IPR - Institute for Policy Research - Northwestern University

Politics, Institutions, and Public Policy
< Accounting for Broadband’s Economic Impact
In September 2001, 45 million U.S. households
accessed the Internet through a dial-up connection,
while only 10 million used a broadband connection.
By March 2006, the households using broadband had
increased to 47 million, with 34 million using dial-up.
In new research, management and strategy professor
Shane Greenstein and Northwestern economist Ryan
McDevitt examine broadband’s economic contribution
to GDP as it surpasses dial-up Internet connections.
They estimate that while broadband accounted for
$28 billion of GDP in 2006—out of $39 billion total
for Internet access—$20 to $22 billion of that was
associated with household use, of which broadband
deployment created between $8.3 and $10.6 billion in
new GDP. In particular, the researchers find that the
increased broadband use raised U.S. consumer surplus
between $6.7 and $4.8 billion. (Consumer surplus is
the benefit to consumers from purchasing a product at
a price that is less than they would be willing to pay.)
Their estimates are much lower than those typically
quoted by Washington-based policy analysts and also
differ from the Consumer Price Index (CPI) for Internet
access. Their findings correct a historically inaccurate
inference about the pricing of Internet access and lead
to the conclusion that the official index’s timing of price
decline is actually several years too late. Finally, their
research also helps explain the puzzle of how changes in
federal policy around 2000 led consumers to upgrade
to broadband without a corresponding CPI-measured
price drop when the new policy seemed to promote wire
line-based broadband diffusion. The researchers show
the CPI undervalued the gains to users, and these gains
were what motivated many households to upgrade.
Greenstein is Elinor and H. Wendell Hobbs Professor.
< Imprisonment and Political Participation
By 2007, more than 2 million people were in prison in
the United States. While sending people to prison obviously
hinders their political participation, what about
the people they leave behind? In this project, political
scientist Traci Burch is exploring whether the removal
and incarceration of individuals depresses voter registration
and turnout not only among convicted offenders,
but also among their families, friends, and neighbors.
The study explores
participation
by individual
offenders and
communities in
which residents
were incarcerated
in the months
leading up to
the 2008 general
election. Using
data from states’
departments of
correction, boards
of elections, and
the U.S. Census
Traci Burch studies how incarceration
affects voting by felons and
their families and neighbors.
Bureau, in addition to extensive new fieldwork, Burch is
focusing primarily on short-term effects.
< Private Politics and Global Commerce
Private politics refers to political and regulatory
competition between firms and interest groups outside
the realm of public institutions, such as governments,
agencies, or courts. In private politics, activists target
companies directly to influence the company’s business
practices. Tools range from conducting boycotts to
shareholder and divestment campaigns. Examples
include the Rainforest Action Network’s calling out
big-box retailers Home Depot and Lowe’s for using oldgrowth
timber products and activists targeting
Wal-Mart for its labor practices.
Combining diverse disciplinary traditions from management,
sociology, and political science, management and
strategy professor Daniel Diermeier and his colleagues
are creating models and assembling data sets that might
help answer how activist organizations choose their
targets and the strategies they use. This study might also
shed light on whether firms can avoid being a target and
how they can fight activist campaigns once they become
a target. Diermeier sees such activism growing alongside
globalization, leading to more use of “private regulation”
as a means of influencing market participants and practices.
He is IBM Professor of Regulation and Competitive
Practice at Kellogg.
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