New Economics Papers
on Collective Decision-Making
Issue of 2012‒03‒21
eight papers chosen by

  1. Optimal Districting with Endogenous Party Platforms By E Bracco
  2. Growth and Election Outcomes in a Developing Country By Poonam Gupta; Arvind Panagariya
  3. India: Election Outcomes and Economic Performance By Poonam Gupta; Arvind Panagariya
  4. The Roman Metro Problem By Christian Roessler; Sandro Shelegia
  5. Statistical test for the mathematical theory of democracy By Tangian, Andranik
  6. Mechanism design and intentions By Felix Bierbrauer; Nick Netzer
  7. Expert Politicians, Electoral Control, and Fiscal Restraints By Uwe Dulleck; Berthold U Wigger
  8. Asymmetrically fair rules for an indivisible good problem with a budget constraint By Paula Jaramillo; Çâatay Kayi; Flip Klijn

  1. By: E Bracco
    Abstract: This paper proposes a theory of socially optimal districting in a legislative-election model with endogenous party platforms. We generalize the model of Coate and Knight (2007), allowing parties to strategically condition their platforms on the districting. The socially optimal districting re ects the ideological leaning of the population, so that parties internalize voters' preferences in their policy platforms. The optimal seat-vote curve is unbiased when voters are risk-neutral, and -contrary to previous findings-biased against the largest partisan group when voters are risk-averse. The model is then calibrated by an econometric analysis of the elections of U.S. State legislators during the 1990s.
    Date: 2011
  2. By: Poonam Gupta (NIPFP, India); Arvind Panagariya (Columbia University)
    Abstract: With the exception Brander and Drazen (2008), who use a comprehensive cross-country database consisting of both developed and developing countries, the hypothesis that rapid growth helps incumbents win elections has been tested exclusively for the developed countries (e.g., Ray Fair 1978). But since sustained rapid growth offers the prospect of pulling vast numbers of the voters out of poverty within a generation, such an effect is far more likely to be present in the developing rather than developed countries. In this paper, we offer the first test of the hypothesis on a large developing and poor country, India, which has seen its economy grow 8 to 9 percent recently. We first generalize the Fair model to allow for multiple candidates instead for just two and then test it using cross-state data. We find quantitatively large and statistically robust effect of growth on the prospects of the candidates of the state incumbent parties to win elections. Specifically, we use the data on 422 candidates in the 2009 parliamentary elections and show that the candidates of incumbent parties in high-growth states have much better prospects of victory than those in low-growth states.
    Keywords: India, growth, elections, developing country, poverty
    Date: 2011–08
  3. By: Poonam Gupta (NIPFP, India); Arvind Panagariya (Columbia University)
    Abstract: In this paper we provide the first analysis of the relationship of growth to election outcomes in India. Using a comprehensive data set consisting of all candidates contesting the election, we also provide the first systematic quantitative analysis of the 2009 Lok Sabha elections. Our key result is that superior growth performance at the level of the state gives a definite advantage to the candidates of the state incumbent party in the constituencies of that state. Conversely, poor growth performance of a state is associated with poor electoral performance by the candidates of the state incumbent party in the constituencies of that state. We offer two additional results: personal characteristics such as education and wealth have at most a small impact on election outcomes; and, at least in the 2009 election, incumbency at all levels contributed positively to election prospects of a candidate.
    Keywords: India, Election outcomes, Economic performance, Incumbency
    Date: 2011–04
  4. By: Christian Roessler; Sandro Shelegia
    Abstract: In Rome, if you start digging, chances are you will nd things. We consider a famous complaint that justies the underdeveloped Roman metro system: \if we tried to build a new metro line, it would probably be stopped by archeological nds that are too valuable to destroy, so we would have wasted the money." Although this statement appears to be self-contradictory, we show that it can be rationalized in a voting model with diverse constituents. Even when there is a majority preference for a metro line, and discovery of an antiquity has the character of a positive option, a majority may oppose construction. We give sucient conditions for this ineciency to occur. One might think it arises from the inability to commit to nishing the metro (no matter what is discovered in the process). We show, however, that the inecient choice is made in voting over immediate actions precisely when there is no Condorcet winner in voting over contingent plans with commitment. Hence, surprisingly, commitment cannot really solve the problem. Our results extend to other common dynamic voting scenarios, such as the academic job market, which share the essential features of the Roman metro game.
    JEL: D70 H41 C70
    Date: 2012–03
  5. By: Tangian, Andranik
    Abstract: In economics and other social sciences, complex processes are often represented by numerical models of reality which more or less well reflect behavioral relationships and interactions. Such attempts are the subject of a lecture course 'Mathematical Theory of Democracy' by the author at the Faculty of Economics of the Karlsruhe Institute of Technology. One new result in this field is presented here in the form of a statistical test to decide whether a political party or coalition of parties represents a majority of the population. For this purpose, party or coalition positions on a sample of policy issues, like introduction of a legal nationwide minimum wage, privatization of railways, and others, are compared with the results of public opinion polls on the same issues. The test is based on estimating the statistical significance of the coincidence observed (i.e. how likely is the coincidence by chance) to the end of accepting or rejecting the representativeness hypothesis. The test is developed for single parties and coalitions of two or three parties. It is illustrated with an estimation of representativeness of five major German parties and their potential coalitions basing on the official party manifestos published before the German parliamentary elections 2009 and on relevant polls of public opinion. -- In der Ökonomie und den anderen Sozialwissenschaften wird immer wieder versucht, komplexe Prozesse der Wirklichkeit durch numerische Modelle abzubilden - was mit Abstraktionen für z. B. Verhaltens- und Wirkungsrelationen mehr oder weniger gut gelingt. Solche Versuche sind Gegenstand einer Vorlesungsreihe 'Mathematische Theorie der Demokratie' des Autors an der Wirtschaftswissenschaftlichen Fakultät des Karlsruhe Institut für Technologie. Ein neues Ergebnis in diesem Bereich wird hier vorgelegt in Form eines statistischen Tests, der entscheiden soll, ob eine politische Partei oder eine Parteienkoalition repräsentativ im Sinn der Bevölkerungsmehrheit agiert. Zu diesem Zweck wird die Übereinstimmung von Parteien- oder Koalitionspositionen mit Ergebnissen von Meinungsumfragen in der Bevölkerung verglichen, etwa zur Einführung eines bundesweiten gesetzlichen Mindestlohns oder der Privatisierung des Schienenverkehrs und anderem mehr. Der Test basiert auf der Einschätzung der statistischen Signifikanz der beobachteten Übereinstimmung (d.h. wie wahrscheinlich ist eine nur zufällige Übereinstimmung), um die Hypothese von der Repräsentativität der Politik zu akzeptieren oder abzulehnen. Die Studie spielt die Repräsentativität von einzelnen Parteien sowie von Zweier- und Dreier-Koalitionen durch. Darunter ist auch die Konstellation der fünf großen deutschen Parteien und ihrer potentiell möglichen Koalitionen auf der Basis der Bundestagswahl von 2009.
    Keywords: mathematical theory of democracy,statistical test,parties,coalitions,representativeness,Bernoulli matrices,sums of random vectors
    JEL: C12 C44 C63 D71 D72
    Date: 2012
  6. By: Felix Bierbrauer; Nick Netzer
    Abstract: We introduce intentions-based social preferences into a Bayesian mechanism design framework. If social preferences are observable, any tension between material efficiency, incentive compatibility, and voluntary participation can be resolved. Hence, the classical impossibility results that the conventional mechanism design literature has established are turned into possibility results. We also investigate different possibilities how to incorporate kindness sensations into assessments of welfare. For the case of unobservable social preferences, we suggest a notion of psychological robustness. Psychologically robust mechanisms can be implemented without any need to acquire information about the intensity of social preferences. We show that the mechanisms which have been the focus of the conventional mechanism design literature need to be modified only slightly to achieve psychological robustness.
    Keywords: Mechanism design, psychological games, social preferences, intentions, reciprocity, revelation principle
    JEL: C70 C72 D02 D03 D82 D86
    Date: 2012–03
  7. By: Uwe Dulleck (QUT); Berthold U Wigger (Karlsruhe Institute of Technology)
    Abstract: Fiscal restraints have been argued to force today’s governments to internalize the externalities that result from extensive borrowing on future electorates and governments as well as on other countries by causing fiscal instability. In this article we provide an alternative argument for fiscal restraints which is based on an agency perspective on government. A budget maximizing politician is better informed than the electorate about the necessary spending to ensure the states ability to provide services for the economy. In this respect, the politician is an expert in the meaning of the credence good literature. The electorate, being able to observe the budget but not the necessary level of spending, will reelect a government if its budget does not exceed a critical level. A fiscal restraint limits the maximum spending a government will choose if the reelection level is not sufficient to ensure the state’s ability to provide services to the economy. We determine when such a fiscal restraint improves voter welfare and discuss the role of the opposition in situations where very high levels of spending are required.
    Keywords: Electoral control, Fiscal restraints, Credence goods
    JEL: D82 H50 H61
    Date: 2012–02–13
  8. By: Paula Jaramillo; Çâatay Kayi; Flip Klijn
    Abstract: Abstract:We study a particular restitution problem where there is an indivisible good (land or property) over which two agents have rights: the dispossessed agent and the owner. A third party, possibly the government, seeks to resolve the situation by assigning rights to one and compensate the other. There is also a maximum amount of money available for the compensation. We characterize a family of asymmetrically fair rules that are immune to strategic behavior, guarantee minimal welfare levels for the agents, and satisfy the budget constraint.
    Date: 2012–03–11

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