This thesis is composed of three chapters on topics of theoretical economics and applied theory. The first chapter analyzes the existence and implementation of a land division rule, defined through two properties: efficiency and equal opportunity equivalence. It is a joint work with Antonio Nicolò and Andrés Perea, and was published in SERIEs (2011), in the special issue in honor of Salvador Barberà, see Nicolò et al. (2012). The second chapter presents a citizen-candidate voting model with lobbying on a multidimensional policy space, with salient issues. The third chapter investigates the strategic behavior of colonizers in state capacity investment in non settlement colonies, giving an explanation also to civil conflict outcomes after independence.
Going more in detail, in the first chapter we look for a normative solution to a land division problem that could be applied to different types of disputes when the arbitrator has a very limited information about the agents’ preferences, and market mechanisms are not available. The solution must be fair and efficient under the constraint of the limited information available to the arbitrator. To this scope, we propose to use the concept of equal-opportunity equivalence defined by Thomson (1994). A land division is equal-opportunity equivalent if each agent receives a parcel of the land who makes her indifferent with respect to her best parcel of a given size µ,where the size of the reference set must be the same for both agents. Existence of the land division rule, uniqueness of utility levels are proved, along with a mechanism to implement it, in which the preferences of the agents do not need to be common knowledge. Moreover there is a unique µ for which the rule exists, therefore µ is not a discretionary choice of the arbitrator.
The second chapter is devoted to the analysis of a citizen-candidate model on a multidimensional policy space with lobbying, where citizens regard some issues more salient than others. In equilibrium special interest groups that lobby on less salient topics move the implemented policy closer to their preferred policy, compared to the ones that lobby on more salient issues. After introducing two types of citizens, who differ with respect to the salience assigned to issues, pooling equilibria are found, where voters are not able to offset the effect of lobbying on the implemented policy. This result is in sharp contrast with previous work on unidimensional citizen-candidate models that predict the irrelevance of lobbying on the implemented policy, see Besley and Coate (2001). In an extension of the model citizens are provided with the possibility of giving monetary contributions to lobbies in order to increase their power. With more than one lobby per dimension there are two findings. First, under some conditions only the most extreme lobbies receive contributions. Second, the effectiveness of a lobby is maximized when the salience of an issue is low in the population and high for a small group of citizens.
The third chapter investigates the determinants of investment in state capacity in non settlement colonies. The results of this analysis overcome the limitations of the framework provided by Acemoglu et al. (2001), whose theory predicts that extractive institutions were set in non settlement colonies, with no explanation for the wide heterogeneity of institutions in those colonies. Roughly half of the colonies that became independent after 1945 suffered costly civil conflicts thereafter. Empirical evidence suggests that the colonizer’s investment in state capacity is one of the determinants of civil conflict in ex colonies. A good state capacity, in the form of an efficient bureaucracy, a working police force, an independent judiciary enforcing the rule of law, fiscal capacity, prevented state failure and civil conflict, once independence was achieved. A theory is developed to study the strategic behavior of colonizers in choosing investment in state capacity in the colony. High state capacity creates a productive gain in the colonial economy, but as side effect it prevents civil conflict in case of independence, and therefore increases the incentive of the colony to fight for it. Colonizers decide to invest in state capacity comparing its productivity gain with the increased military cost of maintaining power when colonies aim at independence. The equilibrium investment in state capacity depends on the matching between the identity of colonizer (a colonizer with a larger colonial empire will have a lower average military cost) and the identity of the colony (the productivity gain depends on the presence of natural resources, distance from the sea). If the colonizer is forced to leave the colony for exogenous events, the lack of state capacity, and the inefficiency of the decolonization process, determine the civil conflict outcome after independence
