nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒10‒08
ten papers chosen by
Stan C. Weeber, McNeese State University

  1. Legislators' behaviour and electoral rules: evidence from an Italian reform By Giuseppe Albanese; Marika Cioffi; Pietro Tommasino
  2. Clientelism beyond Borders? The Political-Electoral Reform of Extending Voting Rights Abroad in Mexico By Yuriko Takahashi
  3. The Inner Workings of the Board: Evidence from Emerging Markets By de Haas, Ralph; Ferreira, Daniel; Kirchmaier, Tom
  4. Fiscal regimes in resource dependent African states: a political economy game By Temitope J. Laniran
  5. Power Politics: Electoral Cycles in German Electricity Prices By Englmaier, Florian; Roider, Andreas; Stowasser, Till; Hinreiner, Lisa
  6. The circulation of worthless objects aids cooperation. An experiment inspired by the Kula By Giuseppe Danese; Luigi Mittone
  7. Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters By Gold, Robert; Dippel, Christian; Heblich, Stephan; Pinto, Rodrigo
  8. The Importance of Oil in the Allocation of Foreign Aid: The case of the G7 donors By Cécile Couharde; Fatih Karanfil; Eric Gabin Kilamaa; Luc Désiré Omgbaa
  9. Incarcerate one to calm the others? Spillover effects of incarceration among criminal groups By Philippe, Arnaud
  10. Incentivizing Complex Problem Solving in Teams - Evidence from a Field Experiment By Englmaier, Florian; Grimm, Stefan; Schindler, David; Schudy, Simeon

  1. By: Giuseppe Albanese (Bank of Italy); Marika Cioffi (Bank of Italy); Pietro Tommasino (Bank of Italy)
    Abstract: We explore how electoral rules and cultural traits (namely, the degree of civicness) interact in shaping elected officials' behaviour. We use a dataset that includes the expenditure proposals sponsored by members of the Italian Senate from 1993 to 2012 (as well as other individual and district characteristics) and exploit the 2005 electoral reform that transformed a mainly majoritarian system into a proportional one. As a first step, we can confirm previous empirical findings: legislators elected in first-past-the-post districts show a higher propensity to sponsor locally oriented bills and to put effort into legislative activity than those elected with a closed-list proportional system. More importantly, however, we find that the effects of the change in the electoral rules are muted in areas with a high degree of civicness. We also propose a simple probabilistic voting model with altruistic preferences that is able to rationalize this finding.
    Keywords: electoral rules, provision of public goods, political economy, civicness
    JEL: D72 H41 Z10
    Date: 2017–09
  2. By: Yuriko Takahashi (Faculty of Political Science and Economics, Waseda University)
    Abstract: This research note provides a tentative analysis of the causes and consequences of Mexico’s political-electoral reform in 2014 with a special focus on the extension of voting rights to Mexicans living abroad. The reform significantly modified the rules and procedures for electing and forming a government in Mexico. Specifically, I am presenting the following arguments. Democratization via increasing electoral competition promoted the reform of extending voting rights abroad as a way of enhancing the democratic representation of Mexican migrants in foreign countries. On the other hand, the usage of postal and internet voting in a context of weak monitoring mechanisms entails the risk of “exporting” clientelism beyond borders, because politicians may have a greater incentive to cultivate support from migrants to survive competitive elections. Since clientelism erodes electoral integrity, the reform of voting rights in Mexico, which was driven by increasing electoral competition, is a double-edged sword. Based on primary and secondary sources, I provide partial evidence to support these claims and propose a viable empirical strategy to rigorously verify the validity of them.
    Keywords: clientelism, substantive voting rights, Mexico, democratization, voting rights abroad, the 2014 political-electoral reform
  3. By: de Haas, Ralph; Ferreira, Daniel; Kirchmaier, Tom
    Abstract: We survey non-executive directors in emerging markets to obtain detailed information about the inner workings of corporate boards across a variety of institutional settings. We document substantial variation in the structure and conduct of boards as well as in directors' perceptions about the local legal environment. Further analysis indicates that directors who feel adequately empowered by local legislation are less likely to actively vote against board proposals. They also form boards that play a stronger role in the company's strategic decision-making. This suggests that a supportive legal environment allows directors to focus more on their advisory, as opposed to their monitoring, role.
    Keywords: Boards of directors; corporate governance; emerging markets
    JEL: G30 G38 K22
    Date: 2017–09
  4. By: Temitope J. Laniran (University of Bradford, UK)
    Abstract: Policy reform debates in African economies often focus on poverty alleviation programs, liberalisation of trade and market and social service provisions. These reforms are heavily dependent on funding from either foreign sources or natural resource wealth, accompanied with concessions from the East and conditionality laden Western sources. They rarely optimally explore the internal fiscal revenue sources of their economy and as such undermines the fiscal prowess of their economies. Despite the less desirable situation, most resource-dependent African economies have found themselves, the elite political class in these countries still engage in wasteful expenditure pattern. The question of demand for accountability and good governance is rather ambiguous to the majority of the electorate as there is often a weakfiscal contract between them and the elite political class. The acknowledgement of this gives politicians an \"incentive\" to perpetuate corrupt activities which enrich the elite class at the expense and well-being of the masses and widens the inequality gap. This scenario is rather worse off in natural resource-endowed developing economies. The elite classis faced with a game-like situation, where the payoffs can either be beneficial to the elite class at the expense of the electorate or beneficial to the electorate at the expense of the elite class.This study expands the discussion on how an effective fiscal regime can help improve accountability and welfare of citizens in natural resource-endowed African states.
    Keywords: Accountability, Natural Resources, Fiscal Regimes
    JEL: D72 O10 Q30
    Date: 2017–09
  5. By: Englmaier, Florian; Roider, Andreas; Stowasser, Till; Hinreiner, Lisa
    Abstract: We provide evidence that German public energy providers, over which municipality-level politicians hold substantial sway, systematically adjust the pricing of electric energy in response to local electoral cycles. The documented pattern is in line with both, an artificial reduction in prices before an election that needs to be countermanded by future price increases, and an artificial postponement of market-driven price increases until after the election is over.
    JEL: D72 D73 H44 H72 H76 K23 L33 L94
    Date: 2017
  6. By: Giuseppe Danese; Luigi Mittone
    Abstract: Many anthropological records exist of apparently worthless objects used in traditional societies, often part of larger institutional arrangements that were instrumental in favoring cooperation and reducing conflict. The most famous examples of such objects are probably the Kula necklaces and armbands first described by B. Malinowski. In our experiment subjects can send a token to another participant before each round of a repeated public good game. We use as tokens a bracelet built by the participants, a piece of cardboard provided by the experimenter, and an object brought from home by the participants. Contributions to the public good in the treatments featuring a bracelet and cardboard are significantly higher than in a control study. The home object was not equally useful in increasing contributions. Notwithstanding the cheap talk nature of the decision to send the token, both sending and receiving the token are associated with a significant increase in contributions.
    Keywords: Kula, worthless objects, cooperation, public goods games, signaling, kitoum
    JEL: C92 D01 H40
    Date: 2017
  7. By: Gold, Robert; Dippel, Christian; Heblich, Stephan; Pinto, Rodrigo
    Abstract: We identify how German voters responded to the labor market turmoil caused by increasing trade with low-wage manufacturing countries. We first establish that import competition increased voters’ support for only extreme (right) parties. We then decompose this populist ‘total effect’ of trade on voting into a ‘mediated effect’ running through labor market adjustments and an independent ‘direct effect’. Our Causal Mediation Analysis reveals that direct and indirect effect work in opposite directions.
    JEL: C36 D72 F16
    Date: 2017
  8. By: Cécile Couharde; Fatih Karanfil; Eric Gabin Kilamaa; Luc Désiré Omgbaa
    Abstract: While it is often alleged that oil endowment might influence the destination of foreign aid, there is lack of empirical evidence of how and why such an effect may come into play, and even less so of the channels through which it works. This paper aims to bring evidence that contributes to address those points. Specifically, we investigate the role of oil in aid allocation of the G7 donors, over the 1980-2010 period. Results show that, unsurprisingly, aid allocated by these donors increases significantly with oil endowment of recipient countries. Looking more deeply, we interestingly show that their strategic interests in terms of oil security play a role in their provision of aid. More importantly, we find evidence for competition for access to oil supplies among this group of donors.
    Keywords: aid allocation, G7 donors, oil competition, spatial lag model.
    JEL: F35 C31
    Date: 2017
  9. By: Philippe, Arnaud
    Abstract: This paper documents the effect of peers’ incarceration on an individual’s criminal activity within small criminal groups. Using established criminal groups, I built a 48-month panel that records the criminal status, Individual imprisonment status and imprisonment status of group members. Panel regressions with individual fixed effects allows me to document five facts. First, the incarceration of a peer is associated with a 5 per cent decrease in the arrest rate among groups composed of two persons. No effect is observed among bigger groups. Second, this effect is present even for incarceration following lone crimes, ruling out an explanation based on common shocks. Third, the probability of committing a group crime strongly decreases, and there is no shift to crime with other peers or lone crimes. Four, this general effect hides significant within-group heterogeneity. The results are consistent with the idea that ‘leaders’ are not affected by the incarceration of ‘followers’. Five, the effect seems to be driven by lower risky behaviour among offenders who remain free, and not by ‘criminal capital’ loss or deterrence.
    Date: 2017–09
  10. By: Englmaier, Florian; Grimm, Stefan; Schindler, David; Schudy, Simeon
    Abstract: We study the role of bonuses, framed as gains and losses, in a unique environment that closely resembles many features of modern working environments: team work, knowledge re-combination and creative problem solving. We conduct a field experiment in cooperation with a provider of real life escape games. Bonuses significantly increase team performance in the field experiment whereas framing the bonus as a loss does not yield additional benefits as compared to the gain frame. We qualitatively replicate these findings with student participants in a lab-in-the field experiment that allows to study potential mechanisms underlying the productivity increase. Our findings suggest that the productivity increase among student participants result from two sources: First, single team members tend to become more dominant and to take more offten the initiative. Second, bonuses induce ”cutting corners” behavior among student participants. In contrast, teams in field experiment, who self-selected into the task, improve performance under bonus incentives without cutting corners more frequently. We discuss the implications of our findings for managers and firms designing contract structures in modern working environments.
    Keywords: team work,bonus,incentives,loss,gain,framing,creative
    JEL: C92 C93 J33 D03 M52
    Date: 2017

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