Democracy and countries with Muslim majorities: a reply and update

My empirical results in Potrafke (2012) confirm past conclusions that Muslim-majority countries are less likely to be democratic. Hanusch takes issue with my results—and by inference with all past empirical results on the relation between Islam and democracy. In his comment on my study, Hanusch indicates that he believes I was using the POLITY IV index. He has not realized, as I made most clear, that the purpose of my study was to show results based on new data from Cheibub et al. (2010). Hanusch claims to have reversed the conclusion that having a Muslim majority is associated with having autocratic government. He establishes his conclusion by excluding the heartland of Islam from the estimation sample. For his estimates, Hanusch moreover uses data that do not appear to exist, at least in the claimed sources. I update my estimates to address issues that Hanusch raises. My new results confirm the conclusion that countries with Muslim majorities are less likely to be democracies. In deriving this result, I do not follow the strategy proposed by Hanusch of excluding from the data sample the countries in the heartland of Islam.     

Islam and democracy: a response

A debate has emerged whether countries with Muslim majorities are intrinsically more likely to be autocratic. Recent studies have traced this to the allegedly repressive nature of Islam. This article replicates the most recent study on this topic, published in Public Choice (Potrafke in Public Choice 151:185–192, 2012), and demonstrates that the effect is not robust to a number of sensible alterations to the statistical specification. The effect between Islam and democracy is spurious. There is no causal relationship between Islam and democracy.     

State aid programs for equalizing spending across local school districts: does the structure of the program matter, or only it’s size?

This paper provides interesting insights into an important causal mechanism underlying Murray, Evans and Schwab’s (Am. Econ. Rev. 88(4):789–812, 1998) finding that court mandated reforms result in less inequality in spending per pupil levels across rich and poor school districts within a state. Treating the choice of an education program’s structure as endogenous, following the analysis of Leyden (Public Finance/Finances Publiques 47:229–247, 1992; Public Choice 115(1–2):83–107, 2003), yields empirical results suggesting that court mandated reforms increase the likelihood that a program’s structure will include a price effect and that the inclusion of a price effect in turn results in a decrease in spending inequality.     

District magnitude and representation of the majority’s preferences: a comment and reinterpretation

Drawing on new data that combine recorded votes from the Swiss National Assembly with canton-level referendum results on identical legislative proposals, Portmann et al. (Public Choice 151:585–610, 2012) develop an innovative strategy to identify the effect of district magnitude on the relationship between representatives and their constituents. We replicate PSE’s central result and also estimate a related model that allows for the possibility of non-monotonicity in the relationship between district magnitude and representatives’ deviance from referendum median voters. Our results indicate that representatives elected in low-magnitude multi-member districts deviate from canton-level majorities less than either MPs from single-member districts or those from high-magnitude multi-member districts.     

The curious commentary on the citation practices of Avner Greif

Rowley’s (Public Choice 140:275–285, 2009) claim that I have “expropriated” (p. 276) intellectual property rights from Professor Landa by insufficiently citing her works is vacuous. It failed, among other faults, to recognize the substantive distinction between the lines of research pursued by Professor Landa and myself. Her analysis of trust is preferences-based while my analysis is beliefs-based. We talk about similar issues but what we say is very different.     

Antitrust public choice(s)

Antitrust legislation and enforcement has over the last few decades been increasingly informed by ever more sophisticated analysis while—at the same time—evidence has continued to mount that the results of antitrust remedies fall far short of the promises held out under still prevalent ‘nirvana fallacy’ (Demsetz in Journal of Law and Economics 12(1):1–22, 1969) expectations. I draw upon a recent Supreme Court decision as well as the results of Young and Shughart’s (Public Choice, 2010. doi:10.1007/s11127_009-9531-y) novel approach to the analysis of antitrust enforcement activities to discuss the extent to which public choice theory is vital in solving the puzzle regarding the “unintended” effects of antitrust (public) choices.     

Agenda trees and sincere voting: a response to Schwartz

Schwartz (Public Choice 136:353–377, 2008) has identified a controversy within the voting theory literature pertaining to the representation of agenda structures and the consequent definition of sincere voting. This note responds to Schwartz’s remarks by arguing that the kind of agenda tree he uses does not adequately represent some common parliamentary agendas, and that consequently his definition of sincere voting cannot always be applied.     

On choosing the alternative with the best median evaluation

The voting rule proposed by Basset and Persky (Public Choice 99:299?C310, 1999) picks the alternative with the best median evaluation. This paper shows that this MaxMed principle is equivalent to the MaxMin (so-called Rawls??) principle, with the proviso that one can discard half of the population. In one-dimensional, single-peaked domains, the paper compares the MaxMed rule with majority rule and the utilitarian criterion. The MaxMed outcome is rejected by a majority of voters in favor of outcomes that are also utilitarian improvements.     

Dupuit, Pigou and cost of inefficiency in public services provision

In this paper we revisit the literature on the economic implications of inefficiency in public services provision. Most authors emphasize the need of changing public sector management practices and the scope of activities carried out by general government. Following Dupuit (1844) and Pigou (1947) we focus instead on the increase in the cost of public services’ provision, when indirect costs, associated with the excess burden of taxation, are taken into account. We rely on Hicks’ compensating variation (following Diamond and McFadden (1974) and Auerbach (1985)), and some public sector inefficiency coefficients from Afonso et al. (2005; 2006) to show that these magnification mechanisms are not only conceptually relevant, they are also important from a quantitative point of view.     

A rejoinder to “A commentary on ‘Does the Fed contribute to a political business cycle?’ ”

Jerry Tempelman (Public Choice 132:433–436, 2007) claims that “advances in macroeconomic theory and in the implementation of monetary policy” make discretionary monetary policy preferable to a rules-based system. His supporting evidence is based on the performance of the Fed during the Volcker–Greenspan regimes. His evidence is inappropriate and his conclusion supporting discretion over rules unwarranted.     

District magnitude and representation of the majority’s preferences—a reply and new perspectives

We reply to the comment of John Carey and Simon Hix on our original contribution entitled “District Magnitude and Representation of the Majority’s Preferences: Quasi-Experimental Evidence from Popular and Parliamentary Votes” in Public Choice 151:585–610 (2012). District magnitude does not necessarily affect deviations between political representatives and their district voters in a strictly monotonic way but monotonicity is upheld for deviations between representatives and the national majority. We provide new perspectives and caution against evaluating electoral systems by focusing on individual politicians’ behavior but neglecting aggregation effects.     

Social or political cleavages? A spatial analysis of?the?party system in post-authoritarian Chile

Lipset and Rokkan??s (Party system and voter alignments: cross national perspectives, Lipset and Rokkan eds., New York: Free Press, pp. 1?C64, 1967) sociological model of cleavages and the so-called ??freezing hypothesis?? dominate theorizing about party system formation. Torcal and Mainwaring (Br. J. Polit. Sci. 33:55?C84, 2003) show the relevance of a purely political cleavage for structuring the party system in the case of Chile, challenging the freezing hypothesis??s claims. They also dispute case-specific research that argues Chile??s party system still reflects a ??three-thirds?? division between Left, Right, and Center. Revisiting this debate, our study employs spatial maps of the party system. Such political-economy models are rare in studies of Latin American politics. The application here supports a democratic/authoritarian political cleavage in Chile.     

A correction to Potters and van Winden (1992)

This note amends the model of informational lobbying presented in Potters and van Winden (Public Choice 74:269–292, 1992). In the original article, the authors find that only separating and pooling equilibria exist when the cost of lobbying is intermediate and the policymaker’s prior favors the interest group’s preferred policy. However, we prove that a semi-separating equilibrium also exists under these conditions. Implications for lobbying behavior are discussed.     

The VP-function revisited: a survey of the literature on vote and popularity functions after over 40 years

Nannestad and Paldam (Public Choice 79:213–245, 1994) published herein an extremely influential review of the literature linking economics and elections, what they called the “VP functions.” In that work, they offered a number of conclusions, in proposition form, about the state of the evidence in this field. We present the key ones (16 in all), and assess the extent to which they continue to hold, in light of the new evidence about what has come to be known as economic voting. As shall be shown, Nannestad and Paldam were prescient in their early establishment of many of the principal results explaining how the economy moves the vote choice.     

Does public sector efficiency matter? Revisiting the relation between fiscal size and economic growth in a world sample

This paper revisits the relationship between fiscal size and economic growth. Our work differs from the empirical growth literature because this relationship depends explicitly on the efficiency of the public sector. We use a sample of 64 countries, both developed and developing, in four five-year time periods between 1980 and 2000. Building on the work of Afonso et al. (Public Choice 123:321–347, 2005), we construct a measure of public sector efficiency in each country and each time period by calculating an output-to-input ratio. In addition, we get an estimate of technical efficiency of public spending for 52 countries from 1995 to 2000 by employing a stochastic frontier analysis. Using these two measures, we find evidence of a non-monotonic relation between fiscal size and economic growth that depends critically on the size-efficiency mix.     

The social sub-optimality of competitive elections: comment

Buchler (Public Choice 133(3-4): 439–456, 2007) models elections as methods of making social choices among different options, and argues that increased electoral competition may produce inferior outcomes. However, competitive elections also play a role in affecting the behavior of candidates, and of elected officials in office. Once this role is recognized, competitive elections must be seen as a necessary (but not sufficient) ingredient in the production of socially-optimal government.     

A political economy model of market intervention

We argue that political competition based on income redistribution à la Lindbeck and Weibull (Public Choice 52:273–297, 1987) may cause distortive regulation in a competitive sector. For this purpose, we propose a model in which imposing a production quota allows the extraction of rents that are then used for vote-buying purposes. Our model permits us to analyze the response of regulatory policy to political factors, such as the size of a group of informed voters and the accuracy of their information about the incumbent. We also show that the extent of voter influence on policy outcomes is shaped by the state of market demand. In particular, if demand becomes weaker, market intervention increases in a magnitude that depends positively on the electoral weight of informed voters.     

The political economy of smoking regulation and taxation

Although anti-smoking policies are on the political agenda in almost all developed countries, a general understanding of these policies is still lacking. Applying the majority voting model of Buchanan and Vanberg (Public Choice 57(2):101–113, 1988) to tobacco taxation and smoking regulation shows that different smoking policies are feasible, depending on the composition of the majority of voters with smokers and non-smokers: (1) internalization of spill-over costs with a mixed majority of smokers and non-smokers as well as (2) a combination of regulation and taxation with a non-smoker majority. Moreover, the influence of the tobacco industry is also discussed.     

An experimental study of the efficiency of unanimity rule and majority rule

Scholars traditionally claim that unanimity rule is more capable of producing Pareto optimal outcomes than majority rule. Dougherty and Edward (Public Choice 151(3):655–678, 2012) make the opposite claim assuming proposals are either random, sincere, or strategic. We test these competing hypotheses in a two-dimensional framework using laboratory experiments. Our primary results suggest: (1) majority rule enters the Pareto set more quickly than unanimity rule, (2) majority rule leaves the Pareto set at the same rate as unanimity rule, and (3) majority rule is more likely to select a Pareto optimal outcome than unanimity rule at the end of the game.     

Optimal linear contracts under common agency and uncertain central bank preferences

We analyze the effects of imperfectly known central banker’s preferences on optimal linear contracts offered by the government and an interest group. These effects depend on the type of uncertainty faced by the principals. When the central bank’s output target is uncertain the results by Campoy and Negrete (Public Choice 137:197–206, 2008) under perfectly known preferences obtain. Uncertainty about the central banker’s degree of conservatism or about its degree of “selfishness” has a multiplicative impact on the principals’ instruments in the agent’s best response function; this may generate an inflation bias independently of the type of contract offered by the interest group.