nep-pol New Economics Papers
on Positive Political Economics
Issue of 2014‒03‒08
four papers chosen by
Eugene Beaulieu
University of Calgary

  1. The Political Economy of Inclusive Rural Growth By Michael Carter; John Morrow
  2. Public Goods, Voting, and Growth By Kirill Borissov; Joseph Hanna; Stephane Lambrecht
  3. The Dynamics of Firm Lobbying By William R. Kerr; William F. Lincoln; Prachi Mishra
  4. Comparing Generalized Median Voter Schemes According to their Manipulability By R. Pablo Arribillaga; Jordi Massó

  1. By: Michael Carter; John Morrow
    Abstract: Abstract Commentators on the `East Asian Miracle' of inclusive growth have often pointed toward shared rural growth policies. But why were these policies not chosen elsewhere? This paper models voters who invest in either subsistence or a complex technology in which public goods complement private capital. Investment and technology choices vary with wealth and the level of public goods enforced by political lobbies. Outcomes depend on the strength of the incipient middle class who bolster political incentives through contributions. Economies with a stronger middle class due to lower inequality or lower risk may thereby sustain higher productivity through public good provision.
    Keywords: Poverty traps, political economy, inequality, lobby formation
    JEL: O1 D2 H4 Q1
    Date: 2014–02
  2. By: Kirill Borissov; Joseph Hanna (Laboratoire IDP, Universite de Valenciennes et du Hainaut-Cambresis); Stephane Lambrecht
    Abstract: We study a parametric politico-economic model of economic growth with productive public goods and public consumption goods. The provision of public goods is funded by a proportional tax on consumers' income. Agents are heterogeneous in their initial capital endowments, discount factors and the relative weights of public consumption in overall private utility. They vote on the shares of public goods in GDP. We propose a definition of voting equilibrium, prove the existence and provide a characterization of voting equilibria, and obtain a closed-form solution for the voting outcomes.
    Keywords: : intertemporal choice, growth, public goods, voting
    JEL: D91 O41 H41 D72
    Date: 2014–02–23
  3. By: William R. Kerr; William F. Lincoln; Prachi Mishra
    Abstract: How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by fi…rms. Estimating a binary choice model of …firm behavior, we fi…nd signifi…cant evidence for the idea that barriers to entry induce persistence in lobbying. The existence of these costs is further confi…rmed in studying how fi…rms responded to a particular policy change: the expiration of legislation relating to the H-1B visa. Due to its influence on fi…rm behavior, we argue that this persistence fundamentally changes the environment in which legislation is made.
    Keywords: lobbying, political economy, immigration, H-1B.
    JEL: D72 D73 D78 F22 F23 J61 O31 O38
    Date: 2014–01–01
  4. By: R. Pablo Arribillaga; Jordi Massó
    Abstract: We propose a simple criterion to compare generalized median voter schemes according to their manipulability. We identify three necessary and sufficient conditions for the comparability of two generalized median voter schemes in terms of their vulnerability to manipulation. The three conditions are stated using the two associated families of monotonic fixed ballots and depend very much on the power each agent has to unilaterally change the outcomes of the two generalized median voter schemes. We perform a specific analysis of all median voter schemes, the anonymous subfamily of generalized median voter schemes.
    Keywords: generalized median voting schemes, strategy-proofness, anonymity
    JEL: C78 D78
    Date: 2014–02

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