Social choice and electoral competition in the general spatial model

This paper extends the theory of the core, the uncovered set, and the related undominated set to a general set of alternatives and an arbitrary measure space of voters. We investigate the properties of social preferences generated by simple games; we extend results on generic emptiness of the core; we prove the general nonemptiness of the uncovered and undominated sets; and we prove the upper hemicontinuity of these correspondences when the voters’ preferences are such that the core is nonempty and externally stable. Finally, we give conditions under which the undominated set is lower hemicontinuous.     

A model of electoral competition with incomplete information

A model of two-candidate electoral competition is developed in which voters are uncertain about the policy either candidate would implement if elected. Candidates simultaneously announce policy positions, from which voters attempt to infer the true positions the candidates would adopt. Announcing a position different from the true position is costly to the winning candidate, with these costs increasing as the difference between the true policy and the announced policy increases. A refinement of the sequential equilibrium concept is used to describe the behavior of candidates and voters.     

Political motivations and electoral competition: Equilibrium analysis and experimental evidence

We study both theoretically and experimentally the set of Nash equilibria of a classical one-dimensional election game with two candidates. These candidates are interested in power and ideology, but their weights on these two motives are not necessarily identical. Apart from obtaining the well known median voter result and the two-sided policy differentiation outcome, the paper uncovers the existence of two new equilibrium configurations, called ‘one-sided’ and ‘probabilistic’ policy differentiation, respectively. Our analysis shows how these equilibrium configurations depend on the relative interests in power (resp., ideology) and the uncertainty about votersʼ preferences. The theoretical predictions are supported by the data collected from a laboratory experiment, as we observe convergence to the Nash equilibrium values at the aggregate as well as at the individual levels in all treatments, and the comparative statics effects across treatments are as predicted by the theory.     

A Hotelling–Downs model of electoral competition with the option to quit

We study a variant of the multi-candidate Hotelling–Downs model that recognizes that politicians, even after declaring candidacy, have the option of withdrawing from the electoral contest before the election date and saving the cost of continuing campaign. We find that this natural variant significantly alters equilibrium predictions. We give conditions for the existence of an equilibrium for an arbitrary finite number of candidates and an arbitrary distribution of single-peaked preferences of voters. We also provide a partial characterization of the equilibrium outcomes that addresses whether policy convergence can be a feature of equilibrium outcomes when more than two candidates enter the electoral contest.     

Leadership and learning from the politicians

As we observe, the political candidates, we have a wonderful laboratory to discover what works and what does not in engaging followers to buy into the leader's message. Relationships and the ability of the candidate and the leader to feel a sense of personal attachment are important keys to success. Leaders who create this sense of magnetism often can tell the compelling stories that connect with people in the organization. The successful leader must first make the commitment to practice evidence-based leadership by examining best practices and modeling her/his leadership practice after these models.     

Power sharing and electoral equilibrium

This paper considers a model of (consensual) democracy where political parties engage first in electoral competition, and they share policy-making power afterward according with the votes gathered in the election. The paper uncovers the difficulties to guarantee stability in this institutional setting; and it provides a condition of symmetry on parties’ political motivations that ensures the existence of pure strategy equilibrium under a broad family of power sharing rules, ranging from fully proportional to winner-take-all. The equilibrium analysis shows that power sharing and ideology exert a centrifugal force on policy platforms that increases party polarization, with the paradoxical result that consensual democracies can actually lead to more radical electoral campaigns than winner-take-all.     

Economic globalization and the change of electoral rules

This paper takes up an argument from Ronald Rogowski about the “natural affinity” between trade and an electoral system with proportional representation. We draw on literature on the historical determinants of electoral system choice to advance the general argument that trade integration and PR are related because the adoption of PR helps to secure gains from trade. Our specific model of electoral rule changes in the age of globalization predicts that the likelihood of electoral rule change towards more proportionality increases with levels of trade integration in the world economy. The theoretical model draws on a micro model of the distributive effects of increased economic integration. Because more proportional systems are more credibly able to commit to compensate the losers of globalization processes, there will be increased demand to change the electoral system towards more proportionality under economic circumstances that increase the costs of maintaining a closed economy. In accordance with our model, our empirical tests find a positive association between (a) trade integration and the proportionality of the electoral system, (b) proportionality and social spending, and (c) global integration levels and the probability of electoral rules changes that render voting rules more proportional.     

The electoral college: diversification and the election process

The basic financial principle of diversification is applied to the U.S. Presidential election process. Applying this principle shows that the current Electoral College system may offer significant advantages over a direct voting system. Calls for an abolishment of the Electoral College may be premature if the goal of the election process is to ensure accurate results.      

Variable rational partisan cycles and electoral uncertainty

Variable rational partisan theory of political business cycles suggests differences in inflation under left-wing and right-wing governments. Fluctuations of economic activity result from uncertainty about the electoral outcome and the exact timing of elections. However, the core hypothesis that post-electoral booms and recessions depend upon the degree of electoral uncertainty has rarely been tested. Using polling data, we provide empirical evidence in favor of the hypothesis of the existence of variable rational partisan cycles.     

The evolution of preferences and competition: a rationalization of Veblen's theory of invidious comparisons

Abstract. We examine how preferences evolve by natural selection in a competitive environment similar to that characterizing much of our evolutionary past. We find that the evolutionarily stable preferences in this context exhibit a concern not only for absolute payoffs but also for relative payoffs, and that this intensifies the degree of competition relative to what obtains when players consider only absolute payoffs. We argue that this has consequences for the equilibrium population size. We argue that the premise of this analysis is consistent with the available anthropological evidence, and that the prediction is broadly consistent with the findings of experimental game theory. JEL Classification: C70 Evolution des préférences et concurrence: une rationalisation de la théorie des comparaisons désobligeantes de Veblen. Les auteurs examinent comment les préférences évoluent par sélection naturelle dans un environnement concurrentiel qui ressemble à celui qui a caractérisé notre passéévolutionnaire, c’est‐à‐dire, un environnement de chasseurs et de cueilleurs. On découvre que les préférences évolutionnairement stables dans ce contexte révèlent un intérêt non seulement pour les résultats en termes absolus mais aussi pour les résultats en termes relatifs, et que cela intensifie le degré de concurrence par rapport à ce qui se passerait si les joueurs prenaient en compte seulement les résultats en termes absolus. En travaillant contre l’espèce si l’on peut dire, la sélection naturelle des préférences réduit les niveaux d’équilibre des populations en deçà de ce qui aurait prévalu si les préférences n’avaient pas évolué. Le postulat de base sur lequel cette analyse se fonde est compatible avec les résultats des travaux anthropologiques et les prédictions sont compatibles avec les résultats des travaux en théorie des jeux expérimentale.     

Promising politicians,rational voters,and election outcomes

Overwhelming anecdotal evidence suggests that politicians often promise more during an election campaign than they are willing or able to deliver once elected. In this paper, we present two signaling models to explain this phenomenon. In the first model, two candidates maximize their share of the vote. In the second model both try to convince the median voter. In each model, candidates rationally distort their true policy position. Voters, however, are not fooled. Upon observing election promises, they can rationally infer the true position of each candidate. Hence, the election outcome is not affected.JEL Classification: D72, D82The author thanks Peter Kooreman, Wilko Letterie, Bert Schoonbeek, and two anonymous referees for useful comments. Financial support from The Netherlands Organization for Scientific Research (NWO) is gratefully acknowledged.     

Lawyers and politicians: the impact of organized legal professions on institutional reforms

Organized legal professions often play a central role in successful institutional development. The paper’s model examines how legal professions affect institutional reform. Professional review of reform proposals solves a politician’s informational problem in a way that makes democracy, political stability, and professional power substitutes. The model’s applicability is examined by showing that its predictions track the fortunes of lawyers in the USSR and early transition and are consistent with events in 1688 in England and 1789 in France, indicating why these two revolutions had different consequences. The model suggests why and when civil law and common law systems differ.

The looks of a winner: Beauty and electoral success

We study the role of beauty in politics using candidate photos that figured prominently in electoral campaigns. Our investigation is based on visual assessments of 1929 Finnish political candidates from 10,011 respondents (of which 3708 were Finnish). As Finland has a proportional electoral system, we are able to compare the electoral success of non-incumbent candidates representing the same party. An increase in our measure of beauty by one standard deviation is associated with an increase of 20% in the number of votes for the average non-incumbent parliamentary candidate. The relationship is unaffected by including education and occupation as control variables and withstands several other robustness checks.     

Entrepreneurial innovations,competition and competition policy

We construct a model where an entrepreneur can innovate for entry or for sale. It is shown that increased product market competition tends to increase the relative profitability of innovation for sale. Increased competition not only reduces the profits of entrants and the acquirer of the inventions in a similar fashion, but also reduces the profit of non-acquirers. Therefore, incumbents' valuations of innovations are less negatively affected by increased competition, and the incentive for innovation for sale can increase with increased competition. Moreover, a stricter, but not too strict, merger policy is shown to increase the incentive for innovations for sale by ensuring the bidding competition for the innovation.     

Political entrepreneurs and electoral capital: the case of the Israeli State Economy Arrangement Law

This article looks at a specific institutional change in Israel. In 1985, Israeli politicians adopted the “State Economy Arrangement Law” (SEAL), commonly regarded as part of the budgetary legislation in Israel. This law became an alternative channel through which applicants could circumvent the necessity of applying to the Israeli parliament (the Knesset) for the implementation of certain policies. This law enabled an accelerated, flexible regulatory process that short circuited democratic discussion in the Knesset and obviated the intervention of Israeli consumer organizations. This article suggests that this institutional change should be analyzed as part of a process where institutional reality influences individual and collective beliefs, thus triggering an individual and collective learning process that eventually leads to institutional change, specific policies and outcomes in terms of economic performance. The article also claims that the SEAL legislation is an equilibrium that results from the actions of political entrepreneurs (or agents of change) who operate to maximize their own electoral capital against the backdrop of certain structural and cultural conditions, both local and international. They operate in an environment characterized by the inability of the government to function effectively (non-governability) and the development of an alternative political culture.

Democracy and growth in Africa: Implications of increasing electoral competitiveness

Estimating a 1975–2004 decadal panel data in an augmented production-function framework, the paper finds that indexes of electoral competitiveness exhibit U-shape relationships with GDP growth, implying quite different “intermediate” and “advanced”-level effects of reforms in Africa.     

Decentralization and electoral accountability: Incentives, separation and voter welfare

This paper provides a systematic analysis of fiscal decentralization on the quality of government by studying jointly its effects on electoral discipline and selection, in a setting where, realistically, voters only have limited information about fiscal policy in other jurisdictions, ruling out yardstick competition. Fiscal centralization reduces the extent of electoral discipline, as a corrupt (rent-seeking) incumbent can target good behavior only at a “minimum winning coalition” of regions (selective rent-diversion) in order to retain office, but thus makes it more profitable for bad incumbents to pool with good ones, thus increasing the probability of electoral discipline occurring at all. Voters tend to prefer centralization when politicians are low quality i.e. more likely to be corruptible. Centralization with uniform taxes can dominate both unconstrained centralization and decentralization, explaining why uniform taxes are so widely observed.     

Local representation and strategic voting: Evidence from electoral boundary reforms

We analyze whether voters value local political representation by exploiting municipal mergers, which increase the number of candidates available to voters and intensify political competition. In the Finnish open-list proportional representation system, voters rank the candidates within parties, and thus, concentrating votes to local candidates increases the extent of local representation. Using a difference-in-differences strategy, we find that the vote distributions become more concentrated in municipalities less likely to gain local representation after the mergers. Moreover, the effect is much larger in municipalities where the benefits of local representation to voters are large. The latter result disentangles voters' responses from the responses of other political actors. The results are important also for designing local government mergers, which are an important policy tool in many countries. They highlight that concerns over deteriorating local democracy due to mergers have merit, because voters have preferences for local representation. At the same time, the vote concentration patterns we find alleviate these concerns.     

Unemployment insurance: The role of electoral systems and regional labour markets

Levels of insurance against unemployment vary considerably across countries. Replacement rates, the ratio relating income from unemployment to what people earned when they were employed, are higher in countries with proportional electoral systems than in countries with majoritarian systems. Also, replacement rates are positively correlated with per capita income and negatively correlated with the countries' unemployment rates. I develop an electoral competition model that replicates these stylized facts.