nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒11‒13
nine papers chosen by
Stan C. Weeber, McNeese State University

  1. On Discounting and Voting in a Simple Growth Model By Kirill Borissov; Mikhail Pakhnin; Clemens Puppe
  2. Primary Effect in Open-List Elections By Meriläinen; - Tukiainen Jaakko; Janne
  3. Voter turnout in Italian municipal elections, 2002-2013 By Federico Revelli
  4. Local Union Organization and Lawmaking in the U.S. CongressAuthor-Name: Michael Becher By Stegmueller, Daniel; Käppner, Konstantin
  5. Public Employees as Politicians: Evidence from Close Elections By Ari Hyytinen; Jaakko Meriläinen; Tuukka Saarimaa; Otto Toivanen; Janne Tukiainen
  6. Fiscal Policy, Government Polarization, and the Economic Literacy of Voters By Samuele Murtinu; Giulio Piccirilli; Agnese Sacchi
  7. Rational Skeptics: On the Strategic Communication of Scientific Data By Joungseok Park
  8. The Direction of Strategic Delegation and Voter Welfare in Asymmetric Tax Competition Models By Yukihiro Nishimura; Kimiko Terai
  9. Effects of income redistribution on the evolution of cooperation in spatial public goods games By Zhenhua Pei; Baokui Wang; Jinming Du

  1. By: Kirill Borissov; Mikhail Pakhnin; Clemens Puppe
    Abstract: In dynamic resource allocation models, the non-existence of voting equilibria is a generic phenomenon due to the multi-dimensionality of the choice space even if agents are heterogeneous only in their discount factors. Nevertheless, at each point in time there may exist a "median voter" whose preferred instantaneous consumption rate is supported by a majority of agents. Based on this observation, we propose an institutional setup ("intertemporal majority voting") in a Ramsey-type growth model with common consumption and heterogeneous agents, and show that it provides a microfoundation of the choice of the optimal consumption stream of the "median" agent. While the corresponding intertemporal consumption stream is in general not a Condorcet winner among all feasible paths, its induced instantaneous consumption rates receive a majority at each point in time in the proposed intertemporal majority voting procedure. We also provide a characterization of stationary voting equilibria in the case where agents may differ not only in their time preferences, but also in their felicity functions.
    Keywords: collective choice, common-pool resource, economic growth, heterogeneous agents, median voter theorem
    JEL: D11 D71 D91 O13 O43
    Date: 2016–11–02
  2. By: Meriläinen; - Tukiainen Jaakko; Janne
    Abstract: We study how political parties select political leaders. Using regression discontinuity design and data from Finnish local elections, we find that parties use vote ranks to decide upon promotions. Moreover, we show that this primary effect is higher when competition either between or within parties is lower. We document differences in promotion patterns between parties, the primary effect being stronger in right-wing parties. This result is in line with previous research arguing that right-wing parties prefer more inclusive nomination procedures. Finally, our descriptive analysis suggests that parties weight previous political experience and candidates? policy positions in their promotion decisions more than voters value these characteristics.
    Keywords: Political promotions; Preference votes; Primary effect; Regression discontinuity design
    JEL: D72 C21
    Date: 2016–09–07
  3. By: Federico Revelli (Università di Torino)
    Abstract: This paper investigates the determinants of voter turnout in a panel dataset of more than 15,000 Italian municipal elections through over a decade (2002-2013). The estimation results show a significant negative effect of the size of the electorate on voter turnout, and an effect of its demographic structure that is compatible with the political life-cycle hypothesis. Moreover, turnout is systematically higher when municipal elections are held at the same time as more salient, higher stakes contests. Finally, all ex post indicators of election closeness are estimated to influence voter turnout in the expected direction.
    Keywords: voting, turnout, political life cycle, salience, electoral uncertainty
    JEL: D72
    Date: 2016–11
  4. By: Stegmueller, Daniel (Duke University); Käppner, Konstantin (University of Konstanz)
    Abstract: While the political power of labor unions is a contentious issue in the social sciences, it is often conceived mainly as a question of aggregate union membership. Going beyond the common focus on numerical strength, we argue that unions’ influence on national lawmaking has significant roots in their local organization. We delineate and test the hypothesis that the horizontal concentration of union members within electoral districts shapes legislators’ voting behavior. Drawing on extensive administrative records, we map the membership size and concentration of union locales to districts of the U.S. House of Representatives, 2003-2012. Our new data reveal that concentration clearly cuts across membership size. Consistent with theoretical expectations, both concentration and membership are robustly linked to legislators’ ideology and votes on key issues. Lower membership concentration means more legislative support of union positions. Altogether, we suggest a new perspective on the political power of unions in the twenty- first century.
    Keywords: JEL Classification:
    Date: 2016
  5. By: Ari Hyytinen; Jaakko Meriläinen; Tuukka Saarimaa; Otto Toivanen; Janne Tukiainen
    Abstract: We analyze the effect of municipal employees? political representation in municipal councils on local public spending. To quantify the effect, we use within-party, as-good-as random variation in close elections in the Finnish open-list proportional election system. One more councilor employed by the public sector increases spending by about one percent. The effect comes largely through the largest party and is specific to the employment sector of the municipal employees. The results are consistent with public employees having an information advantage over other politicians, and thus, being able to influence policy.
    Keywords: Close elections, political representation, public employees, public expenditures
    JEL: H72 D72 H75 C26
    Date: 2016–09–27
  6. By: Samuele Murtinu (University of Groningen); Giulio Piccirilli (Universitas Mercatorum); Agnese Sacchi (Sapienza University of Rome & Governance and Economics research Network (GEN))
    Abstract: We model a two-parties electoral game in an environment where voters are imperfectly informed on the administrative ability of each party. In equilibrium, parties try to manipulate voters’ beliefs and implement fiscal policies that are looser than the social optimum. The size of this deviation from optimality increases with the incentive of parties to manipulate, the voters’ information disadvantage, and the interaction between these two elements. We test our theoretical predictions on a sample of 23 OECD countries over the period 1999–2008. We measure the incentive to manipulate voters’ beliefs through the ideological cohesion of the cabinet (i.e. government polarization), and the scope to manipulate such beliefs through the level of voters’ economic literacy. We find that polarized governments tend to worsen fiscal balances, and this is more likely in countries where the voters’ economic literacy is low. However, such tendency vanishes as literacy increases, suggesting that polarization leads to biased fiscal policies only when there is enough room for manipulation. Our results remain stable after controlling for potentially confounding differences across countries and over time – such as individuals’ education attainments, electoral and institutional systems, voter turnout –, several types of falsification tests, time dynamics and unobserved heterogeneity.
    Keywords: budget balance, government polarization, electoral game, economic literacy
    JEL: D72 E62 H62
    Date: 2016–11
  7. By: Joungseok Park
    Abstract: I show that a credibility gap is created between the scientist and the government if the preference of the scientist is not perfectly aligned with that of the government. I find a remarkable result that the credibility gap is eliminated and the ex-ante social welfare is maximized if and only if the scientist’s preference is perfectly aligned with that of the government, not with that of the median voter. This is endogenously achieved when the government is allowed to appoint its optimal scientist without election concerns. In the case where the government has election concerns, if the median voter perceives an alarming message from the climate scientist, then even a “right-wing” government must choose an aggressive climate change policy to avoid losing the election. Accordingly, it will prefer to appoint a climate scientist who is unlikely to send an alarming message. Thus the government deliberately creates a credibility gap which may cause a distorted climate change policy in a democracy. Key Words: Climate Change; Cheap-Talk; Elections; SocialWelfare.
    JEL: D72 D83 H89 Q48 Q54
    Date: 2016
  8. By: Yukihiro Nishimura (Graduate School of Economics, Osaka University); Kimiko Terai (Faculty of Economics, Keio University)
    Abstract: This paper examined a political process and economic consequences of tax competition among asymmetric countries. Citizens are endowed with heterogeneous capital incomes. The median-voters deliberately elect a delegate whose preferences differ from their own, to pursue advantages in the international tax competition. When the countries have different productivity of the capital, the country with a low capital productivity may delegate the tax authority to a citizen who is richer than the median-voter. As a result, the outcome through strategic delegation may make the median-voters and the majority of citizens worse-off than the selfrepresentation outcome, contrary to the previous studies with symmetric countries. Similar results are obtained when the countries differ in capital endowments. In contrast, when the countries differ in population size, productive inefficiency is reduced, and the median-voters are better-off through strategic delegation. We also point out that the role of campaign promises is important for the equilibrium tax rates and citizens f welfare.
    Keywords: Capital tax competition; Strategic delegation; Asymmetric countries; Voter welfare
    JEL: C72 D72 D78 H23 H87
    Date: 2016–11
  9. By: Zhenhua Pei; Baokui Wang; Jinming Du
    Abstract: Income redistribution is the transfer of income from some individuals to others directly or indirectly by means of social mechanisms, such as taxation, public services and so on. Employing a spatial public goods game, we study the influence of income redistribution on the evolution of cooperation. Two kinds of evolutionary models are constructed, which describe local and global redistribution of income respectively. In the local model, players have to pay part of their income after each PGG and the accumulated income is redistributed to the members. While in the global model, all the players pay part of their income after engaging in all the local PGGs, which are centered on himself and his nearest neighbours, and the accumulated income is redistributed to the whole population. We show that the cooperation prospers significantly with increasing income expenditure proportion in the local redistribution of income, while in the global model the situation is opposite. Furthermore, the cooperation drops dramatically from the maximum curvature point of income expenditure proportion. In particular, the intermediate critical points are closely related to the renormalized enhancement factors.
    Date: 2016–10

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