New Economics Papers
on Collective Decision-Making
Issue of 2005‒01‒09
three papers chosen by

  1. Democracy, Credibility, and Clientelism By Philip Keefer; Razvan Vlaicu
  2. Building a Clean Machine: Anti-Corruption Coalitions and Sustainable Reform By Michael Johnston; Sahr J. Kpundeh
  3. Improving Credibility by Delegating Judicial Competence - the Case of the Judicial Committee of the Privy Council By Stefan Voigt; Michael Ebeling; Lorenz Blume

  1. By: Philip Keefer (World Bank); Razvan Vlaicu
    Abstract: Keefer and Vlaicu demonstrate that sharply different policy choices across democracies can be explained as a consequence of differences in the ability of political competitors to make credible pre-electoral commitments to voters. Politicians can overcome their credibility deficit in two ways. First, they can build reputations. This requires that they fulfill preconditions that in practice are costly—informing voters of their promises, tracking those promises, and ensuring that voters turn out on election day. Alternatively, they can rely on intermediaries—patrons—who are already able to make credible commitments to their clients. Endogenizing credibility in this way, the authors find that targeted transfers and corruption are higher and public good provision lower than in democracies in which political competitors can make credible pre-electoral promises. They also argue that in the absence of political credibility, political reliance on patrons enhances welfare in the short run, in contrast to the traditional view that clientelism in politics is a source of significant policy distortion. However, in the long run reliance on patrons may undermine the emergence of credible political parties. The model helps to explain several puzzles. For example, public investment and corruption are higher in young democracies than old; and democratizing reforms succeeded remarkably in Victorian England, in contrast to the more difficult experiences of many democratizing countries, such as the Dominican Republic. This paper—a product of the Growth and Investment Team, Development Research Group—is part of a larger effort in the group to investigate the political economy of development.
    Keywords: Governance; Macroecon & Growth; Public Sector Management
    Date: 2005–01–03
  2. By: Michael Johnston; Sahr J. Kpundeh
    Abstract: Many societies have limited corruption through the broad-based mobilization of a diverse range of interests willing and able to defend themselves by making meaningful demands for accountability of, and limits on, official power, and for an end to illicit advantages enjoyed by others. Historically such a process has taken place gradually, as political development has proceeded and the base of participation broadens. But today’s high-corruption societies cannot wait for several generations to see such developments take place. Johnston and Kpundeh argue that social action coalitions, linking public and private actors, are a way to mobilize these sorts of participation and advocacy. Such coalitions are neither a new idea nor a guarantee of successful reforms. In many instances they win out by default as an anti-corruption strategy. But they contend that if sustained by careful planning and a diverse set of incentives, they can reinforce political will and enhance the strength of civil society. Coalition-building efforts are underway in many societies. But too often they have focused only on anti-corruption tactics and pursuing their own growth, rather than looking at the coalition-building process in more general terms. In Part I, the authors employ Wilson’s (1973) analysis of the incentives that motivate and reward participation in organizations. This approach helps them identify ways in which the anti-corruption goals can be augmented by other kinds of appeals, even when material incentives are scarce. The authors also identify four stages of the coalition-building process—formation, credibility, expansion, and transformation—in which differing combinations of incentives will be necessary to address the group’s most important problems and opportunities. In Part II the authors examine two important coalition-building efforts in light of the discussions thus far—Ghana’s Anti-Corruption Coalition, and the Bangalore Agenda Task Force in Bangalore, Karnataka State, India. In Part III the authors link those cases to a broader analysis, suggesting that while purposive incentives are common in the early phases of all coalitions, other varieties must be added to the mix. Wilson’s scheme points to ways in which the imaginative use of incentives can aid the transition from one phase of coalition development to the next. The authors conclude with general strategic issues, suggesting ways in which their analysis can be applied to those questions given the important variations to be found among cases. This paper—a product of the Governance, Finance, and Regulation Division, World Bank Institute—is part of a larger effort in the institute to address governance and anti-corruption issues in developing countries.
    Keywords: Governance; Public Sector Management
    Date: 2005–01–05
  3. By: Stefan Voigt (Department of Economics, University of Kassel and ICER, Torino); Michael Ebeling (Department of Economics, University of Kassel); Lorenz Blume (Department of Economics, University of Kassel)
    Abstract: It is argued that government credibility is an important resource and that it can be improved by delegating decision-making competence beyond the nation-state. It is hypothesized that such delegation should result in higher income and growth. Some former British colonies retained the Judicial Committee of the Privy Council as their final court of appeals even after independence. This court is thus taken as a natural experiment to test our hypothesis. It turns out that retaining the jurisdiction is indeed significant for explaining economic growth.
    Keywords: Credibility, Delegation of Competence, Judicial Independence, Economic History, Judicial Committee of the Privy Council
    JEL: H11 K11 K41 N40 O57 P51
    Date: 2004–12

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