nep-pol New Economics Papers
on Positive Political Economics
Issue of 2005‒05‒29
five papers chosen by
Eugene Beaulieu
University of Calgary

  1. Impartiality and Priority. Part 1: The Veil of Ignorance By Juan Moreno-Ternero; John E. Roemer
  2. Impartiality and Priority. Part 2: A Characterization with Solidarity By Juan Moreno-Ternero; John E. Roemer
  3. Failed States and Failed Economies: Nationalism and Economic Behavior, 1955-1995 By Carl Mosk
  4. How to Classify a Government? Can a Neural Network do it? By António Caleiro
  5. The Role of Preconceived Ideas in Macroeconomic Policy: Japan's Experiences in the Two Deflationary Periods By Koichi Hamada; Asahi Noguchi

  1. By: Juan Moreno-Ternero; John E. Roemer (Dept. of Political Science, Yale University)
    Abstract: The veil of ignorance has been used often as a tool for recommending what justice requires with respect to the distribution of wealth. We complete Harsanyi’s model of the veil of ignorance by appending information permitting interpersonal comparability of welfare. We show that the veil-of-ignorance conception of John Harsanyi, so completed, and Ronald Dworkin’s, when modeled formally, recommend wealth allocations in conflict with the prominently espoused view that priority should be given to the worse off with respect to wealth allocation.
    Keywords: Impartiality, Priority, Veil of ignorance
    JEL: D63 D71
    Date: 2004–08
  2. By: Juan Moreno-Ternero; John E. Roemer (Dept. of Political Science, Yale University)
    Abstract: The ethic of 'priority' is a compromise between the extremely compensatory ethic of 'welfare equality' and the needs-blind ethic of ‘income equality’. We propose an axiom of priority, and characterize resource allocation rules that are impartial, prioritarian, and solidaristic. They comprise a class of rules which equalize across individuals some index of resources and welfare. Consequently, we provide an ethical rationalization for the many applications in which such indices have been used (e.g., the 'human development index,' 'index of primary goods,' etc.).
    Keywords: Impartiality, Solidarity, Priority, Allocation rules, Characterization result
    JEL: D63 D71
    Date: 2004–08
  3. By: Carl Mosk (Department of Economics, University of Victoria)
    Abstract: Using data from the Failed State Task Force data set, this paper argues entering onto positive growth paths for income and infrastructure per capita depend upon a nation’s political stability and its geography. A nation’s achieving sustained long-run growth in both variables is essential to its capacity to converge towards countries with high levels of income per capita because high levels of per capita infrastructure are strongly correlated with high levels of income per capita. New nation states seem to face heavy burdens to avoiding negative feedback traps, partly because their youthfulness is associated with political stability; partly because their propinquity to other politically unstable neighbors hampers their capacity to grow through trade and their ability to avert domestic conflict; partly because they tend to be located in the tropics where the incidence of malaria is high.
    Keywords: Political economy, economic development, infrastructure, convergence
    JEL: F1 H1 H8 O5
    Date: 2005–05–26
  4. By: António Caleiro (Department of Economics, University of Évora)
    Abstract: An electoral cycle created by governments is a phenomenon that seems to characterise, at least in some particular occasions and/or circumstances, the democratic economies. As it is generally accepted, the short-run electorally-induced fluctuations prejudice the long-run welfare. Since the very first studies on the matter, some authors offered suggestions as to what should be done against this electorally-induced instability. A good alternative to the obvious proposal to increase the electoral period length is to consider that voters abandon a passive and naive behaviour and, instead, are willing to learn about government’s intentions. The electoral cycle literature has developed in two clearly distinct phases. The first one considered the existence of non-rational (naive) voters whereas the second one considered fully rational voters. It is our view that an intermediate approach is more appropriate, i.e. one that considers learning voters, which are boundedly rational. In this sense, one may consider neural networks as learning mechanisms used by voters to perform a classification of the incumbent in order to distinguish opportunistic (electorally motivated) from benevolent (non-electorally motivated) behaviour of the government. The paper explores precisely the problem of how to classify a government showing in which, if so, circumstances a neural network, namely a perceptron, can resolve that problem.
    Keywords: Classification, Elections, Government, Neural Networks, Output Persistence, Perceptrons
    JEL: C45 D72 E32
    Date: 2005
  5. By: Koichi Hamada (Economic Growth Center, Yale University); Asahi Noguchi (Senshu University)
    Abstract: This paper examines the role of misleading economic ideas that most likely promoted the economic disasters of the two deflationary periods in Japanese economic history. Misleading ideas deepened the depression during the interwar years, and erroneous thinking prolonged the stagnation of the Japanese economy since the 1990s. While the current framework of political economy is based on the self-interests of political agents as well as of voters, we highlight the role of ideas in policy making, in particular, in the field of macro-economy where the incidence of a particular policy is not clear to the public. Using two significant examples, this paper illustrates the role of preconceived ideas, in contrast to economic interests, that dominantly influenced economic policy making.
    Keywords: Preconceived ideas, perception on economic mechanism, vested interests, great depression, deflation in contemporary Japan
    JEL: B2 F4 N2
    Date: 2005–03

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