New Economics Papers
on Collective Decision-Making
Issue of 2013‒01‒07
twelve papers chosen by

  1. Voting Islamist or Voting secular? An empirical analysis of Voting Outcomes in “Arab Spring” Egypt By May Elsayyad; Shima'a Hanafy
  2. Voting functions in the EU-15 By Linda Gonçalves Veiga
  3. Voters Prefer More Qualified Mayors, but Does It Matter for Public Finances?: Evidence for Germany By Ronny Freier; Sebastian Thomasius
  4. Influential Opinion Leaders By Jakub Steiner; Colin Stewart
  5. Political Competition and Policy Choices: The Evidence From Agricultural Protection By Jan Fałkowski; Alessandro Olper
  6. Do More Powerful Interest Groups have a Disproportionate Influence on Policy? By Zara Sharif; Otto H. Swank
  7. Ownership, control and market liquidity. By Hamon, Jacques; Ginglinger, Edith
  8. Growing groups, cooperation, and the rate of entry By Eva Ranehill; Frédéric Schneider; Roberto A. Weber
  9. (Tax evasion) power to the people: does "early democratization" increase the size of the informal sector? By Adam, Antonis; Kammas, Pantelis
  10. State Power and Clientelism: Eight Propositions for Discussion By Fox, Jonathan A.
  11. Coalition Formation and Environmental Policies in International Oligopoly Markets By Cavagnac, Michel; Cheikbossian, Guillaume
  12. In search of consensus: The role of accounting in the definition and reproduction of dominant interests. By Farjaudon, Anne-Laure; Morales, Jérémy

  1. By: May Elsayyad (Max Planck Institute for Tax Law and Public Finance); Shima'a Hanafy (University of Marburg)
    Abstract: This paper empirically studies the voting outcomes of Egypt’s first parliamentary elections after the Arab Spring. In light of the strong Islamist success in the polls, we explore the main determinants of Islamist vs. secular voting. We identify three dimensions that affect voting outcomes at the constituency level: the socio-economic profile, the economic structure and the electoral institutional framework. Our results show that education is negatively associated with Islamist voting. Interestingly, we find significant evidence which suggests that higher poverty levels are associated with a lower vote share for Islamist parties. Later voting stages in the sequential voting setup do not exhibit a bandwagon effect.
    Keywords: Voting Outcomes, Arab Spring, Political Islam, Sequential Voting
    JEL: D72 D78 O53 P26 Z12 Z13
    Date: 2012
  2. By: Linda Gonçalves Veiga (Universidade do Minho - NIPE)
    Abstract: This paper examines if the European integration process, by transferring policy instruments to supra-national authorities, has affected voters’ evaluations of governments’ economic performance at electoral periods. The analysis is implemented on a panel of 15 EU countries, from 1970 to 2011. Results suggest that before the Maastricht Treaty, citizens held incumbents responsible for GDP growth, and for the evolution of inflation, particularly when measured relative to the EU average. After the Maastricht Treaty, only fiscal policy variables show up as statistically significant. The capacity to control the budget deficit appears as the main determinant of electoral results, especially during the current economic crisis.
    Keywords: Vote functions, EU-15, economics, deficits
    JEL: H6 D72 E6 F02
    Date: 2012
  3. By: Ronny Freier; Sebastian Thomasius
    Abstract: This paper studies the importance of politician's qualification, in terms of education and experience, for fiscal outcomes. The analysis is based on a large panel for 2,031 German municipalities for which we have collected information on municipal budgets as well as the election results and qualification levels of mayoral candidates. We principally use a Regression Discontinuity Design focusing on close elections to estimate causal effects. We find that mayors with prior experience in office indeed tend to reduce the level of local public debt, lower total municipal expenditures and decrease the local taxes. In contrast, the education level of the mayor exerts no significant effects on the overall fiscal performance of the municipality. The results are partly surprising as both education and experience are shown to matter greatly in the electoral success of mayoral candidates.
    Keywords: Mayoral elections, regression discontinuity design, politician's education and experience, fiscal outcomes
    JEL: D72 H11 H72
    Date: 2012
  4. By: Jakub Steiner; Colin Stewart
    Abstract: We present a two-stage coordination game in which early choices of experts with special interests are observed by followers who move in the second stage. We show that the equilibrium outcome is biased toward the experts' interests even though followers know the distribution of expert interests and account for it when evaluating observed experts' actions. Expert influence is fully decentralized in the sense that each individual expert has a negligible impact. The bias in favor of experts results from a social learning effect that is multiplied through a coordination motive. We show that the total effect can be large even if the direct social learning effect is small. We apply our results to the diffusion of products with network externalities and the onset of social movements.
    Keywords: voting; coordination; experts
    JEL: D72 D82 D83
    Date: 2012–10
  5. By: Jan Fałkowski (Faculty of Economic Sciences and Centre for Economic Analyses of Public Sector (CEAPS), University of Warsaw); Alessandro Olper (Università degli Studi di Milano and LICOS)
    Abstract: This paper investigates whether political competition plays an important role in determining the level of agricultural protection. In order to do so, we exploit variation in political and economic data from 74 developing and developed countries for the post-war period. We use two measures of political competition: one that captures the extent to which political power can be freely contested regardless of election results and one based on vote share at last parliamentary elections. Our results, based on static and dynamic panel estimators, show unambiguously that the level of support for agriculture is the higher, the higher is the level of political competition.
    Keywords: political competition, constitutional rules, agricultural distortions
    JEL: D72 D78 F13 O13 P16
    Date: 2012
  6. By: Zara Sharif (Erasmus University Rotterdam); Otto H. Swank (Erasmus University Rotterdam)
    Abstract: Decisions-makers often rely on information supplied by interested parties. In practice, some parties have easier access to information than other parties. In this light, we examine whether more powerful parties have a disproportionate influence on decisions. We show that more powerful parties influence decisions with higher probability. However, in expected terms, decisions do not depend on the relative strength of interested parties. When parties have not provided information, decisions are biased towards the less powerful parties. Finally, we show that compelling parties to supply information destroys incentives to collect information.
    Keywords: information collection; communication; interest groups; decision-making
    JEL: D72 D78 D82 H39
    Date: 2012–12–05
  7. By: Hamon, Jacques; Ginglinger, Edith
    Abstract: We examine how ownership concentration and the separation of ownership and control affect secondary-market liquidity in France. We find that firms with a large insider blockholder exhibit significantly lower liquidity. However, different methods of enhancing control affect liquidity in different ways. Pyramid structures impair market liquidity. Double voting right shares, a French specific means of control enhancement rewarding long-term shareholders and restraining insiders from trading their shares, lead to increased liquidity, especially for family firms. Our results suggest that by using double voting rights to enhance their control, a transparent decoupling mechanism, rather than pyramids, an opaque decoupling mechanism, blockholders offer higher secondary-market liquidity to outside investors.
    Keywords: Ownership; Blockholders; Long-term shareholders; Ultimate control; Pyramids; Voting rights; Liquidity; Bid-ask spread;
    JEL: G34 G32 G14
    Date: 2012
  8. By: Eva Ranehill; Frédéric Schneider; Roberto A. Weber
    Abstract: We study the stability of voluntary cooperation to entry by individuals coming from groups with low cooperation rates. We investigate the effect of varying entry rates on sustained cooperation. In a finitely-repeated public good game with economies of scale, we initially allot participants to small, “High-cooperation” groups and large, “Low-cooperation” groups. We then study movement from the “Low” groups into the “High” groups under two main treatment conditions that vary the rate of movement. We find that fast growth disrupts efficient public good provision; but when moved in slowly, members of “failed” groups adapt to contribution levels in cooperative groups. This behavior is generally consistent with a belief-driven explanation similar to Fischbacher and Gächter (2010). In a third condition, in which participants in the “High” group decide on the rate of entry by voting, growth generally occurs slowly but stops short of the efficient group size. Interestingly, newcomers, not incumbents, veto further entry. We conclude that the right rate of entry can greatly facilitate cooperation, but that overly cautious expansion may limit the realization of potential gains from growth.
    Keywords: Voluntary cooperation, experiment, public good game
    JEL: C92 C72
    Date: 2012–12
  9. By: Adam, Antonis; Kammas, Pantelis
    Abstract: This paper examines the political economy forces that lead to the creation of the informal sector in an economy. Our analysis treats unofficial economy as an endogenous outcome that may be produced by the conflict for redistribution between different groups of agents. The crucial factor in our analysis is whether the extension of voting franchise takes place before the consolidation of a strong state characterized by solid institutions (this is what we call "early democratization"). When this happens, distributional conflict affects the quality of institutions since the political elites have an incentive to decide weaker institutions which allows them to mitigate the tax burden fallen on their income. In the empirical section, we examine whether countries that experienced “early democratization” are characterized by relatively larger informal sectors. Our findings provide strong empirical evidence in favor of the implication driven by our theoretical model.
    Keywords: Redistribution; Inequality; Tax Evasion
    JEL: H10 H23 H26
    Date: 2012–12–20
  10. By: Fox, Jonathan A.
    Keywords: Political Science and Government
    Date: 2012–01–01
  11. By: Cavagnac, Michel; Cheikbossian, Guillaume
    Abstract: This paper analyzes the problem of international environmental cooperation as a coalition formation game. For this purpose, we develop a simple model with three countries of unequal size. Strate- gic interactions between those countries come from the imperfect competition among producers in global markets and from the transboundary pollution generated by the ?rms. To capture e¢ ciency gains from coordinating policies, countries can join a coalition and sign an international environmental agreement. The equilibrium coalition structure then depends on the country-size asymmetry and on the marginal environmental damage. Interestingly, we show that the grand coalition is less likely to emerge as an equi- librium outcome once two countries form a subcoalition. Furthermore, the further enlargement of the initial subcoalition can be blocked either by the outsider or by the insiders.
    Keywords: Tax coordination, Transboundary Pollution, International Trade, Oligopoly, Coalition Formation
    JEL: F55 H23
    Date: 2012–04
  12. By: Farjaudon, Anne-Laure; Morales, Jérémy
    Abstract: This article examines the role of accounting in the manufacture of consensus. Consensus building is often considered a central value for rational decision-making and management. However, more than a democratic confrontation of vantage points, the quest for consensus is a way to discourage conflict and resistance. Our main argument is that accounting and consensus play central roles in processes of definition and the social reproduction of dominant interests. Accounting acts to promote some stakes and strategies (and silence others), as if they were collective and disinterested, which makes them more powerful in debates that deny struggles and asymmetries in positions of power, as well as increases legitimacy by creating an illusion of participation. We illustrate these processes through a case study in which we document the intersection between two fields of knowledge, marketing and accounting, that compete for a monopoly on the definition of value and the ability to speak for the organisation. This analysis draws on Bourdieu's conceptualisation of symbolic domination to highlight how powerful actors secure influence while avoiding contestation. Accounting produces symbolic violence that consolidates asymmetries in positions of power by shaping what is consensual and what is not so that dominant interests are reproduced with the consent of those who have most to lose in the process.
    Keywords: Consensus; Symbolic domination; Brand valuation; Intellectual capital; Management control;
    JEL: M31 M41
    Date: 2012

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