We consider a model in which parties that differ in perceived valence choose how to allocate electoral promises (money, pork-barrel projects) among voters. The party perceived to be less valent has a greater incentive to “sell out” to a favored minority and completely expropriate a fraction of the electorate. By reducing the difference in perceived valence, campaign-finance regulations may reduce the extent of the expropriation and achieve a more equitable political outcome. We analyze various instruments of campaign-finance regulation from this perspective. Copyright Springer-Verlag Berlin/Heidelberg 2006Campaign spending regulation, Redistributive politics.,
Democracies rarely engage in conflicts with one another, though they are not averse to fighting autocracies. We exploit the existence in many countries of executive term limits to show that electoral accountability is the key reason behind this "democratic peace" phenomenon. We construct a new dataset of term limits for a sample of 177 countries over the 1816-2001 period, and combine this information with a large dataset of interstate conflicts. Our empirical analysis shows that, although democracies are significantly less likely to fight each other, democracies with leaders who face binding term limits are as conflict prone as autocracies. The study of electoral calendars confirms the importance of re-election incentives: in democracies with two-term limits, conflicts are less likely to occur during the executive's first mandate than in the last one. Our findings support the Kantian idea that elections act as a discipline device, deterring leaders from engaging in costly conflicts. (JEL: F00, C72, D72)
Another issue related to bidding strategy is whether to be bold or cautious in opening bidding. The man who strongly desires an item will jump in with both feet, as it were, or try to rout the enemy by starting out with a high, possibly loud, bid intended to "knock out" his opponents. Sometimes he even tops his own bid. This approach may discourage competitors at the outset and prevent them from ever getting caught up in the spirit of the bidding. In a very different strategy, a prospective buyer, even though determined to purchase an item, bids tentatively and cautiously in order to feel out the opposition. He hopes that by indicating a low regard for the offering he will lull opponents into a false sense of security. (Ralph Cassady, Jr) Copyright 2007 The Review of Economic Studies Limited.
We extend the discussion of redistributive politics across electoral systems to allow for taxation to be distortionary. We allow politicians to choose any tax rate between zero and unity and then redistribute the money collected.We build on the model put forward by Myerson (1993) and Lizzeri andPersico (2001 and to show that the use of distortionnary taxation can be understood as an analysis of the trade-o¤ between e¢ ciency and targetability.We derive the equilibrium taxes and redistribution schemes with distortions.We show that the presence of distortions makes full taxation unattractive.We also derive the size of the government, the deadweight loss and inequality as a function of distortions.
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