New Economics Papers
on Collective Decision-Making
Issue of 2014‒07‒21
twenty papers chosen by
Stan C. Weeber, McNeese State University

  1. Solving the Inverse Power Problem in Two-Tier Voting Settings By Matthias Weber
  2. Experimentation in Democratic Mechanisms By Volker Britz; Hans Gersbach
  3. The 2014 EP Elections: A Victory for European Democracy? A Report on the LEQS Annual Event 2014 By Eri Bertsou
  4. Policy experimentation, political competition, and heterogeneous beliefs By Antony Millner; Hélène Ollivier; Leo Simon
  5. Incumbency Advantage at Municipal Elections in Italy: A Quasi-Experimental Approach By Marco Alberto De Benedetto
  6. Multi-Stage Voting and Sequential Elimination with Productive Players By Matis Nunez; Gabriel Desranges; Mathieu Martin
  7. Incumbency Effects in a Comparative Perspective: Evidence from Brazilian Mayoral Elections By Leandro De Magalhães
  8. Autonomous coalitions By Stéphane Gonzalez; Michel Grabisch
  9. Democracy: a Conflict Extinguisher or a Fuel for Terror? By Konstantin Yanovsky; Sergey Zhavoronkov; Ilia Zaycovetsky
  10. Rethinking spatial inequalities in development: the primacy of politics and power relations By Abdul-Gafaru Abdulai
  11. From Rebellion to Electoral Violence. Evidence from Burundi By Andrea Colombo; Olivia D'Aoust; Olivier Sterck
  12. A dynamic mapping of the political settlement in Ghana By Franklin Oduro; Mohammed Awal; Maxwell Agyei Ashon
  13. Central bank independence and political pressure in the Greenspan era By Veurink, Jan Hessel; Kuper, Gerard H.
  14. Property Rights and Democratic Values in pre-Classical Greece By Economou, Emmanouil Marios Lazaros; Kyriazis, Nicholas
  15. Bargaining through Approval By Matias Nunez; Jean-Francois Laslier
  16. Politics, informality and clientelism – exploring a pro-poor urban politics By Diana Mitlin
  17. Reform of the United Nations Security Council: Equity and Efficiency By Matthew Gould; Matthew D. Rablen
  18. Institutions, incentives and service provision: Bringing politics back in By Brian Levy; Michael Walton
  19. Relational Warm Glow and Giving in Social Groups By Sarah Smith; Kimberley Scharf
  20. The Democratic Window of Opportunity: Evidence from Riots in sub-Saharan Africa By Toke S. Aidt; Gabriel Leon

  1. By: Matthias Weber (CREED, University of Amsterdam)
    Abstract: There are many situations in which different groups make collective decisions by committee voting, where each group is represented by a single person. Theoretical concepts suggest how the voting systems in such committees should be designed, but these abstract rules can usually not be implemented perfectly. To find voting systems that approximate these rules the so called inverse power problem needs to be solved. I introduce a new method to address this problem in two-tier voting settings using the coefficient of variation. This method can easily be applied to a wide variety of settings and rules. After deriving the new method, I illustrate why it is to be preferred over more traditional methods.
    Keywords: inverse power problem, indirect voting power, two-tier voting, Penrose’s Square Root Rule
    JEL: D71 D72
    Date: 2014–02–10
  2. By: Volker Britz (ETH Zurich, Switzerland); Hans Gersbach (ETH Zurich, Switzerland)
    Abstract: We examine whether and how democratic procedures can achieve socially desirable public good provision in the presence of deep uncertainty about the benefits of the public good, i.e., when citizens are able to identify the distribution of benefits only if they aggregate their private information. Some members of the society, however, are harmed by socially desirable policies and try to manipulate information aggregation by misrepresenting their private information. We show that information can be aggregated and the socially desirable policy implemented under a new class of democratic mechanisms involving an experimentation group. Those mechanisms reflect the principles of liberal democracy, are prior{free, and involve a differential tax treatment of experimentation group members which motivates them to reveal their private information truthfully. Conversely, we show that standard democratic mechanisms with an arbitrary number of voting rounds but no experimentation do not generally lead to the socially desirable policy. Finally, we demonstrate how experimentation can be designed in such a way that differential tax treatments occur only off the equilibrium path.
    Keywords: Democratic Mechanisms; Experimentation; Public Goods; Voting; Information Aggregation
    JEL: D62 D72 H40
    Date: 2014–07
  3. By: Eri Bertsou
    Abstract: In the run up to the 2014 European Parliament elections, the new Spitzenkandidaten process and European-wide party campaigns fuelled expectations of strengthening democratic processes in Europe. At the same time, the anticipated surge of support for anti-establishment and Eurosceptic parties caused concerns among political scientists. This paper summarises and critically reviews the contributions presented at the LEQS Annual Event “The 2014 EP Elections: A Victory for European Democracy?” held on the 2nd of June 2014, a week after the final European elections results were announced. The panel discussed the implications of election results for democracy in the European Union and its Member States. The panelists were Dr Sara Hagemann, Dr Mareike Kleine and Professor Iain Begg from the LSE’s European Institute and the event was chaired by Professor Maurice Fraser.
    Keywords: European Parliament Elections, Turnout and Participation, Democratic Deficit, European Extreme Right, President of the Commission
    Date: 2014–07
  4. By: Antony Millner (London School of Economics and Political Science - LSE); Hélène Ollivier (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Leo Simon (University of California - Berkeley - Department of Agricultural and Resource Economics)
    Abstract: We consider a two period model in which an incumbent political party chooses the level of a current policy variable unilaterally, but faces competition from a political opponent in the future. Both parties care about voters' payoffs, but they have different beliefs about how policy choices will map into future economic outcomes. We show that when the incumbent party can endogenously influence whether learning occurs through its policy choices (policy experimentation), future political competition gives it a new incentive to distort its policies - it manipulates them so as to reduce uncertainty and disagreement in the future, thus avoiding the costs of competitive elections with an opponent very different from itself. The model thus demonstrates that all incumbents can find it optimal to 'over experiment', relative to a counterfactual in which they are sure to be in power in both periods. We thus identify an incentive for strategic policy manipulation that does not depend on self-serving behavior by political parties, but rather stems from their differing beliefs about the consequences of their actions.
    Keywords: Beliefs; Learning; Political Economy
    Date: 2014–05
  5. By: Marco Alberto De Benedetto (Department of Economics, Mathematics & Statistics, Birkbeck)
    Abstract: We analyze the incumbency effect on a candidate’s electoral prospects using a large data set on Italian municipal elections held from 1993 to 2011. We apply a non-parametric Sharp Regression Discontinuity Design that compares candidates who barely win an election to those who barely lose, exploiting the fact that incumbency status changes discontinuously at the threshold of margin of victory of zero. We find that incumbents are more likely to win the competition compared to their challengers at the Italian municipal elections. The results are robust to different specifications and estimation strategies with excellent balance in observable characteristics. Also, the effect of interest seems to be larger in magnitude for municipalities located in the North of Italy compared to southern municipalities.
    Keywords: Incumbency Status; Political Participation; Sharp RDD.
    JEL: D72 D78 J45
    Date: 2014–07
  6. By: Matis Nunez; Gabriel Desranges; Mathieu Martin (CNRS- Université de Cergy-Pontoise, THEMA; Université de Cergy-Pontoise, THEMA; Université de Cergy-Pontoise, THEMA)
    Abstract: This paper analyzes a sequential voting mechanism that eliminates at each round one candidate, until only one of them is left (the winner). The candidates are the voters and they only differ across their skill level. The payoff allocated to the winner depends on the sequence of elimination of the players’ skills, the rest of the players receiving a payoff of zero. We fully characterize the equilibria of the game with two skills. The winnermust be a high-skilled player if there is an initial majority of strong types. On the contrary, a high-skilled player might win with an initial majority of weak players independently of the size of the majority. For an arbitrary number of types, if some type of candidates form a strict majority at the first stage, the winner belongs either to the majoritarian type or to a more skilled one.
    Keywords: strategic voting, backward induction, dynamic voting.
    JEL: C7 D7
    Date: 2014
  7. By: Leandro De Magalhães
    Abstract: High rerunning rates among incumbents and among the two major parties, allow studies of US incumbency advantage to bypass the selection problem of who chooses to rerun. In countries where rerunning is not widespread among individuals or parties, estimation using methods developed for the US may result in a sample selection bias. In countries with party switching, there may be a disconnect between party and individual estimates. This paper proposes a definition of incumbency advantage that is valid for countries that present any of these characteristics and that is valid for cross-country comparison: the effect of incumbency for an individual politician on the unconditional probability of winning. I illustrate the issues raised in this paper with evidence from Brazilian Mayoral elections.
    Keywords: Incumbency Advantage, Political Careers, Regression Discontinuity Design, Mayors, Brazil.
    JEL: D70 D72 J00
    Date: 2014–06
  8. By: Stéphane Gonzalez (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We consider in this paper solutions for TU-games where it is not assumed that the grand coalition is necessarily the final state of cooperation. Partitions of the grand coalition, or balanced collections together with a system of balancing weights interpreted as a time allocation vector are considered as possible states of cooperation. The former case corresponds to the c-core, while the latter corresponds to the aspiration core or d-core, where in both case, the best configuration (called a maximising collection) is sought. We study maximising collections and characterize them with autonomous coalitions, that is, coalitions for which any solution of the d-core yields a payment for that coalition equal to its worht. In particular we show that the collection of autonomous coalitions is balanced, and that one cannot have at the same time a single possible payment (core element) and a single possible configuration. We also introduce the notion of inescapable coalitions, that is, those present in every maximising collection. We characterize the class of games for which the sets of autonomous coalitions, vital coalitions (in the sense of Shellshear and Sudhölter), and inescapable coalitions coincide, and prove that the set of games having a unique maximising coalition is dense in the set of games.
    Keywords: Cooperative game; core; balancedness; c-core; aspiration core; coalition formation; autonomous coalitions
    Date: 2014–05
  9. By: Konstantin Yanovsky (Gaidar Institute for Economic Policy); Sergey Zhavoronkov (Gaidar Institute for Economic Policy); Ilia Zaycovetsky (Samuel Neaman Institute for Advanced Studies in Science and Technology)
    Abstract: Today’s exaggerated, deferent focus on democracy (the ability of voters by means of elections to change the government, to cause power rotation) has led to some overvaluations of the institutions associated with this type of government and their ability to cure society of all ills. Thus, some people recommend resolving acute violent conflicts (civil wars) by holding free elections. The present article studies two instances when attempts were made to entrench free elections in the absence of institutions formed in advance to protect persons and property. We have shown that in situations of violent conflict free elections may improve the position of the violence perpetrators – the roving bandits – at the cost of worsening the predicament of the population whom the bandits control. The instances considered lead to the question of the possibility in principle of constructing an effective democratic mechanism in the absence of minimal guarantees provided in advance to protect the lives and property of the voters.
    Keywords: Democracy, violent conflict, bandit competition, basic individual rights
    JEL: D74 D78
    Date: 2014
  10. By: Abdul-Gafaru Abdulai
    Abstract: This paper offers a political explanation to the problem of spatial inequality in developing countries, paying particular attention to the implications of patronage politics and inter-elite power relations for the spatial distribution of public goods. After showing that existing explanations of spatial inequality are at best partial, the paper argues that prospects for overcoming spatial inequalities in the clientelist-driven political environments of developing countries depend substantially on the ways in which elites from lagging regions are incorporated into ruling coalitions, and how such forms of incorporation shape their influence over resource allocation decisions and policy agenda more broadly. The paper also departs from much of the existing literature on spatial inequality by emphasising the need to understand 'powerlessness' on the part of lagging regions as stemming not necessarily from their political exclusion from political decision making structures, but also from their incorporation into such structures on terms that potentially underpin their poverty. Based on this argument, the paper proposes a new framework for exploring the deeper and more structural underpinnings of spatial inequality in developing countries.
    Date: 2014
  11. By: Andrea Colombo; Olivia D'Aoust; Olivier Sterck
    Abstract: We aim at understanding the triggers of electoral violence, which spoiled 80% ofelections in Africa during the last decades. We focus on Burundi, a country wherepolls were organized in 2010, only few months after the end of a long-lasting civilwar. We find that an acute polarization between ex-rebels’ groups is highly conduciveto electoral violence. In particular, we predict a five-fold increase in electoralviolence between the lowest- and highest-polarized municipality. However, neitherethnic nor political cleavages significantly determine such electoral malpractices.These results are robust to numerous specifications. We therefore argue that policiessupporting the transition of ex-rebel groups from warfare to the political arenashould be reinforced.
    Keywords: civil war; electoral violence; polarization; demobilization; burundi
    JEL: D74 O11 O17 O55
    Date: 2014–07
  12. By: Franklin Oduro; Mohammed Awal; Maxwell Agyei Ashon
    Abstract: Ghana displays a number of features of democratic institutionalization and is considered a success story of democratic transformation in Africa. This paper examines the quality of Ghana's political transformation and the nature of its institutions. It seeks to identify the driving power relations and 'ideas' which are shaping Ghana's political and economic development. Following Levy (2012), this involves first framing Ghana as a particular type of competitive clientelist political settlement. The paper also brings agency to the fore by identifying the key actors and members of the ruling coalition that reproduce the political settlement. The final section presents some hypotheses concerning the direct influence of the political settlement on development in Ghana now and in the future. It concludes that in the short- to medium-term Ghana's democratic politics and development will continue to be informed and shaped by a competitive clientelist electoral politics. In the medium- to long-term, however, with the increasingly competitive nature of elections and the continuous expansion of the public space, the character of the political settlement in Ghana will create the incentive structure for the ruling coalition to adopt sustainable policies and strategies towards inclusive development.
    Date: 2014
  13. By: Veurink, Jan Hessel; Kuper, Gerard H. (Groningen University)
    Abstract: This paper investigates whether political pressure from incumbent presidents influences the Fed?s monetary policy during the period that Alan Greenspan was the chairman of the United States Federal Reserve Board. A modified Taylor rule with time-varying coefficients will be used to test wellknown political-economic theories of Nordhaus (1975) and Hibbs (1987). The findings suggest that the Fed under Greenspan did not create election driven monetary cycles, but was less inflation avers with a Democratic president.
    Date: 2014
  14. By: Economou, Emmanouil Marios Lazaros; Kyriazis, Nicholas
    Abstract: In the present essay we introduce the concept of macroculture as a complex of mutually supporting values, norms and beliefs in various areas of human activity, like religion, war, politics, sports etc. in a model. Then, we analyse how some macrocultures that are favorable or the “precondition” for the emergence of democracy and institutions develop, in particular property rights that foster economic development. We analyze this for an extended period that covers Later Bronze Age to Archaic Greece (approximately 1250-510 BC), as being the historical case where such a macroculture favorable to democracy and stable property rights first emerged. We argue that the nature of the Greek polytheist religion (12 gods) depicts a proto-democratic side of the ancient Greek society. We then provide a comparison of the Greek case, in relation to the other, mainly oriental societies, as far as the level of participation in decision making procedures of these societies is concerned. Our main findings indicate that during the last period of the Mycenaean world, as well as during the Geometric and Archaic age periods, the emergence of various elements of macroculture, in religion, warfare, sports and city-state environment evolved into similar proto-democratic values, leading thus to the establishment of democracy as a political phenomenon in Classical Greece, with Athens being the most well-known historical case.
    Keywords: Macroculture, Democracy, Property rights, Ancient Greece.
    JEL: K11 N44 Z12 Z13
    Date: 2014–06–06
  15. By: Matias Nunez; Jean-Francois Laslier (CNRS- Université de Cergy-Pontoise, THEMA; CNRS- Paris SChool of Economics)
    Abstract: The paper considers two-person bargaining under Approval Voting. It first proves the existence of pure strategy equilibria. Then it shows that this bargaining method ensures that both players obtain at least their average and median utility level in equilibrium. Finally it proves that, provided that the players are partially honest, the mechanism triggers sincerity and ensures that no alternative Pareto dominates the outcome of the game.
    Keywords: Bargaining, Approval Voting, Efficiency, Partial Honesty
    JEL: C78 D7
    Date: 2014
  16. By: Diana Mitlin
    Abstract: This paper explores what we have learnt about how to instigate, negotiate or otherwise secure pro-poor government in towns and cities of the global South. With competition for scarce resources, the processes of urban development, and specifically the acquisition of land and basic services, are intensely political. While the nature of urban poverty differs, there is a consistent set of needs related to residency in informal settlements; tenure is insecure and there is a lack of access to basic services, infrastructure, and sometimes other entitlements. Households and communities have to negotiate these collective consumption goods in a context in which political relations are primarily informal, with negotiations that take place away from the transparent and accountable systems of 'modern' government. Clientelist bargaining prevails. Much of the existing literature is polarised, either critiquing clientelism for its consequences, or arguing that it has been dismissed without any grounded assessment of what might take its place and any considered analysis of what it has managed to deliver. In this paper I explore how networks and federations of the urban poor seeking to access secure tenure and basic services have sought to advance their cause and the interests of their members. These organised collectives recognise that they have to challenge clientelist practice; however leaders also recognise that, given existing power relations, they have to work from within to change the realities of clientelism. Their own relative powerlessness means that confrontation is not an effective strategy. To strengthen their influence, they have to make common cause with those in need across the city building a unified and aware movement, and they have to establish their own legitimacy as agencies operating in the public interest and towards the common good. As and when they gain an increased influence, they seek greater flexibility from the city bureaucracy and to reduce the hierarchical highly vertical relations between the urban poor and the political elite. To maintain and extend their advances towards a pro-poor politics, they act to strengthen public accountabilities.
    Date: 2014
  17. By: Matthew Gould; Matthew D. Rablen
    Abstract: Twenty years of negotiations over reform of the United nations Security Council (UNSC) are yet to bear fruit. We use recent advances in the theory of a priori voting power to present a formal quantitative appraisal of the "structural reforms" contained within eleven current reform proposals, and the separate effect of expansion of the UNSC membership. Only two reform proposals, the EU acting as a single entity, or a weakening of the veto power for permanent members, robustly dominate the status quo against our measures of equity and efficency. Several proposals may actually worsen the issues they ostensibly claim to resolve.
    Date: 2014–05
  18. By: Brian Levy; Michael Walton
    Abstract: This paper outlines a conceptual framework for analyzing the politics of service provisioning. The approach uses as its point of departure the 'accountability framework' of relations between citizens, clients and service providers, laid out in the World Bank's 2004 World Development Report. That framework highlights two distinctive ways of governing public service provision – a performance-oriented top-down hierarchy with goals shaped by the overall political process, and participatory approaches which link clients and providers. But a focus on these two polar approaches deflects attention from the vast spaces in the middle: the many countries where governance falls well short of 'good', but is better than disastrous; and the many layers within a specific sector in-between the top-levels of policymaking and the service provision front line. A central hypothesis of this paper is that these in-between spaces are major domains of political, stakeholder and organizational behaviour. These are sources both of within-country and across-country variation in the quality of public service provision and also provide the locus where many opportunities for achieving gains in performance are to be found.
    Date: 2013
  19. By: Sarah Smith; Kimberley Scharf
    Abstract: We study charitable giving within social groups. Exploiting a unique dataset, we establish three key relationships between social group size and fundraising outcomes: (i) a positive relationship between group size and the total number of donations; (ii) a negative relationship between group size and the amount given by each donor; (iii) no relationship between group size and the total amount raised by the fundraiser. We rule out classic free-riding to explain these relationships since the number of social group members is only a subset of total contributors. Instead, the findings are consistent with the notion that giving in social groups is motivated by “relational” warm glow.
    Keywords: Online giving; Fundraising; Social groups; Donations; Charity; Warm glow
    JEL: D64 Z1 H31
    Date: 2014–06
  20. By: Toke S. Aidt; Gabriel Leon
    Abstract: We show that drought-induced changes in the intensity of riots lead to moves towards democracy in sub-Saharan Africa, and that these changes are often a result of concessions made as a result of the riots. This provides evidence that low-intensity conflict can have a substantial short-run impact on democratic change, and supports the window of opportunity hypothesis: droughts lead to an increase in the threat of conflict, and incumbents often respond by making democratic concessions.
    Keywords: Riots, drought, transitions, democracy, autocracy.
    JEL: D7 P16
    Date: 2014–06–26

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