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on Positive Political Economics |
| By: | Li, Ming; Majumdar, Dipjyoti |
| Abstract: | We analyze a psychologically-based model of voter turnout. Potential voters experience regret if they fail to vote, which is the motivation for participation in voting. Regret from abstention is inversely related to the margin of victory. Voters on the winner's side experience less regret than those on the loser's side. We show that the unique equilibrium involves positive voter turnout. We show that the losing side has higher turnout. In addition, voter turnout is positively related to importance of the election and the competitiveness of the election. We also consider scenarios in which voters are uncertain about the composition of the electorate's political preferences and show similar phenomena emerge. |
| Keywords: | voter turnout; regret; economics and psychology. |
| JEL: | D82 D72 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10719&r=pol |
| By: | Micael Castanheira; Benoît S. Crutzen; Nicolas Sahuguet |
| Abstract: | We present a model of electoral competition in which parties act as brands and use competition to select their candidates. We show that the forces that shape the competition between party representatives and independents rationalize the positive correlation between inequality and polarization documented by McCarty, Poole and Rosenthal (2006) for the US. We also show that, when voters are badly informed about the quality of candidates, it is optimal for party to use primaries to get an edge on independent candidates. This rationalizes the introduction of the American direct primary in the US at the beginning of the twentieth century. |
| Keywords: | parties as a brand, direct primary, intra-party discipline, polarization, political regime, Duverger |
| JEL: | D23 D72 D82 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2008_016&r=pol |
| By: | Laurent Bouton; Micael Castanheira |
| Abstract: | In elections, majority divisions pave the way to focal manipulations and coordination failures, which can lead to the victory of the wrong candidate. This paper shows how this flaw can be addressed if voter preferences over candidates are sensitive to information. We consider two potential sources of divisions: majority voters may have similar preferences but opposite information about the candidates, or opposite preferences. We show that when information is the source of majority divisions, Approval Voting features a unique equilibrium with full information and coordination equivalence. That is, it produces the same outcome as if both information and coordination problems could be resolved. Other electoral systems, such as Plurality and Two-Round elections, do not satisfy this equivalence. The second source of division is opposite preferences. Whenever the fraction of voters with such preferences is not too large, Approval Voting still satisfies full information and coordination equivalence. |
| Keywords: | Information Aggregation; Multicandidate Elections; Approval Voting; Poisson Games |
| JEL: | C72 D72 D81 D82 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2008_017&r=pol |
| By: | Rainald Borck; Katharina Wrohlich |
| Abstract: | We analyse preferences for public, private or mixed provision of childcare theoretically and empirically. We model childcare as a publicly provided private good. Richer households should prefer private provision to either pure public or mixed provision. If public provision redistributes from rich to poor, they should favour mixed over pure public provision, but if public provision redistributes from poor to rich, the rich and poor might favour mixed provision while the middle class favour public provision ('ends against the middle'). Using estimates for household preferences from survey data, we find no support for the ends-against-the-middle result. |
| Keywords: | childcare, redistribution, political preferences, public provision of private goods |
| JEL: | J13 D72 H42 D19 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp827&r=pol |
| By: | Paola Conconi; Nicolas Sahuguet; Maurizio Zanardi |
| Abstract: | One of the few stylized facts in international relations is that democracies, unlike autocracies, very rarely fight each other. We examine the sustainability of international peace between democracies and autocracies, where the crucial difference between these two political regimes is whether or not policymakers are subject to periodic elections. We show that the fear of losing office can deter democratic leaders from engaging in military conflicts. Crucially, this discipline effect can only be at work if incumbent leaders can be re-elected, implying that democracies in which the executives are subject to term limits should be more conflict prone. To assess the validity of our predictions, we construct a large dataset on countries with executive term limits. Our analysis of inter-state conflicts for the 1816-2001 period suggests that electoral incentives are indeed behind the democratic peace phenomenon: while democratic dyads are in general less likely to be involved in conflicts than any other dyads, this result does not hold for democracies in which the executive faces binding term limits; moreover, the dispute patterns of democracies with term limits depend on whether the executive is in the last or penultimate mandate. |
| Keywords: | Democratic Peace, Elections, Term Limits |
| JEL: | C72 D72 F00 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2008_015&r=pol |
| By: | Paola Conconi; Giovanni Facchini; Maurizio Zanardi |
| Abstract: | Fast Track Authority (FTA) is the institutional procedure in the Unites States whereby Congress grants to the President the power to negotiate international trade agreements. Under FTA, Congress can only approve or reject negotiated trade deals, with no possibility of amending them. In this paper, we examine the determinants of FTA voting decisions and the implications of this institutional procedure for trade negotiations. We describe a simple two-country trade model, in which industries are unevenly distributed across constituencies. In the foreign country, trade negotiating authority is delegated to the executive, while in the home country Congress can retain the power to amend trade agreements. We show that legislators' FTA voting behavior depends on the trade policy interests of their own constituencies as well as those of the majority of Congress. Empirical analysis of the determinants of all FTA votes between 1974 (when fast track was first introduced) and 2002 (when it was last granted) provides strong support for the predictions of our model. |
| Keywords: | Fast Track Authority, Trade Negotiations, Strategic Delegation |
| JEL: | D72 F13 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2008_013&r=pol |
| By: | Thomas Braendle; Alois Stutzer |
| Abstract: | This paper addresses the personal linkages between the public administration and the legislature that emerge because public servants pursue a political mandate. There are concerns that the strong representation of bureaucrats in many Western parliaments compromises the constitutionally proposed political neutrality of the public service and generates a conflict of interest. We present a cost-benefit calculus and analyze specific legal provisions for the German Laender to understand the selection of public servants into parliaments. Based on a novel data set, we find that incompatibility rules decrease and abeyance compensation increases the fraction of public servants in Laender parliaments. |
| Keywords: | Political selection; parliamentary election; public servants; incompatibility |
| JEL: | D72 D73 H11 H83 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2008-23&r=pol |
| By: | Rebecca Weitz-Shapiro Author-X-Name_First: Rebecca Author-X-Name_Last: Weitz-Shapiro; Matthew S. Winters Author-X-Name_First: Matthew S. Author-X-Name_Last: Winters |
| Abstract: | Theoretical literatures on procedural utility and the psychological benefits of political participation suggest that people who participate in political activities will be more satisfied with their lives because of the resulting feelings of autonomy, competence and relatedness. Individual-level data from Latin America show—in one dataset under study but not in another—a positive and statistically significant relationship between voting and life satisfaction. Variation in desire to vote as measured in Costa Rica, however, suggests that the causal arrow may run from happiness to voting. The use of multilevel models further reveals a consistent—but untheorized—cross-country negative relationship between enforced compulsory voting and happiness. Only preliminary results are found regarding the relationship between some other forms of political participation and life satisfaction. |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4583&r=pol |
| By: | Erich Gundlach; Martin Paldam (School of Economics and Management, University of Aarhus, Denmark) |
| Abstract: | Acemoglu, Johnson, Robinson, and Yared (2008) demonstrate that estimation of the standard adjustment model with country-fixed and time-fixed effects removes the statistical significance of income as a causal factor of democracy. We argue that their empirical approach must produce insignificant income effects and that a small change in the estimation process immediately reveals the strong effect of income on democracy. |
| Keywords: | Democracy, Modernization hypothesis, fixed-effects estimation |
| JEL: | D72 O43 |
| Date: | 2008–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2008-13&r=pol |
| By: | Eduardo A. Cavallo Author-X-Name_First: Eduardo A. Author-X-Name_Last: Cavallo; Alberto Cavallo Author-X-Name_First: Alberto Author-X-Name_Last: Cavallo |
| Abstract: | This paper provides empirical evidence for the importance of institutions in determining the outcome of crises on long-term growth. Once unobserved country-specific effects and other sources of endogeneity are accounted for, political institutions affect growth through their interaction with crises. The results suggest that only countries with strong democracies, high levels of political competition and external constraints on government can potentially benefit from crises and use them as opportunities to enhance long-term output per capita and productivity growth. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4589&r=pol |
| By: | Doepke, Matthias (Northwestern University); Zilibotti, Fabrizio (University of Zurich) |
| Abstract: | Child labor is a persistent phenomenon in many developing countries. In recent years, support has been growing among rich-country governments and consumer groups for the use of trade policies, such as product boycotts and the imposition of international labor standards, to reduce child labor in poor countries. In this paper, we discuss research on the long-run implications of such policies. In particular, we demonstrate that such measures may have the unintended side effect of lowering domestic support for banning child labor within developing countries, and thus may contribute to the persistence of the child-labor problem. |
| Keywords: | child labor, political economy, international labor standards, trade sanctions |
| JEL: | J20 J88 O10 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3742&r=pol |
| By: | Miguel Rueda Author-X-Name_First: Miguel Author-X-Name_Last: Rueda |
| Abstract: | This paper studies the relationship between the hazard rate of the exit of a president of a central bank and a measure of credibility in monetary policy. The expected hazard rate of exit is estimated as a function of legal and political variables. The measure of credibility is the expected probability of a disinflation beginning when inflation is rising. For a sample of 22 Latin American and G7 countries, I find a negative relationship between the hazard rate of exit and the measure of credibility. This provides evidence of the expected relationship between independence and credibility not found in previous cross country studies. Using the executive’s party ideology as a measure of aversion to inflation, there was no evidence that this relationship is different for countries where the government is identified as more conservative. However, when a president of the central bank appointed by a conservative government is in office, a rise in the probability of a disinflation beginning when inflation was rising was found. The results show that legal independence after controlling for the hazard rate of the president’s exit is not associated with credibility gains. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4585&r=pol |
| By: | Alberto Chong Author-X-Name_First: Alberto Author-X-Name_Last: Chong; Mark Gradstein Author-X-Name_First: Mark Author-X-Name_Last: Gradstein |
| Abstract: | This paper’s model suggests that a strong leader, sometimes with little legislative oversight, may nevertheless benefit from public support. The argument is that this support is induced as an attempt by the poor to counter the subversion of public protection of property rights by the rich, and to achieve this goal they are often willing to pay the price of the leader’s diversion of tax revenues for private use. The paper then examines survey data on individual attitudes toward strong leadership and finds their pattern to be consistent with the model’s predictions; specifically, support for strong leadership is inversely related to individual income and to countrywide income inequality. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4563&r=pol |
| By: | Ehud Friedgut; Gil Kalai; Noam Nisan |
| Date: | 2008–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:122247000000002416&r=pol |
| By: | Carlos Scartascini Author-X-Name_First: Carlos Author-X-Name_Last: Scartascini; Mariano Tommasi Author-X-Name_First: Mariano Author-X-Name_Last: Tommasi; Ernesto H. Stein Author-X-Name_First: Ernesto H. Author-X-Name_Last: Stein |
| Abstract: | Veto player theory argues that a higher number of veto players lowers the likelihood of change; in turn, policies that do not change help to sustain commitments but may prevent adaptation to changing circumstances. This paper challenges that claim of veto player theory by arguing that policy stability does not necessarily mean lower policy adaptability. If policymaking takes place over time with actors interacting repeatedly, more cooperative polities might be able to achieve both objectives at once, and a higher number of veto players might even favor intertemporal cooperation. The paper presents a simple formalization of the argument and some supportive cross-national empirical evidence. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4593&r=pol |