nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2023‒06‒12
five papers chosen by
Stan C. Weeber
McNeese State University

  1. Young Voters and Budget Deficits By Ole Henning Nyhus; Bjarne Strøm
  2. Conformism of the Minorities: Theory and Experiment By Fabian Bopp; Wendelin Schnedler; Radovan VadoviÄ
  3. The Gasoline Climate Trap By Josse Delfgaauw; Otto Swank
  4. Theodore Roosevelt, the Election of 1912, and the Founding of the Federal Reserve By Matthew Jaremski; David C. Wheelock
  5. Does Combating Corruption Reduce Clientelism? By Gustavo J. Bobonis; Paul J. Gertler; Marco Gonzalez-Navarro; Simeon Nichter

  1. By: Ole Henning Nyhus; Bjarne Strøm
    Abstract: This paper exploits a novel trial in Norwegian local elections in 2011 to provide empirical evidence on fiscal performance from lowering the minimum voting age from 18 to 16. Using a difference in differences research strategy, we find that this voting age change reduced the net operating surplus by around 600NOK (€60) per capita. This finding is consistent with micro evidence that young individuals have higher discount rates and are more likely to take risk than older ones, although other evidence is needed to confirm that interpretation. Further heterogeneity analysis demonstrates that increased deficits (reduced net operating surplus) due to the extension of the youth voting franchise mainly appear in governments with low party fragmentation and a large share of socialist politicians in the local council.
    Keywords: local public finance, fiscal performance, minimum voting age
    JEL: C23 D72 H72
    Date: 2023
  2. By: Fabian Bopp (Paderborn University); Wendelin Schnedler (Paderborn University); Radovan VadoviÄ (Carleton University)
    Abstract: Successful implementation of new rules and policies depends in part on the degree of popular support. The key ingredient in mounting a general consensus behind one alternative is the individual tendency to conform. What drives conformism? Is it lasting or is it temporary? Traditionally, the literature has focused on adaptive mechanisms which are based on social learning. Observing others' actions generates new information which may lead to a permanent change in own preference. However, this type of conformism requires that individual opinions are still evolving and there is room for new information to make a difference. What happens once opinions mature and people become more steadfast in their preferences? Is it then not possible to generate group-wise consensus? We explore an outstanding conjecture that even steadfast individuals may yield (temporarily) to the will of the majority if they are sufficiently caring and don't like to hinder others. We design a laboratory experiment that allows us to identify the two behavioral mechanisms (adaptive vs. steadfast). We find evidence that steadfast subjects conform because they care about others. We also show that they are more willing to conform if they have more power.
    Keywords: conformism, collective choice, ex-ante fairness
    JEL: D72 C92 D83 D71
    Date: 2023–04
  3. By: Josse Delfgaauw (Erasmus University Rotterdam); Otto Swank (Erasmus University Rotterdam)
    Abstract: Due to taxes and subsidies, gasoline prices vary dramatically across countries. Externalities cannot fully account for this. We develop a simple political-economic model that shows that group interests, resulting from the composition of a country’s car fleet, help to explain differences in gasoline taxes even among countries with identical fundamentals. In the model, citizens’ car ownership is endogenous, which can yield multiple equilibria. Our model demonstrates the possibility of a society in a climate trap where a low gasoline tax reflects the views of a majority, but another majority would benefit from transitioning to an equilibrium with a higher gasoline tax and fewer emissions.
    Keywords: median voter, gasoline taxes, multiple equilibria.
    JEL: D62 D72 H23 Q58
    Date: 2023–05–08
  4. By: Matthew Jaremski; David C. Wheelock
    Abstract: This paper examines how the election of 1912 changed the makeup of Congress and led to the Federal Reserve Act. The decision of Theodore Roosevelt and other Progressives to run as third-party candidates split the Republican Party and enabled Democrats to capture the White House and Congress. We show that the election produced a less polarized Congress and that new members were more likely to support the Act. Absent the Republican split, Republicans would likely have held the White House and Congress, and enactment of legislation to establish a central bank would have been unlikely or certainly quite different.
    Keywords: Federal Reserve Act; Progressive Party; central bank; Aldrich plan
    JEL: N42 G28 P43
    Date: 2023–04
  5. By: Gustavo J. Bobonis; Paul J. Gertler; Marco Gonzalez-Navarro; Simeon Nichter
    Abstract: Does combating corruption reduce clientelism? We examine the impact of a prominent anti-corruption program on clientelism using a novel representative survey of rural Brazilians. Randomized audits reduce politicians’ provision of campaign handouts, decrease citizens’ demands for private goods, and reduce requests fulfilled by politicians. With regards to mechanisms, audits undermine clientelist relationships by reducing citizens’ interactions with politicians and their knowledge of incumbents. Furthermore, audits significantly deteriorate citizens’ perceptions of politician reciprocity in a hypothetical trust game. Results also offer novel insights into audits’ dynamic effects: they have more pronounced effects in the short run, especially during electoral periods.
    Keywords: political clientelism; audits; transparency
    JEL: D72 D73 H83
    Date: 2023–05–17

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