Economics 36101.
Economic Models of Politics
Course description: This course is an introduction to current research in political economics. The emphasis is on game-theoretic models that can be used to study the effects of different constitutional structures on the competitive behavior of politicians and the welfare-relevant performance of government. Strudents who take the course for credit will be required to present a paper from the reading list.
Winter 2016, Tue & Thurs 9:00-10:20pm.
Instructors: Roger Myerson and Richard van Weelden.
COURSE OUTLINE
For most updated references, see https://www.sites.google.com/site/richvanweelden/teaching/econ361w16
Social Choice and Spatial Models
1. The Median Voter Theorem and Probabilistic Voting:
- Myerson, Sections 7-8.
- Randall Calvert 1985. "Robustness of the Multidimensional Voting Model: Candidate Motivations, Uncertainty, and Convergence." American Journal of Political Science 29 (1):69-95.
- Assar Lindbeck and Jorgen Weibull 1993. "A Model of Political Equilibrium in a Representative Democracy." Journal of Public Economics 51 (2):195-209.
- Dan Bernhardt, John Duggan, and Francesco Squintani 2009. "The Case for Responsible Parties." American Political Science Review 103 (4): 570-587.
2. Social Choice Theory: Muller-Sattherwaite Thm and Binary Agendas:
- Roger Myerson. 2013. "Fundamentals of social choice theory." Quarterly Journal of Political Science 8 (3): 305-337. [notes]
3. Candidates:
- Timothy Besley and Stephen Coate 1997. "An Economic Model of Representative Democracy." Quarterly Journal of Economics 112 (1): 85-114.
- Martin Osborne and Al Slivinkski 1996. “A Model of Political Competition with Citizen Candidates.” Quarterly Journal of Economics 111 (1): 65-96.
- Navin Kartik and Preston McAfee. 2007. "Signaling Character in Electoral Competition." American Economic Review 97 (3): 852-870.
- Steven Callander 2008. "Political Motivations." Review of Economic Studies 75 (3):671-697.
4. Valence Models:
- Enriqueta Aragones and Thomas R. Palfrey 2002. "Mixed Equilibrium in a Downsian Model with a Favored Candidate." Journal of Economic Theory 103 (1): 131-161.
- Timothy Groseclose 2001. "A Model of Candidate Location When One Candidate Has a Valence Advantage." American Journal of Political Science 45 (4): 862-886.
- Juan Carillo and Micael Castanheira 2008. "Information and Stategic Political Polarazation," Economic Journal 118:847-874.
- Stefan Krasa and Mattias Polborn 2010. "Competition Between Specialized Candidates." American Political Science Review 104 (4): 745-765.
Agency Models of Elections
5. Pure Moral Hazard
- John Ferejohn 1986. "Incumbent Performance and Electoral Control." Public Choice 50: 5-26.
- David Austen-Smith and Jeffrey Banks 1989. "Electoral Accountability and Incumbency." In Peter Ordeshook [ed.] Models of Strategic Choice in Politics (Ann Arbor: University of Michigan Press).
- Jeffrey S. Banks and Rangarajan K. Sundaram 1998. "Optimal Retention in Agency Problems." Journal of Economic Theory 82 (2): 293-323.
- Kenneth Rogoff and Anne Sibert 1988. "Elections and Macroeconomic Policy Cycles." Review of Economic Studies 55 (1): 1-16.
6. Ideological Competition and Agency Models:
- John Duggan 2000. “Repeated Elections with Asymmetric Information.” Economics and Politics 12 (2): 109-135.
- Dan Bernhardt, Larissa Campuazano, Odilon Camara, and Francesco Squintanti 2009. “On the Benefits of Party Competition.” Games and Economic Behavior 66 (2): 685-707.
- Dan Bernhardt, Odilon Camara, and Francesco Squintani 2011. “Competence and Ideology.” Review of Economic Studies 78 (2): 487-522.
- Richard Van Weelden 2013. “Candidates, Credibility, and Re-election Incentives.” Review of Economic Studies 80 (4): 1622-1651.
7. Lobbying and Common Agency:
- Avinash Dixit, Gene Grossman, and Elhanan Helpman 1997. "Common Agency and Coordination: General Theory and Applications to Government Policymaking." Journal of Political Economy 105 (4): 752-769.
- Gene Grossman and Elhanan Helpman 1996. "Electoral Competition and Special Interest Politics." Review of Economic Studies 63 (2): 265-286.
- Andrea Prat 2002. "Campaign Spending with Office-Seeking Politicians, Rational Voters, and Multiple Lobbies." Journal of Economic Theory 103 (1):169-189.
- Ernesto Dal Bo, Pedro Dal Bo, and Raphael DiTella 2006. “Plato o Plomo:Bribe and Punishment in a Theory of Political Influence.” American Political Science Review 100 (1): 41-53.
- Bard Harstad and Jakob Svensson 2011. "Bribes, Lobbying, and Development." American Political Science Review 105(1):46-63.
Voting
8. Information Aggregation and the Swing Voter's Curse:
- Timothy Feddersen and Wolfgang Pesendorfer 1996. "The Swing Voter's Curse." American Economic Review 86 (3): 408-424.
- Timothy Feddersen and Wolfgang Pesendorfer 1997. "Voting Behavior and Information Aggregation in Elections with Private Information." Econometrica 65 (5):1029-1058.
- Roger Myerson 1998. "Extended Poisson Games and the Condorcet Jury Theorem." Games and Economic Behavior 25 (1):111-131.
- Laurent Bouton and Micael Castanheira 2010. "One Person, Many Votes: Divided Majority and Information Aggregation." Econometrica 80 (1): 43-87.
9. Turnout:
- Martin Osborne, Jeffrey Rosenthal, and Matthew Turner 2000. "Meetings with Costly Participation." American Economic Review 90 (4): 927-943.
- Tim Feddersen and Aldo Sandroni 2006. “A Theory of Participation in Large Elections.” American Economic Review 96 (4): 1271-1282.
- Vijay Krishna and John Morgan 2011. “Overcoming Ideological Bias In Elections.” Journal of Political Economy 119 (2): 183-211.
- Helios Herrera, Massimo Morelli and Tom Palfrey 2014. “Turnout and Power Sharing.” Economic Journal 154(574):131-162..
Comparative Electoral Systems
10. Electoral Outcomes under Different Electoral Systems:
- Roger Myerson 1993. "Incentives to Cultivate Favored Minorities under Alternative Electoral Systems." American Political Science Review 87 (4): 856-869.
- Alessandro Lizzeri and Niccolo Persico 2001. “The Provision of Public Goods under Alternative Electoral Incentives.” American Economic Review 91 (1): 225-239.
- Gary Cox 1987. "Electoral Equilibria Under Alternative Voting Institutions." American Journal of Political Science 31 (1): 82-108.
- Gary Cox 1994. "Strategic Voting Equilibria under Single Non-Transferable Vote." American Political Science Review 88 (3): 608-621.
- Roger Myerson 2006. "Bipolar Multicandidate Elections with Corruption." Scandinavian Journal of Economics 108 (4): 727-742.
11. Federalism:
- Dennis Epple and Allan Zelenitz 1981. "The Implications of Competition among Jurisdictions: Does Tiebout Need Politics?" Journal of Political Economy 89 (6): 1197-1217.
- Avinash Dixit and John Londregan 1998. "Fiscal Federalism and Redistributive Politics." Journal of Public Economics 68 (2): 153-180.
- Tim Besley and Stephen Coate 2003. "Centralized versus Decentralized Provision of Local Public Goods." Journal of Public Economics 87 (12): 2611-2637.
- Roger Myerson 2006. "Federalism and Incentives for Success of Democracy." Quarterly Journal of Political Science 1 (1): 3-23.
- Steven Callander and Bard Harstad 2015. "Experimentation in Federal Systems," Quarterly Journal of Economics, forthcoming.
Communication and Organizational Structure
12. Pandering:
- Eric Maskin and Jean Tirole 2004. "The Politician and the Judge: Accountability in Government." American Economic Review 94 (4): 1034-1054.
- Brandice Canes-Wrone, Michael C. Herron and Kenneth W. Shotts 2001. "Leadership and Pandering: A Theory of Executive Policymaking." American Journal of Political Science 45 (3): 532-550.
- Gilat Levy 2004. “Anti-herding and Strategic Consultation.” European Economic Review 48 (3): 503-525.
- Matthew Gentzkow and Jesse Shapiro. 2006. "Media Bias and Reputation." Journal of Political Economy 114 (2): 280-316.
- Justin Fox and Richard Van Weelden 2010. "Partisanship and the Effectiveness of Oversight." Journal of Public Economics 94(9-10):684-697.
- Daron Acemoglu, Georgy Egorov, and Konstantin Sonin 2013. "A Political Theory of Populism." Quarterly Journal of Economics 128(2):771-805.
13. Communication:
- Vincent Crawford and Joel Sobel 1982. "Strategic Information Transmission." Econometrica 50 (6): 1431-1451.
- Marco Battaglini 2003. "Multiple Referrals and Multidimensional Cheap Talk." Econometrica 70 (4): 1379-1401.
- Stephen Morris 2001. "Political Correctness." Journal of Political Economy 109 (2): 231-265.
- Torun Dewan, Andrea Galeotti, Chritian Ghiglino, and Francesco Squintani 2014. "Information Aggregation and the Optimal Structure of the Executive," American Journal of Political Science 59(2):475-494.
- Navin Kartik and Richard Van Weelden, "Informative Cheap Talk in Elections," working paper.
14. Bureaucracies and Regulation
- David Epstein and Sharyn O'Halloran 1994. "Administrative Procedures, Information, and Agency Discretion." American Journal of Political Science 38(3):697-722.
- Alberto Alesina and Guido Tabellini 2007. "Bureaucrats or Politicians? Part 1: A Single Policy Task" American Economic Review 97 (1): 169-179.
- Sean Gailmard and John Patty 2007. "Slackers and Zealots: Civil Service, Policy Discretion, and Bureaucratic Expertise." American Journal of Political Science 51 (4): 873-889.
- Canice Prendergast 2007. "Motivation and Bias of Bureaucrats." American Economic Review 97(1):180-196.
- Michael Ting 2008. "Whistleblowing." American Political Science Review 102 (2):249-267.
Legislative Structures
15. Legislative Bargaining:
- David Baron and John Ferejohn 1989. "Bargaining in Legislatures." American Political Science Review 83 (4): 1181-1206.
- David Austen-Smith and Jeff Banks 1988. "Elections, Coalitions and Legislative Outcomes." American Political Science Review 82 (2): 405-422.
- Marco Battaglini and Stephen Coate 2008. "A Dynamic Theory of Public Spending, Taxation, and Debt." American Economic Review, 98 (1): 201-36.
- Renee Bowen, Ying Chen and Hülya Eraslan 2013. “Mandatory vs. Discretionary Spending: The Status Quo Effect.” Working Paper.
- Wiola Dziuda and Antoine Loeper 2015. "Dynamic Collective Choice with an Endogenous Status Quo." Journal of Politica Economy, forthcoming
16. Legislative Organization:
- Tom Gilligan and Keith Kreihbel 1987. “Collective Decision-making and Standing Committees: An Informational Role for Restrictive Amendment Procedures.” Journal of Law, Economics and Organization 3 (2): 287-335.
- Tom Gilligan and Keith Krehbriel 1990. "Organization of Informative Committees by a Rational Legislature." American Journal of Political Science 34 (2):531-564.
- Daniel Diermeier and Roger Myerson 1999. "Bicameralism and its Consequences for the Internal Organization of Legislatures." American Economic Review 89 (5):1182-1196.
- Daniel Diermeier and Timothy Feddersen 1998. "Cohesion in Legislatures and the Vote of Confidence Procedure." American Political Science Review 92 (3): 611-621.
- Stefan Krasa and Mattias Polborn 2015. "Political Competition in Legislative Elections," working paper.
Endogenous Institutions and Institutional Stability
17. Nondemocratic Politics:
- Bruce Bueno de Mesquita, Alastair Smith, Randolph Siverson, and James Morrow 2003. The Logic of Political Survival. (Cambridge: MIT Press). Chapters 2 and 3.
- Bruce Bueno de Mesquita, and Alastair Smith 2008. "Political Survival and Endogenous Institutional Change." Comparative Political Studies 42 (2): 167-197.
- Timothy Besley and Torsten Persson 2009. "The Origins of State Capacity." American Economic Review 99 (4): 1218-1244.
- Roger Myerson 2008. "The Autocrat's Credibility Problem and Foundations of the Constitutional State." American Political Science Review 102 (1):125-139.
- Roger Myerson 2010. "Capitalist Investment and Political Liberalization." Theoretical Economics 5 (1): 73-91.
18. Redistribution, the Revolutionary Threat, and Democratization:
- Daron Acemoglu and James Robinson 2000. "Why Did the West Extend the Franchise?" Quarterly Journal of Economics 115 (4):1167-1199.
- Alessandro Lizzeri and Nicola Persico 2004. "Why Did the Elites Extend the Suffrage?" Quarterly Journal of Economics 119 (2):707-765.
- Stephen Morris and Hyun Song Shin 2001. "Global Games: Theory and Applications." Working Paper.
- Daron Acemoglu, Georgy Egorov, and Konstantin Sonin 2008. "Coalition Formation in Non-Democracies." Review of Economic Studies 75(4):987-1009.
- James Fearon 2011. "Self Enforcing Democracy." Quarterly Journal of Economics 126 (4): 1661-1704.
19. Conflict and Violence:
- James Fearon 1994. "Domestic Political Audiences and The Escalation of International Disputes." American Political Science Review 88 (3): 577-592.
- Robert Powell 2006. "War as a Commitment Problem." International Organization 60 (1): 169-203.
- Sandeep Baliga and Tomas Sjorstom 2008. "Strategic Ambiguity and Arms Races." Journal of Political Economy 116 (6): 1023-1057.
- Ethan Bueno de Mesquita 2013. "Rebel Tactics." Journal of Political Economy 121 (2): 323-357.
[Students in the 2009 public-sector field exam were asked, among other things, to summarize the main assumptions and conclusions of a theoretical model from one of the papers that were covered in this course, where the student could choose which paper to discuss.]
See also old syllabus from 2006.