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on Positive Political Economics |
| By: | Paolo Di Giannatale, Francesco Passarelli |
| Abstract: | We study political distortions that emerge in situations where agents' political power is disproportionate with respect to their economic power. We provide a precise definition which adopts the same measure unit, the Shapley value, to evaluate both the economic and the political power. We show that usual weighted majority voting cannot prevent political distortions from emerging in a huge mass of situations. We propose an alternative voting method based on random assignments of voting rights. Agents are given chances to vote instead of weights. If chances are computed according to a specific formula, no political distortion occurs. As an application, we analyze the rotation voting system recently adopted by the European Central Bank. We find that this system yields an enormous amount of political distortion. Then we compute the voting chances that should be assigned to countries in order to eliminate it. |
| Keywords: | Voting power, Economic power, Political distortions, Voting rules, Weighted votes, Shapley value, Shapley Shubik index, European Central Bank |
| JEL: | C71 D71 D72 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:slp:islawp:islawp40&r=pol |
| By: | Cassette, Aurélie; Farvaque, Etienne; Héricourt, Jérôme |
| Abstract: | Using a new database of French municipalities that covers 821 towns and 2 elections (2001 and 2008), we examine how the budget structure, degree of electoral competition and the economic context affect the share of votes for the incumbent. We assess the specicities created by the two-round process under French electoral rule (a dual ballot under plurality rule). We show that in the first round of the electoral process, spending on equipment can influence the voter, and that electoral competition has a strong impact on the incumbent's score. In the second round, the incumbent's vote is affected more by national considerations and local budget variables have no effect. We show that the dynamics between the first and the second rounds are intense. The results suggest that the determinants of each round in a two-round electoral process are different. |
| Keywords: | Economic voting; Local elections; Plurality rule; Visible expenditures |
| JEL: | H72 D72 H76 |
| Date: | 2011–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34675&r=pol |
| By: | Marc Henry (Département de Sciences Economiques, Universite de Montléal); Ismael Mourifié (Département de Sciences Economiques, Universite de Montléal) |
| Abstract: | In the spatial model of voting, voters choose the candidate closest to them in the ideological space. Recent work by (Degan and Merlo 2009) shows that it is falsi¯able on the basis of individual voting data in multiple elections. We show how to tackle the fact that the model only partially identi¯es the distribution of vot- ing pro¯les and we give a formal revealed preference test of the spatial voting model in 3 national elections in the US, and strongly reject the spatial model in all cases. We also construct con¯dence regions for partially identi¯ed voter characteristics in an augmented model with unobserved valence dimension, and identify the amount of voter heterogeneity necessary to reconcile the data with spatial preferences. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2011cf822&r=pol |
| By: | Francesco Passarelli |
| Abstract: | This paper describes policy alternatives as lotteries, and studies how policy preferences are distorted by the cognitive anomalies postulated by Prospect Theory. Loss aversion induces a status quo bias. However, due to the reflection effect, the bias is asymmetric: too moderate attitudes toward a good reform or a good candidate, and too low severity toward bad politics. The reflection effect also determines low loyalty in partisan voting and weak concerns about partisan issues. Preferences about nonpartisan issues are independent of wealth because people use the status quo as a reference point. Ambitious platforms have more chances to pass than incremental and detailed changes because people are risk seeking in the realm of losses. In general, according to Prospect Theory the policy conflict within the society is smoother than under full rationality. Moreover, a pure majority system yields either prolonged conservatism or a radical abandonment of the status quo. |
| Keywords: | prospect theory, behavioral economics, voting behavior, behavioral political economy |
| JEL: | C9 D72 D81 H1 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:slp:islawp:islawp39&r=pol |
| By: | Benoît Le Maux, University of Rennes 1, CREM-CNRS; Federica Minardy, Piemonte Orientale University; Charlotte Magalhaes, University of Rennes 1 |
| Abstract: | The present study aims to test Meltzer and Richard’s (1981) hypothesis that lower-income individuals vote for candidates who favor higher taxes and more redistribution. Assuming that left-wing parties advocate a general increase in taxation, we estimate a vote function for the French Cantonal elections. We show clear-cut evidence that an increasing proportion of voters receiving social assistance raises the number of votes in favor of left-wing parties. This result highlights the importance of including redistribution aspects when estimating a vote function. |
| Keywords: | Vote Function, Local Government, Redistribution, Party ideology |
| JEL: | D72 H20 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cccrwp:2011-03-ccr&r=pol |
| By: | Fumagalli, Laura; Sala, Emanuela |
| Abstract: | Pre-election polls sometimes fail to reach the purpose for which they are carried out: to provide accurate predictions of electoral out-comes. By looking at the 2006 Italian General Elections, this paper aims to assess the role that different factors play in determining the accuracy of the pre-election polls. We find strong evidence that the quality of the sampling frame and non-respondents may contribute to biasing the polls results. This paper also aims to show how to over-come some of the limitations of the survey data by using statistical matching techniques and weighing procedures. |
| Date: | 2011–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2011-29&r=pol |
| By: | Vincenzo Bove (Department of Government, Universiry of Essex); Jennifer Brauner (Department of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | We investigate how the influence of the military differs across authoritarian regimes and verify whether there are actually systematic differences in military expenditures amongst different forms of dictatorships. We argue that public choices in autocracies result from a struggle for power between the leader and the elite. Elites matter because they control the fates of dictators, since most dictators are overthrown by members of their inner circle. Both actors want to ensure their continued political influence through a favorable allocation of the government budget. Moreover, the control over the security forces gives access to troops and weaponry, and affects the ease with which elites can unseat dic¬tators. Autocratic rulers employ different bundles of co-option and repression for staying in power, and thus differ in the extent that they are required to buy off the military. Therefore, the institutional makeup of dictatorships affects the nature of leader-elite interaction, and in turn the share of the government budget allocated to military spending. Drawing on a new data set that sorts dictatorships into 5 categories from 1960 to 2000, our empirical results suggest that while military and personalist regimes have respectively the highest and lowest level of military spending among authoritarian regimes, monarchies and single-party regimes display intermediate patterns of spending. |
| Keywords: | Institutions, Military Expenditure |
| JEL: | H11 H56 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:1106&r=pol |
| By: | Thibault Darcillon (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | Applying regressions on a sample of 18 OECD countries from 1970 to 2009 using new indicators, we find that right-wing governments liberalize more the financial sector that left-wing governments. We show that if a left-wing government accepts to liberalize the financial sector, an increase of social security expenditures can facilitate the adoption of a new legislation in the financial sector. To estimate the impact of the government partisan affiliation on the corporate governance legislation, we use a probit model and a conditional Cox model in gap time in 16 OECD over the 1970-2009 period. Statistically, we find that right-wing governments enhance more pro-shareholder policies. |
| Keywords: | Political Partisanship, financial liberalization, corporate governance, institutional change. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00639840&r=pol |
| By: | Horvath, Roman; Rusnak, Marek; Smidkova, Katerina; Zapal, Jan |
| Abstract: | Abstract We examine the determinants of the dissent in central bank boards’ voting records about monetary policy rates in the Czech Republic, Hungary, Sweden, the U.K. and the U.S. In contrast to previous studies, we consider about 25 different macroeconomic, financial, institutional, psychological or preference-related factors jointly and deal formally with the attendant model uncertainty using Bayesian model averaging. We find that the rate of dissent is between 5% and 20% in these central banks. Our results suggest that most regressors, including those capturing the effect of inflation and output, are not robust determinants of voting dissent. The difference in central bankers’ preferences is likely to drive the dissent in the U.S. Fed and the Bank of England. For the Czech and Hungarian central banks, average dissent tends to be larger when policy rates are changed. Some evidence is also found that food price volatility tends to increase the voting dissent in the U.S. Fed and in Riksbank. |
| Keywords: | monetary policy; voting record; dissent |
| JEL: | E58 E52 |
| Date: | 2011–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34638&r=pol |
| By: | Acuña, Andres A. |
| Abstract: | Youth voter registration is a worldwide phenomenon that exhibits a marked decline over the last two decades. On this basis, this article presents evidence regarding those factors that determine the voter registration of Chilean youth, in particular, the inhabitants of Bio Bio region. The methodology uses a linear model, proposed by Silberman and Durden (1975), which considers a relationship between voter registration and several social/economic variables. The model is estimated using a dynamic panel for the Bio Bio region, which includes its 54 communes and 10 planning territories for the years 2003 and 2009. The results indicate that, at commune level, the main determinants of youth voter registration are citizen participation and poverty rates, while ethnic aspects are also affecting female voter registration, and only citizen participation rate has some influence over male voter registration. Finally, at territory level, the results show that citizen participation rate is a cross determinant of youth voter registration in the Bio Bio region. |
| Keywords: | citizen participation; panel data; unobserved effects model; voter registration |
| JEL: | O10 R00 C23 Z00 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34746&r=pol |