New Economics Papers
on Collective Decision-Making
Issue of 2007‒03‒24
nine papers chosen by

  1. Political Polarization By Dixit, Avinash; Weibull, Jörgen
  2. On the Possibility of Political Change – Outcomes in Between Local and Global Equilibria By Olovsson, Conny; Roine, Jesper
  3. The Condorcet Jury-Theorem with Two Independent Error-Probabilities By Roland Kirstein
  4. Political labor market, government policy, and stability of a non-democratic regime By Lazarev, Valery
  5. The Economic Effects of Direct Democracy - A Cross-Country Assessment By Stefan Voigt; Lorenz Blume
  6. Women's Representation and Public Spending By Svaleryd, Helena
  7. Anti-Sharing. By Roland Kirstein; Robert Cooter
  8. Organes de gouvernance et paradoxe démocratique : By Guillaume Biot-Paquerot
  9. La Constitución y el Futuro de la Unión Europea By Laureano Lázaro Araujo

  1. By: Dixit, Avinash (Princeton University); Weibull, Jörgen (Dept. of Economics, Stockholm School of Economics)
    Abstract: Failures of government policies often provoke opposite reactions from citizens; some call for a reversal of the policy while others favor its continuation in stronger form. We offer an explanation of such polarization, based on a natural bimodality of preferences in political and economic contexts, and consistent with Bayesian rationality.
    Keywords: polarization; voting; information
    JEL: D72 D74 D81 D82
    Date: 2006–08–22
  2. By: Olovsson, Conny (Dept. of Economics, Stockholm School of Economics); Roine, Jesper (SITE)
    Abstract: We study voting over education subsidies where poor individuals may be excluded and the rich may chose private alternatives. With plausible changes of the standard game we show that this problem typically has multiple equilibria; one with low taxes, many excluded, and many in private schooling; another with high taxes, everyone in schooling, and few choosing the private alternative. Shifts between these equilibria can only happen through jumps in policy, not through gradual change. The method we develop identifies the global, as well as all local majority rule equilibria, and it characterizes "stability regions" around each local equilibrium. Introducing costs into the political system can make the local equilibria the globally stable outcome which, for example, implies that identical countries with different starting points could end up with completely different redistributive systems. Outcomes change in intuitive ways with the parameters and several insights with respect to the possibilities of political change seem general for problems of redistribution with excludability.
    Keywords: political economy; political equilibrium; voting; redistribution; education subsidies; local equilibrium; non-median voter equilibrium
    JEL: D72 H20
    Date: 2007–02–16
  3. By: Roland Kirstein (University of Saarland)
    Abstract: The Condorcet jury-theorem is derived from the implicit assumption that jury members may only commit one type of error. In binary decision situations however, two error types may occur, the probability of which is independent of each other. Taking this into account leads to a generalization of the theorem.
    Keywords: Group decisions, judicial, imperfect decision-making,
    JEL: D71 K40 L22
  4. By: Lazarev, Valery
    Abstract: An important source of stability of a hierarchical non-democratic political regime, such as that of the Soviet Union in the past or China today, is the rulers’ ability to buy the services and political support of activists recruited from the working population in the monopsonistic political labor market. Implicit contracts that underlie this exchange require retirement of incumbents to allow for deferred promotion of activists into rent-paying positions. An analysis of optimal promotion contracts shows that regime stability is consistent with a high income gap between the rulers and the working population, strengthened when government pursues an active investment policy, and not affected positively by government spending on public goods. Predictions of the promotion contract model are tested using Soviet data for the period 1956 to 1968.
    Keywords: non-democracy; political rents; hierarchy; promotion incentives; implicit contract
    JEL: P26 J45 D70
    Date: 2007–03–16
  5. By: Stefan Voigt (University of Kassel); Lorenz Blume (Economics Department, University of Kassel, Germany)
    Abstract: This is the first study that assesses the economic effects of direct democratic institutions on a cross country basis. Most of the results of the former intra-country studies could be confirmed. On the basis of some 30 countries, a higher degree of direct democracy leads to lower total government expenditure (albeit insignificantly) but also to higher central government revenue. Central government budget deficits are lower in countries using direct democratic institutions. As former intra-country studies, we also find that government effectiveness is higher under strong direct-democratic institutions and corruption lower. Both labor and total factor productivity are significantly higher in countries with direct democratic institutions. The low number of observations as well as the very general nature of the variable used to proxy for direct democracy clearly call for a more fine-grained analysis of the issues.
    JEL: H1 H3 H5 H8
  6. By: Svaleryd, Helena (Research Institute of Industrial Economics)
    Abstract: This paper studies whether the degree of women’s representation in Swedish local councils affects local public expenditure patterns. Theoretically, the individual preferences of elected representatives may have an impact on public expenditure if full policy commitment is not feasible. To empirically address the question, I first analyze the preferences expressed by elected local council representatives using survey data. This permits me to make precise predictions about the effects of women’s representation on spending. The subsequent panel study on the composition of public spending in Swedish municipalities supports the predictions derived from the survey.
    Keywords: Political Representation; Local Public Expenditure; Gender; Survey Data; Panel Data
    JEL: C23 C25 D78 H40 J16
    Date: 2007–03–07
  7. By: Roland Kirstein (University of Saarland); Robert Cooter (University of California, Berkeley)
    Abstract: Anti-Sharing may solve the sharing problem of teams: the team members promise a fixed payment to the Anti-Sharer. He collects the actual output and pays out its value to them. We prove that the internal Anti- Sharer is unproductive in equilibrium.
    JEL: D L C
  8. By: Guillaume Biot-Paquerot (CEREGE - CEntre de REcherche en sciences de GEstion - [CNRS : EA1722] - [Groupe Sup de Co La Rochelle])
    Abstract: Le but de cet article est de présenter une étape préalable à un travail s'attachant à discuter de la gouvernance des universités françaises, qui s'appuiera ultérieurement sur une étude empirique. Nous discuterons ainsi du contexte particulier qu'offre la cogestion des établissements universitaires depuis 1968, mettant en œuvre des organes de contrôle tels que les conseils d'administration dans les universités. Le cadre de la finance partenariale, et plus particulièrement celui des théories de la gouvernance, permet de discuter et d'intégrer les comportements opportunistes des différentes parties prenantes participant au processus de création et de répartition de la valeur. L'université n'est alors qu'une application particulière du modèle de la théorie de la gouvernance. L'évolution du contexte lié à l'enseignement supérieur en Europe, et plus particulièrement la mise en œuvre des PRES en France, rendent centrale la compréhension des relations contractuelles qui lient les différentes parties prenantes au sein des universités.
    Keywords: universités, gouvernance, conseil d'administration, présidents d'université, contrôle
    Date: 2007–03–17
  9. By: Laureano Lázaro Araujo
    Abstract: Centrar el estudio de las causas de la actual crisis de la Unión Europea en el análisis del estancamiento del expediente constitucional es un planteamiento errado, que confunde el mal con los síntomas de la enfermedad. La novedad del debate sobre el Tratado Constitucional es que ha dado nuevos vuelos al enfrentamiento que, desde hace tiempo está sobre el tapete, con dos visiones contrapuestas sobre el futuro de la UE. Un grupo de Estados concibe la UE como proyecto político, tendente a convertirla en un polo de poder autónomo en el concierto internacional. Un segundo grupo se conforma con que sea una potencia económica y comercial, aglutinada alrededor de un mercado interior pendiente de culminar. Antes o después la UE tendrá que decidir a qué carta se queda. Las ampliaciones se han convertido en una huída hacia delante. Parece llegada la hora de establecer los límites geográficos de la Unión, que, a pesar de los pesares, sigue siendo una experiencia que dejará huella.

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