nep-pol New Economics Papers
on Positive Political Economics
Issue of 2007‒07‒20
three papers chosen by
Eugene Beaulieu
University of Calgary

  1. How Decisive Is the Decisive Voter? By Eric J. Brunner; Stephen L. Ross
  2. Can foreign lobbying enhance development ? The case of tourism in the Caribbean By Gawande, Kishore; Maloney, William; Rojas, Gabriel V. Montes
  3. Governance Matters VI: Aggregate and Individual Governance Indicators, 1996-2006 By Kaufmann, Da niel; Kraay, Aart; Mastruzzi, Massimo

  1. By: Eric J. Brunner (Quinnipiac University); Stephen L. Ross (University of Connecticut)
    Abstract: This paper provides a new test of the political economy "as if" proposition that underlies nearly all empirical studies that utilize the median voter model. Specifically, we employ a unique dataset to examine whether the voter with the median income is decisive in local spending referenda. Previous tests of the median voter model have typically relied on aggregate cross sectional data to examine whether the voter with the median income is pivotal. These studies are likely biased because communities differ across a variety of unobservable dimensions that are likely correlated with both the cost of providing public services and with the distribution of income in each community. In contrast to previous studies we make use of a unique pair of California referendums to estimate a first difference specification that controls for jurisdiction unobservables. The first referendum proposed to lower the required vote share for passing local educational bonding initiatives from 67 to 50 percent, and the second referendum, which was held only six months later, proposed lowering the vote requirement from 67 to 55 percent. This pair of votes allows us to precisely test whether voters vote on each referendum "as if" future public service provision under the rules of that referendum would be determined by the income of the proposed decisive voter. This approach avoids the need to assume that public spending accurately captures public service levels and eliminates potential bias from time invariant district attributes that are likely correlated with median income. Our empirical results suggest that jurisdiction median income accurately captures the expected outcomes of majority votes on public service spending and that voters understand the impact of small changes in the identity of the decisive voter. The estimated effect of median income on voting are not present in counterfactuals estimated at the census tract and state assembly district level.
    Keywords: Median Voter Hypothesis, Voting, School Spending
    JEL: H4 H7 I2
    Date: 2007–07
  2. By: Gawande, Kishore; Maloney, William; Rojas, Gabriel V. Montes
    Abstract: There exist legal channels for informational lobbying of U.S. policymakers by foreign principals. Foreign governments and private sector principals frequently and intensively use this institutional channel to lobby on trade and tourism issues. The authors empirically study whether such lobbying effectively achieves its goal of trade promotion in the context of Caribbean tourism and it is the first paper to examine the potential for using foreign lobbying as a vehicle for development. They use panel data to explore and quantify the association between foreign lobbying by Caribbean principals and U.S. tourist arrivals to Caribbean destinations. A variety of sensitivity analyses support the finding of a strong association. The policy implications are obvious and potentially important for developing countries.
    Keywords: Tourism and Ecotourism,Economic Theory & Research,Accommodation & Tourism Industry,Political Systems and Analysis,Politics and Government
    Date: 2007–07–01
  3. By: Kaufmann, Da niel; Kraay, Aart; Mastruzzi, Massimo
    Abstract: This paper reports on the latest update of the Worldwide Governance Indicators (WGI) research project covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2006: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption. This latest set of aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance taken from 33 data sources provided by 30 different organizations. The data reflect the views on governance of public sector, private sector, and nongovernmental organization experts, as well as thousands of citizen and firm survey respondents worldwide. The paper also explicitly reports the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. It finds that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons, as well as monitoring progress over time. In less than a decade, a substantial number of countries exhibit statistically significant improvements in at least one dimension of governance, while other countries exhibit deterioration in some dimensions. The decade-long aggregate indicators, together with the disaggregated individual indicators, are available in a newly-redesigned website at
    Keywords: Governance Indicators,Statistical & Mathematical Sciences,National Govern ance,Economic Policy, Institutions and Governance,Science Education
    Date: 2007–07–01

This nep-pol issue is ©2007 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.