nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒02‒04
ten papers chosen by
Stan C. Weeber, McNeese State University

  1. Collective Action Abroad: How Foreign Investors Organize Evidence from Foreign Business Associations In the Russian Federation By Michael Rochlitz
  2. Television and voting in Catalonia By Ivan Mauricio Duran
  3. Transparency in Parliamentary Voting By Benesch, Christine; Bütler, Monika; Hofer, Katharina E.
  4. Red versus Blue: Do Political Dimensions Influence the Investment Preferences of State Pension Funds? By Andreas Hoepner; Lisa Schopohl;
  5. Can a single theory explain coordination? An experiment on alternative modes of reasoning and the conditions under which they are used By Marco Faillo; Alessandra Smerilli; Robert Sugden
  6. How are Foreign Policy Decisions Made in China? By Linda Jakobson and Ryan Manuel
  7. Majority Runoff Elections: Strategic Voting and Duverger's Hypothesis By Laurent Bouton; Gabriele Gratton
  8. Citizens‘ preferences for inter-municipal cooperation in rural areas: evidence from a survey in three Hessian counties By Christian Bergholz; Ivo Bischoff
  9. The political economy of food price policy:A synthesis By Derrill D. Watson II
  10. The Knowledge Transmission Mechanism and Austerity By Simon Wren-Lewis

  1. By: Michael Rochlitz (National Research University Higher School of Economics)
    Abstract: What role can collective action by foreign investors play in an environment characterized by incomplete institutions? We study this question by looking on foreign business associations in the Russian Federation. By interviewing 17 foreign business associations and conducting an online survey of their member firms, we find that business associations play an important welfare-enhancing role in providing a series of support and informational services. However, they do not play a significant role in lobbying the collective interests of their member firms, especially in the current political context in Russia where since the start of the Ukraine crisis the business community seems to have suffered a general loss of influence on political decision making
    Keywords: collective action; business associations; lobbying
    JEL: D71 D72
    Date: 2016
  2. By: Ivan Mauricio Duran (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: To what extent can be electoral results in Catalonia explained by the exposure of individuals to television? This paper sheds light on this question by looking into the effect of TV3 on two distinguished political outcomes in the 1984 Catalan Parliamentary election. The outcomes of interest are voter turnout and the vote share of Convergència i Unió (CiU), one of the strongest political forces in Catalonia who has mainly driven the channel since its creation. We resort to a natural experiment based on the geographically differentiated expansion of TV3 in Catalonia. Using a Difference-in-Differences Kernel matching method, we found that the introduction of TV3 caused an increase both in the voter turnout and the CiU vote share in the 1984 Catalan parliamentary elections.
    Keywords: Media, Elections, Voting behaviour, Natural experiment, Difference-in-Differences
    JEL: L82 D72 C99
    Date: 2016–01
  3. By: Benesch, Christine; Bütler, Monika; Hofer, Katharina E.
    Abstract: We use a change in the voting procedures of one of the two chambers of the Swiss parliament to explore how transparency affects the voting behavior of its members. Until 2013, the Council of States (Ständerat) had voted by a show of hands. While publicly observable at the time of the vote, legislators' decisions could only be verified ex post through the time-consuming screening of online videos. In 2014, halfway through the legislative period, the chamber switched to electronic voting. Since then, the individual votes of legislators have become more transparent and observable as their votes are now recorded electronically and, in some cases, published online. Our analysis is based on individual voting behavior in all final passage votes during the 2011-2015 legislative period. In a difference-in-difference framework, the larger chamber, the National Council (Nationalrat), serves as a control group. Not only have the voting procedures of the National Council remained unchanged since 2007 but also the legislative texts on which both chambers vote are the same. This unique framework makes it possible to estimate the causal effects of voting procedures on legislators' choices. Since the voting system reform, members of the Council of States are significantly less likely to deviate from their party line. Our results reflect the increased observability of legislators' votes and the greater conformity pressure exerted by political parties, as easier monitoring enables them to enforce discipline among their members.
    Keywords: Voting; Parliament; Transparency; Parties; Party discipline; Principal agent theory
    JEL: D72 D80 L88
    Date: 2016–02
  4. By: Andreas Hoepner (ICMA Centre, Henley Business School, University of Reading;); Lisa Schopohl (ICMA Centre, Henley Business School, University of Reading;);
    Abstract: Studying the equity holdings of 31 U.S. state pension funds, we find evidence that the political leaning of their members and political pressures by state politicians impact funds’ investment decisions. State pension funds from states with Democratic leaning members tend to tilt their portfolios more strongly towards companies that perform well on environmental, social and governance (ESG) issues, as compared to their Republican counterparts. This tendency is especially strong if the majority of the state government are Democrats. State pension funds intensify their ESG investing when their members’ political leaning changes from Republican to Democratic, and vice versa, suggesting that these funds align their ESG investment approach with the political leaning of their members. Finally, we find that the state pension funds in our sample neither under- nor outperform on their politically-motivated ESG holdings, implying that their ESG preferences are unlikely financially-driven.
    Keywords: ESG, political pressures, political values, portfolio decisions, state pension funds, SRI
    Date: 2015–05
  5. By: Marco Faillo (University of Trento); Alessandra Smerilli (PFSE-Auxilium); Robert Sugden (University of East Anglia)
    Abstract: We investigate experimentally the conditions under which bounded best response and collective optimality reasoning are used in coordination games. Using level-k and team reasoning theories as exemplars, we study games with three pure-strategy equilibria, two of which are mutually isomorphic. The third is always team-optimal, but whether it is predicted by level-k theory differs across games. We find that collective optimality reasoning is facilitated if the collectively optimal equilibrium gives more equal payoffs than the others, and is inhibited if that equlibrium is Pareto-dominated by the others, considered separately. We suggest that coordination cannot be explained by a single theory.
    Keywords: team reasoning, level-k theory, coordination games
    JEL: C7 C9
    Date: 2016–01–18
  6. By: Linda Jakobson and Ryan Manuel
    Abstract: The growing number of actors involved in China's international activities has led to fractured authority in foreign policy decision-making. Actors vie for the attention of senior officials to promote their interests on any specific issue. As a result, decision making is often a slow process; there are multiple channels of information, and actors appeal to public opinion to support their claims. Since 2012, Xi Jinping has taken charge of all foreign policy related decision-making bodies in what appears to be an attempt to improve coordination of interest groups. A slight shift to a more personified foreign policy than during the Hu or Jiang eras has also taken place. In this paper, we describe how foreign policy decisions should be made in China according to formal rules; next, we take into account the reality of how the Chinese political system deals with China's evolving international role. We conclude by assessing the risks of fragmentation, on the one hand, and Xi's efforts to recentralise foreign policy, on the other hand.
    Keywords: Chinese foreign policy, Xi Jinping administration, foreign policy decision-making, Chinese foreign policy actors, Chinese political system, Chinese political fragmentation
    Date: 2016–02–02
  7. By: Laurent Bouton; Gabriele Gratton
    Date: 2015–05–01
  8. By: Christian Bergholz (University of Kassel); Ivo Bischoff (University of Kassel)
    Abstract: In rural areas, small and medium-sized municipalities are challenged by demographic change and intensified competition for capital and high-skilled labor. Inter-municipal cooperation (IMC) is often regarded as a significant element of a strategy to meet these challenges. Based on a survey in three rural counties in the German state of Hesse, we present first evidence on citizens’ policy preferences regarding IMC. Policy preferences are found to be driven primarily by individual characteristics. The strongest factor reducing citizens’ support is the belief that IMC reduces citizens’ influence and control. Support is higher among citizens who assess the current service quality as low and/or assess the future perspective of their home municipality as negative. Trust in local politicians and a high degree of emotional attachment to the home municipality have a negative impact on subjects’ support for IMC. None of the municipal characteristics like municipal size or fiscal stress, nor the availability of suitable partner municipalities are found to drive citizens’ preferences.
    Keywords: fiscal federalism, inter-municipal cooperation, voter preferences, survey, Germany
    JEL: H77 D72
    Date: 2015
  9. By: Derrill D. Watson II
    Abstract: This paper identifies eight political economy factors that influenced governments. policy choices during the most recent global food price crisis. To explain the variety of responses and the policy failures, a framework is proposed that locates policies along the twin dimensions of unitary vs. fragmented decision-making processes and social welfare maximizing vs. selfinterested policy goals. Policies are favoured that maintain government legitimacy and produce private benefits for the best-connected stakeholders. Policy interventions were frequently ad hoc and delayed because of lack of market information, conflicts among fragmented government agencies in all governments, and extended deliberations among competing stakeholder groups.
    Keywords: political economy, food prices, public choice, rent-seeking
  10. By: Simon Wren-Lewis
    Abstract: How do economic policy mistakes happen? One view is that policy makers are benevolent, and errors arise because economic theories are inadequate. Another is that policy makers pursue sectional interests that may have no relation to any academic consensus on good policy. This paper examines a third alternative: policy makers want to do the right thing (although they have political preferences), and the academic consensus is correct, but policy makers do not follow it because they rely on imperfect intermediaries. I use this framework to examine the global switch to fiscal austerity in 2010.
    Date: 2015

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