nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2015‒04‒19
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Electoral competition and endogenous political institutions: Quasi-experimental evidence from Germany By Baskaran, Thushyanthan; da Fonseca, Mariana Lopes
  2. Local Electoral Rewards from Centralized Social Programs: Are Mayors Getting the Credit? By Lourdes Rodríguez-Chamussy
  3. Is Happiness a Predictor of Election Results? By George Ward
  4. Decision making in politics and economics: 6. Empirically constructing the German political spectrum By Tangian, Andranik S.
  5. Citizen Candidates and Voting Over Incentive-Compatible Nonlinear Income Tax Schedules By Craig Brett; John A Weymark
  6. CONSULTATIVE DEMOCRACY AND TRUST By Francesco Bogliacino; Laura Jiménez; Gianluca Grimalda
  7. Relational Warm Glow and Giving in Social Groups By Sarah Smith; Kimberley Scharf
  8. The citizen-candidate model with imperfect policy control By Aytimur, R. Emre; Boukouras, Aristotelis; Schwager, Robert
  9. Authority and Centrality: Power and Cooperation in Social Dilemma Networks By Ramalingam, Abhijit; Rojo Arjona, David; Schram, Arthur; Van Leeuwen, Boris
  10. Socio-technical transitions and policy change - Advocacy coalitions in Swiss energy policy By Jochen Markard; Marco Suter; Karin Ingold
  11. Loss Aversion in Politics By Alberto Alesina; Francesco Passarelli
  12. Identifying the source of incumbency advantage through an electoral reform By da Fonseca, Mariana Lopes
  13. Do We Need More Women in Power? Gender, Public Policy, and Development in Bolivia By Patricia Yáñez-Pagans
  14. State-business relations in the smaller gulf monarchies -- the role of business actors in the decision-making process By Valeri, Marc
  15. Why are heterogenous communities inefficient? Theory, history and an experiment By David Hugh-Jones and; Carlo Perroni

  1. By: Baskaran, Thushyanthan; da Fonseca, Mariana Lopes
    Abstract: Do established parties change political institutions to disadvantage smaller, nonmainstream parties if the latters´ electoral prospects improve? We study this question with a natural experiment from the German federal state of Hesse. The experiment is the abolishment of an explicit electoral threshold (the so called "five percent hurdle") for local elections in 2001 by the Hessian state parliament. The abolishment improved the electoral prospects of smaller parties at local elections, but local politicians from large mainstream parties had the ability to adjust municipal political institutions in such a way as to counteract the increased competitiveness of smaller parties. One such institutional adjustment is to reduce the size of the local council and thereby raise implicit electoral thresholds. Using a dataset that covers all 426 Hessian municipalities over the period 1989-2011, we document with a difference-indiscontinuity design that municipalities where the electoral competitiveness of smaller parties improved more because of the abolishment of the explicit threshold, reduced their council size more. Hence, established parties appear to erect barriers to entry by adjusting political institutions once new political formations become viable electoral alternatives.
    Keywords: electoral rules,electoral thresholds,political competition
    JEL: D70 D72 D78
    Date: 2015
  2. By: Lourdes Rodríguez-Chamussy
    Abstract: This paper uses variation in the timing of the Mexican antipoverty program's introduction across municipalities to identify its impact on the share of votes for the local incumbent party. Evidence is found that voters reward the mayor's party for the central benefit to their constituencies, accounting on average for 2.8 additional percentage points in the share of votes for the mayor's party. The analysis of party alignment shows that this electoral effect cannot be explained as a reward for the federal incumbent in local elections. Alternative explanations are examined, and it is shown that the effect for the local incumbent is heterogeneous for the different political parties and varies with characteristics of the municipalities, being stronger where the mayor faced more contestable elections, in capital cities of the states and in predominantly urban, more educated and relatively wealthier municipalities. Findings are consistent with the hypothesis that politicians have incentives to engage in signaling strategies to link themselves to the transfer program.
    Keywords: Municipal management, Elections, Municipal elections, Municipal elections, Voting, Government transfers
    Date: 2015–01
  3. By: George Ward
    Abstract: Is it in politicians' interest to focus policy on subjective well-being (SWB)? Many governments and international organisations have recently begun to measure progress at least partly in terms of the population's SWB or "happiness". This paper investigates the extent to which citizens themselves judge national success in such terms. Using cross-country panel data, the analysis shows that the electoral fate of governing parties is associated not only with the state of the macroeconomy—as a substantial literature on 'economic voting' suggests—but also with the electorate's wider well-being. A country's aggregate level of SWB is able to account for more of the variance in government vote share than standard macroeconomic variables. This is consistent with a simple political agency model, and has implications for the incentives faced by politicians to act in the interests of voters.
    Keywords: Subjective well-being, political agency, elections
    JEL: I31 D72
    Date: 2015–04
  4. By: Tangian, Andranik S.
    Abstract: The advocates of modern western democracy promote the viewpoint that the class division of the society is becoming outdated. We attempt to disprove this statement with an example of 28 German parties who participated in the 2013 federal election. The official party positions on 38 policy issues are considered and the parties are identified with vectors of this 38-dimensional policy space. The statement in question, that there is no predominant political axis, would imply that the party vectors are scattered homogeneously, making a ball-shaped cloud of 'observations'. However, the Prime Component Analysis (PCA) shows that the party vectors constitute a thin ellipsoid whose two longest diameters cover 83.4% of the total variance. The consequent party ordering is the left-right axis rolled in a circumference, making the far-left and far-right ends meet. Basing on this empirical evidence, we conclude that neither the left-right characterization of parties nor the class opposition is outdated. Next, it is shown that the electoral success is highly correlated with the number of party members, but not with the party's capacity to represent public opinion. For this purpose, a representativeness index is defined which measures how well the party policy profiles match with the results of 36 public opinion polls on 36 out of the 38 policy issues mentioned. To reveal representativeness trends, the parties are ordered contiguously, with neighboring parties having close policy profiles. This contiguous ordering is found with four optimization methods: (1) dimensionality reduction by means of PCA, (2) traveling salesman problem to construct the shortest chain of proximate parties, (3) least squares to minimize the distances between parties with close profiles, and (4) largest squares to maximize the distances between parties with opposite profiles. The most salient trend is observed for the circular left-right party ordering found with the PCA. The best representatives of public opinion are the moderate left, next come the far-left and the far-right, and the least representative are moderate right (conservative) parties. All of these imply the following warning. Since the collapse of communism damaged significantly the image of the left, their election today looks hardly probable, but the power can be taken by the next-representative far-right parties who already represent public opinion better than the currently governing conservative party.
    Date: 2015
  5. By: Craig Brett (Mount Allison University); John A Weymark (Vanderbilt University)
    Abstract: Majority voting over the nonlinear tax schedules proposed by a continuum of citizen candidates is considered. The analysis extends the finite-individual model of Röell (unpublished manuscript, 2012). Each candidate proposes the tax schedule that is utility maximal for him subject to budget and incentive constraints. Each of these schedules is a combination of the maxi-min and maxi-max schedules along with a region of bunching in a neighborhood of the proposer's type. Techniques introduced by Vincent and Mason (1967, NASA Contractor Report CR-744) are used to identify the bunching region. As in Röell's model, it is shown that individual preferences over these schedules are single-peaked, so the median voter theorem applies. In the majority rule equilibrium, marginal tax rates are negative for low-skilled individuals and positive for high-skilled individuals except at the endpoints of the skill distribution where they are typically zero.
    Keywords: bunching, citizen candidates, ironing, majority voting, nonlinear income taxation
    JEL: H2 D7
    Date: 2014–09–26
  6. By: Francesco Bogliacino; Laura Jiménez; Gianluca Grimalda
    Abstract: We report experimental results from three Colombian villages concerning the impact of a voting mechanism on interpersonal trust and trustworthiness. The vote is purely consultative in that participants are asked to declare in a secret ballot the most “appropriate” plan of action for individuals involved in a “Trust Game”. The plan of action that is most voted is then publicly announced. The mechanism is unbinding, as only the aggregate result of the voting is disclosed and it has no bearing on individual decisions. In spite of the strategic irrelevance of the announcement, we observe an increase in both trust and trustworthiness after the announcement is carried out, in comparison to the baseline case where no voting takes place.
    Keywords: Experiments, Trust, Voting.
    JEL: A13 C93 B49 D63
    Date: 2015–04–08
  7. 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
  8. By: Aytimur, R. Emre; Boukouras, Aristotelis; Schwager, Robert
    Abstract: We present a modified citizen-candidate model where the implemented policy arises from a compromise between the government and an unelected external power. We show that the two-candidate equilibria of this model differ significantly from the original: however small the cost of candidacy, the distance between the candidates´ policies, both ideal and implemented, remains strictly above a threshold. Moreover, there may be one-candidate equilibria in which the only candidate is not the one most preferred by the median voter. Both results point out that, even with negligible cost of entry, there are limits to strategic delegation.
    Keywords: elections,polarization,strategic delegation,bureaucracy,foreign influence
    JEL: D72 D78
    Date: 2015
  9. By: Ramalingam, Abhijit; Rojo Arjona, David; Schram, Arthur; Van Leeuwen, Boris
    Abstract: We investigate the effects of power on cooperation in repeated social dilemma settings. Groups of five players play either multi-player trust games or VCM-games on a fixed network. Power stems from having the authority to allocate funds raised through voluntary contributions by all members and/or from having a pivotal position in the network (centrality). We compare environments with and without ostracism by allowing players in some treatments to exclude others from further participation in the network. Our results show that power matters but that its effects hinge strongly on the type involved. Reminiscent of the literature on leadership, players with authority often act more cooperatively than those without such power. Nevertheless, when possible, they are quickly ostracized from the group. Thus, this kind of power is not tolerated by the powerless. In stark contrast, centrality leads to less cooperative behavior and this free riding is not punished; conditional on cooperativeness, players with power from centrality are less likely to be ostracized than those without. Hence, not only is this type of power tolerated, but so is the free riding it leads to.
    Keywords: power, cooperation, networks, public goods
    JEL: C91 D02 D03 H41
    Date: 2015–03
  10. By: Jochen Markard (Swiss Federal Institute of Technology Zurich, Department of Management, Technology and Economics, Group for Sustainability and Technology, Weinbergstrasse 56/58, 8092 Zurich, Switzerland); Marco Suter (Swiss Federal Institute of Technology Zurich, Department of Management, Technology and Economics, Group for Sustainability and Technology, Weinbergstrasse 56/58, 8092 Zurich, Switzerland); Karin Ingold (Institute of Political Science, University of Bern, Fabrikstrasse 8, Bern 3012, Switzerland; Swiss Federal Institute of Aquatic Science and Technology, EAWAG, Überlandstrasse 133, Dübendorf 8600, Switzerland; Oeschger Centre for Climate Change Research, University of Bern, Zähringerstrasse 25, Bern 3012, Switzerland)
    Abstract: Policies and politics are an integral part of socio-technical transitions but have not received much attention in the transitions literature so far. Our paper addresses this gap with a study on actors and coalitions in Swiss energy policy making. Drawing on the advocacy coalition framework, we develop first ideas about the interplay of socio-technical systems and policy systems. Then we investigate empirically how coalitions have changed and whether there are indications for major policy change. Our results show that advocacy coalitions in Switzerland have largely remained stable despite the Fukushima shock. However, heterogeneity of beliefs has increased and in 2013, even a majority of actors expressed their support for the energy transition – an indication that major policy change might be ahead. It seems that in socio-technical transitions policy change is not just a matter of core beliefs. Instead, changes in the policy issue and in the actor base – both as a consequence of technological change – play a role as well. We make suggestions how the advocacy coalition framework can inform analysis and theory building in transition studies.
    Keywords: Politics, policy change, advocacy coalition framework, energy transition, energy policy, Switzerland
    Date: 2015–04
  11. By: Alberto Alesina; Francesco Passarelli
    Abstract: We study loss aversion in majority voting. First, we show a status quo bias. Second, loss aversion implies a moderating effect. Third, in a dynamic setting, the effect of loss aversion diminishes with the length of the planning horizon of voters; however, in the presence of a projection bias, majorities are partially unable to understand how fast they will adapt. Fourth, in a stochastic environment, loss aversion yields a significant distaste for risk, but also a smaller attachment to the status quo. The application of these results to a model of redistribution leads to empirically plausible implications.
    JEL: H0
    Date: 2015–04
  12. By: da Fonseca, Mariana Lopes
    Abstract: This study relies on a constitutional reform introducing term limits at the local elections level in Portugal as a natural experiment to estimate incumbency advantage in mayoral elections. It stresses the distinction between partisan and personal incumbency advantage using data on six local elections in 278 homogenous municipalities from 1993 to 2013. The analysis is based on two quasi-experimental methods, the RD and diff-in-disc designs, that allow for credible inference upon the source and magnitude of the incumbency advantage. Main contributions include one of the first estimates of partisan incumbency advantage in the literature and the use of a novel method in its estimation. Results show that whilst the returns to incumbency accruing to the candidate are positive and significant, there is no evidence of a significant partisan incumbency advantage. In addition, robustness test point to a potential role of term limits in causing political turnover.
    Keywords: incumbency advantage,local politics,electoral reform
    JEL: D70 D72 D78
    Date: 2015
  13. By: Patricia Yáñez-Pagans
    Abstract: This paper evaluates the impacts of increasing female representation in Bolivian municipal councils on public policy choices and welfare outcomes. By combining detailed administrative panel data on municipal expenditures and revenues together with electoral data, an innovative regression discontinuity design (RDD) is applied. As opposed to previous studies, the RDD approach proposed is unique since it is implemented to systems of proportional representation. Findings indicate that municipalities with women councilors devote more resources to social investments. In particular, women politicians prioritize education, health, and environmental protection expenditures giving less attention to infrastructure investments. The impacts of higher female representation appear only some years after the elections, highlighting the importance of training and experience. Despite changes in public policy choices there is weak evidence on the links with final welfare outcomes.
    Keywords: Gender Equality, Women, Elections, Public expenditure, Public policy choices, Female representation, Municipal councils, Public policy choices, Gender equality, Bolivia
    Date: 2014–12
  14. By: Valeri, Marc
    Abstract: The Arab monarchies of the Gulf have been undergoing striking socio-economic changes caused by the ending of the rent-based welfare state model on which they had largely relied since the 1950s. In this perspective, this paper aims at examining the comparative role of local business communities in affecting the orientations and the outcomes of the policies implemented during the period of high oil prices in the 2000s. This paper pays a special attention to the impact of the Arab Spring on the state-business relations in two of the smaller Gulf monarchies (Bahrain and Oman).
    Keywords: Gulf Countries, Bahrain, Oman, Business, Decision making, Elite, State, Monarchy, Royal family, Politics, Persian Gulf, Middle East, Political economy, Arab Spring
    JEL: D72 H32 O53
    Date: 2015–03
  15. By: David Hugh-Jones and (University of East Anglia); Carlo Perroni (University of Warwick)
    Abstract: We examine why heterogenous communities may fail to provide public goods. Current work characterizes sanctioning free-riders as an under-supplied public good. We argue that often free-riders can be punished by the coordinated action of a group. This punishment can be profitable, and need not be undersupplied. But the power to expropriate defectors can also be used to expropriate outgroups. Heterogenous societies may be inefficient because minorities, rather than free-riders, are expropriated. Even if this is not so, groups’ different beliefs about the reasons for expropriation may make the threat of punishment less effective at preventing free-riding. We illustrate our theory with evidence from California mining camps, contemporary India, and US schools. In a public goods experiment using minimal groups and a profitable punishment institution, outgroups were more likely to be punished, and reacted differently to punishment than ingroup members.
    Keywords: Group Coercion, Social Heterogeneity
    Date: 2015

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