New Economics Papers
on Collective Decision-Making
Issue of 2005‒10‒15
six papers chosen by

  1. Rational Ignorance and Voting Behavior By César Martinelli
  2. Why is fiscal policy often procyclical? By Alberto Alesina; Guido Tabellini
  4. The Nature and Role of the Civil Service in Japanese Government Decision-making By Kazumasa Okubo
  5. A theory of civil conflict and democracy in rentier states By Silje Aslaksen; Ragnar Torvik
  6. "Mechanism Design with Side Payments: Individual Rationality and Iterative Dominance" By Hitoshi Matsushima

  1. By: César Martinelli
    Date: 2005–10–06
  2. By: Alberto Alesina; Guido Tabellini
    Date: 2005–10–06
  3. By: Roberto Serrano; Rajiv Vohra
    Abstract: A core allocation of a complete information economy can be characterized as one that would not be unanimously rejected in favor of another feasible alternative by any coalition. We use this test of coalitional voting in an incomplete information environment to formalize a notion of resilience. Since information transmission is implicit in the Bayesian equilibria of such voting games, this approach makes it possible to derive core concepts in which the transmission of information among members of a coalition is endogenous. Our results lend support to the credible core of Dutta and Vohra [4] and the core proposed by Myerson [11] as two that can be justified in terms of coalitional voting
    Date: 2005–10
  4. By: Kazumasa Okubo (MOF - Ministry of Finance Japan, Policy research Institute)
    Abstract: The nature and the role of the civil service in Japan are sufficiently elusive that analysis of the governmental policy-making process tends to focus on the extremes of party politics or the bureaucratic policy-making process, neither of which, in isolation, can reveal the real decision-making process. Analysis of governmental decision-making must focus more on the relation between politicians and civil servants. To this end, principal-agent analysis is useful, but questions remain as to who is the principal and who the agent. The prevailing assumption is that the Liberal Democratic Party LDP (currently the ruling coalition party) is the principal, and civil servants the agent1. However, since cabinet members are the masters of civil servants, an argument could be made that the prime minister and cabinet members must necessarily be the principal. This is particularly the case when other members of the LDP oppose the policies of the prime minister and cabinet members. In fact, who is the principal has varied from time to time and from event to event and politicians have always competed with each other to be the real principal to the civil servants agent. Despite this, there has been a prevailing misunderstanding that civil servants have enormous power to influence politicians and are able to neglect their minister's instructions. By providing an analysis of the historical development and the nature of the civil service in Japan, this paper attempts to present a more accurate picture of the relationship between politicians and civil servants and to describe the role of the civil service in the decision-making process. It also seeks to explain why, despite their role as agent for whatever principal, civil servants are widely regarded as powerful and reliable but also, in some cases, as culpable and blameworthy.
    Keywords: Japan, civil service, policy making, decision-making
    JEL: E61 G18
    Date: 2005–07
  5. By: Silje Aslaksen (Department of Economics, Norwegian University of Science and Technology); Ragnar Torvik (Department of Economics, Norwegian University of Science and Technology)
    Abstract: The effects of resource rents on the political equilibrium have been studied in two main types of models. The first tradition employs models of conflict, and studies how resource rents affect the intensity and duration of civil conflict. The second tradition employs political economy models, where resource rents affect the political equilibrium because the costs and benefits of buying votes change. Although providing much insight, a primary disadvantage of these two model traditions is that they have little to say about when democracy emerges, and about when conflict emerges. This question is simply determined by the type of model one chooses to study. Yet an important empirical literature suggests that a main effect of resource rents may be exactly that it affects the political choice between democracy and civil conflict. In this paper, by integrating the earlier model traditions, we suggest the simplest possible framework we can think of to study this choice. The institutional outcome in our theory is consequently endogenous. We show how factors such as resource rents, the extent of electoral competition, and productivity affect economic and political equilibria, and discuss how our approach, mechanisms and results differ from the earlier theories.
    Keywords: Political economy; Resource curse; Endogenous democratic institutions
    JEL: H1 D72 D74 Q32
    Date: 2005–05–15
  6. By: Hitoshi Matsushima (Faculty of Economics, University of Tokyo)
    Abstract: In this paper, we investigate the collective decision problem with incomplete information and side payments. We show that a direct mechanism associated with the social choice function that satisfies budget balancing, incentive compatibility, and interim individual rationality exists for generic prior distributions. We consider the possibility that a risk-averse principal extracts full surplus in agency problems with adverse selection. Additionally, with regard to generic prior distributions, we show that there exists a modified direct mechanism associated with the virtual social choice function, which satisfies budget balancing and interim individual rationality, such that truth telling is the unique three times iteratively undominated message rule profile.
    Date: 2005–09

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