New Economics Papers
on Collective Decision-Making
Issue of 2007‒07‒13
fourteen papers chosen by

  1. Political Institutional Change in Latin America By Fabio Fossati
  2. Parochial Politics: Ethnic Preferences and Politician Corruption By Banerjee, Abhijit; Pande, Rohini
  3. A non-monetary form of Clarke pivotal voting By Pivato, Marcus
  4. Why one would accept Voting Theory for Democracy and reject the Penrose Square Root Weights By Colignatus, Thomas
  5. Informatization, Voter Turnout and Income Inequality By Ryo Arawatari
  6. Participation and voting behavior in a direct democracy: a structural model of migration policy in Switzerland By Jaya Krishnakumar; Tobias Muller
  7. Voting on a sharing norm in a dictator game By Christoph Vanberg
  8. Pyramidal Democracy By Pivato, Marcus
  9. Judgment aggregation without full rationality By Dietrich Franz; List Christian
  10. The impossibility of unbiased judgment aggregation By Dietrich Franz; List Christian
  11. Smith and Rawls Share a Room By Klaus Bettina; Klijn Flip
  12. Contests with a Stochastic Number of Players By Alexander Matros; Wooyoung Lim
  13. Democracy and the feedback mechanism in Botswana By Sophia du Plessis
  14. The Logic of Globalization and Substantive Democracy By Manuel Couret Branco

  1. By: Fabio Fossati
    Abstract: The last wave of democratization occurred in the 80s, after the big economic failure (except Pinochet in Chile) of military regimes. The 80s, after the debt crisis, were still characterized by uncertainty and seemed to mark just another episode (in favor of democracy) of the “pendulum practice”. There were still both populist (Peru, Venezuela, Brazil) and bureaucratic (Mexico) governments. In Argentina, there was a conflict between a populist president and his técnicos. Chile’s transition to democracy occurred at the end of the decade. In synthesis, during the “pendulum phase”, both populist and bureaucratic decision making processes were highly illiberal, and below the minimum conditions of democracy. In fact, controls (by parties or groups) on the governments’ decisions were very limited.
    Keywords: political change, pendulum practice, democracy
  2. By: Banerjee, Abhijit; Pande, Rohini
    Abstract: This paper examines how increased voter ethnicization, defined as a greater preference for the party representing one's ethnic group, affects politician quality. If politics is characterized by incomplete policy commitment, then ethnicization reduces average winner quality for the pro-majority party with the opposite true for the minority party. The effect increases with greater numerical dominance of the majority (and so social homogeneity). Empirical evidence from a survey on politician corruption that we conducted in North India is remarkably consistent with our theoretical predictions.
    Keywords: Corruption; Ethnic Voting; India
    JEL: O12 P16
    Date: 2007–07
  3. By: Pivato, Marcus
    Abstract: The Clarke Pivotal Voting Mechanism (CPVM) elicits truthful revelation of utility functions by requiring any `pivotal' voter to pay a monetary `Clarke tax'. This neglects wealth effects and gives disproportionate power to rich voters. We propose to replace the `Clarke tax' with a lottery, wherein the pivotal voter risks long-term exclusion from the CPVM (and any other formal political participation). The resulting voting mechanism is nonmanipulable, politically egalitarian, and implements something close to Relative Utilitarianism.
    Keywords: Pivotal Voting Mechanism; demand-revealing mechanism; Groves-Clarke; Clarke tax; Relative Utilitarianism
    JEL: D63 D71
    Date: 2007–07–10
  4. By: Colignatus, Thomas
    Abstract: Various scientists under the label of “Scientists for a democratic Europe” (SDE) sent a joint “Letter to the governments of the EU member states” (2007) advising the use of the Penrose Square Root Weights (PSRW) for the EU Council of Ministers. When we compare the SDE letter with Colignatus (2001, 2007b) “Voting theory for democracy” (VTFD) then we find that SDE does not fit voting theory for democracy. Inspection of the material upon which the SDE letter is based also shows a moral choice while the rigorous empirical analysis by Gelman, Katz and Bafumi (2007) is actually misrepresented. So the SDE letter can also be rejected on its own grounds. The PSRW approach seems not valid for (indivisible) individuals but may be applicable for divisible shares in shareholder meetings.
    Keywords: voting theory; voting systems; elections; public choice; political economy; Borda Fixed Point; democracy; European Union; Penrose square root weights;
    JEL: D71 A2 H0
    Date: 2007–07–06
  5. By: Ryo Arawatari (Graduate School of Economics, Osaka University)
    Abstract: In recent years, voter turnout has been decreasing in most industrial countries, and about 40% of all electors abstain from voting. This may affect income inequality and the GDP growth rate through a redistribution policy determined by majority voting. In this paper, we explore the reasons for this continuing decrease in voter turnout and assess its social costs. We conclude that informatization lowers voter turnout by generating an information overload, and that a decrease in voter turnout lowers GDP growth by limiting income redistribution.
    Keywords: Income inequality; Information; Informatization; Voter turnout; Voting
    JEL: D31 O15 P16
    Date: 2007–07
  6. By: Jaya Krishnakumar; Tobias Muller
    Abstract: In this paper, we analyze the political economy of immigration policy in a direct democracy setting. We formulate a structural model of voting and participation behavior integrating instrumental and expressive motivations. The model is estimated using data drawn from a survey carried out after a vote in Switzerland in 2000 on a popular initiative proposing to implement immigration restrictions. The model enables us to recover estimates of participation costs and preferences towards immigration and analyze how these preferences are translated into actual political outcomes. The results reveal a substantial gap ("participation bias") between attitudes towards immigration in the general population and the outcome of the vote.
    Date: 2007–05
  7. By: Christoph Vanberg (Max Planck Institute of Economics, Jena, Germany.)
    Abstract: I conduct an experiment to assess whether majority voting on a non- binding sharing norm affects subsequent behavior in a dictator game. In a baseline treatment, subjects play a one shot dictator game. In a voting treatment, subjects are ï¬rst placed behind a 'veil of ignorance' and vote on the amount that those chosen to be dictators 'should' give. The outcome of the vote is referred to as a 'non-binding agreement.' The results show that a norm established in this fashion does not induce more 'fairness' on the part of those subsequently chosen to be dictators. In fact, dictators were signiï¬cantly more likely to offer nothing under the treatment. I outline a simple model to account for this 'crowding out' effect of a norm that may demand ‘too much’ of some subjects.
    Keywords: Dictator game, communication, voting, promises, agreements, behavioral economics, guilt aversion, reciprocity, fairness, obligations
    JEL: C91 C92 D63 D64 D70
    Date: 2007–07–06
  8. By: Pivato, Marcus
    Abstract: We consider a decentralized, multilayered representative democracy, where citizens participate in deliberative policy formation after self-organizing into a pyramidal hierarchy of small groups. Each group elects a delegate, who expresses the deliberative consensus of that group at the next tier of the pyramid. The pyramid thus acts as a communications network which efficiently aggregates useful information and policy ideas. It is also a powerful meritocratic device, which channels legislative responsibility towards the most committed and competent citizens. This yields a practical implementation of deliberative democracy in a large polity.
    Keywords: deliberative democracy
    JEL: D71 D72
    Date: 2007–07–10
  9. By: Dietrich Franz; List Christian (METEOR)
    Abstract: Several recent results on the aggregation of judgments over logically connected propositions show that, under certain conditions, dictatorships are the only propositionwise aggregation functions generating fully rational (i.e., complete and consistent) collective judgments. A frequently mentioned route to avoid dictatorships is to allow incomplete collective judgments. We show that this route does not lead very far: we obtain oligarchies rather than dictatorships if instead of full rationality we merely require that collective judgments be deductively closed, arguably a minimal condition of rationality, compatible even with empty judgment sets. We derive several characterizations of oligarchies and provide illustrative applications to Arrowian preference aggregation and Kasher and Rubinstein''s group identification problem.
    Keywords: mathematical economics;
    Date: 2007
  10. By: Dietrich Franz; List Christian (METEOR)
    Abstract: Standard impossibility theorems on judgment aggregation over logically connected propositions either use a controversial systematicity condition or apply only to agendas of propositions with rich logical connections. Are there any serious impossibilities without these restrictions? We prove an impossibility theorem without systematicity that applies to most standard agendas: Every judgment aggregation function (with rational inputs and outputs) satisfying a condition called unbiasedness is dictatorial (or effectively dictatorial if we remove one of the agenda conditions). Our agenda conditions are tight. Applied illustratively to (strict) preference aggregation represented in our model, the result implies that every unbiased social welfare function with universal domain is effectively dictatorial.
    Keywords: mathematical economics;
    Date: 2007
  11. By: Klaus Bettina; Klijn Flip (METEOR)
    Abstract: We consider one-to-one matching (roommate) problems in which agents (students) can either be matched as pairs or remain single. The aim of this paper is twofold. First, we review a key result for roommate problems (the “lonely wolf” theorem) for which we provide a concise and elementary proof. Second, and related to the title of this paper, we show how the often incompatible concepts of stability (represented by the political economist Adam Smith) and fairness (represented by the political philosopher John Rawls) can be reconciled for roommate problems.
    Keywords: microeconomics ;
    Date: 2007
  12. By: Alexander Matros; Wooyoung Lim
    Abstract: We study Tullock`s $n$-player contests where each player has an independent probability $0 < p \le 1$ to participate. A unique symmetric equilibrium is found and its properties are analyzed. In particular, we show that \emph{the individual equilibrium spending} is single-peaked in the probability $p$ for a given number of players and satisfies a single-crossing property; but \emph{the total equilibrium spending} is monotonically increasing in the probability $p$ and in the number of players. We also show that over-dissipation is a natural feature of the equilibrium in our model. Our model has another interpretation: $n$-player private-value contests where each player has two possible values $0$ and $V$. Each player can have value $V$ with probability $0 < p \le 1$.\\
    JEL: C72 D72 D82
    Date: 2007–07
  13. By: Sophia du Plessis (Department of Economics, University of Stellenbosch)
    Abstract: No country knows what the right policy choices are because we live in a world of uncertainty. One way to improve policy choices is to ensure a good feedback mechanism. With feedback, current policy choices might be altered to ensure a better fit with prevailing circumstances. Botswana seems to be an interesting case study, where the deportation of a well-known academic placed a lid on its history of openness and public debate. This paper explores why a government respected for good management would choose to display such signs of autocracy, and how it is possible within the prevailing government institutions.
    Keywords: Poverty, Botswana, Botswana government, Democracy, Feedback mechanism, Institutions
    JEL: N17 N47 O38
    Date: 2007
  14. By: Manuel Couret Branco (Department of Economics, University of Évora)
    Abstract: Despite some notable achievements in many parts of the planet the gap between the rich and the poor has become wider rather than tighter. On the political sphere success seems much more unequivocal, though. Indeed, beyond a handful of anachronistic exceptions, the world seems to have surrendered to the delights of democracy. From there to the conclusion that globalization favours democracy there was a small step that many political scientists all over the world have not hesitated to make. Refusing to share this optimism, many other scientists have, on the contrary, severely questioned the democratic character of the global economy, almost since the term globalization itself has been invented. In this work I will show how the logic of globalisation, in other words the logic of internationalised market capitalism conflicts with a substantive definition of democracy in developed countries as much as in developing countries.
    Keywords: Globalisation, Democracy, Capitalism, Development, Underdevelopment
    JEL: A11 A13 F01 F02 O19 P10
    Date: 2007

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