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on Positive Political Economics |
| By: | Richard Damania (Adelaide University); Erkan Yalcin (Yeditepe University) |
| Abstract: | There is a growing evidence that political corruption is often closely associated with the rent seeking activities of special interest groups. This paper examines the nature of the interaction between the lobbying activities of special interest groups and the incidence of political corruption and determines whether electoral competition can eliminate political corruption. We obtain some striking results. Greater electoral competition serves to lessen policy distortions. However, this in turn stimulates more intense lobbying which increases the scope of corrupt behavior. It is shown that electoral competition merely serves to alter the type of corruption that eventuates, but cannot eliminate it. |
| Keywords: | Corruption, Lobbying, Political Competition |
| JEL: | D72 |
| Date: | 2005–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpmi:0510012&r=pol |
| By: | Pascal Gautier (GREQAM); Raphael Soubeyran (GREQAM) |
| Abstract: | We propose a two dimensional infinite horizon model of public consumption in which investments are decided by a winner-take-all election. Investments in the two public goods create a linkage across periods and parties have different specialities. We show that the incumbent party vote share decreases the longer it stays in power. Parties chances of winning do not converge and, when the median voter is moderate enough, no party can maintain itself in power for ever. Finally, the more parties are specialized and the more public policies have long-term effects, the more political cycles are likely to occur. |
| Keywords: | Cycles, Alternation, Public goods, Advantage, Opposition |
| JEL: | D72 H41 C72 |
| Date: | 2005–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwppe:0510019&r=pol |
| By: | Benno Torgler; Christoph A. Schaltegger |
| Abstract: | The intention of this paper is to analyse how audit courts and local autonomy affect political discussion, controlling in a multivariate analysis for a broad variety of potential factors focusing on Switzerland, due to its variety of audit court competences and its strong decentralised structure. With data from the World Values Survey 1995-1997 (Swiss data 1996) evidence has been found that a higher audit court competence and a lower level of centralization is correlated with a higher level of political discussion. Thus, the results in Switzerland suggest that such institutions help improve citizens’ willingness to acquire information costs and discuss political matters. |
| Keywords: | Political Discussion; Institutions; Audit Courts; Local Autonomy; Decentralisation; Switzerland |
| JEL: | D72 H41 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2005-28&r=pol |
| By: | Ernst Fehr (Institute for Empirical Research in Economics, University of Zurich, Bluemlisalpstrasse 10, CH-8006 Zurich, Switzerland); Michael Naef (Institute for Empirical Research in Economics, University of Zurich, Bluemlisalpstrasse 10, CH-8006 Zurich, Switzerland); Klaus M. Schmidt (Department of Economics, University of Munich, Ludwigstr. 28, D-80539 Muenchen, Germany) |
| Abstract: | Engelmann and Strobel (AER 2004) claim that a combination of efficiency seeking and minmax preferences dominates inequity aversion in simple dictator games. This result relies on a strong subject pool effect. The participants of their experiments were undergraduate students of economics and business administration who self-selected into their field of study and learned early on that efficiency is desirable. We show that for non-economists the preference for efficiency is much less pronounced. We also find a gender effect indicating that women are more egalitarian than men. However, perhaps surprisingly, the dominance of equality over efficiency is unrelated to political attitudes. |
| Keywords: | Social Preferences, Inequity Aversion, Efficiency Preferences |
| JEL: | C7 C91 C92 D63 D64 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:30&r=pol |
| By: | Johannes Münster (Free University Berlin and WZB, Reichpietschufer 50, D-10785 Berlin, Germany) |
| Abstract: | Lobbyists choose what to lobby for. If they can precommit to certain policy proposals, their choice will have an influence on the behavior of opposing lobbyists. Hence lobbyists have an incentive to moderate their policy proposals in order to reduce the intensity of the lobbying contest. This logic has been explored in a number of recent papers. I reconsider the topic with a perfectly discriminating contest. With endogenous policy proposals, there is a subgame perfect equilibrium where the proposals of the lobbyists coincide and maximize joint welfare; moreover, this equilibrium is the only one that survives repeated elimination of dominated strategies. Hence there is no rent dissipation at all. A politician trying to maximize lobbying expenditures would prefer an imperfectly discriminating contest. |
| Keywords: | Interest groups; Endogenous lobbying targets, Voluntary restraint; Polarization |
| JEL: | D72 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:41&r=pol |
| By: | Hein Roelfsema |
| Abstract: | A common claim is that nations should cooperate in environmental policy making. However, there is little empirical support that noncooperative decision making results in too low environmental standards and taxes. We develop a theoretical model and show that if the median voter cares sufficiently for the environment, she has an incentive to delegate policy making to a politician that cares more for the environment than she does herself. By doing so, she mitigates the `race to the bottom' in environmental taxes. In contrast, if environmental policies are determined cooperatively with other countries, the median voter has an incentive to delegate policy making to a politician that cares less for the environment than she does herself, so as to free ride on international environmental agreements. |
| Keywords: | environmental policy, international policy coordination, strategic delegation. |
| JEL: | F12 F18 H77 Q2 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0406&r=pol |
| By: | Robert Dur; Hein Roelfsema |
| Abstract: | We provide an explanation for why centralisation of political decision making results in overspending in some policy domains, whereas too low spending persists in others. We study a model in which delegates from jurisdictions bargain over local public goods provision. If all of the costs of public goods are shared through a common budget, policy makers delegate bargaining to `public good lovers', resulting in overprovision of public goods. If a sufficiently large part of the costs can no be shared, underprovision persists because policy makers delegate bargaining to `conservatives'. We derive financing rules that eliminate the incentives for strategic delegation. |
| Keywords: | Centralised decision making, strategic delegation, financing rules. |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0409&r=pol |
| By: | Colin Jennings; Hein Roelfsema |
| Abstract: | If voters care for the relative supply of public goods compared to other jurisdictions, decentralized provision of public goods will be too high. Potentially, centralization internalizes the negative externalities from the production of these `conspicuous' public goods. However, in a model of strategic delegation of policy making, we show that in the decentralized policy making case the median voter may delegate to a politician who cares less for conspicuous public goods than she does herself. By doing so, she commits to lower public goods in the home and in the foreign country. In contrast, with centralization the median voter anticipates the reduction in public goods supply by delegating to a policy maker who cares more for public goods than she does herself. This last effect mitigates the expected benefits of centralization. |
| Keywords: | Conspicuous goods, strategic delegation, policy centralization |
| JEL: | H21 H23 H41 F36 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0410&r=pol |
| By: | Hein Roelfsema |
| Abstract: | A common claim is that nations should cooperate in environmental policy making. However, there is little empirical support that noncooperative decision making results in too low environmental standards and taxes. We develop a theoretical model and show that if the median voter cares sufficiently for the environment, she has an incentive to delegate policy making to a politician that cares more for the environment than she does herself. By doing so, she mitigates the`race to the bottom' in environmental taxes. In contrast, if environmental policies are determined cooperatively with other countries, the median voter has an incentive to delegate policy making to a politician that cares less for the environment than she does herself, so as to free ride on international environmental agreements. |
| Keywords: | environmental policy, international policy coordination, strategic delegation. |
| JEL: | F12 F18 H77 Q2 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0411&r=pol |