nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2014‒12‒29
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Is Information Power? Using Mobile Phones and Free Newspapers during an Election in Mozambique By Jenny C. Aker; Paul Collier; Pedro C. Vicente
  2. Channeling the Say in Political Decision Bodies By Gersbach, Hans; Imhof, Stephan; Tejada, Oriol
  3. Democratic Redistribution and Rule of the Majority By Corneo, Giacomo; Neher, Frank
  4. Overlapping Political Budget Cycles in the Legislative and the Executive By Dirk Foremny; Ronny Freier; Marc-Daniel Moessinger; Mustafa Yeter
  5. "Read my Lips!" Experimental Evidence on the Effects of Electoral Competition on Shirking and Trust By Gari Walkowitz; Arne R. Weiss
  6. Policy outcomes of single and double-ballot elections By Massimiliano Ferraresi; Leonzio Rizzo; Alberto Zanardi
  7. Resolving Intertemporal Conflicts: Economics vs Politics By Antony Millner; Geoffrey Heal
  8. Electoral politics and regional development: assessing the geographical allocation of public investment in Turkey By Luca, Davide; Rodriguez-Pose, Andres
  9. Relational Warm Glow and Giving in Social Groups By Scharf, Kimberley; Smith, Sarah
  10. Does Secular Education Impact Religiosity, Electoral Participation and the Propensity to Vote for Islamic Parties? Evidence from an Education Reform in a Muslim Country By Resul Cesur; Naci Mocan
  11. Learning and coordinating in a multilayer network By Haydée Lugo; Maxi San Miguel
  12. Local funds and political competition: Evidence from the National Rural Employment Guarantee Scheme in India By Bhanu Gupta; Abhiroop Mukhopadhyay
  13. International Cooperation and Institution Formation: A Game Theoretic Perspective By OKADA, Akira
  14. Extended Families and Child Well-being By Daniel LaFave; Duncan Thomas

  1. By: Jenny C. Aker; Paul Collier; Pedro C. Vicente
    Abstract: African elections often reveal low levels of political accountability. We assess different forms of voter education during an election in Mozambique. Three interventions providing information to voters and calling for their electoral participation were randomized; an SMS-based information campaign, an SMS hotline for electoral misconduct, and the distribution of a free newspaper. To measure impact, we look at official electoral results, reports by electoral observers, behavioral and survey data. We find positive effects of all treatments on voter turnout. We observe that the distribution of the newspaper led to more accountability-based participation and to a decrease in electoral problems. JEL codes: D72, O55, P16
    Keywords: voter education, political economy, cell phones, newspapers, randomized experiment, field experiment, Mozambique, Africa
    Date: 2013
  2. By: Gersbach, Hans; Imhof, Stephan; Tejada, Oriol
    Abstract: We examine optimal procedures for public project provision, financing, and redistribution in democracy. We consider a large and heterogeneous decision body and show that first-best outcomes are obtained by a procedure that involves two proposal-making rounds, the right of the minority to move first, and a ban on subsidies for the agenda-setters. We explore the robustness of the result and consider applications of our rules. For instance, the result rationalizes those rules of democracies that grant minorities in the electorate or in parliament the right to initiate collective decisions on new project proposals. We further show that the above procedure constitutes the unique minimal form of political competition that ensures first-best outcomes.
    Keywords: constitutional design; majority rule; public project provision; subsidies
    JEL: D72 H40
    Date: 2014–09
  3. By: Corneo, Giacomo; Neher, Frank
    Abstract: Does redistribution in democracies cater to the will of the majority? We propose and apply a simple empirical strategy based on survey data to address that longstanding issue. Differently from previous evaluations of the median-voter theory, ours does not assume that voters are guided by pecuniary motives alone. We find that most democracies do implement the amount of redistribution advocated by the median voter and the probability to serve the median voter increases with the quality of democracy. However, we detect a non-negligible share of democracies that implement a minority-backed amount of redistribution. Such outcomes cannot be explained by political absenteeism of the poor. They can be explained by the electoral bundling of redistribution with values and rights issues.
    Keywords: democracy; income redistribution
    JEL: D3 D7 H1
    Date: 2014–07
  4. By: Dirk Foremny; Ronny Freier; Marc-Daniel Moessinger; Mustafa Yeter
    Abstract: We advance the literature on political budget cycles by testing separately for cycles in expenditures for elections in the legislative and the executive. Using municipal data, we can separately identify these cycles and account for general year effects. For the executive branch, we show that it is important whether the incumbent re-runs. To account for the potential endogeneity associated with this decision, we apply a unique instrumental variables approach based on age and pension eligibility rules. We find sizable and significant effects in expenditures before council elections and before joint elections when the incumbent re-runs.
    Keywords: Election cycles, municipal expenditures, council and mayor elections, instrumental variables approach
    JEL: H11 H71 H72 H74
    Date: 2014
  5. By: Gari Walkowitz (University of Cologne); Arne R. Weiss (University of Cologne)
    Abstract: We experimentally test whether electoral competition reduces shirking behavior by office-holders and increases citizens' trust. We hypothesize that competition increases campaign promises by office-holders, who feel committed to what they promise. Using a novel repeated multi-person investment-game with periodic elections, we indeed find that elected office-holders shirk less (i.e., they back-transfer more to citizens relative to investments) as compared to randomly appointed office-holders. Surprisingly, this effect cannot be explained through competition inflating the level of electoral promises. Nevertheless, promises do matter; in fact, they carry greater weight for the behavior of elected office-holders than for their randomly appointed counterparts. Elections also have a positive short-term effect on citizens' trust by cutting off both low and excessively high promises.
    Keywords: elections, promises, shirking, trust game
    JEL: D72 D02 D03 C71 C91
    Date: 2014–11–30
  6. By: Massimiliano Ferraresi (University of Ferrara, Italy); Leonzio Rizzo (University of Ferrara, Italy); Alberto Zanardi (University of Bologna, Italy)
    Abstract: We use data for all Italian municipalities from 2001-2007 to empirically test the extent to which two different electoral rules, which hold for small and large municipalities, affect fiscal policy decisions at local level. Municipalities with fewer than 15,000 inhabitants elect their mayors in accordance with a single-ballot plurality rule where only one list can support her/him, while the rest of the municipalities uses a run-off plurality rule where multiple lists can support her/him. Per capita total taxes, charges and current expenditure in large municipalities are lower than in small ones.
    Keywords: federal budget, double-ballot, coalition, list, taxes, expenditure
    JEL: H3 H21 H77
    Date: 2014–12
  7. By: Antony Millner; Geoffrey Heal
    Abstract: Intertemporal conflicts occur when a group of agents with heterogeneous time preferences must make a collective decision about how to manage a common asset. How should this be done? We examine two methods: an 'Economics' approach that seeks to implement efficient allocations, and a 'Politics' approach in which agents vote over consumption plans. We compare these methods by varying two characteristics of the problem: are agents' preferences known or are they hidden information, and can they commit to intertemporal collective plans or not? We show that if commitment is possible the Economics approach always Pareto dominates the Politics approach, in both full and hidden information scenarios. By contrast, without commitment the group may be better off if the Politics approach is adopted. We investigate when Politics trumps Economics analytically, and then apply our model to a survey of economists' views on the appropriate pure rate of time preference for project appraisal. For a wide range of model parameters, and under both full and hidden information, the Politics approach is supported by a majority of agents, and leads to higher group welfare.
    JEL: D9 H43 Q2
    Date: 2014–11
  8. By: Luca, Davide; Rodriguez-Pose, Andres
    Abstract: One of the most important decisions that governments face is how to allocate the public resources necessary for development, given each country’s budget constraints. According to the literature on the links between wealth and institutional performance, highly kleptocratic countries are expected to show higher levels of politicisation of the public purse. The article tests the extent to which socioeconomic criteria (equity and efficiency) or electoral concerns determined the geographical distribution of public investment in the 81 provinces of Turkey between 2004 and 2012. Our results show that, although electoral concerns mattered for the allocation, socioeconomic measures remained the most relevant predictors of investment. Moreover, in contrast to official regional development policy principles, the Turkish state tended to favour areas with a higher level of development over those with greater ‘socioeconomic need’. Our results therefore challenge much of the distributive politics literature, which has overly emphasised the role of pork-barrel in public policy-making. At the same time, they underline the need of paying more attention to the political economy of regional development strategies.
    Keywords: distributive politics; political geography; public investments; regional development policies; Turkey
    JEL: H76 O12 O53 R12 R58
    Date: 2014–06
  9. By: Scharf, Kimberley; Smith, Sarah
    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: charity; donations; fundraising; online giving; social groups; warm glow
    JEL: D64 H31 Z1
    Date: 2014–06
  10. By: Resul Cesur (University of Connecticut); Naci Mocan (Louisiana State University, NBER and IZA)
    Abstract: Using a unique survey of adults in Turkey, we find that an increase in educational attainment, due to an exogenous secular education reform, decreased women’s propensity to identify themselves as religious, lowered their tendency to wear a religious head cover (head scarf, turban or burka) and increased the tendency for modernity. We also find that education has a negative impact on women’s propensity to vote for Islamic parties. The impact of education on religiosity and voting preference is not working through migration, residential location or labor force participation. There is no statistically significant impact of education on men’s tendency to vote for Islamic parties and education does not influence the propensity to cast a vote in national elections for either men or women.
    Date: 2014–12
  11. By: Haydée Lugo (Departamento de Fundamentos del Análisis Económico II (Economía Cuantitativa) (Department of Foundations of Economic Analysis II (Quantitative Economics)), Facultad de Ciencias Económicas y Empresariales (Faculty of Economics and Business), Universidad Complutense de Madrid (Complutense University of Madrid)); Maxi San Miguel (IFISC (CSIC-UIB), Campus Universitat de les Illes Balears, 07122 Palma de Mallorca, Spain)
    Abstract: We introduce a two layer network model for social coordination incorporating two relevant ingredients: a) different networks of interaction to learn and to obtain a pay-off, and b) decision making processes based both on social and strategic motivations. Two populations of agents are distributed in two layers with intralayer learning processes and playing interlayer a coordination game. We find that the skepticism about the wisdom of crowd and the local connectivity are the driving forces to accomplish full coordination of the two populations, while polarized coordinated layers are only possible for all-to-all interactions. Local interactions also allow for full coordination in the socially efficient Pareto-dominant strategy in spite of being the riskier one
    Keywords: Doubt-based decisions, Coordination games, Multilayer network.
    JEL: D69 D79 C63
    Date: 2014
  12. By: Bhanu Gupta; Abhiroop Mukhopadhyay
    Abstract: The National Rural Employment Guarantee Scheme (NREGS) in India is one of the largest public employment programmes in the developing world. It was introduced by the central government led by Indian National Congress (INC). While its implementation is, in principle, based on demand for work from households, we investigate how political competition affects intra district allocation of funds under the scheme. Using longitudinal data on funds allocated to blocks and elections held at the block level and addressing the issue of endogeneity by focusing on a subsample of blocks which had close elections, we find that the funds allocated were 22 percent higher in blocks where the INC seat share was less than 39 percent in the previous election. We provide a mechanism by for the effect by showing that the results are only true when the MP of the district, a member of the body that approves the block fund allocation, is from INC.
    Date: 2014
  13. By: OKADA, Akira
    Abstract: Game theory presents a useful analytical tool for addressing the problem of international cooperation and the formation of institutions. We first examine four problems that must be solved to achieve international cooperation: the common knowledge problem, agreement problem, compliance problem, and participation problem. An institution is a mechanism used to enforce participants to cooperate for collective benefits. We consider a multi-stage game model of institution formation and show that a group of participants voluntarily forms an institution for international cooperation in a strict subgame perfect equilibrium if and only if the group satisfies the criticality condition. Some of the implications on the international frameworks that attempt to prevent the proliferation of nuclear weapons in East Asia are finally discussed.
    Date: 2014–12
  14. By: Daniel LaFave; Duncan Thomas
    Abstract: Whereas studies have established the intra-household distribution of resources affects allocation decisions, little is known about how these decisions are affected by the distribution of resources among co-resident and non co-resident extended family members. Drawing on theoretical models of collective decision-making, we use extremely rich data from Indonesia to establish that child health- and education-related human capital outcomes are affected by resources of extended family members who co-reside with the child and those who are not co-resident. Extended family members are not completely altruistic but their allocation decisions are apparently co-ordinated in a way that is consistent with Pareto efficiency.
    JEL: D1 I0 J13
    Date: 2014–11

This nep-cdm issue is ©2014 by Stan C. Weeber. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.