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on Positive Political Economics |
| By: | Santanu Gupta; Raghbendra Jha |
| Abstract: | This paper examines allocation of local public goods over jurisdictions (villages) with individuals with identical tastes and different incomes, in a model with democratic institutions and majority rule. The median voter (in income) in each jurisdiction determines the probability of re-election for the incumbent government. The jurisdiction with the median of these median voters is most favoured. With identical median voters in jurisdictions, and with re-election requiring less than 50mandate, jurisdictions with higher income inequality get favoured. Results from a survey data (from NCAER) on infrastructure provision in 1669 Indian villages confirm this hypothesis. Ethnic fragmentation does not affect public good provision but political fragmentation does. Finally, villages with the median population are the most favoured for public goods allocation. Sparsely populated and too densely populated villages are relatively neglected. |
| Keywords: | median voter, local public good, reservation utility |
| JEL: | H41 H72 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2006-07&r=pol |
| By: | Heikki Kauppi (Department of Economics, University of Helsinki); Mika Widgrén (Department of Economics, Turku School of Economics) |
| Abstract: | EU declares to provide support for the rural and poor regions of its member states. However, recent research shows that past EU budget allocations (in EU-15) can be attributed to measures of the distribution of voting power in the Council of Ministers deciding on the bulk of EU spending. A standard power measure alone can explain about 85% of the variance of the past EU budget shares, while, if stable coalition patterns among member countries are taken into account, power can explain at least 95% of the budget allocation. In this paper we use such estimates to predict EU budget shares after the eastern enlargement. According to our estimates eastern enlargement has large effects on the budget receipts of the incumbent member states. Moreover, whether the voting rules are based on the Nice Treaty (NT) or the Constitutional Treaty (CT) makes a difference for most member states. Many member states would be worse off under CT than under NT. |
| Keywords: | EU budget, voting power, Constitutional Treaty, Treaty of Nice |
| JEL: | C71 D70 D72 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp2&r=pol |
| By: | Stefan Napel (Department of Economics, University of Hamburg); Mika Widgrén (Department of Economics, Turku School of Economics) |
| Abstract: | The paper analyzes the appointment of the European Commission as a strategic game between members of the European Parliament and the Council. The focal equilibrium results in Commissioners that duplicate policy preferences of national Council representatives. Different internal decision rules still prevent the Commission from being a Council clone in aggregate. Rather, it is predicted a priori that Commission policies are on average more in accord with the aggregate position of the Parliament. Empirical analysis suggests that the Council is, in fact, significantly more conservative than Parliament and Commission; the latter two are significantly closer to each other than Council and Commission. |
| Keywords: | European Commission, investiture procedure, voting rules, Council of Ministers, European Parliament |
| JEL: | C70 D71 H77 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp6&r=pol |
| By: | Bernard Caillaud; Jean Tirole |
| Abstract: | Many decisions in private and public organizations are made by groups. The paper explores strategies that the sponsor of a proposal may employ to convince a qualified majority of group members to approve the proposal. Adopting a mechanism design approach to communication, it emphasizes the need to distill information selectively to key members of the group and to engineer persuasion cascades in which members who are brought on board sway the opinion of others. The paper unveils the factors, such as the extent of congruence among group members and between them and the sponsor, and the size and governance of the group, that condition the sponsor's ability to maneuver and get his project approved. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2006-19&r=pol |
| By: | Paola Manzini (Queen Mary, University of London and IZA); Marco Mariotti (Queen Mary, University of London) |
| Abstract: | We study and test a class of boundedly rational models of decision making which rely on sequential eliminative heuristics. We formalize two sequential decision procedures, both inspired by plausible models popular among several psychologists and marketing scientists. However we follow a standard `revealed preference' economic approach by fully characterizing these procedures by few, simple and testable conditions on observed choice. Then we test the models (as well as the standard utility maximization model) with experimental data. We find that the large majority of individuals behave in a way consistent with one of our procedures, and inconsistent with the utility maximization model. |
| Keywords: | Bounded rationality, Choice experiments |
| JEL: | C91 D9 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp561&r=pol |