nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2019‒04‒29
seven papers chosen by
Stan C. Weeber
McNeese State University

  1. Political Budget Cycles: Evidence from Swiss Cantons By Baldi, Guido; Forster, Stephan
  2. Norm Compliance,Enforcement,and the Survival of Redistributive Institutions By Gürdal, Mehmet Y.; Torul, Orhan; Vostroknutov, Alexander
  3. The Political Economy of Immigration Enforcement: Conflict and Cooperation under Federalism By Alberto Ciancio; Camilo García-Jimeno
  4. Observing Actions in Bayesian Games By Dominik Grafenhofer; Wolfgang Kuhle
  5. Effective Leadership Selection in Complementary Teams By Hattori, Keisuke; Yamada, Mai
  7. A Heavy Hand or a Helping Hand? Information Provision and Citizen Preferences for Anti-Crime Policies By Gingerich, Daniel; Scartascini, Carlos

  1. By: Baldi, Guido; Forster, Stephan
    Abstract: Models of political budget cycles assume that politicians use fiscal policy to increase their chances of re-election. However, empirical results for advanced economies provide ambiguous support for the existence of such electoral cycles. Also, studies focusing on the regional or local level of advanced economies have found a variety of different results. In this paper, we use data at the sub-federal level of Switzerland from 1978 through 2015 to test for the presence of political budget cycles. Swiss regions called cantons are highly autonomous with regard to budgetary policy and have established direct democratic systems with frequent referendums that often affect budgetary issues. In most cantons, there are fiscal policy rules that restrict the budgetary leeway of governments. Overall, the system of government is designed to foster consensus seeking and gradual adjustment. These features should make the short-run opportunistic or partisan use of fiscal policy less likely in Swiss cantons. Rather surprisingly, however, we find at least some evidence for an electoral cycle in government spending. For government revenue or the overall budget, our empirical results do not point to an electoral cycle.
    Keywords: Political budget cycle,fiscal policy,direct democracy
    JEL: D72 E62 H62
    Date: 2019
  2. By: Gürdal, Mehmet Y. (bogazici university, istanbul); Torul, Orhan (bogazici university, istanbul); Vostroknutov, Alexander (General Economics 1 (Micro))
    Abstract: We study the incentives that drive behavior in redistributive institutions with various levels of enforcement. We are interested in how the opportunistic incentive to use a redistributive institution for personal gain and the desire to follow the rules of a regulated community, populated by similarly obedient individuals, interact and determine the success or failure of an institution. In the experiment, subjects can repeatedly join one of three groups, which are defined by explicitly stated injunctive norms that require to put all, half, or any amount of income to a common pool for redistribution. The treatments differ in the level of enforcement of these norms. We find that contributions are sustained only in the case of full enforcement. However, a sizeable number of subjects persist in following the norms of redistribution even after experiencing many periods of losses due to free riding. We find that subjects with strong propensity to follow norms perceive the same level of income inequality as fairer, when it was achieved without breaking the norm, and favor redistributive mechanisms with more stringent rules. This suggests that well-defined redistributive norms can create a powerful incentive for cooperation as many individuals seem to prefer stable regulated egalitarian institutions to unregulated libertarian ones. Some form of enforcement is, nevertheless, required to protect egalitarian institutions from exploitation by free riders.
    Keywords: social norms, taxation, redistribution, egalitarianism, libertarianism, limited enforcement
    JEL: C91 C92 H26 H41
    Date: 2019–04–16
  3. By: Alberto Ciancio; Camilo García-Jimeno
    Abstract: We study how the shared responsibilities over immigration enforcement by local and federal levels in the US shape immigration enforcement outcomes, using detailed data on the Secure Communities program (2008-2014). Tracking the movement of arrested unlawfully present immigrants along the several steps of the immigration enforcement pipeline, and exploiting a large shift in federal enforcement priorities in mid 2011, we disentangle the three key components of the variation in deportation rates: federal enforcement efforts, local enforcement efforts, and the composition of the pool of arrestees. This decomposition allows us to recover the local (county) level response to changes in federal enforcement intensity. Among urban counties, 80 percent, mostly Democratic but with small shares of Hispanics, exhibit strategic substitutabilities. The inverse relationship between federal and local efforts allowed most counties to reduce opposition to the policy, and was accompanied by an increased alignment of local and federal preferences. The federal level was very effective in directing its enforcement efforts towards counties where it expected local collaboration, but conflict was mostly driven by a change in the types of unlawfully present immigrants it prioritized for removal.
    JEL: D73 D78 H73 H77 J15 J61
    Date: 2019–04
  4. By: Dominik Grafenhofer; Wolfgang Kuhle
    Abstract: We study Bayesian coordination games where agents receive noisy private information over the game's payoff structure, and over each others' actions. If private information over actions is precise, we find that agents can coordinate on multiple equilibria. If private information over actions is of low quality, equilibrium uniqueness obtains like in a standard global games setting. The current model, with its flexible information structure, can thus be used to study phenomena such as bank-runs, currency crises, recessions, riots, and revolutions, where agents rely on information over each others' actions.
    Date: 2019–04
  5. By: Hattori, Keisuke; Yamada, Mai
    Abstract: This paper considers effective leadership selection in a simple two-person team production model with heterogeneous agents. We demonstrate leadership success through synergy by showing that the existence of synergy makes effort complementary, implying that the leader devote more effort than the follower and that a team with a leader yields greater production than a team without a leader. We also show that, to elicit greater team production, a principal should appoint the agent with higher (lower) opportunity cost as the leader (follower). Even if the agents' opportunity costs are unobservable to the principal, the principal can select a better leader by proposing a larger position allowance for the leader. The results may explain why many organizations indeed favor leadership styles and why real-world leaders receive higher compensation than followers.
    Keywords: Team production; Leadership selection; Synergy effect; Complementary team
    JEL: D21 H41 M54
    Date: 2019–04–21
  6. By: Denis Stremoukhov (National Research University Higher School of Economics)
    Abstract: Unlike in the 1990s and early 2000s, nowadays scholars rarely address the issue of international activity of Russian regions (phenomenon known as paradiplomacy). Due to the successful centralization efforts, Russian governors almost lost their domestic as well as external agency. However, there is still a considerable variation in the levels of their international activity which remains unexplained. Employing an original dataset on the international activity of Russian governors from 2005 to 2015 I investigate the effect local political regime, ethnicity and other factors have on the level of gubernatorial participation in paradiplomacy. Contrary to other studies I find that ethnicity has a positive effect on the external activity. I argue that paradiplomacy of republics serves as a tool of their ethnic policy. I also find that more democratic local political regimes bolster the willingness of the governors to participate in paradiplomacy. Varyag governors with no prior connections to the region are also more active internationally.
    Keywords: paradiplomacy, subnational governance, ethnicity, Russia.
    JEL: Z
    Date: 2019
  7. By: Gingerich, Daniel; Scartascini, Carlos
    Abstract: Welfarist justifications of democracy presume that citizens have policy preferences that are responsive to pertinent information. Is this accurate? This paper addresses that question by providing a model and empirical test of how citizens’ policy preferences respond to information in the arena of anti-crime policy. The paper’s model shows that preferences for anti-crime policy hinge on expectations about the crime rate: in high crime regimes punitive policies are preferred, whereas in low crime regimes social policies are. To evaluate the model, the authors employ an information experiment embedded in the 2017 LAPOP survey conducted in Panama. The evidence is partially consistent with the paper’s theory. As expected, a high crime message induced stronger preferences in favor of punitive policies. Unanticipated by the paper’s theory, though, is the finding that a low crime message did not induce stronger preferences in favor of social policies. These findings raise the possibility that political communication about crime may have an inherent punitive policy bias.
    Date: 2019–02

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