 Current Population Survey provides the data for the analysis. The results indicate that child support enforce-ment may represent an effective means for re-ducing welfare program costs but isunlikely to have a dramatic effect on either welfare de-pendency or poverty.

The paper provides evidence to show that many U.S. labor contracts havelittle or no private unemployment insurance provision. A model of an optional contract under asymmetric information, with no private unemployment insurance, is presented. Underemployment and involuntaryunemployment may coexist.

According to human capital theory, changes in the racial schooling gap are a key factor in the historical evolution of blackwhite male income ratios. In a recent paper in this Review (1984), James Smith points out a basic paradox in the human capital explanation. Race differences in years of schooling have diminished sharply and continuously for male cohorts born in the twentieth century. Black-white male income ratios, however, rose only slightly in the aggregate before 1960. After 1960, the ratios increased appreciably. Smith resolves the paradox by constructing new estimates of the racial schooling gap for cohorts stretching back to the Civil War, based on retrospective educational attainment data from the 1940 and subsequent censuses. Race differences in years of schooling widened among males born from 1886 to 1910. Additionally, the quality of black schooling fell relative to the quality of white schooling. Since these cohorts dominate the census occupation and income statistics until 1960, Smith claims the relative constancy of black-white income ratios until 1960 is consistent with the human capital model. This comment challenges one of Smith's conclusions. The increase in the racial schooling gap is shown to be spurious. Scholars often interpret census attainment data as a measure of years of schooling, but the data refer to highest grade completed. Historically, the average black pupil took longer than a single school year to complete a grade. Retention alone would not bias the census attainment data. Most blacks born in the late nineteenth century, however, were educated in ungraded schools. For them, census attainment data measure years of schooling, not grades. The shift from ungraded to graded schools took place throughout the period of educational retrogression identified by Smith. It is the change from years to grades that causes black schooling levels to appear to lag behind white schooling levels. Consistent data show a continuously decreasing racial schooling gap. Whatever the merit of Smith's explanation, it cannot rest on census attainment data. Beginning in 1890, the U.S. Bureau of the Census reported school attendance rates for narrow age groups (for example, ages 5 to 9).1 I use these data to construct new estimates of average years of schooling in the following manner. Let p(j) = proportion of children of age j at school, a(e) = minimum age at entering school, and a(L) = maximum age at leaving school. I assume that a(e) = 5 and a(L) = 20, since attendance rates before age 5 or after age 20 were negligible for the period. Because data are unavailable for single years of age, I also assume the agespecific attendance rates are equal to the average attendance rate for the relevant age 2 j-a(L) group. The sum Ej=a(e)P(j) estimates average years of schooling.3 Empirically, the number of students who skip a grade is less than the number who fail the grade. Hence average years of schooling should exceed average highest grade completed. Table 1 presents the cohort-specific estimates of years of schooling. According to my calculations, the racial schooling gap fell from 3.8 years among 1886-90 cohorts to 2.5 years among 1906-10 cohorts. According