Elites and Institutional Persistence

Particular sets of institutions, once they become established in a society, have a strong tendency to persist. In this paper I argue that understanding how elites form and reproduce is key to understanding the persistence of institutions over time. I illustrate this idea with a simple political economy theory of institutions and through examples from Liberia, the US, South Africa and Germany I show how elites influence institutions. To change institutions requires having an understanding of how reforms influence the preferences, capabilities and strategies of elites.elites, political economy, persistence of institutions

Legislative malapportionment and institutional persistence

This paper argues that legislative malapportionment, denoting a discrepancy between the share of legislative seats and the share of population held by electoral districts, serves as a tool for pre-democratic elites to preserve their political power and economic interests after a transition to democracy. The authors claim that legislative malapportionment enhances the pre-democratic elite’s political influence by over-representing areas that are more likely to vote for parties aligned with the elite. This biased political representation survives in equilibrium as long as it helps democratic consolidation. Using data from Latin America, the authors document empirically that malapportionment increases the probability of transitioning to a democracy. Moreover, the data show that over-represented electoral districts are more likely to vote for parties close to pre-democracy ruling groups. The analysis also finds that overrepresented areas have lower levels of political competition and receive more transfers per capita from the central government, both of which favor the persistence of power of pre-democracy elites.Parliamentary Government,Labor Policies,Emerging Markets,Political Economy,Political Systems and Analysis

COLONIAL INSTITUTIONS AND LONG-RUN ECONOMIC PERFORMANCE IN COLOMBIA: IS THERE EVIDENCE OF PERSISTENCE?

A recent body of literature has claimed that differences in long-run economic performance within the Americas stem from the different institutional structures established during colonial times. This research tries to find evidence of institutional persistence in Colombia using direct measures of colonial institutions, particularly the intensity of encomiendas, slavery and State presence. The paper deals with the possible endogeneity of colonial institutions developing an instrumental variables strategy based upon colonial institutional design. We find evidence of institutional persistence of encomienda, slavery and State capacity on a series of current socioeconomic outcomes.Institutions, institutional persistence, colonial history, long run development

Legislative Malapportionment and institutional persistence

This paper argues that legislative malapportionment, denoting a discrepancy between the share of legislative seats and the share of population held by electoral districts, serves as a tool for predemocratic elites to preserve their political power and economic interests after a transition to democracy. We claim that legislative malapportionment enhances the pre-democratic elite’s political influence by overrepresenting areas that are more likely to vote for parties aligned with the elite. This biased political representation survives in equilibrium as long as it helps democratic consolidation. We use data from Latin America to document empirically that malapportionment increases the probability of transitioning to a democracy. Moreover, our data show that overrepresented electoral districts are more likely to vote for parties close to pre-democracy ruling groups. We also find that overrepresented areas have lower levels of political competition and they receive more transfers per capita from the central government, both of which favor the persistence of power of pre-democracy elites.Democracy, dictatorship, institutions, Latin America, persistence, political economy

Serial Persistence in Equity REIT Returns

Annual and monthly REIT returns display statistically significant serial persistence, although the two types of persistence behavior are qualitatively different. By contrast, quarterly REIT returns do not display serial persistence. This strongly suggests that linear multifactor market models cannot describe REIT investment behavior. Annual REIT returns fail to reflect corresponding persistence behavior in underlying real estate returns precisely when the REITs are large enough to attract institutional investor interest. Institutional investors move in and out of large-capitalization REITs in ways that negatively impact investment returns.

Commitment devices, opportunity windows, and institution building in Central Asia

This paper studies the institutional reform process in Central Asia from a choice perspective. We compare institutional reform processes of Central Asian countries from 1995 to 2006 to those conducted in their neighbouring countries in Central and (South) Eastern Europe, Russia, and the Middle East. Firstly, the paper identifies contemporaneous factors responsible for the persistence of poor institutional arrangements. Secondly, we identify factors that can act as commitment devices through which institutional change can be achieved and sustained. Based on the findings, it is argued that deficiencies in the education system and preferences of individuals and politicians are responsible for the persistence of poor institutional arrangements. External factors such as real and financial openness, fixed exchange rates and non-trade related international agreements, however, provide strong commitment devices for policy makers to improve institutional arrangements in Central Asia despite poor initial conditions. Moreover, large external shocks may help to shift preferences towards more reliable institutional settings.Economic Institutions; Reforms; Central Asia

Why is Voting Habit-Forming: Evidence from Sweden

For decades, scholars of electoral behavior have noted persistence in individuals' turnout decisions and hypothesized that such persistence is the result of habit. Recent empirical studies provide persuasive evidence supporting the habitual voting hypothesis, but we still do not know why individuals develop habits for voting. One theory is that voting causes individuals' to view themselves as "voters," increasing their future probabilities of voting. Another theory asserts that voting may ease institutional barriers, making future voting less costly and changing conative attitudes towards voting. This study seeks to disentangle these two causal mechanisms by testing the habitual voting hypothesis in Sweden. Since institutional barriers to voting are minimal in Sweden, evidence in favor of the habitual voting hypothesis will lend credence to a psychological mechanism. The opposite result will point to an institutional mechanism. Ultimately, habitual voting is found in Sweden, which suggests the psychological mechanism is valid

The Persistence of Small Farms and Poverty Levels in Nigeria: An Empirical Analysis

Small farmers are one of the more disadvantaged and vulnerable groups in Nigeria. Studies have shown that majority of people living in absolute poverty can be found on small farms with half in this group undernourished. The study examined heterogeneity in circumstances and diversity in rural agriculture, the persistence of small farms, poverty and institutional development and facilities. Data for this study came from Nigerian living Standard Survey (NLSS) which covered the two periods 1994/2004. The data set consists of 9550 respondents’ but only 8264 cases were useful for this study. The index of heterogeneity at 29.1 indicated persistence of small farms in the two periods under consideration. Persistence of small farms and poverty are closely related (r = 0.674). The poverty differential in the two surveys data revealed that poverty increased by 14.72%. Disaggregation analysis indicated that institutional development and facilities improved farm outputs, diversification to non-farm and reduction in poverty. Access to these institutional facilities can enable the small farmers to rearticulate their livelihood activities. Policy makers need to show more commitment to develop agriculture through identifying and providing the capacity need of small farmers in order for them to absorb and used whatever modern techniques introduced.Heterogeneity index, Poverty Differential, Institutional Development, Structural Constraints, Nigeria, Agricultural and Food Policy, International Development,

Decomposing the Persistence of International Equity Flows

The portfolio flows of institutional investors are widely known to be persistent. What is less well known, however, is the source of this persistence. One possibility is the ?informed trading hypothesis?: that persistence arises from autocorrelated trades of investors who believe they have information about value and who face an imperfectly liquid market. Another possibility is that there are asynchroneities with respect to investment decisions across funds, across investments, or both. These asynchroneities could be due to wealth effects (across investments for a single fund), investor herding (across funds for a single investment), or generalized contagion (across funds and across investments). We use daily data on institutional flows into 21 developed countries by 471 funds to measure and decompose aggregate flow persistence. We find that the informed trading hypothesis explains about 75% of total persistence, and that the remaining amount is attributable entirely to cross-fund own-country persistence. In other words, we find statistically and economically significant flow asynchroneities across funds investing in the same country. There are no meaningful asynchroneities across countries, either within a given fund, or across funds. The cross-fund flow lags we identify might result from different fund investment processes, or from some funds mimicking others? decisions. We reject the hypothesis that wealth effects explain persistence.

Principles And Practices Fostering Inclusive Excellence: Lessons From The Howard Hughes Medical Institute’s Capstone Institutions

Best-practices pedagogy in science, technology, engineering, and mathematics (STEM) aims for inclusive excellence that fosters student persistence. This paper describes principles of inclusivity across 11 primarily undergraduate institutions designated as Capstone Awardees in Howard Hughes Medical Institute’s (HHMI) 2012 competition. The Capstones represent a range of institutional missions, student profiles, and geographical locations. Each successfully directed activities toward persistence of STEM students, especially those from traditionally underrepresented groups, through a set of common elements: mentoring programs to build community; research experiences to strengthen scientific skill/identity; attention to quantitative skills; and outreach/bridge programs to broaden the student pool. This paper grounds these program elements in learning theory, emphasizing their essential principles with examples of how they were implemented within institutional contexts. We also describe common assessment approaches that in many cases informed programming and created traction for stakeholder buy-in. The lessons learned from our shared experiences in pursuit of inclusive excellence, including the resources housed on our companion website, can inform others’ efforts to increase access to and persistence in STEM in higher education