Sheilagh Ogilvie: The European guilds: an economic analysis

Governance and the political entrepreneur

Busy doing nothing: why politicians implement inefficient policies Abstract A substantial body of literature suggests that politicians are blocked from implementing efficient reforms that solve substantial problems because of special interest groups or budget constraints. Despite the existing mechanisms that block potentially efficient reforms, real-world data show that a large number of new programs and policies are implemented every year in developed countries. These policies are often selective and considered to be fairly inefficient by ex post evaluation, and they tend to be small in size and scope. With this background, this paper studies the reasons why a rational politician would implement an inefficient public policy that is intended to obfuscate the difficulties in achieving reforms. The paper uses a simple competence signaling model that suggests that if an effective reform is impossible, engaging in strategic obfuscation through an inefficient program increases the probability of winning a re-election compared to doing nothing at all. This is because an inefficient reform does not lead voters to believe that the politician is incompetent, which a lack of action risks doing. Intentional inefficiency aiming to obfuscate the difficulty of efficient reforms can therefore complement the previous theories’ explanations of political failure.

Public R&D under different electoral rules: evidence from OECD countries Abstract Despite research on R&D and innovation policies, the effect of constitutional rules in this area has not received adequate attention yet. The paper contributes to filling this research gap by proposing that electoral systems affect governments’ decisions regarding R&D spending. It is expected that investment in R&D is closer to a bounded public good than to transfer payment. Therefore, governments in countries with majoritarian electoral rules should be willing to use this instrument to influence election outcomes. Both the amount invested and structure of funding is expected to depend on whether a government is elected via proportional or majoritarian rules. The analysis covers 25 OECD countries between 1981 and 2014, and relies on panel data analysis. The findings suggest that governments elected under majoritarian rules project higher government budget appropriations or outlays for research and development (GBAORD) than governments elected under proportional rules. Furthermore, GBAORD is more fragmented thematically in countries with proportional electoral rules.

Collective choice in Aristotle Abstract In his Politics VI 3, 1318a–b, Aristotle discusses constitutional procedures for achieving justice in a society where its classes have different views on it. He analyzes the case of a society consisting in two groups, the poor and the rich, each holding a specific understanding of justice (democratic or oligarchic). In this paper we give, first, a non-formal summary of this section of Politics. Then we approach it in the framework of social choice theory and argue that a social rule for selecting between alternatives may be extracted from it. As Aristotle argued, this rule is consistent with the views on justice and equality of the supporters of both democracy and oligarchy. Finally, we study its properties, as well as some extensions of it when multiple classes are allowed or more than two alternatives are present.

Sanctioning, selection, and pivotality in voting: theory and experimental results Abstract Can elected officeholders use their power to extract rents for themselves, or can their accountable behavior be ensured by a threat of future elections? It has been argued that such a threat may fail, particularly if voters are forward looking and elections serve a selection purpose. We consider the accountability problem in elections with selection concerns and multiple voters. When there are multiple voters, pivotality considerations may support equilibria where incumbents behave accountably even with a selection incentive in their favor. In an accompanying laboratory experiment we find that there is heterogeneity among incumbents in terms of their accountability—some incumbents extract much, others do not. Voters are always more likely to re-elect the incumbent if there is a higher future benefit to the voters from her re-election, but less so if they extract rents. An interesting equilibrium is when the incumbent creates a majority group of voters and treats them favorably, with this favored majority voting for her. Here voters’ beliefs about their pivot probabilities are tied to whether they are in this majority group or not.

The classical limits to police power and the economic foundations of the Slaughterhouse dissents Abstract The essay examines the influence of classical economics on an important episode in American 19th-century jurisprudence on business regulation, the Slaughterhouse Cases of 1873. It is well known that the dissents penned by Supreme Court Justices Field and Bradley lay down the fundamental doctrines of the later Lochner era of so-called laissez faire constitutionalism. The essay argues that these dissents were inspired by Adam Smith’s system of natural liberty and, in particular, by his views about the regulation of negative externalities and the undesirability of government-granted monopolies. The Smithian influence emerges even more clearly when the briefs presented by counsel for the plaintiffs John A. Campbell are considered. Those briefs contained most of the issues raised by the dissenting Justices; hence, it is claimed that Lochner’s intellectual roots may be traced back to Campbell and, from him, to Smith.

Do parliamentary gender quotas decrease gender inequality? The case of African countries Abstract Many countries in Africa score very low on gender equality measures; yet, they have some of the highest percentages of women in parliament. They have managed to achieve significant representation of women in government through fast track measures such as the implementation of gender quotas. In the context of fast track reform, this paper evaluates the effectiveness of such parliamentary gender quotas in general, and in particular of different types of quotas, for improving gender equality in African countries. Our empirical results suggest that although all mandated quota systems lead to an increase in the number of women in policy-making, the type of quota affects the de facto ability of women in parliament to influence legislative agendas and ultimately to improve the lives of women. Our findings have implications for the design of affirmative action measures targeting women’s participation in the political process.

Bootleggers, Baptists, and the risks of rent seeking Abstract Interest groups ‘caught’ influencing public policy solely for private gain risk public backlash. These risks can be diminished, and rent seeking efforts made more successful, when moral or social arguments are employed in pushing for changes to public policy. Following Yandle’s Bootlegger and Baptist model, we postulate this risk differential should manifest itself in regulatory output with social regulations being more responsive to political influence than economic regulations. We test, and confirm, our theory using data on economic and social regulations from the new RegData project matched with data on campaign contributions and lobbying activity at the industry level.

Choregia and trierarchy as profit-oriented entrepreneurships Abstract With regards to the model of the homo oeconomicus this paper argues that incentives for performing liturgies in classical Athens were based on profit-oriented calculation rather than desire to gain support for public offices. In classical Athens democratic measures diminished the power of single-person offices which led to a decrease in the desire to hold such offices by the aristocracy. Simultaneously, recourse to altruistic incentives is incompatible with the costs of liturgies and the effort some members of Athens society made in order to perform them. Careful examination of past research on liturgical spending in classical Athens and an analysis of coeval conditions show the validity of economic instruments that lead to a rational-actor perspective on public spending under the incentive of financial gain rather than non-monetary profit.