nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2014‒12‒13
eleven papers chosen by
Stan C. Weeber, McNeese State University

  1. Voter Turnout and City Performance By Anna Lo Prete; Federico Revelli
  2. A Note on Values for Markovian Coalition Processes By Ulrich Faigle; Michel Grabisch
  3. The unsolved contradictions of the modernists. Economic policy expectations and political crisis in France 1978-2012 By Bruno Amable
  4. Incumbency Advantage in Non-Democracies By Georgy Egorov; Konstantin Sonin
  5. Military careers of politicians matter for national security policy By David Stadelmann; Marco Portmann; Reiner Eichenberger
  6. Unauthorized Immigration and Electoral Outcomes By Baerg, Nicole Rae; Hotchkiss, Julie L.; Quispe-Agnoli, Myriam
  7. The democratic output legitimacy of international organizations By Steffek, Jens
  8. Explaining the G7 and G10's influence on World Bank decisions: The role of formal and informal rules of governance By Arthur Foch
  9. Storable Votes and Judicial Nominations in the U.S. Senate By Alessandra Casella; Sébastien Turban; Gregory J. Wawro
  10. Generalised Trust, Institutional and Political Constraints on the Executive and Deregulation of Markets By Markus Leibrecht; Hans Pitlik
  11. Corporate groups: A German's European perspective By Tröger, Tobias H.

  1. By: Anna Lo Prete (Department of Economics and Statistics, University of Torino); Federico Revelli (Department of Economics and Statistics, University of Torino)
    Abstract: We study the impact of exogenous variation in Italian municipal elections'voter turnout rates on city performance scores and elected mayors' indicators of valence. First, we build a simple model of voluntary and costly expressive voting, where the relative weight of ideology and valence issues over voting costs determines how people vote, and if they actually turn out to vote. We show that the cost of voting depresses voter turnout, yet can raise the chances of selecting higher valence candidates and thereby improve government performance. Em- pirically, city performance is measured along a number of dimensions including a unique index of overall urban environmental quality, and mayors'valence is proxied by variables reflecting their professional experience and competence. The staggered nature of the municipal election schedule allows us to exploit exogenous variation in voter turnout rates through the 2000s due to the pres- ence of concomitant regional, general and European parliament elections, and to weather conditions (rainfall) on the election day. The results from a number of specifications and quality of policy-making indicators consistently point to a negative impact of voter turnout rates on the performance of cities and the valence of mayors.
    Keywords: local elections, voter turnout, urban environmental quality, weather
    JEL: D72 H72 C26
    Date: 2014–11
  2. By: Ulrich Faigle (Universität zu Köln - Mathematisches Institut); 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: The Shapley value is defined as the average marginal contribution of a player, taken over all possible ways to form the grand coalition $N$ when one starts from the empty coalition and adds players one by one. The authors have proposed in a previous paper an allocation scheme for a general model of coalition formation where the evolution of the coalition of active players is ruled by a Markov chain, and need not finish at the grand coalition. The aim of this note is to develop some explanations in the general context of time discrete stochastic processes, exhibit new properties of the model, correct some inaccuracies in the original paper, and give a new version of the axiomatization.
    Keywords: coalitional game; coalition formation process; Shapley value
    Date: 2013
  3. By: Bruno Amable (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, CEPREMAP - Centre pour la recherche économique et ses applications - Centre pour la recherche économique et ses applications, IUF - Institut Universitaire de France - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique)
    Abstract: This paper analyses the French political crisis since the late 1970s by investigating the links between the social structure and the economic policy expectations of the electorate. To this end, data on post-electoral survey are used to estimate structural models of political support to political parties for 1978 and 2012, and the estimation results are used to propose an analysis of the French crisis. The enduring French political crisis is found to be the expression of contradictions between the economic policies implemented by the successive governments and the existence of a dominant social bloc, i.e. a coalition of social groups that would politically support the dominant political strategy. Since 1978, both the right and the left have failed to find a solution to the contradictions between the policies they implemented and the expectations of their social bases, which are themselves inhabited by tensions and contradictions that evolve with the structure of French capitalism. The failure of all governing coalitions so far is a new expression of that of the "modernists" to take into account the expectations of the popular classes.
    Keywords: France; political crisis; political economy; social base
    Date: 2014–03
  4. By: Georgy Egorov; Konstantin Sonin
    Abstract: In elections that take place in a less-than-perfect democracy, incumbency advantages are different from those in mature democracies. The incumbent can prevent credible challengers from running, organize vote fraud, or even physically eliminate his main opponents. At the same time, formally winning the election does not guarantee staying in power. We present a unified model of elections and mass protests where the purpose of competitive elections is to reveal information about the relative popularity of the incumbent and the opposition. Citizens are heterogenous in their attitudes toward the dictator, and these individual preferences serve as private signals about the aggregate distribution of preferences; this ensures a unique equilibrium for any information the incumbent may reveal. We show that the most competent or popular dictators run in competitive elections, mediocre ones prevent credible opponents from running or cancel elections, and the least competent ones use outright repressions. A strong opposition makes competitive elections more likely but also increases the probability of repression. A totalitarian regime, where repression is cheaper, will have more repression, but even in the absence of repression, competitive elections will be rarer. A crueler, say, military, regime, where protesting is costly, makes repression less likely and, surprisingly, competitive elections more likely.
    JEL: D72 D82 H00
    Date: 2014–09
  5. By: David Stadelmann; Marco Portmann; Reiner Eichenberger
    Abstract: Do politicians with a military background decide differently on military affairs? We investigate the informative institutional setting of the Swiss conscription army. Politicians who served in the military have a higher probability of accepting pro-military legislative proposals, even when controlling for party affiliations and revealed preferences of constituents that politicians are supposed to represent. While conscription requires all able-bodied man to serve at least as soldiers, we can exploit variation in exposure to enforced and voluntary service. This allows us to provide indicative evidence that motivation for the military, instead of compulsory service, plays a substantial role for explaining legislative decisions on military affairs.
    Keywords: Military; Legislative voting; Constituents� preferences JEL Classification: J16; D72
    JEL: J16 D72
    Date: 2014–11
  6. By: Baerg, Nicole Rae; Hotchkiss, Julie L.; Quispe-Agnoli, Myriam
    Abstract: How do inflows of unauthorized immigrants shape elections? Political economy theories often yield competing predictions and mixed empirical results. The main hurdle of empirically evaluating the impact of unauthorized immigrants on election outcomes is finding reliable data that can measure unauthorized immigration flows over time. Using a unique methodology for identifying undocumented workers across counties in the state of Georgia in the United States, we find a positive relationship between the share of the county's workforce that is unauthorized and the share of votes going to Republicans in elections. Furthermore, we show that this effect is more pronounced for the presence of unauthorized immigrants than Hispanics; is stronger in counties with higher median household income; and is substantively larger in U.S. Congressional elections than Gubernatorial or Senatorial elections. We discuss which political economy theories are most consistent with this set of findings.
    Keywords: Elections, International Migration, Undocumented, Unauthorized
    JEL: J15
    Date: 2014–11
  7. By: Steffek, Jens
    Abstract: In this article I discuss output legitimacy as a category of normative analysis of international organizations (IOs). I first take issue with the widespread view that output legitimacy is just a synonym for organizational effectiveness or efficiency, and unrelated to democracy. Against this view, I argue that output legitimacy has an important democratic dimension. The touchstone of 'democratic output legitimacy' is the extent to which systems of governance generate results that cater to the public interest. This notion of democratic output legitimacy is then applied to IOs. The ability of IOs to safeguard a transnational public interest hinges on i) their ability to keep powerful (state and non-state) actors in check; ii) the epistemic quality of their decision-making procedures; iii) their respect for human and civil rights. Attaining these qualities may require shielding IOs from the input dimension of the international political process. I warn that some strategies to improve the democratic input legitimacy of IOs may enhance the power of strong nations over weaker ones, and of well-organized industry lobbies over other interests.
    Abstract: Der vorliegende Beitrag diskutiert Output-Legitimität als Kategorie normativer Analyse internationaler Organisationen (IOs). Dabei geht er zunächst auf eine weit verbreitete Ansicht ein, der zufolge Output-Legitimität lediglich ein Synonym für organisationale Effektivität oder Effizienz ist, ohne dabei einen Bezug zur Demokratie herzustellen. Im Gegensatz dazu wird hier die Auffassung vertreten, dass Output-Legitimität über eine bedeutende demokratische Dimension verfügt. Als Prüfstein demokratischer Output-Legitimität wird angelegt, inwiefern Governance-Systeme Ergebnisse generieren, die sich am öffentlichen Interesse orientieren. Anschließend wird dieses Verständnis demokratischer Output-Legitimität auf IOs angewendet. Die Fähigkeit von IOs, ein transnationales öffentliches Interesse abzusichern ist abhängig von i) ihrer Fähigkeit, einflussreiche (staatliche und nicht-staatliche) Akteure unter Kontrolle zu halten; ii) der epistemischen Qualität ihrer Entscheidungsverfahren; iii) der Achtung der Menschen- und Bürgerrechte durch die IO. Um dies zu erreichen, kann es erforderlich sein, IOs von der Input-Dimension des internationalen politischen Prozesses abzuschirmen. Der Beitrag warnt damit zugleich davor, dass einige Strategien zur Verbesserung der demokratischen Input-Legitimität von IOs die Macht stärkerer über schwächere Staaten oder gut organisierter Industrielobbys über andere Interessen vergrößern könnten.
    Keywords: international organizations,legitimacy,democratic legitimacy,output legitimacy,internationale Organisationen,Legitimität,demokratische Legitimität,Output-Legitimität
    Date: 2014
  8. By: Arthur Foch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-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
    Date: 2013–04
  9. By: Alessandra Casella; Sébastien Turban; Gregory J. Wawro
    Abstract: We model a procedural reform aimed at restoring a proper role for the minority in the confirmation process of judicial nominations in the U.S. Senate. We analyze a proposal that would call for nominations to the same level court to be collected in periodic lists and voted upon individually with Storable Votes, allowing each senator to allocate freely a fixed number of total votes. Although each nomination is decided by simple majority, storable votes make it possible for the minority to win occasionally, but only when the relative importance its members assign to a nomination is higher than the relative importance assigned by the majority. Numerical simulations, motivated by a game theoretic model, show that under plausible assumptions a minority of 45 senators would be able to block between 20 and 35 percent of nominees. For most parameter values, the possibility of minority victories increases aggregate welfare.
    JEL: D72 H11 K40
    Date: 2014–09
  10. By: Markus Leibrecht; Hans Pitlik (WIFO)
    Abstract: It is frequently claimed that high levels of generalised trust are conducive for economic reforms. In contrast, the "traditional view" on institutional and political constraints on the executive (IPCE) postulates that high IPCE tend to paralyse the decision-making process, thus blocking required policy changes. By stressing credibility issues of economic reforms and transaction cost for special interest groups, a more positive view however sees IPCE as potentially conducive to reforms. This paper empirically explores the significance of these claims for the case of economic deregulation. In particular, it elaborates on the hypotheses that IPCE do not impact on economic reforms in an environment of high generalised trust and that the positive impact of trust increases with the extent of IPCE. The results provide evidence in favour of the traditional view on IPCE. However, it is also shown that IPCE are an obstacle for economic policy liberalisation only in relatively low trusting environments. In contrast, a robust positive correlation of generalised trust with the extent of economic deregulation is isolated, and trust unfolds a particular strength with increasing levels of IPCE.
    Date: 2014–10–29
  11. By: Tröger, Tobias H.
    Abstract: This paper contrasts the recent European initiatives on regulating corporate groups with alternative approaches to the phenomenon. In doing so it pays particular regard to the German codified law on corporate groups as the polar opposite to the piecemeal approach favored by E.U. legislation. It finds that the European Commission's proposal to submit (significant) related party transactions to enhanced transparency, outside fairness review, and ex ante shareholder approval is both flawed in its design and based on contestable assumptions on informed voting of institutional investors. In particular, the contemplated exemption for transactions with wholly owned subsidiaries allows controlling shareholders to circumvent the rule extensively. Moreover, vesting voting rights with (institutional) investors will not lead to the informed assessment that is hoped for, because these investors will rationally abstain from active monitoring and rely on proxy advisory firms instead whose competency to analyze non-routine significant related party transactions is questionable. The paper further delineates that the proposed recognition of an overriding interest of the group requires strong counterbalances to adequately protect minority shareholders and creditors. Hence, if the Commission choses to go down this route it might end up with a comprehensive regulation that is akin to the unpopular Ninth Company Law Directive in spirit, though not in content. The latter prediction is corroborated by the pertinent parts of the proposal for a European Model Company Act.
    Keywords: Corporate Groups,Related Party Transactions,Tunneling,Corporate Governance,E.U. Corporate Law,Shareholder Rights Directive,Group Interest,Minority Shareholder Protection,Creditor Protection
    JEL: D23 D62 K22
    Date: 2014

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