D72 - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting BehaviorReturn

This paper examines the effect of vote buying on the vote shares of multiple parties using maximum likelihood estimation of a Dirichlet distribution in a panel of 23 counties of Taiwan over the period of 1998-2008. We find that vote buying significantly influences the vote shares of multiple parties in Taiwan parliamentary elections. In particular, we find that vote buying reduces the likelihood of Chinese National Party (KMT) and Democratic Progressive Party (DPP) votes by 10% and 11%, respectively. Our results provide strong evidence that vote buying decreases the probability of electoral success. We conclude that vote buying does not ensure victory in Taiwan parliamentary elections, and, therefore, emphasize that vote buying is ineffective and counterproductive practice. We offer several possible explanations for why candidates use scarce resources for this illegal practice during election campaigns. These results are robust to group logit model with seemingly unrelated regressions.

This paper discusses the electoral implications of psychological motivation on voting functions. We tested a claim of the Weber-Fechner law as applied to electoral behaviour - specifically, that an expanded public sector leads politicians to make more significant, opportunistic distortions of public expenditures than the distortions observed when the public sector is diminished. We employed a system of simultaneous equations to test this hypothesis for cases observed in more than sixty democracies since 1960. We gave a special focus to the cases of Central and Eastern European countries. Our results confirm the main implications of the Weber-Fechner law. Years in incumbency, running for re-election, higher unemployment and higher inflation rates tend to generate negative moods, feelings and affects in the electorate; thus, these factors tend to approximate the vote share of the most voted party to the remaining vote share of the challenger political forces.

The paper examines the political business cycle at the municipal level in the Czech Republic using data for 205 municipalities in the period 2001-2007. We introduce empirical models based on fixed-effects panel data regression testing the capital and current expenditure manipulation prior to elections. The results indicate significant increase in capital expenditures and significant decrease in current expenditures prior to elections. At the same time the manipulation with capital expenditures does not increase the probability of re-election for the incumbents in the Czech municipalities.

This paper mainly discusses the effects of media capture on local government accountability in undemocratic countries. Firstly, we construct the models with and without media capture from the perspective of incentive theory. Secondly, we conduct a comparative analysis between the outcomes with and without media capture. The analysis shows that no media capture decreases the local official's equilibrium efficiency wage under whatever conditions, and at the same time makes the central government's constraint to incentivize the local official to exert effort easier to be satisfied under some conditions, while harder to be satisfied under other conditions.

Economic theories of the last decades provide analytical framework within which we can explain institutional conditions for corrupt action. Specialists making economic policy recommendations to resolve this problem use several approaches, the most dominant of which are rent seeking and agency theories. In this paper, I explain economic policy recommendations that stem out of both approaches. I argue that scholars suggesting these recommendations within these two frameworks do not understand each other because of different assumptions they make. More specifically, I show that two sets of policy recommendations presented here are based on the particular system of property rights assumed within each theory. In this example, I show why corruption is a problem of the state rather than the market.

Corruption and corruptibility - due to their illegal and therefore secretive nature - are difficult to be assessed either with traditional tools, such as hard data on criminal convictions or soft data elicited through opinion polls, questionnaires, or case studies. While there seems to be agreement nowadays that corruption does have a negative impact on (foreign) private investment and growth, government revenue and infrastructure, and social equality, and while there seems to be evidence that low economic development, federal structure and short histories of experience with democracy and free trade all favour corruption on the macro-level, it is poorly understood what exactly, on the micro-level, the determinants of corruptibility are and what institutional arrangements could be used to fight (the causes of) corruption. In this article we review a third, complementary mode of investigation of corruption and corruptibility: experiments. We assess their strengths and weaknesses, and identify areas where they could be particularly useful in guiding policy choices - namely in designing incentive-compatible and effective anti-corruption measures in public procurement.