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on Positive Political Economics |
| By: | Louis Putterman; Jean-Robert Tyran; Kenju Kamei |
| Abstract: | The burgeoning literature on the use of sanctions to support public goods provision has largely neglected the use of formal or centralized sanctions. We let subjects playing a linear public goods game vote on the parameters of a formal sanction scheme capable both of resolving and of exacerbating the free-rider problem, depending on parameter settings. Most groups quickly learned to choose parameters inducing efficient outcomes. But despite uniform money payoffs implying common interest in those parameters, voting patterns suggest significant influence of cooperative orientation, political attitudes, and of gender and intelligence. |
| Keywords: | Public good; voluntary contribution; formal sanction; experiment; penalty; |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2010-1&r=pol |
| By: | Duha Altindag (Louisiana State University); Naci Mocan (Louisiana State University) |
| Abstract: | Using micro data on more than 130,000 individuals from 69 countries, we analyze the extent to which joblessness of the individuals and the prevailing unemployment rate in the country impact perceptions of the effectiveness of democracy. We find that personal joblessness experience translates into negative opinions about the effectiveness of democracy, and it increases the desire for a rouge leader. Evidence from people who live in European countries suggests that being jobless for more than a year is the main source of the impact. Joblessness-related negative attitude towards the effectiveness of democracy is not because of a general displeasure towards the government, but rather, it is targeted towards democracy. We also find that well-educated and wealthier individuals are less likely to indicate that democracies are ineffective. The beliefs about the effectiveness of democracy as system of governance are also shaped by the unemployment rate in countries with low levels of democracy. The results suggest that periods of high unemployment and joblessness would hinder the development of democracy. |
| Keywords: | Unemployment duration, Democracy, Education, Development, World Values Survey |
| JEL: | J2 O1 P1 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:1016&r=pol |
| By: | Tresiman, Daniel |
| Abstract: | What explains the divergent political paths that the post-communist countries of Eastern Europe and the former Soviet Union have followed since the fall of the Berlin Wall? While some appear today to be consolidated democracies, others have all the features of consolidated autocracy. This study reviews the patterns of change and examines correlates of progress towards democracy. Variation across post-communist countries in the degree of democracy twenty years after the start of transition can be parsimoniously explained by two variables: the length of time the country spent under a communist regime and—within the former Soviet Union, but not Eastern Europe—the proportion of Muslim adherents in the population. |
| Keywords: | democracy, transition, post-communism, Islam |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-31&r=pol |
| By: | Andrea Ichino; Loukas Karabarbounis; Enrico Moretti |
| Abstract: | The intergenerational elasticity of income is generally considered one of the best summary measures of the degree to which a society gives equal opportunity of success to all its members, irrespective of their family background. We present a parsimonious political economy model and show how the interaction between private and collective decisions determines the equilibrium level of mobility. Contrary to what it is generally assumed, a low correlation between father income and son income is not always desirable, as it may imply more inefficiency due to the distortionary effects of mobility-enhancing public policies. Moreover, taking into account the heterogeneity in preferences for intergenerational mobility leads to the conclusion that even if a fully mobile society is desirable ex ante, it may not be politically sustainable ex post. Our model clarifies the structural parameters behind the widely studied intergenerational elasticity of income in terms of political economy forces. Finally, we show some empirical evidence on the relationship between intergenerational elasticity of income across countries and its underlying determinants that is consistent with the predictions of the model. |
| JEL: | J01 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15946&r=pol |
| By: | Daron Acemoglu |
| Abstract: | I discuss the role of economic theory in empirical work in development economics with special emphasis on general equilibrium and political economy considerations. I argue that economic theory plays (should play) a central role in formulating models, estimates of which can be used for counterfactual and policy analysis. I discuss why counterfactual analysis based on microdata that ignores general equilibrium and political economy issues may lead to misleading conclusions. I illustrate the main arguments using examples from recent work in development economics and political economy. |
| JEL: | B41 D50 O10 O12 P48 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15944&r=pol |
| By: | Thomas Richter (GIGA German Institute of Global and Area Studies) |
| Abstract: | This paper argues that trade and capital account reforms within autocracies underlie the primacy of foreign currency procurement. A longitudinal comparison of four countries (Morocco, Tunisia, Egypt and Jordan) in the Middle East and North Africa region shows a historical sequencing of reforms. In the 1960s and 1970s, the foreign exchange scarcity was managed primarily by rising restrictions, accumulation of debt and a number of unilateral country-specific strategies, including broader economic openings (infitah) and isolated capital account liberalizations. However, IMF-friendly reforms (orthodox trade liberalization) only became a political option in the context of the extreme fiscal scarcity of the 1980s and 1990s, after the failure of these earlier policies and the drying up of alternative unconditional finance. Additionally, the time differences regarding when orthodox reforms are implemented within autocracies mainly relate to global and regional cycles of different external windfall gains. These findings complement recent debates about the rush to free trade in at least two regards. First, they point to distinct causal mechanisms depending on the type of political regime (for example, autocracy versus democracy), explaining the beginning of trade and capital account liberalizations among developing countries. Second, they reveal the conditional historical influence of neoliberal ideas among structurally similar autocracies. |
| Keywords: | Autocracy, trade and capital account liberalization, Morocco, Tunisia, Egypt,Jordan |
| JEL: | F23 L14 O14 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:131&r=pol |