Showing papers in "Public Choice in 2017"
TL;DR: In this article, the authors study the patterns of political selection in majoritarian versus proportional systems and show that for a large enough share of competitive districts, a non-monotonic relation arises: the marginal (positive) effect of adding high-quality politicians on the probability of winning the election is reduced.
Abstract: We study the patterns of political selection in majoritarian versus proportional systems. Political parties face a trade off in choosing the mix of high- and low-quality candidates: high-quality candidates are valuable to voters, and thus help to win elections, but they crowd out loyal candidates, who are most preferred by the parties. Under proportional representation, politicians’ selection depends on the share of swing voters in the entire electorate. In majoritarian elections, it depends also on the distribution of competitive versus safe (single-member) districts. We show that a majoritarian system with only a few competitive districts is less capable of selecting good politicians than a proportional system. As the share of competitive districts increases, the majoritarian system becomes more efficient than the proportional system. However, for a large enough share of competitive districts, a non-monotonic relation arises: the marginal (positive) effect of adding high-quality politicians on the probability of winning the election is reduced, and highly competitive majoritarian systems become less efficient than proportional ones in selecting good politicians.
36 citations
TL;DR: This paper studied the causal effect of the Stockholm bombings of 11 December 2010 on Swedish public opinion and found that isolated terrorist events have only limited, transitory effects on established social attitudes. But they did not identify a strong effect on individuals' concern over terrorism, any observed effects with respect to generalised and neighbourhood trust appear to be short-lived.
Abstract: How do people respond to terrorist events? Exploiting the timing of the 2010 wave of the annual ‘Society Opinion Media’ survey in Sweden, we study the causal effect of the Stockholm bombings of 11 December 2010 on Swedish public opinion. Our main contribution is that we draw explicit attention to the link between terrorist events and individuals’ social trust. While we identify a strong effect on individuals’ concern over terrorism, any observed effects with respect to generalised and neighbourhood trust appear to be short-lived—suggesting that isolated terror events have only limited, transitory effects on established social attitudes.
33 citations
TL;DR: The authors found that more fragmented governments and parliaments tend to produce more pessimistic, or less optimistic, tax revenue forecasts than do right-wing ones, and no empirical evidence that political business cycles play a role in tax revenue forecast.
Abstract: Sustainable budgets are important quality signals for the electorate. Politicians might thus have an incentive to influence tax revenue forecasts, which are widely regarded as a key element of national budget plans. Looking at the time period from 1996 to 2012, we systematically analyze whether national tax revenue forecasts in 18 OECD countries are biased due to political manipulation. Drawing on theories from the field of political economy, we test three hypotheses using panel estimation techniques. We find support for partisan politics. Left-wing governments seem to produce more optimistic, or less pessimistic, tax revenue forecasts than do right-wing ones. Contrary to the theoretical prediction based on the “common pool” problem, we find that more fragmented governments and parliaments tend to produce more pessimistic, or less optimistic, tax revenue forecasts. We find no empirical evidence that political business cycles play a role in tax revenue forecasts.
31 citations
TL;DR: The authors study partisan favoritism in the allocation of intergovernmental transfers within a quasi-experimental framework and show empirically that the effect of political alignment on grant receipts varies depending on the degree of local support for the state government.
Abstract: Combining local council election data with fiscal data on grant allocations in a German state, we study partisan favoritism in the allocation of intergovernmental transfers within a quasi-experimental framework. We hypothesize that state governments pursue two distinct goals when allocating grants to local governments: (1) helping aligned local parties win the next election and (2) buying off unaligned municipalities that may obstruct the state government’s policy agenda. We argue furthermore that the relative importance of these two goals depends on local political conditions. In line with this argument, we show empirically that the effect of political alignment on grant receipts varies depending on the degree of local support for the state government. While previous contributions find that aligned local governments always tend to receive larger transfers, our results imply that the political economy of intergovernmental transfers is more intricate.
29 citations
TL;DR: In this article, the effects of emigration on bribery experience and attitudes towards corruption in the migrants' countries of origin were studied using data from the Gallup Balkan Monitor survey and instrumental variable analysis.
Abstract: We study the effects of emigration on bribery experience and attitudes towards corruption in the migrants’ countries of origin. Using data from the Gallup Balkan Monitor survey and instrumental variable analysis, we find that having relatives abroad reduces the likelihood of bribing public officials, renders bribe-taking behavior by public officials less acceptable, and reduces the likelihood of being asked for bribes by public officials. Receiving monetary remittances does not change the beneficial effects regarding bribe paying and attitudes toward corruption; however, remittances counteract the beneficial effect on bribe solicitations by public officials. Overall, our findings support the conjecture that migration contributes to the transfer of norms and practices from destination to source countries.
27 citations
TL;DR: This article found that banks that were politically connected (either through lobbying efforts or employment of politically connected individuals) were substantially more likely to participate in the Federal Reserve's emergency loan programs during the recent financial crisis.
Abstract: This paper tests whether the political connections of banks were important in explaining participation in the Federal Reserve’s emergency lending programs during the recent financial crisis. Our multivariate tests show that banks that were politically connected—either through lobbying efforts or employment of politically connected individuals—were substantially more likely to participate in the Federal Reserve’s emergency loan programs. In economic terms, participation in these programs was 28–36% more likely for banks that were politically connected than for banks that were not politically connected. In our final set of tests, we attempt to identify a proper explanation for this peculiar relationship. While a broad literature speaks of the moral hazard associated with receiving bailouts, we test whether another type of moral hazard exists in the period preceding the bailout. In particular, we argue that, to the extent that political connections act as synthetic insurance, banks may have engaged in more risky behavior that lead them to the Fed’s emergency lending facilities. Tests seem to confirm this explanation.
27 citations
TL;DR: In this article, the authors show that the problem of monotonicity failure in instant runoff voting is significant in many circumstances and very substantial when IRV elections are closely contested by three candidates.
Abstract: A striking attribute of instant runoff voting (IRV) is that it is subject to monotonicity failure—that is, getting more (first-preference) votes may result in defeat for a candidate who would otherwise have won and getting fewer votes may result in victory for a candidate who otherwise would have lost. Proponents of IRV have argued that monotonicity failure, while a mathematical possibility, is highly unlikely to occur in practice. This paper specifies the precise conditions under which this phenomenon arises in three-candidate elections and applies them to a number of large simulated data sets in order to get a sense of the likelihood of IRV’s monotonicity problem in varying circumstances. The basic finding is that the problem is significant in many circumstances and very substantial when IRV elections are closely contested by three candidates.
26 citations
TL;DR: In this article, the authors show that coalition agreements significantly reduce the negative effect of government fragmentation on government spending in those institutional contexts where prime ministerial power is low, and they also find clear support for an original conditional hypothesis suggesting that coalition agreement significantly reduces the negative effects of fragmentation.
Abstract: Multiparty government has often been associated with poor economic policy-making, with distortions like lower growth rates and high budget deficits. One proposed reason for such distortions is that coalition governments face more severe ‘common pool problems’ since parties use their control over specific ministries to advance their specific spending priorities rather than practice budgetary discipline. We suggest that this view of multiparty government is incomplete and that we need to take into account that coalitions may have established certain control mechanisms to deal with such problems. One such mechanism is the drafting of a coalition agreement. Our results, when focusing on the spending behavior of cabinets formed in 17 Western European countries (1970–1998), support our claim that coalition agreements matter for the performance of multiparty cabinets in economic policy-making. More specifically, we find clear support for an original conditional hypothesis suggesting that coalition agreements significantly reduce the negative effect of government fragmentation on government spending in those institutional contexts where prime ministerial power is low.
24 citations
TL;DR: In this paper, the authors show that a bandwagon effect can be generated within the pivotal voter model by concavity in the voters' utility function, which makes electoral participation more costly for the expected loser supporters.
Abstract: The empirical literature on the effects of opinion polls on election outcomes has recently found substantial evidence of a bandwagon effect, defined as the phenomenon according to which the publication of opinion polls is advantageous to the candidate with the greatest support This result is driven, in the lab experiments, by a higher turnout rate among the majority than among the minority Such evidence is however in stark contrast with the main theoretical model of electoral participation in public choice, the pivotal voter model, which predicts that the supporters of an underdog candidate participate at a higher rate, given the higher probability of casting a pivotal vote This paper tries to reconcile this discrepancy by showing that a bandwagon effect can be generated within the pivotal voter model by concavity in the voters’ utility function, which makes electoral participation more costly for the expected loser supporters Given the strict relationship between concavity and risk aversion, the paper also establishes the role of risk aversion as a determinant of bandwagon
22 citations
TL;DR: In this paper, the impact of Jewish emancipation in nineteenth century Europe on patterns of education was studied and it was shown that it is individually rational for agents who benefit least from rising returns to education to respond by reducing their investment in education.
Abstract: Why do some minority communities take up opportunities for education while others reject them? To shed light on this, we study the impact of Jewish Emancipation in nineteenth century Europe on patterns of education. In Germany, non-religious and Reform Jews dramatically increased their rates of education. In the less developed parts of Eastern Europe, Orthodox and ultra-Orthodox communities imposed unprecedented restrictions on secular education and isolated themselves from society. Explaining this bifurcation requires a model of education that is different from the standard human capital approach. In our model, education not only confers economic benefits but also transmits values that undermine the cultural identity of minority groups. We show that it is individually rational for agents who benefit least from rising returns to education to respond by reducing their investment in education. Group-level sanctions for high levels of education piggyback upon this effect and amplify it.
22 citations
TL;DR: In this paper, the authors show that for euro area countries the EC's fiscal forecasts are indeed biased upwards when the budget deficit threatens to exceed the critical value of 3% of GDP, while for non-euro area countries which do not face the risk of fines, this bias cannot be established.
Abstract: Enforcement of European fiscal rules, to a large extent, hinges on fiscal forecasts prepared by the European Commission (EC). The reliability of these forecasts has received little attention in the literature, despite the fact that (i) the forecasts have potentially far-reaching consequences for national governments, especially in the euro area while (ii) the EC depends on information supplied by national officials in preparing its forecasts. We hypothesize that the EC’s forecasts are biased upwards when national governments expect European fiscal rules to bind. Reconstructing this expectation using real-time information, we show that for euro area countries the EC’s fiscal forecasts are indeed biased upwards when the budget deficit threatens to exceed the critical value of 3 % of GDP. For non-euro area countries, which do not face the risk of fines, this bias cannot be established. Our results are robust to various ways of controlling for crisis-induced budgetary problems and the exclusion of various country groups. We offer suggestive evidence that the presence of independent fiscal councils at the national level helps to attenuate the bias induced by the 3 % threshold.
TL;DR: This article found that education, occupational status and psychological traits were the most systematic drivers of reform preferences, while age had a limited impact, and significantly, the year fixed effects were the main drivers of respondents' acceptance of reform.
Abstract: Governments often find it hard to pursue economic reforms, even if they eventually will benefit a majority of voters. The literature remains inconclusive about the reasons for this. Some scholars, on the one hand, stress the role of distributional conflicts between different classes, for instance dividing the young and the old in the case of pay-as-you-go pensions. Others have highlighted that resistance to reform is rather broad-based owing to the public’s poor understanding of the need for reform. This paper attempts to disentangle the drivers of public acceptance of reform by means of a case study: the 2012 increase of the Dutch statutory retirement age from 65 to 67. We exploit a unique longitudinal dataset on the attitudes of Dutch households respecting pension reform in the 2003–2013 period. Our findings offer various new insights. First, we find that education, occupational status and psychological traits were the most systematic drivers of reform preferences, while age had a limited impact. Second, and significantly, we find that the year fixed effects were the main drivers of respondents’ acceptance of reform. We interpret the pattern of the year coefficients as evidence of a collective learning process whereby households gradually updated their expectations and reform preferences in light of new information.
TL;DR: In this paper, the role of rents, rent seeking, and the political choice of environmental policy in public policy has been investigated under conditions of uncertainty, and it is shown that the choice of an environmental policy depends on the interaction between the efficiency of rent transfer and the size of rent-seeking groups within the economy.
Abstract: Rents and political motives are present in many aspects of public policy. This article considers the role of rents, rent seeking, and the political choice of environmental policy. Rents are introduced into the political choice of price and quantity regulation under conditions of uncertainty. The model shows how political-economy aspects affect the choice between price and quantity regulation. The contesting of rents associated with different policies affects the regulatory structure and influences the political choice of an environmental policy target. The primary conclusion is that the political choice of environmental policy depends on the interaction between the efficiency of rent transfer and the size of rent-seeking groups within the economy.
TL;DR: The authors analyzed the relationship between decentralization, the duration of fiscal consolidation episodes, and their success for 17 OECD countries between 1978 and 2009 and found that the consolidation of the general government budget appears to be of longer duration when expenditure decisions are more decentralized.
Abstract: This paper analyzes the relationship between fiscal decentralization, the duration of fiscal consolidation episodes, and their success for 17 OECD countries between 1978 and 2009. The consolidation of the general government budget appears to be of longer duration when expenditure decisions are more decentralized. We also find that transfers from higher levels of government are cut during consolidation episodes, suggesting that central governments shift the burden of consolidation towards lower tiers of government. This is especially true when the latter have little legal autonomy to raise tax revenues and have little influence over executive decisions taken at the central level. We document that this increases local governments’ public debt/GDP ratios. In terms of the success of consolidation episodes, countries with greater degrees of decentralization appear to make smaller improvements in their primary balance when consolidating.
TL;DR: In this article, the authors investigate the existence of a careerists' premium in performance evaluations of Korean state-owned enterprises (SOEs) managed by different types of executives between 2000 and 2015 and find that the premium is most salient and significant when executives had retired from the governmental agency that oversees the performance evaluation process.
Abstract: This study investigates the concept of bureaucratic competence. Specifically, we challenge the argument that a “careerists’ premium”—the tendency for public services run by careerists to receive better performance evaluations than services administered by other types of public managers—necessarily is explained by the superior expertise of career bureaucrats. Evidence that forms the basis of this possibility comes from performance evaluations of Korean state-owned enterprises (SOEs) managed by different types of executives between 2000 and 2015. The results of our analyses provide support for the existence of a careerists’ premium. However, we find that the premium is most salient and significant when executives had retired from the governmental agency that oversees the performance-evaluation process. Moreover, the gap between qualitative and quantitative assessment scores increase significantly when the evaluated SOEs are managed by career executives who have retired from the regulating agency. This result suggests that the oft-cited careerists’ premium may not necessarily signify careerists’ greater expertise; it may also be the product of lobbying and regulatory capture.
TL;DR: In this paper, the causal effect of a reduction in the opening hours of polling stations on voter turnout was investigated in a German state and it was shown that reducing the number of opening hours significantly reduced voter turnout.
Abstract: In recent years, scholars and policymakers alike have discussed potential causes and consequences of low voter turnout. Election administration laws may provide means to encourage turnout that are of low cost and easily implementable. In this paper, I provide a policy evaluation of a change in an election administration law. Specifically, I estimate the causal effect of a reduction in the opening hours of polling stations on turnout. To this end, I make use of a policy change in a German state that cut the number of opening hours of polling stations. Using political units from an adjacent state with the same election dates and effectively the same election system as a control group in a difference-in-differences design, I find that reducing the opening hours of polling stations significantly reduces voter turnout.
TL;DR: In this article, the effects of electoral concerns on grant allocation within and between Croatian municipalities were investigated using a unique panel dataset on more than 500 Croatian municipalities over a 12-year period to uncover the extent to which grant distribution is biased owing to grantors' electoral concerns.
Abstract: Instead of alleviating fiscal inequalities, intergovernmental grants are often used to fulfill the grantors’ political goals. This study uses a unique panel dataset on more than 500 Croatian municipalities over a 12-year period to uncover the extent to which grant distribution is biased owing to grantors’ electoral concerns. Instead of the default fixed effects approach to modelling panel data, we apply a novel within-between specification aimed at uncovering the contextual source of variation, focusing on the effects of electoral concerns on grant allocation within and between municipalities. We find evidence of a substantial political bias in grant allocations both within and between municipalities, particularly when it comes to local-level electoral concerns. The paper offers researchers a new perspective when tackling the issue of politically biased grant allocation using panel data, particularly when they wish to uncover the simultaneous impact of time-variant and time-invariant factors, or when they cannot apply a quasi-experimental approach because of specific institutional contexts.
TL;DR: The Hells Angels Motorcycle Club as mentioned in this paper developed a hierarchical organizational form, which allowed them to overcome internal conflict and exploit the gains from their involvement in criminal activities, and played a central role in the rapid success of the Angels in the North American (and international) criminal landscape.
Abstract: This paper investigates the organizational structure of the Hells Angels Motorcycle Club, one of the largest and best known North American motorcycle gangs. Within the first few decades since their establishment, the Angels developed a hierarchical organizational form, which allowed them to overcome internal conflict and exploit the gains from their involvement in criminal activities. This organizational form, I argue, played a central role in the rapid success of the Angels in the North American (and international) criminal landscape.
TL;DR: In this article, the effect of more politicians on corruption problems is analyzed using discontinuities in the required minimum size of local councils, and the regression discontinuity design suggests that the effect is causal.
Abstract: In the literature on political economy and public choice, it is typically assumed that government size correlates positively with public corruption. The empirical literature, however, is inconclusive, owing to both measurement problems and endogeneity. This paper creates a corruption index based on original data from a survey covering top politicians and civil servants in all Swedish municipalities. The effect of more politicians on corruption problems is analyzed using discontinuities in the required minimum size of local councils. Despite the fact that Sweden consistently has been ranked among the least corrupt countries in the world, the survey suggest that non-trivial corruption problems are present in Sweden. Municipalities with more local council seats have more reported corruption problems, and the regression discontinuity design suggests that the effect is causal.
TL;DR: In this paper, the authors examined the electoral rewards for the distribution of public employment and found that the program led to an increase in the vote share for the ruling party in the treated municipalities.
Abstract: This paper examines the electoral rewards for the distribution of public employment. We focus on the Spanish Plan for Rural Employment, a public jobs program introduced by the central government in two lagging regions. We evaluate voters’ responsiveness to this policy using municipal-level electoral data and employ an estimator that combines difference-in-differences with propensity score matching. The main findings are that the program lead to an increase in the vote share for the ruling party in the treated municipalities. This effect is very persistent over the years, and it is unlikely to be explained by turnout buying.
TL;DR: For example, this paper studied the ballot order effect in the 2014 Texas primary and runoff elections and found that going from last to first on the ballot raises a candidate's vote share by nearly ten percentage points.
Abstract: Primary and runoff elections in Texas provide an ideal test of the ballot order hypothesis, because ballot order is randomized within each county and the state offers many counties and contests to analyze. Doing so for all statewide offices contested in the 2014 Democratic and Republican primaries and runoffs yields precise estimates of the ballot order effect across 24 different contests, including several not studied previously. Except for a few high-profile, high-information races, the ballot order effect is large, especially in down-ballot races for judicial positions. There, the empirical results indicate that going from last to first on the ballot raises a candidate’s vote share by nearly ten percentage points. The magnitude of this effect is not sensitive to demographic and economic factors.
TL;DR: In this paper, the authors test the validity of the "law of 1/n" using a dataset of 9325 German municipalities between 2008 and 2010, and find a negative effect of legislature size on public spending in German municipal councils.
Abstract: What is the effect of legislature size on public spending? An answer to this question is provided by Weingast et al. (J Polit Econ 89(4):642–664, 1981), whose “law of 1/n” posits that an increase in the number of elected representatives always leads to an increase in public spending. Because elected politicians regard the tax base as a common pool from which they can finance specific projects for their constituencies, and these specific constituencies internalize the full benefits of the projects, but only bear a fraction of the costs (projects are financed from the common tax base), fiscal inefficiency will increase with the number of representatives. In this paper, I test the validity of the “law of 1/n” using a dataset of 9325 German municipalities between 2008 and 2010. Through the application of a regression discontinuity design, many of the methodological pitfalls of previous studies can be avoided and a valid estimation of the causal effect of legislature size on public spending for German municipalities can be determined. The results do not corroborate the positive findings of previous studies, which generally supported the implications of the “law of 1/n”. For the years 2008–2010, I find a negative effect of legislature size on public spending in German municipal councils.
TL;DR: A survey of the literature related to quadratic voting and the public good can be found in the Public Choice special issue on "Quadratic Voting and the Public Good" as discussed by the authors.
Abstract: This introduction to the Public Choice special issue on “quadratic voting (QV) and the public good” provides an opinionated narrative summary of the contents and surveys the broader literature related to QV. QV is a voting rule, proposed by one of us Weyl (Quadratic vote buying. http://goo.gl/8YEO73, 2012), Lalley and Weyl (Quadratic voting. https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2003531, 2016) building off earlier work by Groves and Ledyard (Econometrica 45(4):783–810 1977a), Hylland and Zeckhauser (A mechanism for selecting public goods when preferences must be elicited, Kennedy School of Government Discussion Paper D, 70, 1980), where individuals buy as many votes as they wish by paying the square of the votes they buy using some currency. An appreciation of the history of research in the field suggests that QV is uniquely practically relevant compared to the other approximately Pareto-efficient mechanisms economists have proposed for collective decisions on public goods. However, it faces a number of sociological and ethical concerns regarding how a political system organized around QV would achieve the efficiency aims stated in abstract theory and whether the pure aggregate income-maximizing definition of efficiency QV optimizes in its simplest form is desirable. The papers in this volume flesh out and formalize these concerns, but also provide important responses in two ways: by suggesting domains where they are unlikely to be applicable (primarily related to survey research of various kinds) and versions of QV (using an artificial currency) that maintain many of QV’s benefits while diffusing the most important critiques. Together this work suggests both a practical path for applying QV in the near-term and a series of research questions that would have to be addressed to broaden its application.
TL;DR: This article studied the effect of disenfranchisement laws on over-incarceration and found that the removal of ex-convicts from the pool of eligible voters reduces the pressure politicians may otherwise face to protect the interests of this group, and thereby causes the political process to push the sentences for criminal offenses upwards.
Abstract: This article presents a model wherein law enforcers propose sentences to maximize their likelihood of reelection, and shows that elections typically generate over-incarceration, i.e., longer than optimal sentences. It then studies the effects of disenfranchisement laws, which prohibit convicted felons from voting. The removal of ex-convicts from the pool of eligible voters reduces the pressure politicians may otherwise face to protect the interests of this group, and thereby causes the political process to push the sentences for criminal offenses upwards. Therefore, disenfranchisement further widens the gap between the optimal sentence and the equilibrium sentence, and thereby exacerbates the problem of over-incarceration. Moreover, this result is valid even when voter turnout is negatively correlated with people’s criminal tendencies, i.e., when criminals vote less frequently than non-criminals.
TL;DR: In this paper, the authors evaluate a new, broadly applicable approach to opinion measurement based on quadratic voting (QV), a method in which respondents express preferences by "buying" votes for options using a fixed budget from which they pay for votes, and provide some initial evidence that the QV-based instrument provides a clearer measure of the preferences of the most intensely motivated respondents than the Likert-based one.
Abstract: Since their introduction in 1932, Likert and other continuous, independent rating scales have become the de facto toolset for survey research. Scholars have raised significant reliability and validity problems with these types of scales, and alternative methods for capturing perceptions and preferences have gained traction within specific domains. In this paper, we evaluate a new, broadly applicable approach to opinion measurement based on quadratic voting (QV), a method in which respondents express preferences by ‘buying’ votes for options using a fixed budget from which they pay quadratic prices for votes. Comparable QV-based and Likert-based survey instruments designed by Collective Decision Engines LLC were evaluated experimentally by assigning potential respondents randomly to one or the other method. Using a host of metrics, including respondent engagement and process-based metrics, we provide some initial evidence that the QV-based instrument provides a clearer measure of the preferences of the most intensely motivated respondents than the Likert-based instrument does. We consider the implications for survey satisficing, a key threat to the continued value of survey research, and discuss the mechanisms by which QV differentiates itself from Likert-based scales, thus establishing QV as a promising alternative survey tool for political and commercial research. We also explore key design issues within QV-based surveys to extend these promising results.
TL;DR: In this article, the authors investigate the effect of income inequality on economic growth in non-democratic regimes and provide an explanation for the negative relationship between inequality and economic growth as well as the negative relation between income inequality and institutional quality, both of which are observed in nondemocratic countries.
Abstract: This study investigates the effect of income inequality on economic growth in nondemocratic regimes. We provide a model in which a self-interested ruler chooses an institution that constrains his or her policy choice. The ruler must care about the extent of citizens’ support in order to remain in power. Under an extractive institution, the ruler can extract a large share of citizens’ wealth, but faces a high probability of losing power because of low public support. We show that inequality affects the ruler’s tradeoff between the expropriation of citizens’ wealth and his or her hold on power. Substantial inequality among citizens makes support for the ruler inelastic with respect to his or her institutional choice. The ruler therefore chooses an extractive institution, which impedes investment and growth. These results provide an explanation for the negative relationship between inequality and growth as well as the negative relationship between inequality and institutional quality, both of which are observed in nondemocratic countries.
TL;DR: In this paper, the authors discuss the mechanisms related to quadratic voting, from Vickrey's counter-speculation mechanism and his second-price auction, through the family of Groves mechanisms and its most notable member, the Clarke mechanism, to the expected externality mechanism, Goeree and Zhang's mechanism, the Groves-Ledyard mechanism, and the Hylland-Zeckhauser mechanism.
Abstract: We discuss the mechanisms related to quadratic voting, from Vickrey’s counter-speculation mechanism and his second-price auction, through the family of Groves mechanisms and its most notable member, the Clarke mechanism, to the expected externality mechanism, Goeree and Zhang’s mechanism, the Groves–Ledyard mechanism, and the Hylland–Zeckhauser mechanism. We show that each mechanism that involves collective decisions has a quadratic aspect and that all of the mechanisms that we discuss are applications of the fundamental insight that for a process to be efficient, all parties involved must bear the marginal social costs of their actions.
TL;DR: In this article, the authors present a model of provocation in a federation, wherein the state government triggers an insurgency with a view toward acquiring control of some economic assets with the help of the central government.
Abstract: This paper presents a model of provocation in a federation, wherein the state government triggers an insurgency with a view toward acquiring control of some economic assets with the help of the central government. Some econometric support for this model is found using data on the Naxalite conflict in eight states of India. The tests performed control for endogeneity of the state government’s police force interventions. They suggest that the latter are meant to trigger the violent activity of the insurgents, so as to lure the central government into intervening and helping clear the ground for mining purposes in the lands of tribal people.
TL;DR: In this paper, preference data from the 2015 parliament election in the Austrian federal state of Styria was used to analyze different voting rules. But the analysis was limited to the two types of parties.
Abstract: We use preference data from the 2015 parliament election in the Austrian federal state of Styria to analyze different voting rules. An exit poll right after the election collected data on ordinal and cardinal preferences from approximately 1000 actual voters. Our analysis is threefold. First, we determine the hypothetical social outcomes under different voting rules; second, we investigate the stability of the outcomes under those rules. Finally, we provide a categorization of different types of parties and analyze the impact of certain voting rules (Plurality Rule, Plurality Run Off, Hare System, Condorcet Method, Approval Voting, Borda Rule, Evaluative Voting, and Majority Judgment) on the performances of parties in those scenarios.
TL;DR: The authors showed that an angry voter with a strong sense of shame at the thought of voting to harm others, may still do so, even when the harm is brutal, even though the angry voter is more "decent" than most of us sometimes are.
Abstract: To consider some political implications of angry voters, we alter the standard expressive model in a fundamental way. One result is that an angry voter with a strong sense of shame at the thought of voting to harm others, may still do so, even when the harm is brutal. Indeed, his willingness to vote for harming others may increase if the proposed harm becomes more severe, even though the angry voter is more “decent” (less willing to harm others) than most of us sometimes are. Several examples are given that are consistent with the most troubling implications of the model. An empirical appendix follows the concluding section which tests the implications of the model indirectly.