In a large economy, a first-best provison rule for a public good is robustly implementable with budget balance because no one individual alone can affect the aggregate outcome. First-best outcomes can, however, be blocked by coalitions of agents acting in concert. With a requirement of immunity against robustly blocking coalitions, we find that, for a pubic good that come as a single indivisible unit, a monotonic social choice function cannot condition on preference intensities but only on the population shares of people favoring one outcome over another. Any such social choice function can be implemented by a simple voting mechanism. With more public-good provision levels, more complicated mechanisms are required, but they still involve the counting of votes rather than an assessment of benefits. Monotonicity and immunity against robust blocking thus provide a foundation for the use of voting mechanisms.
{"title":"Public-Good Provision in Large Economies","authors":"Felix J. Bierbrauer, M. Hellwig","doi":"10.2139/ssrn.2670425","DOIUrl":"https://doi.org/10.2139/ssrn.2670425","url":null,"abstract":"In a large economy, a first-best provison rule for a public good is robustly implementable with budget balance because no one individual alone can affect the aggregate outcome. First-best outcomes can, however, be blocked by coalitions of agents acting in concert. With a requirement of immunity against robustly blocking coalitions, we find that, for a pubic good that come as a single indivisible unit, a monotonic social choice function cannot condition on preference intensities but only on the population shares of people favoring one outcome over another. Any such social choice function can be implemented by a simple voting mechanism. With more public-good provision levels, more complicated mechanisms are required, but they still involve the counting of votes rather than an assessment of benefits. Monotonicity and immunity against robust blocking thus provide a foundation for the use of voting mechanisms.","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123574127","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the relation between mechanism design and voting in public-good provision. If incentive mechanisms must satisfy conditions of coalition-proofness and robustness, as well as individual incentive compatibility, the participants' contributions to public-good provision can only depend on the level of the public good that is provided and that level can only depend on the population shares of people favouring one level over another. For a public good that comes as a single indivisible unit the outcome depends on whether or not the share of votes in favour of provision exceeds a specified threshold. With more provision levels for the public good more complicated mechanisms can be used but they still involve the counting of votes rather than any measurement of the participants' willingness to pay. The paper thus provides a foundation for the use of voting mechanisms.
{"title":"Public-Good Provision, Mechanism Design and Voting","authors":"Felix J. Bierbrauer, M. Hellwig","doi":"10.2139/ssrn.2642151","DOIUrl":"https://doi.org/10.2139/ssrn.2642151","url":null,"abstract":"We study the relation between mechanism design and voting in public-good provision. If incentive mechanisms must satisfy conditions of coalition-proofness and robustness, as well as individual incentive compatibility, the participants' contributions to public-good provision can only depend on the level of the public good that is provided and that level can only depend on the population shares of people favouring one level over another. For a public good that comes as a single indivisible unit the outcome depends on whether or not the share of votes in favour of provision exceeds a specified threshold. With more provision levels for the public good more complicated mechanisms can be used but they still involve the counting of votes rather than any measurement of the participants' willingness to pay. The paper thus provides a foundation for the use of voting mechanisms.","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133960971","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article analyses how the presence of a dominant group of voters within the electorate affects voter turnout. Theoretically, we argue that both the absolute size and the relative power of a dominant group influence voters' decision-making process. The former effect derives from increased free-riding incentives and reduced social pressure to vote within a larger dominant group, while the latter effect is driven by instrumental and expressive responses-in both the dominant and dominated groups-to electoral competition between groups. Our empirical analysis of a large cross-section of German municipalities confirms this joint importance of a dominant group's absolute and relative size for voter turnout. Such effects should thus be taken into account when redesigning electoral jurisdictions through, for instance, municipal mergers or gerrymandering.
{"title":"David and Goliath in the Poll Booth: Group Size, Voting Power and Voter Turnout","authors":"Peter M. Boenisch, B. Geys, C. Michelsen","doi":"10.2139/ssrn.2622381","DOIUrl":"https://doi.org/10.2139/ssrn.2622381","url":null,"abstract":"This article analyses how the presence of a dominant group of voters within the electorate affects voter turnout. Theoretically, we argue that both the absolute size and the relative power of a dominant group influence voters' decision-making process. The former effect derives from increased free-riding incentives and reduced social pressure to vote within a larger dominant group, while the latter effect is driven by instrumental and expressive responses-in both the dominant and dominated groups-to electoral competition between groups. Our empirical analysis of a large cross-section of German municipalities confirms this joint importance of a dominant group's absolute and relative size for voter turnout. Such effects should thus be taken into account when redesigning electoral jurisdictions through, for instance, municipal mergers or gerrymandering.","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"33 1-2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116731137","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Economic development and transformation processes have become much more intense in economic reality in the last years than they have ever been before. At this time a lot of questions were raised about the causes of the actual Global Crisis, future crises, the factors affecting the modern economy, about the essence of contemporary capitalism, demographic problems and overgrown bureaucracy. The most spectacular threat to capitalism, (based on private entrepreneurship) according to Schumpeter, stems from the high, growing and progressive taxation. Schumpeter saw clearly that the financing of public goods and services (requiring taxes, maybe even relatively high) is something other than a clerical control of the economic system that violates the natural economic mechanism. Moreover, Schumpeter says explicitly that an entrepreneur does not have to be one person, he even states that the country (state) itself, or its agenda, can act as an entrepreneur. Therefore, it can be concluded that we may have to deal with “Tax State”, which is typical for “fettered capitalism”, and with “entrepreneurial state”, which is typical for “unfettered capitalism”. The main goal of this paper is to present two different approaches to the economic development concept: Schumpeter’s “fettered” and “unfettered” capitalism in the context of “Tax State” and interventionism. The Author analyzes presented concept in contemporary issues from the banking perspective. In the paper, the Author used critical analysis as a research method. This allowed to identify gaps in the current state of knowledge and the scientific discussion focused on J.A. Schumpeter’s theoretical concept. Analysis was performed in 2015.
{"title":"'Fettered' and 'Unfettered' Capitalism in J.A. Schumpeter’s Concept of Tax State and Economic Development – Issues in Banking Perspective","authors":"K. Śledzik","doi":"10.2139/ssrn.2594663","DOIUrl":"https://doi.org/10.2139/ssrn.2594663","url":null,"abstract":"Economic development and transformation processes have become much more intense in economic reality in the last years than they have ever been before. At this time a lot of questions were raised about the causes of the actual Global Crisis, future crises, the factors affecting the modern economy, about the essence of contemporary capitalism, demographic problems and overgrown bureaucracy. The most spectacular threat to capitalism, (based on private entrepreneurship) according to Schumpeter, stems from the high, growing and progressive taxation. Schumpeter saw clearly that the financing of public goods and services (requiring taxes, maybe even relatively high) is something other than a clerical control of the economic system that violates the natural economic mechanism. Moreover, Schumpeter says explicitly that an entrepreneur does not have to be one person, he even states that the country (state) itself, or its agenda, can act as an entrepreneur. Therefore, it can be concluded that we may have to deal with “Tax State”, which is typical for “fettered capitalism”, and with “entrepreneurial state”, which is typical for “unfettered capitalism”. The main goal of this paper is to present two different approaches to the economic development concept: Schumpeter’s “fettered” and “unfettered” capitalism in the context of “Tax State” and interventionism. The Author analyzes presented concept in contemporary issues from the banking perspective. In the paper, the Author used critical analysis as a research method. This allowed to identify gaps in the current state of knowledge and the scientific discussion focused on J.A. Schumpeter’s theoretical concept. Analysis was performed in 2015.","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-04-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125944062","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In light of recent evidence, we develop a theory of charitable giving in which donors feel social pressure from a direct solicitation. We show that equilibrium donations are concentrated around a social norm: donors below the norm increase giving while those above the norm reduce it. Despite a higher level of the public good, relatively poor and/or low altruism givers fare worse under social pressure and would avoid the solicitor at a cost. Aggregate donor welfare improves to the extent that the added social motive alleviates the underprovision of the public good; however, overprovision may result. Our theory therefore predicts a light-handed regulation for charitable solicitations, which is consistent with their exemption from the popular Do Not Call list in the U.S. We further show that contrary to pure altruism, a more equal income distribution may produce more of the public good. In fundraising campaigns where a social norm is not apparent, one may emerge endogenously if donors are not too heterogeneous. In fact, multiple social norms may form, which offers a focal point argument for suggested donations.
{"title":"'Giving' in to Social Pressure","authors":"Alvaro J. Name-Correa, H. Yildirim","doi":"10.2139/ssrn.2617496","DOIUrl":"https://doi.org/10.2139/ssrn.2617496","url":null,"abstract":"In light of recent evidence, we develop a theory of charitable giving in which donors feel social pressure from a direct solicitation. We show that equilibrium donations are concentrated around a social norm: donors below the norm increase giving while those above the norm reduce it. Despite a higher level of the public good, relatively poor and/or low altruism givers fare worse under social pressure and would avoid the solicitor at a cost. Aggregate donor welfare improves to the extent that the added social motive alleviates the underprovision of the public good; however, overprovision may result. Our theory therefore predicts a light-handed regulation for charitable solicitations, which is consistent with their exemption from the popular Do Not Call list in the U.S. We further show that contrary to pure altruism, a more equal income distribution may produce more of the public good. In fundraising campaigns where a social norm is not apparent, one may emerge endogenously if donors are not too heterogeneous. In fact, multiple social norms may form, which offers a focal point argument for suggested donations.","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"71 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127358585","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
These speaking notes were the basis of a plenary address to the North American Basic Income Guarantee (NABIG) Congress in February 2015
这些演讲笔记是2015年2月在北美基本收入保障大会(NABIG)全体会议上发表讲话的基础
{"title":"Working with an Elegant Idea in a Messy and Chaotic World: Thoughts on Real-World Implementation of Basic Income","authors":"James P. Mulvale","doi":"10.2139/ssrn.3305610","DOIUrl":"https://doi.org/10.2139/ssrn.3305610","url":null,"abstract":"These speaking notes were the basis of a plenary address to the North American Basic Income Guarantee (NABIG) Congress in February 2015","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127734858","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Since 2013, more than 20 states have considered legislation on Pay It Forward (PIF) models of higher education finance (which enable students to pay the price of college upon departure from an institution, as opposed to paying upfront tuition). This paper proposes a theoretical model of PIF policies within a framework in which voters belonging to different income groups vote over the level of subsidies to higher education. We analyze the impact of two facets of potential PIF policies – a deferred tuition approach and an income share approach – on college access and on voting equilibria over subsidies levels. The results show that college access is enhanced by PIF policies. The equilibrium level of subsidies depends crucially on the pattern of income distribution, in particular on the relationship between mean income and the income of the median income group. We show that the equilibrium level of subsidies to higher education will not necessarily decline under PIF, and may increase in some equilibria due to changes in college access for low income groups. We also present a descriptive cross-country empirical analysis showing that there are higher levels of access to college credentials in countries with deferred tuition systems.
自2013年以来，已有20多个州考虑为高等教育融资的“未来支付”(Pay It Forward，简称PIF)模式立法(该模式允许学生在离开学校时支付大学学费，而不是预先支付学费)。本文在不同收入群体选民对高等教育补贴水平进行投票的框架下，提出了一个PIF政策的理论模型。我们分析了潜在的PIF政策的两个方面——递延学费方法和收入分成方法——对大学入学和补贴水平上的投票均衡的影响。结果表明，PIF政策对高校录取有促进作用。补贴的均衡水平在很大程度上取决于收入分配的格局，特别是取决于平均收入与中等收入群体的收入之间的关系。我们表明，在PIF下，高等教育补贴的均衡水平不一定会下降，并且由于低收入群体的大学入学机会的变化，在某些均衡中可能会增加。我们还提出了一项描述性的跨国实证分析，表明在实行延期学费制度的国家，获得大学文凭的水平更高。
{"title":"'Pay It Forward' and Higher Education Subsidies: A Theoretical Model","authors":"Jennifer A. Delaney, Dhammika Dharmapala","doi":"10.2139/ssrn.2518248","DOIUrl":"https://doi.org/10.2139/ssrn.2518248","url":null,"abstract":"Since 2013, more than 20 states have considered legislation on Pay It Forward (PIF) models of higher education finance (which enable students to pay the price of college upon departure from an institution, as opposed to paying upfront tuition). This paper proposes a theoretical model of PIF policies within a framework in which voters belonging to different income groups vote over the level of subsidies to higher education. We analyze the impact of two facets of potential PIF policies – a deferred tuition approach and an income share approach – on college access and on voting equilibria over subsidies levels. The results show that college access is enhanced by PIF policies. The equilibrium level of subsidies depends crucially on the pattern of income distribution, in particular on the relationship between mean income and the income of the median income group. We show that the equilibrium level of subsidies to higher education will not necessarily decline under PIF, and may increase in some equilibria due to changes in college access for low income groups. We also present a descriptive cross-country empirical analysis showing that there are higher levels of access to college credentials in countries with deferred tuition systems.","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114179646","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper documents robust evidence that increases in public spending on basic education are associated with significant reductions in household private tutoring spending in urban China. This reduction comes primarily from the top and bottom income households, suggesting multi-dimensional demands for private tutoring. It concentrates on households with an only boy and is larger for middle-school than primary-school children. Increases in public education spending are associated with significant reduction in school tuition, which is homogeneous across households of different income levels. Changes in household spending on textbooks in response to more public education spending are modest but statistically insignificant.
{"title":"Public Education Spending and Private Substitution in Urban China","authors":"Cheng Yuan, Lei Zhang","doi":"10.2139/ssrn.2061390","DOIUrl":"https://doi.org/10.2139/ssrn.2061390","url":null,"abstract":"This paper documents robust evidence that increases in public spending on basic education are associated with significant reductions in household private tutoring spending in urban China. This reduction comes primarily from the top and bottom income households, suggesting multi-dimensional demands for private tutoring. It concentrates on households with an only boy and is larger for middle-school than primary-school children. Increases in public education spending are associated with significant reduction in school tuition, which is homogeneous across households of different income levels. Changes in household spending on textbooks in response to more public education spending are modest but statistically insignificant.","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114290494","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Unequally-distributed resources, whether people’s income or competence, are ubiquitous in our real world. Whether to promote competition or to lead to a more equal environment is often in question in societies or organizations. With heterogeneous endowments, we let subjects collectively choose whether to have a competitive lottery contest - where only one individual in a group wins and receives an award, generating a greater income inequality - or to have a public good that benefits the less-endowed to a greater degree. Our data indicates that highly-endowed individuals contribute little when the public good is selected. The majority of subjects, however, vote in favor of having a public good, contrary to the standard theory predictions. In addition, a belief elicitation task shows that they expect payoffs to be more equally distributed under the public good regime than under the contest regime. Moreover, the subjects’ preferences between the two regimes are little affected by their risk attitudes or the size of awards in competition. These suggest that people’s institutional choices are driven more by their income inequality-averse preferences.
{"title":"Promoting Competition or Helping the Less Endowed? Distributional Preferences and Collective Institutional Choices under Intra-Group Inequality","authors":"Kenju Kamei","doi":"10.2139/ssrn.2457242","DOIUrl":"https://doi.org/10.2139/ssrn.2457242","url":null,"abstract":"Unequally-distributed resources, whether people’s income or competence, are ubiquitous in our real world. Whether to promote competition or to lead to a more equal environment is often in question in societies or organizations. With heterogeneous endowments, we let subjects collectively choose whether to have a competitive lottery contest - where only one individual in a group wins and receives an award, generating a greater income inequality - or to have a public good that benefits the less-endowed to a greater degree. Our data indicates that highly-endowed individuals contribute little when the public good is selected. The majority of subjects, however, vote in favor of having a public good, contrary to the standard theory predictions. In addition, a belief elicitation task shows that they expect payoffs to be more equally distributed under the public good regime than under the contest regime. Moreover, the subjects’ preferences between the two regimes are little affected by their risk attitudes or the size of awards in competition. These suggest that people’s institutional choices are driven more by their income inequality-averse preferences.","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128178475","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using data from 144 village-level governments in India's Tamil Nadu state, this paper investigates political reservations for women and whether the gender of village government leaders influences the provision of village public goods. A knowledge test of village government presidents and a survey about the interaction between village presidents and higher-level officials reveal that female village government presidents have much lower knowledge of the village government system than do their male counterparts and have significantly less contact with higher-level government officials. Although male and female presidents provide similar amounts of some public goods, there is strong evidence that village governments led by a woman built fewer schools and roadstwo public goods that require relatively more contact and coordination with higher-level officials.
{"title":"Gender and Public Goods Provision in Tamil Nadu's Village Governments","authors":"Kiran Gajwani, X. Zhang","doi":"10.1093/WBER/LHU001","DOIUrl":"https://doi.org/10.1093/WBER/LHU001","url":null,"abstract":"Using data from 144 village-level governments in India's Tamil Nadu state, this paper investigates political reservations for women and whether the gender of village government leaders influences the provision of village public goods. A knowledge test of village government presidents and a survey about the interaction between village presidents and higher-level officials reveal that female village government presidents have much lower knowledge of the village government system than do their male counterparts and have significantly less contact with higher-level government officials. Although male and female presidents provide similar amounts of some public goods, there is strong evidence that village governments led by a woman built fewer schools and roadstwo public goods that require relatively more contact and coordination with higher-level officials.","PeriodicalId":113748,"journal":{"name":"Public Economics: Publicly Provided Goods eJournal","volume":"76 ","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"113992931","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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