New Economics Papers
on Collective Decision-Making
Issue of 2005‒12‒14
four papers chosen by

  1. When will a dictator be good? By Ling Shen
  2. Decentralization and Electoral Accountability : Incentives, Separation and Vote Welfare By Jean, HINDRIKS; Ben, Lockwood
  3. Congressional Trends to Tax and Spend: Examining Fiscal Voting Across Time and Chamber By Edward J. Lopez
  4. Strategic Institutional Choice: Voters, States, and Congressional Term Limits By Edward J. Lopez; R. Todd Jewell

  1. By: Ling Shen
    Abstract: Dictatorship is the predominant political system in many developing countries. However, different dictators act quite differently: a good dictator implements growth-enhancing economic policies, e.g. investment in public education and infrastructure, whereas a bad dictator expropriates wealth of her citizens for her own consumption. The present paper provides a theoretical model by deriving underlying determinants of dictatorial behavior. We assume that the engine of economic growth is private investment. It can increase the productivity of individuals who invest, as well as the aggregate technological level. A good dictator encourages this investment in order to expropriate more. However, the cost of this encouragement is that the ensuing higher growth rate will induce earlier democratization. In this paper we will illustrate the trade-off between economic benefits from a growth-enhancing policy in the short run and the shorter life-time of the dictator in the long run. Furthermore, we will find that the higher the return from private investments is the less likely the dictator will be a good one. Contrary to McGuire and Olson (1996) we find that a long life-time does not always induce positive incentives among dictators.
    Keywords: dictatorship, political transition, economic growth
    JEL: H00 O12 P16
    Date: 2005–09
  2. By: Jean, HINDRIKS; Ben, Lockwood
    Abstract: This paper studies the relationship between fiscal decentralization and electoral accountability, by analyzing how decentralization impacts upon incentive and selecion effects, and thus on voter welfare. The model abstracts from features such as public good spillovers or economics of scale, so that absent elections, voters are indifferent about the fiscal regime. The effect of fiscal centralization on voter welfare works through two channels : (i) via its effect on the probability of pooling by the bad incumbent; (ii) conditional on the probability of pooling, the extent to which, with centralization, the incumbent can divert rents in some regions without this being detected by voters in other regions (selective rent diversion). Both these effects depend on the information structure; whether voters only observe fiscal policy in their own region, in all regions, or an intermediate case with a uniform tax across all regions. More voter information does not necessarily raise voter welfare, and under some conditions, voter would choose uniform over differentiated taxes ex ante to constrain selective rent diversion
    Keywords: Fiscal federalism; decentralization; elections; accountability
    JEL: D72 D73 H41
    Date: 2005–03–15
  3. By: Edward J. Lopez (San Jose State University)
    Abstract: This paper examines congressional spending preferences over time by party and chamber. The data employed is the annual vote index compiled by the National Taxpayers Union for 1979-2002. NTU scores are presented with and without adjusting for interchamber and intertemporal movements of the policy space over which the scores are calculated. Results indicate that the parties and chambers are much more stable over time, and exhibit a slighter liberal trend, with adjustments for movements in the policy space. In addition, during fiscal milestones the adjusted scores indicate less pronounced changes in spending preferences than the unadjusted data do.
    Keywords: fiscal policy, legislator voting, ideal point estimation
    JEL: D6 D7 H
    Date: 2005–12–02
  4. By: Edward J. Lopez (San Jose State University); R. Todd Jewell (University of North Texas)
    Abstract: This paper demonstrates that states’ decisions on limiting congressional terms are empirically determined by measures of relative political influence in Congress. States’ choices on term limits are quantified as a multiple-categorical variable that reflects variation in the stringency of term limits laws passed. Using 1992 data on the American states, the model controls for unobserved heterogeneity that is introduced by some voters having access to institutions of direct democracy. At 2002 state-level values for congressional tenure and federal spending, the model predicts approximately eight to ten additional states would choose to limit terms of their own congressional delegations, but are prohibited from doing so under a Supreme Court ruling. The results hold implications for institutional federalism and the potential passage of similar political institutions across the states.
    Keywords: term limits; political institutions; federalism; political economy
    JEL: D72 H7
    Date: 2005–12–02

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.