New Economics Papers
on Collective Decision-Making
Issue of 2008‒01‒05
ten papers chosen by

  1. Habit formation, strategic extremism and debt policy By Egil Matsen; Øystein Thøgersen
  2. Strategic Voting for Noncooperative Environmental Policies in Open Economies By Hattori, Keisuke
  3. Why Votes Have a Value By Ingolf Dittmann; Dorothea Kübler; Ernst Maug; Lydia Mechtenberg
  4. Is There an Incumbency Advantage or a Cost of Ruling in Proportional Election Systems? By Liang, Che-Yuan
  5. Assessing democratic legitimacy from a deliberative perspective: An analytical framework for evaluating the EU’s second pillar decision-making system By Anne Elizabeth Stie
  6. Explaining Party Emergence in Swedish Local Politics 1973–2002 By Erlingsson, Gissur Ó.
  7. Containing ethnic conflicts through ethical voting? Evidence from Ethiopia By Marie-Anne Valfort
  8. Public and private environmental spending. A political economy approach By Pierre-André Jouvet; Philippe Michel; Pierre Pestieau
  9. Information aggregation and equilibrium selection in committees By Ali, S. Nageeb; Goeree, Jacob K.; Kartik, Navin; Palfrey, Thomas R.
  10. The Importance of Actor Cleavages in Negotiating the European Constitutional Treaty By Hosli, Madeleine O.; Arnold, Christine

  1. By: Egil Matsen (Department of Economics, Norwegian University of Science and Technology); Øystein Thøgersen (Department of Economics, Norwegian School of Economics and Business Administration, and CESifo,)
    Abstract: We suggest a probabilistic voting model where voters’ preferences for alternative public goods display habit formation. Current policies determine habit levels and in turn the future preferences of the voters. This allows the incumbent to act strategically in order to influence the probability of re-election. Comparing to a benchmark case of a certain re-election, we demonstrate that the incumbent’s optimal policy features both a more polarized allocation between the alternative public goods and a debt bias.
    Keywords: Budget deficits; voting; extremism; habit formation
    JEL: D72 D78 H62
    Date: 2007–12–11
  2. By: Hattori, Keisuke
    Abstract: In this paper, we construct a political-economy model of international noncooperative environmental policymaking, and examine the strategic incentives for voters to elect an environmental policymaker in open economies. We show that under several circumstances, citizens have an incentive to deliberately vote for a candidate whose environmental preferences differ from their own. Further, the strategic voting incentives are crucially depend on the environmental policy tools employed by the government, the international market structures, and the degree of product differentiation among firms.
    Keywords: strategic voting; the race to the bottom; market structure; environmental policy
    JEL: F18 D72 D43
    Date: 2007–12–18
  3. By: Ingolf Dittmann; Dorothea Kübler; Ernst Maug; Lydia Mechtenberg
    Abstract: We perform an experiment where subjects pay for the right to participate in a shareholder vote. We find that experimental subjects are willing to pay a significant premium for the voting right even though there should be no such premium in our setup under full rationality. Private benefits from controlling the firm are absent from our setup and overconfidence cannot explain the size of the observed voting premium. The premium disappears in treatments where voting has no material consequences for the subjects. We conclude that individuals enjoy being part of a group that exercises power and are therefore willing to pay for the right to vote even when the impact of their own vote on their payoffs is negligible.
    Keywords: Smoking, Voting, dual-class shares, paradox of voting, experimental economics
    JEL: C92 D72 G32
    Date: 2007–12
  4. By: Liang, Che-Yuan (Department of Economics)
    Abstract: This paper investigates the effect of political representation on the electoral outcome at the party level in a proportional multiparty election system using data from Swedish local government elections. There are two notions of representation in a council; the first is to hold seats, and the second is to belong to the ruling coalition. I refer to the effect of the former as the incumbency effect and the effect of the latter as the effect of ruling. To identify causal effects, I use the discontinuous variations in the number of seats and ruling (as a coalition receives a majority of the seats) to isolate exogenous variation in incumbency and ruling respectively. I find an advantage of 0.11 percent of the votes for each percent of incumbency. 11 percent of the votes in an election are therefore determined by incumbency, a figure close to the advantage found in majoritarian systems. However, the advantage differs significantly between parties. Further, I find no effects of ruling, contrary to the commonly found cost of ruling in proportional systems.
    Keywords: incumbency advantage; cost of ruling; proportional elections; multiparty systems; local governments; regression-discontinuity
    JEL: D72 D73
    Date: 2007–12–19
  5. By: Anne Elizabeth Stie
    Abstract: In this article, I outline an analytical framework allowing for an assessment of the democratic legitimacy of the decision-making system of the EU’s second pillar with reference to five criteria. The criteria are developed on the basis of a discourse-theoretical reading of a deliberative perspective on democracy. Empirical indicators for each criterion are specified and discussed. With this analytical framework the institutional and procedural aspects of the second pillar decision-making system can be evaluated for its democratic qualities or lack thereof.
    Keywords: access to documents; accountability; CFSP/ESDP; deliberative democracy; CFSP/ESDP; institutions; legitimacy; majority voting; MEPs; national parliaments; normative political theory
    Date: 2007–12–15
  6. By: Erlingsson, Gissur Ó. (The Ratio Institute)
    Abstract: Since individuals demanding formations of new parties face a collective action problem, I inquire why people form new parties, and why this political strategy became increasingly popular between 1973 and 2002 in Swedish municipalities. Case-studies indicate that ‘strong emotions’ – i.e. anger, frustration and indignation – mobilize rational actors to start up new parties. However, ‘strong emotions’ only explain why individuals form parties in the first place, not why party formation has become a popular strategy. Hence, I hypothesize that entrepreneurs forming parties at t inspire potential entrepreneurs in neighbouring municipalities at t + 1. Since previous attempts to explain the increasing number of new parties in Sweden have failed, I maintain that the support the hypothesis gains adds important knowledge to this field.
    Keywords: Party entrepreneurs; new parties; emotional arousal; rational imitation; local politics; Sweden
    JEL: D01 D71 D72 H41
    Date: 2008–01–03
  7. By: Marie-Anne Valfort (Paris School of Economics)
    Abstract: In an ethnically polarized country, does aversion towards inter-ethnic inequity induce citizens to vote for a party promoting an equitable allocation of national resources among ethnic groups? We base our analysis on a survey that we conducted among 331 students from Addis Ababa University. We show that aversion towards inter-ethnic inequity does exert a significant influence on university students’ vote. Yet, its relative impact is small in comparison to the impact of ethnic group loyalty which determines ethnic voting. We provide confirmation that some specific sociodemographic characteristics significantly (i) increase the degree of aversion towards inter-ethnic inequity and (ii) lower ethnic group loyalty. Those characteristics have in common that they reduce the ‘psychological’ distance between ethnic groups, like living in a cosmopolitan city and having parents belonging to different ethnic groups.
    Keywords: Africa, Ethiopia, ethnic conflict, voting behavior, aversion towards inter-ethnic inequity.
    JEL: D02 D63 D64 D72 H77 N47
    Date: 2007–11
  8. By: Pierre-André Jouvet; Philippe Michel; Pierre Pestieau
    Abstract: This paper studies the determination of public investment in environmental quality when there are private alternatives. Public investment is chosen by majority voting. When consumption and environmental quality are complementary one may observe a solution of the type "ends against the middle".
    Date: 2007
  9. By: Ali, S. Nageeb; Goeree, Jacob K.; Kartik, Navin; Palfrey, Thomas R.
    Date: 2007–12
  10. By: Hosli, Madeleine O.; Arnold, Christine
    Abstract: This paper aims to explore government preferences, cleavages, and pat-terns of coalition-formation among a variety of actors in the bargaining process on the European Constitution, across the range of twenty-five European Union (EU) member states. The study focuses on preferences concerning socio-economic policy-making and explores whether divisions can be discerned between preferences held by actors according to locations on the left-right policy scale, actors in older as compared to newer EU states, net EU budget positions, domestic rates of support for European integration, and smaller as compared to larger states. The analysis also controls for possible external effects, such as recent domestic macro-economic developments. Finally, the paper explores, while focusing on Article 3 of the European Constitution, which actors submitted collaborative contributions during the Convention process and whether or not they followed discernable patterns of collaborations between representatives of member states and political party groups.
    Keywords: Constitution for Europe; European Convention; European public space
    Date: 2007–12–17

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