He Who Counts Elects: Economic Elites,Political Elites,and Electoral Fraud

What determines the extent of electoral fraud? This paper constructs a model of the tradeoff between fraud and policy concessions (public good provision) which also incorporates the strength of the state. In addition, we parameterize the extent to which economic elites (to whom fraud is costly) and political elites (to whom fraud is advantageous) “overlap.” The model predicts that fraud will be lower and public good provision higher when land inequality is higher, the overlap between elites lower, and the strength of the state higher. We test these predictions using a unique, municipal‐level dataset from Colombia's 1922 Presidential elections. We find empirical support for all the predictions of the model.     

Accounting for the wealth of Denmark: a case study of Smithian growth using the emergence of modern accounting in Danish dairying

Abstract

The idea of “Smithian growth” rests on a “natural” development out of agriculture through capital accumulation, and the division of labour. We confront these concepts with an “historical experiment” and the case of Danish agriculture in the nineteenth century. Specifically, we look at how accounting was used to promote specialization, ultimately in butter production, leading to the massive increases in productivity that Smith predicted. We also observe the emergence of Smithian “philosophers”. This ultimately led to the capital-intensive industrialization of Danish agriculture through butter factories, and general development. We argue that this establishes the historical relevance of Smith’s theories.     

Income Inequality and Workers’ Powerlessness in Selected OECD Countries

Our goal is to show the effects of “elitization” on income inequality in affluent countries over the last two decades. By applying a robust regression model on a sample of twenty-one OECD countries, we observe that a high concentration of wealth by the richest “1%” of the population results in reducing the impact of trade unions on income redistribution through political institutions. Insufficient redistribution can be interpreted not only as the elites’ control over the resources that influence public policy and opinion, but also as affecting the evolutionary path of the economy. Moreover, this influence emphasizes the importance of traditional institutions and serves as an inspiration to reconsider the established social consensus regarding the welfare state.     

Women's Paid Work and Intimate Partner Violence: Insights from Tanzania

Theoretical and empirical research provide conflicting views on whether women who do paid work are less at risk from violence by an intimate partner in low- and middle-income countries. Economic household-bargaining models propose increased access to monetary resources will enhance women's “agency” and hence their bargaining power within the household, which reduces their vulnerability to intimate-partner violence. Feminist theorists also argue, however, that culture, context, and social norms can impede women's ability to access and benefit from employment. This study uses semi-structured interviews conducted in 2009 to explore the implications of paid work among women market traders in Dar es Salaam and Mbeya, Tanzania. While in this sample, informal-sector work did not result in women being able to fully exercise agency, their access to money did have a positive effect on their lives and reduced one major source of conflict and trigger for violence: that of negotiating money from men.     

An experimental study of price dispersion

We report an experiment examining a simple clearinghouse model that generates price dispersion. According to this model, price dispersion arises because of consumer heterogeneity—some consumers are “informed” and simply buy from the firm offering the lowest price, while the remaining consumers are “captive” and shop based on considerations other than price. In our experiment we observe substantial and persistent price dispersion. We find that, as predicted, an increase in the fraction of informed consumers leads to more competitive pricing for all consumers. We also find, as predicted, that when more firms enter the market, prices to informed consumers become more competitive while prices to captive customers become less competitive. Thus, our experiment provides strong support for the model's comparative static predictions about how changes in market structure affect pricing.     

Does the paradox of plenty exist? Experimental evidence on the curse of resource abundance

There is conflicting evidence about whether abundant resources are indeed a blessing or a curse. We make use of specially designed economic experiments to investigate how resource abundance affects cooperation in the absence or presence of regulatory institutions. We observe that in the absence of regulatory institutions, there is less cooperation in groups with access to large resource pools than in groups with access to small resource pools. However, if regulatory institutions are present, we show that there is more cooperation in groups with access to large resource pools than in groups with access to small resource pools. Our findings also reveal that resource users are more willing to regulate access to abundant than to small resource pools. These findings provide causal evidence for the “paradox of plenty” and identify the causes for the pitfalls and potentials of resource wealth.     

Empowerment and intimate partner violence: Domestic abuse when household income is uncertain

Intimate partner violence is an important global health problem that remains ill understood. Several studies have documented that female empowerment may increase violence against women—the so‐called “male backlash.” We propose a utilitarian explanation for this phenomenon, based on the assumption that violence may be used as an instrument to affect the distribution of the household surplus between the spouses. Our main result is that promoting norms of gender equity (or otherwise enhancing the prospects of divorced women) may inadvertently promote violence against women in settings where production outcomes are uncertain.     

Embedded autonomy,political institutions,and access orders

We construct a model of “embedded autonomy,” the idea that the closeness of bureaucrats and business people may lead to growth-promoting policies by the government, though at the risk of leading to crony capitalism. We analyze how the level of monitoring to control corruption and the weight given to the future affect the nature of the possible outcomes. We explore possible tradeoffs between growth and inclusiveness and discuss how our model relates to more general concepts of inclusiveness of institutions, as framed by Acemoglu and Robinson, or the nature of “access orders,” as introduced by North, Wallis, and Weingast.     

An experimental investigation of Hobbesian jungles

Hobbes's state of nature serves as the analytical starting point for much of what economists have written on anarchy and the formation of government. Unfortunately little historical evidence exists about how men behaved in a “state of nature”, if such a situation ever even existed. We conducted a laboratory experiment to create a Hobbesian state of nature and observe the level of economic efficiency subjects achieve. We also investigate Buchanan's conjecture that people would unanimously agree to a social contract against theft.     

DIRECTED SEARCH,COORDINATION FAILURE,AND SELLER PROFITS: AN EXPERIMENTAL COMPARISON OF POSTED PRICING WITH SINGLE AND MULTIPLE PRICES

We experimentally examine posted pricing and directed search. In one treatment, capacity‐constrained sellers post fixed prices, which buyers observe before choosing whom to visit. In the other, firms post both “single‐buyer” (applied when one buyer visits) and “multibuyer” (when multiple buyers visit) prices. We find, based on a 2 × 2 (two buyers and two sellers) market and a follow‐up experiment with 3 and 2 × 3 markets, that multibuyer prices can be lower than single‐buyer prices or prices in the one‐price treatment. Also, allowing the multibuyer price does not affect seller profits and increases market frictions.     

MACROECONOMIC POLICY AND ELECTIONS IN OECD DEMOCRACIES*

The purpose of this paper is to test for evidence of opportunistic “political business cycles” in a large sample of 18 OECD economies. Our results can be summarized as follows: 1) We find very little evidence of pre-electoral effects on economic outcomes, in particular, on GDP growth and unemployment; 2) We see some evidence of “political monetary cycles,” that is, expansionary monetary policy in election years; 3) We also observe indications of “political budget cycles,” or “loose” fiscal policy prior to elections; 4) Inflation exhibits a post-electoral jump, which could be explained by either the pre-electoral “loose” monetary and fiscal policies and/or by an opportunistic timing of increases in publicly controlled prices, or indirect taxes.     

Economics,Power, and Regulation of Multinational Corporations

Contingent — rather than secure — provisioning is the core of the institutions of capitalism. This differential access to means of life is a method of prodding labor force participation, considered “coercion” by “old” institutional economists and “freedom” by neoliberal thinkers. Status differentials, which are based on pay hierarchies and branded consumer goods, help reinforce the individual competition for differential rewards. Reform would require reconstituting the labor market, as well as financial institutions, and restructuring the rationales for income distribution.     

Over the ROC methodology: Productivity,economic size and firms’ export thresholds

We identify the minimum combinations of productivity and “economic size” that Italian manufacturing firms need to achieve in order to access international markets. These “export thresholds” are estimated by applying, for the first time in economics, the ROC (receiver operating characteristics) methodology. In this way, we detect a model‐based (rather than a subjectively determined) cut‐off that allows to identify exporters and nonexporters and provides a measure of each firm’s distance from the export threshold. This methodology also paves the way to investigate other determinants of thresholds, thus helping to design more effective policy interventions to reduce barriers to trade.     

FDI,Poverty, and the Politics of Potable Water Access

How does foreign direct investment (FDI) affect the wellbeing of the poor? We address this question by analyzing the impacts of FDI on access to potable water. We predict that higher levels of greenfield FDI in water‐intensive sectors slow the rate of access to potable water in developing countries, with these adverse effects conditional on subnational politics. We hypothesize that this is more likely to occur in polities marked by relatively large poor and marginalized populations, where regulatory capture is more likely to occur. To test our intuition, we analyze subnational data on greenfield FDI in India, confirming that multinational investment in “thirsty” manufacturing sectors are negatively associated with improvements in potable water access. We then present a controlled comparison case study of two Indian states, Kerala and Rajasthan, highlighting the political mechanisms conditioning FDI's effects on potable water.     

Family violence and football: the effect of unexpected emotional cues on violent behavior

We study the link between family violence and the emotional cues associated with wins and losses by professional football teams. We hypothesize that the risk of violence is affected by the “gain-loss” utility of game outcomes around a rationally expected reference point. Our empirical analysis uses police reports of violent incidents on Sundays during the professional football season. Controlling for the pregame point spread and the size of the local viewing audience, we find that upset losses (defeats when the home team was predicted to win by four or more points) lead to a 10% increase in the rate of at-home violence by men against their wives and girlfriends. In contrast, losses when the game was expected to be close have small and insignificant effects. Upset wins (victories when the home team was predicted to lose) also have little impact on violence, consistent with asymmetry in the gain-loss utility function. The rise in violence after an upset loss is concentrated in a narrow time window near the end of the game and is larger for more important games. We find no evidence for reference point updating based on the halftime score.     

Depression of the deprived or eroding enthusiasm of the elites: What has shifted the support for international trade?

We use the 2003 and 2013 waves of the International Survey Program (ISSP) in order to explore the change in people’s attitudes that may be behind the recent backlash against globalization. We show that the average support for international trade has decreased in many – albeit not all – countries, and we demonstrate that these changes are related to the depth and length of the global financial crisis of 2008/09 as well as the evolution of income inequality. Moreover, our results document a declining support of those individuals who are likely to benefit from international trade: the young, high-skilled and well-off. We show that this “eroding enthusiasm of the elites” is empirically relevant even if we control for individuals’ increasing exposure to international labor-market competition.     

Market Entry Regulation and International Competition*

We analyze a non‐cooperative two‐country game where each government decides whether to allow free market entry of firms or to regulate market access. We show that a Pareto‐efficient allocation may result in equilibrium. In particular, if the cost difference between home and foreign production is “significant,” production will be located in the cost‐efficient country exclusively; and if this cost difference is even “substantial,” the induced allocation is also Pareto efficient. Only if the cost difference is “insignificant,” production may take place in both countries and the allocation is inefficient.     

Mobile money,risk sharing,and educational investment: Panel evidence from rural Uganda

We examine the impact of the rapidly expanding mobile banking service “mobile money” on rural households' ability to smooth investment in schooling after a negative shock. We find that a negative shock induces a 9.3‐percentage point decrease in per school‐age child educational expenditure for households who do not use mobile money compared to an 8.3‐percentage point decrease for households that have adopted mobile money. The underlying mechanism is an increase in remittance receipt and the diversity of senders owing to the reduction in transactions cost provided by mobile money. We show that our results are robust to alternative mechanisms. We use the expansion in mobile money agent network as an exogenous variation in access to mobile money.     

Robert Brenner on political accumulation and the transition to capitalism

This paper is an immanent critique of Robert Brenner’s writings on the transition from feudalism to capitalism. The concept “immanent” is defined as a logic of implication, according to which a text or theory is evaluated within the terms that it sets for itself, to determine whether its objectives and assumptions are true in the way they are said to be true. Using this method of critique, the paper shows how Brenner’s concept of “political accumulation” undermines his own initial claim that the balance of class forces between lords and peasants determined the long-term trends of preindustrial Europe, in that this concept points toward intralord struggles dominated by military interests. The paper also discusses why Brenner’s account of France’s tax/office state seriously weakens his postulate that “surplus extracting relations” were the “fundamental” relation of fuedalism, on the grounds that office-holding reflected an unequal distribution of property based upon status. Finally, the paper draws out the theoretical implications of these contradictory instances, to delineate ways in which Brenner’s basic theory may be sublated within a more comprehensive account.