Ambiguous Contracting: Natural Language and Judicial Interpretation

We study the relationship between ambiguity (which comes into the picture since contracts have to be written in natural language), and contractual incompleteness. The contracting process is modelled as a signalling game between the parties and the judge, with the contract as the signal. The judge is assumed to be bound by the content of the contract (in as far as it can be ascertained unambiguously). Two kind of examples are presented: The first set of examples shows how ambiguity can lead to incompleteness. Here incompleteness is a way of hedging against adverse judgements on the part of an imperfectly informed judge. The remaining example illustrates a sort of converse intuition: It shows how incompleteness might lead the contracting parties to write ambiguous contracts in order to afford a relatively well-informed judge freedom to enforce the parties'willincomplete contracts, natural language

Voter coercion and pro-poor redistribution in rural Mexico

Voter coercion is a recurrent threat to pro-poor redistribution in young democracies. In this study we focus on Mexico’s paradigmatic Progresa-Oportunidades-Prospera (POP) programme. We investigate whether local mayors exploited POP to coerce voters, and if so, what effect these actions had on the municipal incumbent’s vote. For identification of vote coercion, we exploit the fact that the so-called ‘enlaces municipales’—a municipal liaison officer that under strict apolitical rules acted as the link between the municipal administration and POP—were discontinued in 2008, but then restored in 2010. Our empirical strategy relies on an innovative ‘difference-in-differences-in-discontinuities’ design, which allows us to compare how election results in competitive electoral districts before and after the discontinuation and restoration of enlaces differed between communities with and without POP. Overall, we find that in close elections, the discontinuation of enlaces increased the vote share to the incumbent by approximately 10.5 per cent, while their restoration decreased that vote share by 6.4 per cent. The results suggest that the discontinuation of enlaces created a rules-free environment that allowed local incumbents to coerce beneficiaries to achieve an electoral gain. A review of the existing ethnographic literature on the role of enlaces in POP’s operations provides further evidence to support our findings. Our study underscores the importance of implementing clear and well-designed rules to prevent the political capture of social policies

Campaign externalities, programmatic spending, and voting preferences in rural Mexico: The case of Progresa-Oportunidades-Prospera programme

This study presents an analysis of the electoral impacts of one of the most prominent conditional cash transfers in the world: Mexico’s Progresa-Oportunidades-Prospera (POP) programme. Using population censuses, and POP’s administrative records and elections data, we exploit the targeting criteria of the programme and its gradual expansion to implement difference-in-differences estimators and a regression discontinuity design for past presidential elections (2000, 2006, and 2012). Overall, we find no sizeable electoral effects of POP in favour to the incumbent in the 2000 and 2012 presidential elections, but instead a significant negative effect in the very competitive presidential election of 2006. We provide a theoretical rationalization for this result, which highlights the role of behaviour towards risk near a subsistence threshold and ex-ante expectations among the poor in control localities that were influenced by campaign externalities. We conclude with a discussion on the implications of our results for future theoretical and empirical research

Trading in Names under Moral Hazard.

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Learning About a Population and the Emergence of Trust in Transition Economies.

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Divergencia de intereses e informatividad de los mensajes en un modelo de señalización gratuita. Un ejemplo

En este artículo se estudia una modificación del modelo de señalización gratuita de Crawford y Sobel (1982) en la que el espacio de estados no es un intervalo sino la circunferencia de un círculo. Se demuestra mediante un ejemplo que, contrario a lo que sucede en Crawford y Sobel, el equilibrio más informativo se alcanza cuando la divergencia de intereses entre el receptor y el emisor es la mayor posible