nep-pol New Economics Papers
on Positive Political Economics
Issue of 2009‒05‒09
eight papers chosen by
Eugene Beaulieu
University of Calgary

  1. Controlling Money and Politics – An Exercise in Damage Control By Marcin Walecki
  2. Downsian Model with Asymmetric Information: Possibility of Policy Divergence By Kikuchi, Kazuya
  3. The determinants of public deficit volatility By Luca Agnello; Ricardo M. Sousa
  4. Government Instability Indicators and the Exercise of limited "Consensus" in post-communist Romania 1992-2004 By Olimid, Anca Parmena
  5. Economic Growth, Governance and Voting Behaviour: an Application to Indian Elections By Arvind Virmani
  6. Political cleavages in Romania. A theoretical overview of the post-communist parties and party systems By OLIMID, ANCA PARMENA
  7. Constrain-Thy-Neighbor Effects as a Determinant of Transnational Interest Group Cohesion By Callaghan, Helen
  8. Attitudes to Personal Carbon Allowances: The effect of trust in politicians, perceived fairness and ideology By Jagers, Sverker C.; Löfgren, Åsa; Stripple, Johannes

  1. By: Marcin Walecki
    Abstract: In many countries political financial regulations have been introduced.
    Keywords: political, governance,,money, politics, democracies, democracy, financial
    Date: 2009
  2. By: Kikuchi, Kazuya
    Abstract: This paper presents a model of Downsian political competition in which voters are imperfectly informed about economic fundamentals. In this setting, parties' choices of platforms influence voters' behavior not only through voters' preferences over policies, but also through formation of their expectation on the unknown fundamentals. We show that there exist pure-strategy equilibria in this political game with asymmetric information at which the two parties' policies diverge with positive probability. This result is in contrast with the well-known median voter theorem in the classical model of Downsian competition. We also study refinement of equilibria, and identify the perfect equilibria (Selten, 1975) and the strictly perfect equilibria (Okada, 1981). The Nash equilibria with the strongest asymmetry in the parties' strategies are proved to be strictly perfect.
    Date: 2008–09
  3. By: Luca Agnello (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Ricardo M. Sousa (University of Minho, Department of Economics and Economic Policies Research Unit (NIPE), Campus of Gualtar, 4710-057 - Braga, Portugal.)
    Abstract: This paper empirically analyzes the political, institutional and economic sources of public deficit volatility. Using the system-GMM estimator for linear dynamic panel data models and a sample of 125 countries analyzed from 1980 to 2006, we show that higher public deficit volatility is typically associated with higher levels of political instability and less democracy. In addition, public deficit volatility tends to be magnified for small countries, in the outcome of hyper-inflation episodes and for countries with a high degree of openness. JEL Classification: E31, E63.
    Keywords: Public deficit, volatility, political instability, institutions.
    Date: 2009–04
  4. By: Olimid, Anca Parmena
    Abstract: During the 1990s post communist societies faced similar challenges at the level of executive government. Since the early studies of Rosenthal (1978), political science literature’s focus is on the different continuums of political stability.In recent years there has been an increased interest in analyzing the effects of political instability in post communist Romania. This article is an effort to look at the indicators of political instability (redefined as Government instability) in an unconsolidated democracy. The issue of political stability in post-communist Romania must of course be analyzed in relation to the challenges of reform and the sources of the limited consensus in government coalition in Romania (1992-2004).
    Keywords: government; post-communist society; political stability;crisis of governality
    JEL: H11
    Date: 2008–11–22
  5. By: Arvind Virmani
    Abstract: The focus of this paper is on the potential economic factors underlying voter behaviour in a democracy. It develops a simplified model based on economic theory (welfare & conditional probabilities) and governance problems prevalent in developing countries and emerging economies. [WP No. 138].
    Keywords: potential economic factors, voter, elections, democracy, developing countries, India,
    Date: 2009
    Abstract: The following article examines the emergence of parties in post-communist Romania concluding that the theoretical basis of cleavages (the Lipset-Rokkanian model) is almost impossible to apply in this country. Accordingly, the historical evolution of the post-communist society and the strategic moves of political actors during democratization were often perceived as an „expected moments lacking any theoretical model”. Contrary to this assumption, I argue that even an incipient cleavage suggests at least two questions about the significance of an ideological framework and a stable party system.
    Keywords: post-communist cleavages; post-communist party systems; transition; the Lipset-Rokkanian model; electoral behavior.
    JEL: P20
    Date: 2009–02–15
  7. By: Callaghan, Helen
    Abstract: Abstract This article identifies conditions for transnational interest group cohesion by examining German and British employer positions on EU company law proposals. Employers were divided over proposals on takeover bids but formed a united front against proposals on worker participation. I argue that divergent “constrain-thy-neighbor effects†contribute to explaining the observed variation. Actors consider not only how it affects them if they themselves are subjected to an EU law. They also consider how it affects them that the same law will apply abroad. Positive constrain-thy-neighbor effects weaken transnational cohesion. Negative constrain-thy-neighbor effects reinforce it. This argument and analytic framework could be applied to many issues beyond the realm of company law, and to all actors confronted with proposals for cross-border cooperation, including not just employers, but also governments, unions, and a broad range of organized interests. By attending to the multidimensionality of actors’ decision-making calculus, the article advances the materialist literature on preference formation in two ways. It bridges the artificial chasm between class-centered and firm-centered perspectives, and it shows how interaction between national and international institutions shapes preferences and cleavages. Zusammenfassung Der vorliegende Aufsatz untersucht Bedingungen für den grenzübergreifenden Zusammenhalt von Interessengruppen anhand der Positionen deutscher und britischer Arbeitgeberverbände zum EU-Gesellschaftsrecht seit 1970. Während bei Richtlinien zur Regelung von Übernahmen Uneinigkeit herrschte, zogen deutsche und britische Arbeitgeber bei Richtlinien zur betrieblichen Mitbestimmung an einem Strang. Ich argumentiere, dass unterschiedliche „Constrain-Thy-Neighbor“-Effekte zur Erklärung der Varianz beitragen. Wenn Akteure die Vor- und Nachteile einer EU-Richtlinie gegeneinander abwägen, berücksichtigen sie nicht nur die zu erwartenden Auswirkungen der Richtlinie im eigenen Land. Sie berücksichtigen auch, dass dieselbe Richtlinie auch in anderen Mitgliedstaaten zur Anwendung käme. Positive Constrain-Thy-Neighbor-Effekte schwächen den grenzübergreifenden Zusammenhalt von Interessengruppen. Negative Constrain-Thy-Neighbor-Effekte stärken ihn. Das Anwendungsfeld des vorgestellten analytischen Rahmens umfasst neben gesellschaftsrechtlichen Fragen viele andere Themenbereiche und neben Arbeitgebern alle Akteursgruppen, die mit Vorschlägen für grenzübergreifende Kooperation konfrontiert sind, wie zum Beispiel auch Regierungen, Gewerkschaften und andere Interessenverbände. Indem er die Mehrdimensionalität von Entscheidungskalkülen verdeutlicht, leistet der Artikel zwei Beiträge zur Literatur über Präferenzbildung. Er überbrückt den künstlichen Graben zwischen klassenzentrierten und firmenzentrierten Perspektiven und zeigt auf, wie das Zusammenspiel von nationalen und internationalen Institutionen Präferenzen und Koalitionsmuster beinflusst.
    Keywords: interest intermediation; corporate governance; directives; harmonisation; multilevel governance; Europeanization; regulatory competition; Germany; U.K.; political science; political economy
    Date: 2009–04–20
  8. By: Jagers, Sverker C. (Department of Political Science, Göteborg University); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Stripple, Johannes (Department of Political Science, Lund University)
    Abstract: The idea of Personal Carbon Allowances (PCAs) was presented by the British Environment Secretary David Miliband in 2006. Although no state is seriously developing proposals for them, they have been heavily debated within academia, NGOs and policy making circles. PCAs can be seen as a logical extension of market efficiency underpinning emissions trading schemes, so far only applied at the firm level, to individuals. The purpose of this paper is to analyse some critical aspects of the public’s support for a PCA scheme. We focus on the relations between attitude towards a PCA scheme and trust in politicians, perceived fairness and ideology, respectively. We also analyse the relation between the respective attitudes towards an increase in the current tax rate and towards an implementation of a PCA scheme. We base our study on a mail questionnaire sent out to a random, representative sample in Sweden.<p>
    Keywords: personal carbon allowances; attitudes; trust; fairness; ideology
    JEL: Q54 Q58
    Date: 2009–05–04

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