This paper considers an organizational aspect of the market in which votes are exchanged for public-policy outcomes. Specifically, the effect on the stability and behavior of politicians of assigning the demanders of political products (i.e., voters) to geographic areas is addressed. Implications concerning the locational division of the "buyers" of political outcomes for collusive efforts by existing officeholders to restrict entry are drawn and tested empirically. The results indicate in effect that the institutional structure of political markets is an important aspect of the degree of rivalry among existing politicians and hence the extent of entry by nonincumbent candidates.

This paper considers an organizational aspect of the market in which votes are exchanged for public-policy outcomes. Specifically, the effect on the stability and behavior of politicians of assigning the demanders of political products (i.e., voters) to geographic areas is addressed. Implications concerning the locational division of the "buyers" of political outcomes for collusive efforts by existing officeholders to restrict entry are drawn and tested empirically. The results indicate in effect that the institutional structure of political markets is an important aspect of the degree of rivalry among existing politicians and hence the extent of entry by nonincumbent candidates.

Several recent papers have stressed that opportunities to obtain monopoly profits will attract resources into efforts to obtain monopolies (see Gordon Tullock; Anne Krueger; Richard Posner). The major message of this literature is that traditional analysis and empirical estimates of the welfare losses from monopoly (see Arnold Harberger; David Schwartzman, 1960; David Kamerschen) may very substantially understate the total magnitude of these losses. However, the behavior underlying the tendency for monopoly rents to be transformed into genuine social costs- activity-has additional relevance for analysis of public vs. private enterprise. The presence of rent-seeking behavior results in predictable and important differences in the conduct and performance of public vs. private enterprise that are unexplained by the present property rights theory of the firm. While distinctions between public and private enterprise have been raised in the property rights literature, there remains no unambiguous prediction that privately owned firms will perform differently than public firms in a number of industries.' Indeed, there are at least two often-cited arguments which predict (particularly for utilities) that the conduct of firms in these two respective ownership categories will be similar. In this paper we argue that the bases of these apparent similarities between public and private enterprise are inapplicable in a rentseeking environment, and that the introduction of this framework enhances the explanatory power of the property rights approach. In Section I we briefly review the key arguments and offer in Section II an alternative characterization of public vs. private firm behavior in a world of rent seeking. In light of the implications of our analysis, Section III offers two types of empirical evidence on the contrasting incentives in public vs. private utilities. Specifically, we first compare the respective rewards structures for managers in publicly and privately owned water utilities in the United States. Second, we examine the impact of efficiency in private utility operation on rates of return subsequently allowed in formal rate hearings, under differing rent-seeking environments. Finally, Section IV offers some concluding remarks and discusses the relevance of our analysis for the welfare costs of monopoly.

Economic models of politics typically use the expected value of a candidate's vote share to proxy electoral probability. In this paper, the authors introduce a risk calculation to augment the evaluation of a candidate's (or party's) expected vote share and they divide this risk element into its systematic and unsystematic components. For the same reason that systematic risk is a primary focus of portfolio management, the authors discover that an analogous systematic risk component is central to presidential elections. Their approach accounts for correlations in vote swings among states, piercing the fiction of a state-by-state or 'local' campaign strategy. Copyright 1993 by MIT Press.

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.