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on Collective Decision-Making |
| By: | Kärnä, Anders (Research Institute of Industrial Economics (IFN)); Meriläinen, Jaakko (Department of Economics, Stockholm School of Economics); Norell, John (Department of Economics, Stockholm University) |
| Abstract: | The increasing electoral success of populist radical-right parties poses a significant challenge to established political parties in Western democracies. While mainstream parties often maintain a policy of non-cooperation with these newcomers, such cordon sanitaire strategies can become increasingly costly as radical parties gain support. This study examines the conditions under which established parties abandon their exclusionary stance, focusing on the case of the Sweden Democrats in Swedish municipal politics. We adapt time-series econometric methods to identify unknown thresholds at which exclusion costs become untenable, leading to shifts in coalition formation strategies. Our analysis reveals a critical threshold at approximately 19% electoral support, beyond which the probability of Sweden Democrats’ inclusion in governing coalitions significantly increases. We demonstrate that as radical party support approaches this threshold, coalition sizes expand, office rents are redistributed, and the ideological dispersion of governing parties widens. Once the threshold is surpassed, these trends reverse. Our findings highlight the trade-offs mainstream parties face in responding to the rise of challenger parties and contribute to broader debates on coalition formation, party system change, and the accommodation of anti-establishment parties in democratic systems. |
| Keywords: | Coalition formation; Cordon sanitaire; Populist radical right; Sweden Democrats |
| JEL: | D72 P16 |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1507 |
| By: | Matthew Gould (Department of Economics and Finance, Brunel University London, Cleveland Road, Uxbridge, UB8 2TL, UK); Matthew D. Rablen (School of Economics, University of Sheffield, Sheffield S1 4DT, UK) |
| Abstract: | We focus on the preferences of a salient group of highly-experienced individuals who are entrusted with making decisions that affect the lives of millions of their citizens, heads of government. We test for the presence of a fundamental behavioral bias, loss aversion, by examining heads of governments choice of decision rules for international organizations. Loss averse leaders would choose decision rules that oversupply negative (blocking) power at the expense of positive power (to initiate affirmative action), causing potential welfare losses through harmful policy persistence and reform deadlocks. If loss aversion is muted by experience and high-stakes it may not be exhibited in this context. We find evidence of significant loss aversion implied in the Qualified Majority rule of the Treaty of Lisbon, when understood as a Nash bargaining outcome. World leaders may be more loss averse than the populous they represent. |
| Keywords: | Loss aversion, Behavioral biases, Voting, Bargaining, Voting power, EU Council of Ministers |
| JEL: | D03 D81 D72 C78 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:shf:wpaper:2024011 |
| By: | Philipp Denter; Boris Ginzburg |
| Abstract: | Political agents often aim to influence elections through troll farms -- organisations that disseminate messages emulating genuine information. We study the behaviour of a troll farm that faces a heterogeneous electorate of partially informed voters, and aims to achieve a desired political outcome by targeting each type of voter with a specific distribution of messages. We show that such tactics are more effective when voters are otherwise well-informed, for example, when the media is of high quality. At the same time, increased polarisation, as well as deviations from Bayesian rationality, can reduce the negative effect of troll farms and restore efficiency of electoral outcomes. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.03241 |
| By: | Awad, Emiel; Judd, Gleason; Riquelme, Nicolas |
| Abstract: | How do interest groups learn about and influence politicians over time? We develop a game-theoretic model where an interest group can lobby a politician while learning about their ideological alignment. Our analysis reveals a fundamental tradeoff: interest groups must balance gathering information against exerting immediate influence, while politicians strategically manage their reputations to shape future interactions. These strategic forces generate systematic dynamics: policies and transfers shift in tandem, with early-career politicians showing greater policy variance and extracting larger rents through reputation management than veterans. Uncertainty about alignment increases policy volatility as groups experiment with offers, while institutional features like committee power and revolving-door incentives systematically alter both learning incentives and influence strategies. Our results shed new light on how interest group influence evolves across political careers and varies with institutional context. |
| Date: | 2024–11–11 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:834vd |
| By: | Feldhaus, Christoph (Ruhr University Bochum); Reinhardt, Lukas (University of Oxford); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | In a democracy, it is essential that citizens accept rules and laws, regardless of which party is in power. We study why citizens in polarized societies resist rules implemented by political opponents. This may be due to the rules' specific content, but also because of a general preference against being restricted by political opponents. We develop a method to measure the latter channel. In our experiment with almost 1, 300 supporters and opponents of Donald Trump, we show that polarization undermines rule-following behavior significantly, independent of the rules' content. Subjects perceive the intentions behind (identical) rules as much more malevolent if they were imposed by a political opponent rather than a political ally. |
| Keywords: | political polarization, social identity, outgroup, economic preferences, experiment |
| JEL: | C91 D90 D91 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17448 |
| By: | Orkun Saka; Yuemei Ji; Clement Minaudier |
| Abstract: | We show that politicians facing a binding term limit are more likely to engage in financial de-liberalisation than those facing re-election, but only in the wake of a financial crisis. In particular, they implement policies that tend to favour incumbent financial institutions over the general population, such as increasing barriers to entry in the banking sector. We rationalise this behaviour with a theory of political accountability in which crises generate two opposite effects: they increase the salience of financial policies to voters but also create a window of opportunity for politicians captured by the financial industry to push potentially harmful reforms. In line with the implications of our model, we show that revolving doors between the government and the financial sector play a key role in encouraging bank-friendly policies after crises. |
| Keywords: | financial crises, political accountability, democracies, term-limits, special-interest groups |
| JEL: | D72 D78 G01 P11 P16 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11461 |