nep-pol New Economics Papers
on Positive Political Economics
Issue of 2006‒02‒19
eight papers chosen by
Eugene Beaulieu
University of Calgary

  2. United We Vote By Jon X. Eguia
  4. Choosing the Stick or the Carrot? Endogenous Institutional Choice in Social Dilemma Situations By Haigner, Stefan; Kocher, Martin; Sutter, Matthias
  5. BARGAINING, VOTING, AND VALUE By Federico Valenciano; Annick Laruelle
  6. Globalisation and the mix of wage and profit taxes By Haufler, Andreas; Klemm, Alexander; Schjelderup, Guttorm
  7. ON THE DIFFICULTY OF MAKING DECISIONS WITHIN THE EU-25 By Federico Valenciano; Annick Laruelle; Ricardo Martínez
  8. Poverty, politics, and preferences: Field Experiments and survey data from Vietnam By Tomomi Tanaka; Colin F Camerer; Quang Nguyen

  1. By: Ascensión Andina (Universidad de Alicante)
    Abstract: This paper analyzes an electoral game where candidates have private information on their own types. Candidates propose non-binding platforms and run for office. Voters make inferences on the politicians' types and cast their votes. We show that in this set-up, the existence of a media industry is desirable, as it improves the quality of the political game by increasing the accuracy of the candidates' signals. In particular, it induces politicians to discard the use of pooling strategies. We show that this monitoring role of the media is more likely to appear in societies with large numbers of swing voters, or with great competition among the media. We do this analysis in a context of a neutral media. We also analyze the case of an ideological media and show that ideology is not harmful per se, but the possibility of asymmetries in the support of different candidates may well be.
    Keywords: Uncertainty, electoral campaigns, media.
    JEL: D72 D82
    Date: 2004–09
  2. By: Jon X. Eguia (California Institute of Technology)
    Abstract: This paper studies the advantages that a coalition of agents obtains by forming a voting bloc to pool their votes and cast them all together. We identify the necessary and sufficient conditions for an agent to benefit from the formation of the voting bloc, both if the agent is a member of the bloc and if the agent is not part of the bloc. We also determine whether individual agents prefer to participate in or step out of the bloc, and we find the different optimal internal voting rules that aggregate preferences within the coalition.
    Keywords: Voting bloc, Coalition formation, Voting rule
    JEL: D72 D71
    Date: 2006–01
  3. By: Iñigo Iturbe Ormaetxe (Universidad de Alicante); Guadalupe Valera (Universidad Pablo de Olavide)
    Abstract: The provision of pensions for the old and public education for the young represent a large share of public budgets. In most Western countries, current Social Security systems are under a big financial stress. Several reforms have been proposed to solve this problem. This paper deals with the impact that some of these reforms have, through a political process, on publicly financed education. We develop a model linking both public transfer schemes, in which heterogeneous individuals vote the educational tax. Our findings show that most of the proposals that entail a partial privatization of the pension system have a negative impact on public education and, thus, on economic growth.
    Keywords: Social Security Reform, Human Capital, Public Education, Voting.
    JEL: D72 H55 I22 J24
    Date: 2004–05
  4. By: Haigner, Stefan; Kocher, Martin; Sutter, Matthias
    Abstract: We analyse an experimental public goods game in which group members can endogenously determine whether they want to supplement a standard voluntary contribution mechanism with the possibility of rewarding or punishing other group members. We find a large and positive effect of endogenous institutional choice on the level of cooperation in comparison to exogenously implemented institutions. This suggests that democratic participation rights enhance cooperation in groups. With endogenous choice, groups typically vote for the reward option, even though punishment is actually more effective in sustaining high levels of cooperation. Our results are evaluated against the predictions of social preference models.
    Keywords: endogenous institutional choice; experiment; public goods; punishment; reward; voting
    JEL: C72 C91 C92
    Date: 2006–02
  5. By: Federico Valenciano (Universidad del País Vasco); Annick Laruelle (Universidad de Alicante)
    Abstract: This paper addresses the following issue: If a set of agents bargain on a set of feasible alternatives 'in the shadow' of a voting rule, that is, any agreement can be enforced if a 'winning coalition' supports it, what general agreements are likely to arise? In other words: What influence can the voting rule used to settle (possibly non-unanimous) agreements have on the outcome of negotiations? To give an answer we model the situation as an extension of the Nash bargaining problem in which an arbitrary voting rule replaces unanimity to settle agreements by n players. This provides a setting in which a natural extension of Nash's solution is obtained axiomatically. Two extensions admitting randomization on voting rules based on two informational scenarios are considered.
    Keywords: Bargaining, voting, value, bargaining in committees.
    Date: 2004–04
  6. By: Haufler, Andreas; Klemm, Alexander; Schjelderup, Guttorm
    Abstract: This paper analyses the development of the ratio of corporate taxes to wage taxes using a simple political economy model with internationally mobile and immobile firms. Among other results, our model predicts that countries reduce their corporate tax rate, relative to the wage tax, either when preferences for public goods increase or when a rising share of capital is employed in multinational firms. The predicted relationships are tested using panel data for 23 OECD countries for the period 1980 through 2001. The results of the empirical analysis support our central hypotheses.
    JEL: F23 F15 H73 H20
    Date: 2006–02
  7. By: Federico Valenciano (Universidad del País Vasco); Annick Laruelle (Universidad de Alicante); Ricardo Martínez (Universidad de La Rioja)
    Abstract: In this paper we measure the effect of the quota on the difficulty of making decisions in the EU-25 Council after the next enlargement. We compute the probability of a proposal being rejected in the Council. This probability depends on the voting rule (and therefore on the quota) and on the probabilities of the different vote configurations. Here we do not consider that all vote configurations are equiprobable, the classical implicit or explicit assumption. We assume that vote configurations with a minority of members states in favour of the proposal have a null probability, with other vote configurations being equiprobable.
    Keywords: European Council, Decision making, Voting rules, European enlargement.
    Date: 2004–04
  8. By: Tomomi Tanaka; Colin F Camerer; Quang Nguyen
    Date: 2006–02–08

This nep-pol issue is ©2006 by Eugene Beaulieu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.