The relationships between the workings of democratic institutions and currency markets are studied. Severa competing propositions about how political (re)equilibration affects currency markets are derived and tested. The results support the view that democratic politics affects currency markets. Expectations and uncertainty about electoral outcomes and government survival affect the probability of switching between currency-market equilibria. Additionally, opinion polls about chief executive performance have a direct effect on the probabilities of switches between currency regimes suggesting that these polls cause currency traders to revise their expectations about the stability of governments and (or) the contents of public policies. Electoral institutions mitigate the impact of politics on currency-market equilibria. Political effects are weaker in countries with proportional representation electoral systems than in countries with majority-plurality systems. There is less evidence that central-bank independence, consensual-corporatist systems, or "political coherency" reduces the effect of politics on currency markets. he study of democracy and markets is at the heart of political economy. Understanding how political equilibration and economic equilibration are related is one of the main challenges facing this field. The size and nature of currency markets make them especially important cases. Substantively, with globalization, currency markets have become important constraints on elected governments, reducing their "room to maneuver." Analytically, in comparison to most goods markets, currency markets are informationally efficient asset markets with distinctive equilibria: today's exchange rate is determined by currency traders' fully informed expectations about tomorrow's exchange rate. The sensitivity of these markets to the arrival of new information therefore makes them particularly well suited for studying the effects of political news and uncertainty on economic equilibration.1 This article demonstrates there are "informationally relevant" political factors insofar as exchange rate determination is concerned, factors that directly affect the transition probabilities between currency-market equilibria. Moreover, these factors vary in important ways across democracies. Some electoral institutions lessen the effects of politics on currency

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Democracy and markets: The case of exchange rates

This article investigates the effect of social conformity on voting behavior. Past research shows that many people vote to conform with the social norm that voting is a civic duty. The hypothesis here is that when conformity motivates people to vote, it also stimulates conformist behavior among some voters when they decide which party to vote for. This produces a distinctive relationship between voter turnout and the distribution of votes among parties?a relationship not anticipated by rational choice theory. I test a mathematical model of this behavior with linear and nonlinear regression analyses of state-level data for presidential elections in the United States from 1904 to 1996, longitudinal data on parliamentary elections in Western Europe over most of the twentieth century, and cross-sectional data for recent elections in Western Europe, Eastern Europe, and Russia. The results generally validate the model.

The Effect of Social Conformity on Collective Voting Behavior

Using voter turnout to measure conformity, this article examines whether conformity with social norms moderates the crime rate in the United States at the state and county levels. If people are fairly consistent in their response to the perceived local degree of conformity with norms about voting and against crime, analysis predicts a unique quadratic relationship between reported crime rates and voter turnout. A pooled multivariate regression analysis of state crime rates for several index crimes in 1960, 1970, and 1980 confirms the predicted relationship, as do county-level analyses of the violent crime rate in 1985 and 1991. This method might also be used to assess the effect of social conformity on other social choices.

A test for the effect of conformity on crime rates using voter turnout

This paper introduces a new mathematical methodology suitable for the modelling and simulation of conflict phenomena. While methodologies already exist in this area of study, they have a number of limitations which make them unsuitable as general formulations, particularly in explaining or for simulating real situations. Some deal with only static phenomena - those in which time is not a factor of consideration, others are confined to their own small fields of study, yet others do not cater adequately for any numbers of interactive actors, or tend to be restrictive in their modelling flexibility. This approach ultimately uses a Weibull distribution to stochastically model dynamic processes

Modelling Conflict with Weibull Games

This paper investigates aggregate voting behavior in American presidential elections from 1904 to 1980; the state is unit of analysis. We abandon the traditional assumption that voting is a rational process and instead construct a model to test the power of social conformity over voting decisions. The model, which uses the entropy measure of statistical information theory, allows specific numerical tests of its validity and, additionally, reveals unexpected dynamic patterns in voting behavior. We find four distinct processes related to social conformity that affect voter turnout and the distribution of votes among presidential candidates. A mathematical model for each process is identified and parameters are estimated from election data.

Stephen Coleman

Papers

Measurement and Analysis of Political Systems: A Science of Social Behavior