nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2008‒08‒14
ten papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Electoral Competition amongst Citizen-candidates and Downsian Politicians By Jaideep Roy; M Dziubinski
  2. Mackerels in the Moonlight: A Duopoly Model of Political Agency By Evrenk, Haldun
  3. Forecasting Elections from Voters’ Perceptions of Candidates’ Positions on Issues and Policies By Graefe, Andreas; Armstrong, J. Scott
  4. Corruption and Power in Democracies By Francesco Giovannoni; Daniel J. Seidmann
  5. On the (In)Effectiveness of Some Commonly Proposed Anti-Corruption Reforms By Evrenk, Haldun
  6. A Game-Theoretic Explanation for the Persistence of Political Corruption By Evrenk, Haldun
  7. The Impossibility of Social Choice and the Possibilities of Individual Values: Political and Philosophical Liberalism Reconsidered By Werner Güth; Hartmut Kliemt
  8. Democracy and Volatility: Do Special-Interest Groups Matter? By Bonnie Wilson; Dennis Coates; Jac Heckelman
  9. Three-Candidate Competition when Candidates Have Valence: The Base Case By Evrenk, Haldun
  10. Mass Media and Contested Meanings: EU Constitutional Politics after Popular Rejection By Ulrike LIEBERT; Hans-Jörg TRENZ

  1. By: Jaideep Roy; M Dziubinski
    Abstract: In this paper we study a model of political competition where citizens vote sincerely and candidates may be either citizens or Downsian politicians. The model extends the citizen-candidate model proposed by Osborne and Slivinski [1996] by including Downsian politicians similar to those studied by Osborne [1993]. We give necessary and sufficient conditions for existence, together with complete characterisation, of one party and two party Nash equilibria in our model. An important feature, in view of the Duverger's Law, of the two-party equilibrium is that these equilibria cannot have any Downsian contestant. Moreover, we compare our model with that studied by Osborne and Slivinski [1996], showing that in both cases there exist po- litical configurations that can appear in one of the models only. We show also that in our settings it is possible to have Nash equilibria with Downsian candidates, without requiring to have very restrictive constraints on the dis- tribution function. We also argue that as the number of parties in equilibrium increases, the `likelihood' of an ideology driven citizen-candidate winning the elections and running the government falls. Finally we argue that in any equilibrium extremist parties proposing their policies uniquely are typically ideology-driven as well.
    Keywords: Citizen-candidates, Downsian Politicians, Plurality Rule. JEL classification: C70, D70, D72
    Date: 2008
  2. By: Evrenk, Haldun (Suffolk University, Department of Economics)
    Abstract: I study political competition between two candidates who could differ in their ability, popularity, and ethics. In elections, each candidate proposes a flat (income) tax rate and a public good level. A high(er)-ability candidate can produce the public good using less funds. Collected taxes that are not used in public goods production are stolen by the elected politician. The voting decision is probabilistic; it depends on a candidate's fiscal policy and his popularity. I prove that the pure strategy Nash Equilibrium exists and that there are at most two separate equilibria. I also provide a fully solved example.
    Keywords: Political Agency; Political Corruption; Nash Equilibrium
    JEL: D72 H30 H83 K42
    Date: 2008–04–25
  3. By: Graefe, Andreas; Armstrong, J. Scott
    Abstract: Ideally, presidential elections should be decided based on how the candidates would handle issues facing the country. If so, knowledge about the voters’ perception of the candidates should help to forecast election outcomes. We make two forecasts of the winner of the popular vote in the U.S. Presidential Election. One is based on voters’ perceptions of how the candidates would deal with issues (problems facing the country) if elected. We show that this approach would have correctly picked the winner for the three elections from 1996 to 2004. The other is based on voters’ preference for policies and their perceptions of which policies the candidates are likely to pursue. Both approaches lead to a forecast that Democrat candidate Barack Obama will win the popular vote.
    Keywords: forecasting methods; regression models; index method; experience tables; accuracy
    JEL: C5
    Date: 2008–08–04
  4. By: Francesco Giovannoni; Daniel J. Seidmann
    Abstract: According to Acton: “Power corrupts and absolute power corrupts absolutely”. We study the implications of Acton’s dictum in models where citizens vote (for three parties) and governments then form in a series of elections. In each election, parties have fixed tastes for graft, which affect negotiations to form a government if parliament hangs; but incumbency changes tastes across elections. We argue that combinations of Acton’s dictum with various assumptions about citizen sophistication and inter-party commitments generate tight and testable predictions which cover plausible dynamics of government formation in an otherwise stationary environment.
    Keywords: Corruption, government dynamics
    JEL: H11 D72
    Date: 2008–02
  5. By: Evrenk, Haldun (Suffolk University, Department of Economics)
    Abstract: Using a theoretical model of two-candidate political competition under probabilistic voting, I study the effectiveness of the following anti-corruption reforms: (i) higher wages for politicians, (ii) higher penalties for political corruption, and (iii) constitutional constraints on the tax rates and the public good levels. In the setup I study, the competing candidates may differ in their popularity, (non-verifiable) ability, and corruptibility. I find that the reforms are more likely to be effective when the candidates are (almost) identical. When the candidates differ significantly from each other, each reform may increase equilibrium level of corruption or reduce voters' welfare.
    Keywords: Anti-Corruption Reform; Political Corruption; Constitutional Constraints
    JEL: D72 H30 H83 K42
    Date: 2008–05–15
  6. By: Evrenk, Haldun (Suffolk University, Department of Economics)
    Abstract: Using a theoretical model of two-candidate competition, I study the political support for a fully effective and costless reform targeting high level political corruption. I find that when the candidates have a high discount factor, and when the level of political corruption is not too low, both corrupt and honest candidates have incentives to oppose the reform. I also find that a fully informed and fully coordinated electorate can change a candidate's incentives by bundling the reform with high wages and by voting strategically.
    Keywords: Political Corruption; Political Economy of Anti-Corruption Reform
    JEL: D72 K42
    Date: 2008–04–20
  7. By: Werner Güth (Max Planck Institute of Economics, Jena, Strategic Interaction Group); Hartmut Kliemt (Frankfurt School of Finance and Management)
    Abstract: Though the social choice of social institutions or social results is impossible - there is, strictly speaking, no social choice - individual evaluations of social institutions or results trivially are possible. Such individual evaluations can be deemed liberal either because they emphasize political institutions that embody liberal values (political liberalism) or because individuals make up their mind in a specifically "liberal" way of forming ethical judgment (philosophical liberalism). Seen in this light the Paradox of Liberalism is of theoretical or philosophical interest but not a practical problem of political (institutional) liberalism.
    Keywords: Philosophical Liberalism, Political Liberalism, Public Choice, Social Choice
    JEL: B3 B52 D6 D7 D71
    Date: 2008–08–12
  8. By: Bonnie Wilson (Department of Economics, Saint Louis University); Dennis Coates (Department of Economics, University of Maryland Baltimore County); Jac Heckelman (Department of Economics, Wake Forest University)
    Abstract: This paper empirically explores the relationship between special-interest groups and volatility, with focus on the interplay between groups and democracy and on the impact of groups on policy volatility. We find that countries with more interest groups are characterized by less policy volatility; that the number of interest groups has a direct impact on growth volatility, in addition to an indirect impact through policy volatility; and that interest groups appear to be a channel through which democracy impacts both policy volatility and growth volatility.
    Keywords: special interest groups, volatility, democracy
    JEL: P16 O43 D7
    Date: 2008–08
  9. By: Evrenk, Haldun (Suffolk University, Department of Economics)
    Abstract: We study the Nash Equilibrium of three-candidate unidimensional spatial competition when candidates differ in their non-policy characteristics (valence). If the voters' policy preferences are represented by a strictly convex loss function, and if the voter density is unimodal and symmetric, then a unique, modulo symmetry, local Nash Equilibrium exists under fairly plausible conditions. The global Nash Equilibrium, however, exists when only one candidate has a valence advantage (or disadvantage) while the other two candidates have the same valence
    Keywords: Multi-candidate competition; valence; local Nash Equilibrium
    JEL: C72 H89
    Date: 2008–03–31
  10. By: Ulrike LIEBERT; Hans-Jörg TRENZ
    Abstract: This paper applies a normative democratic perspective on European constitutional politics to the analysis of discursive practices related to the crisis of the 'Treaty establishing a Constitution for Europe' (TCE), in the aftermath of the failed referenda. Starting from three distinct logics of constitutionalisation, we ask whether and in which ways EU constitutional politics has interacted with the general public sphere. In terms of constitution politics, did the national mass media basically ignore the European dimension, and fail to take the debate beyond the national state? Or did they closely represent deliberations that went on during the 'reflection period,' and present the various reasons for and against this joint agreement designed to get the EU out of its impasse? And, moreover, did they represent social contentions and enhance the diversity of interests and identities involved in the constitutional crisis debates in the run up to the Lisbon Reform Treaty? To answer these questions, we will use the methodology of comparative discourse analysis and a data set covering constitutional media debates from May 2005 - June 2007 in 14 EU member and candidate countries.
    Keywords: constitution building; discourse; media; normative political theory; treaty reform
    Date: 2008–07–15

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