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on Positive Political Economics |
| By: | Sharun Mukand; Dani Rodrik |
| Abstract: | We distinguish between three sets of rights – property rights, political rights, and civil rights – and provide a taxonomy of political regimes. The distinctive nature of liberal democracy is that it protects civil rights (equality before the law for minorities) in addition to the other two. Democratic transitions are typically the product of a settlement between the elite (who care mostly about property rights) and the majority (who care mostly about political rights). Such settlements rarely produce liberal democracy, as the minority has neither the resources nor the numbers to make a contribution at the bargaining table. We develop a formal model to sharpen the contrast between electoral and liberal democracies and highlight circumstances under which liberal democracy can emerge. We discuss informally the difference between social mobilizations sparked by industrialization and decolonization. Since the latter revolve around identity cleavages rather than class cleavages, they are less conducive to liberal politics. |
| JEL: | P48 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21540&r=all |
| By: | Hans Gersbach (ETH Zurich, Switzerland); Philippe Muller (ETH Zurich, Switzerland); Oriol Tejada (ETH Zurich, Switzerland) |
| Abstract: | We develop and study a two-period model of political competition with office- and policymotivated candidates, in which (i) changes of policies impose costs on all individuals and (ii) such costs increase with the magnitude of the policy change. We show that there is an optimal positive level of costs of change that minimizes policy polarization and maximizes welfare. One interpretation of this finding is that societies with intermediate levels of conservatism achieve the highest welfare and the lowest polarization levels. We apply our model to the design of optimal re-election hurdles. In particular, we show that raising the vote-share needed for re-election above 50% weakly reduces policy polarization and tends to increase welfare. Furthermore, we identify circumstances where the optimal re-election hurdle is strictly larger than 50%. |
| Keywords: | elections, democracy, political polarization, costs of change, re-election hurdles, political contracts |
| JEL: | D7 H4 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:15-222&r=all |
| By: | Philippe De Donder; Francisco Martinez-Mora |
| Abstract: | We study the political determination of the proportion of students attending university when access to higher education is rationed by admission tests. Parents differ in income and in the ability of their unique child. They vote over the minimum ability level required to attend public universities, which are tuition-free and financed by proportional income taxation. University graduates become high skilled, while the other children attend vocational school and become low skilled. Even though individual preferences are neither single-peaked nor single-crossing, we obtain a unique majority voting equilibrium, which can be either classical (with 50% of the population attending university) or “ends-against-the-middle”, with less than 50% attending university (and parents of low and high ability children favoring a smaller university system). The majority chosen university size is smaller than the Pareto efficient level in an ends-against-the-middle equilibrium. Higher income inequality decreases the majority chosen size of the university. A larger positive correlation between parents’ income and child’s ability leads to a larger university populated by a larger fraction of rich students, in line with the so-called participation gap. Our results are robust to the introduction of private schooling alternatives, financed with fees. |
| Keywords: | majority voting, ends-against-the-middle, non single-peaked preferences, non single-crossing preferences, higher education participation gap, income ability correlation, size of university |
| JEL: | D72 I22 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_5382&r=all |
| By: | Sanjeev Gupta; Estelle X. Liu; Carlos Mulas-Granados |
| Abstract: | This paper explores the impact of political and institutional variables on public investment. Working with a sample of 80 presidential and parliamentary democracies between 1975 and 2012, we find that the rate of growth of public investment is higher at the beginning of electoral cycles and decelerates thereafter. The peak in public investment growth occurs between 21 and 25 months before elections. Cabinet ideology and government fragmentation influence the size of investment booms. More parties in government are associated with smaller increases in public investment while left-wing cabinets are associated with higher sustained increases in investment. Stronger institutions help attenuate the impact of elections on investment, but available information is insufficient to draw definitive conclusions. |
| Keywords: | Public investment;Political economy;Governance;Public finance;Political economy, Public Investment, Elections, Fragmentation, Ideology |
| Date: | 2015–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:15/175&r=all |
| By: | Mukand, Sharun; Rodrik, Dani |
| Abstract: | We distinguish between three sets of rights – property rights, political rights, and civil rights – and provide a taxonomy of political regimes. The distinctive nature of liberal democracy is that it protects civil rights (equality before the law for minorities) in addition to the other two. Democratic transitions are typically the product of a settlement between the elite (who care mostly about property rights) and the majority (who care mostly about political rights). Such settlements rarely produce liberal democracy, as the minority has neither the resources nor the numbers to make a contribution at the bargaining table. We develop a formal model to sharpen the contrast between electoral and liberal democracies and highlight circumstances under which liberal democracy can emerge. We discuss informally the difference between social mobilizations sparked by industrialization and decolonization. Since the latter revolve around identity cleavages rather than class cleavages, they are less conducive to liberal politics. |
| Keywords: | democratic transitions; liberal democracy |
| JEL: | P48 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10808&r=all |
| By: | De Roeck, Mathias; Van Rossem, Ronan |
| Abstract: | The conceptualization and measurement of the range of political regimes in-between authoritarianism and democracy is characterized by many shades of grey. After the end of the Cold War, scholars formulated numerous new political regime typologies, commonly presented as diminished subtypes of democracy and authoritarianism and as transitional rather than stable institutional forms. Correspondingly, scholars collected data to develop new longitudinal and cross-national measures of political regimes. Although these efforts led to important new insights, they also face limitations. A myriad of regime typologies precipitates conceptual confusion and dichotomous measurements hamper the investigation of hybrid regimes. The paper addresses these limitations by developing a new measurement model of political regimes. Conceptually, the model is anchored within theories of democracy and focuses on institutions regulating the access to and exercise of political power, i.e. (1) political participation and competition (2) respect for human rights and (3) institutional constraints on the executive. Empirically, the model approaches political regimes as multi-dimensional and focuses on differences in degree rather than in kind. A Confirmatory Factor Analysis (CFA) is applied on longitudinal data between 1972 and 2010 to measure the three political regime dimensions using multiple indicators. Second, Hierarchical Cluster Analysis allows for the study of political regimes beyond their constitutive attributes. We validate the new latent variables using content, convergentdiscriminant and nomological validation. So doing, we illustrate the usefulness of the approach by presenting new empirical insights. |
| Keywords: | political regimes; conceptualization; measurement; multi-dimensionality; graded approach |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iob:wpaper:201505&r=all |