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on Collective Decision-Making |
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Issue of 2007‒09‒30
four papers chosen by |
| By: | Michalis Drouvelis (School of Economics, University of Nottingham); Maria Montero (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham) |
| Abstract: | Power indices suggest that adding new members to a voting body may affect the balance of power between the original members even if their number of votes and the decision rule remain constant. Some of the original members may actually gain, a phenomenon known as the paradox of new members. We show that the paradox can occur as an equilibrium of a noncooperative bargaining game based on the Baron-Ferejohn (1989) model of legislative bargaining. We implement this game in the laboratory and find empirical support for the paradox. |
| Keywords: | voting, non-cooperative bargaining, power indices, experiments, paradox of new members |
| JEL: | C70 C92 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:cdx:dpaper:2007-06&r=cdm |
| By: | Tasos Kalandrakis (W. Allen Wallis Institute of Political Economy, 107 Harkness Hall, University of Rochester, Rochester, NY 14627-0158) |
| Abstract: | We develop a theory of the emergence of minority and majority governments in multiparty parliamentary systems using a canonical non-cooperative bargaining model and assuming a policy space of arbitrary finite dimension, any number of political parties, and a general class of preferences over the government agreement space. Only majority governments form in the absence of significant political disagreement. Generically, minority governments form with positive probability when parties represented in parliament are ideologically polarized (or when utility from holding cabinet office is small relative to partisan political disagreement). Rather than being paradoxical, minority governments are a regular equilibrium phenomenon. |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:roc:wallis:wp47&r=cdm |
| By: | Bernardo S. da Silveira (Department of Economic, New York University); João Manoel Pinho de Mello (Department of Economics, PUC-Rio) |
| Abstract: | Despite the “minimal effects” conventional wisdom, the question of whether campaign advertising influence elections outcome remains open. This is paradoxical because in the absence of a causal link from advertising to candidate performance, it is difficult to rationalize the amounts spent on campaigns in general, and on TV advertising in particular. Most studies using US data, however, suffer from omitted variable bias and reverse causality problems caused by the decentralized market-based method of allocating campaign spending and TV advertising. In contrast with received literature, we explore a quasi-natural experiment produced by the Brazilian electoral legislation, and show that TV and radio advertising has a much larger impact on election outcomes than previously found by the literature. In Brazil, by law, campaign advertising is free of charge and allocated among candidates in a centralized manner. Gubernatorial elections work in a runoff system. While in the first round, candidates’ TV and radio time shares are determined by their coalitions’ share of seats in the national parliament, the two most voted candidates split equally TV time if a second round is necessary. Thus, differences in TV and radio advertising time between the first and second rounds are explored as a source of exogenous variation to evaluate the impact of TV advertising on election outcomes. Estimates suggest that a one percentage point increase in TV time causes a 0.241 percentage point increase in votes. Since TV advertising is the most important item in campaign expenditures, this result sheds light on the more general question of the effect of campaign spending on elections outcome. |
| Keywords: | Campaign Expenditures, Election Outcomes, Endogeneity, Quasi-Natural Experiments |
| JEL: | G12 C22 C53 E44 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:rio:texdis:550&r=cdm |
| By: | Mario Jametti (Department of Economics, York University); Marius Brülharty (University of Lausanne) |
| Abstract: | We study the impact of tax competition on equilibrium taxes and welfare, focusing on the jurisdictional fragmentation of federations. In a representative-agent model of fiscal federalism, fragmentation among jurisdictions with benevolent tax-setting authorities unambiguously reduces welfare. If, however, tax-setting authorities pursue revenue maximization, fragmentation, by pushing down equilibrium tax rates, may under certain conditions increase citizen welfare. We exploit the highly decentralized and heterogeneous Swiss fiscal system as a laboratory for the estimation of these e¤ects. While for purely direct-democratic jurisdictions (which we associate with benevolent tax setting) we find that tax rates increase in fragmentation, fragmentation has a moderating e¤ect on the tax rates of jurisdictions with some degree of delegated government. Our results thereby support the view that tax competition can be second-best welfare enhancing by constraining the scope for public-sector revenue maximization. |
| Keywords: | tax competition,optimal taxation,government preferences,fiscal federalism,direct democracy |
| JEL: | H2 H7 D7 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:yca:wpaper:2007_7&r=cdm |