New Economics Papers
on Collective Decision-Making
Issue of 2010‒02‒20
eight papers chosen by

  1. Do ECB Council Decisions represent always a Real Euro Consensus? By Sousa, Pedro
  2. From Comparing Regulatory Agencies. Report on the results of a worldwide survey By Chris Hanretty; Christel Koop
  3. The organization of expertise in the presence of communication By Roldan, Flavia
  4. Delayed Perfect Monitoring in Repeated Games By Kinateder, Markus
  5. A better process for a better budget By Susanne Neheider; Indhira Santos
  6. Watchdog or Lapdog? Media and the U.S. Government By Nancy Qian; David Yanagizawa
  7. Politics and trade: lessons from past globalisations By Kevin O'Rourke
  8. Political Limits to Globalization By Daron Acemoglu; Pierre Yared

  1. By: Sousa, Pedro (Universidade Portucalense)
    Abstract: Since January 1999, according to the law, the common monetary policy for all the Economic and Monetary Union (EMU) Member States should be decided by simple majority in the Governing Council (GC) of the European Central Bank (ECB), regarding the Euro area aggregate conditions. Notwithstanding, no formal vote has been taken until today and a consensus solution has been the officially announced practical rule, hiding different points of view fuelled by national divergences that might exist within Euro area. Assuming that EMU national central bankers take into account national perspectives from their home countries when they vote interest rate decisions in the GC, we try to find whether there have been favourable conditions for the emergence of voting coalitions among them. In order to accomplish that purpose, for every month since January 1999 until August 2003, we applied cluster analysis techniques to national stances before GC meetings, which we describe using three variables. We found high stability in the identified cluster structure, particularly since August 2001, favouring the emergence of alliances between national interests. In spite of that, it is likely that the strong strategic position enjoyed by the Executive Board of the ECB has been sufficient to a priori defeat any coalitions of opposing proposals on the monetary policy for the Euro-area, situation that will change with EMU enlargement.
    Keywords: Monetary Policy; European Central Bank; Desired Interest Rate; Cluster Analysis
    JEL: C80 E40 E52
    Date: 2009–07–31
  2. By: Chris Hanretty; Christel Koop
    Abstract: Although regulatory agencies have been created all over the world in the past decade, their design may vary considerably. In this report, we offer more insight into the variation in design by presenting the findings of a worldwide survey among regulators in seven policy areas: competition, energy, environmental, financial market, food safety, pharmaceutical and telecommunication policy. On the basis of the answers of 175 regulatory agencies from 88 countries, we conclude that although their design shows huge variation, a picture of the modal regulator can be drawn. The modal regulator is managed by a head and board members who serve for a fixed and renewable term of five years, who can be dismissed for reasons unrelated to their decisions, who cannot hold other offices in the public administration, and who need to be formally independent. The regulator is typically obliged to submit to politicians an annual report, whilst politicians can give the regulator policy instructions, can start an inquiry into the regulator’s operations, and can control the budget. Finally, the regulator is formally independent, has exclusive competence, decides on its own internal organisation and personnel policy, and makes policy decisions which cannot be reversed by another body than a court.
    Keywords: administrative law, structure of government, public administration, independent regulatory agencies
    Date: 2009–11–19
  3. By: Roldan, Flavia (IESE Business School)
    Abstract: A decision-maker has to elicit information from informed multiple experts about a policy's value. The principal may prevent communication among the agents. However, it may be in the principal's interest to allow communication among them. I assume that communication allows synergies to emerge among the experts but also opens the possibility of collusion among them. I study the optimal design of contracts, focusing on the organization of expertise in the communication phase. I show that, from the principal's point of view, when the advantage of synergies prevails over the collusion problem, communication dominates the no communication case. However, synergies will always prevail if the principal lets agents communicate with each other before they make their choices rather than after.
    Keywords: information acquisition; communication; coordination; collusion; expertise; organization;
    JEL: D81 D82 L23
    Date: 2009–11–09
  4. By: Kinateder, Markus
    Abstract: Delayed perfect monitoring in an in…nitely repeated discounted game is studied. A player perfectly observes any other player's action choice with a fixed, but finite delay. The observational delays between different pairs of players are heterogeneous and asymmetric. The Folk Theorem extends to this setup, although for a range of discount factors strictly below 1, the set of belief-free equilibria is reduced under certain conditions. This model applies to any situation in which there is a heterogeneous delay between information generation and the players-reaction to it.
    Keywords: Repeated Game; Delayed Perfect Monitoring; Folk Theorem
    JEL: C72 C73
    Date: 2009–12
  5. By: Susanne Neheider; Indhira Santos
    Abstract: This policy brief provides a practical solution to facilitate reform of the EU budget decision-making process, overcome the detachment of EU spending from political priorities and increase focus on EU public goods. As the negotiations for the next financial framework are expected to start in less than two years, the window of opportunity for reform is closing rapidly. Additional pressure arises from the need to design a substitute, by Spring 2010, for the Lisbon Strategy that better aligns EU policy goals and spending. For the authors now is the time for reform.
    Date: 2009–07
  6. By: Nancy Qian; David Yanagizawa
    Abstract: This paper investigates the extent to which strategic objectives of the U.S. government influenced news coverage during the Cold War. We establish two relationships: 1) strategic objectives of the U.S. government cause the State Department to under-report human rights violations of strategic allies; and 2) these objectives reduce news coverage of human rights abuses for strategic allies in six U.S. national newspapers. To establish causality, we exploit plausibly exogenous variation in a country's strategic value to the U.S. from the interaction of its political alliance to the U.S. and membership on the United Nations Security Council. In addition to the main results, we are able to provide qualitative evidence and indirect quantitative evidence to shed light on the mechanisms underlying the reduced form effects.
    JEL: L82 P16
    Date: 2010–02
  7. By: Kevin O'Rourke
    Abstract: After tracing the link between politics and trade over a millennium, KevinO'Rourke identifies permanent features of international economic relations. His timing is perfect. The crisis has switched the balance of power. Government is back in the driving seat and corporations look fragile. No one can predict how the cards will fall, but politics is making a come-back and will inevitably play a bigger role in shaping our future.
    Date: 2009–01
  8. By: Daron Acemoglu; Pierre Yared
    Abstract: Despite the major advances in information technology that have shaped the recent wave of globalization, openness to trade is still a political choice, and trade policy can change with shifts in domestic political equilibria. This paper suggests that a particular threat and a limiting factor to globalization and its future developments may be militarist sentiments that appear to be on the rise among many nations around the globe today. We proxy militarism by spending on the military and the size of the military, and document that over the past 20 years, countries experiencing greater increases in militarism according to these measures have had lower growth in trade. Focusing on bilateral trade flows, we also show that controlling flexibly for country trends, a pair of countries jointly experiencing greater increases in militarism has lower growth in bilateral trade.
    JEL: F01 F10 F52
    Date: 2010–01

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