Public Debt in South Africa

After four decades of racial segregation, South Africa transitioned to a non-racial democracy in 1994. Inevitably for a country with segregationist labour market policies for so long, South Africa is also one of the most unequal countries in the world. In order to take an overview of government debt in South Africa, this chapter looks at macroeconomic performance but also at how the political regime characteristics and inequality have interplayed with government debt during the 1970–2016 period. The data suggest that economic growth correlates negatively with debt and that democracy correlates positively with debt. In addition, the data do not suggest that democratic maturity is already associated with lower debt nor that the outgoing apartheid-era National Party bequeathed the young democracy with high debt. Encouragingly, the data do suggest that inequality and public expenditure on education correlate positively with debt, which suggests that the democratic government has the median voter in mind when creating debt and also that part of the debt is being invested in human capital formation.

Optimizing voting order on sequential juries: a median voter theorem and beyond

We consider an odd-sized “jury”, which votes sequentially between two equiprobable states of Nature (say A and B, or Innocent and Guilty), with the majority opinion determining the verdict. Jurors have private information in the form of a signal in $$[-1,+1]$$ [ - 1 , + 1 ] , with higher signals indicating A more likely. Each juror has an ability in [0, 1], which is proportional to the probability of A given a positive signal, an analog of Condorcet’s p for binary signals. We assume that jurors vote honestly for the alternative they view more likely, given their signal and prior voting, because they are experts who want to enhance their reputation (after their vote and actual state of Nature is revealed). For a fixed set of jury abilities, the reliability of the verdict depends on the voting order. For a jury of size three, the optimal ordering is always as follows: middle ability first, then highest ability, then lowest. For sufficiently heterogeneous juries, sequential voting is more reliable than simultaneous voting and is in fact optimal (allowing for non-honest voting). When average ability is fixed, verdict reliability is increasing in heterogeneity. For medium-sized juries, we find through simulation that the median ability juror should still vote first and the remaining ones should have increasing and then decreasing abilities.

The Phenomenon of the Freedom Party: the Effect of Newness or the Beginning of a New Value Cleavage?

The article analyzes the reasons of success of the Freedom Party in the 2020 Seimas elections. The case of Freedom Party is particularly interesting as it did not appeal to the median voter like previous new parties, but took a clearly liberal stance on such vulnerable issues (in rather conservative Lithuanian society) as LGBT rights. The article examines several probable accounts of the success story of the party: the newness of the party, the value shift in the society and the realignment of the voters. The article employs the data of the 2020 post-election survey and other relevant data sets. The analysis revealed that the effect of novelty contributed somewhat to the success of the Freedom Party, but the main reason for its good performance was the ability to mobilize liberal-minded voters, the number of which increased significantly compared to the 2016 Seimas elections. The party was able not only to take advantage of the changing values of the new generation, but also to consolidate liberal-minded voters who were previously dispersed. The results of the analysis suggest that attitudes on the conservatism–liberalism dimension have become an important factor determining party preferences in Lithuania, while so far, the only significant cleavage in Lithuania was based on different attitudes towards Russia and the Soviet past.

The flypaper sticks even when aid travels overseas

This paper extends the current literature by considering the existence of the flypaper effect internationally, with donor countries supplying foreign aid to recipient countries. The flypaper effect refers to the empirical anomaly associated with intergovernmental grants stimulating government expenditures more than can be explained by a pure income effect. The results reveal evidence of flypaper behavior such that for recipient countries one dollar of foreign aid raises public spending by $0.21-$0.42, whereas an equal increase in domestic income raises government expenditures by only $0.09-$0.16. Furthermore, we exploit variation in political institutions across countries and find that the flypaper effect is most pronounced in less democratic countries and find no flypaper effect in more democratic countries. This suggests that government officials are more likely to behave as expected by the median voter model when they are held accountable. Furthermore, countries with proportional, rather than majority/plurality, voting mechanisms do not display flypaper behavior.

Social discount rate: spaces for agreement

We study the problem of aggregating discounted utility preferences into a social discounted utility preference model. We use an axiom capturing a social responsibility of individuals’ attitudes to time, called consensus Pareto. We show that this axiom can provide consistent foundations for welfare judgments. Moreover, in conjunction with the standard axioms of anonymity and continuity, consensus Pareto can help adjudicate some fundamental issues related to the choice of the social discount rate: the society selects the rate through a generalized median voter scheme.

APPLICATION OF INTEGRATED RATING MECHANISMS AND MATRIX NON-ANONYMOUS GENERALIZED MEDIAN VOTER SCHEMES TO COORDINATION OF THE AGENTS’ INTERESTS

The collective agent coordination problem in organizational behavior systems is consider. In particular, the problem of coordinating of the agents’ interests to assess the degree of achieve-ment of the corporate strategic targets. The relevance of the problem is due to the need to increase the speed of decision-making, the speed of reaction to changes in the external environment, which can be achieved using appropriate control mechanisms. Aim. Improving methods of collective deci-sion making under circumstances where agents have different ranks of significance. Materials and methods. Methods comprise the integrated rating mechanisms and the generalized median voter schemes. The mathematical apparatus was chosen is contingent on the group decision making in organizational systems. Active agents strives to maximize his target function in the process of inter-action, which leads to a conflict of interests and a desire to distort information. The chosen methods allow these problems to be solved. The first ones are used to aggregate indicators that reflect the de-gree of achievement of the private goals of the organization at the strategic level. The second ones are used to identification the true agents’ opinions about the type of target index convolution matri-ces. Results. The matrix non-anonymous generalized median mechanism is proposed. The non-anonymous statement allows taking into account the interests of agents with different ranks. It is shown how to reduce non-anonymous procedure to an anonymous one. Decisions making process about all elements of the convolution matrices in integrated rating mechanisms with using anony-mous median voter scheme is strategy proofnees. However, the results of aggregation are not stabil-ity to the agent strategic behavior in cases of application anonymous or non-anonymous coordina-tion procedures. The new integrated mechanism based on the synthesis of known control mecha-nisms is proposed to overcome the discovered problem. Conclusion. The statement of the problem corresponds to the real procedures of decision making by governance board, when the opinion of one agent turns out to be more significant than the opinion of another agent. The developed mech-anism makes it possible to agree on the opinions of experts on the degree of achievement of the strategic goals of the organization; it can also be adapted to solve other applied problems, for ex-ample, making a decision on the choice of a project, assessing risks, assessing suppliers, etc.

Estimating the locations of voters, politicians, policy outcomes, and status quos on a common scale

How well are voters represented and what explains how well voters are represented? Answering these questions requires unpacking the mechanisms by which voters choose elected officials and elected officials implement policies. Though spatial theories of voting and legislative bargaining provide a broad framework for understanding these mechanisms, testing these theories involves a measurement problem where multiple political actors and outcomes must be located. We develop a technique for estimating policy outcomes, status quo locations, the ideology of elite political actors, and the ideology of voters, on a common scale. Using our new estimates, we demonstrate a similar level of incongruence for tax policies and spending policies. The incongruence arises for different reasons however—tax policies are over-responsive to the position of the median voter. Contrarily, spending policies are under-responsive and barely correlated with the position of the median voter. In examining the underlying mechanisms for policy change, we find that while the positions of elected officials over-respond to the median voter, the changing composition of state government has little immediate impact on policy. Instead, policy outcomes respond to long-term trends in the composition of government.

Voice and Balancing in US Congressional Elections

If the median voter wrote the Constitution, every Tuesday would be Election Day. Consider the case of the United States: Halfway into a presidential term, congressional elections allow the people to adjust the course of federal policy. Two complementary mechanisms describe how this opportunity is embraced by centrists: a direct mechanism, which strengthens the out-party in Congress to “balance” the president’s policy impact, and an indirect mechanism, by which midterm voting serves to “voice” dissatisfaction as a signal to the president. A model of repeated elections unites the two mechanisms: whereas midterm balancing reacts to the preceding presidential election, midterm voice anticipates the following one. Using micro and macro data for all House elections from 1956 through 2018, I show that balancing and voice work hand in hand: it is those voters with both policy incentives who contribute most to the notorious “midterm loss,” and particularly so under circumstances that make balancing more necessary and voice more promising. Yet although policy-oriented behavior typically restrains dominant parties, it may also cushion the fall of unpopular administrations. Centrists can be creative.

Models Explaining the Levels of Forest Environmental Taxes and Other PES Schemes in Japan

Between 2003 and April 2016, 37 of 47 prefectures (i.e., sub-national local governmental units) introduced forest environmental taxes—local payment for environmental services (PES) schemes. These introductions are unique historical natural experiments, in which local governments made their own political decisions considering multiple factors. This study empirically evaluates models that explain normalized expenditures from forest environmental taxes as well as other PES schemes (subsidies for enhancing forests’ and mountain villages’ multifunction, and green donation) and traditional forestry budgets for Japan’s 47 prefectures based on the median voter model. Results demonstrate that the median voter model can particularly explain forest environmental taxes and forestry budgets. Specifically, the past incidence of droughts and landslides is positively correlated with the levels of forest environmental taxes. The higher the number of municipalities in a prefecture, the lower the amount of forest environmental tax spent on forests. Moreover, the number of forest volunteering groups, possibly an indicator of social capital in the forest sectors, had strong positive correlations with the levels of forest environmental taxes and forestry budgets. Other PES schemes and forestry budgets had unique patterns of correlations with the examined factors.

Strategic Welfare Policies with Migration: A Theoretical Model and Empirical Evidence

We test the welfare magnet hypothesis for Europe. We modify the existing theoretical frameworks assuming that: (a) welfare services, intended as the output of welfare expenditure, not the poor’s income or social expenditure, enter the median voter’s utility function; (b) preferences depend on the position of the median voter in the income distribution; and (c) the total amount of welfare services provided may differ from the amount needed to finance them, because of inefficiencies in the transfer process. We then test the welfare magnet hypothesis for 22 European countries by estimating a reaction function corresponding to the generic form adopted by the literature, but using the variables inspired by the model. We find evidence of a positive strategic interaction among countries, which suggests a downward bias in the choice of the protection level because of welfare competition. The level of social protection also positively depends on GDP, the redistributive attitudes of residents and their weight in the population, vis-à-vis the migrants’ share, and the efficiency of social expenditure.