The Determinants of Success of Special Interests in Redistributive Politics
TL;DR: In this paper, the authors examine what determines whether an interest group will receive favors in pork-barrel politics, using a model of majority voting with two competing parties, where each group's membership is heterogeneous in its ideological affinity for the parties.
Abstract: We examine what determines whether an interest group will receive favors in pork-barrel politics, using a model of majority voting with two competing parties. Each group's membership is heterogeneous in its ideological affinity for the parties. Individuals face a trade-off between party affinity and their own transfer receipts. The model is general enough to yield two often-discussed but competing theories as special cases. If the parties are equally effective in delivering transfers to any group, then the outcome of the process conforms to the "swing voter" theory: both parties woo the groups that are politically central, and most willing to switch their votes in response to economic favors. If groups have party affinities, and each party is more effective in delivering favors to its own support group, then we can get the "machine politics" outcome, where each party favors its core support group. We derive these results theoretically, and illustrate their operation in particular examples.
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01 Jan 2006TL;DR: The politics of vote-buying and the game of electoral transitions are discussed in this article, where the authors focus on the structural determinants of mass support and the electoral fraud.
Abstract: 1. Equilibrium party hegemony 2. Structural determinants of mass support 3. Budget cycles under autocracy 4. The politics of vote-buying 5. Judging economic performance in hard times 6. Ideological divisions in the opposition camp 7. How voters choose and mass coordination dilemmas 8. Electoral fraud and the game of electoral transitions 9. Conclusion.
1,227 citations
Cites background from "The Determinants of Success of Spec..."
...As Dixit and Londregan (1996) note, higher marginal utility among the poor make them “more willing to compromise their political preferences for additional private consumption” (1144)....
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TL;DR: In this paper, the authors analyze the strategic interaction between machines and voters as an iterated prisoners' dilemma game with one-sided uncertainty and generate hypotheses about the impact of the machine's capacity to monitor voters, and of voters' incomes and ideological stances, on the effectiveness of machine politics.
Abstract: Political machines (or clientelist parties) mobilize electoral support by trading particularistic benefits to voters in exchange for their votes. But if the secret ballot hides voters' actions from the machine, voters are able to renege, accepting benefits and then voting as they choose. To explain how machine politics works, I observe that machines use their deep insertion into voters' social networks to try to circumvent the secret ballot and infer individuals' votes. When parties influence how people vote by threatening to punish them for voting for another party, I call this accountability. I analyze the strategic interaction between machines and voters as an iterated prisoners' dilemma game with one-sided uncertainty. The game generates hypotheses about the impact of the machine's capacity to monitor voters, and of voters' incomes and ideological stances, on the effectiveness of machine politics. I test these hypotheses with data from Argentina.
1,174 citations
Book•
01 Jan 2005TL;DR: In this article, the authors present a review of bank regulation and its effect on bank performance and its role in the development of banks around the world, focusing on two approaches to bank regulation: public interest approach and private interest approach.
Abstract: 1. Introduction: 1.A Motivation 1.B Objectives and contributions 1.C Key findings: a brief synopsis 1.D Guide to the book 2. Contrasting approaches to bank regulation: 2.A Two approaches to bank regulation: 2.A.1 Public interest approach 2.A.2 Private interest view of regulation 2.B Bank regulation: how 2.C The Basel Committee and regulatory convergence 2.D Conclusion 3. How are banks regulated and supervised around the world?: 3.A Overview 3.B Structure, scope and independence of regulation and supervision 3.C What is a 'bank'? 3.D Entry into banking, capital requirements and supervisory powers 3.E Explicit deposit insurance schemes 3.F Private monitoring and external governance 3.G Does bank ownership type affect the choice of regulations and supervisory practices? 3.H Forces for greater harmonization of regulation and supervision among countries 4. What works best: 4.A Goals and boundaries 4.B Bank regulation and supervision and bank development 4.C Bank supervision, regulation, and stability 4.D Bank supervision, regulation, and bank efficiency 4.E Bank supervision, regulation, and bank lending 4.F Supervision, regulation, and bank governance 4.G Summary of results 5. Choosing bank regulations 5.A Recap and motivation 5.B Motivating example: Mexico and the United States 5.C Conceptual framework 5.D Empirical framework and data 5.E Summary remarks 6. Rethinking bank regulation: 6.A Approach and context 6.B Lessons and implications.
1,082 citations
Posted Content•
TL;DR: In this article, the authors study the competition between two political parties for seats in a parliament and show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups.
Abstract: We study the competition between two political parties for seats in a parliament. The parliament will set two types of policies: ideological and non-ideological. The parties have fixed positions on the ideological issues, but choose their non-ideological platforms to attract voters and campaign contributions. In this context, we ask: How do the equilibrium contributions from special interest groups influence the platforms of the parties? We show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups. The party that is expected to win a majority of seats caters more to the special interests.
824 citations
Cites background from "The Determinants of Success of Spec..."
...…about how any individual will vote, even if they know how he or she will be affected by the policy in question.2 Lindbeck and Weibuil (1987) and Dixit and Londregan (1994) adopted a similar probabilistic.voting approach to study policies that redistribute income to narrow groups of voters....
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Posted Content•
TL;DR: This paper found a political deficit cycle in a large cross-section of countries, but show that this result is driven by the experience of "new democracies" and that voters punish rather than reward fiscal manipulation.
Abstract: Like other recent studies, we find a political deficit cycle in a large cross-section of countries, but show that this result is driven by the experience of "new democracies". The political budget cycle in new democracies accounts for the finding of a budget cycle in larger samples that include these countries and disappears when they are removed from the larger sample. The political deficit cycle in new democracies accounts for findings in both developed and less developed economies, for the stronger cycle in weaker democracies, and for differences in the political cycle across governmental and electoral systems. Our findings may reconcile two contradictory views of pre-electoral manipulation, one that it is a useful instrument to gain voter support and a widespread empirical phenomenon, the other that voters punish rather than reward fiscal manipulation.
755 citations
References
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01 Jan 1957
TL;DR: Downs presents a rational calculus of voting that has inspired much of the later work on voting and turnout as discussed by the authors, particularly significant was his conclusion that a rational voter should almost never bother to vote.
Abstract: Downs presents a rational calculus of voting that has inspired much of the later work on voting and turnout. Particularly significant was his conclusion that a rational voter should almost never bother to vote. This conclusion, especially as elaborated on by Riker and Ordeshook (1968) has shifted the attention of modern political scientists from explaining why people don't vote to explaining why they do.
14,677 citations
"The Determinants of Success of Spec..." refers background in this paper
...Other models emphasize primarily the position-issue aspect of political competition (e.g., Downs 1957)....
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TL;DR: In this article, balanced budget redistribution between socioeconomic groups is modeled as the outcome of electoral competition between two political parties, and a sufficient condition for existence is given, requiring that there be enough heterogeneity with respect to party preferences in the electorate.
Abstract: This paper models balanced-budget redistribution between socio-economic groups as the outcome of electoral competition between two political parties. Equilibrium is unique in the present model, and a sufficient condition for existence is given, requiring that there be enough ‘stochastic heterogeneity’ with respect to party preferences in the electorate. The validity of Hotelling's ‘principle of minimum differentiation’, and of ‘Director's Law’, are examined under alternative hypotheses concerning administrative costs of redistributions, and voter's possibilities both of abstaining from voting and of becoming campaign activists for one of the parties. The policy strategy of expected-plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality. Incomes are fixed and known, so lump-sum taxation is feasible. However, constraints on tax/transfer differentiation between individuals are permitted in the analysis.
1,486 citations
"The Determinants of Success of Spec..." refers background in this paper
...the same moderate blocs of voters was noted by Lindbeck and Weibull(1987), but they did not obtain all the implications of this case....
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...This is and McCubbins (1986) and Lindbeck and Weibull(1987) require exact balance: B = not necessary for our purpose....
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...Others including Cox and McCubbins (1986) and Lindbeck and Weibull(1987) have studied tactical redistribution under budget constraints; we will discuss their models in greater detail below....
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TL;DR: In this paper, the authors argue that the optimal strategy for risk-averse candidates will be to promise redistributions first and foremost to their reelection constituency and thereby to maintain existing political coalitions.
Abstract: Spatial models of electoral competition typically simplify the analysis by ignoring the question of internal constituency politics: constituencies are modeled simply as a distribution of ideal points along a set of issue dimensions. Matters related to the stability of divergent electoral coalitions have rarely been addressed. We explicitly take into account how differential rates of support by various groups in a constituency will influence candidates' campaign promises and the likelihood that stable electoral coalitions will be forged. Viewing campaign platforms as promised redistributions of welfare, we argue that the optimal strategy for risk-averse candidates will be to promise redistributions first and foremost to their reelection constituency and thereby to maintain existing political coalitions. We use evidence from the urban services literature to support our propositions.
1,117 citations
TL;DR: In this paper, the authors provide a rational explanation for the observation of oversized coalitions, often approaching unanimous size, in the realm of distributive policies, i.e., policies which concentrate benefits in specific geographic areas (states, congressional districts) while spreading costs through general taxation.
Abstract: This paper provides a rational explanation for the observation of oversized coalitions, often approaching unanimous size, in the realm of distributive policies. Distributive policies are those which concentrate benefits in specific geographic areas (states, congressional districts) while spreading costs through general taxation. The explanation offered here-that legislators may rationally prefer universalism to "hard-ball" coalition politics-generalizes earlier work of Weingast and Fiorina. In particular, it extends their results to pork-barrel politics, i.e., projects that are economically inefficient, and demonstrates how packages of economically inefficient projects can nevertheless be politically popular. The main theoretical feature that induces preferences for universalism is uncertainty over the composition of winning coalitions and, consequently, the desire for the political "insurance" that universalism provides.
502 citations
TL;DR: In this article, a simple game model is used to compare the incentives for candidates to create inequalities among otherwise homogeneous voters, by making campaign promises that favor small groups, rather than appealing equally to all voters.
Abstract: A simple model is used to compare, under different electoral systems, the incentives for candidates to create inequalities among otherwise homogeneous voters, by making campaign promises that favor small groups, rather than appealing equally to all voters. In this game model, each candidate generates offers for voters independently out of a distribution that is chosen by the candidate, subject only to the constraints that offers must be nonnegative and have mean 1. Symmetric equilibria with sincere voting are analyzed for two-candidate elections and for multicandidate elections under rank-scoring rules, approval voting, and single transferable vote. Voting rules that can guarantee representation for minorities in multiseat elections generate, in this model, the most severely unequal campaign promises.
431 citations