New Economics Papers
on Collective Decision-Making
Issue of 2010‒03‒13
eight papers chosen by

  1. Conflict and Leadership: Why is There a Hawkish Drift in Politics? By Siddhartha Bandyopadhyay; Mandar Oak
  2. Power, ideology, and electoral competition By Alejandro Saporiti
  3. Determinants of Constitutional Change: Why Do Countries Change Their Form of Government? By Bernd Hayo; Stefan Voigt
  4. Fiscal equalization and political conflict By Maria Cubel
  5. Democratic Errors By Christopher J. Ellis; John Fender
  6. Measuring Institutions: Indicators of Political Rights, Property Rights and Political Instability in Malawi By Johannes Fedderke; Julia Garlick
  7. Renegotiation-proof Mechanism Design By Zvika Neeman; Gregory Pavlov
  8. Political Disagreement and Delegation in a Multi-Level Governance Setting By Annemarije Oosterwaal; Diane Payne; René Torenvlied

  1. By: Siddhartha Bandyopadhyay; Mandar Oak
    Abstract: We analyze an agency model of political competition to examine whether conflict encourages hawkish behavior, and if such behavior can itself aggravate conflict. We consider situations of conflict between a state and an insurgent group, such as a conflict over a piece of land. Negotiations are carried on behalf of the state, by a democratically elected leader, whose ability and ideology are imperfectly observed by the electorate. A more capable leader can cede less land at a lower cost (modeled as the probability of the conflict continuing the next period) than a less capable one, while an ideologically hawkish leader enjoys a greater intrinsic utility from retaining land than a less hawkish leader. Two main results that emerge are: certain types of politicians may be excessively hawkish, (as compared to their fi…rst best policy choices), which itself increases the probability of conflict and for any credible voting strategy the probability of re-election for a hawk is greater than for a dove. Finally, we show that the voting equilibrium of this game does not always achieve a constrained Pareto optimum suggesting that third party mediation may improve welfare.
    Keywords: Conflict, hawkish drift
    JEL: C72 D82 P16
    Date: 2010–03
  2. By: Alejandro Saporiti
    Date: 2010
  3. By: Bernd Hayo (Philipps-University Marburg); Stefan Voigt (University of Hamburg)
    Abstract: A country’s form of government has important economic and political consequences, but the determinants that lead societies to choose either parliamentary or presidential systems are largely unexplored. This paper studies this choice by analyzing the factors that make countries switch from parliamentary to presidential systems (or vice versa). The analysis proceeds in two steps. First, we identify the survival probability of the existing form of government (drawing on a proportional hazard model). In our model, which is based on 169 countries, we find that geographical factors and former colonial status are important determinants of survival probability. Also, presidential systems are, ceteris paribus, more likely to survive than parliamentary ones. Second, given that a change has taken place, we identify the underlying reasons based on panel data logit models. We find that domestic political factors are more important than economic ones. The most important factors relate to intermediate internal armed conflict, sectarian political participation, degree of democratization, and party competition, as well as the extent to which knowledge resources are distributed among the members of society.
    Keywords: Constitutional change, institutional dynamics, form of government, endogenous constitutions, separation of powers
    JEL: H11 K10 P48
    Date: 2010
  4. By: Maria Cubel (University of Barcelona & IEB)
    Abstract: In this paper we analyze the political viability of equalization rules in the context of a decentralized country. In concrete terms, we suggest that when equalization devices are perceived as unfair by one or more regions, political conflict may emerge as a result. Political conflict is analysed through a non cooperative game. Regions are formed by identical individuals who, through lobbying, try to impose their regional preferences on the rest of the country, and political conflict is measured as the total contribution to lobbying. We conclude that the onset of conflict depends on the degree of publicness of the regional budget. When regional budgets are used to provide pure public goods, proportional equalization is politically feasible. However, no equalization rule is immune to conflict when budgets are used to provide private goods or a linear combination of private and public goods.
    Keywords: political conflict, lobbying, equalization grants, social decision rules
    JEL: D74 D31 H77 R51
    Date: 2010
  5. By: Christopher J. Ellis; John Fender
    Abstract: We combine Acemoglu and Robinson’s model of the economic origins of democracy with Lohmann’s model of political mass protest. This allows us to analyze the economic causes of political regime change based on the microfoundations of revolution. We are able to derive conditions under which democracy arises peacefully, when it occurs only after a revolution, and when oligarchy persists. We model these possibilities in a world of asymmetric information where information cascades are possible, and where these cascades may involve errors in the sense that they make everyone worse off.
    Keywords: Democracy, Information Cascades, Revolution
    JEL: H0 P4 P16
    Date: 2010–01
  6. By: Johannes Fedderke; Julia Garlick
    Date: 2010
  7. By: Zvika Neeman (Tel-Aviv University); Gregory Pavlov (University of Western Ontario)
    Abstract: We study a mechanism design problem under the assumption that renegotiation cannot be prevented. We investigate what kind of equilibria of which mechanisms are renegotiation-proof under a variety of renegotiation procedures, and which social choice functions can be implemented in a way that is renegotiation-proof. In complete information environments, we show that the set of ex post renegotiation-proof implementable social choice functions contains all ex post efficient allocations when there at least three agents, but only budget balanced Groves allocations when there are two agents. In incomplete information environments with correlated beliefs and at least three agents, every ex post efficient social choice function can be implemented in the presence of ex post renegotiation, but with independent private values only social choice functions that are given by budget balanced “Groves in expectations” mechanisms are implementable in such a way. We further show that the requirement of interim renegotiation-proofness does not impose additional restrictions on implementable social choice functions under complete information, but is likely to impose additional restrictions under incomplete information.
    Keywords: Mechanism design; Implementation; Ex post renegotiation; Interim renegotiation
    JEL: D02 D70 D82 D86
    Date: 2010
  8. By: Annemarije Oosterwaal (Department of Sociology / ICS, Utrecht University); Diane Payne (School of Sociology/Geary Institute, University College Dublin); René Torenvlied (Department of Sociology / ICS, Utrecht University)
    Abstract: A large share of delegation models takes into account the effect of political disagreement when explaining delegation. Yet, delegation models make sharply contrasting predictions on how political disagreement translates into the level of discretion delegated to agencies. Moreover, empirical findings are contradictory. The current paper addresses this puzzle by disentangling mechanisms driving the effect of political disagreement on delegation. Furthermore, we distinguish conditions interacting with the effect of political disagreement on discretion. We apply the conditions to the research context of the present paper: economic restructuring in the UK under New Labour, which took place in a multi-level governance setting. We derive hypotheses on the effect of political disagreement on discretion and explore our theoretical predictions with the use of a novel dataset on economic restructuring in the UK under New Labour (Bennett and Payne 2000). Our analysis show that political disagreement leads to lower levels of discretion delegated.
    Date: 2010–03–03

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