New Economics Papers
on Collective Decision-Making
Issue of 2011‒11‒14
ten papers chosen by

  1. Analysis of Municipal Election Outcomes in Romania By Dorin Jula; Nicolae-Marius Jula
  2. Knowledge is power: a theory of information, income, and welfare spending By Jo Thori Lind; Dominic Rohner
  3. The men who weren't even there: Legislative voting with absentees By Laszlo A. Koczy; Mikl¢s Pinter
  4. Marx vs. Weber: does religion affect politics and the economy? By Christoph Basten; Frank Betz
  5. Choice Democracy By Olivier Ledoit
  6. A Dynamic theory of electoral competition By Battaglini, Marco
  7. Resource Windfalls, Political Regimes, and Political Stability By Francesco Caselli; Andrea Tesei
  8. Voting with the Wallet By Leonardo Becchetti
  9. A model of influence based on aggregation functions. By Michel Grabisch; Agnieszka Rusinowska
  10. The political economy of neo-liberalism in Italy and France. By Bruno Amable; Elvire Guillaud; Stefano Palombarini

  1. By: Dorin Jula; Nicolae-Marius Jula
    Abstract: In Romania, the 2008 local elections were held based on a new electoral law. The main changes concerned the election of chairpersons of county councils by uninominal voting, shifting of the general and presidential elections and the introduction of a uninominal voting system for parliamentary elections, with a correction of the total number of seats according to the total number of votes obtained by each party on national level. Voting behavior in local elections on 1st June 2008 was primarily determined by political reasons (loyal voters) and was influenced by the effect of the local leaders and the noise produced by ethnic vote. For all parties, prominent leaders drew votes. Inertia in voting behavior (electorate’s fidelity) influenced all parties’ results and the ethnic behavior had a strong effect on nationalist parties. At regional level, the electoral impact of economic variables was marginal.
    Date: 2011–09
  2. By: Jo Thori Lind; Dominic Rohner
    Abstract: No voters cast their votes based on perfect information, but better educated and richer voters are on average better informed than others. We develop a model where the voting mistakes resulting from low political knowledge reduce the weight of poor voters, and cause parties to choose political platforms that are better aligned with the preferences of rich voters. In US election survey data, we find that income is more important in affecting voting behavior for more informed voters than for less informed voters, as predicted by the model. Further, in a panel of US states we find that when there is a strong correlation between income and political information, Congress representatives vote more conservatively, which is also in line with our theory.
    Keywords: Redistribution, welfare spending, information, income, voting, political economics
    JEL: D31 D72 D82 H53
    Date: 2011–10
  3. By: Laszlo A. Koczy (Institute of Economics - Hungarian Academy of Sciences); Mikl¢s Pinter (Department of Mathematics - Corvinus University Budapest)
    Abstract: Voting power in voting situations is measured by the probability of changing decisions by altering the cast 'yes' or 'no' votes. Recently this analysis has been extended by strategic abstention. Abstention, just as 'yes' or 'no' votes can change decisions. This theory is often applied to weighted voting situations, where voters can cast multiple votes. Measuring the power of a party in a national assembly seems to fit this model, but in fact its power comprises of votes of individual representatives each having a single vote. These representatives may vote yes or no, or may abstain, but in some cases they are not even there to vote. We look at absentees not due to a conscious decision, but due to illness, for instance. Formally voters will be absent, say, ill, with a certain probability and only present otherwise. As in general not all voters will be present, a thin majority may quickly melt away making a coalition that is winning in theory a losing one in practice. A simple model allows us to differentiate between winning and more winning and losing and less losing coalitions reected by a voting game that is not any more simple. We use data from Scotland, Hungary and a number of other countries both to illustrate the relation of theoretical and effective power and show our results working in the practice.
    Keywords: a priori voting power; power index; being absent from voting; minority; Shapley-Shubik index; Shapley value
    JEL: C71 D72
    Date: 2011–06
  4. By: Christoph Basten (European University Institute, Badia Fiesolana, Via dei Roccettini 9, I-50014 San Domenico di Fiesole, Italy.); Frank Betz (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt, Germany.)
    Abstract: We investigate the effect of Reformed Protestantism, relative to Catholicism, on preferences for leisure and for redistribution and intervention in the economy. With a Fuzzy Spatial Regression Discontinuity Design, we exploit a historical quasiexperiment in Western Switzerland, where in the 16th century a so far homogeneous region was split and one part assigned to convert to Protestantism. We find that Reformed Protestantism reduces the fraction of citizens voting for more leisure by 13, and that voting for more redistribution and government intervention by respectively 3 and 11 percentage points. These preferences are found to translate into greater income inequality, but we find no robust effect on average income. JEL Classification: Z12, D72, H23, N33.
    Keywords: Max Weber, culture, protestant work ethic, political preferences, regression discontinuity design.
    Date: 2011–10
  5. By: Olivier Ledoit
    Abstract: Democracy is defined by two core tenets: voice and pluralism. Within these constraints, a wide variety of regime types can be designed. We show that the only new, untested form of democracy is when every citizen is governed by the political party of his/her choice. Multiple full-fledged governments would coexist in the same national territory at the same time, each one sovereign only over the people who chose to vote for it - hence the name: "Choice Democracy". Choice Democracy can be regarded as pure polyarchy, the broadest form of political competition, and a robust mechanism for disciplining government agencies. We argue that this system makes democracy more stable by reducing the risk of revolutionary and financial crises. We develop a theory for the optimal number of governments per countries, where the answer is determined by a trade-off between cooperation and competition. We also provide evidence indicating that Choice Democracy would be viable in the real world.
    Keywords: Democracy, choice, polyarchy, stability, competition, effciency
    JEL: H11 H41
    Date: 2011–10
  6. By: Battaglini, Marco
    Abstract: We present a dynamic model of electoral competition to study the determinants of fiscal policy. In each period, two parties choose electoral platforms to maximize the expected number of elected representatives. The electoral platform includes public expenditure, redistributive transfers, the tax rate and the level of public debt. Voters cast their vote after seeing the platforms and elect representatives according to a majoritarian winner take all system. The level of debt, by affecting the budget constraint in future periods, creates a strategic linkage between electoral cycles. We characterize the Markov equilibrium of this game when public debt is the state variable, and study how Pareto efficiency depends on the electoral rule and the underlying fundamentals of the economy.
    Date: 2011–11
  7. By: Francesco Caselli; Andrea Tesei
    Abstract: We study theoretically and empirically whether natural resource windfalls affect political regimes. We document the following regularities. Natural resource windfalls have no effect on the political system when they occur in democracies. However, windfalls have significant political consequences in autocracies. In particular, when an autocratic country receives a positive shock to its flow of resource rents it responds by becoming even more autocratic. Furthermore, there is heterogeneity in the response of autocracies. In deeply entrenched autocracies the effect of windfalls on politics is virtually nil, while in moderately entrenched autocracies windfalls significantly exacerbate the autocratic nature of the political system. To frame the empirical work we present a simple model in which political incumbents choose the degree of political contestability by deciding how much to spend on vote-buying, bullying, or outright repression. Potential challengers decide whether or not to try to unseat the incumbent and replace him. The model uncovers a reason for the asymmetric impact of resource windfalls on democracies and autocracies, as well as the differential impact within autocratic regimes.
    Keywords: natural resources, elections, political accountability
    JEL: D72 D78 Q33
    Date: 2011–11
  8. By: Leonardo Becchetti (Department of Economics, Universitˆ Tor Vergata)
    Abstract: The vote with the wallet is a new, emerging feature of economic participation and democracy in the globally-integrated market economy. This expression identifies the pivotal role that responsible consumption and investment can play in addressing social and environmental emergencies which have been aggravated by the asymmetry of power between domestic institutions and global corporations. In this paper, we examine (both in general and by using examples drawn from the financial and non-financial sectors) how ÒvotingÓ for producers which are at the forefront of a three-sided efficiency which reconciles the creation of economic value with social and environmental responsibility, may generate contagion effects by triggering ethical imitation of traditional profit-maximizing actors, thereby enhancing the production of positive social and environmental externalities. Within this new framework policies which reduce the search and information costs of voting with the wallet may help socioeconomic systems to exploit the bottom-up market forces of other-regarding preferences, thereby enhancing opportunities to achieve well-being with reduced top-down government intervention
    Keywords: social responsibility, other regarding preferences.
    Date: 2011–11
  9. By: Michel Grabisch (Centre d'Economie de la Sorbonne - Paris School of Economics); Agnieszka Rusinowska (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: The paper concerns a dynamic model of influence in which agents have to make a yes-no decision. Each agent has an initial opinion, which he may change during different phases of interaction, due to mutual influence among agents. The influence mechanism is assumed to be stochastic and to follow a Markov chain. In the paper, we investigate a model of influence based on aggregation functions. Each agent modifies his opinion independently of the others, by aggregating the current opinion of all agents, possibly including himself. We provide a general analysis of convergence in the aggregation model and give more practical conditions based on influential players. We show that the process of influence converges always to one of the two consensus states, and there may exist other terminal classes, which are either cyclic or union of Boolean lattices. We give sufficient conditions for avoiding these additional terminal classes, based on properties of the graph of influence and influential players. We also introduce the notion of influential coalition and show that it can fully describe terminal classes. Some important families of aggregation functions are discussed.
    Keywords: Influence, aggregation function, convergence, terminal class, infuential coalition, social network.
    JEL: C7 D7
    Date: 2011–10
  10. By: Bruno Amable (Centre d'Economie de la Sorbonne, CEPREMAP et IUF); Elvire Guillaud (Centre d'Economie de la Sorbonne); Stefano Palombarini (LED - Université Paris 8)
    Abstract: There are many apparent similarities between the current political and economic situations of France and Italy. The mainstream view is that at least part of the neo-liberal strategy could be a solution to the economic problems of both variants of the European model of capitalism. However, the difficulties met by the implementation of these strategies by Sarkozy and Berlusconi lead to believe that the success or failure of neo-liberalisation has less to do with its (lack of) macroeconomic merits than with the stability of the socio-political alliances that support it. In this respect, France and Italy are markedly different. This paper shows that even if the "hard core" of the neoliberal social bloc is roughly the same in both countries, this core constitutes a minority of the electorate ; a neoliberal strategy must therefore rely on an extended social coalition, which might not be similar between countries. The Great Recession revealed part of the structural characteristics that set both countries apart. The aim of this article is to show that the consideration of the different socio-political alliances found in each country can help to understand how Italy and France ended up on different economic trajectories.
    Keywords: Institutions, model of capitalism, neoliberal reforms, political crisis.
    JEL: P16 P51 B52
    Date: 2011–09

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