nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒07‒16
six papers chosen by
Stan C. Weeber, McNeese State University

  1. Perception vs Reality: How does the British electorate evaluate economic performance of incumbent governments in the post war period? By Jonathon M. Clegg
  2. Collective Versus Individual Decisionmaking : A Case Study of the Bank of Israel Law By Francisco RUGE-MURCIA; Alessandro RIBONI
  3. The Informational Theory of Legislative Committees: An Experimental Analysis By Battaglini, Marco; Lai, Ernest; Lim, Wooyoung; Tao-yi Wang, Joseph
  4. Nongovernmental Organizations and Influence on Global Public Policy By Cecilia Tortajada
  5. Affirmative Action and Team Performance By Felix Koelle
  6. The Effects of Higher Re-election Hurdles and Costs of Policy Change on Political Polarization By Gersbach, Hans; Muller, Philippe; Tejada, Oriol

  1. By: Jonathon M. Clegg (Faculty of History, University of Oxford)
    Abstract: Rational retrospective voting models have dominated the literature on election forecasting and the economic vote since they were first proposed by Anthony Downs in 1957. The theory views voters as appraisers of incumbent government’s past performance, which acts as the principal source of information individuals use when making their vote. Pure retrospective voting requires far less of the electorate in order to hold a government accountable and empirical work based on this theory has been very adept at predicting election outcomes and explaining individual voting decisions. In terms of the time period assessed to form judgements on past performance however, there is a surprising disconnect between the theoretical line of thought and actual testing. The sensible assumption of retrospective voting models is that voters, looking to judge a government’s past performance, should assess changes in their own welfare over an entire term of office, with little or no discounting of past events. The majority of empirical studies however, focus on economic performance over shorter time horizons, usually within a year of an election. There have only been a handful of studies attempting to empirically test the correct temporal relationship between changes in economic indicators and election outcomes, despite its importance for retrospective voting models and democratic accountability. This working paper empirically tests over which time horizons changes in macroeconomic fundamentals continue to have a significant bearing on election outcomes in Post War Britain. It finds that longer-term measures of economic change, over entire government terms, are better at predicting changes in incumbent’s vote shares than shorter-term measures, closer to the election period. This has important consequences for future voting models and is a promising result for democratic accountability.
    JEL: D72 C52
    Date: 2016–03–10
  2. By: Francisco RUGE-MURCIA; Alessandro RIBONI
    Abstract: The new Bank of Israel Law of 2010 changed monetary policy decisionmaking at the Bank of Israel from a setup where decisions are taken by the governor to one where decisions are taken by a committee of voting members. We use this institutional change as a natural experiment to compare individual versus collective decisionmaking. Empirical results show different dynamics for interest rate decisions across the two regimes and support the view that the status quo bias is larger when decisions are taken by a committee than when they are taken by a single individual.
    Keywords: committees, voting models, political economy of central banking
    JEL: D7 E5
    Date: 2016
  3. By: Battaglini, Marco; Lai, Ernest; Lim, Wooyoung; Tao-yi Wang, Joseph
    Abstract: We experimentally investigate the informational theory of legislative committees first proposed by Gilligan and Krehbiel [1987, 1989]. Two committees provide policy-relevant information to a legislature under two different procedural rules. Under the open rule, the legislature is free to make any decision; under the closed rule, the legislature is constrained to choose between a committee's proposal and an exogenous status quo. Our experiment shows that even in the presence of conflicts of interests, legislative committees help improve the legislature's decision by providing useful information. We further obtain evidence in support of three theoretical predictions: the Outlier Principle, according to which more extreme preferences of the committees reduce the extent of information transmission; the Distributional Principle, according to which the open rule is more distributionally eefficient than the closed rule; and the Restrictive-rule Principle, according to which the closed rule better facilitates the informational role of legislative committees. We, however, obtain mixed evidence for the Heterogeneity Principle, according to which more information can be extracted in the presence of multiple committees with heterogeneous preferences. Our experimental findings provide overall support for the equilibrium predictions of Gilligan and Krehbiel [1989], some of which have been controversial in the literature.
    Keywords: information transmission; laboratory experiment; legislative committees
    JEL: C72 C82 D83
    Date: 2016–06
  4. By: Cecilia Tortajada
    Abstract: Nongovernmental organizations (NGOs) were once considered as altruistic groups which aim was to impartially influence public policy with no vested interests. Nevertheless, this perception has changed. They are increasingly perceived as groups that prioritize their own ideologies or that respond to the interests of their donors, patrons, and members rather than to those of the groups they represent. This article discusses the politics of NGOs in the present changing globalized world as agents concerned with social and environmental change as much as with their own causes. It argues that numerous NGOs are as much a part of national and international politics as any other interest group and that their practices and activities are not always in the search of a good society or the common good.
    Keywords: nongovernmental organizations, donors, global public policy, governance, dams
    Date: 2016–07–01
  5. By: Felix Koelle (Faculty of Management, Economics and Social Sciences, University of Cologne)
    Abstract: We experimentally investigate spillover effects of affirmative action policies on team performance and the willingness to work in teams. We find that such policies in form of gender quotas do not harm performance and cooperation within teams, and do not discourage selection into teams.
    Keywords: Affirmative action, cooperation, competition, teams, selection, experiments
    Date: 2016–07
  6. By: Gersbach, Hans; Muller, Philippe; Tejada, Oriol
    Abstract: We develop and study a two-period model of political competition where (i) changes of policies impose costs on all individuals, and (ii) such costs increase linearly with the magnitude of the policy change. The contribution is two-fold. First, we show that intermediate marginal costs yield the lowest levels of policy polarization, welfare being a single-peaked function of the marginal cost. Second, we apply our model to the design of optimal re-election hurdles. We show that whatever the marginal cost of change, raising the vote-share needed for re-election above a half reduces policy polarization and increases welfare. We further prove the existence of a unique re-election hurdle that simultaneously maximizes welfare and minimizes policy polarization. The robustness of our results is studied for several extensions of the baseline model, notably for convex costs of change.
    Date: 2016–07

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