nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒10‒15
seventeen papers chosen by
Stan C. Weeber
McNeese State University

  1. Skill of the Immigrants and Vote of the Natives: Immigration and Nationalism in European Elections 2007-2016 By Simone Moriconi; Giovanni Peri; Riccardo Turati
  2. Backlash in Attitudes after the Election of Extreme Political Parties By Carlsson, Magnus; Dahl, Gordon B.; Rooth, Dan-Olof
  3. Unbundling Polarization By Nathan Canen; Chad Kendall; Francesco Trebbi
  4. Vote trading in power-sharing systems: A laboratory investigation By Nikolas Tsakas; Dimitrios Xefteris; Nicholas Ziros
  5. Does Immigration Decrease Far-Fight Popularity? Evidence from Finnish Municipalities By Jakub Lonsky
  6. Migration, Political Institutions, and Social Networks By Batista, Catia; Seither, Julia; Vicente, Pedro C.
  7. Why do voters elect less qualified candidates? By Mizuno, Nobuhiro; Okazawa, Ryosuke
  8. UK Political Cycle and the Effect on National House Prices: An Exploratory Study By Bismark Aha; David.M Higgins; Timothy Lee
  10. Extensions of the Shapley Value for Environments with Externalities By Inés Macho-Stadler; David Pérez-Castrillo; David Wettstein
  11. Cooperation, Discounting, and the Effects of Delayed Costs and Benefits By Felix Koelle; Thomas Lauer
  12. Collective Action and Application of Tax Regulation in the Mining Industry in Development Countries: the Case of Cameroon By Biloa Essimi, Jean Aristide
  13. Who Votes for Medicaid Expansion? Lessons from Maine’s 2017 Referendum By David A. Matsa; Amalia R. Miller
  14. Organised Crime, Captured Politicians and the Allocation of Public Resources By Nicola Mastrorocco
  15. In the Shadow of Coase By Kevin Berry; Anthony R. Delmond; Rémi Morin Chassé; John C. Strandholm; Jason F. Shogren
  16. Do image spillovers deter rule breaking? By Rémi Suchon; Daniel Houser
  17. The Future of Eurozone Fiscal Governance By Sarah Ciaglia; Clemens Fuest; Friedrich Heinemann

  1. By: Simone Moriconi; Giovanni Peri; Riccardo Turati
    Abstract: In this paper we document the impact of immigration at the regional level on Europeans’ political preferences as expressed by voting behavior in parliamentary or presidential elections between 2007 and 2016. We combine individual data on party voting with a classification of each party's political agenda on a scale of their "nationalistic" attitudes over 28 elections across 126 parties in 12 countries. To reduce immigrant selection and omitted variable bias, we use immigrant settlements in 2005 and the skill composition of recent immigrant flows as instruments. OLS and IV estimates show that larger inflows of highly educated immigrants were associated with a change in the vote of citizens away from nationalism. However the inflow of less educated immigrants was positively associated with a vote shift towards nationalist positions. These effects were stronger for non-tertiary educated voters and in response to non-European immigrants. We also show that they are consistent with the impact of immigration on individual political preferences, which we estimate using longitudinal data, and on opinions about immigrants. Conversely, immigration did not affect electoral turnout. Simulations based on the estimated coefficients show that immigration policies balancing the number of high-skilled and low-skilled immigrants from outside the EU would be associated with a shift in votes away from nationalist parties in almost all European regions.
    JEL: D72 I28 J61
    Date: 2018–09
  2. By: Carlsson, Magnus (Linnaeus University); Dahl, Gordon B. (University of California, San Diego); Rooth, Dan-Olof (Stockholm University)
    Abstract: Far-right and far-left parties by definition occupy the fringes of politics, with policy proposals outside the mainstream. This paper asks how public attitudes about such policies respond once an extreme party increases their political representation at the local level. We study attitudes towards the signature policies of two radical populist parties in Sweden, one from the right and one from the left, using panel data from 290 municipal election districts. To identify causal effects, we take advantage of large nonlinearities in the function which assigns council seats, comparing otherwise similar elections where a party either barely wins or loses an additional seat. We estimate that a one seat increase for the far-right, anti-immigration party decreases negative attitudes towards immigration by 4.1 percentage points, in opposition to the party's policy position. Likewise, when a far-left, anti-capitalist party politician gets elected, support for a six hour workday falls by 2.7 percentage points. Mirroring these attitudinal changes, the far-right and far-left parties have no incumbency advantage in the next election. Exploring possible mechanisms, we find evidence that when the anti-immigrant party wins a marginal seat, they experience higher levels of politician turnover before the next election and receive negative coverage in local newspapers. These findings demonstrate that political representation can cause an attitudinal backlash as fringe parties and their ideas are placed under closer scrutiny.
    Keywords: political backlash, far-right and far-left parties, public attitudes
    JEL: D72 H70
    Date: 2018–08
  3. By: Nathan Canen; Chad Kendall; Francesco Trebbi
    Abstract: This paper investigates the determinants of political polarization, a phenomenon of increasing relevance in Western democracies. How much of polarization is driven by divergence in the ideologies of politicians? How much is instead the result of changes in the capacity of parties to control their members? We use detailed internal information on party discipline in the context of the U.S. Congress – whip count data for 1977-1986 – to identify and structurally estimate an economic model of legislative activity where agenda selection, party discipline, and member votes are endogenous. The model delivers estimates of the ideological preferences of politicians, the extent of party control, and allows us to assess the effects of polarization through agenda setting (i.e. which alternatives to a status quo are strategically pursued). We find that parties account for approximately 40 percent of the political polarization in legislative voting over this time period, a critical inflection point in U.S. polarization. We also show that, absent party control, historically significant economic policies, including Debt Limit bills, the Social Security Amendments of 1983, and the two Reagan Tax Cuts of 1981 and 1984 would have not passed or lost substantial support. Counterfactual exercises establish that party control is highly relevant for the probability of success of a given bill and that polarization in ideological preferences is instead more consequential for policy selection, resulting in different bills being pursued.
    JEL: P16 P48
    Date: 2018–09
  4. By: Nikolas Tsakas; Dimitrios Xefteris; Nicholas Ziros
    Abstract: In theory, decentralized vote trading in power-sharing systems promotes: a) efficiency, by assigning greater decision-making power to individuals that care a lot about the election’s outcome, and b) dispersion of benefits, since even individuals that have little interest about the electoral result can profit by selling their votes. We experimentally test these intuitions in the laboratory and find that, indeed, allowing real subjects to trade votes for money in such systems increases collective welfare, and substantially redistributes it towards those that are less concerned about the election. Importantly, these findings hold true under alternative trading institutions, thus, reinforcing their empirical relevance.
    Keywords: vote trading; power sharing; experiment; collective welfare
    JEL: D72
    Date: 2018–10
  5. By: Jakub Lonsky
    Abstract: Across Europe, far-right parties have made signi ficant electoral gains in recent years, posing aserious threat to the European integration process. Their anti-immigration stance is consideredone of the main factors behind their success. Yet, the causal evidence on how immigrationaffects far-right voting is still relatively scarce. Using data from Finland, this paper studiesthe effect of immigration on voting for the far-right Finns Party on a local level. Exploiting aconvenient setup for a shift-share instrument, I find that one percentage point increase in theshare of foreign citizens in municipality decreases Finns Party's vote share by 3.4 percentagepoints. A placebo test using pre-period data confi rms this effect is not driven by persistenttrends at the municipality level. The far-right votes lost to immigration are captured by the twopro-immigration parties. In addition, immigration is found to increase voter turnout while theprotest vote remains unaffected. Turning to potential mechanisms, the negative effect is onlypresent in municipalities with high initial exposure to immigrants. Moreover, I provide someevidence for welfare-state channel as a plausible mechanism behind the main result.
    Date: 2018–01
  6. By: Batista, Catia (Universidade Nova de Lisboa); Seither, Julia (Universidade Nova de Lisboa); Vicente, Pedro C. (Universidade Nova de Lisboa)
    Abstract: What is the role of international migrants and, specifically, migrant networks in shaping political attitudes and behavior in migrant sending countries? Our theoretical framework proposes that migration might change individual social identities and thus stimulate intrinsic motivation for political participation, while it may also improve knowledge about better quality political institutions. Hence, international migration might increase political awareness and participation both by migrants and by other individuals in their networks. To test this hypothesis, we use detailed data on different migrant networks (geographic, kinship, and chatting networks), as well as several different measures of political participation and electoral knowledge (self-reports, behavioral, and actual voting measures). These data were purposely collected around the time of the 2009 elections in Mozambique, a country with substantial emigration to neighboring countries – especially South Africa - and with one of the lowest political participation rates in the region. The empirical results show that the number of migrants an individual is in close contact with via regular chatting significantly increases political participation of residents in that village – more so than family links to migrants. Our findings are consistent with both improved knowledge about political processes and increased intrinsic motivation for political participation being transmitted through migrant networks. These results are robust to controlling for self-selection into migration as well as endogenous network formation. Our work is relevant for the many contexts of South-South migration where both countries of origin and destination are recent democracies. It shows that even in this context there may be domestic gains arising from international emigration.
    Keywords: international migration, social networks, political participation, information, diffusion of political norms, governance
    JEL: D72 D83 F22 O15
    Date: 2018–08
  7. By: Mizuno, Nobuhiro; Okazawa, Ryosuke
    Abstract: Voters sometimes vote for seemingly less qualified candidates; the winners of elections are sometimes less competent than the losers in light of candidates' observable characteristics such as their past careers. To explain this fact, we develop a political agency model with repeated elections in which a voter elects a policy maker among candidates with different competency (valence) levels. We show that politicians' competency relates negatively with political accountability when the challenger in the future election is likely to be incompetent. When this negative relation exists, voters prefer to elect an incompetent candidate if they emphasize politicians' policy choices over their competency. The negative relation between competency and accountability is possible because voters cannot commit to future voting strategies. Furthermore, voters' private information about how they evaluate candidates' competency generates a complementary mechanism leading to the negative relation between competency and accountability. This mechanism implies that voters' anti-elitism can be rational ex post even if it is groundless in the first place.
    Keywords: Candidates' competency, Political agency, Repeated elections, Private information, Signaling
    JEL: D72 D82
    Date: 2018–09–27
  8. By: Bismark Aha; David.M Higgins; Timothy Lee
    Abstract: Over the last two decades, many developed countries have experienced notable changes in house prices. This exploratory study considers if house price movements in the UK can be linked to the political cycle as governments realise homeowners represent a large portion of the voter base and their voting decisions could be influenced by the magnitude and direction of house price changes. Specifically, the study investigates whether house prices behave differently before and after elections and under different political regimes. To examine this relationship, the study analyzed quarterly UK national house price data since 1960, along with data on the results of UK parliamentary elections during the same period. Over this period, real UK house prices increased by an average of 2.83% per annum. While there is no evidence that house prices in the UK behave significantly differently under different political parties, it is evident that house prices perform much better in the last year before an election, compared to the first year after an election. House prices increased by 5.2% per annum, on the average, in the last year before an election compared to 1.0% per annum in the first year following an election. As this research clearly identifies major variations in house price performance around election times, residential property investment decisions should take into consideration the political cycle.
    Keywords: Housing Market; Political Studies; Property Cycles; Residential house prices; United Kingdom
    JEL: R3
    Date: 2018–01–01
  9. By: Marco Alberto De Benedetto; Maria De Paola (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: We study the effect of term limits on voter turnout in local Italian elections. Since 2014 the Italian law allows mayors in municipalities with a population size lower than 3,000 inhabitants to re-run for a third term, whereas mayors in cities with a number of residents above the cutoff still face a two-term limit. The introduction of the reform permits us to implement a difference-in-discontinuities design exploiting the before/after with the discontinuous policy change. We find that voters negatively react to the introduction of the reform and in particular electoral participation decreases by about 5 percentage points in municipalities eligible to the treatment compared to municipalities in the control group. This negative effect is essentially driven by a decrease in the political competition. We also find that relaxing term limits does not improve the quality of politicians running for election.
    Keywords: Diff-in-discontinuities, Voter Turnout, Political Competition
    JEL: C21 D72 H70
    Date: 2018–10
  10. By: Inés Macho-Stadler; David Pérez-Castrillo; David Wettstein
    Abstract: Shapley (1953a) formulates his proposal of a value for cooperative games with transferable utility in characteristic function form, that is, for games where the resources every group of players has available to distribute among its members only depend on the members of the group. However, the worth of a coalition of agents often depends on the organization of the rest of the players. The existence of externalities is one of the key ingredients in most interesting economic, social, or political environments. Thrall and Lucas (1963) provide the first formal description of settings with externalities by introducing the games in partition function form. In this chapter, we present the extensions of the Shapley value to this larger set of games. The different approaches that lead to the Shapley value in characteristic function form games (axiomatic, marginalistic, potential, dividends, non-cooperative) provide alternative routes for addressing the question of the most suitable extension of the Shapley value for the set of games in partition function form.
    Keywords: shapley value, Externalities
    JEL: C71 D62
    Date: 2018–10
  11. By: Felix Koelle (University of Cologne); Thomas Lauer (University of Cologne)
    Abstract: Numerous studies have investigated how people resolve intertemporal trade-offs in individual decision making, but little is known about how the timing of costs and benefits affects behavior in strategic decision situations. Here, we experimentally study how delayed costs and/or benefits affect cooperation in a social dilemma situation. We find that cooperation is substantially reduced (increased) when only the benefits (costs) of cooperation are shifted towards the future. We show that the change in contributions can be explained by (i ) a shift in the beliefs about others' cooperativeness, (ii ) a shift in subjects' willingness to conditionally cooperate, and (iii ) a subject's degree of impatience. We further demonstrate that the amount of economic incentives needed to close the cooperation gap are substantial, indicating discount rates in our strategic context of about 50 percent, much higher than the ones typically observed in individual decision contexts. Finally, when both costs and benefits are delayed to the same extent, contribution levels do not change, indicating that cooperation is time-consistent.
    Keywords: Public goods, cooperation, discounting, time preferences, delay
    Date: 2018–10
  12. By: Biloa Essimi, Jean Aristide
    Abstract: This paper highlights civil society actors involved in collecting and monitoring the tax obligations of mining companies in Cameroon. To achieve this goal, we used data collection from leaders or members of civil society companies through semi-structured interviews using a questionnaire developed for this purpose on the one hand and the tools of game theory and sociology of behavior on the other hand. The study shows that there are two civil society organization groups (CSOs) in the extractive sector: CSO leaders and CSO followers. They are all grouped together in the "Cameroon Coalition Publish What You Pay". They are characterized by a lack of specialization, a strong identity withdrawal and a lack of expertise in public finances because the promoters are recruited in various sectors of the working life. One could speak of an inadequacy training job and a game indefinitely repeated between the actors.
    Keywords: Engagement, Citizenship, Training, Governance, Game Theory, Cameroon
    JEL: C7 H2 O1 O12
    Date: 2018–06–29
  13. By: David A. Matsa; Amalia R. Miller
    Abstract: In November 2017, Maine became the first state in the nation to vote on a key provision of the Affordable Care Act: the expansion of Medicaid. We analyze local voting results to identify characteristics of areas that support Medicaid expansion. Support is strongly correlated with voter education. Places with more bachelor’s degree holders more often vote in favor, whereas those with more associate’s degree graduates vote against. Other patterns are consistent with economic self-interest. Conditional on education rates, areas with more uninsured individuals who would qualify for expanded coverage tend to vote in favor, while those with more high-income individuals vote against. Also conditional on education rates, greater hospitals employment is associated with support for expansion, but the presence of other health professionals, whose incomes might decrease from expansion, is associated with less support. Extrapolating from Maine to other states, our model predicts that hypothetical referendums on Medicaid expansion would pass in five of the 18 states that had not yet expanded Medicaid coverage.
    JEL: D72 I13 I23
    Date: 2018–09
  14. By: Nicola Mastrorocco (Trinity College Dublin)
    Abstract: What is the impact of organised crime on the allocation of public resources and on tax collection? This paper studies the consequences of collusion between members of criminal organisations and politicians in Italian local governments. In order to capture the presence of organised crime, we exploit the staggered enforcement of a national law allowing for dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this collusion by using newly collected data on public spending, local taxes and elected politicians at the local level. Differences-in-differences estimates reveal that infiltrated local governments not only spend more on average on construction and waste management and less on police enforcement, but also collect fewer fiscal revenues. In addition, we uncover key elements of local elections associated with mafia-government collusion. In particular, Regression Discontinuity estimates show that infiltration is more likely to occur when right-wing parties win local elections.
    Keywords: Organized crime, Elections, Collusions, Public Spending, Italy.
    JEL: K42 H72 D72
    Date: 2018–09
  15. By: Kevin Berry (Institute of Social and Economic Reesarch, Department of Economics, University of Alaska Anchorage); Anthony R. Delmond (The University of Tennessee at Martin); Rémi Morin Chassé (University of Quebec at Chicoutimi); John C. Strandholm (University of South Carolina Upstate); Jason F. Shogren (Department of Economics, University of Wyoming)
    Abstract: We explore how three parties bargain over a public good created by development on only one party’s property. With strong property rights, parties secure equal payment. With weak rights, parties reimburse costs and divide surplus so the developer is indifferent.
    Keywords: public good, bargaining, experiment
    JEL: C7 C92 H41 D63
    Date: 2018–08
  16. By: Rémi Suchon (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Daniel Houser (Interdisciplinary Center for Economic Science, George Mason University - George Mason University [Fairfax])
    Abstract: We test whether individuals internalize the effects that their behavior may have on the social image of their group. In our experiment, we recruit pairs of real-life friends and study whether rule breaking in the form of misreporting decreases when misreporting may have negative spillovers on the image of the friend. We find that participants hurt their friends' social image by misreporting because external observers update their beliefs: they rightfully expect that a participant whose friend misreported is likely to misreport himself. However, participants misreport as often when their behavior can hurt the friend's image as when it cannot, even though hurting their friends' image reduces their own monetary gains. Our interpretation is that they underestimate the impact of their behavior on external observers' beliefs about their friends. Our results cast doubts on the capacity of groups to sustain a good image absent the possibility of punishment, which is bad news. The good news is that external observers may use image spillovers to update their beliefs and interact with members of social groups more efficiently.
    Keywords: Social image,Group image,Misreporting
    Date: 2018
  17. By: Sarah Ciaglia; Clemens Fuest; Friedrich Heinemann
    Abstract: Despite the great achievements for peace and economic prosperity, the European project has recently been challenged with public support being on decline in many member states, culminating in the decision of the United Kingdom to leave the EU. Against this background, this study looks into ‘European identity’ as a concept of fundamental importance for European integration. In the economic literature, ‘identity’ has been increasingly recognized as a crucial driver of individual behavior with joint group identities as a precondition for trustful cooperation. Hence, some type of European identity (in addition to, not replacing national identities) can be regarded as one of the underlying preconditions for the European project. Against this background, this study develops the contents and nuances of the ‘European identity’ terminology as distinct from other categories like EU support. It empirically describes ongoing trends and comprehensively summarizes the literature’s insights on the important determinants of European identity. On the basis of identified determinants and target groups a classification of measures to promote European identity is developed. This classification is based on the distinctions between a ‘civic’ and a ‘cultural’ European identity on the one hand and between the ‘input’ and ‘output legitimacy’-creating function of potential measures. Based on this classification and survey of possible approaches for the advancement of European identity we give a broad overview on possible approaches to foster European identity. We elaborate six proposals in more detail: transnational party lists, an EU Citizens’ Assembly, EU consular offices, Pensioners’ Erasmus, a ‘European Waltz’ program, and an EU public service broadcaster.
    Date: 2018

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