Binary, count, and duration data all code discrete events occurring at points in time. Although a single data generation process can produce all of these three data types, the statistical literature is not very helpful in providing methods to estimate parameters of the same process from each. In fact, only a single theoretical process exists for which known statistical methods can estimate the same parameters—and it is generally used only for count and duration data. The result is that seemingly trivial decisions about which level of data to use can have important consequences for substantive interpretations. We describe the theoretical event process for which results exist, based on time independence. We also derive a set of models for a time-dependent process and compare their predictions to those of a commonly used model. Any hope of understanding and avoiding the more serious problems of aggregation bias in events data is contingent on first deriving a much wider arsenal of statistical models and theoretical processes that are not constrained by the particular forms of data that happen to be available. We discuss these issues and suggest an agenda for political methodologists interested in this very large class of aggregation problems.

This special issue is devoted to original articles that reflect recent progress in one of the most exciting developments in Political Science, the National Science Foundation's (NSF) initiative called Empirical Implications of Theoretical Models (EITM). This initiative reflects the ideas and hard work of the Political Science team there, Jim Granato and Frank Scioli, backed up by the contributions of an EITM panel that assembled at NSF in July 2001, some of whose observations we mention below. The challenge set by the EITM program is straightforward: to improve our theoretical work so that it yields more testable hypotheses and to improve our methodological work so that testing is made more effective and informative about theories. It is hard to object to this, but it also turns out to be hard to meet fully. The EITM initiative contains several components designed to close the gap between theoretical derivation and empirical test. This issue represents one component, presenting some of the most innovative work in the discipline on the current research frontier in EITM.

This article analyzes the political origins of differences in adherence to the fiscal framework of the European Union (EU). It shows how incentives to use fiscal policy for electoral purposes and limited budget transparency at the national level, combined with the need to respond to fiscal rules at the supranational level, interact to systematically undermine the Economic and Monetary Union through the employment of fiscal gimmicks or creative accounting. It also explains in detail how national accounts were manipulated to produce electoral cycles that were under the radar of the EU budget surveillance system, and concludes with new perspectives on the changes to (and challenges for) euro area fiscal rules.

Britain enjoys a textbook reputation as the historic home and model representative of a stable two-party system. From the factors most frequently cited by way of explanation – the electoral system, the absence of cross-cutting social cleavages – it is implied that this uncommon state of affairs is a natural and permanent part of British politics. This reputation is, in fact, somewhat exaggerated. At no time have MPs or parliamentary candidates in Britain been confined to two parties only (in contrast to the United States); and for most of the period since the introduction of the majority male franchise and the beginning of mass parties in 1884 the configuration of party forces in the Commons would be best described as multi-party (1884–1922), three-party (1922–31), or dominant one-party (1931–45). Britain's experience of a stable two-party politics has therefore been both recent and relatively short-lived; it is only since the Second World War that two parties – Conservative and Labour – have alternated in exclusive incumbency of government office on the basis of an evenly balanced duopoly of electoral support and parliamentary seats.

In this article it is proposed to take another look at what have elsewhere been called ‘sources of diversity’ in British local government. The purpose is to show that across a sample of English and Welsh county boroughs, significant associations can be found between levels of expenditure in certain public service areas and both socio-economic and political variables. In particular, it will be shown that the presence of greater Labour representation on councils is associated in such areas as housing, education, and local health with higher levels and in the case of the police service with lower levels of expenditure.

Paul Abramson's Note (this Journal, p. 505) is an interesting exercise in comparative data reanalysis. But we do not believe that it effectively refutes our argument that partisan weakening in Britain has been caused by ‘period’ rather than ‘generational’ factors.

Inherent in many models of voting, as well as in defences of representative democracy, is the assumption that the voting public has knowledge of and opinions about public policy issues. In recent years in the United States a stream of scholarly articles has been devoted to assessing not just the extent to which issue knowledge and opinions exist but also the extent to which they influence electoral decisions. This new literature suggests that issue-related perceptions and attitudes are rather more important in the electoral process than earlier studies had suggested. This increased focus on issues appears to reflect both methodological changes in the analysis of them and also real changes in the importance of policy issues in American electoral politics. By contrast, students of British electoral behaviour have made few systematic attempts to assess the fit between popular attitudes and knowledge of party policy positions on issues. Instead, the conventional wisdom is repeated which holds that ‘a majority of people are either ignorant of, or disagree with, the specific policies of the party they support’. The implication of this seems to be that electors' familiarity with issues is so low, and the holding of policy attitudes by them so uncommon, that rigorous analysis of issues in the context of electoral politics is unnecessary.

I am grateful to Mr. Brown for quoting enough of my correspondence to necessitate my writing rather little at this point. A great deal of research done on the American states suggests that such variables as party control of legislatures do not explain variations in spending very well. In Britain the assumption is frequently made that each local authority has so many unique features that to attempt to make broad-scale comparisons is either useless or impossible. My article was written to suggest that neither of these notions should be applied uncritically, at least to some services provided by English and Welsh county boroughs.

This article extends existing political-economic models to deal more rigorously with politics in countries with trade-dependent economies, and in particular with the policy consequences of oil-exporting in industrial countries. Models drawn from economics and finance show how much of Britain's recent unemployment results from North Sea oil, at first through speculation in sterling in rapidly-growing international currency markets and more recently through the balance of payments. In Norway, by contrast, speculation was deterred by a variety of policies on fixing exchange rates, and the unemployment problem contained by better-planned and executed employment subsidy programmes. These policy variations are explained by differences in available ideas, institutions and, ultimately, structural characteristics.

Recent developments in the political behaviour of the British electorate have called into question the once-prevalent view that class was what counted when it came to voting and all else was ‘embellishment and detail’. Two streams of thought dominate the recent literature. One notes the continuing prominence of social class in the context of voting behaviour, but stresses the extent to which class is no longer expressable as a simple function of occupation (manual and non-manual), but instead requires paying attention to such aspects of lifestyle as tenancy patterns. The other, best exemplified in Dunleavy's recent work, pays less attention to individual lifestyle and emphasizes instead the extent to which changes in the occupational structure (particularly sectoral location and unionization) have altered the political meaning of workplace (‘production’) locations. The theoretical interest in sectoral location arises from the growth of public sector employment since the early 1960s and the increase in public sector labour militancy in the early 1970s. According to this view, partisan choice is influenced by sectoral location and by union membership, which is itself not a matter of lifestyle nor a simple extension of social class, but is bound up with sectoral (public/corporate/small private) location of occupation.

This paper presents the results of tests of a number of models of public expenditure growth which have achieved wide currency. The main types of models examined are a permanent income model, electoral cycle models, and stabilization policy models. The models are tested with data from Britain and the United States of America and the results are compared with evidence from other countries. The paper concludes that government expenditure grows in proportion to national income because politicians find it convenient to plan that way; electoral-cyclical factors are relatively unimportant in determining public expenditure; there appears to be a limited role for public expenditure in economic stabilization policy; in a comparative context institutions of expenditure control are important in determining relative rates of growth of public sector consumption expenditure.

Alt and Lowry (2000) show that Democrats generally target more of state income for public budgets than do Republicans, though exact party positions vary from state to state, and unified governments adjust faster than divided. McAtee, Yackee, and Lowery (2003) question these results. However, their estimated revenue changes ignore income shares, usually set independent variables equal to sample rather than subsample means, and omit some fixed effects. Modeling short-run changes during transitions must take note of different conditions under which different partisan configurations assume power. When their estimates do this, predicted revenue changes relative to income line up as we expected. Their analysis raises other issues regarding polarization and the distribution of partisan configurations across space and time that merit further investigation.

We explore the effect of the transparency of fiscal institutions in government on the scale of government and gubernatorial approval using a formal model of accountability. We construct an index of fiscal transparency for the American states from detailed budgetary information. With cross-sectional data for 1986-95, we find that—on average and controlling for other factors—fiscal transparency increases both the scale of government and gubernatorial approval. Our results imply that more transparent fiscal institutions induce greater effort by politicians, to whom voters give higher job approval, on average. Voters also respond by entrusting greater resources to politicians where fiscal institutions are more transparent, leading to larger government.

This article analyzes the politics of fiscal adjustment in a bicameral system when parties prefer different scales of taxes and public spending. Data from 33 non-southern American states for the years 1952–1995 show that Democrats nearly everywhere target a larger share of state incomes for the public budget than Republicans, though exact party positions vary from state to state. Republicans react more strongly to budget surpluses by reducing revenues than do Democrats. Unified governments adjust faster than divided ones. A party having unified control can shift fiscal scale one-quarter to one-third of the way toward its ideal share of income within two years. When each party controls a different branch of government, the legislative party shifts fiscal scale in its desired direction; but when each party controls one legislative chamber, there is a smaller shift in the direction preferred by the governor's party.

Previous research into endogenous trade policy has described extensively the political incentives of firms with specific assets, but no studies have shown directly that firms behave as predicted. We adopt insights from transaction costs economics to develop measures of asset specificity and to investigate how variation in these measures affects the political behavior of firms. In particular, we examine the lobbying choices of Norwegian firms in the 1980s. Given available subsidy funds from Norway's oil boom and some government decisions in the 1970s, firms with more specific assets faced potentially greater losses from adjusting to new activities in the face of competitive pressures and thus had greater incentives to lobby for subsidies to protect themselves. Joint contacting of Parliament and government on behalf of firm interests by representatives of both management and labor should be particularly likely where firms had specific assets. Data analysis shows that asset specificity, as indicated by R&D intensity and job immobility, predicts joint contacting independently of plausible alternative explanatory variables like firm size and export orientation.

Clear fiscal policy effects appear in American state gubernatorial and legislative elections between 1968 and 1992, independent of the effects of incumbency, coattails, term limits, and macroeconomic conditions. The results show that accountability is generally stronger following a period of unified party control than under divided government. Voter reactions to taxes and spending relative to the state economy are conditional on expectations, which differ for each party. Net of these expectations, Republican gubernatorial candidates lose votes if their party is responsible for unanticipated increases in the size of the state budget; Democrats do not and, indeed, may be rewarded for small increases. Independent of this, the incumbent governor's party is punished in legislative elections for failing to maintain fiscal balance. Taken together, these results show how electoral accountability for fiscal policy outcomes is strong but highly contingent on a complex configuration of party labels, partisan control, expectations, and institutions.

Does partisan control of American state government have systematic effects on state spending and taxing levels? Does divided control affect the government's ability to make hard decisions? Do institutional rules like legal deficit carryover restrictions matter? Using a formal model of fiscal policy to guide empirical analysis of data covering the American states from 1968 to 1987, we conclude that (1) aggregate state budget totals are driven by different factors under Democrats and Republicans, the net result being that Democrats target spending (and taxes) to higher shares of state-level personal income; (2) divided government is less able to react to revenue shocks that lead to budget deficits, particularly where different parties control each chamber of the legislature; and (3) unified party governments with restricted ability to carry deficits into the next fiscal year (outside the South) have sharper reactions to negative revenue shocks than those without restrictions.