New Economics Papers
on Collective Decision-Making
Issue of 2010‒10‒16
eight papers chosen by

  1. Democracy and innovation By Bruno S. Frey
  2. Exit Polls and Voter Turnout By Thomas Jensen; Asger Lau Andersen
  3. Primaries: The Unifying Force By Rafael Hortala-Vallve; Hannes Mueller
  4. Portfolio Managers and Elections in Emerging Economies: How investors dislike political uncertainty By Frot, Emmanuel; Santiso, Javier
  5. Information Aggregation, Growth and Franchise Extension with Applications to Female Enfranchisement and Inequality By Christopher J Ellis; John Fender
  6. Aggregating sets of von Neumann-Morgenstern utilities By Eric Danan; Thibault Gajdos; Jean-Marc Tallon
  7. Political participation in Africa: Participatory inequalities and the role of resources By Isaksson, Ann-Sofie
  8. State capacity, manufacturing and civil conflict By Costa, Jacopo; Ricciuti, Roberto

  1. By: Bruno S. Frey
    Keywords: Democracy, innovation, randomization, voting rules
    JEL: D02 D70 H1 O31
    Date: 2010–10
  2. By: Thomas Jensen (Department of Economics, University of Copenhagen); Asger Lau Andersen (Department of Economics, University of Copenhagen)
    Abstract: We set up a model of elections or referendums with two alternatives to study how voter turnout and election outcomes are affected by the publication of exit polls on election day. We find that the introduction of an exit poll influences the incentive to vote both before and after the poll is published, but the signs of the effects are generally ambiguous. The fact that exit polls influence the incentive to vote before they are even published is sometimes overlooked in the debate on their desirability. We show that this can lead to premature conclusions about the impact of exit polls on election outcomes.
    Keywords: elections, exit polls, voter turnout
    JEL: D71 D72 D82
    Date: 2010–09
  3. By: Rafael Hortala-Vallve; Hannes Mueller
    Abstract: We present a formal model of intra-party politics to explain candidate selection within parties. We think of parties as heterogeneous groups of individuals who aim to implement a set of policies but who differ in their priorities. When party heterogeneity is too large, parties are in danger of splitting into smaller yet more homogeneous groups. In this context we argue that primaries can have a unifying role if the party elite cannot commit to policy concessions. Our model shows how alignment in the preferred policies of various factions within a party, the relative weight of each of these factions and the electoral system interact to create incentives for the adoption of primary elections. We discuss the existing empirical literature in the light of our theoretical predictions to provide a new, structured perspective on the adoption of primary elections.
    Date: 2010–09–30
  4. By: Frot, Emmanuel (Stockholm Institute of Transition Economics); Santiso, Javier (ESADE Business School)
    Abstract: This paper studies the effect of elections and democracy on bond and equity flows to emerging countries. Our results indicate that elections affect portfolio flows: the period following an election is generally characterised by a fall in equity flows, and this occurs only where the incumbent is not re-elected. We interpret this result as evidence that political uncertainty about future policies plays a key role in explaining the effect of elections. Bond flows decrease after an election that brings a change of ideology in government, with some evidence that this effect is stronger if such change is from right- to leftwing. This set of results suggests that investors value continuity and stability in the political environment, and dislike changes. Finally, democracy, in itself, is not found to significantly influence portfolio equity and bond flows, such that there is no democratic premium. On the other hand, a decrease in the democracy score implies lower equity flows. Investors value continuity (stable democracy level, even if low) rather than improvements (democratic transitions) but are responsive to a deterioration in the democratic environment that is often accompanied by less transparency, and therefore greater uncertainty.
    Keywords: Portfolio decisions; Elections
    JEL: F59 G11 G15
    Date: 2010–10–06
  5. By: Christopher J Ellis; John Fender
    Abstract: We develop a model of voluntary gradual franchise extension and growth based on the idea that voting is an information aggregation mechanism. A larger number of voters mean more correct decisions are made hence more output, but also imply that any incremental output needs to be shared among more individuals. These conflicting incentives are shown to lead to a dynamic model of franchise extensions that is not inconsistent with several real world episodes, including female enfranchisement. The model also predicts that in certain circumstances growth and enfranchisement will be accompanied by Kuznets curve type behaviour in inequality. Contrary to the preceding literature these conclusions do not rest on incentives for strategic delegation.
    Keywords: Democracy, Franchise Extension, Growth
    JEL: H0 P4 P16
    Date: 2010–08
  6. By: Eric Danan (THEMA - THéorie Economique, Modélisation et Applications - université de Cergy-Pontoise); Thibault Gajdos (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Jean-Marc Tallon (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We analyze the aggregation problem without the assumption that individuals and society have fully determined and observable preferences. More precisely, we endow individuals ans society with sets of possible von Neumann-Morgenstern utility functions over lotteries. We generalize the classical neutrality assumption to this setting and characterize the class of neutral social welfare function. This class turns out to be considerably broader for indeterminate than for determinate utilities, where it basically reduces to utilitarianism. In particular, aggregation rules may differ by the relationship between individual and social indeterminacy. We characterize several subclasses of neutral aggregation rules and show that utilitarian rules are those that yield the least indeterminate social utilities, although they still fail to systematically yield a determinate social utility.
    Keywords: Aggregation, vNM utility, indeterminacy, neutrality, utilitarianism.
    Date: 2010–07
  7. By: Isaksson, Ann-Sofie (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The aim of this paper is to examine the role of individual resource endowments for explaining individual and group variation in African political participation. Drawing on new data for more than 27 000 respondents in 20 emerging African democracies, the empirical findings suggest surprisingly weak explanatory power of the resource perspective, both for explaining individual variation and observed group inequalities in participation. In several cases, the relatively resource poor groups participate to a greater extent than the relatively resource rich.<p>
    Keywords: Political participation; Group inequalities; Resources; Africa; Afrobarometer
    JEL: D01 D72 O12 O55
    Date: 2010–08–03
  8. By: Costa, Jacopo; Ricciuti, Roberto
    Abstract: In this note we empirically analyze the link between state capacity and civil conflict via the manufacturing sector, which is the source of wealth for an emerging new elite interested in obtaining political representation, and is the outcome of a new political equilibrium more in tune with capital accumulation. This raises the cost of civil conflict, reducing its probability of occurrence. We find evidence in favor of our hypothesis in a panel of African countries.
    Keywords: civil conflict, manufacturing, state capacity, fragile states, Africa
    JEL: D74 O14
    Date: 2010–09

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