nep-pol New Economics Papers
on Positive Political Economics
Issue of 2015‒08‒25
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. Strategic Voting under Committee Approval: An Application to the 2011 Regional Government Election in Zurich By Romain Lachat; Jean-François Laslier; Karine Van Der Straeten
  2. The 9/11 conservative shift By Simone Schüller
  3. Mobile Politicians: Opportunistic Career Moves and Moral Hazard By Duha T. Altindag; Naci Mocan
  4. Electoral System and Number of Candidates: Candidate Entry under Plurality and Majority Runoff By Damien Bol; André Blais; Jean-François Laslier; Antonin Macé
  5. Does Development Aid Undermine Political Accountability? Leader and Constituent Responses to a Large-Scale Intervention By Raymond P. Guiteras; Ahmed Mushfiq Mobarak
  6. Partisan Conflict By Marina Azzimonti
  7. Heuristic voting under the Alternative Vote: the efficiency of “sour grapes" behavior By Jean-Francois Laslier
  8. Competence versus Honesty: What Do Voters Care About? By Fabio Galeotti; Daniel John Zizzo
  9. MAJORITY MEASURES By Michel Balinski; Rida Laraki
  10. State fragility and fiscal decentralization in EU ex-communist countries in a public choice approach By Francesco Forte; Mihai Mutascu

  1. By: Romain Lachat (Universitat Pompeu Fabra - Universitat Pompeu Fabra); Jean-François Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Karine Van Der Straeten (TSE - Toulouse School of Economics - Toulouse School of Economics, Institute for Advanced Study Toulouse - Institute for Advanced Study Toulouse)
    Abstract: In several cantons in Switzerland the regional government, i.e. a set of governors who share the executive power in the canton, is elected according to an original voting rule, in which voters can vote for several candidates (up to a maximal number of votes). Up to some details, these elections are instances of what is known in Social Choice Theory as “Committee Approval Voting”. The paper makes use of data from a panel survey collected during the 2011 Zurich cantonal election to check whether a strategic voting theory is consistent with individual behaviour observed during that election. We show that roughly 70% of the individual decisions on candidates are consistent with our model of rational voting.
    Date: 2015–06
  2. By: Simone Schüller
    Abstract: This study analyzes the causal impact of the 9/11 terror attacks on individual political orientation and political support intensity using the German Socio-Economic Panel 1999-2003. Exploiting survey interview timing in 2001 for identification and controlling for unobserved individual heterogeneity, I find 9/11 to have increased overall political mobilization. While there is no indication of a considerable switch in support between political blocks, the attacks significantly weakened support intensity among left-wing voters and increased the strength of political support among right-wing voters, indicating a shift in conservative direction.
    Keywords: political orientation, party support, terrorism, causal inference
    JEL: C23 D72 H56
    Date: 2015–08
  3. By: Duha T. Altindag; Naci Mocan
    Abstract: We exploit the randomness generated by a seat allocation mechanism utilized in Parliamentary elections that determines those politicians who get elected from a given district by a small margin, and those who lose. Using detailed information on personal attributes of more than 2,000 elected Members of the Parliament (MPs) and the votes received by each political party in every district and each of the five consecutive Parliamentary elections in Turkey between 1991 and 2011, we show that elected MPs are more likely to switch parties after an election if they faced electoral uncertainty and experienced a narrowly-won victory. The tendency to switch parties goes up as it becomes more lucrative to hold the post of MP. The impact of election uncertainty on party-switching is greater for younger MPs, and for those who are less educated. The propensity to switch due to uncertainty is higher if the MP is a member of the governing party, but only if the seat is valuable (if the majority of the party in the Parliament is slim). Politicians switch parties after an election to improve their ex-ante re-election probability in the following election. Although switching parties during a legislative session (between elections) for personal career concerns creates moral hazard, we find that party-switching MPs are more likely to get elected in the next election. These results point to forward-looking opportunistic behavior of politicians regarding their strategy to win future elections, and they indicate that politicians switch parties primarily for career concerns and for financial benefits that are associated with longer tenure in the Parliament. The results also signify that competition between political parties continues after the election, in the form of gaining seats in the Parliament post- election by transferring elected representatives of competing parties. This constitutes another dimension of the political agency problem.
    JEL: D72 K0
    Date: 2015–07
  4. By: Damien Bol (Université de Montréal - UdeM (CANADA) - Université de Montréal - UdeM (CANADA)); André Blais (Université de Montréal - UdeM (CANADA) - Université de Montréal - UdeM (CANADA)); Jean-François Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Antonin Macé (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université)
    Abstract: We know that electoral systems have an effect on the number of competing candidates. However, a mystery remains concerning the impact of majority runoff. According to theory, the number of competing candidates should be equal (or only marginally larger) under majority runoff than under plurality. However, in real-life elections, this number is much higher under majority runoff. To provide new insights on this puzzle, we report the results of a laboratory experiment where subjects play the role of candidates in plurality and majority runoff elections. We use a candidate-only and sincere-voting model to isolate the effect of the electoral system on the decision of candidates to enter the election. We find very little difference between the two electoral systems. We thus re-affirm the mystery of the number of competing candidates under majority runoff.
    Date: 2015–06
  5. By: Raymond P. Guiteras; Ahmed Mushfiq Mobarak
    Abstract: Comprehensive evaluation requires tracking indirect effects of interventions, such as politicians and constituents reacting to the arrival of a development program. We study political economy responses to a large scale intervention in Bangladesh, where 346 communities consisting of 16,600 households were randomly assigned to control, information or subsidy treatments to encourage investments in improved sanitation. In one intervention where the leaders’ role in program allocation was not clear to constituents, leaders react by spending more time in treatment areas, and treated constituents appear to attribute credit to their local leader for a randomly assigned program. In contrast, in another lottery where subsidy assignment is clearly and transparently random, the lottery winners do not attribute any extra credit to the politician relative to lottery losers. These reactions are consistent with a model in which constituents have imperfect information about leader ability. A third intervention returns to a random subset of treated households to inform them that the program was externally funded and randomly assigned. This simple, scalable information treatment eliminates the excess credit that leaders received in villages that received subsidies. These results suggest that while politicians may respond to try to take credit for development programs, it is not easy for them do so. Political accountability is not easily undermined by development aid.
    JEL: O1 O43 P16 Q56
    Date: 2015–07
  6. By: Marina Azzimonti (stonybrook university)
    Abstract: American politics have become extremely polarized in recent decades. This deep political divide has caused significant government dysfunction. Political divisions make the timing, size, and composition of government policy less predictable. According to existing theories, an increase in the degree of economic policy uncertainty results in a decline in economic activity. This occurs because businesses and households may be induced to delay decisions that involve high reversibility costs. In addition, disagreement between policymakers may result in stalemate that adversely aeffects the optimal implementation of policy reforms, and may result in excessive debt accumulation. Testing these theories has been challenging given the low frequency at which existing measures have been computed. In this paper, I provide a novel high-frequency indicator of partisan conflict. The index, constructed between 1891 and 2013, uses a search-based approach that measures the frequency of newspaper articles reporting lawmakers' disagreement about policy. I show that the trend in partisan conflict is related to polarization and income inequality. Its short-run fluctuations are highly correlated with elections, but unrelated to recessions. The lower-than-average values observed during wars suggest a "rally around the flag" effect. I use the index to study the effect of an increase in partisan conflict, equivalent to the one observed since the Great Recession, on business cycles. Using a simple VAR, I find that an innovation to partisan conflict increases government deficits and significantly discourages investment, output, and employment. Moreover, these declines are persistent, which may help explain the slow recovery observed since the 2007 recession ended.
    Date: 2015
  7. By: Jean-Francois Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)
    Abstract: This theoretical paper contrasts two voting heuristics: overstating and replacing. Under the Alternative Vote, overstatement is inefficient but replacement is efficient. The paper argues that the “replacing" manipulation corresponds to a psychologically and politically plausible voter behavior.
    Date: 2015–06
  8. By: Fabio Galeotti (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS); Daniel John Zizzo (University of Newcastle, UK)
    Abstract: We set up an experiment to measure voter preferences trade-offs between competence and honesty. We measure the competence and honesty of candidates by asking them to work on a real effort task and decide whether to report truthfully or not the value of their work. In the first stage, the earnings are the result of the competence and honesty of one randomly selected participant. In the second stage, subjects can select who will determine their earnings based on the fi rst stage's competence and honesty of the alternative candidates. We find that most voters tend to have a bias towards caring about honesty even when this results in lower payoffs.
    Date: 2015
  9. By: Michel Balinski (Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X); Rida Laraki (Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X)
    Abstract: The validity of majority rule in an election with but two candidates—and of Condorcet consistency—is challenged. Axioms based on measures— paralleling those of K. O. May characterizing majority rule for two candidates that are based on comparisons—lead to another method. It is unique in agreeing with the majority rule when the electorate is “polarized” and meets R. A. Dahl’s requirement that an apathetic majority not defeat an intense minority. It accommodates any number of candidates and avoids both the Condorcet and Arrow paradoxes.
    Date: 2015–03–30
  10. By: Francesco Forte (Sapienza Università di Roma); Mihai Mutascu (University of Orleans - LEO)
    Abstract: While in J. Buchanan clubs theory, the decentralized governments should supply only public goods suited to their spatial dimension, for G. Tullock the decentralization should prevail over spatial dimension of the public goods to broaden individuals" control on government. For A. Peacock too, devolution responds to the demand of participation against the irrelevance of the individuals in centralization, but an extended "dispersive revolution" might increase rather than decrease the "government failures". Under Coase theory of the firm, applied to the government as firm, contracting out is limited by the cost of the deterioration of the power control. We here, therefore, investigates the impact of the quantitative dimension of fiscal decentralization on the political robustness of the considered states in term of fragility, for 10 European Union (EU) ex-communist countries, over the period 1995-2012, by a panel-model approach. The main results show that between state fragility and fiscal decentralization there is a relationship with inverted-U and U shapes, analogous to the BARS (Barro, Armey, Rahn, and Scully) curve relating the government size to GDP growth. Fragility is low under reduced revenues inequality and inflation rate, and rises when the urbanization and democratization decrease, under given level of political rights. The relation between the fragility curve and the BARS curve may need further research. The relation between the fragility curve and the BARS curve may need further research.
    Date: 2015–01

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