Stability and voting by committees with exit

Abstract: We study the problem of a society choosing a subset of new members from a finite set of candidates (as in JEL Classification Number: D71 Running title: Stability and voting by committees with exi

On two basic properties of equilibria of voting with exit

We consider the problem of a society whose members must choose from a finite set of alternatives. After knowing the chosen alternative, members may reconsider their membership. Thus, they must take into account, when voting, the effect of their votes not only on the chosen alternative but also on the final composition of the society. We show that, under plausible restrictions on preferences, equilibria of this two-stage game satisfy stability and voter's sovereignty.

ICANN, Inc.: Accountability and participation in the governance of critical Internet resources

This paper assesses the relationship between public participation and accountability in ICANN. It explains how ICANN has responded to accountability concerns by creating new opportunities for public comment, review, and participation. Is public participation an adequate means of making this global Internet governance organization accountable to the public? ICANN is fundamentally a private corporation. Private corporations are held accountable in three ways: 1) directly through their membership or shareholders, 2) through competition, which gives the public the opportunity to avoid their products or services, and 3) through external regulation or supervision by judicial or public authorities. None of these forms of accountability apply to ICANN. Instead, the public is given a wide range of opportunities to participate in ICANN's processes and to voice their opinions. This paper questions whether participation is an adequate substitute for accountability. It analyzes three distinct reforms in ICANN's history to show how participation can displace accountability rather than improve it

Bonding, Structure and the Stability of Political Parties: Party Government in the House

The public policy benefits that parties-deliver are allocated by democratic procedures that devolve ultimately to majority rule. Majority-rule decision making, however, does not lead to consistent policy choices; it is unstable. In this paper, we argue that institutions - and thereby policy coalitions -- can be stabilized by extra-legislative organization. The rules of the Democratic Caucus in the U.S. House of Representatives dictate that a requirement for continued membership is support on the floor of Caucus decisions for a variety of key structural matters. Because membership in the majority party’s caucus is valuable, it constitutes a bond, the posting of which stabilizes the structure of the House, and hence the policy decisions made in the House. We examine the rules of the House Democratic Caucus and find that they do in fact contain the essential elements of an effective, extralegislative bonding mechanism

Governing Fiscal Commons in the Enlarged EU

This study explores the achievements of the acceding countries in the sphere of procedural fiscal rules (labeled as fiscal governance). The primary goal is to answer two questions: what is the current state of fiscal governance in the “novice” EU comparing to the “old” EU-15? Can we prescribe the acceding states any country-specific fiscal procedures? Three major sections of the study aim at three different issues. Section 2 reviews the rationale for fiscal governance, and the main focus draws upon the common-pool problem. The next section reviews methods to find the fiscal governance suitable for countries with differing political environments. Next, observed fiscal governance is reported by means of indices from survey data gathered in May-June 2004. Group by group, the author compares the observations with what has been measured for EU-15 countries. The findings reveal the existence of groups of countries with similar characteristics and similar institutional potential.fiscal governance; fiscal rules; political fragmentation

Count the Limbs: Designing Robust Aggregation Clauses in Sovereign Bonds

On August 29, 2014, the International Capital Market Association (ICMA) published new recommended terms for sovereign bond contracts governed by English law. One of the new terms would allow a super majority of creditors to approve a debtor’s restructuring proposal in one vote across multiple bond series. The vote could bind all bond holders, even if a series voted unanimously against restructuring, so long as enough holders in the other series voted for it. An apparently technical change, awkwardly named “single-limb aggregated collective action clauses (CACs)” promised to eliminate free-riders for the first time in the history of sovereign bond restructuring. It could also open up new possibilities for abuse. The markets might have rebelled. Instead, they yawned … and proceeded to adopt the new terms. We consider why such consequential contract change met with less resistance than its relatively modest predecessors, series-by-series and two-limb aggregated CACs. We focus on contract design, and the process by which it came about. Most of the essay is devoted to analyzing the key features of single-limb aggregated CACs and the considerations that shaped decisions about these features. We conclude with observations on contract reform in sovereign debt restructuring and the challenges ahead

The increasing role professional service firms play in the reform of shareholders' meetings

The purpose of this paper is to analyse the role of consultants, professional service firms or knowledge intermediaries in articulating the collective action of shareholders. The regulatory background is the current proposals for the reform of General Meetings of Shareholders in Spain. General Meetings are particularly revealing of shareholder activism, as they are the forum in which shareholders' actions can be most effective. We believe that our arguments are, to a very large extent, equally applicable to other European countries, as these proposals have been put forward in Spain within the context of the wider governance reforms promoted by the Winter Report in Europe and other national and supranational regulatory efforts.shareholders meetings; corporate governance; consultants;

Shareholders as Stakeholders: A Future Paradigm for Institutional Activism in Japan

Over the last quarter century, the landscape of Japanese corporate governance has been overhauled by a combination of domestic reform, financial collapse, and foreign influence. Amidst these changes, institutional investors have claimed a growing role within Japanese listed companies, not only as monitors of management but as crucial agents for corporate governance reform. In this new role, institutional investors have adopted a diverse array of strategies and tactics for their dealings with management. This paper explores the future contours of Japanese shareholder activism against the backdrop of Japan’s twenty-first century corporate evolution. In particular, it analyzes how Japan’s modern corporate governance regime alters the behavior of institutional investors, and in turn the nature of their engagements with management of Japanese companies. Due to recent changes in Japanese law, Japan’s current governance standards limit the effectiveness of “aggressive” institutional activists. Rather than encourage contentious, highly public battles between adversarial activists and target companies, Japan’s current regime limits the opportunities for investment available to aggressive institutional investors by encouraging constructive engagement between investors and management. Although the quest for profits will continue to influence the behavior of investors and managers, Japan’s current regime invites institutions to act not only as profit-seeking shareholders, but also as stakeholders invested in the long-term financial stability of listed companies

Credibilidad en la política monetaria: Papel de políticas en la estabilidad del Presidente del Banco Central

Este documento estudia la relación entre el índice de riesgo de salida de un presidente de banco central y una medida de credibilidad en la política monetaria. El índice de riesgo de salida previsto se considera como una función de variables legales y políticas. La medida de credibilidad es la probabilidad prevista de un principio de deflación cuando la inflación está en aumento. En una muestra de 22 países latinoamericanos y del G7, se encuentra una relación negativa entre el índice de riesgo de salida y la medida de credibilidad. Los resultados demuestran que la independencia legal después de controlar el índice de riesgo de la salida del presidente no está asociada a aumentos de credibilidad.

Cross-Cutting Literature Review on the Drivers of Local Council Accountability and Performance

There is now a considerable body of literature on decentralization in diverse national contexts. Ascertaining factors that drive local accountability and performance have been the key concerns of these studies. Diverse ethodological instruments and approaches have been used—from large-n statistical analyses to in-depth case study techniques. And yet, the findings regarding the drivers of local performance and accountability remain inconclusive or even contradictory even when different scholars employ similar data.Local Performance; Democracy; Rule of Law; Elections; Socio-Economic development; Political Culture; Corruption; Ethnic Diversity; Party System; Fiscal Decentralization; Local Government; Outsourcing; Leadership Skills