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on Contract Theory and Applications |
| By: | Kenju Kamei (Durham University Business School) |
| Abstract: | Clientelism is frequently observed in our societies. Various mechanisms that help sustain incomplete political contracts (e.g., monitoring and punishment) have been studied in the literature to date. However, do such contracts emerge in elections with secret ballots when the interactions are one-shot? How does repetition affect the evolution of incomplete political contracts? Using an incentivized experiment, this paper finds that even during one-shot interactions where monitoring is not possible, candidates form incomplete contracts through vote buying and promise-making. The candidates’ clientelistic behaviors are heterogeneous: some target swing voters, whereas others offer the most to loyal voters, or even opposition voters. These tactics distort voting behaviors as well as election outcomes. Repeated interactions significantly magnify candidates’ offers and deepen clientelistic relationships. These results underscore the possibility that clientelism evolves due to people’s strategic behaviors and interdependent preferences, without relying on alternative mechanism |
| Keywords: | experiment, cooperation, vote buying, election, clientelism |
| JEL: | C92 D72 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:dur:durham:2020_04&r=all |
| By: | W. Bentley MacLeod; Victoria Valle Lara; Christian Zehnder |
| Abstract: | Although conflicts typically lead to a waste of resources, organizations may still benefit from a corporate culture that tolerates or even encourages conflicts. The reason is that coordinated conflicts may help to enforce informal contracts and foster cooperation. In this paper we report results of a series of laboratory experiments designed to explore whether and under what conditions an efficiency-enhancing conflict culture can emerge. Using a principal-worker setup with subjective performance evaluation, we show that establishing a functional conflict culture is a delicate matter. If conflicts are encouraged in a careless, hands-off manner, the destructive side of conflicts is likely to dominate. To be successful a conflict culture requires a careful management of fairness norms. In our experiment we find that conflicts have positive net effects on efficiency only if an explicit code of conduct is established and conflicts are institutionalized through a grievance process. Thus, providing workers with more power may be a necessary but not sufficient condition for improving productivity when performance evaluations are subjective. |
| JEL: | D02 D03 J33 J41 M5 M52 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27857&r=all |