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on Collective Decision-Making |
| By: | Federico Boffa (Institut d'Economia de Barcelona); Giacomo A.M. Ponzetto (Centre de Recerca en Economia Internacional - CREi); Amedeo Piolatto (Universidad de Alicante) |
| Abstract: | This paper studies fiscal federalism when voter information varies across regions. We develop a model of political agency with heterogeneously informed voters. Rent-seeking politicians provide public goods to win the votes of the informed. As a result, rent extraction is lower in regions with higher information. In equilibrium, electoral discipline has decreasing returns. Thus, political centralization reduces aggregate rent extraction. When the central government provides public goods uniformly across space, the model predicts that a region’s benefits from centralization are decreasing in its residents’ information. We test this prediction using panel data on pollutant emissions and newspaper circulation across the United States. The 1970 Clean Air Act centralized environmental policy at the federal level. In line with our theory, we find that centralization induced a faster decrease in pollution in less informed states. |
| Keywords: | Political centralization, Government accountability, Imperfect information, Interregional heterogeneity, Elections, Environmental policy, Air pollution. |
| JEL: | D72 D82 H73 H77 Q58 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2013-03&r=cdm |
| By: | Nehring, Klaus; Pivato, Marcus |
| Abstract: | What is the meaning of "majoritarianism" as a principle of democratic group decision-making in a judgement aggregation problem, when the propositionwise majority view is logically inconsistent? We argue that the majoritarian ideal is best embodied by the principle of "supermajority efficiency" (SME). SME reflects the idea that smaller supermajorities must yield to larger supermajorities. We show that in a well-demarcated class of judgement spaces, the SME outcome is generically unique. But in most spaces, it is not unique; we must make trade-offs between the different supermajorities. We axiomatically characterize the class of "additive majority rules", which specify how such trade-offs are made. This requires, in general, a hyperreal-valued representation. |
| Keywords: | judgement aggregation; majority rule; majoritarian; hyperreal; Condorcet |
| JEL: | D71 |
| Date: | 2013–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:46721&r=cdm |
| By: | Francesco Lancia; Alessia Russo |
| Abstract: | This paper proposes a dynamic politico-economic theory of intergenerational contracts, whose driving force is the intergenerational con?ict over government spending. Embedding a repeated probabilistic voting setup in a standard OLG model with human capital accumulation, we ?nd that the empowerment of elderly constituencies is key in order to enforce productive policies. The paper characterizes the Markov-perfect equilibrium of the voting game, as well as the welfare properties. The main results are: (i) the existence of a Markov-perfect equilibrium which attains a growth- enhancing intergenerational contract does not require pre-commitment through the establishment of long-lasting institutions; (ii) the political sustainability of the intergenerational contract relies solely on the politico-economic fundamentals that are payo¤-relevant for future constituents; (iii) the implementation of pork-barrel transfers does not necessarily crowd out productive public investment; and, (iv) the greater the degree of intergenerational con?icts over the government spending, the lower the ine¢ ciency. |
| JEL: | D72 E62 H23 H30 H53 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:1304&r=cdm |
| By: | Savikhin , Anya; Sheremeta , Roman |
| Abstract: | We experimentally investigate simultaneous decision-making in two contrasting environments: one that encourages competition (lottery contest) and one that encourages cooperation (public good game). We find that simultaneous participation in the public good game affects behavior in the contest, decreasing sub-optimal overbidding. Contributions to the public good are not affected by participation in the contest. The direction of behavioral spillover is explained by differences in strategic uncertainty and path-dependence across games. Our design allows us to compare preferences for cooperation and competition. We find that in early periods, there is a negative correlation between decisions in competitive and in cooperative environments. |
| Keywords: | cooperation, competition, public goods, contests, experiments, behavioral spillover |
| JEL: | C72 C91 |
| Date: | 2012–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:46809&r=cdm |
| By: | Arthur Foch (Centre d'Economie de la Sorbonne) |
| Abstract: | This paper contributes to the literature examining the role played by donors' interests within International Financial Institutions by showing how the G7 and G10 countries manage to influence World Bank (WB) decisions to satisfy their interests. It demonstrates that the G7 and G10 meets the two conditions required to influence WB decisions: they form a unified group (1) possessing sufficient power (2). The main thrust of the argument is that the G7 and G10 provide opportunity for big countries to come together and unify their preferences regarding WB decisions. Referring to a new dataset I find conjunctions between the G7's declarations and the WB's decisions, primarily reflecting the G7's unity and influence over the WB. Then, relying on interviews with WB officials and an examination of WB formal and informal rules of governance, I show how G7 instructions provided outside the WB through declarations are relayed within to impact decisions. |
| Keywords: | World Bank, governance, informality, G10, power, influence. |
| JEL: | O16 O19 F35 F59 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:13035&r=cdm |
| By: | Fabian Winter (Max Planck Institute of Economics, Jena) |
| Abstract: | Cooperation norms often emerge in situations, where the long term collective benefits help to overcome short run individual interests, for instance in repeated Prisoner's Dilemma (PD) situations. Often, however, there are different paths to cooperation, benefiting different kinds of actors to different degrees. This leads to payoff asymmetries even in the state of cooperation, and consequently can give rise to normative conflicts about which norms should be in place. This norm-coordination problem will be modeled as a Battle of the Sexes game (BoS) with different degrees of asymmetry in payoffs. We combine the PD and the BoS to the 3×3 Battle of the Prisoners Dilemma (BOPD) with several asymmetric cooperative and one non-cooperative equilibria. Bame theoretical and "behavioral" predictions are derived about the kind of norms that are likely to emerge under different shadows of the future and degrees of asymmetry and tested in a lab-experiment. Our experimental data show that game theory fairly well predicts the basic main effects of our experimental manipulations, but "behavioral" predictions perform better in describing the equilibrium selection process of emerging norms. |
| Keywords: | Social norms, normative conflict, Prisoner's Dilemma, coordination, experiment |
| JEL: | Z13 C92 C72 D31 |
| Date: | 2013–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-016&r=cdm |