nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒02‒26
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Distributive Politics Inside the City? The Political Economy of Spain's Plan E By Felipe Carozzi; Luca Repetto
  2. Satisfaction with Democracy in Latin America: Do the Characteristics of the Political System Matter? By Selim Jürgen Ergun; M. Fernanda Rivas; Máximo Rossi
  3. Increasing Women's Parliamentary Representation in Asia and the Pacific: The Indonesian Experience By Ben Hillman
  4. Does electoral competition curb party favoritism? By Marta Curto‐Grau; Albert Solé‐Ollé; Pilar Sorribas‐Navarro
  5. A Model of Protests, Revolution, and Information By Salvador Barbera; Matthew O. Jackson
  6. Complex ballot propositions, individual voting behavior, and status quo bias By Hessami, Zohal; Resnjanskij, Sven
  7. Media content's role in the making of a democrat: Evidence from East Germany By Tim Friehe; Helge Muller; Florian Neumeier
  8. Voters’ Private Valuation of Candidates’ Quality By Enriqueta Aragonès; Dimitros Xefteris
  9. Indirect Reciprocity, Resource Sharing, and Environmental Risk: Evidence from Field Experiments in Siberia By Drew Gerkey; E. Lance Howe; James Murphy; Colin West
  10. Local public goods as perfect substitutes -- centralization vs. decentralization By Maier, Carl
  11. The political economy of interregional competition for firms By Hopp, Daniel; Kriebel, Michael
  12. Money and Votes. Incumbents in Mayoral Elections in Chile By Renato Aguilar; Claudio Parés
  13. A Theory of Sequential Group Reciprocity By Moreno-Okuno, Alejandro T.; Mosiño, Alejandro

  1. By: Felipe Carozzi; Luca Repetto
    Abstract: We study the allocation of investment projects by municipal governments across groups of voters using data from a fiscal stimulus program carried out in Spain between 2009 and 2011. This program provided municipalities with a large endowment to spend in public investments and required the geocoding of each individual project. Combining these data with disaggregated election information at the census area level, we study whether politicians use expenditures to target their supporters or to raise turnout. Estimates from regression, matching and RDD methods show no evidence of local governments targeting areas of core support. Instead, investment goes disproportionately to low turnout areas, suggesting that politicians use funds to increase participation. We confirm this hypothesis by showing that, in the following elections, turnout is increased in areas that received more investment. Our results suggest that mobilization can be a force in shaping the allocation of resources across voter groups within cities.
    Keywords: political economy, distributive politics, core voters, turnout, partisan alignment
    JEL: R53 H76 D72
    Date: 2017–02
  2. By: Selim Jürgen Ergun (Middle East Technical University, Northern Cyprus Campus); M. Fernanda Rivas (Middle East Technical University, Northern Cyprus Campus); Máximo Rossi (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: This paper analyzes the impact that the rules and characteristics of the political system have on satisfaction with democracy in Latin America. Using individual level survey data provided by Latinobarometer and controlling for both personal characteristics and macroeconomic variables, we find that the rules and characteristics of the political system do matter: Satisfaction with democracy is higher in countries that use a proportional electoral rule for choosing the legislature, where voting is not enforced, and in countries with a federal system. The age of democracy has a negative impact on satisfaction with democracy while the electoral rule used to choose the president does not matter. On the economic side, we find that personal assessments of the economy impact more on satisfaction with democracy than actual macroeconomic data.
    Keywords: satisfaction with democracy, Latin America, electoral system
    JEL: D70 D72
    Date: 2016–10
  3. By: Ben Hillman
    Abstract: In recent years, governments across Asia and the Pacific have adopted gender quotas to increase women's representation in parliament. In 2003, Indonesia introduced a 30% gender quota that, over two election cycles, contributed to an increase in women's share of seats in the national parliament from 9 per cent to 18 per cent. In the most recent (2014) elections, despite stronger enforcement of the quota provisions, expansive civil society-led efforts to support women candidates and favourable press coverage, the percentage of women elected to the national parliament declined. This article examines the evolving political context in which the gender quota operates to argue that common support programs designed to maximize the gender quota's impact on women's representation are insufficiently targeted at major obstacles. Findings will be of interest to lawmakers and public sector professionals working to advance gender equity and to students of democratization, representation and gender politics.
    Keywords: women, democracy, parliament, Asia Pacific, gender quota, Indonesia
    Date: 2017–02–16
  4. By: Marta Curto‐Grau (University of Heidelberg & IEB); Albert Solé‐Ollé (Universitat de Barcelona & IEB); Pilar Sorribas‐Navarro (Universitat de Barcelona & IEB)
    Abstract: We study whether incumbents facing uncontested elections channel public spending towards co‐partisan officials more than is the case of incumbents that are worried about their chances of re‐election. To do so, we draw on data detailing capital transfers allocated by Spanish regions to local governments during the period 1995‐2007. Using a regression discontinuity design, we document strong and robust effects. We find that, on average, a mayor belonging to the same party as that of the regional president obtains nearly twice the amount in grants as is received by a mayor belonging to an opposition party. This effect is much greater for regional incumbents that won the previous election by a large margin, but it disappears in the case of highly competitive elections. The effects estimated by difference‐in‐differences are not so great but they point in the same direction. Overall, the results are consistent with predictions that regional incumbents focus on obtaining the most votes possible when elections are strongly contested, while they seek to increase the number of aligned mayors when their position at the ballot box is not vulnerable.
    Keywords: Political parties, intergovernmental transfers, distributive politics, regression discontinuity
    JEL: C2 D72
    Date: 2017
  5. By: Salvador Barbera (MOVE, Universitat Autònoma de Barcelona and Barcelona GSE); Matthew O. Jackson (Stanford University)
    Abstract: A revolt or protest succeeds only if sufficient people participate. We study how potential participants' ability to coordinate is affected by their information. We distinguish four phenomena that affect whether information either encourages or inhibits protests and revolutions: (i) Unraveling: When agents learn about each others' types, some are discouraged by meeting partisans of the status quo. This can unravel, as even confident agents realize that enough supporters will be discouraged to preclude a successful revolution. (ii) Homophily: Learning someone else's type under homophily is less informative since that individual is more likely to be similar to the learner. This can lead people to be less confident of a revolution, but can also stop potential unraveling. (iii) Extremism: Meeting other protestors, and seeing pilot demonstrations or outcomes in similar countries, reveal not only how much support for change exists, but also from which constituencies it emerges. This can undercut a revolution if factions differ sufficiently in their preferred changes. (iv) Counter Demonstrations: partisans for the status quo can hold counter-demonstrations to signal their strength. We also discuss why holding mass demonstrations before a revolution may provide better signals of peoples willingness to actively participate than other less costly forms of communication (e.g., via social media), and how governments use redistribution and propaganda to avoid a revolution.
    Keywords: Revolution, demonstration, protests, strikes, Arab Spring JEL Classification Codes: D74, D72, D71, D83, C72
    Date: 2017–02
  6. By: Hessami, Zohal; Resnjanskij, Sven
    Abstract: This paper analyzes how the complexity of ballot propositions influences individual voting behavior in direct-democratic elections. We combine micro-data from representative post-referendum surveys in Switzerland with unique data on a novel measure of proposition complexity which relies on a word count of information provided in official booklets. Using Heckman estimations to correct for participation bias, we provide evidence that proposition complexity leads to rejection-biased voting (status quo bias). An increase of one standard deviation in our complexity measure is associated with an average increase in the rejection rate by 5.3 percentage points. However, correcting for the participation bias reduces the effect by 2.3 percentage points highlighting the importance of selection effects in determining vote outcomes. Further evidence suggests cognitive overburdening as the transmission channel and excludes alternative explanations.
    JEL: D71 D72 D81
    Date: 2016
  7. By: Tim Friehe (University of Marburg); Helge Muller (University of Marburg); Florian Neumeier (CESifo)
    Abstract: This paper explores the causal infl uence of access to Western television programming on voting behavior. We exploit a natural experiment involving access to West German TV within the German Democratic Republic in which only geography and topography determined the allocation of individuals to treatment and control groups. Focusing on both the shares of extremist parties and voter turnout, we find that in the post-reuni cation decade in which TV content was harmonized, regions that already had access to Western TV broadcasts before reunification experience lower vote shares of extremist parties and higher voter turnout.
    Keywords: Voting; Television; Media; Natural experiment; Germany.
    JEL: J22 K42 P37 P39
    Date: 2017
  8. By: Enriqueta Aragonès; Dimitros Xefteris
    Abstract: We study a Downsian model of electoral competition, allowing different voters to have different and private valuations of candidates?quality. Unlike models in which the voters?valuations of candidates? quality are common and common knowledge and which never admit pure strategy equilibria, in our setup we show existence of both converging and mildly diverging pure strategy equilibria. Perhaps more importantly, we uncover a non-monotonic (U-shaped) relationship between the extent of heterogeneity in voters?valuations and the maximum degree of equilibrium platform differentiation. In particular, we demonstrate that: a) a disagreement among voters on which candidate is better leads to a depoliticized vote, while an agreement on this issue leads to a politicized one; and b) as voters become more heterogeneous in how they evaluate candidates?quality, existence of pure strategy equilibria becomes more likely.
    Keywords: Downsian model, private information, advantaged candidate, platform differentiation
    JEL: D72
    Date: 2015–12
  9. By: Drew Gerkey; E. Lance Howe; James Murphy; Colin West
    Abstract: Integrating information from existing research, qualitative ethnographic interviews, and participant observation, we designed a field experiment that introduces idiosyncratic environmental risk and a voluntary sharing decision into a standard public goods game. Conducted with subsistence resource users in rural villages on the Kamchatka Peninsula in Northeast Siberia, we find evidence consistent with a model of indirect reciprocity and local social norms of helping the needy. When participants are allowed to develop reputations in the experiments, as is the case in most small-scale societies, we find that sharing is increasingly directed toward individuals experiencing hardship, good reputations increase aid, and the pooling of resources through voluntary sharing becomes more effective. We also find high levels of voluntary sharing without a strong commitment device; however, this form of cooperation does not increase contributions to the public good. Our results are consistent with previous experiments and theoretical models, suggesting strategic risks tied to rewards, punishments, and reputations are important. However, unlike studies that focus solely on strategic risks, we find the effects of rewards, punishments, and reputations are altered by the presence of environmental factors. Unexpected changes in resource abundance increase interdependence and may alter the costs and benefits of cooperation, relative to defection. We suggest environmental factors that increase interdependence are critically important to consider when developing and testing theories of cooperation.
    Date: 2016
  10. By: Maier, Carl
    Abstract: The main message of recent evaluations of decentralization efforts around the world is that these efforts were unable to generate the beneficial effects they were thought to induce. This finding constitutes a contrast to the rich body of literature on centralization and decentralization which was itself one driving factor of these efforts of decentralization. By arguing that (local) public goods can be viewed as perfect substitutes, this paper provides an explanation for these recent empirical findings and helps to reintegrate them into the theoretical literature on the subject. The main finding of this paper is that centralized and decentralized structures can induce identical provision levels of public goods. This ambivalence is generated by the interaction between electorates and representatives. Whereas both of these actors behave differently in the two scenarios, the overall outcomes are identical due to the leveling effects of strategic delegation. This finding is robust with respect to the assumption of a multistage government.
    JEL: H41 H77 C72
    Date: 2016
  11. By: Hopp, Daniel; Kriebel, Michael
    Abstract: This paper studies the impact of majority voting on interregional competition for firms. We model the competition as a first-price sealed bid auction under full information between two regions inhabited by low- and high-skilled individuals. The firm's location causes an increase in wages for the high-skilled. A region's bid is determined by the median voter's preference. We derive two results. First, the location decision may be inefficient because the firm may not locate in the region that benefits most. Second, if regional differences are sufficiently small and the median voter of the successful region is high-skilled, the winning region suffers a loss of aggregated income as subsidies exceed the surplus created by a firm's location. This implies that restricting inter-regional competition for firms, e.g. banning subsidies, may prevent inefficient location decisions.
    JEL: H23 H25 H31 P16
    Date: 2016
  12. By: Renato Aguilar (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Claudio Parés (Departamento de Economía, Universidad de Concepción (Chile))
    Abstract: Being an incumbent is an important advantage in an election. This issue has been discussed in numerous studies and has been formalized into the so called permanent campaign hypothesis. This means that the incumbents, during all the duration of their tenure, should be running a more or less intensive campaign. The tenure of the office, eventually disputed in the election, allows an elected officer to use some resources and opportunities that are no available for the other candidates. This study empirically explores this hypothesis for the mayoral election of 2012 in Chile, using a database covering all the Chilean municipalities. A central point is the money spent in the campaign by the incumbents in the mayoral election. We empirically study these issues with the help of a regression model for the campaign expenditures and the vote obtained by the incumbents. The estimation of this model is not trivial because we have two equations determining simultaneously the expenditures and the vote. Additionally, we had to consider that both variables are bounded and that we have a latent variable: the expected vote for 2012. We solved these problems using maximum likelihood truncated estimations and instrumental variables. Our results suggest that incumbent candidates plan their campaign expenditures based mostly in their expected vote. We also found empirical evidence suggesting that winners behave differently than losers.
    Keywords: Incumbents, Mayoral Elections, Campaign Expenditures, Simultaneous Equations, Truncated Regressions
    JEL: D70 D72 C34
    Date: 2016–12
  13. By: Moreno-Okuno, Alejandro T.; Mosiño, Alejandro
    Abstract: Games that appear to be independent, involving none of the same players, may be related by emotions of reciprocity between the members of the same groups. In the real world, individuals are members of groups and want to reward or punish those groups whose members have been kind or unkind to members of their own. In this paper we extend Dufwenberg and Kirchsteiger's model of sequential reciprocity (2004) to groups of individuals and define a new "sequential group reciprocity equilibrium" for which we prove its existence. We study the case of two games with two players in each game, where each player belongs to the same group as a player in the other game. We show that when the payoffs of one game are much higher than the payoffs of the other, the outcome of the game with higher payoffs determines the outcome of the other game. We also find that when the payoffs are very asymmetric, the outcome where the sum of the payoffs is maximized is a sequential group reciprocity equilibrium.
    Keywords: Fairness, Groups, Psychological Games, Game Theory
    JEL: A12 C60 D63
    Date: 2017–02–19

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