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on Positive Political Economics |
| By: | Aidt, T.S.; Eterovic, D.S. |
| Abstract: | Rational choice models predict that political competition and political participation have opposite effects on the size of government. We investigate these theories using data from a panel of 18 Latin American countries during the 20th century. Our research builds evidence for the prediction that reforms enhancing political competition tend to limit the size of government, while reforms increasing political participation tend to increase the size of government. Furthermore, we find that reforms which remove literacy requirements from franchise laws are associated with governmental expansion, while changes in women.s su¤rage laws have no impact on the size of government. Our findings demonstrate the empirical relevance of the distinction between political competition and participation. |
| Keywords: | Political competition, political participation, the extension of the franchise, women.s su¤rage, literacy requirements; size of government; school enrollment. |
| JEL: | D7 H11 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0714&r=pol |
| By: | Matteo Cervellati; Joan Esteban; Laurence Kranich |
| Abstract: | Moral values influence individual behavior and social interactions. A specially significant instance is the case of moral values concerning work effort. Individuals determine what they take to be proper behaviour and judge the others, and themselves, accordingly. They increase their esteem -and self-esteem- for those who perform in excess of the standard and decrease their esteem for those who work less. These changes in self-esteem result from the self-regulatory emotions of guilt or pride extensively studied in Social Psychology. We examine the interactions between sentiments, individual behaviour and the social contract in a model of rational voting over redistribution where individual self-esteem and relative es-teem for others are endogenously determined. Individuals differ in their productivities. The desired extent of redistribution depends both on individual income and on individual attitudes toward others. We characterize the politico-economic equilibria in which s |
| Keywords: | Social Contract, Endogenous Sentiments, Voting over Taxes, Moral Work |
| JEL: | D64 D72 Z13 H3 J2 |
| Date: | 2007–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:702.07&r=pol |
| By: | Giovanni Prarolo (University of Bologna and Fondazione Eni Enrico Mattei); Francesco Lancia (University of Bologna) |
| Abstract: | Over the past century, all OECD countries have been characterized by a dramatic increase in economic conditions, life expectancy and educational attainment. This paper provides a positive theory that explains how an economy might evolve when the longevity of its citizens both influences and is influenced by the process of economic development. We propose a three periods OLG model where agents, during their lifetime, cover different economic roles characterized by different incentive schemes and time horizon. Agents’ decisions embrace two dimensions: the private choice about education and the public one upon innovation policy. The theory focuses on the crucial role played by heterogeneous interests in determining innovation policies, which are one of the keys to the growth process: the economy can be discontinuously innovation-oriented due to the different incentives of individuals and different schemes of political aggregation of preferences. The model produces multiple development regimes associated with different predictions about life expectancy evolution, educational investment dynamics, and technology adoption policies. Transitions between these regimes depend on initial conditions and parameter values. |
| Keywords: | Growth, Life Expectancy, Human Capital, Systemic Innovation, Majority Voting |
| JEL: | D70 J10 O14 O31 O43 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2007.48&r=pol |
| By: | Erlingsson, Gissur (The Ratio Institute) |
| Abstract: | It is now 40 years since Lipset and Rokkans heavily influential ‘Cleavage Structures…’ was first published. Current research has still made little effort to explain why the ‘freezing’ of party systems these authors observed actually took place. The purpose here is to contribute to this field by elucidating the individual-level mechanisms that make party system stability more intelligible. The argument put forward here is that three interrelated factors give us deeper insights into the mechanics of the so called ‘freezing process’. Firstly, the ‘problem of collective action among potential party-entrepreneurs’ makes it puzzling that new political parties emerge at all. Secondly, even if the original collective-action problem somehow is overcome, the ‘principal-agent problem’ and the ‘problem of voter coordination’ make it hard for new parties to attract voters. Finally, well-established and powerful competitors have the incentives and instruments to fight newcomers and steer them away from the political arena. I reach the conclusion that it is not surprising at all that Lipset and Rokkan made their empirical observations. Instead, what is really puzzling is why new political parties emerge and gain support at all. |
| Keywords: | Party systems; 'freezing hypothesis'; party formation |
| JEL: | D01 D71 D72 H41 |
| Date: | 2007–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0113&r=pol |
| By: | Aidt, T.S.; Jense , P.S. |
| Abstract: | We study the consequences of the extension of the voting franchise for the size of (central) government and for the tax structure in 10 Western European countries, 1860-1938. We show, .rstly, that the gradual relaxation of income and wealth restrictions on the right to vote contributed to growth in government spending and taxation. Secondly, we show that the impact of the franchise extension on the tax structure is conditional on tax collection costs. We find that the share of direct taxes (including the personal income tax) is positively affected by the franchise extension, but only if relative collection costs are below a given threshold. We use literacy as a proxy for the cost of levying a broad-based income tax. |
| Keywords: | Voting franchise, democracy, public finance, taxation. |
| JEL: | D7 H11 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0715&r=pol |