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on Positive Political Economics |
| By: | Evrenk, Haldun (Suffolk University, Department of Economics) |
| Abstract: | Using a theoretical model of two-candidate competition, I study the political support for a fully effective and costless reform targeting high level political corruption. I find that when the candidates have a high discount factor, and when the level of political corruption is not too low, both corrupt and honest candidates have incentives to oppose the reform. I also find that a fully informed and fully coordinated electorate can change a candidate's incentives by bundling the reform with high wages and by voting strategically. |
| Keywords: | Political Corruption; Political Economy of Anti-Corruption Reform |
| JEL: | D72 K42 |
| Date: | 2008–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:suf:wpaper:2008-3&r=pol |
| By: | Evrenk, Haldun (Suffolk University, Department of Economics) |
| Abstract: | Using a theoretical model of two-candidate political competition under probabilistic voting, I study the effectiveness of the following anti-corruption reforms: (i) higher wages for politicians, (ii) higher penalties for political corruption, and (iii) constitutional constraints on the tax rates and the public good levels. In the setup I study, the competing candidates may differ in their popularity, (non-verifiable) ability, and corruptibility. I find that the reforms are more likely to be effective when the candidates are (almost) identical. When the candidates differ significantly from each other, each reform may increase equilibrium level of corruption or reduce voters' welfare. |
| Keywords: | Anti-Corruption Reform; Political Corruption; Constitutional Constraints |
| JEL: | D72 H30 H83 K42 |
| Date: | 2008–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:suf:wpaper:2008-5&r=pol |
| By: | Francesco Giovannoni; Daniel J. Seidmann |
| Abstract: | According to Acton: “Power corrupts and absolute power corrupts absolutely”. We study the implications of Acton’s dictum in models where citizens vote (for three parties) and governments then form in a series of elections. In each election, parties have fixed tastes for graft, which affect negotiations to form a government if parliament hangs; but incumbency changes tastes across elections. We argue that combinations of Acton’s dictum with various assumptions about citizen sophistication and inter-party commitments generate tight and testable predictions which cover plausible dynamics of government formation in an otherwise stationary environment. |
| Keywords: | Corruption, government dynamics |
| JEL: | H11 D72 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:08/192&r=pol |
| By: | Evrenk, Haldun (Suffolk University, Department of Economics) |
| Abstract: | I study political competition between two candidates who could differ in their ability, popularity, and ethics. In elections, each candidate proposes a flat (income) tax rate and a public good level. A high(er)-ability candidate can produce the public good using less funds. Collected taxes that are not used in public goods production are stolen by the elected politician. The voting decision is probabilistic; it depends on a candidate's fiscal policy and his popularity. I prove that the pure strategy Nash Equilibrium exists and that there are at most two separate equilibria. I also provide a fully solved example. |
| Keywords: | Political Agency; Political Corruption; Nash Equilibrium |
| JEL: | D72 H30 H83 K42 |
| Date: | 2008–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:suf:wpaper:2008-4&r=pol |
| By: | Jaideep Roy; M Dziubinski |
| Abstract: | In this paper we study a model of political competition where citizens vote sincerely and candidates may be either citizens or Downsian politicians. The model extends the citizen-candidate model proposed by Osborne and Slivinski [1996] by including Downsian politicians similar to those studied by Osborne [1993]. We give necessary and sufficient conditions for existence, together with complete characterisation, of one party and two party Nash equilibria in our model. An important feature, in view of the Duverger's Law, of the two-party equilibrium is that these equilibria cannot have any Downsian contestant. Moreover, we compare our model with that studied by Osborne and Slivinski [1996], showing that in both cases there exist po- litical configurations that can appear in one of the models only. We show also that in our settings it is possible to have Nash equilibria with Downsian candidates, without requiring to have very restrictive constraints on the dis- tribution function. We also argue that as the number of parties in equilibrium increases, the `likelihood' of an ideology driven citizen-candidate winning the elections and running the government falls. Finally we argue that in any equilibrium extremist parties proposing their policies uniquely are typically ideology-driven as well. |
| Keywords: | Citizen-candidates, Downsian Politicians, Plurality Rule. JEL classification: C70, D70, D72 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005502&r=pol |
| By: | Bonnie Wilson (Department of Economics, Saint Louis University); Dennis Coates (Department of Economics, University of Maryland Baltimore County); Jac Heckelman (Department of Economics, Wake Forest University) |
| Abstract: | This paper empirically explores the relationship between special-interest groups and volatility, with focus on the interplay between groups and democracy and on the impact of groups on policy volatility. We find that countries with more interest groups are characterized by less policy volatility; that the number of interest groups has a direct impact on growth volatility, in addition to an indirect impact through policy volatility; and that interest groups appear to be a channel through which democracy impacts both policy volatility and growth volatility. |
| Keywords: | special interest groups, volatility, democracy |
| JEL: | P16 O43 D7 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:slu:wpaper:2008-01&r=pol |
| By: | Graefe, Andreas; Armstrong, J. Scott |
| Abstract: | Ideally, presidential elections should be decided based on how the candidates would handle issues facing the country. If so, knowledge about the voters’ perception of the candidates should help to forecast election outcomes. We make two forecasts of the winner of the popular vote in the U.S. Presidential Election. One is based on voters’ perceptions of how the candidates would deal with issues (problems facing the country) if elected. We show that this approach would have correctly picked the winner for the three elections from 1996 to 2004. The other is based on voters’ preference for policies and their perceptions of which policies the candidates are likely to pursue. Both approaches lead to a forecast that Democrat candidate Barack Obama will win the popular vote. |
| Keywords: | forecasting methods; regression models; index method; experience tables; accuracy |
| JEL: | C5 |
| Date: | 2008–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:9829&r=pol |
| By: | Werner Güth (Max Planck Institute of Economics, Jena, Strategic Interaction Group); Hartmut Kliemt (Frankfurt School of Finance and Management) |
| Abstract: | Though the social choice of social institutions or social results is impossible - there is, strictly speaking, no social choice - individual evaluations of social institutions or results trivially are possible. Such individual evaluations can be deemed liberal either because they emphasize political institutions that embody liberal values (political liberalism) or because individuals make up their mind in a specifically "liberal" way of forming ethical judgment (philosophical liberalism). Seen in this light the Paradox of Liberalism is of theoretical or philosophical interest but not a practical problem of political (institutional) liberalism. |
| Keywords: | Philosophical Liberalism, Political Liberalism, Public Choice, Social Choice |
| JEL: | B3 B52 D6 D7 D71 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-061&r=pol |
| By: | Evrenk, Haldun (Suffolk University, Department of Economics) |
| Abstract: | We study the Nash Equilibrium of three-candidate unidimensional spatial competition when candidates differ in their non-policy characteristics (valence). If the voters' policy preferences are represented by a strictly convex loss function, and if the voter density is unimodal and symmetric, then a unique, modulo symmetry, local Nash Equilibrium exists under fairly plausible conditions. The global Nash Equilibrium, however, exists when only one candidate has a valence advantage (or disadvantage) while the other two candidates have the same valence |
| Keywords: | Multi-candidate competition; valence; local Nash Equilibrium |
| JEL: | C72 H89 |
| Date: | 2008–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:suf:wpaper:2008-2&r=pol |
| By: | Dasgupta, Indraneel (University of Nottingham) |
| Abstract: | We examine how group-specific differences in reservation wage, arising due to asymmetries in social entitlements, impact on distribution via the joint determination of class conflict between workers and employers, and ‘ethnic’ conflict among workers. We model a two-dimensional contest, where two unions, representing different sections of workers, jointly but non-cooperatively invest resources against employers in enforcing an exogenously given rent, while also contesting one another. The rent arises from a ‘living’ wage, set above reservation wage rates via labour regulations. We show that high reservation wage workers gain, and employers lose, from better social entitlements for low reservation wage workers. The latter however benefit, with employers and against the former, from weak labour regulations. When minority/immigrant workers are marginalized both in the labour market and in non-wage entitlements, improving job access and expanding ‘social support’ has contradictory effects on class and ethnic conflicts. ‘Trade unionism’, i.e. political articulation of shared economic interests alone, appears insufficient to temper ethnic conflicts among workers. |
| Keywords: | class conflict, ethnic conflict, living wage, labour regulation, social entitlement, affirmative action, Distribution |
| JEL: | D31 D72 D74 I38 J52 O17 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3631&r=pol |