nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2021‒12‒06
three papers chosen by
Stan C. Weeber, McNeese State University

  1. The Rise and Fall of Social Democracy, 1918-2017 By Nicola Mastrorocco; Simon Hix; Giacomo Benedetto
  2. The Gates Effect in Public Goods Experiments: How Donations Flow to the Recipients Favored by the Wealthy By Luca Corazzini; Christopher Cotton; Enrico Longo; Tommaso Reggiani
  3. Austerity and Elections By Davide Furceri; Gabriele Ciminelli; Giorgio Saponaro; Mr. Alberto Alesina

  1. By: Nicola Mastrorocco (Department of Economics, Trinity College Dublin); Simon Hix (London School of Economics); Giacomo Benedetto (Royal Holloway London)
    Abstract: We describe the electoral history of one of Europe's most successful party families over the past 100 years in 31 countries. With a unique and newly collected dataset of national election results, and a large number of economic and social variables measured for each country-election observation, we find that two main factors drive the electoral performance of social democratic parties: public sector spending, and the size of the manufacturing sector. We investigate these results further with an analysis of individual-level voting behaviour, using the European Social Surveys from 2002 to 2016. Together, our findings suggest that most of the fall in support for social democratic parties in recent years is correlated with a decline in the number of industrial workers as well as a reduction in the propensity of social democratic parties' core supporters (industrial workers and public sector employees) to vote for them.
    Keywords: Social Democracy, Elections, Political economy
    JEL: K42 H72
    Date: 2019–12
  2. By: Luca Corazzini (University of Venice Ca’ Foscari, Italy, Masaryk University, Lipová 41a, Czech Republic); Christopher Cotton (Queen’s University, Canada); Enrico Longo (University of Venice Ca’ Foscari, Italy); Tommaso Reggiani (Cardiff University, United Kingdom, Masaryk University, Lipová 14a, Czech Republic, IZA, Germany)
    Abstract: Experiments involving multiple public goods with contribution thresholds capture many features of charitable giving environments in which donors try to coordinate their contributions across various potential recipients. We present results from a laboratory experiment that introduces endowment and preference differences into such a framework to explore the impact of donor heterogeneity on public good success and payoffs. We observe that wealthier donors tend to provide larger contributions to the public goods, and that the contributions of all other donors are most likely directed to the public good preferred by the wealthiest donor as other group members try to coordinate their donations to ensure public good success. We refer to this collective focus on the preferred good of the wealthiest as the Gates Effect. The Gates Effect can reduce inequality among donors groups that succeed in funding a public good; however, it also affects the philanthropic agenda, reducing the variety of public goods that receive funding.
    Keywords: Multiple public goods, Donor heterogeneity, Crowdfunding, Charitable giving, Philanthropy, Lab experiment
    JEL: C91 C92 H40 H41 L31
    Date: 2021–11
  3. By: Davide Furceri; Gabriele Ciminelli; Giorgio Saponaro; Mr. Alberto Alesina
    Abstract: Conventional wisdom holds that voters punish governments that implement fiscal austerity. Yet, most empirical studies, which rely on ex-post yearly austerity measures, do not find supportive evidence. This paper revisits the issue using action-based, real-time, ex-ante measures of fiscal austerity as well as a new database of changes in vote shares of incumbent parties. The analysis emphasizes the importance of the ‘how’—whether austerity is done via tax hikes or expenditure cuts—and the ‘who’—whether it is carried out by left- vs. right-leaning governments. Our main finding is that tax-based austerity carries large electoral costs, while the effect of expenditure-based consolidations depends on the political-leaning of the government. An austerity package worth 1% of GDP, carried out mostly through tax hikes, reduces the vote share of the leader’s party by about 7%. In contrast, expenditure-based austerity is detrimental for left- but beneficial for right-leaning governments. We also find that the electoral cost of austerity—especially tax hikes—can be contained if it is implemented during good economic times.
    Keywords: austerity package; expenditure cut; yearly austerity; construction of Austerity variable; economy to Austerity; Tax expenditures; Government debt management
    Date: 2021–04–30

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