nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒06‒11
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Local Candidates and Distributive Politics under Closed-list Proportional Representation By Jon H. Fiva; Askill Halse; Daniel M. Smith
  2. Social Polarization and Partisan Voting in Representative Democracies By Dominik Duell; Justin Mattias Valasek
  3. Women's Representation and Electoral System Reform in Papua New Guinea: The Limitations of Limited Preferential Voting By Kerryn Baker
  4. Social solidarity for all? Trade union strategies, labour market dualisation and the welfare state in Italy and South Korea By Durazzi, Niccolo; Fleckenstein, Timo; Lee, Soohyun Christine
  5. The Origins of Common Identity: Division, Homogenization Policies and Identity Formation in Alsace-Lorraine By Sirus Dehdari; Kai Gehring
  6. Douglass C. North: Transaction Costs, Property Rights, and Economic Outcomes By Gary D. Libecap
  7. Tracing policy influence of diffuse interests: The post-crisis consumer finance protection politics in the US By Lisa Kastner
  8. From Outsiders to Insiders: A Civil Society Perspective on EU Financial Reforms By Lisa Kastner
  9. Help, Prejudice and Headscarves By Artavia-Mora, Luis; Bedi, Arjun S.; Rieger, Matthias
  10. Business lobbying under salience: Financial industry mobilization against the European financial transaction tax By Lisa Kastner
  11. Tariff Bindings and the Dynamic Formation of Preferential Trade Agreements By James Lake; Moise Nken; Halis Murat Yildiz
  12. Women's Political Power and Environmental Outcomes By Georgios Voucharas; Dimitrios Xefteris
  13. The politics of implementation or why institutional interaction matters: The role of traditional authorities in delivering pro-poor social policies in Kenya By Barbara Rohregger; Katja Bender; Bethuel Kinuthia; Esther Schüring; Grace Ikua; Nicky Pouw

  1. By: Jon H. Fiva; Askill Halse; Daniel M. Smith
    Abstract: Geographic representation is an important consideration in candidate nominations, even under closed-list proportional representation (PR), and may even matter for distributive policy outcomes. However, since nominations are determined strategically, the causal effects of local representation are difficult to identify. We investigate the relationship between local representation and electoral and distributive politics in the closed-list PR setting of Norway. Exploiting as-good-as-random election outcomes for marginal candidates, we find that parties obtain higher support in subsequent elections in the hometowns of narrowly-elected candidates. This effect appears to be driven by the local candidate appearing at the top of the party list in the next election. However, we find no evidence that representation results in geographically targeted policy benefits going to the candidates’ hometowns.
    Keywords: distributive politics, representation, voting behavior
    JEL: D72
    Date: 2018
  2. By: Dominik Duell; Justin Mattias Valasek
    Abstract: While scholars and pundits alike have expressed concern regarding increasing social polarization based on partisan identity, there has been little analysis of how social polarization impacts voting. In this paper, we incorporate social identity into a principal-agent model of political representation and characterize the influence of social polarization on partisan voting. We show that social identity has an indirect effect on voting through voters’ beliefs regarding the ex post decision of political representatives on top of a direct effect through an expressive channel. We conduct a laboratory experiment designed to identify the relative effect of the two channels. We find that social polarization causes partisan voting, and that up to fifty-five percent of partisan voting is due to the indirect effect of social identity.
    Keywords: social identity, partisan voting, social polarization, political polarization
    JEL: D72
    Date: 2018
  3. By: Kerryn Baker
    Abstract: Papua New Guinea moved to a limited preferential voting (LPV) system prior to the 2007 national election. The shift from first†past†the†post to preferential voting was intended to encourage the election of candidates with broader mandates from constituents; to reverse the trend of increasing election†related violence; and to lead to more cooperation between candidates and voting blocs. It was also anticipated that instituting a preferential system would increase the electoral chances of female candidates. This article looks at the impact of the LPV system on women's participation and performances as candidates in Papua New Guinean elections since 2002, focusing in particular on the three general elections in 2007, 2012 and 2017. It argues that the benefits of LPV have not outweighed its costs, at least in terms of women's participation and representation. This demonstrates the limits of institutional reform of this nature in tackling deep†seated issues relating to political culture.
    Keywords: Papua New Guinea, electoral reform, women's representation, elections, political participation
    Date: 2018–05–21
  4. By: Durazzi, Niccolo; Fleckenstein, Timo; Lee, Soohyun Christine
    Abstract: Political-economic analyses of trade unions in post-industrial societies have shifted away from traditional class-analytic approaches to embrace insider/outsider and producer coalition arguments based on the assumption that unions hold on to the defence of their core constituencies in the face of labour market deregulation and dualisation. Challenging this conventional wisdom, we provide an analysis of union strategies in Italy and South Korea, two most-different union movements perceived as unlikely cases for the pursuit of broader social solidarity, and we argue that in both countries unions have successively moved away from insider-focussed strategies. We show a movement towards “solidarity for all” in the industrial relations arena as well as in their social policy preferences. Furthermore, unions also explored new avenues of political agency, often in alliance with civil society organisations. We ascribe this convergent trend towards a social model of unionism to a response of unions to a “double crisis”; that is a socio-economic crisis, which takes the form of a growing periphery of the labour market associated with growing social exclusion, and a socio-political crisis, which takes the form of a increasing marginalisation of the unions from the political process pursued by right- and left-wing parties alike.
    JEL: J50
    Date: 2018–03–26
  5. By: Sirus Dehdari; Kai Gehring
    Abstract: We exploit the quasi-exogenous division of the French regions Alsace and Lorraine after the Franco-Prussian War in 1870 due to disagreements in the German leadership to provide evidence of group identity formation within historically homogeneous regions. People in the treated area, which was exposed to repressive homogenization policies aimed to suppress group identity, express a stronger regional identity and support more regional autonomy today. Using a regression discontinuity design at the municipal level, we find that support for two crucial referenda, which would have increased regional autonomy, subscription rates to regional newspapers, and regionalist party votes are significantly higher in the treated area. The results are robust across different specifications and bandwidths, and not driven by language differences, large agglomerations or distance to foreign countries. The differences in regional identity are strongest for the first two age cohorts after World War II and become weaker for later generations.
    Keywords: group identity, regional identity, identity formation, persistence of preferences, homogenization policies, assimilation, Alsace-Lorraine
    JEL: D91 H70 H80 N40 Z19
    Date: 2018
  6. By: Gary D. Libecap
    Abstract: Douglass North asked why some societies historically and contemporarily have rising per-capita incomes and individual welfare, whereas others do not? He argued that successful economies had property rights that encouraged markets, trade, and investment in new production and organizational methods. In other economies, transaction costs, especially those due to the political process, blocked more efficient property rights. Property rights grant decision making over valuable resources and are the basis for investment, and market exchange. They mold the economy and the distribution of wealth and political power. Politicians and coalitions of privileged elites with stakes in the status quo join to preserve it. Inefficiencies create their own constituencies. There is no clear remedy for general citizens in North’s cases. Despite the power of North’s argument, transaction costs are not clear in aggregate studies of economies. They are more apparent in US common-pool resource problems with large, continuing losses in resource rents. This evidence runs counter to the facile arguments in the welfare and environmental economics literatures for addressing externalities that are reminiscent of the simplistic recommendations in the growth and economic history literatures that North challenged. If the observed costly political response to open access losses is characteristic of regulation in general, then welfare losses permeate developed economies as well and are more pervasive than the dramatic examples of development failure examined by North and others. Mitigation requires competitive interest groups that benefit from more secure property rights and greater resource rents to offset powerful elites that align with politicians and capture bureaucratic agencies to achieve particularistic benefits that undermine general welfare.
    JEL: K11 K32 N4 N42 N5 N52 Q15 Q2 Q22 Q25 Q28 Q32 Q38
    Date: 2018–05
  7. By: Lisa Kastner (Centre d'études européennes et de politique comparée)
    Abstract: Dodd–Frank, the financial reform law passed in the United States in response to the 2008 financial crisis, established the Consumer Financial Protection Bureau, a new federal regulator with the sole responsibility of protecting consumers from unfair, deceptive, or abusive practices. This decision marked the end of a highly politicized reform debate in the US Congress, in which proponents of the new bureau would normally have been considered to be much weaker than its opponents. Paradoxically, an emerging civil society coalition successfully lobbied decision-makers and countered industry attempts to prevent industry capture. What explains the fact that rather weak and peripheral actors prevailed over more resourceful and dominant actors? The goal of this study is to examine and challenge questions of regulatory capture by concentrated industry interests in the reform debates in response to the credit crisis which originated in the US in 2007. The analysis suggests that for weak actors to prevail in policy conflicts over established, resource-rich opponents, they must undertake broad coalition building among themselves and with influential elite allies outside and inside of Congress who share the same policy goals.
    Keywords: Financial crisis; Financial regulation; Consumer protection; Interest groups; Lobbying
    Date: 2017
  8. By: Lisa Kastner (Centre d'études européennes et de politique comparée)
    Abstract: This article examines the role of non-financial interest groups in EU financial regulatory decisionmaking. While regulatory capture theories clearly helped identify the causes for the incrementality in spite of the major shock the 2008 crisis had caused, this article will consider a range of regulatory policy initiatives that do not neatly conform with this theory. I examine the extent to which nonfinancial groups are able to have their preferences met in the making of three different consumer policies: the Mortgage Credit Directive (MCD), stricter regulations of retail investment products (PRIPs/KID) and the reform of EU level supervisory structures. By employing a process-tracing approach based on qualitative interviews to analyze political responses to the 2008 financial crisis, the article demonstrates that newly mobilized groups could translate key advocacy goals into policy by deploying counter-expertise and co-operating with policy-makers in some cases but not in others.
    Keywords: Consumer finance protection; Financial crisis; Interest groups; Lobbying
    Date: 2017
  9. By: Artavia-Mora, Luis (ISS, Erasmus University Rotterdam); Bedi, Arjun S. (ISS, Erasmus University Rotterdam); Rieger, Matthias (ISS, Erasmus University Rotterdam)
    Abstract: This paper employs a natural field experiment in the Netherlands to test whether individuals intuitively help strangers with different group identities. We implement time manipulations in an everyday task to stimulate intuitive versus deliberate decision-making and thereafter examine helpfulness towards a female stranger with in-group (native) or out-group (Muslim) appearance. We find that time delay decreases helping rates. In contrast, regardless of time manipulation, out-group appearance does not influence helping rates. Overall, subjects are intuitively predisposed to help, independent of identity. We discuss our findings with respect to the literature on in-group favoritism and the cognitive origins of human cooperation.
    Keywords: help, cooperation, in-group favoritism, Muslim, dual-process of cognition, natural field experiment, The Netherlands
    JEL: D03 D63 D64
    Date: 2018–04
  10. By: Lisa Kastner (Centre d'études européennes et de politique comparée)
    Abstract: This article examines interest group conflicts surrounding the financial transaction tax (FTT) debate in the European Union (EU). Specifically, it focuses on the advocacy efforts of EU-based financial industry groups at different stages of the policy debate. The article provides a detailed description of changes to the post-crisis regulatory environment and points to public salience as important factor that can constrain business power. Much in line with the existing literature, industry groups did not fare very well under conditions of high salience and public pressure during the agenda-setting stage. However, this article also shows that in order to get back on its feet, the financial sector lobby had to employ a combination of quiet and noisy politics during later stages of the policy process. As soon as the contextual conditions provided by the financial crisis started to fade away, industry groups were able to bounce back by using a framing strategy that linked their arguments against an FTT to broader societal goals, by disseminating scientific evidence and by building coalitions with business groups outside of finance in order to water-down the proposed directive.
    Keywords: EU financial regulation; Financial crisis; Financial transactions tax; Interest groups; Lobbying
    Date: 2017
  11. By: James Lake (Department of Economics, Southern Methodist University); Moise Nken (Department of Economics, Ryerson University, Toronto, Canada); Halis Murat Yildiz (Department of Economics, Ryerson University, Toronto, Canada)
    Abstract: We show that multilateral tari§ binding liberalization substantially impacts the nature and extent of Preferential Trade Agreement (PTA) formation. First, it shapes the nature of forces constraining expansion of Free Trade Agreements (FTAs). The constraining force is a free riding incentive of FTA non-members under relatively high bindings but an exclusion incentive of FTA members under relatively low bindings. Second, multilateral tari§ binding liberalization shapes the role played by PTAs in the attainment of global free trade. Initially, tari§ binding liberalization leads to Custom Union (CU) formation in equilibrium but in a way that undermines the pursuit of global free trade. However, further tari§ binding liberalization leads to FTA formation in equilibrium and in a way that facilitates the attainment of global free trade. Our theoretical analysis also has implications regarding recent empirical discussions over the relative merits of FTAs versus CUs.
    Date: 2018–05
  12. By: Georgios Voucharas; Dimitrios Xefteris
    Abstract: Environmental deterioration is believed to affect women more than men. Thus, in the context of democratic decision-making, an increase in the political power of women should lead to better environmental outcomes. In this paper, we test this intuition by estimating how suffrage rights affected countries' emissions using data for the period 1850-2014. By employing a) a difference-in-difference empirical strategy a la Miller (2008) and b) a calibrated regression discontinuity design that focuses on the few years before and after the suffrage reform, we provide -for the first time- robust evidence suggesting that environmental outcomes strongly depend on the extent of women's political participation.
    Keywords: women's suffrage; emissions; voting rights; political economy; environmental outcomes.
    Date: 2018–05
  13. By: Barbara Rohregger (International Centre for Sustainable Development (IZNE), Bonn-Rhein-Sieg University of Applied Sciences); Katja Bender; Bethuel Kinuthia; Esther Schüring; Grace Ikua; Nicky Pouw
    Abstract: The paper contributes to the debate on the political economy of implementation of propoor social policy. It argues for a broadening of the debate, which is dominated by technocratic arguments, emphasizing the lack of financial resources, technology or skills as the major barriers for effective implementation. Describing the dynamic interplay of ‘formal’ operational programme structures and ‘informal’ traditional institutions in delivering the CT-OVC – the largest and oldest cash transfer programme in Kenya – it argues for the need to look more closely into the local political economy as an important mediating arena for implementing social policies. Implementation is heavily contingent upon the local social, political and institutional context that influences and shapes its outcomes. These processes are highly dynamic and ambivalent evolving between ‘formal’ and ‘informal’ structures and institutions. They may change over time and place, challenging the implicit assumption that programmes are evenly implemented across geographic and political entities.
    Keywords: Social policies, Kenya, local political economy, traditional authorities, devolution
    JEL: I38
    Date: 2018–05

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