Using the ITERATE dataset, we explore the origins of transnational terrorist activity, from 1982 through 1997, in 118 countries. We model terrorism, not as a function of a nation's ethnic, religious or linguistic fractionalization, but of an independent measure of perceived ethnic tensions. When we control for institutional quality, evidence that political rights and civil liberties mitigate the terrorism-producing effects of ethnic tensions exists only since 1990. Economic freedoms, on the other hand, robustly reduce the number of terrorist attacks originating in ethnically tense societies. JEL Codes: D74

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This paper tests a multiple principal–agent model of the Internal Revenue Service. Using data for 33 IRS districts over six tax years, 1992–1997, we report evidence that the fraction of individual income tax returns audited is significantly lower in districts that are important to the president electorally and that have representation on key congressional committees. These findings suggest that the IRS is not a rogue government agency, but rather is an effective bureaucratic agent of its political sponsors. “Reforming” the IRS by subjecting it to an independent oversight board appointed by the president would therefore seem to be redundant.

An FBI investigation of county purchasing activities in the mid 1980s resulted in the conviction of 55 of Mississippi's 410 county supervisors. Analyzing data from the state's 1987 county supervisor elections and hypothesizing that candidates' demands for votes increase as the gains from holding public office increase, we predict larger voter turnouts in the 26 of the state's 82 counties where supervisor corruption was exposed. Holding constant average voter turnout in the preceding U.S. presidential election and controlling for the competitiveness of supervisor races, we find that more Mississippians indeed voted in corrupt than in non-corrupt counties. Copyright Springer Science + Business Media, Inc. 2006

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