nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2015‒04‒11
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Voting behavior in Indonesia from 1999 to 2014 : religious cleavage or economic performance? By Higashikata, Takayuki; Kawamura, Koichi
  2. Do Politicians Change Public Attitudes? By Magnus Carlsson; Gordon B. Dahl; Dan-Olof Rooth
  3. The Partisan Effects of Voter Turnout: How Conservatives Profit from Rainy Election Days By Felix Arnold; Ronny Freier
  4. Making Democracy Work: Culture, Social Capital and Elections in China By Gerard Padró i Miquel; Nancy Qian; Yiqing Xu; Yang Yao
  5. The political economy of bank bailouts By Behn, Markus; Haselmann, Rainer; Kick, Thomas; Vig, Vikrant
  6. Greening up or not? The determinants of political parties’ environmental concern: an empirical analysis based on European data (1970-2008) By Michallet, Benjamin; Gaeta, Giuseppe Lucio; Facchini, Francois
  7. Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections By Do, Quoc-Anh; Lee, Yen-Teik; Nguyen, Bang Dang
  8. Can Farmers Create Efficient Information Networks? Experimental Evidence from Rural India By A. Stefano Caria; Marcel Fafchamps
  9. Are Results of Social- and Self-Image Concerns in Voluntary Contributions Game Similar? By Martin Daniel Siyaranamual
  10. Finding Your Right (or Left) Partner to Merge By Benjamin Bruns; Ronny Freier; Abel Schumann
  11. Linking Team Leaders’ Human & Social Capital to their Team Members’ Career Advancement By Malhotra, Pearl; Singh, Manjari
  12. Economic Growth and Property Rights on Natural Resources By Kirill Borissov; Mikhail Pakhnin
  13. Internal vs. core coalitional stability in the environmental externality game: A reconciliation By Tulkens, Henry
  14. Links of interest of Swiss MPs: a comprehensive dataset By Martin Péclat; Stefano Puddu

  1. By: Higashikata, Takayuki; Kawamura, Koichi
    Abstract: In this study, we examine the voting behavior in Indonesian parliamentary elections from 1999 to 2014. After summarizing the changes in Indonesian parties' share of the vote from a historical standpoint, we investigate the voting behavior with simple regression models to analyze the effect of regional characteristics on Islamic/secular parties' vote share, using aggregated panel data at the district level. Then, we also test the hypothesis of retrospective economic voting. The results show that districts which formerly stood strongly behind Islamic parties continued to select those parties, or gave preference to abstention over the parties in some elections. From the point of view of retrospective economic voting, we found that districts which experienced higher per capita economic growth gave more support to the ruling parties, although our results remain tentative because information on 2014 is not yet available.
    Keywords: Indonesia, Elections, Political parties, Politics, Religion, Election, Political party, Voting behavior, Electoral volatility, Effective number of parties, Religious cleavage voting, Retrospective economic voting
    JEL: D72
    Date: 2015–03
  2. By: Magnus Carlsson; Gordon B. Dahl; Dan-Olof Rooth
    Abstract: A large theoretical and empirical literature explores whether politicians and political parties change their policy positions in response to voters' preferences. This paper asks the opposite question: do political parties affect public attitudes on important policy issues? Problems of reverse causality and omitted variable bias make this a difficult question to answer empirically. We study attitudes towards nuclear energy and immigration in Sweden using panel data from 290 municipal election areas. To identify causal effects, we take advantage of large nonlinearities in the function which assigns council seats, comparing otherwise similar elections where one party either barely wins or loses an additional seat. We estimate that a one seat increase for the anti-nuclear party reduces support for nuclear energy in that municipality by 18%. In contrast, when an anti-immigration politician gets elected, negative attitudes towards immigration decrease by 7%, which is opposite the party's policy position. Consistent with the estimated changes in attitudes, the anti-nuclear party receives more votes in the next election after gaining a seat, while the anti-immigrant party experiences no such incumbency advantage. The rise of the anti-immigration party is recent enough to permit an exploration of possible mechanisms using several ancillary data sources. We find causal evidence that gaining an extra seat draws in lower quality politicians, reduces negotiated refugee quotas, and increases negative newspaper coverage of the anti-immigrant party at the local level. Our finding that politicians can shape public attitudes has important implications for the theory and estimation of how voter preferences enter into electoral and political economy models.
    JEL: D72 D8 L82
    Date: 2015–04
  3. By: Felix Arnold; Ronny Freier
    Abstract: In this short note, we use data from different elections in the German state of North-Rhine Westphalia between 1975 and 2010 to show that the social democrats generally profit from higher voter turnout at the expense of the conservatives. We deal with the endogeneity of voter turnout by using election day rain as an instrumental variable. Our particular contribution is the comparison of municipal and state elections.
    Keywords: Turnout, Partisan effects, rain, Germany, municipalities, elections
    JEL: D72 H70
    Date: 2015
  4. By: Gerard Padró i Miquel; Nancy Qian; Yiqing Xu; Yang Yao
    Abstract: This paper aims to show that culture is an important determinant of the effectiveness of formal democratic institutions, such as elections. We collect new data to document the presence of voluntary and social organizations and the history of electoral reforms in Chinese villages. We use the presence of village temples to proxy for culture, or more specifically, for social (civic) capital and show that their presence greatly enhances the increase in public goods due to the introduction of elections. These results support the view that social capital complements democratic institutions such as elections.
    JEL: H41 P16
    Date: 2015–04
  5. By: Behn, Markus; Haselmann, Rainer; Kick, Thomas; Vig, Vikrant
    Abstract: In this paper, we examine how the institutional design affects the outcome of bank bailout decisions. In the German savings bank sector, distress events can be resolved by local politicians or a state-level association. We show that decisions by local politicians with close links to the bank are distorted by personal considerations: While distress events per se are not related to the electoral cycle, the probability of local politicians injecting taxpayers' money into a bank in distress is 30 percent lower in the year directly preceding an election. Using the electoral cycle as an instrument, we show that banks that are bailed out by local politicians experience less restructuring and perform considerably worse than banks that are supported by the savings bank association. Our findings illustrate that larger distance between banks and decision makers reduces distortions in the decision making process, which has implications for the design of bank regulation and supervision.
    Keywords: political economy,bailouts,state-owned enterprises,elections
    JEL: G21 G28 D72 D73
    Date: 2015
  6. By: Michallet, Benjamin; Gaeta, Giuseppe Lucio; Facchini, Francois
    Abstract: Why do parties offer environmental policies in their political programs? While a number of papers examine the determinants of citizens’ pro-environmental behaviour, we know little about the extent to which political parties adjust their platform towards environmentalism. We investigate this process through data provided by the Manifesto Project Dataset (CMP) for 20 European countries over the period 1970-2008. Following the literature on public concern towards environment, we examine economic, environmental and political determinants. Our findings provide evidence that political parties’ environmental concern is strongly correlated with their political ideology and with country-level economic conditions.
    Keywords: environmental concern, environmental attitudes, political parties, electoral manifestos
    JEL: D78 Q58 Z13
    Date: 2015–03–30
  7. By: Do, Quoc-Anh; Lee, Yen-Teik; Nguyen, Bang Dang
    Abstract: Using the regression discontinuity design of close gubernatorial elections in the U.S., we identify a significant and positive impact of the social networks of corporate directors and politicians on firm value. Firms connected to elected governors increase their value by 3.89%. Political connections are more valuable for firms connected to winning challengers, for smaller and financially dependent firms, in more corrupt states, in states of connected firms’ headquarters and operations, and in closer, smaller, and active networks. Post-election, firms connected to the winner receive significantly more state procurement contracts and invest more than do firms connected to the loser.
    Keywords: close gubernatorial election; corruption; firm value; political connection; procurement; regression discontinuity design; social networks
    JEL: D72 D73 G28 G30 G34 G38 H57
    Date: 2015–04
  8. By: A. Stefano Caria; Marcel Fafchamps
    Abstract: We run an artefactual field experiment in rural India which tests whether farmers can create efficient networks in a repeated link formation game, and whether group categorization results in homophily and loss of network efficiency. We find that the efficiency of the networks formed in the experiment is significantly lower than the efficiency which could be achieved under selfish, rational play. Many individual decisions are consistent with selfish rationality and with a concern for overall welfare, but the tendency to link with the ‘most popular’ farmer in the network causes large efficiency losses. When information about group membership is disclosed, social networks become more homophilous, but not significantly less efficient. Networks play an important role in the diffusion of innovations in developing countries. If they are inefficiently structured, there is scope for development policies that support diffusion.
    Date: 2015
  9. By: Martin Daniel Siyaranamual (Department of Economics, Padjadjaran University)
    Abstract: Social interactions may encourage the cooperative behaviours by triggering either self-image concerns (when one sees others’ decisions without being seen) or social-image concerns (when one’s decision is seen by others). A laboratory experiment is designed to compare these two concerns directly, using a four-players finitely repeated public goods experiment on two directed star networks, self-image and social-image networks. The comparison of the players voluntary contributions in both types of networks reveals that their contributing behaviours are statistically indistinguishable. However, the players who belong to the self-image network are more willing to conform with the group behaviours, meaning that they will increase (reduce) the contributions if theirs are below (above) their groups average. Furthermore, I also find evidence that the contributing behaviours are more stable in the self-image networks than in the social-image network.
    Keywords: Social-image; Self-image; Directed network; Public good experiment
    JEL: C92 D19 H41 Z13
    Date: 2015–02
  10. By: Benjamin Bruns; Ronny Freier; Abel Schumann
    Abstract: We study political determinants of municipality amalgamations during a boundary reform in the German state of Brandenburg, which reduced the number of municipalities from 1,489 to 421. The analysis is conducted using data on the political decision makers as well as fiscal and socio-economic variables for the municipalities. We ask whether party representation in the town council influences the merger decision. To identify the effect, we follow a dual approach and make use of different stages in the reform process. First, municipalities were initially free to choose partners. In a later phase of the reform the state legislature forced municipalities to amalgamate. We can, thus, compare voluntary to forced units. Second, we simulate potential mergers from the map of municipalities and compare voluntary mergers to those simulated units. Both approaches show that political representation matters significantly during the voluntary stage of the merger reform.
    Keywords: municipality mergers, political decision makers probit analysis, geospatial analysis
    JEL: H10 H11 H77
    Date: 2015
  11. By: Malhotra, Pearl; Singh, Manjari
    Abstract: This paper looks at a conceptual model depicting the impact of high performing Team Leaders (TL) on their team members’ career advancement. Certain inherent factors present in high performing TLs are not usually linked to either the development or the career advancement of the team members; however their presence ensures that there is a positive impact. For this study those factors were classified into two main categories – a) Human Capital and b) Social capital. Using Social Learning Theory, one can say that high performing TLs provide modelling stimuli based on live experiences to their team members. Social modelling and learning in this context can further be understood using Social Network Theory. This impact is positively moderated by the strength of the TL-team member dyads, which can be theoretically examined through Leader-Membership exchange and supervisory support.
  12. By: Kirill Borissov; Mikhail Pakhnin
    Abstract: We consider two models of economic growth with exhaustible natural resources, exogenous technical progress and agents heterogeneous in their time preferences. In the first model we assume private ownership of natural resources. We show that every competitive equilibrium in this model converges to a balanced-growth equilibrium. The long-run extraction rate and the rate of growth are determined by the discount factor of the most patient agents. The second model assumes public ownership of natural resources. The resource revenue is equally distributed among agents, who choose the resource extraction rate by voting. We define an intertemporal voting equilibrium and show that it also converges to a balanced-growth equilibrium. The long-run voting equilibrium extraction rate and the rate of growth are determined by the median discount factor. Our results suggest that, other things being equal, the growth rate in the case of private ownership is higher than that of public ownership if the most patient agents do not constitute the majority in population; otherwise there is no difference in the growth rates between the two regimes. However, in the long run private ownership leads to a higher level of inequality than public ownership. If we take into account the detrimental effect of inequality on economic growth, then the public property regime will likely result in a higher long-run rate of growth compared to the private property regime.
    Keywords: economic growth, exhaustible resources, heterogeneous agents, voting
    JEL: Q32 E13 D91 O40
    Date: 2014–12–31
  13. By: Tulkens, Henry (Université catholique de Louvain, CORE, Belgium)
    Abstract: In a game with positive externalities, such as e.g. the standard environmental externality game used in the analysis of international environmental agreements, the solutions having the property of coalitional internal stability, when they exist, are compared in this paper with the solutions with the property of ?-core stability. Key instruments for that comparison are the notions of stable imputations, on the one hand, and on the other, of partial agreement Nash equilibria relative to a coalition as they result from unacceptable, i.e. unstable imputations. The relation between internal and core stable solutions is claimed to be one of compatibility, the former concept complementing the latter in the games where internally stable solutions exist. But this class of games is more restricted than the one for which only ?-core solutions exist. The argument is first presented graphically, then analytically. The relations here exhibited between core and internal forms of stability arouse some concluding thoughts on efficiency, coalitional stability, and on motivations in sharing the surplus generated by cooperation in international environmental issues
    Keywords: environmental externalities, game theory, coalitions, core, internal stability
    JEL: C7 H4 H87 Q5
    Date: 2014–11–30
  14. By: Martin Péclat (Institute of economic research IRENE, Faculty of Economics and Business, University of Neuchâtel, Switzerland); Stefano Puddu (Institute of economic research IRENE, Faculty of Economics and Business, University of Neuchâtel, Switzerland)
    Abstract: This study provides a comprehensive, accurate and ready-to-use dataset on the relationships between the members of the Swiss Parliament and groups of interests. We capture politicians' linkages exploiting (1) their mandates in legal entities; (2) the enterprises, associations or other organizations related to the people they invite for attending parliamentary sessions; and (3) their occupations. Using NOGA 2008 and SSCO 2000 codes, legal entities and professions are categorized into 28 categories. The dataset obtained by combining this information documents \textit{ties} intensity, which is measured by the number of occurrences an MP has in a particular category. The results show that there are substantial differences between the two chambers, and across the main parliamentary groups. The three types of information employed provide complementary information.
    Keywords: Groups of pressure, lobbies, special interests, Swiss Parliament, voting behaviour.
    JEL: D7 H7
    Date: 2015–03

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