Findings

Instituted

Kevin Lewis

June 30, 2012

Wisdom, Alterability, and Social Rules

Peter Leeson & Christopher Coyne
Managerial and Decision Economics, forthcoming

Abstract:
This paper uses cost-benefit analysis to evaluate the relative efficiency of three competing sources of social rules: legislation, norms, and private rules. On the benefit side, we consider the 'wisdom' and 'alterability' of social rules produced under each source. Wisdom refers to the extent to which social rules reflect society members' rule demands. Alterability refers to the ease with which society members can change social rules when their rule demands change. On the cost side, we consider the production and external costs associated with producing social rules under each source. We find that legislation is relatively alterable but unwise. Norms are wiser but unalterable. Private rules avoid the wisdom-alterability tradeoff and are both wise and alterable. However, private rules have higher external costs than legislation and may have higher production costs than norms. Many societies may be able to produce more efficient social rules privately.

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Dynastic Political Privilege and Electoral Accountability: The Case of U.S. Governors, 1950-2005

George Crowley & William Reece
Economic Inquiry, forthcoming

Abstract:
This paper examines the impact of dynastic political privilege on the behavior of incumbents. Incumbents have opportunities to serve themselves at the expense of voters, but society can design political institutions to mitigate these principal-agent problems. Dynastic political privilege may be one such mechanism. We argue that the possibility that opportunistic behavior in office may damage family members' political prospects disciplines incumbents. We test this hypothesis using data for 1950-2005 on U.S. governors, including a new data set on the family relationships of politicians, and find that dynastic political privilege increases incumbent accountability.

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Do Political Protests Matter? Evidence from the Tea Party Movement

Andreas Madestam et al.
Harvard Working Paper, December 2011

Abstract:
Can protests cause political change, or are they merely symptoms of underlying shifts in policy preferences? This paper studies the effect of the Tea Party movement in the United States, which rose to prominence through a series of rallies across the country on April 15, Tax Day, 2009. To identify the causal effect of protests, we use an instrumental variables approach that exploits variation in rainfall on the day of the coordinated rallies. Weather on Tax Day robustly predicts rally attendance and the subsequent local strength of the movement as measured by donations, media coverage, social networking activity, and later events. We show that larger rallies cause an increase in turnout in favor of the Republicans in the 2010 Congressional elections, and increase the likelihood that incumbent Democratic representatives retire. Incumbent policymaking is affected as well: representatives respond to large protests in their district by voting more conservatively in Congress. Finally, the estimates imply significant multiplier effects: for every protester, Republican votes increase by seven to fourteen votes. Together our results show that protests can build political movements that ultimately affect policy, and they suggest that it is unlikely that these effects arise solely through the standard channel of private-information revelation.

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Congressional Response to Presidential Signing Statements

Scott Ainsworth, Brian Harward & Kenneth Moffett
American Politics Research, forthcoming

Abstract:
Popular and scholarly accounts argue that signing statements are important tools for presidents to shape the implementation of policy. Although signing statements might be important presidential tools, the legislative branch stands in the most immediate and direct competition with the executive for ultimate control of the bureaucracy. In this article, we assess whether congressional committees react to presidential signing statements with increased oversight. Using a data set that includes every oversight hearing held by the U.S. House between 1995 and 2007, we find evidence that congressional committees are sensitive to the number of objections raised by presidents in signing statements. As the president uses signing statements to object to a larger number of provisions in laws, the affected House committees respond with more oversight.

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The rise and decline of European parliaments, 1188-1789

Jan Luiten Van Zanden, Eltjo Buringh & Maarten Bosker
Economic History Review, August 2012, Pages 835-861

Abstract:
This article quantifies the activities of medieval and early modern parliaments. It traces the long-term evolution of this European institution, and offers a first pass at analysing its impact on long-term economic development. Starting in Spain in the twelfth century, parliaments gradually spread over the Latin west between 1200 and 1500. In the early modern period, parliaments declined in influence in southern and central Europe and further gained in importance in the Netherlands and Britain, resulting in an institutional 'Little Divergence' between 1500 and 1800. We discuss the background of this phenomenon in detail. Moreover, by analysing the effects of parliamentary activity on city growth we find that these differences in institutional development help to explain the economic divergence between north-western and southern and central Europe.

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Morality, social norms and the rule of law as transaction cost-saving devices: The case of ancient Athens

Anastassios Karayiannis & Aristides Hatzis
European Journal of Law and Economics, June 2012, Pages 621-643

Abstract:
The importance of the institutional framework for economic development is widely accepted today and it is duly stressed in the economic literature. The protection of property rights, the enforcement of contracts and an efficient legal system are the pillars of the contemporary rule of law. However, formal institutions cannot function without being internalized by the citizens and without the strong backing of social norms. Morality and social norms are the major elements of the informal institutional structure, the social capital, which is also critical for social welfare and economic development. In this paper we will discuss both the formal and the informal institutional framework of Ancient Athens, which was a free market society with economic problems similar to contemporary market societies. Athenians developed a highly sophisticated legal framework for the protection of private property, the enforcement of contracts and the efficient resolution of disputes. Such an institutional framework functioned effectively, cultivating trust and protecting the security of transactions. This entire system however was based on social norms such as reciprocity, the value of reputation and widely accepted business ethics. Conformity to social norms as well as moral behavior was fostered by social sanction mechanisms (such as stigma) and moral education. The Athenian example is a further proof of the importance of morality and social norms as transaction cost-saving devices even in quite sophisticated legal systems. Their absence or decline leads inevitably to the need for more regulation and litigation and to a growing preference for clear-cut rules instead of discretionary standards. Athenian law was pioneering in the development of rules and institutional mechanisms suitable for the reduction of transaction costs, many of them surviving in the most complex contemporary legal systems.

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Magnitude and durability of electoral change: Identifying critical elections in the U.S. Congress 1854-2010

Thomas Brunell, Bernard Grofman & Samuel Merrill
Electoral Studies, forthcoming

Abstract:
The two hallmarks of a critical election and, hence, of a critical realignment are the magnitude of the observed change and the durability of that change. In addition to offering a new approach to measuring durable change in national party dominance, and providing a non-parametric criterion to identify unusual changes in seat/vote shares, we provide fresh insights via a unifying statistical approach that reflects both of these factors simultaneously. Furthermore, we assess the robustness of critical election determinations in two ways. First, we compare the magnitude of inter-election shifts with both average volatility over the entire time period and volatility relative to a particular time period. Second, as an alternative to the usual perspective, we consider critical elections not as a one-time cataclysm, but rather as a pair (or perhaps even triple) of consecutive substantial shifts, generated by the same underlying factors. Overall, we distinguish six elections that marginally or provisionally meet our criteria to be critical elections. But focusing on pairs of elections, 1858-60 and 1930-32 stand out as critical among all elections since the 1850s.

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Levels of Education and Support for Direct Democracy

Loren Collingwood
American Politics Research, July 2012, Pages 571-602

Abstract:
Conventional wisdom based on public opinion surveys suggests that voters are generally supportive of direct democracy. Recent research has shown that perhaps public support for direct democracy may not be as strong as is traditionally thought. Given this, I hypothesize that voters without a college degree are less supportive of direct democracy once asked how they will vote on a series of ballot initiative questions in the context of a survey. Voters with a college degree will not be affected by these questions in their evaluations of direct democracy because they have more confidence in their ability to participate in politics. I conduct a split sample survey experiment to investigate opinions toward direct democracy. The results confirm that, when exposed to ballot initiative questions, voters without a college degree are less supportive of direct democracy compared to college graduates. Implications are discussed.

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The Tea Party Movement and the Geography of Collective Action

Wendy Tam Cho, James Gimpel & Daron Shaw
Quarterly Journal of Political Science, April 2012, Pages 105-133

Abstract:
We examine the geography of the Tea Party movement by drawing upon a unique data source that harvested thousands of events from the Meetup.org and Tea Party Patriots websites during the latter half of 2010. The spatial distribution of events strongly suggests that Tea Party activism was borne out of economic grievance, as it corresponds quite closely to the incidence of home foreclosures. The findings more generally reinforce the impression that Tea Party activists varied in the extent of their broader political vision and strategic acumen. On the one hand, many gathered together to express dissent and make their opposition identity known wherever they happened to live. But some did unite with like-minded groups to direct their activity toward defeating incumbents, capturing open seats, and electing their own candidates, possibly altering the outcome in a number of elections, primary and general. A geographic perspective on movement activism reveals that while not remarkably strategic with respect to the 2010 elections, Tea Party protest was not purely expressive either.

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Veto Players, the Policy-Making Environment and the Expression of Authoritarian Attitudes

Shane Singh & Kris Dunn
Political Studies, forthcoming

Abstract:
The number of veto players - actors with the ability to halt a change to the status quo - is consistently linked to the fluidity of the policy-making process across countries. Building upon previous work on authoritarianism, we theorize that the nature of the policy-making process, as influenced by the number of veto players, serves to shape attitudes among the public. Specifically, we argue that fractionalization of powerful political actors leads to a conflictual policy-making process, which in turn exacerbates the expression of authoritarian attitudes among those predisposed to such by portraying an image of a heterogeneous and divided society. To test this, we gather data on thousands of individuals and several countries from the World Values Survey and other sources. Results indicate that those with authoritarian predispositions are much more likely to express authoritarian attitudes where the number of veto players is high, where the preferences of these players are diverse and where the overall capacity for political change is diminished.

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Voting in the Bicameral Congress: Large Majorities as a Signal of Quality

Matias Iaryczower, Gabriel Katz & Sebastian Saiegh
Journal of Law, Economics, and Organization, forthcoming

Abstract:
We estimate a model of voting in Congress that allows for dispersed information about the quality of proposals in an equilibrium context. In equilibrium, the Senate only approves House bills that receive the support of a supermajority of members of the lower chamber. We estimate this endogenous supermajority rule to be about four-fifths on average across policy areas. Our results indicate that the value of information dispersed among legislators is significant, and that in equilibrium a large fraction of House members' (40-50%) votes following their private information. Finally, we show that the probability of a type I error in Congress (not passing a good bill) is on average about twice as high as the probability of a type II error (passing a low-quality bill).

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The Impact of Income on Democracy Revisited

Yi Che et al.
Journal of Comparative Economics, forthcoming

Abstract:
This paper revisits the important issue of whether economic development promotes democracy by using the system-GMM method, which is superior to the difference-GMM method when dependent variables (democracy in this paper) are highly persistent over time. With the same data set as that of Acemoglu, Johnson, Robinson, and Yared (2008), we find that the system-GMM estimated coefficient of income per capita is positive and highly statistically significant, in sharp contrast to the difference-GMM results reported by Acemoglu, Johnson, Robinson, and Yared (2008). Furthermore, employing the U.S. and Colombia as an example, we find that much of the difference in democracy across countries can be explained by the corresponding difference in income per capita.

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Democracy and Reforms: Evidence from a New Dataset

Paola Giuliano, Prachi Mishra & Antonio Spilimbergo
NBER Working Paper, June 2012

Abstract:
Empirical evidence on the relationship between democracy and economic reforms is limited to few reforms, countries, and periods. This paper studies the effect of democracy on the adoption of economic reforms using a new dataset on reforms in the financial, capital and banking sectors, product markets, agriculture, and trade for 150 countries over the period 1960-2004. Democracy has a positive and significant impact on the adoption of economic reforms but there is scarce evidence that economic reforms foster democracy. Our results are robust to the inclusion of a large variety of controls and estimation strategies.

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The Optimal Bargain between the Elite and the Majority: Party and Managerial Ideologies as Devices to Control Politicians and Managers

Wayne Eastman & Deirdre Collier
Group Decision and Negotiation, July 2012, Pages 475-494

Abstract:
We investigate problems that arise in aligning office-seeking politicians with social welfare in situations where society (or the firm) is composed of groups of different sizes with different preferences. Similar alignment issues arise in corporations where management must respond to the demands of multiple constituencies. The problems arise because the agents have a suboptimal incentive to cater to majority preferences in situations with low participation costs and to elite minority preferences in situations with high participation costs. Our paper is mainly devoted to democratic politics, in which there is no group of residual claimants who are aligned to social welfare. In democratic politics, we claim that an efficient elite-majority bargain involves the creation of competing party ideologies that serve to check opportunism by majorities in low participation-cost scenarios and by elites in high participation-cost scenarios, and in doing so align politicians with social welfare. We suggest that in non-profit firms that also lack a residual claimant, an efficient elite-majority bargain involves a parallel creation of managerial ideologies, and that such managerial ideologies may also have utility in the for-profit firm as a supplementary device to foster alignment with firm value.

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Is polarization bad?

Cecilia Testa
European Economic Review, August 2012, Pages 1104-1118

Abstract:
The adverse effects of political and social polarization on government policies are empirically well documented, yet some democracies seem to cope well or even benefit from diversity. In this paper we develop a theoretical model to show how elections in polarized societies contribute to improve quality of government. We consider both polarization among citizens and political actors (political polarization), where the second is endogenously determined by parties competing to win the support of the majority of voters. We find that more heterogeneous societies are more likely to be politically polarized, but that the divergence of positions in the political arena helps the electorate control government corruption by raising electoral stakes. Our results, which are consistent with the findings of a substantial empirical literature, suggest that, when funneled into political competition, polarization may help improving quality of government and policies.

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Civic Participation and Political Trust: The Impact of Compulsory Voting

Krister Lundell
Representation, Spring 2012, Pages 221-234

Abstract:
Compulsory voting is first and foremost an institutional remedy for low electoral turnout in parliamentary elections. In this article, the effect of compulsory voting on two other dimensions of the well-being of democracy is explored, namely civic participation and political trust. Some support for the proposition that compulsory voting enhances the legitimacy of political institutions is provided; by contrast, mandatory electoral participation has a negative impact on the level of civic participation.

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Tea Party Influence: A Story of Activists and Elites

Michael Bailey, Jonathan Mummolo & Hans Noel
American Politics Research, forthcoming

Abstract:
Understanding how the Tea Party has affected congressional elections and roll call voting helps us understand not only an important political movement, but how movements affect politics more generally. We investigate four channels for the movement to influence political outcomes: activists, constituent opinion, group endorsement activity and elite-level self-identification. We find consistent evidence that activists mattered both electorally and for roll call voting on issues of importance to the movement. Constituent opinion had virtually no impact on either political outcome. Group endorsement activity had possible effects on elections, but mostly no effect on congressional voting. Self-identification among elites did not enhance - or harm - Republican electoral fortunes, but did affect congressional votes important to the movement. These divergent results illustrate how movement politics can influence outcomes through multiple channels and call into question the usefulness of the "Tea Party'' moniker without important qualifiers.

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Human Rights Violations after 9/11 and the Role of Constitutional Constraints

Benedikt Goderis & Mila Versteeg
Journal of Legal Studies, January 2012, Pages 131-164

Abstract:
After 9/11, the United States and its allies took measures to protect their citizens from future terrorist attacks. While these measures aim to increase security, they have often been criticized for violating human rights. But violating rights is difficult in a constitutional democracy with separated powers and checks and balances. This paper empirically investigates the effect of the post-9/11 terror threat on human rights. We find strong evidence of a systematic increase in rights violations in the United States and its ally countries after 9/11. When testing the importance of checks and balances, we find that this increase is significantly smaller in countries with independent judicial review (countermajoritarian checks) but did not depend on the presence of veto players in the legislative branch (majoritarian checks). These findings have important implications for constitutional debates on rights protection in times of emergency.

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Autocracy and coups d'etat

Ronald Wintrobe
Public Choice, July 2012, Pages 115-130

Abstract:
In this paper I first briefly survey Tullock's contributions to the study of autocracy and coups d'etat. Tullock's analysis of the coup d'etat is insightful. He suggested that those at the top could control those at the bottom with a proper system of incentive payments. Here I expand on that idea by asking the reverse question, not what keeps those at the bottom from rebelling, but what keeps those at the top from looting the regime? I begin by noting that shareholders of the modern widely held corporation face a similar problem: what keeps the CEO from looting the company when the market for corporate control is flawed, shareholders are too weak to exercise discipline, and the board is in the CEO's pocket? I suggest the answer is provided by "internal governance": the old need the young for good performance. I explain the financial crisis of 2008 as in part the result of the failure of this mechanism. I also explain the success of modern China this way: The Communist Party facilitates growth because its structure provides a way for superiors (the "old") to trade with subordinates (the "young"). I have also expanded on Tullock's analysis to ask what conditions might prevent the dictator from implementing his solution to the coup d'etat problem, thus explaining why coups d'etats actually occur. The basic reason is the weakness of the state. Japanese history provides two interesting illustrations of this: first the Tokugawa regime, where the people were over-controlled, and second, the Meiji constitution, implemented after the fall of the Tokugawa state. The Japanese problem after Meiji was that the military (the young) had no incentive to offer their loyalty to the old (the civilian regime), so the young acted on their own. The problem was the reverse of the Tokugawa regime's: the Meiji constitution left the bottom with too much control over the top. There was no formal coup d'etat but a number of coup attempts were made and de facto the military increasingly constituted a state within a state. This reversal of authority apparently continued down the chain of command, ultimately with tragic consequences, most notably the invasion of Pearl Harbor.

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The Effects of Democratization on Public Goods and Redistribution: Evidence from China

Monica Martinez-Bravo et al.
NBER Working Paper, May 2012

Abstract:
This study investigates the effects of introducing elections on public goods and redistribution in rural China. We collect a large and unique survey to document the history of political reforms and economic policies and exploit the staggered timing of the introduction of elections for causal identification. We find that elections significantly increase public goods expenditure, the increase corresponds to demand and is paralleled by an increase in public goods provision and local taxes. We also find that elections cause significant income redistribution within villages. The results support the basic assumptions of recent theories of democratization (Acemoglu and Robinson, 2000; Lizzeri and Persico, 2004). In addition, we show that the main mechanism underlying the effect of elections is increased leader incentives.

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Can't get no satisfaction with the Westminster model? Winners, losers and the effects of consensual and direct democratic institutions on satisfaction with democracy

Julian Bernauer & Adrian Vatter
European Journal of Political Research, June 2012, Pages 435-468

Abstract:
Are citizens in consensus democracies with developed direct democratic institutions more satisfied with their political system than those in majoritarian democracies? In this article, individual-level data from the second wave of the Comparative Study of Electoral Systems and an updated version of Lijphart's multivariate measure of consensus and majoritarian democracy covering 24 countries are used to investigate this question. The findings from logistic multilevel models indicate that consensual cabinet types and direct democratic institutions are associated with higher levels of citizens' satisfaction with democracy. Furthermore, consensus democracy in these institutions closes the gap in satisfaction with democracy between losers and winners of elections by both comforting losers and reducing the satisfaction of winners. Simultaneously, consensus democracy in terms of electoral rules, the executive-legislative power balance, interest groups and the party system reduces the satisfaction of election winners, but does not enhance that of losers.

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Aggregating Information by Voting: The Wisdom of the Experts versus the Wisdom of the Masses

Joseph McMurray
Review of Economic Studies, forthcoming

Abstract:
This paper analyzes participation and information aggregation in a common-value election with continuous private signals. In equilibrium, some citizens ignore their private information and abstain from voting, in deference to those with higher-quality signals. Even as the number of highly-informed peers grows large, however, citizens with only moderate expertise continue voting, so that voter participation remains at realistic levels (e.g. 50% or 60%, for simple examples). The precise level of voter turnout, along with the margin of victory, are determined by the distribution of expertise. Improving a voter's information makes her more willing to vote, consistent with a growing body of empirical evidence, but makes her peers more willing to abstain, providing a new explanation for various empirical patterns of voting. Equilibrium participation is optimal, even though the marginal voter may have very little (e.g. below-average) expertise, and even though non-voters' information is not utilized.

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Social media and social movements: Facebook and an online Guatemalan justice movement that moved offline

Summer Harlow
New Media & Society, March 2012, Pages 225-243

Abstract:
In May of 2009, a posthumous video surfaced in which prominent lawyer Rodrigo Rosenberg blamed Guatemalan president Alvaro Colom for murdering him. The accusations prompted the creation of numerous Facebook pages calling for Colom's resignation, and for justice for Rosenberg. Using interviews and a content analysis of Facebook comments from the two most-active Facebook groups, this study found that the social network site was used to mobilize an online movement that moved offline. Users' protest-related and motivational comments, in addition to their use of links and other interactive elements of Facebook, helped organize massive protests demanding justice and an end to violence.

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Why electoral systems don't always matter: The impact of 'mega-seats' on legislative behaviour in Ireland

Shane Martin
Party Politics, forthcoming

Abstract:
A significant and influential body of research suggests that electoral systems influence legislators' behaviour. Yet, individual legislators are potentially motivated by other concerns, such as policy and office. What happens when competing goals predict contradictory behaviour, for example, when electoral incentives clash with enticements to win prized post-election positions (mega-seats)? When party leaders cartelize the allocation of mega-seats, the anticipated effects of the electoral system on legislators' behaviour may dissolve - creating strong parties in the legislature despite a candidate-centred electoral system. New data on mega-seats and voting behaviour in the Irish parliament between 1980 and 2010 supports the notion that mega-seat considerations trump the impact of the electoral system on roll-call behaviour. The implication is that what goes on within the legislature may be more important for influencing legislators' behaviour than what goes on at the ballot box.


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