nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒04‒16
nine papers chosen by
Stan C. Weeber, McNeese State University

  1. The Welfare Economics of Tactical Voting in Democracies: A Partial Identification Equilibrium Analysis By Demeze, Herman; Moyouwou, Issofa; Pongou, Roland
  2. Coalition governments and their structures in Turkey By Özlem Becerik YoldaÅŸ; Yunus YoldaÅŸ
  3. Selective Incentives and Intra-Group Heterogeneity in Collective Contents By NITZAN, Shmuel; UEDA, Kaoru
  4. Exposure to Refugees and Voting for the Far-Right. (Unexpected) Results from Austria By Andreas Steinmayr
  5. Election, Implementation, and Social Capital in SchoolBased Management: Evidence from a Randomized Field Experiment on the COGES Project in Burkina Faso By Sawada, Yasuyuki; Aida, Takeshi; Griffen, Andrew S; Kozuka, Eiji; Noguchi, Haruko; Todo, Yasuyuki
  6. A Simple Model of Homophily in Social Networks By Sergio Currarini; Jesse Matheson; Fernando Vega Redondo
  7. Logrolling under Fragmented Authoritarianism: Theory and Evidence from China By Mario, Gilli; Yuan, Li; Jiwei, Qian
  8. Developing a strategic leadership style in the United Arab Emirates By Hanan AlMazrouei
  9. International Migration: Driver of Political and Social Change? By Tuccio, Michele; Wahba, Jackline; Hamdouch, Bachir

  1. By: Demeze, Herman; Moyouwou, Issofa; Pongou, Roland
    Abstract: The fact that voters can manipulate election outcomes by misrepresenting their true preferences over competing political parties or candidates is commonly viewed as a major flaw of democratic voting systems. It is argued that insincere voting typically leads to suboptimal voting outcomes. However, it is also understood that insincere voting is rational behavior as it may result in the election of a candidate preferred by the voter to the candidate who would otherwise be selected. The relative magnitude of the welfare gains and losses of those who benefit from and those adversely affected by insincere voting behavior is consequently an important empirical issue. We address this question by providing exact asymptotic bounds on the welfare effects, in equilibrium, of insincere voting for an infinite class of democratic rules. We find, for instance, that preference manipulation benefits one-half to two-thirds of the population in three-candidate elections held under first-past-the-post, and one-third to one-hundred percent of the population in antiplurality elections. These bounds differ from those obtained under out-of-equilibrium manipulation. Our partial identification analysis provides a novel approach to evaluating mechanisms as a function of attitude towards risk, and it has practical implications for the choice of election rules by a mechanism designer facing a worst-case or a best-case objective. It also provides a new answer to the longstanding question of why certain rules, such as first-past-the-post, are more common in practice.
    Keywords: Democracy, tactical voting, political equilibrium, social welfare, mechanism design, worst-case-scenario, best-case-scenario, partial identification
    JEL: D60 D72 D81 H41 P4 P48
    Date: 2016–04–08
  2. By: Özlem Becerik YoldaÅŸ (Çanakkale Onsekiz Mart University); Yunus YoldaÅŸ (Çanakkale Onsekiz Mart University)
    Abstract: A coalition refers to an alliance of two or more political parties to form a government and to perceive common interests for a continuance of a parliamentary term. In general, if no political party achieved an absolute majority of mandates in general elections, a coalition government will be formed. In West European parliamentary systems, coalitions are unavoidable. With a view to political systems in Europe, coalition cabinets are common, such as in Germany, Italy, Austria, Belgium and the Netherlands. Since its foundation in 1923, Turkey is also characterized by coalition governments which were unstable and negative assessed by the media and public at large. In particular, at times of political unrest and economic crises including the military coup in 1960,1970 and 1980, fifteen coalition governments in the Turkish parliamentary system.have been formed. Against this background, the main focus of the paper will be on the lifespan and stability of coalition governments in Turkey. The paper then investigates the main reasons for the resolution of coalition governments and their impacts on political culture in Turkey.
    Keywords: Turkey, coalition governments, polititcal culture
  3. By: NITZAN, Shmuel; UEDA, Kaoru
    Abstract: A group taking part in a contest has to confront the collective-action problem among its members and devices of selective incentives are possible means of resolution. We argue that heterogeneous prize-valuations in a competing group normally prevent effective use of such selective incentives. To substantiate this claim, we adopt cost sharing as a means of incentivizing the individual group members. We confirm that homogeneous prize valuations within a group result in a cost-sharing rule inducing the first-best individual contributions. As long as the cost-sharing rule is dependent only on the members' contributions, however, such a first-best rule does not exist for a group with intra-group heterogeneity. Our main result clarifies how unequal prize valuations affect the cost-sharing rule and, in particular, the degree of cost sharing. The results are related to the fact that heterogeneous valuations of the prize in a group cause inappropriate realization of voluntary contributions, a situation known as the "exploitation of the great by the small."
    Keywords: collective contest, selective incentives, intra-group heterogeneity, cost-sharing, elasticity of marginal costs
    JEL: D70 D71 D72
    Date: 2016–03–31
  4. By: Andreas Steinmayr
    Abstract: An important concern about the surge in the number of refugees arriving in Europe is increased support for far-right, nationalist, anti-immigration parties. This paper studies a natural experiment in an Austrian federal state to identify the causal effect of exposure to refugees in the neighborhood on the support for the far-right Freedom Party of Austria (FPÖ). In the Upper Austria state election in September 2015 the FPÖ doubled its vote share with a fierce anti-asylum campaign. Since only 42 percent of Upper Austrian communities hosted refugees at the time of the election, direct exposure to refugees varied at the local level. To account for the potential endogeneity in the distribution of refugees, I use pre-existing group accommodations as instrumental variable. To cope with the sudden inflow of large numbers of refugees, these buildings were used for refugee accommodation and thus strongly increase the probability of refugee presence in the community. In line with the contact hypothesis I find that hosting refugees in the community dampens the positive overall trend and decreases FPÖ support by 4.42 percentage points in state elections. Further analysis using exit poll data reveals a positive effect on the optimism in the population that the integration of refugees can be managed. Placebo tests show that there were no effects in elections prior to 2015.
    Keywords: Immigration, refugees, political economy, voting
    Date: 2016–03–14
  5. By: Sawada, Yasuyuki; Aida, Takeshi; Griffen, Andrew S; Kozuka, Eiji; Noguchi, Haruko; Todo, Yasuyuki
    Abstract: In this paper, we investigate the role of School Management Committees (COGES) in Burkina Faso. These committees include elected members of each community, and are tasked with setting and implementing annual school plans. The study adopted a hybrid evaluation method incorporating a randomized controlled trial and a large-scale artefactual field experiment a la Levitt and List (2007) on public goods with monetary rewards, to closely examine unexplored issues impacting on the sustainability of community-driven projects, and to identify at least partially the mechanisms of this sustainability. We found that the COGES project significantly increased social capital in the form of voluntary contributions to public goods, especially by linking those that people can be connected to vertically. On average, the direct increase in voluntary contributions to public goods from the implementation of the COGES project was between 8.0 and 10.2%. For groups composed of school principals, teachers, and parents, the average contribution increased by between 12.7 and 24.1% through the democratic election of school management committee members, and by between 11.0 and 17.2% through the implementation of the COGES project. These results suggest that community management projects can improve local cost recovery by increasing local contributions of public goods, potentially leading to better fiscal sustainability in community-driven projects. Moreover, the results based on our hybrid experiments are largely in line with real-world decisions observed in the schools under our investigation. As a byproduct, our findings are supportive of models of other-regarding preferences.
    Keywords: school-based management , randomized controlled trials , artefactual field experiments , public goods game , social capital , sustainability of development project
    Date: 2016–03–10
  6. By: Sergio Currarini; Jesse Matheson; Fernando Vega Redondo
    Abstract: Biases in meeting opportunities have been recently shown to play a key role for the emergence of homophily in social networks (see Currarini, Jackson and Pin 2009). The aim of this paper is to provide a simple microfoundation of these biases in a model where the size and typecomposition of the meeting pools are shaped by agents' socialization decisions. In particular, agents either inbreed (direct search only to similar types) or outbreed (direct search to population at large). When outbreeding is costly, this is shown to induce stark equilibrium behavior of a threshold type: agents \inbreed" (i.e. mostly meet their own type) if, and only if, their group is above certain size. We show that this threshold equilibrium generates patterns of in-group and cross-group ties that are consistent with empirical evidence of homophily in two paradigmatic instances: high school friendships and interethnic marriages.
    Keywords: Homophily, social networks, segregation.
    JEL: D7 D71 D85 Z13
    Date: 2016–04
  7. By: Mario, Gilli; Yuan, Li; Jiwei, Qian
    Abstract: Autocratic policy-making processes have been under studied both theoretically and empirically, while most literature on autocracies has assumed them to have a monolithic and top-down nature. This paper seeks to remedy this deficiency by focusing on logrolling among interest groups in fragmented autocracies, and tries to pick apart the black-box of decision making in autocracies. In particular, we focus on China where decision making exemplifies a process of logrolling among key actors in the political system. The key question in this paper is: what are the effects of the logrolling of parochial interest groups on state policies and social welfare in autocracies? We address this question both theoretically and empirically. The theoretical model helps us to focus on a specific distortion in resource allocation because of logrolling, while the econometric results confirm our theoretical prediction in a very robust way. To find out the distinctive consequences of autocratic logrolling on state policy and social welfare, we compare the policy outcomes under logrolling with the policy outcomes under different decision-making rules. We find policy outcomes under logrolling are characterized by excessive spending on all the interest groups' preferred goods and insufficient spending on public goods. Finally, the paper provides empirical evidence on autocratic logrolling by studying the effects of the interaction between two vertical bureaucracies in China – the Ministry of Civil Affairs and the Ministry of Health. In particular, we test the predictions of our model and identify the effects of logrolling in autocracies. Building on the existing literature, we introduce new approaches, including natural experiment and placebo test, to empirically test the existence of logrolling and identify its effects. We show that the direction of inefficiency on resource allocation is in accordance with the prediction in our theoretical model.
    Keywords: Authoritarianism, Policy Making, Logrolling, Fragmented Authoritarianism, China.
    JEL: D72 H11 H41 P48
    Date: 2016–04–04
  8. By: Hanan AlMazrouei (United Arab Emirates University)
    Abstract: Purpose – Expatriate leaders on overseas assignment often attempt to transfer their home organization culture to their new location. The subsequent cultural clash can have a destructive impact on both the leader and the organization. We explore the impact of organizational culture, adaptation, political environment, and leadership for expatriate managers working in the United Arab Emirates (UAE).Design/methodology/approach –Expatriate leaders’ experiences in the UAE were collected through interviews, with a specific focus on cultural adaptation and most effective leadership styles for implementing strategic organizational change.Findings – Our research revealed that a consultative style was found to be most effective by expatriate leaders in the UAE. Communication with local staff, team building, motivating staff, and involving staff in decision-making were highly effective approaches in assisting expatriate leaders to succeed within their organizational cultures. Several strategies have been identified based on the experiences of the expatriate leaders interviewed in our study.Practical implications – The findings offer practical advice for organizational leaders anticipating an assignment in the UAE and HRM practitioners preparing expatriate leaders for their duties there. We also provide suggestions for expatriate leaders to enhance their adjustment to the organizational and political culture.Originality/value – Numerous studies have been done on organizational cultural adaptation, however comparatively little research has been offered on practical organizational adaptation and leadership specific to the UAE.
    Keywords: Expatriate leadership, leadership styles, management, organizational
    JEL: M10
  9. By: Tuccio, Michele (University of Southampton); Wahba, Jackline (University of Southampton); Hamdouch, Bachir (University Mohammed V - Agdal Rabat)
    Abstract: This paper focuses on the impact of international migration on the transfer of political and social norms. Exploiting recent and unique data on Morocco, it explores whether households with return and current migrants bear different political preferences and behaviours than non-migrant families. Once controlling for the double selection into emigration and return migration, findings suggest that having a returnee in the household increases the demand for political and social change, driven by returnees mostly from Western European countries, who have been exposed to more democratic norms at destination. However, we find a negative impact of having a current migrant on the willingness to change of the left-behind household, driven by migrants to non-West countries, where the quality of political and social institutions are lower. Our results are robust to also controlling for destination selectivity. Finally, findings suggest that migration not only affect political attitudes but also actual behaviour: regions with higher returnee shares have had greater participation rates in the 2011 political elections.
    Keywords: international migration, political change, transfer of norms, Morocco
    JEL: D72 F22 O15 O55
    Date: 2016–03

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