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Introducing Institutions

Introducing Institutions. John Aldrich and Arthur Lupia. Condorcet Winner in France. Introducing Institutions. The Importance of Agenda Control. Institutional Structures and their Effects on the Existence and/or Location of Equilibrium. The Importance of Agenda Control.

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Introducing Institutions

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  1. Introducing Institutions John Aldrich and Arthur Lupia

  2. Condorcet Winner in France

  3. Introducing Institutions The Importance of Agenda Control

  4. Institutional Structures and their Effects on the Existence and/or Location of Equilibrium

  5. The Importance of Agenda Control • D. Black (1948) “On the Rationale of Group Decision Making,” • T. Romer and H. Rosenthal (1978) “Political Resource Allocation, Controlled Agendas, and the Status Quo,” • K. Shepsle, (1979) "Institutional Arrangements and Equilibrium in Multidimensional Voting Models." • M. Laver and K. Shepsle (1990) “Coalitions and Cabinet Government.”

  6. Black (1948) • M: “When a decision is reached by voting or is arrived at by a group all of whose members are not in complete accord, there is no part of economic theory which applies.”NH: Is there more than one point that can beat all others by a simple majority.P: One dimension. Single-peaked preferences. N voters, M alternatives. Majority rule. Complete information.C: The median voter theorem.

  7. Romer and Rosenthal (1978) • M: Does monopoly power have the same effect in politics as economics? • NH: Agenda Control implies unlimited power. • P1: There are two completely informed players: an agenda setter and a voter. • The setter wants to maximize his budget. • Voter preferences are single-peaked in one dimension

  8. R&R Premises • P2: There exists a status quo policy, Q[0, 100]. • P3: The setter makes a proposal X[0, 100]. • P4: The voter chooses a winner Y{X, Q}. • P5: Each player has an ideal point and single peaked preferences • US = -|Y-S| • UV= -|Y-V|

  9. R&R Conclusions • C1: Suppose VQ (parallel solution for V>Q.) In equilibrium, the voter will choose X only if X[V-(|V-Q|), Q]. • C2: The outcome is often not the median voter’s ideal point. • C3: The setter’s best response to his anticipation of voter reactions is: • If S [V-(|V-Q|), Q], then X=S=Y. • If S [0, V-(|V-Q|)), then X=max[0, V-(|V-Q|)]=Y. • If S (Q, 1], then X=SY.

  10. R&R Example 1

  11. Shesple, “Institutional Arrangements • M: Institutions can induce equilibrium, jointly with preferences, where preferences alone would not yield eq. (SIE even in the absence of PIE) • NH: In more than one dimension, “democratic” equilibriums exist only by chance, even in a legislative/committee setting

  12. Shesple, “Institutional Arrangements • P • Multidimensional space • Committees cover members • Jurisdictions cover the issue space • Committees have gate-keeping powers • Floor has amendment powers

  13. Shesple, “Institutional Arrangements • C1: Existence result: • Simple jurisdictions • One jurisdiction per committee • Non-open agenda rule • C2: SIEs may not be Pareto optimal

  14. Shesple, “Institutional Arrangements

  15. Laver and Shepsle, “Coalitions and Cabinet Government” • M: The Shepsle model can generalize to parliamentary systems • NH: Yeah, right. • P: • Coalitions are negotiations among parties over control over ministries. • Ministries are simple jurisdictions • Minister is a one-person committee

  16. Laver and Shepsle, “Coalitions and Cabinet Government” Thus, point AB in the southwest corner of each panel describes a proposal to enact policy AB, "policed by giving party A the portfolio controlling the x dimension and party B the portfolio controlling the y dimension. Obviously the ideal point of a party, AA for example, represents a credible proposal; this gives all relevant portfolios to the party in question, allowing it to implement its ideal policies. Since a proposal is credible only if it is policed by the right portfolio allocation, the point AB in Figure 1, for example, represents a credible proposal if and only if party A gets portfolio x and party B gets portfolio y. If party Cis nominated for one of these portfolios, then the point AB is not a credible proposal; its promise of policy output AB is cheap talk. More significantly, AB is not credible if party A gets portfolio y and B gets portfolio x. In this very important sense, AB and BA represent utterly different coalition governments, even though they involve precisely the same coalition partners.

  17. Problem Set 1 Romer and Rosenthal (1978) (Due Tuesday, 9 a.m.) • What happens if you add one more setter? • What happens if there is one setter and the voters have incomplete information? • What happens if there is one setter and the voter can offer one amendment? • What happens if the voter lacks information? • Does the amendment rule matter?

  18. Second Assignment(Due Thursday, 9am) • Take paper X, change three premises. • Rank the changes using three criteria: • Service to other scientists. • Service to society. • Testability (if model) or generalizability (if empirical). • Each group will make a 5-10 minute presentation followed by 5-10 minutes of questions. • A class evaluation will follow.

  19. Papers for Second Assignment • Aldrich and McKelvey 1977 • A Method of Scaling • Austen-Smith and Banks 1988 • Elections, Coalitions, and Legislative Outcomes • Lupia and Strom 1995 • Coalition Termination • Kollman, Miller, and Page 1992 • Adaptive Parties in Spatial Elections • McKelvey and Niemi 1978 • Sophisticated Voting

  20. Gerber Overview • Reacts to claims from literatures that do not employ formal models. • Uses insights from formal models to structure their data collection and empirical modeling. • The main insight is that observable variations are insufficient to determine causality • understanding the incentive effects of institutions yields better empirical explanations.

  21. Gerber (1996) • M. Do initiatives affect legislative choices? • NH. They do not. • P. Interest groups react to legislation by proposing initiatives. • Initiatives are costly. • Complete information. • C. When voters or interest groups are “moderate,” the threat of initiatives yields legislation closer to the median voter’s ideal point.

  22. Gerber Model

  23. Sample Dynamic

  24. Main Theoretical Result

  25. Empirical Estimation • Use responses to questions about abortion policy on the 1980’s Senate Election Studies to estimate a median voter ideal point (i.e., lh support parental consent) for each state. • Regress actual consent on estimated preferences, initiative dummy variable and control variables.

  26. Main Empirical Result

  27. Implication The mere threat of initiatives is sufficient to induce the legislature to be more responsive to the median voter. Additional empirical implication: “No initiatives” and “Initiative Process inducing legislative responsiveness” are observationally equivalent.

  28. Legislative Response to the Threat of Popular Initiatives What would you do?

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