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on Positive Political Economics |
| By: | Amihai Glazer (Department of Economics, University of California-Irvine) |
| Abstract: | Members of political parties talk to each other often, and may thereby influence each other. For example, a liberal in a party of moderates may moderate his views. At the same time, the moderates in the party may become more sympathetic to liberal views. Voters in a district may favor such effects if they care about the ideology of officeholders in other districts. They may therefore prefer a candidate who affiliates with a party over an independent with the same position. |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:060709&r=pol |
| By: | Bialkowski, Jedrzej; Gottschalk, Katrin; Wisniewski, Tomasz |
| Abstract: | Prior research documented that U.S. stock prices tend to grow faster during Democratic administrations than during Republican administrations. This letter examines whether stock returns in other countries also depend on the political orientation of the incumbents. An analysis of 24 stock markets and 173 different governments reveals that there are no statistically significant differences in returns between left-wing and right-wing executives. Consequently, international investment strategies based on the political orientation of countries' leadership are likely to be futile. |
| Keywords: | Stock market returns; Politics; Presidential puzzle |
| JEL: | G14 G11 G15 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:307&r=pol |
| By: | Andreas Freytag (University of Jena, Faculty of Economics); Gernot Pehnelt (University of Jena, Faculty of Economics) |
| Abstract: | In this paper we empirically discuss the question whether or not debt relief in the past fifteen years has been economically rational. Analysing the determinants of debt relief our results suggest that governance quality did not play a role in the decision of creditor countries to forgive debt in the 1990s. Furthermore, even the actual debt burden of highly indebted poor countries had not been crucial for the decision whether or not debt forgiveness was granted. Rather, debt relief followed a strong path dependence: those countries whose debt had been forgiven in the first half of the 1990s have also been granted debt forgiveness in the second half of this decade. However, this allocation pattern changed at the beginning of the 21st century, where the path dependence was less strong and at least some dimensions of governance quality have been taken into account by donor countries. |
| Keywords: | debt relief, HIPC, development, governance, institutional quality |
| JEL: | O17 O19 O29 |
| Date: | 2006–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:jen:jenasw:2006-31&r=pol |
| By: | Vivi Alatas; Lisa Cameron; Ananish Chaudhuri; Nisvan Erkal; Lata Gangadharan |
| Abstract: | In recent years, a substantial body of work has emerged in the social sciences exploring differences in the behavior of men and women in various contexts. This paper contributes to this literature by investigating gender differences in attitudes towards corruption. It departs from the previous literature on gender and corruption by using experimental methodology. Attitudes towards corruption play a critical role in the persistence of corruption. Based on experimental data collected in Australia (Melbourne), India (Delhi), Indonesia (Jakarta) and Singapore, we show that while women in Australia are less tolerant of corruption than men in Australia, there are no significant gender differences in attitudes towards corruption in India, Indonesia and Singapore. Hence, our findings suggest that the gender differences found in the previous studies may not be nearly as universal as stated and may be more culture-specific. We also explore behavioral differences by gender across countries and find that there are larger variations in women’s attitudes towards corruption than in men’s across the countries in our sample. |
| Keywords: | Gender, Corruption, Experiments, Punishment, Multicultural Analysis |
| JEL: | C91 J16 K42 O12 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:974&r=pol |
| By: | Vivi Alatas; Lisa Cameron; Ananish Chaudhuri; Nisvan Erkal; Lata Gangadharan |
| Abstract: | We report results from a corruption experiment with Indonesian public servants and Indonesian students. Our results suggest that although both subject pools show a high level of concern with the extent of corruption in Indonesia, the Indonesian public servant subjects have a significantly lower tolerance of corruption than the Indonesian students. We find no evidence that this is due to a selection effect. The reasons given by the public servants for either engaging in or not engaging in corruption suggest that the differences in behavior across the subject pools are driven by their different real life experiences. For example, when abstaining from corruption public servants more often cite the need to reduce the social costs of corruption as a reason for their actions, and when engaging in corruption they cite low government salaries or a belief that corruption is a necessary evil in the current environment. In contrast, students give more simplistic moral reasons. We conclude by arguing that experiments such as the one considered in this paper can be used to measure forward-looking attitudinal change in society and that results obtained from different subject pools can complement each other in the determination of such attitudinal changes. |
| Keywords: | Corruption, Experiments, Subject Pool Effects |
| JEL: | C91 D73 O12 K42 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:975&r=pol |
| By: | Bialkowski, Jedrzej; Gottschalk, Katrin; Wisniewski, Tomasz |
| Abstract: | This paper investigates a sample of 27 OECD countries to test whether national elections induce higher stock market volatility. It is found that the country-specific component of index return variance can easily double during the week around an Election Day, which shows that investors are surprised by the election outcome. Several factors, such as a narrow margin of victory, lack of compulsory voting laws, change in the political orientation of the government, or the failure to form a coalition with a majority of seats in parliament significantly contribute to the magnitude of the election shock. Our findings have important implications for the optimal strategies of risk-averse stock market investors and participants of the option markets. |
| Keywords: | Political risk; National elections; Stock market volatility |
| JEL: | G12 G14 G11 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:302&r=pol |
| By: | Pivato, Marcus |
| Abstract: | `Relative Utilitarianism' (RU) is a version of classical utilitarianism, where each person's utility function is rescaled to range from zero to one. As a voting system, RU is vulnerable to preference exaggeration by strategic voters. The Groves-Clarke Pivotal Mechanism elicits truthful revelation of preferences by requiring each voter to `bid' a sum of real money to cast a pivotal vote. However, this neglects wealth effects and gives disproportionate power to rich voters. We propose a variant of the Pivotal Mechanism using fixed allotments of notional `voting money'; this `Voting Money Pivotal Mechanism' (VMPM) is politically egalitarian and immune to wealth effects. In the large-population limit, the only admissible (i.e. weakly undominated) voting strategies in the VMPM are approximately truthful revelations of preferences; thus the VMPM yields an arbitrarily close approximation of RU. |
| Keywords: | Relative Utilitarianism; Groves-Clarke; pivotal mechanism; demand-revealing mechanism; voting dollars; point voting |
| JEL: | D71 D63 |
| Date: | 2006–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:627&r=pol |