nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2021‒11‒22
eight papers chosen by
Stan C. Weeber, McNeese State University

  1. When Do Politicians Appeal Broadly? The Economic Consequences of Electoral Rules in Brazil By Moya Chin
  2. Socioeconomic factors and shifts in ideological orientation among political parties: Parliamentary elections in Slovakia from 1998 to 2020 By Bačo, Tomáš; Baumöhl, Eduard
  3. Humanistic Digital Governance By Snower, Dennis J.; Twomey, Paul
  4. The Financial Drivers of Populism in Europe By Luigi Guiso; Massimo Morelli; Tommaso Sonno; Helios Herrera
  5. Free Trade and the Formation of Environmental Policy: Evidence from US Legislative Votes By Jevan Cherniwchan; Nouri Najjar
  6. Strategy-proofness of the unanimity with status-quo rule over restricted domains By Sarvesh Bandhu; Bishwajyoti Mondal; Anup Pramanik
  7. Contingent Reasoning and Dynamic Public Goods Provision By Evan M. Calford; Timothy N. Cason
  8. Crime as Conditional Rule Violation By Christoph Engel

  1. By: Moya Chin
    Abstract: Electoral rules determine how voters' preferences are aggregated and translated into political representation, and their design can lead to the election of representatives who represent broader or narrower constituencies. Relying on a regression discontinuity design, I contrast single- and two-round elections in Brazilian municipal races. Two-round elections use two rounds of voting to elect a winner, ensuring that the eventual winner obtains at least 50% of the vote. Theoretically, this can provide incentives for candidates to secure a broader base of support. Consistent with this, I show that in two-round elections, candidates represent a more geographically diverse group of voters, public schools have more resources, and there is less variation in resources across public schools. Effects appear to be driven by strategic responses of candidates, rather than differential entry into races. These results suggest that two-round elections can lead candidates to secure broader bases of support and to distribute public goods more broadly.
    Keywords: Electoral institutions, voting theory, political responsiveness, political favoritism, education resources; candidate maximization problem; two-round election; voter threshold; appendix C. theory appendix; concentration of voter; swingable voter; Infrastructure; Income; Budget planning and preparation
    Date: 2021–08–27
  2. By: Bačo, Tomáš; Baumöhl, Eduard
    Abstract: We analyze the election results of political parties and ideological blocs in parliamentary elections held in the Slovak Republic from 1998 to 2020 across 79 districts (LAU 1 level). Interestingly, correlations among parties’ election results between consecutive elections are very high across all elections from 1998 until 2016, meaning that any increase or decrease in electoral support was almost uniform across all districts from one election to another. The last elections disrupted this trend, and in line with the significantly lower degree of correlation with prior elections for all ideological groups, we observe territorially heterogeneous voting behavior. Especially in districts with left-wing support, the electorate shifted toward what we refer to as ideologically vague parties. Within a seemingly unrelated regression (SUR) framework, we show that systematic influence of economic variables on the election results is present only for right-wing parties. For other ideological blocs, age and population density appear to be more influential factors. The “economically rational” right-wing election camp, however, has exhibited a decline in electoral support.
    Keywords: Economic voting,Elections,Popularity,Government support,Populism
    JEL: D72 E24 E61 P20
    Date: 2021
  3. By: Snower, Dennis J. (Hertie School of Governance); Twomey, Paul (Global Solutions Initiative)
    Abstract: We identify an important feature of current digital governance systems: "third-party funded digital barter": consumers of digital services get many digital services for free (or underpriced) and in return have personal information about themselves collected for free. In addition, the digital consumers receive advertising and other forms of influence from the third parties that fund the digital services. The interests of the third-party funders are not well-aligned with the interests of the digital consumers. This fundamental flaw of current digital governance systems is responsible for an array of serious problems, including inequities, inefficiencies, manipulation of digital consumers, as well as dangers to social cohesion and democracy. We present four policy guidelines that aim to correct this flaw by shifting control of personal data from the data aggregators and their third-party funders to the digital consumers. The proposals cover "official data" that require official authentication, "privy data" that is either generated by the data subjects about themselves or by a second parties, and "collective data." The proposals put each of these data types under the individual or collective control of the data subjects. There are also proposals to mitigate asymmetries of information and market power.
    Keywords: digital governance, digital services, personal data, digital service providers, market power, advertising, preference manipulation
    JEL: O33 P34 O35 O36 O38 H41 L41 L44 L51
    Date: 2020–12
  4. By: Luigi Guiso (Einaudi Institute for Economics and Finance and CEPR); Massimo Morelli (Bocconi University, IGIER, PERICLES and CEPR); Tommaso Sonno (University of Bologna and CEP (LSE)); Helios Herrera (Warwick University and CEPR)
    Abstract: This paper argues that the financial crisis was a watershed in the burst of populism both on the demand side (voters behaviour) and on the supply side (political parties behaviour). On the demand side, we provide novel results on the causal effect of the financial crisis on trust, turnout and voting choices via its effects on voters economic insecurity. Economic insecurity peaks during the financial crisis and extends to segments of the population untouched by the globalization and robotization shocks. To establish causality, we use a pseudo-panel analysis and instrument the economic insecurity of different cohorts leveraging on a new methodology designed to highlight the different sensitivity to financial constraints for people in different occupations. On the supply side, we trace from manifestos the policy positions of old and new parties showing that the supply of populism had the largest jump right after the financial crisis. The size of the jump is largest in countries with low fiscal space and for parties on the left of the political spectrum. We provide a formal rationalization for the key role of fiscal space, showing how the pre-financial crisis shocks enter the picture as sources of a shrinking fiscal space.
    Date: 2021
  5. By: Jevan Cherniwchan (Department of Economics, Carleton University); Nouri Najjar (Department of Economics,)
    Abstract: We examine NAFTA’s effect on roll call votes on environmental legislation in the US House of Representatives. Our results suggest that reductions in US tariffs caused representatives of affected districts to significantly reduce their support for environmental policy, but reductions in Mexican tariffs did little to affect legislator behavior.
    Keywords: NAFTA, trade liberalization, voting, environmental policy
    JEL: F18 F64 F68 Q56 Q58
    Date: 2021–09–15
  6. By: Sarvesh Bandhu (IIM, Bangalore); Bishwajyoti Mondal (Department Of Economics, Shiv Nadar University); Anup Pramanik (Department Of Economics, Shiv Nadar University)
    Abstract: In this paper we provide a complete characterization of preference domains on which the Unanimity with Status-quo rule is strategy-proof. Further, we introduce a notion of "conflicting preference domains" and show that the Unanimity with Status- quo rule defined over these domains is strategy-proof.
    Keywords: Voting, Strategy-proofness, Unanimity with status-quo rules, Conflicting preference domains.
    JEL: D71
    Date: 2021–11–11
  7. By: Evan M. Calford; Timothy N. Cason
    Abstract: Individuals often possess private information about the common value of a public good. Their contributions toward funding the public good can therefore reveal information that is useful to others who are considering their own contributions. This experiment compares static and dynamic contribution decisions to determine how hypothetical contingent reasoning differs in dynamic decisions. The timing of individuals’ sequential contribution decisions is endogenous. Funding the public good is more efficient with dynamic than static decisions in equilibrium, but this requires decision-makers to understand that in the future they can learn from past events. Our results indicate that a substantial fraction of subjects appreciate the benefits of deferring choice to learn about and condition their behavior on the contribution decisions of others. Many subjects, however, exhibit a bias away from rational choices in the direction of Cursed equilibrium, and some appear to extract information only from prior, and not concurrent, behavior.
    Keywords: Cursed equilibrium; Voluntary contributions; Club goods; Laboratory experiment
    JEL: C91 D71 D91 H41
    Date: 2021–11
  8. By: Christoph Engel (Max Planck Institute for Research on Collective Goods)
    Abstract: Most of the time most individuals do not commit crime. Why? One explanation is deonto-logical. People abide by legal rules just because these are the rules. In this perspective, the power of normativity is critical. It is supported by experimental evidence. To an im-pressive degree, participants even abide by arbitrary, costly rules, in the complete absence of enforcement. Yet do they also do that if they learn that some of their peers violate the rule? The experiment shows that rule following is conditional on social information. The more peers violate the rule, the more participants are likely to do so as well, and the more severely the violation. This main finding replicates in a vignette study. The effect is most pronounced with speeding, weaker with tax evasion, and absent with littering. In the lab, social information has an effect whether it is framed as the incidence of rule violation or of rule following. If they have no explicit social information, participants condition choices on their beliefs. Even merely knowing that they are part of a group, without knowing how others behave, has an effect.
    Keywords: decision to engage in criminal behavior, normativity, deontological motives, rule following, social context, social information, conditional rule following
    Date: 2021–11–10

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