New Economics Papers
on Collective Decision-Making
Issue of 2010‒11‒13
twelve papers chosen by

  1. Voting in international environmental agreements: Experimental evidence from the lab By Dannenberg, Astrid
  2. Voting on traffic congestion policy with two levels of government By Russo, Antonio
  3. Legislative malapportionment and institutional persistence By Bruhn, Miriam; Gallego, Francisco; Onorato, Massimiliano
  4. Search Committees By Benny Moldovanu; Xianwen Shi
  5. Political Competition, Policy and Growth: Theory and Evidence from the United States By Timothy Besley; Torsten Persson; Daniel M. Sturm
  6. How to Include Political Capabilities in the HDI? An Evaluation of Alternatives By José Antonio Cheibub
  7. The Logic of Collective Action and Australia's Climate Policy By Jotzo, Frank; Mazouz, Salim; Pezzey, John C.V.
  8. A construção política do estado By Pereira, Luiz Carlos Bresser
  9. Are Korean Voters Faithful to Their Ideologies in Voting?:The Case of the 2010 Local Election By Woojin Lee
  10. Bureaucracy Norms and Market Size By Koziashvili, Arkadi; Nitzan, Shmuel; Tobol, Yossef
  11. Islam and Democracy By Niklas Potrafke
  12. Politics and elections at the Spanish stock exchange By Ángel Pardo Tornero; María Dolores Furió Ortega

  1. By: Dannenberg, Astrid
    Abstract: This paper experimentally analyzes the effects if signatories to an international environmental agreement (IEA) apply different voting schemes to determine the terms of the agreement. To this end, unanimity, qualified majority voting, and simple majority voting are compared with respect to the resulting pollution abatement level and social welfare. At first sight in line with theoretical predictions, the experiment shows that the change of the voting scheme implemented in an IEA does not significantly change social welfare. However, changing the majority required to determine the terms of an IEA alters the 'depth and breadth' of cooperation. The coalitions under the unanimity rule are relatively large and implement moderate effort levels while the coalitions with majority votes implement very high effort levels but attract only few participants. --
    Keywords: international environmental agreements,cooperation, voting
    JEL: C72 C92 D71 H41
    Date: 2010
  2. By: Russo, Antonio
    Abstract: I study how the political decision process affects urban traffic congestion policy. First, I look at the case of a single government deciding, through majority voting, on a monetary charge to be paid to drive to a city's Central Business District (CBD): if the majority of individuals prefers to drive more (resp. less) than the average, a voting equilibrium with lower (higher) charge emerges. Next, I consider the case of two government levels involved in traffic policy: parking charges in (resp. cordon tolls around) a city's CBD and capacity investments are chosen by a local (resp. regional) government, through a majority voting process. While tax exporting motives and the imperfect coordination among the two governments may lead to higher overall charges than in the case of a single government, strong preferences for driving across the population can still bring to an equilibiurm with suboptimal total charges.
    Keywords: traffic congestion policy; cordon tolls; parking; voting; fiscal competition;
    JEL: H77 D78 H23 L98
    Date: 2010–11–06
  3. By: Bruhn, Miriam; Gallego, Francisco; Onorato, Massimiliano
    Abstract: This paper argues that legislative malapportionment, denoting a discrepancy between the share of legislative seats and the share of population held by electoral districts, serves as a tool for pre-democratic elites to preserve their political power and economic interests after a transition to democracy. The authors claim that legislative malapportionment enhances the pre-democratic elite’s political influence by over-representing areas that are more likely to vote for parties aligned with the elite. This biased political representation survives in equilibrium as long as it helps democratic consolidation. Using data from Latin America, the authors document empirically that malapportionment increases the probability of transitioning to a democracy. Moreover, the data show that over-represented electoral districts are more likely to vote for parties close to pre-democracy ruling groups. The analysis also finds that overrepresented areas have lower levels of political competition and receive more transfers per capita from the central government, both of which favor the persistence of power of pre-democracy elites.
    Keywords: Parliamentary Government,Labor Policies,Emerging Markets,Political Economy,Political Systems and Analysis
    Date: 2010–11–01
  4. By: Benny Moldovanu; Xianwen Shi
    Abstract: A committee decides by unanimity whether to accept the current alternative, or to continue costly search. Alternatives are described by several distinct attributes. Each committee member privately assesses the quality of one attribute (her \
    Keywords: Committee, Search, Specialization, Interdependent Values, Voting, Partisanship
    JEL: D82 D83 C72
    Date: 2010–11–04
  5. By: Timothy Besley; Torsten Persson; Daniel M. Sturm
    Abstract: This paper develops a simple model to analyze how a lack of political competition may leadto policies that hinder economic growth. We test the predictions of the model on panel datafor the US states. In these data, we find robust evidence that lack of political competition in astate is associated with anti-growth policies: higher taxes, lower capital spending and areduced likelihood of using right-to-work laws. We also document a strong link between lowpolitical competition and low income growth.
    Keywords: political competition, competition, government, US, economic development
    JEL: D72 H11 H70 N12 O11
    Date: 2010–10
  6. By: José Antonio Cheibub (Cline Center for Democracy at University of Illinois at Urgana-Champaign)
    Abstract: This paper evaluates existing measures of political regimes and political freedom with respect to their desirability as indicators of political capabilities. It argues that the focus of desirable measures should be on the political and civil institutions that affect individuals’ opportunities to pursue their goals (their capabilities). Attempts to capture “actual” capabilities are misleading since they replicate what the existing HDI already does and muddle a measure that derives power from its simplicity. The paper then suggests indicators that are intuitive, clear and sufficiently encompassing to capture the political and civil environment within which individuals must pursue their goals.
    Keywords: democracy, regime classification, civil and political freedom
    JEL: C80 O15
    Date: 2010–10
  7. By: Jotzo, Frank; Mazouz, Salim; Pezzey, John C.V.
    Abstract: We analyse the long-term efficiency of the emissions target and of the provisions to reduce carbon leakage in the Australian Government's Carbon Pollution Reduction Scheme, as proposed in March 2009, and the nature and likely cause of changes to these features in the previous year. The target range of 5-15% cuts in national emission entitlements during 2000-2020 was weak, in that on balance it is too low to minimise Australia's long-term mitigation costs. The free allocation of outputlinked, tradable emission permits to Emissions-Intensive, Trade-Exposed (EITE) sectors was much higher than proposed earlier, or shown to be needed to deal with carbon leakage. It plausibly means that EITE emissions can rise by 13% during 2010-2020, while non-EITE sectors must cut emissions by 34-51% (or make equivalent permit imports) to meet the national targets proposed, far from a cost-effective outcome. The weak targets and excessive EITE assistance illustrate the efficiencydamaging power of collective action by the 'carbon lobby'. Resisting this requires new national or international institutions to assess lobby claims impartially, and more government publicity about the true economic importance of carbon-intensive sectors. Published in the Australian Journal of Agricultural and Resource Economics, volume 54, pages 185-202.
    Date: 2010–01
  8. By: Pereira, Luiz Carlos Bresser
    Abstract: In the relations between society and the state, the two forms of politicallyorganized societies – the nation and civil society – play a key role, as also do classcoalitions and political pacts. The relation between both is dialectical, but, initially, thestate exerts more influence on the society; as democratization takes place this relationgradually changes in favor of society. Despite the fact that politics (the art of governingthe state) is subjected to economic and political constraints, it counts with a relativeautonomy. It is not the state but politics that has relative autonomy. Whereas societyand the economy are the realm of necessity, politics is the realm of men’s will andfreedom. The deterministic political theories that search to predict political behavior failbecause they ignore this relative autonomy of politics. It is through politics, in theframework of the democratic state, that men and women build their state and theirsociety.
    Date: 2010–11–05
  9. By: Woojin Lee (Department of Economics, Korea University, Seoul, Republic of Korea)
    Abstract: ÀÌ ³í¹®Àº 2010³â 6.2ÀÏ ½Ç½ÃµÈ Áö¹æ¼±°Å¿¡¼­ Çѱ¹ÀÇ À¯±ÇÀÚµéÀÌ ÀڽŵéÀÇ À̳信 ¾ó¸¶³ª Ãæ½ÇÇÏ°Ô ÅõÇ¥ÇÏ¿´´ÂÁö¸¦ ºÐ¼®ÇÏ°í ÀÖ´Ù. ºÐ¼®À» À§ÇÏ¿© ¿ì¸®´Â µ¿¾Æ½Ã¾Æ ¿¬±¸¿ø-SBS-Áß¾ÓÀϺ¸-Çѱ¹¸®¼­Ä¡°¡ °øµ¿À¸·Î Á¶»çÇÑ µÎ Â÷·ÊÀÇ Àü±¹ÆгΠÀڷḦ »ç¿ëÇÏ¿´´Âµ¥ 16°³ ±¤¿ª´Üü Áß Á¦ÁÖ¸¦ Á¦¿ÜÇÑ 15°³ ±¤¿ª´Üü¸¦ ºÐ¼®´ë»óÀ¸·Î ÇÏ¿´´Ù. ¿ì¸®ÀÇ ºÐ¼®¿¡ ÀÇÇϸé À¯±ÇÀÚµéÀº ÀÚ½ÅÀÇ À̳äÀ§Ä¡»Ó ¾Æ´Ï¶ó Á¤´çµéÀÇ À̳äÀ§Ä¡¿¡ ´ëÇؼ­µµ ¸íÈ®ÇÏ°Ô ÀνÄÇÏ°í ÀÖ¾úÀ¸¸ç ¸¹Àº À¯±ÇÀÚµéÀÌ ÀÚ½ÅÀÇ À̳äÀ§Ä¡¿Í °¡Àå °¡±õ´Ù°í ÀνÄÇÏ°í ÀÖ´Â Á¤´ç¿¡ ÅõÇ¥ÇÏ¿´´Ù. ±¤¿ª´ÜüÀå ¼±°ÅÀÇ °æ¿ì¸¦ ¿¹·Î µé¸é Áö¿ªº°·Î ÆíÂ÷°¡ Á¸ÀçÇÏÁö¸¸ ÀüüÀûÀ¸·Î º¸¸é ¾à 70% Á¤µµÀÇ ÀÀ´äÀÚµéÀÌ ÀڽŵéÀÇ À̳信 Ãæ½ÇÇÏ°Ô ÅõÇ¥ÇÏ°í Àִµ¥ ÀÌ´Â ¸Å¿ì ³ôÀº ¼öÄ¡¶ó ÇÒ ¼ö ÀÖ´Ù. À̳äÃæ½Çµµ´Â ¼ºº°, Çзº°, ¼Òµæº°·Î´Â Å©°Ô ´Ù¸£Áö ¾Ê¾ÒÁö¸¸ ¿¬·Éº°, ±×¸®°í À̳亰·Î´Â Â÷ÀÌ°¡ ÀÖ¾ú´Ù. ¿¬·Éº°·Î´Â 60´ë ÀÌ»óÀÇ °í·ÉÃþÀÌ, À̳äÀûÀ¸·Î´Â º¸¼öÃþÀÌ À̳äÃæ½Çµµ°¡ °¡Àå ³ô¾Ò´Ù. ÇÑÆí À̳äÀû ´ë¸³ÀÇ ÁÖ¿äÀïÁ¡ÀÌ µÇ´Â Á¤Ã¥Â÷¿ø¿¡ ´ëÇØ ¿ì¸®´Â ¼ºÀå°ú ºÐ¹è, ÀÚÀ¯¿Í Áú¼­, Çѹ̵¿¸Í¿¡ ´ëÇÑ ÁöÁö¿©ºÎ, ´ëºÏÁ¤Ã¥ ÀÇ ³× °¡Áö¸¦ °ËÅäÇÏ¿´´Âµ¥ À̳亰 Â÷ÀÌ°¡ ÀÌ ³× °¡Áö Â÷¿ø ¸ðµÎ¿¡ ´ëÇØ ÇöÀúÇßÁö¸¸ ±× Áß¿¡¼­µµ ÀÚÀ¯¿Í Áú¼­¿¡ ´ëÇÑ ÀÔÀå Â÷ÀÌ°¡ °¡Àå Áß¿äÇÏ¿´´Ù.
    Keywords: À̳ä, ÅõÇ¥, 6.2 Áö¹æ¼±°Å
    JEL: D3 D7 H2
    Date: 2010
  10. By: Koziashvili, Arkadi; Nitzan, Shmuel (Department of Economics, Bar Ilan University, Ramat Gan, Israel); Tobol, Yossef
    Abstract: This paper proposes a new model of market structure determination. It demonstrates that market structure need not be the result of ideology, political power, collusion among producers or the nature of the technology. In our setting, it is determined by bureaucrats who maximize their share of the industry profits. The approach is illustrated by studying the relationship between industry size and the existing institutional norm and by identifying the bureaucrats' most preferred norm. In the latter context, we establish the fundamental inverse relationship between the costs of interaction with government officials and industry size.
    Keywords: Institutional norms, bureaucracy costs, norm viability, industry size
    JEL: D72 D73
    Date: 2010–11
  11. By: Niklas Potrafke (Department of Economics, University of Konstanz, Germany)
    Abstract: Using the POLITY IV and Freedom House indices, Rowley and Smith (2009) found that countries with Muslim majorities enjoy less freedom and are less democratic than countries in which Muslims are a minority. Because the POLITY IV and Freedom House indices have been criticized on several grounds, I reinvestigate Rowley and Smith’s finding using the new Democracy-Dictatorship data from Cheibub et al. (2010). The empirical results confirm that countries with Muslim majorities are indeed less likely to be democratic.
    Keywords: Islam, religion, democracy, political institutions
    JEL: Z12 O11 P16 P48 F59
    Date: 2010–11–04
  12. By: Ángel Pardo Tornero (Dpto. Economía Financiera y Actuarial); María Dolores Furió Ortega (Universitat de València)
    Abstract: This paper examines the influence of Spanish major political events on the stock market performance. The analytical results demonstrate that there are no systematic differences in excess returns in the last two years preceding an election, that market responses are of the same magnitude when incumbents win or lose the election, and that there is no difference between the excess returns during left-leaning and right-leaning governments. Regarding to the stock market performance around election dates, negative price changes are observed in the days prior to elections, reverting to positive once the election takes place. Our results are in line with the work of Brown, Harlow and Tinic (1988) on the Uncertain Information Hypothesis that postulates that volatility of stock returns increases following the arrival of unexpected information and prices rise as uncertainty is resolved.convirtiéndose en incrementos con posterioridad a las mismas. Estos resultados son consistentes con la hipótesis de información incierta de Brown et al. (1988), de acuerdo con la cual, la volatilidad de los rendimientos de las acciones se incrementa con la aparición en el mercado de información que no se esperaba y los precios se recuperan a medida que desaparece la incertidumbre. Este trabajo examina la influencia de la política en el comportamiento del mercado bursátil español. Analíticamente se demuestra que no hay diferencias sistemáticas en los rendimientos anormales de las acciones durante los dos años anteriores a la celebración de elecciones, que la respuesta del mercado es la misma con independencia de que un determinado partido revalide su victoria electoral y que no existen diferencias entre los rendimientos anormales de las acciones observados bajo gobiernos de izquierdas o de derechas. Con respecto al comportamiento de las acciones durante el periodo anterior y posterior a la fecha de las elecciones, se observan disminuciones en los precios en los días previos a las elecciones
    Keywords: política, rendimientos anormales, comportamiento del mercado bursátil politics, excess returns, stock market performance
    JEL: G14 D81 H11
    Date: 2010–10

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