Knowledge that Transforms

Regulatory practices by the Federal Communications Commission (FCC) have the effect of rationing the use of a particular resource required for communications satellite technology, the electromagnetic spectrum. Spectrum, or the airwaves, is the medium over which communications signals such as TV, telephone, and radar travel. Federal government allocation of spectrum among competing services has long been implemented to mitigate the interference that can arise between nearby signals-hence, for instance, the assignment of radio stations to unique regions along the AM and FM dials. That government regulation can and probably does fail to allocate spectrum efficiently, for all the usual economic reasons, has been attested to, criticized, and in turn the subject of proposed reformation in an economics literature both historic (radio spectrum regulation inspired Coase's theorem) and growing (including work which dates from Harvey Levin, 1971, and references cited therein, to, most recently, Stanley Besen et al., 1984). Left unaddressed, however, have been the implications of inefficient spectrum regulation for the pace and direction of technical change. Specifically, the problems of static resource misallocation may be compounded by inefficiency in induced innovation (V. Kerry Smith, 1974, 1975; Koji Okuguchi, 1975; Wesley Magat, 1976). If FCC allocations incorrectly signal the true economic scarcity of spectrum, innovation to augment spectrum and other inputs on the basis of relative scarcity may be misdirected, and the overall rate of R&D spending may be distorted accordingly. The effect of government regulation on innovation in communications satellite technology merits particular attention for several reasons. First, a recent FCC ruling will increase the cost of future satellites by requiring them to operate at FCC-mandated minimum levels of intensity of spectrum use, on top of rationed quantities of spectrum (see Federal Register, 1983, para. 69). Second, unlike other uses of spectrum, there is a large public sector component to satellite R &D spending that is also likely to be affected by FCC regulation. Undertaken by NASA, current research expenditures on advanced communications satellite technology have been justified in large part by a perceived need to develop methods that use spectrum more intensively (see NASA, 1984, and U.S. Congress, House, 1984). Third, and again distinguishing satellites from other users of spectrum, the inherently global nature of satellite technology renders satellite spectrum allocations a contentious international issue. In particular, developing countries not currently using satellite technology have expressed serious concern about future spectrum availability. In response, technical change economizing on spectrum is frequently endorsed by regulators, and moral suasion is accordingly brought to bear on industry, as an appropriate solution (see FCC, 1985, and U.S. Congress, 1982).1 This paper proceeds as follows. Section I tailors a model of induced innovation de-

Governments often finance the development of new technologies. Such new technologies are public inputs whose simultaneous use by several industries imparts a kind of increasing returns to scale to the economy. By means of an example incorporating such a government-financed public input, this note demonstrates that (i) differences in the absolute amounts of factor endowments alone can cause trade, and (ii) such a trade can exhibit Leontief's paradox. Consider an economy which uses its endowments of labor L and capital K to produce two tradable private goods X, and X2 and a public input XO. The public input is not traded internationally but is purchased by the government and made available to the private-good industries. Their production functions are given by'

Numerous studies have established that part of the very substantial male-female earnings gap is explained by differences in the amount of human capital workers have accumulated. (See, for example, Jacob Mincer and Haim Ofek, 1983.) Institutional factors have also been found to play a role in determining wages (David Gordon et al., 1982). Occupation further helped to explain the remaining gap, but several researchers have shown that introducing dimensions of work authority by taking into account the individual's position in the work hierarchy explains more of the variation in earnings than does occupation (Martha Hill, 1980). Last, two recent studies (Ferber and Spaeth, 1984; Spaeth, 1985) also included control over monetary resources. This variable added substantially to the explanatory power of earnings regressions, even after human capital variables, institutional factors, and several other measures of work authority had been entered. Like the other studies, Ferber and Spaeth also found that reward structures for men and women are quite different, suggesting the possible existence of discrimination. The question whether women may also be at a disadvantage in achieving control over monetary resources was not investigated. When Hill examined the process of achievement of work authority, she found substantial differences between male and female workers. In this paper we examine whether the same is true for attaining financial control. I. Data and Analysis

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.