New Economics Papers
on Collective Decision-Making
Issue of 2010‒09‒18
ten papers chosen by

  1. Government Spending and Re-election By Stephan Litschig; Kevin Morrison
  2. Prospects after the voting reform of the Lisbon Treaty By László Á. Kóczy
  3. Pillars and electoral behavior in Belgium: The neighborhood effect revisited By Quentin David; Gilles Van Hamme
  4. Is the Indonesian President strong or weak? By Kawamura, Koichi
  5. Political institutions and policy outcomes : effects of presidential vetoes on budget making By Kawanaka, Takeshi
  6. Government Spending and Legislative Organization: Quasi-experimental evidence from Germany By Peter Egger; Marko Koethenbuerger
  7. Oil and the Duration of Dictatorships By Jesus Crespo Cuaresma; Harald Oberhofer; Paul Raschky
  8. Interaction of powers in the Philippine presidential system By Kawanaka, Takeshi
  9. No insulation : politics and technocracy's troubled trajectory By Khoo, Boo Teik
  10. Size Matters (in Output-Sharing Groups): Voting to End the Tragedy of the Commons By Cherry, Josh; Salant, Stephen; Uler, Neslihan

  1. By: Stephan Litschig; Kevin Morrison
    Abstract: Does additional government spending improve the electoral chances of incumbent political parties? This paper provides the first quasi-experimental evidence on this question. Our research design exploits discontinuities in federal funding to local governments in Brazil around several population cutoffs over the period 1982-1985. We find that extra fiscal transfers resulted in a 20% increase in local government spending per capita, and an increase of about 10 percentage points in the re-election probability of local incumbent parties. We also find positive effects of the government spending on education outcomes and earnings, which we interpret as indirect evidence of public service improvements. Together, our results provide evidence that electoral rewards encourage incumbents to spend part of additional revenues on public services valued by voters, a finding in line with agency models of electoral accountability.
    Keywords: Government spending, voting, regression discontinuity.
    JEL: H40 H72 D72
    Date: 2010–06
  2. By: László Á. Kóczy (Óbuda University)
    Abstract: The European Union used to make decisions by unanimity or near unanimity. After a series of extensions, with 27 member states the present decision making mechanisms have become very slow and assigned power to the members in an arbitrary way. The new decision rules accepted as part of the Lisbon Treaty did not only make decision making far easier, but streamlined the process by removing the most controversial element: the voting weights. The new system relies entirely on population data. We look at the immediate impact of the reform as well as the long term effects of the different demographic trends in the 27 member states. We find that the Lisbon rules benefit the largest member states, while medium sized countries, especially Central Eastern European countries suffer the biggest losses.
    Keywords: European Union, Council of Ministers, qualied majority voting, Banzhaf index, Shapley-Shubik index, a priori voting power, demographics.
    Date: 2010
  3. By: Quentin David (CREA, University of Luxembourg); Gilles Van Hamme (IGEAT, Université Libre de Bruxelles)
    Abstract: This paper explores the processes behind the neighborhood effect in electoral geography. Studies on neighborhood effect have largely ignored the local institutions and cultural milieu within which people are socialized. By taking into account the spatially differentiated social supervision of individuals, we are able to highlight the impact of local institutions on electoral behavior and restore the temporal dimension that has shaped the political specificities of places. In the case of Belgium, we show that social supervision (which took the very accomplished form of pillars) affects voting behavior through two different channels: a direct effect, coming from the family transmission of pillar values, and a contextual effect captured by a measure of the local embeddedness of the pillar.
    Keywords: electoral geography, neighborhood effect, social supervision, pillar, Belgium
    Date: 2010
  4. By: Kawamura, Koichi
    Abstract: This paper analyzes the newly institutionalized political system in democratizing Indonesia, with particular reference to the presidential system. Consensus has not yet been reached among scholars on whether the Indonesian president is strong or weak. This paper tries to answer this question by analyzing the legislative and partisan powers of the Indonesian president. It must be acknowledged, however, that these two functions do not on their own explain the strengths and weaknesses of the president. This paper suggests that in order to fully understand the presidential system in Indonesia, we need to take into account not just the president's legislative and partisan powers, but also the legislative process and the characteristics of coalition government.
    Keywords: Indonesia, State, Internal politics, Presidency, Executive-legislative relations, Legislative process, Democracy
    Date: 2010–05
  5. By: Kawanaka, Takeshi
    Abstract: The article examines how the power distribution between the executive and the legislature under the Presidential system affects policy outcomes. We focus in particular on the presidential veto, both package and partial. Using a simple game theory model, we show that the presidential partial veto generally yields a result in favor of the President, but that such effects vary depending on the reversion points of the package veto and the Congress's possible use of sanctions against the President. The effects of the Presidential partial veto diminish if the reversion point meets certain conditions, or if the Congress has no power to impose sufficient sanctions on the President when the President revises the outcome ex-post. To clarify and explain the model, we present the case of budget making in the Philippines between 1994 and 2008. In the Philippines, the presidential partial veto has been bringing expenditure programs closer to the President's ideal point within what may be called the Congress's indifference curve. The Congress, however, has not always passed budget bills and from time to time has carried over the previous year's budget, in years when the budget deficit increased. This is the situation that the policy makers cannot retrieve from the reversion point.
    Keywords: Philippines, Internal politics, Budget and accounts, Institutions, Democracy, Policy, Budget
    Date: 2010–06
  6. By: Peter Egger (ETH Zurich); Marko Koethenbuerger (Department of Economics, University of Copenhagen)
    Abstract: This paper presents empirical evidence of a positive effect of council size on government spending using a data set of 2,056 municipalities in the German state of Bavaria over a period of 21 years. We apply a regression discontinuity design to avoid an endogeneity bias. In particular, we exploit discontinuities in the legal rule that relates population size of a municipality to council size to identify a causal relationship between council size and public spending, and find a robust positive impact of council size on spending. Moreover, we show that municipalities primarily adjust current expenditure in response to a rise in council size.
    Keywords: Legislative organization; Regression-discontinuity design; Government spending; Mayor-council system
    JEL: D7 H7 C2
    Date: 2010–08
  7. By: Jesus Crespo Cuaresma; Harald Oberhofer; Paul Raschky
    Abstract: This paper studies empirically the relationship between oil endowment and the duration of autocratic leaders. A simple theoretical setting shows how the relationship between oil endowment and the duration of the dictatorial regime is mediated by the price of oil. Using a dataset on 106 dictators, our empirical analysis supports the predictions of the theoretical model and indicates that dictators in countries which are relatively better endowed in terms of oil stay longer in office. This result is robust to changes in the definition of dictatorial regimes, as well as to controlling for other economic and political variables.
    Keywords: Natural resources, dictatorship, political economy, duration
    JEL: Q34 D72 H11
    Date: 2010–05
  8. By: Kawanaka, Takeshi
    Abstract: The executive - legislative relations in the Philippines have been described in two contrasting stories, namely the "strong president" story, and the "strong congress" story. This paper tries to consolidate the existing arguments and propose a new perspective focusing on the "compromise exchange" between the president and the congress across the different policy areas. It considers that the policy outcome is not brought by unilateral power of the president or the congress, but formed as the product of such an exchange. Interaction of powers and their complementary function are addressed. Furthermore, aside from the constitutional power, the weak party discipline is pointed out as a key factor in making the exchange possible.
    Keywords: Internal politics, Executive-legislative relations, Presidency, Policy process, Democracy
    Date: 2010–04
  9. By: Khoo, Boo Teik
    Abstract: Technocracy often holds out the promise of rational, disinterested decision-making. Yet states look to technocracy not just for expert inputs and calculated outcomes but to embed the exercise of power in many agendas, policies and programs. Thus, technocracy operates as an appendage of politically constructed structures and configurations of power, and highly placed technocrats cannot be 'mere' backroom experts who supply disinterested rational-technical solutions in economic planning, resource allocation and social distribution, which are inherently political. This paper traces the trajectories of technocracy in conditions of rapid social transformation, severe economic restructuring, or political crises - when the technocratic was unavoidably political.
    Keywords: Developing countries, Internal politics, Economic policy, Public officers, Ruling classes, Technocracy, Technocrats, Economic crises, Structural adjustment, Politics in Chile, Indonesia, The Philippines, Neoliberalism, Populism
    Date: 2010–05
  10. By: Cherry, Josh; Salant, Stephen; Uler, Neslihan
    Abstract: Individuals extracting common-pool resources in the field sometimes form output-sharing groups to avoid costs of crowding. In theory, if the right number of groups forms, Nash equilibrium aggregate effort should fall to the socially optimal level. Whether individuals manage to form the efficient number of groups and to invest within the chosen groups as theory predicts, however, has not been previously determined. We investigate these questions experimentally. We find that subjects do vote in most cases to divide themselves into the optimal number of output-sharing groups, and in addition do decrease the inefficiency significantly (by 50% to 71%). We did observe systematic departures from the theory when the group sizes are not predicted to induce socially optimal investment. Without exception these are in the direction of the socially optimal investment, confirming the tendency noted elsewhere in public goods experiments for subjects to be more “other-regarding” than purely selfish.
    Keywords: catch-sharing, common-pool resources, efficient private provision, free-riding, laboratory experiment, partnership solution
    Date: 2010–09–08

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