nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒12‒18
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Social Interactions in Voting Behavior: Evidence from India By Umair Khalil; Sulagna Mookerjee; Ryan Tierney
  2. Ethnic Diversity, Public Spending and Political Regimes By Ghosh, Sugata; Mitra, Anirban
  3. Redistribution, inequality and political participation: Evidence from Mexico during the 2008 financial crisis By Patricia Justino; Bruno Martorano
  4. Individual and Group Preferences Over Risk: An Experiment By Morone, Andrea; Temerario, Tiziana
  5. Citizens or lobbies: who controls policy? By P. Roberti
  6. Populism and Institutional Capture By N. Chesterley; P. Roberti
  7. Trump, Condorcet and Borda: Voting paradoxes in the 2016 Republican presidential primaries By Kurrild-Klitgaard, Peter
  8. Set them (almost) free. Discretion in electoral campaigns under asymmetric information By Vardan, Baghdasaryan; Elena, Manzoni;
  9. Politicians' coherence and government debt By G. Bellettini; P. Roberti
  10. Asymmetric Social Norms By Gabriele Camera; Alessandro Gioffre
  11. When the two ends meet: an experiment on cooperation across the Italian North-South divide By Pietro Battiston; Simona Gamba
  12. Social Interactions and Aspirations Formation in Rural Ethiopia By Mekonnen, Daniel Ayalew
  13. JRC Insights - Social Policy Innovation Series - The role of the Social Economy in promoting Social Investment By Gianluca Misuraca; Fiorenza Lipparini; Csaba Kucsera
  14. Political agency and public healthcare: Evidence from India By Joan Costa-Font; Divya Parmar

  1. By: Umair Khalil (West Virginia University, Department of Economics); Sulagna Mookerjee (Georgetown University School of Foreign Service Qatar); Ryan Tierney (Université de Montréal)
    Abstract: Using the unique staggered nature of the Indian General Elections, where voting takes place in several different phases spanning several weeks, we investigate how spatial variation in electoral dynamics affects subsequent voter turnout. Exploiting quasirandom assignment of constituencies to electoral phases each election, we assess the impact of average voter turnout in a given phase, on turnout in the subsequent phase. Standard endogeneity concerns in the estimation of social interactions are dealt by employing two distinct instrumental variables: 1) constituency specific average historical turnout in elections from the pre-staggered era, 2) voter density as measured by number of voters per polling location in a given constituency. Our estimates from both IVs, show that a 1 percentage point (pp) increase in turnout in a given phase depresses turnout in the subsequent phase by 0.3-0.5 pp. Crucially, falsification tests examining the effect on turnout in the current phase, of constituencies in the same phase or in future phases in the same election, produce no such effect. We find the data broadly support an ethical voter model, in which each agent acts as if setting an example for all and seek to maximize social welfare.
    Keywords: Voting Behavior, Staggered Elections, Election Spillovers
    Date: 2016–12
  2. By: Ghosh, Sugata; Mitra, Anirban
    Abstract: We study the relationship between ethnic diversity and public spending under two different political regimes, namely, democracy and dictatorship. We build a theory where political leaders (democratically elected or not) decide on the allocation of spending on different types of public goods: a general public good and an ethnically-targetable public good. We show that the relationship between public spending and ethnic diversity is qualitatively different under the two regimes. In particular, higher ethnic diversity leads to greater investment in general rather than group-specific public goods under democracy; the opposite relation obtains under dictatorship. We also discuss some implications of our results for economic performance and citizen's welfare.
    Keywords: Ethnic diversity, Public goods, Democracy, Dictatorship, Economic performance.
    JEL: D72 D74 H40
    Date: 2016
  3. By: Patricia Justino; Bruno Martorano
    Abstract: This paper explores the relationship between a large government cash transfer programme, changes in inequality, and political participation in Mexico. The results show that increases in the coverage of the programme during the 2008 financial crisis resulted in greater individual participation in the last presidential elections and in higher individual propensity to vote, particularly for the incumbent party. The programme was particularly effective in increasing political participation among rural and indigenous groups, and had a mitigating effect on participation in presidential elections and the propensity to vote among the urban unskilled. The programme resulted also in reductions in individual participation in protests. Further analysis suggests that these changes were driven by redistributive gains following the changes to the cash transfer programme.
    Keywords: conditional cash transfers, inequality, Mexico, protests, voting behaviour
  4. By: Morone, Andrea; Temerario, Tiziana
    Abstract: The recent literature on individual and group choices over risk has led to different results. In some studies under unanimity, groups were found to be less risk averse than individuals, while those under majority did not highlight significant differences. However, both the types of studies impose the decision rule to the group. In the present work we elicited groups’ preference under risk using a consensus rule, i.e. groups are free to solve disagreement endogenously, just as in the real life. Results from our pairwise choices experiment shows that when group members are free to use any rule they want in order to reach unanimity, there is no statistical difference between individuals’ and groups’ risk aversion.
    Keywords: Group Preferences,Risk,Individual Preferences,Lab
    JEL: C9 C90
    Date: 2016
  5. By: P. Roberti
    Abstract: This paper analyses a model of electoral competition with lobbying, where candidates hold private information about their willingness to pander to lobbies, if elected. I show that this uncertainty induces risk-averse voters to choose candidates who implement policies biased in favor of the lobby. Increasing the prior probability of non-pandering candidates can increase the effect of lobbying. If, however, the cost of running for office is sufficiently large, there is no effect of lobbying on policy. The model thus demonstrates that uncertainty on the influence of special interests can lead to large effects of lobbying on policy.
    JEL: D72 D74 D78
    Date: 2016–11
  6. By: N. Chesterley; P. Roberti
    Abstract: This paper considers electoral behavior and institutional capture when voters choose between a populist and non-populist politician. Populist politicians provide voters with a utility boom followed by a subsequent bust, as in Dornbusch and Edwards (The Macroeconomics of Populism in Latin America, University of Chicago Press, 1991). Non-populists provide a constant level of utility. Once in power, however, politicians of both types are able to seize control of institutions to ensure their re-election. We show that in equilibrium, populist politicians may capture institutions to avoid being replaced during the bust: non-populists do not. Voters rationally elect a populist if voters discount the future sufficiently or if it is too costly for the populist to seize control of institutions. Unfortunately, both types of politician may prefer weakened institutions, either to allow their capture or to discourage the election of the populist.
    JEL: D72 D73 D74
    Date: 2016–11
  7. By: Kurrild-Klitgaard, Peter
    Abstract: The organization of US presidential elections make them potentially vulnerable to so-called “voting paradoxes”, identified by social choice theorists but rarely documented empirically. The presence of a record high number of candidates in the 2016 Republican Party presidential primaries may have made this possibility particularly latent. Using polling data from the primaries we identify two possible cases: Early in the pre-primary (2015) a cyclical majority may have existed in Republican voters’ preferences between Bush, Cruz and Walker—thereby giving a rare example of the Condorcet Paradox. Furthermore, later polling data (March 2016) suggests that while Trump (who achieved less than 50% of the total Republican primary vote) was the Plurality Winner, he could have been beaten in pairwise contests by at least one other candidate—thereby exhibiting a case of the Borda Paradox. The cases confirm the empirical relevance of the theoretical voting paradoxes and the importance of voting procedures.
    Keywords: Social choice; Condorcet Paradox; Borda Paradox; US presidential election 2016; Jeb Bush; Chris Christie; Ted Cruz; John Kasich; Marco Rubio; Donald Trump; Scot Walker; voting system.
    JEL: D7 D71 D72
    Date: 2016–12–15
  8. By: Vardan, Baghdasaryan; Elena, Manzoni;
    Abstract: The paper analyses a model of electoral campaigning as a problem of competitive delegation. We model a situation in which there is uncertainty about what the optimal policy should be and about the extent of candidates' bias. While voters know whether the candidate is left or right wing, the bias measures the extremity of the candidate. In this environment discretion may benefit voters as it allows the elected politician to adjust his policies to the state of the world. The paper shows that the optimal set of promises must be a closed interval, whose size is decreasing in the expected bias of the candidate. An example where the set of types is finite shows that an increase in the variability of candidates' types may either increase or decrease the level of discretion granted to politicians.
    Keywords: Electoral campaigns, Ideological bias, Uncertainty
    JEL: D72 D82
    Date: 2016–12–13
  9. By: G. Bellettini; P. Roberti
    Abstract: We model a society that values the coherence between past policy platforms and current implemented policy, and where policy platforms partially commit candidates to their future actions. If an incumbent politician seeks to be reelected, she has to use her platforms to commit to moderate policies that can be distant from her most preferred one. Commitment is related to the incoherence cost that politicians pay when they renege on promised platforms. In this context, we suggest a novel mechanism through which issuing government debt can affect electoral results. Debt is exploited by an incumbent politician, who is in favor of low spending, to damage the credibility of her opponent's policy platforms, and be reelected. A higher level of debt decreases voters' most preferred level of spending, and makes the opponent's past platform a losing policy. Even if the latter chose to update her proposal, she would not be able to credibly commit to it, given the incoherence cost associated to changing proposals.
    JEL: D72 H63 D78
    Date: 2016–11
  10. By: Gabriele Camera (Chapman University and University of Basel); Alessandro Gioffre (Goethe University)
    Abstract: Studies of cooperation in infinitely repeated matching games focus on homogeneous economies, where full cooperation is efficient and any defection is collectively sanctioned. Here we study heterogeneous economies where occasional defections are part of efficient play, and show how to support those outcomes through contagious punishments.
    Keywords: cooperation, repeated games, social dilemmas
    JEL: C6 C7
    Date: 2016
  11. By: Pietro Battiston; Simona Gamba
    Abstract: We study the behavior of individuals coming from different geographic regions of Italy, in a same public good game. We confirm previous findings according to which, faced with the same incentives and experimental conditions, Southern citizens exhibit a lower propensity to cooperate than Northern ones. This difference is mainly explained by a gap in the impact of coordination devices available to participants, as we show by manipulating them. Most importantly, when subjects with different geographic origins are teamed up together, their contributions decrease with respect to homogeneous groups, again because of a reduced effect of coordination devices. These findings reinforce the interpretation of the Italian South-North divide as related to trust, prejudice and a consequent path-dependence in levels of social capital, rather than due to the mere effect of differences in institutions and economic opportunities.
    Keywords: public good, cooperation, social capital, cultural differences, laboratory experiment
    Date: 2016–12–13
  12. By: Mekonnen, Daniel Ayalew
    Abstract: The recent literature postulates that aspirations are one of the key determinants of economic decision making, and that aspirations are formed socially through observations and by learning from ‘relevant others’ (or the ‘reference group’). This study empirically examines the latter using survey data collected from sample households in rural Ethiopia. Specifically, the study examines the effect of social interactions on aspirations. Based on several definitions of a ‘reference group’, we find that aspirations are indeed socially determined through observations as well as social interactions. Results also indicate that the social network size is an important determinant of aspirations, attesting to the importance of widening the aspirations window – a person’s cognitive world that shapes their aspirations. Across gender, results indicate that the effect of social interactions on aspirations is larger for females.
    Keywords: social interactions, aspirations, Ethiopia, Institutional and Behavioral Economics, D03, D62, Z1,
    Date: 2016–11
  13. By: Gianluca Misuraca (European Commission – JRC); Fiorenza Lipparini (PlusValue); Csaba Kucsera (European Commission – JRC)
    Abstract: Social enterprises play an important role in tackling societal challenges. Their numbers have grown significantly over recent years, becoming a strong engine of social innovation in the EU. This trend is confirmed by results of the JRC-led IESI project, which supports the implementation of the EU Social Investment Package through the analysis of ICT-Enabled Social Innovation initiatives in Member States. This issue of the ‘JRC Insights’ presents results from the study of these initiatives, assessed against the three main objectives of the Social Investment Package: implementing active inclusion strategies, investing in individuals throughout their lives and modernizing social protection systems. Evidence gathered shows that social enterprises are crucial in realising these policy goals. Their capacity to identify emerging or unmet needs, engage stakeholders and turn their governance model into a sustainable production process makes them particularly apt to contribute to social investment approaches. Social enterprises are the most innovative forms of social economy and their action tends to be flexible and responsive, thanks to their capacity to involve users and understand their needs. Their governance structures, their roots in local communities, and the fact that they are often multi-stakeholder partnerships contribute to greater social innovation. Nevertheless, more comprehensive socio-economic impact evaluations are required to understand what initiatives could and should be fostered and scaled-up.
    Keywords: Social investment, social policy innovation, SIP, Social Investment Package, social economy, social enterprise, ICT enabled social innovation, ICT, services, social protection, social welfare
    Date: 2016–11
  14. By: Joan Costa-Font; Divya Parmar
    Abstract: The development of institutions of self-governance in India, and specifically the 2005 reform—the National Rural Health Mission that introduced village health and sanitation committees—provide a unique opportunity to study the effects of the strengthening of the political agency on collective healthcare decision-making in rural areas. We use data from the District Level Household Survey and take advantage of the heterogeneity of maternal and child healthcare use, before and after the introduction of village health and sanitation committees. Specifically, we examine the effect of village health and sanitation committees on use of both public and preventive healthcare among children. Our results suggest that local democracy has increased access to preventive child healthcare services. Part of the effect is driven by an increase in the utilization of the public healthcare network. We find some evidence of an effect of village residence heads of a Panchayat on preventive healthcare use.
    Keywords: decentralization, direct democracy, India, immunization, maternal healthcare, public

This nep-cdm issue is ©2016 by Stan C. Weeber. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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