nep-pol New Economics Papers
on Positive Political Economics
Issue of 2011‒05‒07
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Three Stories about the Chance of Casting a Pivotal Vote By Dan Usher
  2. Do Canadian Business Cycle Peaks Predict Federal Election Calls? By Marcel-Cristian Voia; J. Stephen Ferris
  3. Satisfaction and adaptation in voting behavior: an empirical exploration By Martorana, Marco; Mazza, Isidoro
  4. A Duty to Vote By Dan Usher
  5. Do Campaign Finance Policies Really Improve Voters' Welfare? By Filippo Gregorini; Filippo Pavesi
  6. Good versus Bad Political Institutions and Economic Welfare By Mamoon, Dawood
  7. Narrowing the field in elections: the next-two rule By Brams, Steven J.; Kilgour, D. Marc
  8. Is German Domestic Social Policy Politically Controversial? By Niklas Potrafke
  9. Political Crises and Risk of Financial Contagion in Developing Countries: Evidence from Africa By Simplice A., Asongu
  10. Voting Rules in Bargaining with Costly Persistent Recognition By Nicolas Quérou; Raphael Soubeyran
  11. North Korea and the Politics of Visual Representation By David Shim; Dirk Nabers
  12. Transition from Democracy. Loss of Quality, Hybridisation and Breakdown of Democracy By Gero Erdmann

  1. By: Dan Usher (Queen's University)
    Abstract: People vote from self-interest or from a sense of duty. Voting from self-interest requires there to be some chance, however small, that one’s vote swings the outcome of the election from the political party one opposes to the political party one favours. This paper is a discussion of three models of how that chance might arise: the common sense model inferring the probability of a tied vote today from the distribution of outcomes in past elections, person-to-person randomization where each voter looks upon the political preferences of rest of the electorate as analogous to drawings from an urn with given proportions of red and blue balls, and nation-wide randomization where voters are lined up according to their valuations (positive or negative) of a win for one of the two competing parties, but where chance shifts the entire schedule of preferences up or down. Emphasis is on the third model about which this paper may have something new to say.
    Keywords: Pivotal voting, Duty to vote, Compulsory voting
    JEL: D72
    Date: 2011–04
  2. By: Marcel-Cristian Voia (Department of Economics, Carleton University); J. Stephen Ferris (Department of Economics, Carleton University)
    Abstract: This paper examines the regularity that business cycle peaks and federal elections often arise together in parliamentary democracies as it applies to Canadian data over the post Confederation time period (1870 onwards). Breaking the simultaneity of these two events and properly identifying causality is possible we argue only if we address carefully the selection issue associated with observed events. Our results suggest that it is business cycle peaks that lead federal elections rather than the other way around. While such a finding reinforces the hypothesis of strategic election timing, the result is also insightful because it helps to explain why the predicted presence of a political business cycle is harder to find in parliamentary governments where the date of the next election is under the control of the governing political party than in democratic systems where governing durations and election dates are fixed.
    Keywords: election timing, political business cycles, selection models, election hazard
    JEL: D72 D78 C41
    Date: 2011–04–25
  3. By: Martorana, Marco (University of Catania, Department of Economics and Quantitative Methods); Mazza, Isidoro (University of Catania, Department of Economics and Quantitative Methods)
    Abstract: Dynamic models of learning and adaptation have provided realistic predictions in terms of voting behavior. This study aims at contributing to their scant empirical verification. We develop a learning algorithm based on bounded rationality estimating the pattern of learning process through a two-stage econometric model. The analysis links voting behavior to past choices and economic satisfaction derived from previous period election and state of the economy. This represents a novelty in the literature on voting that assumes given voter preferences. Results show that persistence is positively affected by the combination of income changes and past behavior and by union membership.
    Keywords: voting; bounded rationality; learning; political accountability
    JEL: C23 C25 D72
    Date: 2010–12–01
  4. By: Dan Usher (Queen's University)
    Abstract: A duty to vote may be many things. It may be no more than an obligation to cast one’s ballot as self-interestedly or as altruistically as one pleases. It may a requirement to vote for the political party most likely to yield the highest social welfare. It may be a requirement to choose between competing parties in the interest of one’s social class or with recognition of the needs of the poor. It may include a requirement to inform oneself about the issues in an election. This paper begins with a critique of the argument denying any duty to vote because, as with participants in the market, there is no conflict between self-interest and public interest in the choice whether to vote or abstain. The core of the paper is a discussion of several interpretations of the duty to vote, and there is a brief review of pros and cons of compulsory voting.
    Keywords: Pivotal voting, Duty to vote, Compulsory voting
    JEL: D72
    Date: 2011–04
  5. By: Filippo Gregorini; Filippo Pavesi
    Abstract: In an electoral race, interest groups will be willing to finance political candidates’ campaigns in return for favors that are costly to voters. Starting from the empirical observation of split contributions, we develop a theoretical model of directly informative campaign advertising with rational voters. In this setting, interest groups that demand more favors are less likely to finance candidates to enhance their electoral prospects. We find that the only feasible Pareto improving policy involves providing specific limits and subsidies to each candidate. Unfortunately, this policy is very demanding in terms of information for the policy maker and always involves candidates providing favors to interest groups. We argue that bans on contributions without public subsidies may not be welfare improving, since they negatively affect the informational value of advertisements of the 2008 crisis.
    Keywords: Campaign Finance, Interest Groups, Elections, Welfare
    JEL: D72 H40
    Date: 2011–04
  6. By: Mamoon, Dawood
    Abstract: The paper finds that countries which practice democracy are less prone to unequal outcomes especially when it comes to wage inequality and income inequality whereas autocracy is associated with higher level of wage inequalities but its impact on income inequalities are insignificant. Though under good economic management, autocracies may redistribute incomes from the richest to the poorest, more generally an autocratic set up violates the median voter hypothesis. The results also show that political stability and voice and accountability are more sensitive to inequalities than democracy and autocracy which is to say that the countries which are politically stable and practice accountability also form more equal societies.
    Keywords: Institutions; Redistribution; Inequality
    JEL: C51 D63 B15
    Date: 2011–04–25
  7. By: Brams, Steven J.; Kilgour, D. Marc
    Abstract: We suggest a new approach to narrowing the field in elections, based on the deservingness of candidates to be contenders in a runoff, or to be declared one of several winners. Instead of specifying some minimum percentage (e.g., 50) that the leading candidate must surpass to avoid a runoff (usually between the top two candidates), we propose that the number of contenders depend on the distribution of votes among candidates. Divisor methods of apportionment proposed by Jefferson and Webster, among others, provide measures of deservingness, but they can prescribe a runoff even when one candidate receives more than 50 percent of the vote. We propose a new measure of deservingness, called the Next-Two rule, which compares the performance of candidates to the two that immediately follow them. It never prescribes a runoff when one candidate receives more than 50 percent of the vote. More generally, it identifies as contenders candidates who are bunched together near the top and, unlike the Jefferson and Webster methods, never declares that all candidates are contenders. We apply the Next-Two rule to several empirical examples, including one (elections to major league baseball’s Hall of Fame) in which more than one candidate can be elected.
    Keywords: voting; contenders in elections; runoffs; apportionment; fairness
    JEL: D63 D74
    Date: 2011–04
  8. By: Niklas Potrafke (Department of Economics, University of Konstanz, Germany)
    Abstract: This paper investigates empirically the influence of government ideology on social policy using German data. Examining the funding and the benefits of social security and public healthcare policy, my results suggest that policies implemented by governments dominated by left- and rightwing parties were similar over the 1951-2007 period. Leftwing governments, however, spent more in the 1970s and rightwing governments did so after German Reunification in 1990. Since policy convergence encourages new parties to enter the political arena, and party platforms on social policy matters are likely to undergo further changes in light of demographic change, the observed pattern may thus be a transitory phenomenon.
    Keywords: social policy, political business and partisan cycles, government ideology, policy polarization, demographic change
    JEL: H52 H55 I38 J18 D72
    Date: 2011–04–26
  9. By: Simplice A., Asongu
    Abstract: The recent waves of political crises in Africa and the Middle East have inspired the debate over how political instability could pose a risk of financial contagion to emerging countries. With retrospect to the Kenyan political crisis, our findings suggest stock markets in Lebanon, Mauritius and Nigeria were contaminated.
    Keywords: Political crisis; Contagion; Developing countries; Equity Markets
    JEL: F30 G15 G10
    Date: 2011–04–04
  10. 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
  11. By: David Shim; Dirk Nabers
    Abstract: Within international discourses on security, North Korea is often associated with risk and danger, emanating paradoxically from what can be called its strengths-particularly military strength, as embodied by its missile and nuclear programs-and its weaknesses-such as its ever?present political, economic, and food crises-which are considered to be imminent threats to international peace and stability. We argue that images play an important role in these representations, and suggest that one should take into account the role of visual imagery in the way particular issues, actions, and events related to North Korea are approached and understood. Reflecting on the politics of visual representation means to examine the functions and effects of images, that is what they do and how they are put to work by allowing only particular kinds of seeing. After addressing theoretical and methodological questions, we discuss individual (and serial) photographs depicting what we think are typical examples of how North Korea is portrayed in the Western media and imagined in international politics.
    Keywords: Visual representation, synecdoche, identity, North Korea
    Date: 2011–04
  12. By: Gero Erdmann
    Abstract: The paper points out that there is hardly any research for the reverse transition, the transition from democracy to non-democratic regimes for more than 30 years. For heuristical purposes, it provides basic data of the decline of democracy, which refers to loss of democratic quality, changes from liberal democracy to hybrid and to authoritarian regimes, during the third wave of democratisation (1974-2008). The stocktaking shows that most of the cases of decline refer to the change in and from young democracies established during the third wave, especially after 1989. Loss of democratic quality and hybridization are the most frequent cases of decline, while the breakdown of democracy has been very rare. Young democracies and poorer countries are more prone to decline than the older and richer cases – aside from a few remarkable exceptions. Finally, the overview argues that the research on the decline of democracy can benefit from the richness of the approaches of transitology, but should also avoid its methodological traps and failures, concluding with a number of suggestions for the future research agenda.
    Keywords: authoritarian regimes, breakdown of democracy, hybrid regimes, quality of democracy, transition from democracy
    Date: 2011–03

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