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on Positive Political Economics |
| 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 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp1259 |
| 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 |
| URL: | https://d.repec.org/n?u=RePEc:eus:wpaper:ec0114 |
| 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 |
| URL: | https://d.repec.org/n?u=RePEc:wdi:papers:2014-1072 |
| 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 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:753 |
| By: | Andreas Bernecker |
| Abstract: | Divided government is often thought of as causing legislative deadlock. I investigate the link between divided government and economic reforms using a novel data set on welfare reforms in US states between 1978 and 2010. Panel data regressions show that under divided government a US state is around 25% more likely to adopt a welfare reform than under unified government. An analysis of close elections providing quasi-random variation in the form of government and other robustness checks confirm this counter-intuitive finding. The empirical evidence is consistent with an explanation based on policy competition between governor, senate, and house. |
| Keywords: | divided government, legislative deadlock, policy innovation, US welfare reform, policy competition |
| JEL: | D72 D78 H11 H75 |
| Date: | 2014 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_4564 |
| By: | Schnellenbach, Jan; Schubert, Christian |
| Abstract: | Public choice theory has originally been motivated by the need to correct the asymmetry, widespread in traditional welfare economics, between the motivational assumptions of market participants and policymakers: Those who played the game of politics should also be considered rational and self-interested. History repeats itself with the rise of behavioral economics: Cognitive biases discovered in market participants often induce a call for rational governments to intervene. Recently, however, behavioral economics has also been applied to the explanatory analysis of the political process. This paper surveys the current state of the emerging field of 'behavioral public choice' and considers the scope for further research. -- |
| Keywords: | Behavioral Public Choice,Behavioral Economics,Rational Irrationality,Cognitive Biases,Social Norms,Voting,Paternalism |
| JEL: | D78 D03 A12 D72 |
| Date: | 2014 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:aluord:1403 |