Group Incentives and Rational Voting

Our model describes competition between groups driven by the choices of self-interested voters within groups. Within a Poisson voting environment, parties observe aggregate support from groups and can allocate prizes or punishments to them. In a tournament style analysis, the model characterizes how contingent allocation of prizes based on relative levels of support affects equilibrium voting behavior. In addition to standard notions of pivotality, voters influence the distribution of prizes across groups. Such prize pivotality supports positive voter turnout even in non-competitive electoral settings. The analysis shows that competition for a prize awarded to the most supportive group is only stable when two groups actively support a party. However, competition among groups to avoid punishment is stable in environments with any number of groups. We conclude by examining implications for endogenous group formation and how politicians structure the allocation of rewards and punishments.Comment: 34 pages, 1 figur

Why the sovereign debt crisis could lead to a federal fiscal union : the paradoxical origins of fiscalization in the United States and insights for the European Union

Published online: 09 Feb 2017This paper shows that the emergence of the federal power to tax is the result of a sovereign debt crisis at the state level. I analyse the fiscal history of the early United States (US) to demonstrate how the institutional flaws of the Articles of Confederation, mainly the central budget based on contributions from the states, so-called ‘requisitions’, led to a sovereign debt crisis on the state level, which triggered taxpayers’ revolts in 1786/1787. This social unrest, in turn, was perceived by the political élite as an endogenous threat to the union and paved the way for the fiscalization of the federal government, i.e., the creation of a fiscal union with the federal power to tax based firmly in the Constitution of 1789. This analysis concludes with four insights for the European Union (EU).This work was supported by the US State Department and the Directorate-General for Education and Culture of the European Commission, under Fulbright-Schuman Grant [25.04.2014], administered by the Commission for Educational Exchange between the United States and Belgium; the European University Institute under the Exchange Programme with University of California, Berkeley [04.02.2014]; Ministry of Foreign Affairs of the Republic of Poland, under PhD Scholarship [09.07.2012]; College of Europe and Arenberg Foundation under ‘College of Europe-Arenberg European Prize: Exploring Federal Solutions’ (24.02.2015); and Fondation Jean Monnet pour l’ Europe under the Henri Rieben Scholarship (19.06.2015)