New Economics Papers
on Collective Decision-Making
Issue of 2008‒03‒01
seven papers chosen by

  1. War and Endogenous Democracy By Davide Ticchi; Andrea Vindigni
  2. Referendum Design, Quorum Rules and Turnout By Luís Aguiar-Conraria; Pedro C. Magalhães
  3. The spatial range of public goods revealed through referendum voting By Robert Deacon; Felix Schläpfer
  4. Aggregating judgments on dependent variables: An (Im)possibility result By Carl Andreas Claussen; Øistein Røisland.
  5. Corruption and Political Interest: Empirical Evidence at the Micro Level By Benno Torgler; Bin Dong
  6. Decisiveness By Junichiro Ishida
  7. Social choice and information: a note on the calculus of mappings from utility spaces By Alex Coram

  1. By: Davide Ticchi (Department of Economics, University of Urbino (Italy)); Andrea Vindigni (Department of Politics, Princeton University & IZA)
    Abstract: Many episodes of extension of franchise in the 19th and especially in the 20th century occurred during or in the aftermath of major wars. Motivated by this fact, we offer a theory of political transitions which focuses on the impact of international conflicts on domestic political institutions. We argue that mass-armies, which appeared in Europe after the French Revolution, are an effective military organization only if the conscripted citizens are willing to put effort in fighting wars, which in turn depends on the economic incentives that are provided to them. The need to provide such incentives, implies that an oligarchy adopting a mass-army may voluntarily decide to promise some amount of income redistribution to its citizens, conditionally on satisfactory performance as soldiers. When the elite cannot credibly commit to provide an incentive-compatible redistribution, they may cope with the moral hazard problem of the citizens-soldiers only by relinquishing political power to them through the extension of franchise. This is because democracy always implements a highly redistributive fiscal policy, which makes fighting hard incentive-compatible for the citizens-soldiers. We show that a transition to democracy is more likely to occur when the external threat faced by an incumbent oligarchy is in some sense intermediate. A very high external threat allows the elite to make credible commitments of future income redistribution in favor of the citizens, while a limited external threat makes optimal for the elite not making any (economic or political) concession to the masses. Some historical evidence consistent with our theory is also provided.
    Keywords: Autocracy, Democracy, Wars, Redistribution.
    JEL: D72 D74 H56 N40 P16
    Date: 2007–12
  2. By: Luís Aguiar-Conraria (Universidade do Minho - NIPE); Pedro C. Magalhães (University of Lisbon, Social Sciences Institute,)
    Abstract: What is the impact of different referenda designs on the willingness of the electorate to vote? In this article, we focus on quorum requirements. We use a rational choice-voting model to demonstrate that certain types of quorum requirements change the incentives each elector faces. In particular, participation quorums induce electors who oppose changes in the status quo and expect to be in the minority to abstain rather than vote. As a result, such quorums decrease turnout. We test this model prediction using data for all referendums held in current European Union countries from 1970 until 2007. We show that that the existence of participation quorums does increase abstention by 10 percentage points.
    Date: 2008
  3. By: Robert Deacon (University of California, Santa Barbara); Felix Schläpfer (Socioeconomic Institute, University of Zurich, Switzerland)
    Abstract: Billions of dollars are now spent annually in the United States and Europe for spatially delineated environmental services such as agricultural landscape management and river restoration programs, yet little is known about the spatial distribution of the benefits from these policies. This paper develops a framework for recovering information on this question from the spatial pattern of votes cast for referenda on the provision of spatially delineated public goods. We specify a model linking voter support for environmental improvement to the distance at which such improvements are expected to occur. The empirical application is to a river restoration referendum in the Swiss canton of Bern. Our results indicate that the benefits from river restoration have a strong local component, sufficiently strong that voter approval would not occur if only canton-wide benefits were at stake. Surprisingly, support of river restoration is no greater, and in some specifications is actually lower, in locations where rivers are a prominent feature in the environment.
    Keywords: voting, local public goods, valuation,
    Date: 2007–08–01
  4. By: Carl Andreas Claussen (Norges Bank (Central Bank of Norway)); Øistein Røisland. (Norges Bank (Central Bank of Norway))
    Abstract: The typical judgment aggregation problem in economics and other felds is the following: A group of people has to judge (estimate) the value of an uncertain variable y whose value depends on the judgments of k other uncertain independent variables by some function y = D(x1, ...Xk). We analyze when it is possible for the group to arrive at collective judgments on the variables that respect D. We consider aggregators that fulfill Arrow's IIA-condition and a "neutrality" condition. We show how possibility and impossibility depend on the functional form of D.
    Keywords: Judgment aggregation, Dependent variables, Impossibility
    JEL: D71
    Date: 2007–12–14
  5. By: Benno Torgler; Bin Dong
    Abstract: In recent years the topic of corruption has attracted a great deal of attention. However, there is still a lack of empirical evidence about the determinants of corruption at the micro level. Therefore we explore in detail the impact of political interest using three different proxies. Furthermore, investigation of the effects of political interest on corruption has been neglected in the present literature. We address this deficiency by analyzing a cross-section of individuals, using the World Values Survey to explore the determinants of corruption using not only perceived corruption as a dependent variable, but also the justifiability of corruption. In addition, we present empirical evidence at both the cross-country level and at the within country level. The results of the multivariate analysis suggest that political interest has an impact on corruption, when controlling for additional significant factors such as institutional conditions (e.g., voice and accountability).
    Keywords: Corruption; Political Interest; Social Norms
    JEL: K42 D72 O17 J24
    Date: 2008–01
  6. By: Junichiro Ishida (Osaka School of International Public Policy (OSIPP))
    Abstract: This paper investigates how the presence of strong leadership influences an organization's ability to acquire and process information. The key concept is the leader's decisiveness. A decisive leader can make a bold move in response to a large change in the underlying landscape, whereas an indecisive leader biases her position excessively towards the status quo. An organization led by an indecisive leader needs to accumulate unrealistically strong evidence before it changes the course of action, thereby hindering the organization's ability to adapt to a changing environment. The analysis identifies several attributes and environmental factors that impair one's decisiveness and illuminates how leadership emerges or fades in organizations. The paper also sheds light on a classical issue of whether leaders can be made, rather than are born: our answer is partially `yes' in that mutual trust among members of the organization is a critical ingredient of effective leadership.
    Keywords: Decisiveness, Transformational leadership, Charismatic leadership, Information acquisition, Career concerns.
    JEL: D23 D82
    Date: 2008–02
  7. By: Alex Coram (Robert Gordon University, Scotland, and The University of Western Australia)
    Abstract: Social choice is studied in this paper as a mapping from information on utilities over states of the world to an ordering of those states of the world. The idea of using this type of information originates in the work of Sen and Roberts. This paper differs in that it uses theorems from analysis to derive its results in a straightforward manner. It also gives information on the way in which all states of the world, on any path through the set of states of the world, must be ordered. JEL Categories: D60, D71.
    Keywords: social choice theory, information, analysis.
    Date: 2008–02

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