New Economics Papers
on Collective Decision-Making
Issue of 2010‒09‒25
nine papers chosen by

  1. Democracy models and parties at the EU level: Empirical evidence from the adoption of the 2009 European election manifestoes By Emmanuel Sigalas, Monika Mokre, Johannes Pollak, Peter Slominski; Jozef Bátora
  2. Electoral Control under Decentralization: Decentralization as unbundling of public goods provision. By Farfan-Vallespin, Antonio
  3. The Golden Halo and Political Transitions By Aidt, Toke; Albornoz, Facundo; Gassebner, Martin
  4. Do groups fall prey to the winner’s curse? By Marco Casari; Jingjing Zhang; Christine Jackson
  5. Proto-coalition bargaining and the core By Breitmoser, Yves
  6. Constitutionalism beyond the state: myth or necessity? By Jean L. Cohen
  7. Political economy of infrastructure spending in India By Khemani, Stuti
  8. Endogenous Timing in General Rentâ€Seeking and Conflict Models By Grégoire ROTA-GRAZIOSI; Magnus HOFFMANN
  9. A study on the relationship between corruption and government size: the role of democracy By Kotera, Go; Okada, Keisuke; Samreth, Sovannroeun

  1. By: Emmanuel Sigalas, Monika Mokre, Johannes Pollak, Peter Slominski; Jozef Bátora
    Abstract: This paper builds upon the theoretical premises developed by Erik O. Eriksen and John Erik Fossum and empirically examines if democracy at the EU level is closer to the ideal-type of delegated, federal or regional-cosmopolitan democracy. We focus on a particular dimension of parliamentary representation, namely, party politics at the European level, and we concentrate on the 2009 European election party manifestoes. We hypothesise that under the delegated democracy model there should hardly be any similarities between the Euro-party and their member party manifestoes. The opposite should hold for the federal model, whereas in the case of the regional-cosmopolitan model the manifestoes should have a post-national outlook. Even though most manifestoes have a discernible European outlook and the national and Euro-party manifestoes share a number of common features, the differences remain more than the similarities. Our empirical findings suggest that the PES, the EPP and the EGP cannot be placed under the same EU democracy model.
    Keywords: democracy; political representation
    Date: 2010–08–15
  2. By: Farfan-Vallespin, Antonio
    Abstract: This paper addresses the question of whether a decentralized government is subject to a stronger level of electoral control than a centralized government. When electoral control is strong an incumbent investing a low level of effort in providing public goods will face a serious threat of being voted out of office. This threat should provide the incentives to the incumbent to exert effort in order to be re-elected as shown by Barro (1973) and Ferejohn (1986). According to the literature decentralization should increase electoral control due to the fact that under centralization the incumbent only needs to please the half plus one of the electorate in order to be re-elected. This paper presents analytically two new sources of differences in electoral control: assuming that public goods can be classified in lower tier public goods (e.g. sub-national or local level) and upper tier public goods (e.g. national public goods), then under centralization there are potential advantages derived from bundling the provision of both types of public goods, whereas under decentralization there are potential advantages derived from a clear delimitation of the responsibilities of the provider of each type of public good. We show that the trade-off depends on the probability distribution of the shocks and on the size of these shocks. --
    Keywords: Decentralization,electoral control,provision of public goods,bundling of issues
    JEL: H11 H41 H77
    Date: 2010
  3. By: Aidt, Toke; Albornoz, Facundo; Gassebner, Martin
    Abstract: In this paper we analyze the role of the IMF and the World Bank in triggering changes in the political regime, i.e., democracy and autocracy. We develop a theoretical model which predicts that anticipation of financial flows from international financial institutions may trigger political regime changes which would not take place otherwise. We test the implications of our model empirically and find support both for the role of perfectly foreseen IMF and World Bank programs and of the history of previous World Bank programs. The magnitude of this effects is quite substantial. --
    Keywords: political transitions,democracy,autocracy,political instability
    Date: 2010
  4. By: Marco Casari; Jingjing Zhang; Christine Jackson
    Abstract: In a company takeover experiment, groups placed better bids than individuals and substantially reduced the winner’s curse. This improvement was mostly due to peer pressure over the minority opinion and to group learning. Learning took place from interacting and negotiating consensus with others, not simply from observing their bids. When there was disagreement within a group, what prevailed was not the best proposal but the one of the majority. Groups underperformed with respect to a “truth wins” benchmark although they outperformed individuals deciding in isolation. We draw general lessons about when to employ groups instead of individuals in intellectual tasks.
    Keywords: Winner’s curse, takeover game, group decision making, communication, experiments
    JEL: C91 C92 D81
    Date: 2010–09
  5. By: Breitmoser, Yves
    Abstract: In the proto-coalition model of government formation, formateur F appoints a proto-coalition and asks its members whether to start negotiating a coalition contract. If all accept, then the proto-coalition forms and starts negotiating; otherwise a caretaker government assumes office. I extend this model by allowing F to revise the chosen proto-coalition after rejections, that he states pre-conditions for the subsequent negotiations, and that F's opponents may publicly pre-commit to accept/reject certain proposals. The set of equilibrium outcomes is identified as the core if F's opponents can pre-commit and as the convex hull of the core if they cannot pre-commit credibly. This extended model eliminates two flaws of the standard model: it explains why F cannot always install his favored coalition (whatever the status quo) and why "important" coalition members may have more bargaining power in the subsequent negotiations than others.
    Keywords: coalition formation; non-cooperative bargaining; core
    JEL: C78 D72 C72
    Date: 2010–09–14
  6. By: Jean L. Cohen
    Abstract: Constitutionalism beyond the state is a deeply contested project. The emergence of global governance and global laws that directly affect individuals and regulate the conduct of states toward their own citizens raise questions about the basic hierarchy of authority among states, regional bodies and global institutions. States no longer have a monopoly of the production of international or global law. Thus questions about the legitimacy of global law and governance arise particularly, but not only, when they have constitutionalism- and democracy eviscerating effects. The discourse of global constitutionalism as a possible characterization of or response to the expanded juridification and exercise of coercive public power on the supra state level follows from these developments. But what kind of constitutionalism is appropriate beyond the state and what should be the relation among distinct and at times competing legal orders? This article addresses these questions focusing on the global political system and using the lens of the recent ECJ decision in the Kadi case to formulate the appropriate conceptual issues. I argue for a constitutional pluralist approach but I also argue that this requires reform of the global political system. I claim that a human rights-oriented constitutionalism is compatible with state sovereignty, appropriately understood. We should drop unhelpful dichotomous frameworks such as cosmopolitanism versus sovereignty, monism versus dualism and think creatively with respect to changing sovereignty regimes, federal unions of states that are not themselves states but which are constitutional and potentially constitutionalist legal orders. In this way we can try to preserve the best of what the older sovereignty regime of international law had to offer – constitutionalism, democracy, self determination of states, sovereign equality – while conceptualizing and (re-)designing the new, especially in light of international human rights concerns, in ways compatible with these and other, individual-oriented normative principles.
    Keywords: constitutional change; democracy; governance; law; legitimacy; pluralism
    Date: 2010–09–15
  7. By: Khemani, Stuti
    Abstract: This paper examines a puzzle in the political economy of infrastructure in India -- the co-existence of relatively low shares of capital spending in public budgets alongside evidence of large demand for village infrastructure from poor voters. It argues that this pattern is due to infrastructure projects being used at the margin for political rent-seeking, while spending on employment and welfare transfers are the preferred vehicles to win votes for re-election. New suggestive evidence on the variation of public spending composition across states, and within states over time is offered that is consistent with this argument. This evidence underscores a growing argument in the development literature that the level and composition of public spending per se may not be sufficient metrics to assess the quality of public goods policies -- greater infrastructure spending in some contexts may go to political rents rather than to the actual delivery of broad public goods for growth and poverty reduction.
    Keywords: Public Sector Economics,National Governance,Public Sector Management and Reform,Parliamentary Government,Debt Markets
    Date: 2010–09–01
  8. By: Grégoire ROTA-GRAZIOSI (Centre d'Etudes et de Recherches sur le Développement International); Magnus HOFFMANN
    Abstract: This paper examines simultaneous versus sequential choice of effort in a twoplayer contest with a general contest success function. The timing of moves, determined in a preâ€play stage prior to the contestâ€subgame, as well as the value of the prize is allowed to be endogenous. Contrary to endogenous timing models with an exogenously fixed prize the present paper finds the following. (1) Players may decide to choose their effort simultaneously in the subgame perfect equilibrium (SPE) of the extended game, (2) the SPE does not need to be unique, (3) in particular, there is no unique SPE with sequential moves if costs of effort are exclusively endogenously determined, (4) if the unique SPE is sequential play, the win probability in the NE is in no way crucial for the determination of an endogenous leadership, (5) and symmetry among players does not rule out incentives for precommitment to effort locally away from the Nashâ€Cournot level
    Keywords: Contests, Endogenous timing, Endogenous prize
    JEL: D30 D23 C72
    Date: 2010
  9. By: Kotera, Go; Okada, Keisuke; Samreth, Sovannroeun
    Abstract: Previous studies on the effect of government size on corruption have produced mixed results. For the purpose of explaining these ambiguous results, our study investigates the effect of government size on corruption by taking into account the role of democracy level in each country. Using annual data from 82 countries from 1995 to 2008, the estimation results indicate that an increase in government size can lead to a decrease in corruption if democracy level is sufficiently high and, in contrast, can lead to an increase in corruption if it is too low. As a robustness check, estimations using a different index of corruption and a different proxy for government size are also conducted. The results show that our main results are robust. Furthermore, to deal with endogeneity problems, we conduct an instrumental variable estimation, the results of which support our main results. These findings provide some important implications for policymakers seeking to conduct government intervention without aggravating corruption.
    Keywords: Corruption; Government Size; Democracy; Instrumental Variable Estimation
    JEL: D73 H50 H11
    Date: 2010–09–15

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