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on Positive Political Economics |
| By: | Aristotelis Boukouras (Georg-August-University Göttingen); Kostas Koufopoulos (University of Warwick) |
| Abstract: | This paper presents a model of political competition, where voter decisions are affected by their ideological adherence to political parties. We derive a number of interesting results: First, we show that an equilibrium exists even though voting is fully deterministic. Second, although politicians, because of deterministic voting, can win an election with certainty by making concessions to voters, they choose to win the election only with some probability in order to maximize their expected rents. Third, if the distribution of ideology is asymmetric, then political parties follow different platforms in equilibrium. Finally, our model generates two novel empirical predicitions, which, to the best of our knowledge, have not been tested yet: i) the higher the ideological adherence to a political party the more inefficient policies this party will follow, ii) the higher the number of extra votes required for election victory (the super-majority requirement) the higher the degree of corruption. |
| Keywords: | corruption; political instability; voting behavior |
| JEL: | G21 G28 H32 P16 P43 |
| Date: | 2011–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:058&r=pol |
| By: | Aristotelis Boukouras (Georg-August-University Göttingen); Kostas Koufopoulos (University of Warwick) |
| Abstract: | In this paper we provide a political game where agents decide whether to become legislators or politicians. Legislators determine the political institutions constraining politicians\' behavior and politicians compete for gaining the power to make decisions about the level of the public good. We derive the following results: i) Political competition is a necessary but not a suffcient condition for the elimination of political rents. ii) Agents utilize the separation of powers in order to endogenously select institutions which restrict the power of politicians. iii) In conjunction with political competition, these institutions implement the Lindahl allocation in the economy as a sub-game perfect Nash equilibrium of the political game. iv) As a consequence of the previous result, political rents are zero in equilibrium, in the sense that the winning politician does not extract part of the social surplus because of his power. To the best of our knowledge, this in the only citizen-candidate model with this equilibrium property. |
| Keywords: | Lindahl allocation; political competition; voting games |
| JEL: | D02 D62 D72 H41 |
| Date: | 2011–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:060&r=pol |
| By: | Aristotelis Boukouras (Georg-August-University Göttingen); Kostas Koufopoulos (University of Warwick) |
| Abstract: | In this paper we present a political economy approach in order to explain the degree of financial openness for an economy. In the model, entrepreneurs, who may have good or bad projects, vote for policies, which are proposed by selfish politicians. Two political frictions (ideological adherence and a super- majority requirement) impair political competition and lead to equilibria, where politicians receive corruption bribes. Furthermore, the model implies a non-monotonic relationship between financial openness and corruption and a positive relationship between financial openness and government size. Some of the model predictions are consistent with empirical findings while other predictions have not beeen tested yet. |
| Keywords: | corruption; financial openness; ideology; politicians |
| JEL: | G21 G28 H32 P16 P43 |
| Date: | 2011–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:059&r=pol |
| By: | Domink Hangartner; Lukas Schmid |
| Abstract: | Why do some people go to the polling station, sometimes up to several times a year, while others always prefer to stay at home? This question has launched a wide theoretical debate in both economics and political science, but convincing empirical support for the different models proposed is still rare. The basic rational voting model of Downs (1957) predicts zero participation because each individual vote is extremely unlikely to be pivotal. One prominent modification of this model is the inclusion of a civic duty term into the voter's utility function (Riker and Ordeshook, 1968) which has been the basis of structural ethical voting models such as Coate and Conlin (2004) and Feddersen and Sandroni (2006). Another branch of structural models looks at informational asymmetries among citizens (Feddersen and Pesendorfer, 1996, 1999). This paper tests the implications of these two branches of structural models by exploiting a unique variability in compulsory voting laws in Swiss federal states. By analyzing a newly compiled comparative data set covering the 1900-1950 period, we find large positive effects of the introduction of compulsory voting laws on turnout. Along with the arguably exogenous treatment allocation, several specifcation and placebo tests lend support to a causal interpretation of this result. The findings of this study lend support to the ethical voting models since citizens do react to compulsory voting laws only if it is enforced with a fee. At the same time, the informational aspect of non-voting is questioned as „new" voters do not delegate their votes. |
| Keywords: | Compulsory Voting; Voter Turnout; Structural Voting Models |
| JEL: | D72 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ube:dpvwib:dp1101&r=pol |
| By: | Enriqueta Aragonès; Dimitrios Xefteris |
| Abstract: | This paper characterizes a mixed strategy Nash equilibrium in a one-dimensional Downsian model of two-candidate elections with a continuous policy space, where candidates are office motivated and one candidate enjoys a non- policy advantage over the other candidate. We assume that voters have quadratic preferences over policies and that their ideal points are drawn from a uniform distribution over the unit interval. In our equilibrium the advantaged candidate chooses the expected median voter with probability one and the disadvantaged candidate uses a mixed strategy that is symmetric around it. We show that this equilibrium exists if the number of voters is large enough relative to the size of the advantage. |
| Keywords: | spatial competition; mixed strategies; candidate quality |
| Date: | 2011–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:859.11&r=pol |
| By: | Nicolas Quérou; Raphael Soubeyran |
| Abstract: | In this paper, we consider a model of multilateral bargaining where homogeneous agents may exert e¤ort before negotiations in order to inuence their chances to become the proposer. E¤ort levels have a permanent effect on the recognition process (persistent recognition). We prove two main results. First, all voting rules are equivalent (that is, they yield the same social cost) when recognition becomes persistent. Secondly, an equilibrium may fail to exist, because players may have more incentives to reduce their e¤ort level (in order to be included in winning coalitions) than to increase it (in order to increase their proposal power). Both results di¤er greatly from the case where recognition is transitory: Yildirim (2007) shows that una- nimity is the unique strictly optimal rule, and that an equilibrium always exists (under mild assumptions) in such a setting. Moreover, our second conclusion is quite di¤erent from the one obtained in most of the existing literature on bargaining (which assumes an exogenous recognition process), where it is generally considered that it is always in an agents best interest to have a proposal power as high as possible. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:04-11&r=pol |