nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2019‒11‒18
five papers chosen by
Stan C. Weeber, McNeese State University

  1. Accumulation by Dispossession and Electoral Democracies : An Analysis of Land Acquisition for Special Economic Zones in India By Kartik Misra
  2. Tackling the Bundestag growth by introducing fraction-valued votes By Tanguiane, Andranick S.
  3. Social Distance and Parochial Altruism: An Experimental Study By Béatrice Boulu-Reshef; Jonah Schulhofer-Wohl
  4. Crowdfunding dynamics By BELLEFLAMME Paul,; LAMBERT Thomas,; SCHWIENBACHER Armin,
  5. The political economy of multilateral lending to European regions By Asatryan, Zareh; Havlik, Annika

  1. By: Kartik Misra (Department of Economics, University of Massachusetts Amherst)
    Abstract: Forcible acquisition of agricultural land to facilitate accumulation by dispossession attempts like setting up of Special Economic Zones (SEZ) is fiercely resisted by farmers in India. These agitations may determine the political viability of governments. The ability if the state to enact and implement policies favoring accumulation by dispossession is determined by the political conflict between, on the one side, the elite and the state, and, on the other side, dispossessed farmers and landless agricultural workers. The outcome of this conflict is determined by the distribution of power in society and the success of different groups in mobilizing and enforcing their class interests. Using a simple model of the political conflict over land acquisition and new data-set on SEZs that failed to acquire land from farmers, this paper shows that factors like inequality in land ownership (class) and hierarchies of caste and gender hinder the ability of small and marginal farmers from protecting their class interests even though they have de jure political rights and majority in the voting process. Further, excessive political competition along caste and ethnic lines weakens the political power of farmers and reduces the probability of success of farmer movements. Finally, the promise of formal employment and higher wages does not convince marginalized communities or educated farmers to support SEZs.
    Date: 2019
  2. By: Tanguiane, Andranick S.
    Abstract: Currently, only China has a parliament larger than the German Bundestag, which continues to grow due to the increasing number of overhang mandates. In 2016, Norbert Lammert, then president of the Bundestag, proposed to restrict it to 630 members by allocating mandates according to quotas for each of the German states (Länder), which should be proportional to their population. This idea found no approval among the German parties, neither large nor small [Finthammer 2018]. Only in October 2019, after predictions that the next Bundestag could exceed 800 seats, did some 100 German experts in constitutional law write an open letter suggesting to constrain its size by reducing the number of effective constituencies, and the Bundestag vice-president, Thomas Oppermann, called for such a reform without delay. These and other proposals require a profound change in the existing election system. But a mathematical solution to the problem does not require such changes and is much simpler. We can prevent unfettered growth of the Bundestag - caused by allotting too many direct mandates to parties that received too few second votes - by replacing the principle of "one man, one vote" with a new concept: fraction-valued votes for Bundestag members. Such a practice could make overhang mandates unnecessary and the basic 598 Bundestag seats sufficient under all circumstances. For this purpose, the members of the overrepresented parties (because they receive too many direct mandates) should have vote power 1. We explain the vote power adjustments using the example of the 2017 Bundestag.
    Keywords: representative democracy,elections,theory of voting,proportional representation
    JEL: D71
    Date: 2019
  3. By: Béatrice Boulu-Reshef (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne); Jonah Schulhofer-Wohl (University of Virginia, The Department of Politics)
    Abstract: Parochial altruism-individual sacrifice to benefit the in-group and harm an out-group-undermines inter-group cooperation and is implicated in a plethora of politically-significant behaviors. We report new experimental findings about the impact of variation in social distance within the in-group together with variation in social distance between the in-and out-groups on parochial altruism. Building from a minimal group paradigm setup , we find that differential social distance has a systematic effect on individual choice in a setting of potential inter-group conflict. In particular, parochial altruism is stimulated when individuals' distance to both their in-and out-group is high. A long-standing finding about behavior in contexts of inter-group conflict is that low social distance facilitates collective action. Our results suggest that the effects of high social distance may create a potential additional pathway to group-based individual action. Research on inter-group conflict and collective action can be advanced by investigating such effects.
    Date: 2019–05–21
  4. By: BELLEFLAMME Paul, (Université catholique de Louvain); LAMBERT Thomas, (Rotterdam School of Management); SCHWIENBACHER Armin, (Université Côte d’Azur, Euralille)
    Abstract: Various forms of social learning and network effects are at work on crowdfunding platforms, giving rise to informational and payoff externalities. We use novel entrepreneur-backer data to study how these externalities shape funding dynamics, within and across projects. We find that backers decide to back a particular project based on past contributions not only to that project - as documented by prior work - but also to other contemporaneous projects - a novel result. Our difference-in-differences estimates indicate that such ‘cross-project funding dynamics’ account for 4-5% in the increase of contributions that projects generate on a daily basis. We show that recurrent backers are the main transmission channel of cross-project funding dynamics: by initiating social learning about project existence and quality, recurrent backers encourage future funding by other backers. Our results demonstrate that even though contemporaneous projects compete for funding, they jointly benefit from their common presence on the platform. We finally show that these crowdfunding dynamics stir platform growth, with important consequences for competition among platforms.
    Keywords: crowdfunding, digital platforms, FinTech, network effects, social learning
    JEL: D43 G23 L14 L26 L86
    Date: 2019–07–10
  5. By: Asatryan, Zareh; Havlik, Annika
    Abstract: We study the political economy of allocation decisions within a major state investment bank. Our focus is the European Investment Bank (EIB) - "The Bank of the EU" - which is the largest multilateral lending (and borrowing) institution in the world. We collect (and make available) information on the regions of origin of about 500 national representatives at the EIB's Board of Directors - the decisive body for loan approvals - since its foundation in 1959 and show that a representative's appointment increases the probability of her sub-national region receiving a loan by about 17 percentage points. This "home-bias" effect is driven by large loans financing infrastructure projects. We provide several pieces of evidence, which are consistent with the hypothesis that home-bias lending may lead to resource misallocation, however we cannot conclusively demonstrate this case of economic ineffciency.
    Keywords: Political economy of international organizations,Regional favoritism,European Investment Bank,European Union
    JEL: D72 F53 G2
    Date: 2019

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