New Economics Papers
on Collective Decision-Making
Issue of 2010‒07‒03
six papers chosen by

  1. Electoral Rules, Political Competition And Fiscal Spending:Regression Discontinuity Evidence From Brazilian Municipalities By Chamon, Marcos; M. P. De Mello, João; Firpo, Sergio
  2. Political capture of decentralization : vote-buying through grants-financed local jurisdictions By Khemani, Stuti
  3. Whose impartiality? An experimental study of veiled stakeholders, impartial spectators and ideal observers By Fernando Aguiar; Alice Becker; Luis Miller
  4. Self interest and justice principle By Luis José Blas Moreno Garrido; Ismael Rodríguez Lara
  5. Communication and Power: The State of Research By Biswajit Das
  6. Governance and value creation in grant-giving foundations By Fabio Monteduro; Alessandro Hinna; Giacomo Boesso

  1. By: Chamon, Marcos; M. P. De Mello, João; Firpo, Sergio
    Abstract: We exploit a discontinuity in Brazilian municipal election rules to investigate whetherpolitical competition has a causal impact on policy choices. In municipalities with less than200,000 voters mayors are elected with a plurality of the vote. In municipalities with morethan 200,000 voters a run-off election takes place among the top two candidates if neitherachieves a majority of the votes. At a first stage, we show that the possibility of runoffincreases political competition. At a second stage, we use the discontinuity as a source ofexogenous variation to infer causality from political competition to fiscal policy. Our secondstage results suggest that political competition induces more investment and less currentspending, particularly personnel expenses. Furthermore, the impact of political competition islarger when incumbents can run for reelection, suggesting incentives matter insofar asincumbents can themselves remain in office.
    Date: 2010–06–16
  2. By: Khemani, Stuti
    Abstract: A recent trend in decentralization in several large and diverse countries is the creation of local jurisdictions below the regional level -- municipalities, towns, and villages -- whose spending is almost exclusively financed by grants from both regional and national governments. This paper argues that such grants-financed decentralization enables politicians to target benefits to pivotal voters and organized interest groups in exchange for political support. Decentralization, in this model, is subject to political capture, facilitating vote-buying, patronage, or pork-barrel projects, at the expense of effective provision of broad public goods. There is anecdotal evidence on local politics in several large countries that is consistent with this theory. The paper explores its implications for international development programs in support of decentralization.
    Keywords: Subnational Economic Development,Public Sector Economics,National Governance,Parliamentary Government,Banks&Banking Reform
    Date: 2010–06–01
  3. By: Fernando Aguiar (Spanish Council for Scientific Research (IESA-CSIC)); Alice Becker (Max Planck Institute for Economics, Jena); Luis Miller (Nuffield Centre for Experimental Social Sciences, University of Oxford)
    Abstract: This article defines in a precise manner three different mechanisms to achieve impartiality in distributive justice and studies them experimentally. We consider a first-person procedure, the Rawlsian veil of ignorance, and two third-party procedures, the impartial spectator and the ideal observer. As a result, we find striking differences in the chosen outcome distributions by the three methods. Ideal observers that do not have a stake in the allocation problem nor information about their position in society propose significantly more egalitarian distributions than veiled stakeholders or impartial spectators. Risk preferences seem to explain why participants that have a stake in the final allocation propose less egalitarian distributions. Impartial spectators that are informed about their position in society tend to favor stakeholders holding the same position.
    Keywords: impartiality, veil of ignorance, impartial spectator, distributive justice
    JEL: C72 C92 D63 A13
    Date: 2010–06–23
  4. By: Luis José Blas Moreno Garrido (Dpto. Fundamentos del Análisis Económico); Ismael Rodríguez Lara (Universidad de Alicante)
    Abstract: We introduce non-enforceable property rights over bargaining surplus in a dictator game with production, in which the effort of the agents is differentially rewarded. Using experimental data we elicit individual preferences over the egalitarian, the accountability and the libertarian principle and provide evidence to support the inability of these justice principles to account for the observed behavior. Although this finding is consistent with the idea of individuals interpreting justice principles differently, we show that dictators behave self-interested concerning redistribution and choose which justice principle best maximizes their own payoff. We interpret this result as the justice norm imposing a constraint on otherwise self-maximizing agents.
    Keywords: dictator game, justice principles, self-interest, self-serving bias.
    JEL: C91 D3 D63 D64 P14
    Date: 2010–03
  5. By: Biswajit Das
    Abstract: Given the increasingly confusing proliferation of models for communication research, documentation of some of the differences that exists have been done. There are a number of ways to divide the terrain; the framework constitutes as well as describes the differences. The framework proposed here focuses on the way power is construed and analysed within the debates and discussions on communication rather than any theory per se. [WP No. 01/2007].
    Keywords: communication, reseach, documentation, power, theoretical, methodological, empirical tradition, social, political, intellectual, Pluralist Approach, society, pluralism,
    Date: 2010
  6. By: Fabio Monteduro (Università di Roma Tor Vergata); Alessandro Hinna (Università di Roma Tor Vergata); Giacomo Boesso (Università di Padova)
    Abstract: Grant giving foundation leaders are increasingly concerned with understanding the primary role their institutions are pressured to play in financing the growing non-profit sectors of developed economies. Furthermore, many academics, political leaders and practitioners are expecting foundations to play the unique role of merchant banks and venture capitalists to foster the positive impact of non-profit organizations on societies, people and issues they affect. The main contribution of this study lies in proposing and testing a theoretical framework that foundations might implement in order to efficiently disseminate liquidity and managerial expertise among selected grantees as well as to improve grantees’ social outcome.
    Keywords: governance, foundations, strategic philanthropy
    JEL: M14 M41
    Date: 2010–05

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.