Russell S. Sobel

• Ph.D.
• Professor at Citadel

Are the economic freedom levels of all countries converging now that the Cold War is over? If not, are they converging into a subset of economic freedom groups or ‘clubs’ based upon underlying legal origins and country characteristics? This study investigates these questions using recent methodological developments in panel data convergence analysi...

A rapidly growing literature explores the link between linguistic structures and economic outcomes. The language a speaker uses systematically influences cognition, thinking, and thus behavior. It also influences the form and content of cultural information that is shared through time and generations. We examine how these linguistic structures infl...

We examine whether the positive effects of educational attainment on views toward ethnic diversity and a sense of world citizenship are influenced by personal views related to gender equality, civil rights for all, and sexual orientation. Our hypothesis is that tolerance toward those of different ethnic backgrounds is enhanced with greater educatio...

In the last decade authors have increasingly examined the role of two cultural traits – trust and individualism – on a variety of economic outcomes ranging from gendered attitudes to entrepreneurship, human capital accumulation, and economic development. While both have positive effects, recent literature suggests that the effects of trust are ofte...

Social trust has a complex interrelationship with attitudes toward gender equality. Social trust has its origins in exchange relationships in preindustrial societies, lowering uncertainty in transactions and easing interpersonal exchanges. The degree to which this trust was extended to opportunities for women in commercial and societal roles, howev...

Education affects individual values and beliefs, mitigates prejudices and enhances open-mindedness. Additionally, education has been shown to affect cultural traits like trust and respect in societies. Building on this literature and employing an extensive individual-level cross country data from World Value Survey (WVS), we explore the role of edu...

Cordis and Milyo replicate our study, which found a positive relationship between FEMA-provided disaster relief and public corruption in the US states. Our study used the corruption data that virtually every study of American corruption uses: PIN data. Using the same data, Cordis and Milyo find the same result. And using different corruption data f...

((Link to Full-text)): <<<<<<<https://rdcu.be/ckl8j>>>>>>>> ----------------copy and paste in the browser ------------- Abstract: Self-employment among immigrants is a key source for income and social assimilation with natives. Rate of self-employment is significantly higher for immigrants than for native-born individuals, and the causal reasons be...

The previous literature finds that self-reported ‘fear of failure’ has a significant negative effect on individuals’ choice to become entrepreneurs. We hypothesize this effect is lessened in economies with a larger number of additional, alternative, entrepreneurial opportunities to pursue if a failure occurs. Prior literature also concludes the num...

While technology entrepreneurship has been widely recognized as a driver of economic growth, there exists little in the way of a unified framework for understanding technology entrepreneurship and assessing its value proposition, particularly when network externalities and information are involved. In this paper we bring together several strands of...

The profit and loss system is an integral part of a dynamic market economy. Losses eliminate businesses that are inefficiently managed or whose products no longer provide sufficient value. Almost a dozen popular television shows feature entertaining expert hosts claiming to “save” failing businesses with injections of physical and human capital. We...

The previous literature is filled with mixed findings with regard to human capital's impact on entrepreneurial outcomes. Using data from Global Entrepreneurship Monitor, we re-explore the human capital-entrepreneurship relationship and attempt to clarify the mixed findings. In particular, the prior literature has treated human capital's impact on e...

The media incorrectly called Al Gore the winner of Florida at 7:48 p.m. eastern time with 12 min still remaining to vote in the 10 Central time zone counties in Florida. In addition, the media reported that polls “close in Florida at 7:00 p.m. eastern time,” which may have misled some panhandle voters into thinking their polls closed at 6:00 p.m. c...

Objective: Epilepsy surgery is one of the most effective treatments in modern medicine. Yet, it remains largely underutilized in spite of its proven efficacy. The referrals for epilepsy surgery are often delayed until it is too late to prevent the detrimental psychosocial effects of refractory seizures. The reluctance towards epilepsy surgery is i...

While it is now well established in the literature that countries with better policies and institutions, as measured by the Economic Freedom of the World index, have better outcomes in terms of prosperity, growth, and measures of human well-being. However, we know little about the process of institutional reform – that is why and how country polici...

Purpose Existing literature has expressed significant pessimism about the outcomes of foreign aid received by developing nations. Foreign aid can lead to negative outcomes by generating greater rent-seeking opportunities and creating aid dependence. While aid’s negative impact has been explored in the context of growth, political institutions, and...

Purpose of Review This paper is a review of the recent academic literature on the socioeconomic impacts of gambling. The purpose is to provide a review of the most recent contributions to the growing literature regarding the economic and social impacts of gambling, with a focus on casinos. We divide our review into two sections: economic impacts an...

The current literature contains mixed results regarding the impact of corruption on entrepreneurship and economic growth. In this paper, we examine a much larger set of countries and time periods to attempt to gain insights into this relationship. In particular, the central question is whether corruption can compensate for a bad business climate. O...

This article provides a systematic empirical study of how differences in regulatory review processes across the fifty US states affect the level of regulation. We examine whether rules for regulatory review matter in terms of lowering the overall level of regulation in states. Our findings suggest that sunset provisions are the most effective means...

A large literature on the ‘flypaper effect’ examines how federal grants to states at time period t affect state spending (or taxes) at time period t. We explore the fundamentally different question of how federal grants at time period t affect state tax policy in the future. Federal grants often result in states creating new programs and hiring new...

Economic models are founded in the idea of taking individuals’ preferences as both known and given. This article explores the evolution of personal preferences, within a context of both entrepreneurial discovery and Objectivist philosophy. It begins by formalizing Ayn Rand’s theory of Objectivism applied to human values, and continues by modeling p...

In this article, we examine how the level of regulation affects the size distribution of businesses. To the extent that regulation functions as a fixed cost, it should lead to larger firm size. However, regulations may also lead to smaller establishments with firms outsourcing regulated activities or staying small to take advantage of state exempti...

Social scientists, governments, and the casino industry have all emphasized the need for casino patrons to "gamble responsibly." Strategies for responsible gambling include self-imposed time limits and loss limits on gambling. Such strategies help prevent people from losing more than they can afford and may help prevent excessive gambling behavior....

Economists have long studied the determinants and organization of commercial enterprises, but few researchers have applied these theories in the context of criminal street gangs. Past research on street gangs has focused primarily on a single gang's activity or on gang activity in a single city. We examine more broadly the industrial organization o...

Previous literature generally finds greater fiscal decentralization associated with faster economic growth. A separate, but related, literature finds greater fiscal decentralization associated with improved government performance, and stronger constraints on the Leviathan behavior of governments. Because economic growth critically depends on the pr...

Purpose – Previous literature has clearly demonstrated the need for sound government policies or “institutions” to promote and support entrepreneurship in a country. The purpose of this paper is to explore the role of one such institution – political stability – in boosting entrepreneurial endeavors. A politically stable nation will have lower risk...

We apply Leeson and Dean’s (2009) method for studying democratic dominoes to capitalist spillovers to compare the rates at which capitalism and democracy spread between countries. We find that capitalism and democracy spread at approximately the same modest rate.

Substantial disagreement exists among economists about the degree to which central banks should pursue discretionary stabilization policy. Activists believe that central banks can promote greater macroeconomic stability through the use of discretionary policy, while nonactivists (such as the monetarists) do not. In particular, monetarists believe t...

This paper empirically evaluates two competing theories of electoral accountability in the context of New Orleans’ 2006 mayoral election. According to the democratic efficiency theory, voters can successfully punish ineffective political agents by removing them from office. In contrast, the public choice theory argues that the bundled nature of pol...

A large literature explores the importance of entrepreneurship as the catalyst of economic progress. In contrast, this paper argues that entrepreneurs are the driver of economic stagnation. We analyze the non-productive entrepreneurial process and discuss three channels through which non-productive activities have a multiplier effect culminating in...

The international development community has encouraged investment in physical and human capital as a precursor to economic progress. Recent evidence shows, however, that increases in capital do not always lead to increases in output. We develop a growth model where the allocation and productivity of capital depends on a country’s institutions. We f...

Purpose The paper aims to apply the ideas found in the paper of Adam Smith, the pre‐eminent eighteenth century economist, to the field of management. Design/methodology/approach The paper provides a brief biography of Smith, summarizes his main contributions, and then applies them to contemporary management practices. Findings Adam Smith was the...

We examine the US state-level pattern of American Recovery and Reinvestment Act (ARRA) spending. We relate spending to (1) Keynesian determinants of countercyclical policy, (2) congressional power and dominance, and (3) presidential electoral vote importance. We find that the ARRA is, in practice, poorly-designed countercyclical stimulus. After con...

In the economic development literature, cultural diversity (for example, ethnolinguistic fractionalization) has been shown to have a negative impact on economic outcomes in many underdeveloped countries. We hypothesize that the impact of diversity on economic performance depends on the quality of a country's institutions. Under bad institutions div...

In the economic development literature, cultural diversity has been shown to have a positive impact on economic outcomes. A culturally diverse society or interaction among different cultures encourages exchange and competition and generates efficient outcome. Our paper hypothesizes that a culturally diverse society has a positive impact on the rate...

The rise of the Industrial Revolution is often depicted as a cause of hazardous working conditions and is skillfully epitomized in William Blake's tale of a child chimney sweeper. Conventional wisdom puts firm profit in conflict with occupational safety. We reexamine this argument noting that injuries are very costly to firms because they lead to h...

Previous literature stresses the importance of free media for economic development. By its nature TV, radio, and newspapers cross borders, allowing citizens to easily sample media from neighboring countries. This creates pressure for domestic reform and spreads media freedom between countries. Using spatial econometric techniques, and a sample of 1...

This paper reexamines whether fiscal decentralization constrains Leviathan government. Using panel data for Pennsylvania, we compare actual property tax rates to the Leviathan revenue-maximizing rates for municipalities, school districts, and counties. Using spatial econometric methods we also estimate the degree of spatial dependence at the three...

Decisions made within the legal system are typically viewed as being impartial informed only by the testimony and evidence presented and legal precedent. For this reason, many scholars treat legal decisions as exogenous events, that is, that they are independent of preexisting conditions (see, for example, Baicker and Gordon 2006). However, politic...

We hypothesize that the failure of government to protect the rights of individuals from violence committed by youths has led to the formation of youth gangs as protective agencies. Our theory predicts an opposite direction of causality between gang activity and violent crime from what is widely accepted. While areas with more gang activity also hav...

A country’s political and economic institutions are critical for economic prosperity. The literature abounds with institutional measures, precisely because institutions are multidimensional. We use panel unit root and cointegration tests to examine the time-series properties of several institutional measures to answer two questions. First, do insti...

Prior to 2003, the Federal Emergency Management Agency (FEMA) was an independent agency with direct congressional oversight. But in the wake of the September 11th attacks, FEMA was integrated into the newly-formed Department of Homeland Security (DHS). This merger, which severed the congressional influence over FEMA's decision making, brought about...

It is well established that geographic areas benefit, in terms of the share of government spending they capture, from having a legislator with higher tenure, holding constant the tenure of other legislators. However, the implications of this literature for how the total production of legislation changes if all members gained seniority is less clear...

This paper investigates the political economy of FEMA’s post-9/11 merger with the Department of Homeland Security. Using panel data for the post-DHS merger but pre-Katrina period, we examine how FEMA’s much-debated reorganization has impacted the strong political influences on disaster declaration and relief spending identified by Garrett and Sobel...

Entrepreneurship is the main engine of economic growth and prosperity. Previous research has explored both the factors that make individuals more likely to be entrepreneurs and the economic policies that foster entrepreneurial activity. In this paper we explore, for the first time, the relationship between media freedom and entrepreneurial activity...

We analyse the determinants of high growth expectations entrepreneurial entry (HGE) using individual data drawn on working age population, based on the Global Entrepreneurship Monitor (GEM) surveys for the 1998-2004 period. Individual level explanatory variables are combined with country-level factors. Our results suggest that availability of ventu...

"This paper explores the widely accepted view that Wal-Mart causes significant harm to the traditional, small "mom and pop" business sector of the U.S. economy. We present the first rigorous econometric investigation of this issue by examining the rate of self-employment and the number of small employer establishments using both time series and cro...

Because entrepreneurial activity is a key source of economic growth, promoting youth entrepreneurship has become a priority for policymakers. School choice programs force administrators and teachers to be more entrepreneurial in their jobs by encouraging innovation and by creating competition and a more business-like environment in K-12 education....

Standard theory neglects that enacting price discrimination is costly to firms. When this costliness is accounted for, perfect price discrimination is often socially inefficient. For pure monopolists it is sometimes socially inefficient. For monopolistic competitors it is always socially inefficient.

The report argues that aid volatility is an important source of volatility for the poorest countries. Following a method already applied by the Agence Française de Développement, the report argues that loans to LICs should incorporate a floating grace period, which the country could draw upon when hit by a shock. The definition of a shock should in...

Could bad weather be responsible for U.S. corruption? Natural disasters create resource windfalls in the states they strike by triggering federally provided natural-disaster relief. By increasing the benefit of fraudulent appropriation and creating new opportunities for such theft, disaster-relief windfalls may also increase corruption. We investig...

This paper takes an institutional approach to explaining dif- ferences in the levels of entrepreneurship and economic growth across U.S. states. The institutional approach to growth argues that political and economic institutions influence the productiv- ity of resource use. We hypothesize that institutions influence economic growth primarily throu...

In this paper, we examine the resiliency of community recovery after a natural disaster. We argue that a resilient recovery requires robust economic/financial institutions, political/legal institutions, and social/cultural institutions. We explore how politically and privately created disaster preconditions and responses have contributed to or unde...

In this paper, we examine the resiliency of community recovery after a natural disaster. We argue that a resilient recovery requires robust economic/financial institutions, political/legal institutions, and social/cultural institutions. We explore how politically and privately created disaster preconditions and responses have contributed to or unde...

Proponents argue that tax amnesties raise revenue both in the short and long run, by bringing former nonfilers back into the tax system. Opponents contend that amnesties produce little short-run revenue and weaken incentives for long-run tax compliance. However, over the last 21 years, 27 states offered tax amnesties for a second or third time. Whi...

When safety regulation makes automobiles safer, drivers may drive more recklessly, partially or completely offsetting effects on the overall level of safety. Evidence of these offsetting effects has been hard to find, however, primarily because of the aggregate nature of accident data. In this paper we explore how changes in the safety of automobil...

When safety regulation makes automobiles safer, drivers may drive more recklessly, partially or completely offsetting effects on the overall level of safety. Evidence of these offsetting effects has been hard to find, however, primarily because of the aggregate nature of accident data. In this paper we explore how changes in the safety of automobil...

While entrepreneurs benefit from unrestricted free entry into markets, they have a time-inconsistent incentive to lobby for government entry restrictions once they become successful. Bad political institutions yield to these demands, and growing barriers are placed on domestic and international competition. Good institutions do not, and this effort...

This Policy Comment examines the effect that federal government disaster relief payments have on local corruption. Using econometric analysis Leeson and Sobel explain how federal disaster aid acts as a resource windfall and why states that have more natural disasters see higher levels of public corruption. They explain how public corruption has neg...

We hypothesize that the failure of government to protect the rights of individuals from violence committed by youths has led to the formation of youth gangs as protective agencies. Our theory predicts an opposite direction of causality between gang activity and violent crime from what is widely accepted. While areas with more gang activity also hav...

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To successfully coordinate natural disaster relief, society must solve Hayek’s “knowledge problem” at three critical information nodes: (1) identification of disaster; (2) determination of what relief is needed and who needs which relief resources; and (3) evaluation of on-going relief efforts. This paper investigates the comparative ability of gov...

The high rate of budget stabilization fund adoption during the 1980s is often attributed to the 1980–1982 recession. In this view, states adopted funds to prevent a recurrence of the fiscal crises experienced during that recession. An alternative hypothesis is that some funds adopted during this period were intended to circumvent tax and expenditur...

We use public choice theory to explain the failure of FEMA and other governmental agencies to carry out effective disaster relief in the wake of Hurricane Katrina. The areas in which we focus are: (1) the tragedy of the anti-commons resulting from layered bureaucracy, (2) a type-two error policy bias causing over cautiousness in decision making, (3...

This contribution deals firstly with the differences between market action and government action, and then explores the justification for government intervention based on concepts of economic efficiency and equity. The chapter then proceeds to discuss individual cases in which unregulated private market outcomes are generally considered to violate...

The report argues that aid volatility is an important source of volatility for the poorest countries. Following a method already applied by the Agence Française de Développement, the report argues that loans to LICs should incorporate a floating grace period, which the country could draw upon when hit by a shock. The definition of a shock should in...

In this paper we provide a statistical analysis of authorship in Public Choice over the past 30 years. We explore trends in article length and coauthorship, as well as provide rankings of individual authors and institutions by total pages published in the journal. This is the first such ranking of publications in the journal since 1987. We find a s...

Following the disintegration of the Soviet Union in December 1991, the former Soviet republics and many other Eastern European nations began their transition from socialism to capitalism. Private sector entrepreneurship, an activity that had been illegal for decades, not only became legal but it also became essential for the creation of wealth and...

Models of expressive voting postulate that voters will `consume' ideological stances on issues by voting for them, even when they are against the voter's own narrow self interest, if the probability of being a decisive voter is low. When a voter is unlikely to sway the outcome, the odds that a voter will incur any real personal cost (a higher tax b...

A central contribution of public choice theory to the analysis of government activity is in viewing the activities of government, not as determined by some single altruistic dictator, but rather as the result of a process involving individual political agents who react to the incentives they face. Federal disaster relief, administered by the Federa...

The authors suggest reducing the cyclical variability of state revenue streams to ease fiscal stress during recessions. For exemple, states could eliminate or reduce sales tax and personal income tax exemptions.

Market efficiency dictates it equally profitable to bet on any racing participant, including the favourite or longshot. However, a well-documented anomaly is that racetrack bettors tend to overbet longshots and underbet favourites. This study presents and tests two theoretical explanations for this favourite-longshot bias. The unparalleled richness...

We find that presidential and congressional influences affect the rate of disaster declaration and the allocation of FEMA disaster expenditures across states. States politically important to the president have a higher rate of disaster declaration by the president, and disaster expenditures are higher in states having congressional representation o...

Incorporating the possibility that individuals may vote partially as an act of ‘expressive behavior’ is one of the most promising modern extensions of the rational-voter model. The rational-voter model, founded in the work of Downs (1957), Tullock (1967), and Riker and Ordeshook (1968, Riker and Ordeshook 1973), assumes the voting calculus of an in...

Previous studies find state lottery sales are significantly influenced by socioeconomic characteristics of the population. We extend this literature by examining how the overall expected value, the top prize, and the total combinations influence sales after controlling for these other socioeconomic factors. We perform our empirical analysis on an u...

Utilizing 4-digit industry data by county, we compare the allocation of resources across industries in state capital areas with noncapital areas. We are able to identify which industries are expanded and contracted relative to noncapital areas. Our results provide the first direct evidence and measurement of the foregone productive activity resulti...

This reply addresses the issues raised by Dougherty (forthcoming) in response to my 1999 article in this journal. I also develop a new graphical model of the optimal collection rate under the Articles, where states made contributions, and contrast it to the revenue potential from direct taxation. I believe that despite Dougherty's criticisms, my ar...

This paper examines the 1906 Pure Food and Drugs Act and its legacy in modern pharmaceutical legislation. The 1906 Act was one of the first attempts of the federal government to regulate an entire industry in the name of consumer protection. The debate surrounding the act helped to strengthen interest group politics at a critical era of government...

Pecuniary externalities create third-party effects through changes in relative prices or asset prices. Unlike technological externalities, they do not misallocate resources and are necessary for the market to work efficiently. However, the political process does not differentiate pecuniary from technological externalities and often tries to prevent...

Pecuniary externalities create third-party effects through changes in relative prices or asset prices. Unlike technological externalities, they do not misallocate resources and are necessary for the market to work efficiently. However the political process does not differentiate pecuniary from technological externalities and often tries to prevent...

The unanimous voting rule is often viewed as analogous to voluntary market exchange. This paper demonstrates that when third-party pecuniary effects exist, this analogy breaks down because unlike markets, unanimous voting requires compensation for these effects. Thus, efficient market outcomes typically will be rejected by the unanimous voting rule...

We provide new evidence regarding the role of interest groups in influencing the size and growth of government spending. Using data on the change in individual legislators’ total voted and sponsored spending from the status quo, we explore this relationship in a manner closer to the public choice tradition. Examining the impact diat interest groups...

This paper presents a diagrammatic solution to the firm’s profit-maximizing price discrimination problem in the face of capacity constraints. Airlines, hotels, and other firms practice yield management, allocating fixed capacity to customer groups paying different prices. In these cases, the firm’s short-run problem is not a decision about producti...

The distinction between technological and pecuniary externalities, usually made in production, can also be applied to consumption. Technological externalities create resource misallocations while pecuniary externalities do not. Taking a household production approach to consumption, this paper shows that many cases in which there are external effect...

Theoretical models of risk have attempted to explain why risk-averse individuals take unfair gambles. Using all United States’ lottery games, we find theoretical and empirical evidence that skewness of prize distributions explains why risk averse individuals may play the lottery.

This paper examines how closely the minimum wage has been set to the most popularly stated goals of minimum-wage policy. I first estimate these goals: the minimum-wage rate at which the relevant labor demand is unitary elastic--maximizing the total earnings of minimum-wage workers (about $5.35)--and the level that would lift a typical minimum-wage...