nep-pol New Economics Papers
on Positive Political Economics
Issue of 2006‒08‒19
six papers chosen by
Eugene Beaulieu
University of Calgary

  1. On the Theory of Ethnic Conflict By Francesco Caselli; Wilbur John Coleman II
  2. Heterogeneity in individual preferences for public expenditure: what suggestions for the assignment of competencies to the EU? By Carlo Mazzaferro; Alberto Zanardi
  3. Contestable leaderships: Party discipline and vote buying in legislatures By Iaryczower, Matias
  4. Individual Attitudes towards Immigrants: Welfare-State Determinants across Countries By Giovanni Facchini; Anna Maria Mayda
  5. Social Cohesion, Institutions, and Growth By William Easterly; Jozef Ritzan; Michael Woolcock
  6. Geography Rules Too! Economic Development and the Geography of Institutions By Maarten Bosker; Harry Garretsen

  1. By: Francesco Caselli; Wilbur John Coleman II
    Abstract: We present a theory of ethnic conflict in which coalitions formed along ethnic lines competefor the economy's resources. The role of ethnicity is to enforce coalition membership: inethnically homogeneous societies members of the losing coalition can defect to the winners atlow cost, and this rules out conflict as an equilibrium outcome. We derive a number ofimplications of the model relating social, political, and economic indicators such as theincidence of conflict, the distance among ethnic groups, group sizes, income inequality, andexpropriable resources.
    Keywords: ethnic distance, exploitation
    JEL: P48 Q34 Z13
    Date: 2006–07
  2. By: Carlo Mazzaferro (University of Bologna and Capp); Alberto Zanardi (University of Bologna and EconPubblica-Università Bocconi)
    Abstract: Building on the principles of the classical thoey of fiscl federalism, the new political economy of multi-level government indicates a number of criteria asa guide for the efficient assignment of competencies between the European Union (EU) and the member states: internalize interregional spillovers; exploit economies of scale; take into account heterogeneity of preferencies. The aim of this paper is to compare the welfare effects that the heterogeneity of individual preferencies for public expenditures imply with the centralized and the decentralized solutions. In this perspective a median voter mechanism of collective decision is assumed to work both at national and EU level. Using data from a large international survey (ISSP), a series of econometric models has been estimated in order to make individual attitudes for public expenditures representative and comparable across different categories and different countries. A measurement of the individual and total welfare loss has then been derived in the cases when the decision upon the level of public provision is taken by the national or by the median EU voter respectively. The empirical analysis reveals that in some sectors of public expenditures (health, education, employment benefits) centralized solution welfare dominates (or is close to dominating) decentralization even in the absence of economies of scale and interregional spillovers.
    Keywords: public expenditure, preferences, European Union,
    Date: 2006–02–20
  3. By: Iaryczower, Matias
  4. By: Giovanni Facchini; Anna Maria Mayda
    Abstract: This paper analyzes welfare-state determinants of individual attitudes towards immigrants - within and across countries - and their interaction with labor-market drivers of preferences. We consider two different mechanisms through which a redistributive welfare system might adjust as a result of immigration. Under the first scenario, immigration has a larger impact on individuals at the top of the income distribution, while under the second one it is low-income individuals who are most affected through this channel. Individual attitudes are consistent with the first welfare-state scenario and with labor-market determinants of immigration attitudes. In countries where natives are on average more skilled than immigrants, individual income is negatively correlated with pro-immigration preferences, while individual skill is positively correlated with them. These relationships have the opposite signs in economies characterized by skilled migration (relative to the native population). Such results are confirmed when we exploit international differences in the characteristics of destination countries' welfare state.
    Keywords: immigration attitudes, welfare state, political economy
    JEL: F10 F22 J61
    Date: 2006
  5. By: William Easterly; Jozef Ritzan; Michael Woolcock
    Abstract: We present evidence that measures of “social cohesion,” such as income inequality and ethnic fractionalization, endogenously determine institutional quality, which in turn casually determines growth.
    Keywords: Political institutions, social cohesion, poverty, economic policy
    JEL: H5 O1
    Date: 2006–08
  6. By: Maarten Bosker; Harry Garretsen
    Abstract: To explain cross-country income differences, research has recently focused on the so-called deep determinants of economic development, notably institutions and geography. This paper sheds a different light on these determinants. We use spatial econometrics to analyse the importance of the geography of institutions. We show that it is not only absolute geography, in terms of for instance climate, but also relative geography, the spatial linkages between countries, that matters for a country’s gdp per capita. Apart from a country’s own institutions, institutions in neighboring countries turn out to be relevant as well. This finding is robust to various alternative specifications.
    JEL: F43 O11
    Date: 2006

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