nep-pol New Economics Papers
on Positive Political Economics
Issue of 2013‒02‒03
24 papers chosen by
Eugene Beaulieu
University of Calgary

  1. Information and Extremism in Elections By Raphael Boleslavsky; Christopher Cotton
  2. An Inquiry into the Use of Illegal Electoral Practices and Effects of Political Violence By Roxana Gutierrez-Romero
  3. Public Investment and Re-election Prospects in Developed Countries By Margarita Katsimi; Vassilis Sarantides
  4. Political reforms and public policy : evidence from agricultural and food policies By Olper, Alessandro; Fatkowski, Jan; Swinnenm Johan
  5. Divided Majority and Information Aggregation: Theory and Experiment By Laurent Bouton; Micael Castanheira; Aniol Llorente-Saguer
  6. Media Freedom and Democracy: Complements or Substitutes in the Fight against Corruption? By Sambit Bhattacharyya; Roland Hodler
  7. Why do some party leaders in Flemish municipal councils get more acquainted with New Public Management principles than others ? An investigation into the impact of their individual characteristics. By B. BUYLEN; J. CHRISTIAENS
  8. State fragility, rent seeking and lobbying: evidence from African data By Simplice A , Asongu; Oasis , Kodila-Tedika
  9. Cross-Border Spillover: U.S. Gun Laws and Violence in Mexico By Dube, Arindrajit; Dube, Oeindrila; García-Ponce, Omar
  10. Buying votes vs. supplying public services : political incentives to under-invest in pro-poor policies By Khemani, Stuti
  11. An Exceptional Nation? American Political Values in Comparative Perspective By Karabel, Jerome; Laurison, Daniel
  12. Notes on financial system development and political intervention By Song. Fenghua; Thakor, Anjan
  13. Is inclusive development a sustainable development? : A political economic perspective By Pushparaj, Soundararajan
  14. Corruption, Shadow Economy and Income Inequality: Evidence from Asia By Kar, Saibal; Saha, Shrabani
  15. Fighting corruption with strategy By Frederico Cavazzini; Pedro Picaluga Nevado
  16. Fighting African Conflicts and Crimes: Which Governance Tools Matter? By Simplice A , Asongu; Oasis, Kodila-Tedika
  17. Identifying corruption through latent class models: evidence from transition economies By Pieroni, Luca; d'Agostino, Giorgio; Bartolucci, Francesco
  18. When to Favour Your Own group? The Threats of Costly Punishments and In-group Favouritism By Donna Harris; Benedikt Herrmann
  19. Uncertainty and the Politics of Employment Protection By Andrea Vindigni; Cristina Tealdi
  20. Economic Growth and Inequality: Evidence from the Young Democracies of South America By Manoel Bittencourt
  21. Informational Lobbying and Agenda Distortion By Christopher Cotton; Arnaud Dellis
  22. The Theory of Interhybridity: Socio-political Dimensions and Migration Experiences of Post-communist Western Balkan States By Aliu, Armando
  23. Decorrupting Government: The United States Board of Overseers By Bruce M. Owen
  24. The Transmission of Democracy: From the Village to the Nation-State By Giuliano, Paola; Nunn, Nathan

  1. By: Raphael Boleslavsky (Department of Economics, University of Miami); Christopher Cotton (Department of Economics, University of Miami)
    Abstract: We show that informative political campaigns can increase political extremism and decrease voter welfare. We present a model of elections in which candidate ideology is strategically selected prior to a campaign which reveals information about candidate quality. Documented means by which campaigns can harm voters are not present in our model; special interest groups, fundraising, and biased or private information are not part of the analysis. Even under these optimistic assumptions, informative campaigns have negative consequences. Our results have implications regarding media coverage, the number of debates, and campaign finance reform.
    Keywords: Campaigns, elections, persuasion, policy divergence, probabilistic voting
    JEL: D72 D83
    Date: 2012–11–04
  2. By: Roxana Gutierrez-Romero
    Abstract: This article investigates whether vote-buying and the instigation of violence in the disputed 2007 Kenyan elections were strategically motivated, and whether those affected by electoral violence changed their views towards ethno-politics and the use of violence.  To answer these questions, a panel survey conducted before and after the elections is combined with external indicators of electoral violence.  We find that political parties targeted vote-buying towards specific groups to weaken the support of their political rivals and to mobilize their own supporters.  Furthermore, parties instigated violence strategically in areas where they were less likely to win.  Although the victims of violence would prefer that parties are no longer allowed to organize in ethnic or religious lines, they are more likely to identify in ethnic terms, support the use of violence and avoid relying on the police to resolve disputes.  The overall findings suggest an increased risk of electoral-violence reoccurring.
    Keywords: Political competition, electoral violence, vote-buying, election fraud, ethnic identity, Kenya
    Date: 2012–10–30
  3. By: Margarita Katsimi (Athens University of Economics and Business and CESifo); Vassilis Sarantides (Department of Economics, The University of Sheffield)
    Abstract: A growing body of literature suggests that office-motivated politicians manipulate fiscal policy instruments in order to seek their re-election. This paper directly examines the impact of the electoral manipulation of the level and composition of fiscal policy on incumbents’ re-election prospects. This impact is estimated through a panel of 21 OECD countries over the period of 1972-1999. Our results suggest that increased public investment during the term in office as well as a shift in expenditures toward public investment can improve re-election prospects. To the contrary, results seem to verify the assumption of low visibility of capital spending, since election year manipulation via public investment does not affect re-election prospects. We also find that voters disfavour politicians who create deficits during elections, while deficit creation over the term in office and preceding the election year (when it is financed by equal proportions of public investment and consumption expenditures) does not seem to affect re-election prospects.
    Keywords: political budget cycles; elections; quality of public expenditure; public investment
    JEL: D72 E62
    Date: 2013
  4. By: Olper, Alessandro; Fatkowski, Jan; Swinnenm Johan
    Abstract: This paper studies the effect of political regime transitions on public policy using a new data set on global agricultural and food policies over a 50-year period (including data from 74 developing and developed countries over the 1955–2005 period). The authors find evidence that democratization leads to a reduction of agricultural taxation, an increase in agricultural subsidization, or both. The empirical findings are consistent with the predictions of the median voter model because political transitions occurred primarily in countries with a majority of farmers. The results are robust to different specifications, estimation approaches, and variable definitions.
    Keywords: Parliamentary Government,Labor Policies,Emerging Markets,Political Economy,Population Policies
    Date: 2013–01–01
  5. By: Laurent Bouton (Boston University); Micael Castanheira (Université Libre de Bruxelles); Aniol Llorente-Saguer (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: This paper both theoretically and experimentally studies the properties of plurality and approval voting when the majority is divided as a result of information imperfections. The minority backs a third alternative, which the majority views as strictly inferior. The majority thus faces two problems: aggregating information and coordinating to defeat the minority candidate. Two types of equilibria coexist under plurality: either voters aggregate information, but this requires splitting their votes, or they coordinate but cannot aggregate information. With approval voting, expected welfare is strictly higher, because some voters multiple vote to achieve both goals at once. In the laboratory, we observe both types of equilibrium under plurality. Which one is selected depends on the size of the minority. Approval voting vastly outperforms plurality. Finally, subject behavior suggests the need to study asymmetric equilibria.
    Keywords: Experiments, Multicandidate Elections, Plurality, Approval Voting
    JEL: C92 C72 D70 P16
    Date: 2012–11
  6. By: Sambit Bhattacharyya; Roland Hodler
    Abstract: Democracy and media freedom have been suggested as useful tools in the fight against political corruption, but so far their interplay in this fight has received scant attention. We present a game theoretic model which predicts that the corruption-reducing effect of democracy becomes stronger as media freedom increases. Using panel data covering the period 1980-2008 and 126 countries, we find empirical support for this prediction. Our main results hold when we control for the effects of income, time varying common shocks, regional fixed effects and various additional covariates. The complementarity between democracy and media freedom in the fight against corruption is also supported by Indian state level data. 
    Keywords: Corruption, Political institutions, Democracy, Media freedom
    JEL: D72 D73 H11
    Date: 2012–02–01
    Abstract: This paper contributes to the scarce literature on politicians’ individual characteristics as determinants of their acquaintanceship with New Public Management (NPM) concepts and tools. It focuses on party leaders as the leaders of the political groups consisting of members of the same party in the municipal council. Our sample covers 363 party leaders in Flemish municipalities. Using survey data, we combine individual factors in a regression analysis to reveal which personal characteristics mediate their processes of getting acquainted with NPM principles. Party leaders’ acquaintanceship with 5 concrete NPM concepts is used as a dependent variable. The results reveal that political experience, being majority leader, combination of political mandates at a higher political level and financial expertise have a positive effect on acquaintanceship with NPM. Economic education, gender, profession, age or size have no significant effect.
    Keywords: local government reform, NPM, party leaders
    Date: 2012–11
  8. By: Simplice A , Asongu; Oasis , Kodila-Tedika
    Abstract: This paper assesses the determinants of state fragility in sub-Saharan Africa using hitherto unexplored variables in the literature. The previously missing dimension of nation building is integrated and the hypothesis of state fragility being a function of rent seeking and/or lobbying by de facto power holders is tested. The resulting interesting finding is that, political interference, rent seeking and lobbying increase the probability of state fragility by mitigating the effectiveness of governance capacity. This relationship (after controlling for a range of economic, institutional and demographic factors) is consistent with a plethora of models and specifications. The validity of the hypothesis is confirmed in a scenario of extreme state fragility. Moreover, the interaction between political interferences and revolutions mitigate the probability of state fragility while the interaction between natural resources and political interferences breeds the probability of extreme state fragility. As a policy implication, there is a ‘sub-Saharan African specificity’ in ‘nation building’ and prevention of conflicts. Blanket fragility oriented policies will be misplaced unless they are contingent on the degree of fragility, since ‘fragile’ and ‘extreme fragile’ countries respond differently to economic, institutional and demographic characteristics of state fragility.
    Keywords: State fragility; rent seeking; lobbying; nation building; Africa
    JEL: C43 O55 O43 H11 O20
    Date: 2013–01–29
  9. By: Dube, Arindrajit (University of Massachusetts Amherst); Dube, Oeindrila (New York University); García-Ponce, Omar (New York University)
    Abstract: To what extent, and under what conditions, does access to arms fuel violent crime? To answer this question, we exploit a unique natural experiment: the 2004 expiration of the U.S. Federal Assault Weapons Ban exerted a spillover on gun supply in Mexican municipios near Texas, Arizona and New Mexico, but not near California, which retained a pre-existing state-level ban. We find first that Mexican municipios located closer to the non-California border states experienced differential increases in homicides, gun-related homicides and crime gun seizures in the post-2004 period. Second, the magnitude of this effect is contingent on political factors related to Mexico's democratic transition. Killings increased substantially more in municipios where local elections had become more competitive prior to 2004, with the largest differentials emerging in high narco-trafficking areas. Our findings are consistent with the notion that political competition undermined informal agreements between drug cartels and entrenched local governments, highlighting the role of political instability in mediating the gun-crime relationship.
    Keywords: gun control, violence, informal employment, cross-border spillover, cartels
    JEL: K14 D72 D73
    Date: 2012–12
  10. By: Khemani, Stuti
    Abstract: This paper uses unique survey data to provide, for the first time in the literature, direct evidence that vote buying in poor economies is associated with lower provision of public services that disproportionately benefit the poor. Various features of the data and the institutional context allow the interpretation of this correlation as the equilibrium policy consequence of clientelist politics, ruling out alternate explanations (such as, for example, poverty driving both vote buying and health outcomes). The data come from the Philippines, a country context that allows for measuring vote buying during elections and services delivered by the administrative unit controlled by winners of those elections. The data reveal a significant, robust negative correlation between vote buying and the delivery of primary health services. In places where households report more vote buying, government records show that municipalities invest less in basic health services for mothers and children; and, quite strikingly, as a summary measure of weak service delivery performance, a higher percentage of children are severely under-weight.
    Keywords: Health Monitoring&Evaluation,Housing&Human Habitats,Public Sector Corruption&Anticorruption Measures,Municipal Financial Management,Health Systems Development&Reform
    Date: 2013–01–01
  11. By: Karabel, Jerome; Laurison, Daniel
    Abstract: This paper compares the political values and viewpoints of Americans with those of citizens of 19 other wealthy democracies. Drawing on the long history of scholarship and debate about “American Exceptionalism,†we ask whether Americans’ positions on issues of governance, taxation, equality, religion, and morality are significantly different from those of people in comparable countries in Europe and elsewhere. Using data from the International Social Survey Program’s Role of Government survey, the World Values Survey, and other sources, we show that, on almost all of these questions, Americans’ views are on average substantially to the right of those of people in our comparison countries: Americans are less supportive of redistribution and government intervention in the economy, are more likely to blame poverty on the failings of the poor, and are by far more religious. These findings confirm that Americans are on the whole more right-leaning than Europeans, Canadians, Australians, New Zealanders, and the Japanese.
    Keywords: Sociology, American Exceptionalism, Comparative Political Values
    Date: 2012–12–05
  12. By: Song. Fenghua; Thakor, Anjan
    Abstract: The paper studies the impact of political intervention on a financial system that consists of banks and financial markets and develops over time. In this financial system, banks and markets exhibit three forms of interaction: they compete, they complement each other, and they co-evolve. Coevolution is generated by two new ingredients of financial system architecture relative to the existing theories: securitization and risk-sensitive bank capital. The authors show that securitization propagates banking advances to the financial market, permitting market evolution to be driven by bank evolution, and market advances are transmitted to banks through bank capital. Then they examine how politicians determine the nature of political intervention designed to expand credit availability. The authors find that political intervention in banking exhibits a U-shaped pattern, where it is most notable in the early stage of financial system development (through bank capital subsidy in exchange for state ownership of banks) and in the advanced stage (through direct lending regulation). Despite expanding credit access, political intervention results in an increase in financial system risk and does not contribute to financial system evolution. Numerous policy implications are drawn out.
    Keywords: Access to Finance,Banks&Banking Reform,Debt Markets,Bankruptcy and Resolution of Financial Distress,Financial Intermediation
    Date: 2013–01–01
  13. By: Pushparaj, Soundararajan
    Abstract: A major development policy challenge in the contemporary economic policy discourse is to sustain the development momentum. Prevailing political economic realities influence the economic thinking to accommodate the political compulsions. The inclusive development is one such development strategy. Inclusive development is not a mere political pragmatism but a sensible development strategy. This paper discusses the relevance of distributive justice in relation to civil disturbance across and within national boundaries in the context of sustainable development. This paper argues that the inclusive development guarantees the sustainable development. Further, argues for the revival of welfare state for sustainable development.
    Keywords: Sustainable Development; Inclusion; Inequality; Distributive Justice; Civil unrest
    JEL: D63 Q01 P16
    Date: 2013–01–23
  14. By: Kar, Saibal (Centre for Studies in Social Sciences, Calcutta); Saha, Shrabani (Edith Cowan University)
    Abstract: A number of recent studies for Latin America show that as the size of the informal economy grows, corruption is less harmful to inequality. We investigate if this relationship is equally compelling for developing countries in Asia where corruption, inequality and shadow economies are considerably large. We use Panel Least Square and Fixed Effects Models for Asia to find that both 'Corruption Perception Index' and 'ICRG' index are sensitive to a number of important macroeconomic variables. We find that in the absence of the shadow economy, corruption increases inequality. However, with larger shadow economies in South Asia, the income inequality tends to fall.
    Keywords: corruption, inequality, shadow economy, panel data, South Asia
    JEL: J48 K42 O17 O53
    Date: 2012–12
  15. By: Frederico Cavazzini (ISEG – Technical University of Lisbon); Pedro Picaluga Nevado (ISEG – Technical University of Lisbon)
    Abstract: This article aims to discuss the different conceptions currently surrounding the fight against corruption. The main question to be answered is whether or not there is a formula for combating corruption? Given its complexity, the article breaks down some of the most common understandings of the corruption phenomenon into different and relevant variables and undertakes joint and interconnected analysis. Drawing upon this conceptual approach, the article presents an adjustment to Klitgaard’s formula for corruption in which the level of education combined with access to information play a determinant role in providing the necessary capacity to claim political and social accountability. The article concludes by emphasizing that while there is no optimal solution to curb corruption, the combination of certain variables may induce or reduce the likelihood of corrupt conduct.
    Keywords: corruption; strategies; education; information
    Date: 2013–01
  16. By: Simplice A , Asongu; Oasis, Kodila-Tedika
    Abstract: Crimes and conflicts are seriously undermining African development. This article assesses the best governance tools in the fight against the scourges. The following findings are established. (1) Democracy, autocracy and voice & accountability have no significant negative correlations with crime. (2) The increasing relevance of government quality in the fight is as follows: regulation quality, government effectiveness, political stability, rule of law and corruption-control. (3) Corruption-control is the most effective mechanism in fighting crimes (conflicts). The findings are significantly strong when controlling for age dependency, number of police (and security) officers, per capita economic prosperity, educational level and population density. Justifications for the edge of corruption-control (as the most effective governance tool) and policy implications are discussed.
    Keywords: Security; Governance; Conflicts; Crime; Africa
    JEL: O55 F52 O17 K42 P16
    Date: 2013–01–20
  17. By: Pieroni, Luca; d'Agostino, Giorgio; Bartolucci, Francesco
    Abstract: Evaluation of corrupt activities is incrementally based on administration of questionnaires to firms in business, and generally involves a large number of items. Data collected by questionnaires of this type can be analyzed by Latent Class (LC) models in order to classify firms into homogeneous groups according to the perception of corruption. In this paper, we propose a multidimensional framework, based on an LC model, to identify various types of corruption. By using a dataset for transition economies, we identify four classes of corrupt activities, which go beyond the usual classification into administrative and political types of corruption; we then validate our estimates by using a direct administrative corruption index from the same dataset and by comparing, at country level, corruption perception rankings published by Transparency International. The potential of the proposed approach is illustrated through an application to the relationship between firms' competitiveness and the identified latent corruption classes, with evident heterogeneity in the interpretation of results regarding policy implications.
    Keywords: Latent class models; multidimensional item response theory; corruption; transition economies
    JEL: D73 C52 D22
    Date: 2013–01–13
  18. By: Donna Harris; Benedikt Herrmann
    Abstract: Using a laboratory experiment with minimal groups, we examined the extent to which the threats of costly punishments affect in-group favouritism behaviour. We studied three types of punishment separately: in-group, out-group, and third-party punishments. In line with previous studies, the majority of the allocators favoured their own group by allocating more money to each of the in-group members at the expense of the out-group in the baseline without punishment. In the in-group punishment treatment, we observed a slight increase in in-group favouritism behaviour. On the contrary, when only the out-group could punish the allocators, there was a significant drop in in-group favouritism behaviour as well as an increase in the equal division option. Finally, when faced with an independent third-party punisher the allocators continued to favour their own group. The threat of third-party punishment appeared to have no effect on their decisions. Our paper contributes to the literature on in-group favouritism and the nature of social norms by showing that the decision whether to favour one’s own group is affected by the threats of in-group and out-group punishments and whether it leads to an increase or decrease in this behaviour depends on who has the punishment power. Parochial or in-group biased norm was enforced by the in-group members, whilst ‘egalitarian sharing norm’ (across groups) was enforced by the out-group members. We conclude firstly that people apply different ‘self-serving’ social norms depending on their own group identity. Secondly, unlike selfish or opportunistic behaviours, independent third-parties, who only observed this behaviour but were not directly affected by it, were not willing to punish this behaviour. 
    Keywords: In-group favouritism, Group behaviour, Social identity, Social norm, In-group punishment, Out-group punishment, Third-party punishment, Favour game
    JEL: D70 D73 C92
    Date: 2012–11–02
  19. By: Andrea Vindigni (IMT Lucca Institute for Advanced Studies); Cristina Tealdi (IMT Lucca Institute for Advanced Studies)
    Abstract: This paper investigates the social preferences over labor market flexibility, in a general equilibrium model of dynamic labor demand where the productivity of active firms evolves as a Geometric Brownian motion. A key result demonstrated is that how the economy responds to shocks, i.e. unexpected changes in the drift and standard deviation of the stochastic process describing the dynamics of productivity, depends on the power of labor to extract rents and on the status quo level of firing costs. In particular, we show that when firing costs are initially relatively low, a transition to a rigid labor market is favored by all and only the employed workers with idiosyncratic productivity below some threshold value. A more volatile environment, and a lower rate of productivity growth, i.e. "bad times," increase the political support for more labor market rigidity only where labor appropriates of relatively large rents. Moreover, we demonstrate that when the status quo level of firing costs is relatively high, the preservation of a rigid labor market is favored by the employed with intermediate productivity, whereas all other workers favor more flexibility. The coming of better economic conditions need not favor the demise of high firing costs in rigid high-rents economies, because "good times" cut down the support for flexibility among the least productive employed workers. The model described provides some new insights on the comparative dynamics of labor market institutions in the U.S. and in Europe over the last few decades, shedding some new light both on the reasons for the original build-up of "Eurosclerosis," and for its relative persistence until the present day.
    Keywords: employment protection, job creation and destruction, ?ring costs, idiosyncratic productivity, volatility, growth, political economy, voting, rents, status quo, path depen- dency, institutional divergence.
    JEL: D71 D72 E24 J41 J63 J65
    Date: 2012–11
  20. By: Manoel Bittencourt (Department of Economics, University of Pretoria)
    Abstract: We investigate in this paper whether income growth has played any role on inequality in all nine young South American democracies during the period 1970-2007. The results, based on dynamic panel time-series analysis, robustly suggest that income growth has indeed played a progressive role in reducing inequality during the period. Moreover, the results suggest that this negative relationship is even stronger in the 1990s and early 2000s, a period in which the continent achieved macroeconomic stabilisation, political consolidation and much improved economic performance. On the contrary, during the 1980s (the so-called "lost decade"), the negative income growth experienced by the continent at the time has hit the poor the hardest, or alternatively speaking, it has played a regressive role on inequality. All in all, we suggest that consistent growth, and all that it encompasses, is an important equaliser which should not be discarded as a serious option by policy makers interested in a more equal income distribution.
    Keywords: Growth, inequality, South America
    JEL: E20 O11 O15 O54
    Date: 2013–01
  21. By: Christopher Cotton (Department of Economics, University of Miami); Arnaud Dellis (Department of Economics, Universite Laval and CIRPEE)
    Abstract: This paper challenges the prevailing view in the literature that informational lobbying is socially beneficial. Key to our analysis is the fact that policymakers are constrained on the number of issues they can address, which forces them to prioritize issues. Under reasonable conditions, interest groups advocating less-salient reforms produce information, inducing policymakers to prioritize those reforms instead of more-salient ones. Such distortion of the policy agenda reduces social welfare. Our story is consistent with empirical accounts of the lobbying process.
    Keywords: Informational lobbying, agenda setting, information collection, persuasion
    JEL: D72 D78 D83
    Date: 2012–09–15
  22. By: Aliu, Armando
    Abstract: The Western Balkans integration within the EU has started a legal process which is the rejection of former communist legal/political approaches and the transformation of former communist institutions. Indeed, the EU agenda has brought vertical/horizontal integration and Europeanization of national institutions (i.e. shifting power to the EU institutions and international authorities). At this point, it is very crucial to emphasize the fact that the Western Balkans as a whole region has currently an image that includes characteristics of both the Soviet socialism and the European democracy. The EU foreign policies and enlargement strategy for Western Balkans have significant effects on four core factors (i.e. Schengen visa regulations, remittances, asylum and migration as an aggregate process). The convergence/divergence of EU member states’ priorities for migration policies regulate and even shape directly the migration dynamics in migrant sender countries. From this standpoint, the research explores how main migration factors are influenced by political and judicial factors such as; rule of law and democracy score, the economic liberation score, political and human rights, civil society score and citizenship rights in Western Balkan countries. The proposal of interhybridity explores how the hybridization of state and non-state actors within home and host countries can solve labor migration-related problems. Indisputably, hybrid model (i.e. collaboration state and non-state actors) has a catalyst role in terms of balancing social problems and civil society needs. Paradigmatically, it is better to perceive the hybrid model as a combination of communicative and strategic action that means the reciprocal recognition within the model is precondition for significant functionality. This will shape social and industrial relations with moral meanings of communication.
    Keywords: Interhybridity; Migration; Politics; Western Balkans
    JEL: F22 A1 C0 B4 P48 C1 F5 P3 J61 C8 J53
    Date: 2013–01–25
  23. By: Bruce M. Owen (Stanford University)
    Abstract: This essay considers whether the organizational arrangements established by the Constitution of the United States remain effective in promoting “life, liberty and the pursuit of happiness,” which are the purposes of government according to Jefferson's Declaration of Independence. I conclude that they are no longer effective, and explore organizational reforms to address this failure. Specifically, the Constitution lacks a provision for substantive review of laws and regulations for consistency with the purposes of government—a function known in the private sector as quality assurance. The judicial power deals with legislative threats to life and liberty, but we need a better way to interdict threats to well-being. I propose the creation of a new branch, provisionally called the United States Board of Overseers, with responsibilities and powers analogous to those of the Supreme Court, but focused chiefly on the people’s opportunities for well-being rather than protecting life and liberty through the rule of law. For reasons of political legitimacy the eleven Overseers are chosen by lot from a College consisting of millions of citizens qualified by age, education and (middle) income. In political terms, the proposal is intended to counter the current power of the oligarchy over the legislature and the administrative state with a strongly democratic institution representing the principal victims of oligarchic power, the middle class. Given the difficulty faced by the oligarchy in containing the destabilizing and inefficient excess greed of its members, the proposal is also in the collective interest of the one percent. Protection for the poorest is included in the proposal.
    Date: 2013–01
  24. By: Giuliano, Paola (University of California, Los Angeles); Nunn, Nathan (Harvard University)
    Abstract: We provide evidence that a history of democracy at the local level is associated with contemporary democracy at the national level. Auxiliary estimates show that a tradition of local democracy is also associated with attitudes that favor democracy, with better quality institutions, and higher level of economic development.
    Keywords: democracy, historical persistence, local institutions
    JEL: N30 P0 Z1
    Date: 2013–01

This nep-pol issue is ©2013 by Eugene Beaulieu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.