New Economics Papers
on Collective Decision-Making
Issue of 2006‒06‒24
twelve papers chosen by

  1. Socially Optimal Districting: An Empirical Investigation By Stephen Coate; Brian Knight
  2. Politique publique décentralisée : quel rôle pour la proximité. By Maïten Bel
  3. Class voting, spatial segregation and metropolitan context: Operators in pluralized urban countries By Vilalta y Perdomo, Carlos J.
  4. Bevolent Planners, Malevolent Dictators and Democratic Voters By Agell, Jonas; Persson, Mats
  5. Media Markets and Localism: Does Local News en Español Boost Hispanic Voter Turnout? By Felix Oberholzer-Gee; Joel Waldfogel
  6. Does Opportunism Pay Off? By Linda Gonçalves Veiga; Francisco José Veiga
  7. Moral Norms in a Partly Compliant Society By Sebastian Kranz
  8. Smooth Monotone Contribution Games By Steven A. Matthews
  9. Where are you from? Cultural Differences in Public Good Experiments. By Massimo Finocchiaro Castro
  10. New public management and management changes in Dutch local government: some recent experiences and future topics By Bogt, H.J. ter
  11. Cultures of Corruption: Evidence From Diplomatic Parking Tickets By Raymond Fisman; Edward Miguel
  12. Corruption and Bureaucratic Structure in a Developing Economy By John Bennett; Saul Estrin

  1. By: Stephen Coate; Brian Knight
    Abstract: This paper provides an empirical exploration of the potential gains from socially optimal districting. As emphasized in the political science literature, districting matters because it determines the seat-vote curve, which relates the fraction of seats parties obtain to their share of the aggregate vote. Building on the theoretical work of Coate and Knight (2006), which develops and analyzes the optimal seat-vote curve, this paper develops a methodology for computing actual and optimal seat-vote curves and for measuring the potential welfare gains that would emerge from implementing optimal seat-vote curves. This method is then applied to analyze districting plans in place during the 1990s to elect U.S. State legislators. The analysis shows that the plans used by the states in our data set generate seat-vote curves that are overly responsive to changes in voters' preferences. While there is significant variation across states, the potential welfare gains from implementing optimal seat-vote curves are on average small relative to the overall surplus generated by legislatures. This appears to be because seat-vote curves are reasonably close to optimal rather than because aggregate welfare is insensitive to varying districting plans. Interestingly, implementing proportional representation would produce welfare levels quite close to those achieved by implementing optimal seat-vote curves.
    JEL: D7 H7
    Date: 2006–06
  2. By: Maïten Bel (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - [Université de la Méditerranée - Aix-Marseille II][Université de droit, d'économie et des sciences - Aix-Marseille III] - [Ecole des Hautes Etudes en Sciences Sociales])
    Abstract: L'action publique en matière d'offre de formation supérieure professionnalisée mobilise des coordinations entre divers acteurs : État, organismes de formation, entreprises et collectivités territoriales. En s'appuyant sur le cas des licences professionnelles, le texte présenté propose d'expliciter les différents types de coordination à l'œuvre. Les formes de coordination dépendent de la nature et des logiques de l'acteur dominant dans l'association à l'origine de l'ouverture des formations.
    Keywords: politiques publiques, formation professionnelle, enseignement supérieur, proximité
    Date: 2006–06–13
  3. By: Vilalta y Perdomo, Carlos J. (Tecnológico de Monterrey, Campus Ciudad de México)
    Keywords: class voting
    Date: 2005–06
  4. By: Agell, Jonas (Dept. of Economics, Stockholm University); Persson, Mats (Institute for International Economic Studies)
    Abstract: We study the size of government and of GDP, under autocratic and democratic rule, respectively. It turns out that first, both democratic and authoritarian rulers apply the Samuelson (1954) criterion when deciding on productive public goods. Second, the labor supply elasticity and the skewness of the ability distribution determine whether democracy or autocracy will lead to the highest output. Third, when the ability distribution is sufficiently skewed, the democratic majority will behave like a rational autocrat, who chooses the tax rate that maximizes tax revenue. Fourth, population ageing in Western societies may lead to the policy preferred by a rational autocrat.
    Keywords: Leviathan; democracy; median voter; redistribution; public goods
    JEL: D70 H20 H40
    Date: 2006–06–16
  5. By: Felix Oberholzer-Gee; Joel Waldfogel
    Abstract: Since the dawn of broadcasting, and especially in the past decade, Americans have turned their attention from local to more distant sources of news and entertainment. While the integration of media markets will raise the private welfare of many consumers, a globalized information and entertainment industry can undermine civic engagement, transforming locally engaged citizens into viewers consuming programming from distant sources. In response to such concerns, many regulatory agencies, including the Federal Communication Commission in the United States, curtail the integration of media markets to promote “localism.” Determining the right balance between the private benefits of integrated markets and the public value of civic engagement requires evidence on the size of the positive spillovers from local media. In this paper, we exploit the rapid growth of Hispanic communities in the United States to test whether the presence of local television news affects local civic behavior. We find that Hispanic voter turnout increased by 5 to 10 percentage points, relative to non-Hispanic voter turnout, in markets where local Spanish-language television news became available. Thus, the tradeoff between integrated media markets and civic engagement is real, and our results provide a basis for the continued pursuit of regulatory policies that promote localism.
    JEL: L82 D72
    Date: 2006–06
  6. By: Linda Gonçalves Veiga (Universidade do Minho - NIPE); Francisco José Veiga (Universidade do Minho - NIPE)
    Abstract: This article tests the hypothesis that the opportunistic manipulation of financial accounts by mayors increases their chances of re-election. Working with a large and detailed dataset comprising all Portuguese mainland municipalities, which covers the municipal elections that took place from 1979 to 2001, we clearly show that increases in investment expenditures and changes in the composition of spending favouring highly visible items are associated with higher vote percentages for incumbent mayors seeking re-election. Our results also indicate that the political payoff to opportunistic spending increased after democracy became well-established in the country.
    Keywords: Voting functions, opportunism, local governments, elections, Portugal.
    JEL: D72 H72
    Date: 2006
  7. By: Sebastian Kranz
    Abstract: This paper analyses competition of moral norms and institutions in a society where a fixed share of people unconditionally complies with norms and the remaining people act selfishly. Whether a person is a norm-complier or selfish is private knowledge. A model of voting-by-feet shows that those norms and institutions arise that maximize expected utility of norm-compliers, taken into account selfish players' behavior. Such complier optimal norms lead to a simple behavioral model that, when combined with preferences for equitable outcomes, is in line with the relevant stylized facts from a wide range of economic experiments, like reciprocal behavior, costly punishment, the role of intentions, giving in dictator games and concerns for social efficiency. The paper contributes to the literature on voting-by-feet, institutional design, ethics and social preferences.
    Keywords: moral norms, social preferences, fairness, reciprocity, rule utilitarianism, voting-by-feet, farsighted-stability, cultural evolution, golden rule, social norms
    JEL: A13 C7 D02 D63 D64 D71 D8 Z13
    Date: 2006–05
  8. By: Steven A. Matthews (Department of Economics, University of Pennsylvania)
    Abstract: A monotone game is a multistage game in which no player can lower her action in any period below its previous level. A motivation for the monotone games of this paper is dynamic voluntary contribution to a public project. Each player's utility is a strictly concave function of the public good, and quasilinear in the private good. The main result is a description of the limit points of (subgame perfect) equilibrium paths as the period length shrinks. The limiting set of such profiles is equal to the undercore of the underlying static game - the set of profiles that cannot be blocked by a coalition using a smaller profile. A corollary is that the limiting set of achievable profiles does not depend on whether the players can move simultaneously or only in a round-robin fashion. The familiar core is the efficient subset of the undercore; hence, some but not all profiles that are efficient and individually rational can be nearly achieved when the period length is small. As the period length shrinks, any core profile can be achieved in a “twinkling of the eye” - neither real-time gradualism nor inefficiency are necessary.
    Keywords: dynamic games, monotone games, core, public goods, voluntary contribution, gradualism
    JEL: C7
    Date: 2006–06–15
  9. By: Massimo Finocchiaro Castro (Department of Economics, Royal Holloway, University of London)
    Abstract: We study the effect of cultural differences on contributions in a public good experiment, analysing real-time interactions between Italian and British subjects in their home countries. In the first treatment, subjects play in nationally-homogeneous groups. In the second treatment, Italian and British subjects play in heterogeneous groups, knowing the nationality of the group members. In the third treatment, we control for a possible “country effect” by giving players no information on nationality. The data suggest that, in homogeneous groups, British subjects contribute significantly more to the public good; contributions are lower in heterogeneous groups; there is no country effect.
    Keywords: public goods, experiments, real time interactions, cultural differences
    JEL: C92 H41 Z13
    Date: 2006–06
  10. By: Bogt, H.J. ter (Groningen University)
    Abstract: Since about 1985, Dutch municipalities and provinces, i.e. local government, initiated many reforms and change projects in the field of their management control, which are lumped together here as ?management changes?. Was the introduction of these changes mainly based on functionalist, ?rational? considerations, that is, a wish to improve economic performance, as New Public Management suggests? Or did economically seen irrational considerations perhaps also play a part, for example, a wish to follow new management trends and to look ?modern?? Based on documents and interviews with 23 politicians and professional managers in twelve Dutch municipalities and two provinces, this explorative paper examines experiences with various management changes implemented by local government as part of New Public Management (NPM), and with subsequent related changes. In addition, it discusses ?change initiating factors? that may have contributed to the high amount of major change initiatives that were started in a rather short space of time. Some of these factors are, for example, budgets cuts, trends and more demanding citizens/voters. One important change initiating factor that was mentioned is uncertainty amongst politicians, which is a consequence of the increased political volatility amongst voters. This factor suggests that, now and in the near future, for politicians and professional managers it could be ?politically rational? to try to increase the (economic) performances of their organization. Several authors have questioned or criticized the effects of NPM?s and government?s focus on economic efficiency and effectiveness. However, taking the change initiating factors into consideration, the paper speculates that in the future, too, it could be a rational survival strategy for politicians and managers to focus on initiatves that are intended to enhance performance and efficiency
    Date: 2006
  11. By: Raymond Fisman; Edward Miguel
    Abstract: Corruption is believed to be a major factor impeding economic development, but the importance of legal enforcement versus cultural norms in controlling corruption is poorly understood. To disentangle these two factors, we exploit a natural experiment, the stationing of thousands of diplomats from around the world in New York City. Diplomatic immunity means there was essentially zero legal enforcement of diplomatic parking violations, allowing us to examine the role of cultural norms alone. This generates a revealed preference measure of government officials' corruption based on real-world behavior taking place in the same setting. We find strong persistence in corruption norms: diplomats from high corruption countries (based on existing survey-based indices) have significantly more parking violations, and these differences persist over time. In a second main result, officials from countries that survey evidence indicates have less favorable popular views of the United States commit significantly more parking violations, providing non-laboratory evidence on sentiment in economic decision-making. Taken together, factors other than legal enforcement appear to be important determinants of corruption.
    JEL: K42 Z13 D73 P48
    Date: 2006–06
  12. By: John Bennett (Brunel University); Saul Estrin (London Business School and IZA Bonn)
    Abstract: We address the impact of corruption in a developing economy in the context of an empirically relevant hold-up problem - when a foreign firm sinks an investment to provide infrastructure services. We focus on the structure of the economy’s bureaucracy, which can be centralized or decentralized, and characterize the ‘corruptibility’ of bureaucrats in each case. Results are explained in terms of the non-internalization, under decentralization, of the ‘bribe externality’ and the ‘price externality.’ In welfare terms, decentralization is favoured, relatively speaking, if the tax system is less inefficient, funding is less tight, bureaucrats are less venal, or compensation for expropriation is ungenerous.
    Keywords: corruption, bureaucratic structure, developing economy
    JEL: D73 H11 H77
    Date: 2006–06

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