Essays in political economics [Elektronische Ressource] / vorgelegt von Marcus Drometer

Marcus Drometer

Informations

• Publié par: ludwig-maximilians-universitat_munchen
• Publié le: 01 janvier 2009
• Nombre de lectures: 7
• Langue: English

Extrait

Essays in Political Economics
Inauguraldissertation
zur Erlangung des Grades
Doctor oeconomiae publicae(Dr. oec. publ.)
an der Ludwig-Maximilians-Universit˜at Munc˜ hen
Volkswirtschaftliche Fakult˜at
2008
vorgelegt von
Marcus Drometer
Referent: Prof. Dr. Andreas Hau er
Korreferent: Prof. Dr. Berthold Wigger
Promotionsabschlussberatung: 04. Februar 2009Acknowledgements
First of all, I would like to thank my supervisor Andreas Hau er who always provided me
with an ideal mixture of friendly encouragement and constructive criticism. This thesis has
gained substantially from his comments and suggestions. During the past years, I have also
received a lot of support from colleagues at the Economics Department at the University of
Munich. In particular, I would like to thank Florian Kajuth, Christian Schulte, Christian
Traxler and Hannah H˜ohrisch for helpful advice and many enjoyable lunch and cofiee breaks.
Many of the ideas underlying this thesis were stimulated during my stay at the Stockholm
School of Economics and in particular during the lectures at the Institute of International
Economics Studies (IIES) at the University of Stockholm. I would like to acknowledge the
hospitality of these institutions and thank Magnus Johannesson, David Str˜omberg, Jakob
Svensson and Ethan Kaplan for their advice. I also would like to thank Gh˜okan Butarak and
Ignat Stepanok for many fruitful discussions and for having made my stay in Stockholm a
real pleasure. With regard to Chapter 1, I am grateful to Mikael Priks and Rainald Borck
for their comments. Chapters 3 and 4 of my thesis are based on joint work with Johannes
Rincke. This thesis has beneflted a lot from the collaboration with him and I would like to
acknowledge his constant advice. I also would like to thank Berthold Wigger whom I could
gain as second advisor within the Bavarian Graduate Program in Economics (BGPE). I am
also grateful to Joachim Winter who kindly agreed to act as my third examiner. Moreover, I
would like to thank Jens Lubk˜ e, the Hiwis at the Seminar for Economic Policy, in particluar
Claudia, Daniel, Marcus, Lisa and Ulrich, and Renate Schwirtz. Financial support from the
Bavarian Graduate Program in Economics (BGPE) is gratefully acknowledged. Finally, I
thank my parents for their support during the entire time of my studies and Birgit for her
patience and encouragement.
Marcus Drometer
Munich, September 2008Contents
Preface 1
1 Bureaucracies and short-term politics 9
1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.2 The model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.2.1 Political equilibrium . . . . . . . . . . . . . . . . . . . . . . . . 13
1.2.2 Pareto e–cient policy . . . . . . . . . . . . . . . . . . . . . . . . 17
1.3 Sharing power with a bureaucracy . . . . . . . . . . . . . . . . . . . . . 19
1.3.1 Impact on public goods provision . . . . . . . . . . . . . . . . . 19
1.3.2 Impact on rents . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1.4 The beneflcial welfare efiects of a bureaucracy . . . . . . . . . . . . . . 24
1.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.6 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2 Foreign aid and political accountability 30
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.2 The model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.2.1 Investments in disaster prevention . . . . . . . . . . . . . . . . . 39Contents ii
2.2.2 Investments in relief infrastructure . . . . . . . . . . . . . . . . 40
2.3 Empirical analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.3.1 Estimation approach . . . . . . . . . . . . . . . . . . . . . . . . 42
2.3.2 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
2.3.3 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.4 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
13 Ballot access restrictions and electoral competition 51
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.2 The history of ballot access in Ohio . . . . . . . . . . . . . . . . . . . . 55
3.3 Estimation approach and data . . . . . . . . . . . . . . . . . . . . . . . 56
3.4 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.4.1 The efiectiveness of ballot access laws: Ohio vs. Illinois . . . . . 60
3.4.2 Robustness: Extended control group . . . . . . . . . . . . . . . 64
3.4.3 Placebo-treatment Georgia. . . . . . . . . . . . . . 66
3.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
24 The design of political institutions 71
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.2 Setting optimal barriers to entry . . . . . . . . . . . . . . . . . . . . . . 74
4.3 Historical background. . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
4.4 Empirical approach and data . . . . . . . . . . . . . . . . . . . . . . . 78
4.4.1 Estimation approach . . . . . . . . . . . . . . . . . . . . . . . . 78
1This chapter is based on joint work with Johannes Rincke, LMU Munich.
2This c is on joint work with Rincke, LMUh.Contents iii
4.4.2 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
4.5 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
4.5.1 The efiect of the VRA on electoral competition . . . . . . . . . 86
4.5.2 The efiect of electoral competition on the design of
ballot access laws . . . . . . . . . . . . . . . . . . . . . . . . . . 87
4.5.3 Robustness: Instrumental variable estimation . . . . . . . . . . 90
4.5.4 Difierence-in-difierence estimation . . . . . . . . . . 95
4.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Bibliography 105List of Figures
3.1 Minor-party and independent candidates . . . . . . . . . . . . . . . . . 62List of Tables
2.1 Summary statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.2 Impact of foreign aid on political accountability, one instrument . . . . 47
2.3 Impact of foreign aid on political accountability, two instruments . . . . 48
3.1 Characteristics of treatment and control group . . . . . . . . . . . . . . 59
3.2 Summary statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.3 Avg. no. of congressional candidates per district, Ohio vs. Illinois . . . 61
3.4 Efiectiveness of ballot access laws, Ohio vs. Illinois . . . . . . . . . . . 63
3.5 Avg. no. of congressional candidates per district, extended control group 65
3.6 Efiectiveness of ballot access rules, extended control group . . . . . . . 66
3.7 Avg. no. of congressional candidates per district, Georgia vs. Illinois . 68
3.8 Efiectiveness of ballot access rules, Georgia vs. Illinois. . . . . . . . . . 69
4.1 Petition requirements for minor-party and independent candidates . . . 85
4.2 Summary statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
4.3 Efiect of VRA on electoral competition . . . . . . . . . . . . . . . . . . 86
4.4 Efiect of electoral competition on signature requirements . . . . . . . . 88
4.5 Efiect of electoral competition, reflned instruments . . . . . . . . . . . 91
4.6 Efiect of electoral competition, minor party & independent cand.’s . . . 92
4.7 Efiect of electoral competition, adjusted dependent variable . . . . . . . 94
4.8 Efiect of VRA on electoral competition, further robustness checks . . . 96Preface
The fundamental idea underlying this thesis is the importance of elections as an in-
centive device for solving political agency problems between the government and its
citizens. Beginning with Barro (1973) and Ferejohn (1986) political agency models
demonstrate the importance of elections as an incentive device for disciplining the self-
interest of politicians and emphasize the role of political competition regarding that
matter. But, while it is widely accepted that competition is salient for the e–cient
functioning of markets for goods and services, the precise role of competition in pol-
itics is less evident. Numerous authors like Becker (1983, 1985) and Wittman (1989)
have argued that political competition enhances the e–ciency of democracies. More-
over, there is some empirical evidence indicating that political competition is indeed
1important for mitigating agency problems that are prevalent in politics. However, the
literaturealsodiscussesthepossibilitythattheincentivespoliticiansfacewhenstriving
for reelection distort policy choices. Political budget cycle models following Nordhaus
(1975), for example, argue that politics becomes short-sighted whenever elections are
pending. Lizzeri and Persico (2005), for instance, argue that more competition forces
parties to focus on the interests of a narrower constituency thereby strengthening the
in uence of special interests.
The aim of the thesis is to provide some more pieces of evidence which help to clarify
the functioning of elections as an incentive mechanism. We are going to study how the
short-term incentives provided by elections can be mitigated, which role the informed-
ness of voters plays for holding the government accountable, whether res