nep-pol New Economics Papers
on Positive Political Economics
Issue of 2011‒11‒28
six papers chosen by
Eugene Beaulieu
University of Calgary

  1. Does gender matter for public spending? Empirical evidence from Italian municipalities. By Rigon, Massimiliano; Tanzi, Giulia M.
  2. Is Elite Political Stability a Necessary Condition for Economic Growth? An Empirical Evidence from the Baltic States By Ladislava Grochová; Luděk Kouba
  3. Towards a Political Economy of Macroeconomic Thinking By Saint-Paul, Gilles
  4. Public sector corruption and the probability of technological disasters By Yamamura, Eiji
  5. Inequality Perceptions, Distributional Norms, and Redistributive Preferences in East and West Germany By Andreas Kuhn
  6. Arrow’s Impossibility Theorem and the distinction between Voting and Deciding By Colignatus, Thomas

  1. By: Rigon, Massimiliano; Tanzi, Giulia M.
    Abstract: This paper studies whether municipal expenditure in Italy is influenced by female representation in city councils. To correctly capture the causal relation we use the instrumental variable technique. Our instrument is based on a temporary change in the Italian normative occurred between 1993 and 1995 that reserved a gender quota in party lists for municipal elections, causing an exogenous change in the number of women elected in city councils. We take advantage of the fact that not all the municipalities have been treated by the law, due to its short period of enforcement. Despite the existence of gender specific preferences in the society, we find no evidence that the allocation of resources among different spending categories is affected by the gender of politicians. Our results are consistent with the Median voter theorem. Alternatively, they may suggest that the gender is not a determinant of politicians’ voting behaviour, implying that the preferences of the women involved in political activities are close to those of their male colleagues.
    Keywords: gender; political representation; municipal expenditure
    JEL: H72 C23 D78 J16
    Date: 2011–11
  2. By: Ladislava Grochová (Department of Economics, FBE MENDELU in Brno); Luděk Kouba (Department of Economics, FBE MENDELU in Brno)
    Abstract: The growth theory of new political economy distinguishes two types of political instability – elite (violent coups, riots) and non-elite (non-violent government breakdowns). The purpose of the paper is to show that elite political stability is not a necessary condition for economic growth, i.e. we cast a doubt on a generality of growth theory when considering not exact term of political stability. Our hypothesis is tested on panel data from the Baltic states where a number of government changes has taken place and still fast economic growth can be seen over the last two decades. A dynamic ordinary least square (DOLS) model is used to estimate production function augmented with an elite political instability variable. Since it is shown that elite political instability has a negligible impact on economic growth, we consider the hypothesis regarding the necessity of political stability for economic development to be only a specific non-generalizable case, emphasizing the necessity of distinguishing elite and non-elite political instability.
    Keywords: new political economy, political instability, elite political instability, production function, single equation, Baltic states
    JEL: B59 C20 O52 P26
    Date: 2011–11
  3. By: Saint-Paul, Gilles (TSE)
    JEL: A11 E6
    Date: 2011–05–23
  4. By: Yamamura, Eiji
    Abstract: A growing number of studies have explored the influence of institution on the outcomes of disasters and accidents from the viewpoint of political economy. This paper focuses on the probability of the occurrence of disasters rather than disaster outcomes. Using panel data from 98 countries, this paper examines how public sector corruption is associated with the probability of technological disasters. It was found that public sector corruption raises the probability of technological disasters. This result is robust when endogeneity bias is controlled.
    Keywords: Corruption; Institution; Disasters; Risk
    JEL: D73 D81 Q54
    Date: 2011–11–10
  5. By: Andreas Kuhn (University of Zurich, Department of Economics)
    Abstract: This paper studies differences in inequality perceptions, distributional norms, and redistributive preferences between East and West Germany. As expected, there are substantial differences with respect to all three of these measures. Surprisingly, however, differences in distributional norms are much smaller than differences with respect to inequality perceptions or redistributive preferences. Nonetheless, individuals from East Germany tend to be more supportive of state redistribution and progressive taxation, and less likely to have a conservative political orientation, even conditional on having the same inequality perceptions and distributional norms.
    Keywords: subjective inequality indices, redistributive preferences, political preferences
    JEL: D31 D63 H50 J31
    Date: 2011–03
  6. By: Colignatus, Thomas
    Abstract: Arrow’s Impossibility Theorem in social choice finds different interpretations. Bordes-Tideman (1991) and Tideman (2006) suggest that collective rationality would be an illusion and that practical voting procedures do not tend to require completeness or transitivity. Colignatus (1990 and 2011) makes the distinction between voting and deciding. A voting field arises when pairwise comparisons are made without an overall winner, like in chess or basketball matches. Such (complete) comparisons can form cycles that need not be transitive. When transitivity is imposed then a decision is made who is the best. A cycle or deadlock may turn into indifference, that can be resolved by a tie-breaking rule. Since the objective behind a voting process is to determine a winner, then it is part of the very definition of collective rationality that there is completeness and transitivity, and then the voting field is extended with a decision.
    Keywords: economic crisis; voting theory; democracy; economics and mathematics;
    JEL: D71 A10 P16
    Date: 2011–11–21

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