nep-pol New Economics Papers
on Positive Political Economics
Issue of 2007‒05‒26
eight papers chosen by
Eugene Beaulieu
University of Calgary

  1. The Role of Immigration in Sustaining the Social Security System: A Political Economy Approach By Razin, Assaf; Sand, Edith
  2. Citizens’ Freedom to Choose Representatives: Ballot Structure, Proportionality and “Fragmented” Parliaments By Paulo Trigo Pereira; João Andrade e Silva
  3. The Political Opinions of Swedish Social Scientists By Berggren, Niclas; Jordahl, Henrik; Stern, Charlotta
  4. The growth effect of democracy: Is it heterogenous and how can it be estimated? By Torsten Persson and Guido Tabellini
  5. Mediators Enable Truthful Voting By Bezalel Peleg; Ariel D. Procaccia
  6. Hit or Miss? The Effect of Assassinations on Institutions and War By Benjamin F. Jones; Benjamin A. Olken
  7. Majority Rule Dynamics with Endogenous Status Quo By Tasos Kalandrakis
  8. Dynamic Legislative Policy Making By John Duggan; Tasos Kalandrakis

  1. By: Razin, Assaf; Sand, Edith
    Abstract: In the political debate people express the idea that immigrants are good because they can help pay for the old. The paper explores this idea in a dynamic political-economy setup. We characterize sub-game perfect Markov equilibria where immigration policy and pay-as-you-go (PAYG) social security system are jointly determined through a majority voting process. The main feature of the model is that immigrants are desirable for the sustainability of the social security system, because the political system is able to manipulate the ratio of old to young and thereby the coalition which supports future high social security benefits. We demonstrate that the older is the native born population the more likely is that the immigration policy is liberalized; which in turn has a positive effect on the sustainability of the social security system.
    Keywords: demographic stretegic voting; overlapping generations; social security sustainability
    JEL: E1 H3 P1
    Date: 2007–05
  2. By: Paulo Trigo Pereira; João Andrade e Silva
    Abstract: The analysis of the political consequences of electoral laws has emphasized how individual characteristics of the electoral system (electoral formulas, district magnitude, ballot structure) affect the degree of parliament “fragmentation” and proportionality. This paper argues that the personal attributes of representatives are also an important consequence of electoral laws, and that they are in part determined by citizens’ freedom to choose representatives. We clarify this concept and develop an index of citizens’ freedom to choose members of parliament as a function of the ballot structure, district size and electoral formulae. Using data from twenty nine countries, we find that neither proportionality nor the effective number of parties is significantly affected by voters’ freedom of choice. This result has important normative implications for electoral reform.
    Keywords: Ballot structure; Electoral index; Freedom to choose; Personal vote.
    JEL: D72
    Date: 2007
  3. By: Berggren, Niclas (The Ratio Institute); Jordahl, Henrik (IFN); Stern, Charlotta (SOFI, Stockholm University)
    Abstract: We study the political opinions of Swedish social scientists in seven disciplines. A survey was sent to 4,301 academics at 25 colleges and universities, which makes the coverage of the disciplines included more or less comprehensive. When it comes to party sympathies there are 1.3 academics on the right for each academic on the left—a sharp contrast to the situation in the United States, where Democrats greatly dominate the social sciences. The corresponding ratio for Swedish citizens in general is 1.1. The most left-leaning disciplines are sociology and gender studies, the most right-leaning ones are business administration, economics, and law, with political science and economic history somewhere in between. The differences between the disciplines are smaller in Sweden than in the more polarized U.S. We also asked 14 policy questions. The replies largely confirm the pattern of a left-right divide – but overall the desire to change the status quo is tepid.
    Keywords: Academics; social scientists; policy views; political opinions; party sympathies
    JEL: A11 A13 A14
    Date: 2007–05–21
  4. By: Torsten Persson and Guido Tabellini
    Abstract: We estimate the effect of political regime transitions on growth with semi-parametric methods, combining difference in differences with matching, that have not been used in macroeconomic settings. Our semi-parametric estimates suggest that previous parametric estimates may have seriously underestimated the growth effects of democracy. In particular, we find an average negative effect on growth of leaving democracy on the order of ?2 percentage points implying effects on income per capita as large as 45 percent over the 1960-2000 panel. Heterogenous characteristics of reforming and non-reforming countries appear to play an important role in driving these results.
  5. By: Bezalel Peleg; Ariel D. Procaccia
    Abstract: The Gibbard-Satterthwaite Theorem asserts the impossibility of designing a non-dictatorial voting rule in which truth-telling always constitutes a Nash equilibrium. We show that in voting games of complete information where a mediator is on hand, this troubling impossibility result can be alleviated. Indeed, we characterize families of voting rules where, given a mediator, truthful preference revelation is always in strong equilibrium. In particular, we observe that the family of feasible elimination procedures has the foregoing property.
    Date: 2007–04
  6. By: Benjamin F. Jones; Benjamin A. Olken
    Abstract: Assassinations are a persistent feature of the political landscape. Using a new data set of assassination attempts on all world leaders from 1875 to 2004, we exploit inherent randomness in the success or failure of assassination attempts to identify assassination's effects. We find that, on average, successful assassinations of autocrats produce sustained moves toward democracy. We also find that assassinations affect the intensity of small-scale conflicts. The results document a contemporary source of institutional change, inform theories of conflict, and show that small sources of randomness can have a pronounced effect on history.
    JEL: D74 F52 P16
    Date: 2007–05
  7. By: Tasos Kalandrakis (W. Allen Wallis Institute of Political Economy, 107 Harkness Hall, University of Rochester, Rochester, NY 14627-0158)
    Abstract: We analyze a stochastic bargaining game in which a new dollar is divided among committee members in each of an infinity of periods. In each period, a committee member is recognized and offers a proposal for the division of the dollar. The proposal is implemented if it is approved by a majority. If the proposal is rejected, then last period’s allocation is implemented. We show existence of equilibrium in Markovian strategies. It is such that irrespective of the initial status quo, the discount factor, or the probabilities of recognition, the proposer extracts the entire dollar in all periods but the initial two. We also derive a fully strategic version of McKelvey’s (1976), (1979) dictatorial agenda setting, so that a player with exclusive access to the formulation of proposals can extract the entire dollar in all periods except the first. The equilibrium collapses when within period payoffs are sufficiently concave. Winning coalitions may comprise players with high instead of low recognition probabilities, ceteris paribus.
    JEL: C73 C78 D72
    Date: 2007–05
  8. By: John Duggan; Tasos Kalandrakis (W. Allen Wallis Institute of Political Economy, 107 Harkness Hall, University of Rochester, Rochester, NY 14627-0158)
    Abstract: We prove existence of stationary Markov perfect equilibria in an infinite-horizon model of legislative policy making in which the policy outcome in one period determines the status quo in the next. We allow for a multidimensional policy space and arbitrary smooth stage utilities. We prove that all such equilibria are essentially in pure strategies and that proposal strategies are differentiable almost everywhere. We establish upper hemicontinuity of the equilibrium correspondence, and we derive conditions under which each equilibrium of our model determines a unique invariant distribution characterizing long run policy outcomes. We illustrate the equilibria of the model in a numerical example of policy making in a single dimension, and we discuss extensions of our approach to accommodate much of the institutional structure observed in real-world politics.
    Date: 2007–05

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