Strategic delegation and voting rules

The selection of political representatives depends on the political system. Principals, such as voters or districts, may benefit by strategically electing representatives different from themselves. While a status-quo biased delegate may be a better negotiator, an enthusiastic representative has a better chance of being included in the majority coalition. A larger majority requirement leads to “conservative” delegation and hence a status quo bias; a poor minority protection does the opposite. Through strategic delegation, the political system also determines whether centralization or decentralization is beneficial.     

The geometry of voting power: Weighted voting and hyper-ellipsoids

Suppose legislators represent districts of varying population, and their assembly's voting rule is intended to implement the principle of one person, one vote. How should legislators' voting weights appropriately reflect these population differences? An analysis requires an understanding of the relationship between voting weight and some measure of the influence that each legislator has over collective decisions. We provide three new characterizations of weighted voting that embody this relationship. Each is based on the intuition that winning coalitions should be close to one another. The locally minimal and tightly packed characterizations use a weighted Hamming metric. Ellipsoidal separability employs the Euclidean metric: a separating hyper-ellipsoid contains all winning coalitions, and omits losing ones. The ellipsoid's proportions, and the Hamming weights, reflect the ratio of voting weight to influence, measured as Penrose–Banzhaf voting power. In particular, the spherically separable rules are those for which voting powers can serve as voting weights.     

Political economy of eastern enlargement of the European Union: Budgetary costs and reforms in voting rules

Eastern European countries are likely to be major recipients of European Union (EU) funds after membership, which has created serious concern among incumbent members. The EU has devised reforms of budgetary rules to limit the funds that will flow to the East. Using a political economy model and drawing on the experience of previous enlargements, this paper argues that such pre-accession reforms will be ineffective because they can be reversed by a coalition of Eastern European countries after membership. The paper then estimates budgetary costs of eastern enlargement. A better way to resolve budgetary concerns is to reform voting rules rather than budgetary rules, before eastern enlargement.     

The rules of abstraction

Friedrich Hayek’s work on spontaneous order suggests that the emergence of a spontaneous order requires the existence of abstract rules of conduct. But how much abstraction is required? Abstraction exists on a gradient, from the highest specificity (pertaining to particular persons and narrowly defined circumstances) to the highest generality (pertaining to all persons in all circumstances). If rules create order by coordinating expectations, either end of the spectrum is undesirable; the most specific and the most abstract rules fail to provide decision makers with useful guidance. This article argues that rules that foster coordination must be characterized by an intermediate degree of abstraction. This conclusion will be explained and applied to law, language, and etiquette in order to draw out the similar character of rules across various contexts. The article concludes by discussing four properties that rules of intermediate abstraction must also possess to foster spontaneous order.     

Unsettling aspects of voting theory

Summary. Voting procedures are known to be plagued with a variety of difficulties such as strategic voting, or where a voter is rewarded with a better election outcome by not voting, or where a winning candidate can lose by receiving more support. Once we know that these problems can occur, the next objective should be to completely understand how, why, and where they arise. Namely, for each election procedure, the new goal is to determine when such problems can occur, all voter types who can cause these difficulties, and the actions they must take. This paper develops an easily used approach to handle all of these issues for standard voting methods. New intuitive explanations for these various oddities follow from this approach. Received: August 14, 2002 ; revised version: September 4, 2002 RID="*" ID="*"My thanks to Richard Barrett and, in particular, to Hannu Nurmi for corrections, several useful comments, and suggestions they made about earlier versions. Also, my thanks to a referee for calling some excellent references to my attention. An earlier draft was presented at the 2002 Public Choice Society meeting. This research was supported by an NSF grant.     

Water allocation by social choice rules: The case of sequential rules

This paper considers the problem of allocating shares of irrigation water to different agricultural agents with single-peaked preferences with respect to their own shares. We define two different sequential allocation rules that respect the asymmetry between the agents and maintain the properties of Pareto efficiency and strategy-proofness, and we design a specific algorithm to apply these rules. The results of the empirical application of these rules for the case of an irrigated area located in the Ebro Basin (Spain) show that the designed sequential rules are able to substantially improve the efficiency of the currently applied proportional rule in context of severe scarcity of water and/or high administrative water prices.     

The paradox of voting: Effects of individual indifference and intransitivity

Assessments of the likelihood of the paradox of voting usually assume that voters are never indifferent between distinct candidates and that their preferences are transitive. When these assumptions are relaxed, it is seen that the likelihood of the paradox decreases as individual indifference increases, and increases as individual intransitivity increases. The resultant changes in the likelihood can be significant. Since individual indifference is probably more common than intransitivity, many previous assessments of the paradox's likelihood are too large. Although this does not decrease the problems associated with the paradox when it occurs, it does tend to alleviate its general importance.     

The fable of the leeches,or: The single most unrealistic positive assumption of most economists

Most economists assume that markets depend on government to enforce contracts and rules against default or fraud. With small transactions, however, the cost to use the legal system far exceeds the value at stake in a contract, and even with large contracts, the legal system often cannot solve problems quickly enough to be helpful for companies. This article focuses on four real stories that illustrate how market participants solve problems privately rather than through law and then concludes with a fable to help illustrate that point.     

Mathematical structure of voting paradoxes

Summary. A theory is developed to identify, characterize, and explain all possible positional and pairwise voting outcomes that can occur for any number of alternatives and any profile. This paper describes pairwise voting where new results include explanations for all paradoxes, cycles, conflict between Borda and Condorcet rankings, differences among procedures using pairwise votes (such as the Borda Count, Kemeny's method, and the Arrow-Raynaud rule), and discrepancies among the societal rankings as candidates are dropped or added. Other new results include new relationships among the Borda and Condorcet "winners" and "losers." The theory also shows how to construct all supporting profiles. The following companion paper does the same for positional methods.     

The welfare consequences of strategic behaviour under approval and plurality voting

This paper studies the welfare consequences of strategic behaviour under approval and plurality voting by comparing the utilitarian efficiencies obtained in simulated voting under two behavioural assumptions: expected utility-maximising behaviour and sincere behaviour. Under approval voting utilitarian efficiency is relatively high irrespective of the behavioural assumption, and under the plurality rule strategic voting significantly increases utilitarian efficiency.     

A voting paradox of fiscal federalism

This paper draws attention to certain tensions within fiscal federalism. We compare median- voter decisions on the socialization of goods and services at different levels of government. They show typical differences which are primarily due not to changes in the economic or political situation but to changes in the level of decision making.     

Pareto violations of parliamentary voting systems

It has been known for a long time that many binary voting rules can select a Pareto dominated outcome, that is an outcome such that there exists some other alternative which is preferred by every voter. In this paper, we show that some of these rules can select an outcome Pareto dominated in a much stronger sense. Furthermore, our main results are concerned with the evaluation of the likelihood of Pareto dominated outcomes under four social choice rules commonly used in Parliaments or in committees. Given a set of four alternatives and a set of n individuals, we assume anonymous profiles and using analytical methods we compute the proportion of profiles at which the Pareto criterion is violated. Our results show that one should not be especially worried about the existence of the possibility as such. We are grateful to two anonymous referees for very helpful remarks and suggestions.     

Victory margins and the paradox of voting

This paper addresses a simple question: why do people vote? Though simple, this question remains unanswered despite the considerable attention it has received. In this paper, I show that purely rational–instrumental factors explain a large fraction of turnout variations, provided that the effect of the margin of victory on implemented policy is considered. I extend Myerson's models of elections based on Poisson games, and show that, when platforms are responsive to vote shares, the predictions of the model become consistent with several stylized facts, including the secular fall in turnout rates in the US.     

The financial accelerator and monetary policy rules

Comparing Bernanke et al.’s (1999) financial accelerator model to a comparable model without an operational financial accelerator mechanism, we find that financial acceleration is reduced when monetary policy reacts to the output gap and when firm-specific volatility rises.