Bargaining, Voting and Lobby Powre

This paper studies the impact of the competition between lobbies and voters on policy outcomes. Lobbies offer payments to policy makers and citizens offer votes. At the beginning of the game a policy maker is exogeneously put in place. Then government, lobby and voters interact in two stages. First, there is a bargaining stage between the lobby and the government; then there is an election stage. The policy has two dimensions: the type that is non-contractible and the cost that is contractible. We show that the equilibrium of the game depends on the polarization of individual non-contractible preferences on policy types. In a two parties system, when there is a single legislative body, the government accountability is increasing in the polarization of party positions. Finally, for a given level of polarization, the government is more accountable in a legislative procedure with a single legislative body then in a legislative procedure with two legislative bodies.

Party Polarization and Electoral Accountability

In this paper we model the interaction between parties and candidates to highlight the mechanisms by which parties selecting candidates may discipline legislators. Parties are long-lived institutions providing incentives to short-lived candidates. Citizens have preferences over a multimentional policy space comprising an ideological and a monetary dimension. Candidates are policy motivated on the ideological dimension only and have opposing interest with respect to citizens on the monetary dimension. Policy motivation implies that candidates care more about winning elections the bigger the ideological distance from the candidate of the opponent party. Therefore, parties can use strategically polarization to provide incentives to candidates. Because of this strategic use, the polarization of the political race may diverge from the polarization of voters' preferences. In general, the polarization of the political race is a compromise between policy preferences of party members and electoral goals. Finally, when parties converge to the median voter, electoral accountability is inevitably compromisedparties, polarization, elections, accountability, convergence,

The rhetoric of closed borders: quotas, lax enforcement and illegal migration

In 2008, approximately 12 million immigrants lived illegally in the United States, and large numbers of undocumented foreigners resided also in other advanced destination countries. Hence, attempts at controlling immigration flows seem to often fail. If governments are not enforcing their "official" immigration policy, why do they set such a policy in the first place? The purpose of this paper is to address this apparent puzzle, using a political agency framework. We consider a setting in which there is uncertainty on the supply of migrants, and the policy maker who faces elections can be of one of two types. Either he has preferences congruent with the median voter, or he desires a larger number of migrants, because he is interested in the maximization of social welfare or has fallen prey to a pro-immigration lobby. We show that, if the incumbent wants to admit more migrants than the median voter, he might find it optimal to announce a binding quota to be re-elected, and strategically relax its enforcement. The control of migration flows can take place at the border or domestically, and we argue that even if the former is less effective as a policy tool, it might be chosen in equilibrium. Thus, our model illustrates how strategic considerations by elected officials play an important role in explaining both the observed large number of illegal immigrants and lax enforcement.Illegal immigration, Immigration Policy, Political Economy.

Reforming Legislatures: Is one House better than two?

During the last decade unicameral proposals have been put forward in fourteen US states. In this paper we propose a theoretical framework casting some lights on the drawbacks of bicameral state legislatures and on the effects of the proposed constitutional reforms. In a setting where lawmakers interact with a lobby through a bargaining process and with voters by means of elections, we show that when time constraints are binding, bicameralism might lead to a decline in the legislator's bargaining power vis-à-vis the lobby and to a reduction in his electoral accountability. On the other hand, when the time constraint is not binding, bicameralism might improve electoral accountability. Hence, arguments suggesting that bicameralism is a panacea against the abuse of power by elected legislators should be taken with due caution and the proposed unicameral reforms in US states may indeed reduce corruption levels among elected representatives.bicameralism, corruption, lobbying, bargaining, elections

Who is Against a Common Market?

This paper develops a theory of the endogenous formation of a common market in a three-country, two-factor political economy model. In the status quo, Home and Foreign implement non-discriminatory policies towards international factor flows, as to maximize the domestic median voter\'s welfare. Each of the two countries simultaneously holds then a referendum on a Common Market initiative leading to the removal of the pre-existing policies for factor flows occurring between the member countries, while no coordination is imposed on policies vis-µa-vis the rest of the world. Several interesting results emerge. In a common market, factors moving between the members are more likely to gain, the bigger is the import demand of one country as compared to the factor supply of the exporting partner. Factors which instead do not relocate are more likely to see their return decrease when flows are big and import demands are inelastic. Importantly, for the common market to emerge as an equilibrium, some factors must continue to experience enhanced protection when the integration process is completed. This result highlights the potential tension between social desirability and political feasibility of the integration process.Economic Integration, Factor Mobility, Political Economy

Government corruption and legislative procedures: is one chamber better than two?

This paper studies the impact of the competition between lobbies and voters on policy outcomes under alternative legislative procedures. Lobbies and citizens have opposing interests in a public policy and offer money and votes, respectively, to legislators to obtain their preferred policy. Comparing a unicameral and a bicameral legislative procedure, we show that bicameralism improves legislators' accountability when the same party controls the two chambers but not necessarily, if the two chambers are controlled by opposite parties. We also show that bicameralism with amendment rights (open rule) is better than bicameralism without amendment rights (closed rule). Finally, the evidence from a cross-country analysis, including 43 democracies, is consistent with our theoretical findings

Do Small States Get More Federal Monies? Myth and Reality about the US Senate Malapportionment

We analyze the relationship between senate malapportionment and the allocation of the US federal budget to the states during the period 1978-2002. A substantial literature originating from the in�uential paper by Atlas et al. (1995), using a within estimation methodology �nds that small and overrepresented states get signi�cantly larger shares of federal funds. Revisiting the econometric speci�cation used by the current empiri- cal research, we show that the number of senators percapita is inappropriate to capture malapportionement in regressions using broad federal programs, and that the results ob- tained with this indicator are extremely non-robust to reasonable speci�cation changes. In particular, senators percapita have a signi�cant impact on federal spending only in re- gressions containing state �xed e¤ects. Furthermore, the coefficients estimated using the within methodology are statistically di¤erent across states and, therefore, cannot be used to assess spending differentials between states. The magnitude and signi�cance of those coe¢ cients suggest a within state-speci�c inverse relationship between broad spending categories and population which is not systematically related to the size of the states and seems more compatible with incrementalist theories of budget allocation.federal budget; malapportionment; small state advantage; overrepresentation

Do Small States Get More Federal Monies?Myth and Reality About the US SenateMalapportionment

We analyze the relationship between senate malapportionment and the allocation ofthe US federal budget to the states during the period 1978-2002. A substantialliterature originating from the influential paper by ?) finds that small andoverrepresented states get significantly larger shares of federal funds. We show thatthese studies suffer from fundamental identification problems and grosslyoverestimate the impact of malapportionment. Most of the estimated impact is not ascale but a change effect. Rather than evidence of "small state advantage", we findthat states with fast growing population are penalized in the allocation of the federalbudget independently of whether they are large or small.federal budget, malapportionment, small state advantage,overrepresentation

The power of the purse: what do the data say on US federal budget allocation to the states?"

This paper provides new evidence on the relevance of alternative theories of federal budget allocation to US States. Using a panel of 48 states over 20 years, we estimate the size and relative importance of different institutional and political factors in determining such allocation. We find that although socio-economic characteristics are very important explanatory variables of spending allocation, some states receive disproportionate amounts of money for reasons essentially linked to politics and the budget allocation process. In particular we find that the overrepresentation of small states determined by the Senate and Presidential election systems has an important impact on federal budget allocation. States whose governor has the same political affiliation of the President receive more federal funds in the form of procurement and defense spending. On the other hand, the political alignment between governor and majority in the House and/or Senate does not affect the allocation of federal funds. We do not find any evidence that marginal states receive more funding; on the opposite we find that safe states tend to be rewarded. Finally, the appropriation committee membership affects the distribution of broad spending categories like total expenditure per capita and direct payments to individuals, while senior members have a disproportionate impact on grant allocationfederal budget, pork-barrel, congress, committees, president

Government Corruption and Legislative Procedures: is One Chamber Better Than Two?

This paper studies the impact of the competition between lobbies and voters on policy outcomes under alternative legislative procedures. Lobbies and citizens have opposing interests in a public policy and offer money and votes, respectively, to legislators to obtain their preferred policy. Comparing a unicameral and a bicameral legislative procedure, we show that bicameralism improves legislators' accountability when the same party controls the two chambers but not necessarily, if the two chambers are controlled by opposite parties. We also show that bicameralism with amendment rights (open rule) is better than bicameralism without amendment rights (closed rule). Finally, the evidence from a cross-country analysis, including 43 democracies, is consistent with our theoretical findings.Bicameralism, corruption, lobbying, voting, party polarization.