Do dictatorships redistribute more?

November 2018 By in Economics, Politics

PANTELIS KAMMAS, VASSILIS SARANTIDES

JOURNAL OF COMPARATIVE ECONOMICS

Abstract: This paper examines the effect of political institutions on fiscal redistribution for a country-level panel from 1960–2010. Using data on Gini coefficients before and after government intervention, we apply a measure of effective fiscal redistribution that reflects the effect of taxes and transfers on income inequality. Our findings clearly indicate that non-democratic regimes demonstrate significantly greater direct fiscal redistribution. Subsequently, we employ fiscal data in an attempt to enlighten this puzzling empirical finding. We find that dictatorial regimes rely more heavily on cash transfers that exhibit a direct impact on net inequality and consequently on the difference between market and net inequality (i.e., effective fiscal redistribution), whereas democratic regimes devote a larger amount of resources to public inputs (health and education) that may influence market inequality but not the difference between market and net inequality per se. We argue that the driving force behind the observed differences within the pattern on government spending and effective fiscal redistribution is that democratic institutions lead survival-oriented leaders to care more for the private market, and thus to follow policies that enhance the productivity of the whole economy.

The People’s Perspective on Libertarian-Paternalistic Policies

November 2018 By in Economics, Law

AYALA ARAD, ARIEL RUBINSTEIN

THE JOURNAL OF LAW AND ECONOMICS, Volume 61, Number 2

Abstract: We examine the views toward libertarian-paternalistic (soft) governmental interventions in a series of online experiments conducted in three countries. We use both standard and new methods to elicit attitudes toward soft interventions in various hypothetical scenarios. The majority of the participants accept these types of interventions by the government. However, a substantial proportion opposes them and would prefer that the government simply provide information to help the public make the right choice rather than use a more effective choice architecture intervention. Some even refuse to make the choice that the government promotes, although they would have done so in the absence of the intervention. The opposition to soft interventions appears to be driven by concerns about manipulation and the fear of a slippery slope to nonconsensual interventions. Opposition to soft interventions is reduced when they are implemented by employers rather than the government.

Working Out the Details of Hume and Smith on Sympathy

November 2018 By in Philosophy

JOHN MCHUGH

JOURNAL OF THE HISTORY OF PHILOSOPHY

Abstract: Many scholars have had interesting things to say about the relationship between Adam Smith’s and David Hume’s theories of sympathy. The diversity of angles taken in these discussions demonstrates how fertile a topic of investigation this relationship is. This paper takes as its point of entry Hume’s criticism of Smith’s theory. Focusing on Hume’s claim that Smith’s theory describes a phenomenon that only occurs among friends, I argue that the disagreement between them is more about the importance than about the existence of what Smith calls the “pleasure of mutual sympathy.” I conclude that this difference in emphasis might suggest a fundamental difference not just in how they conceive of human sociality but also in the motivations and influences behind their work.

Correctional Autonomy and Authority in the Rise of Mass Incarceration

November 2018 By in Law

KERAMET REITER, KELSIE CHESNUT

ANNUAL REVIEW OF LAW AND SOCIAL SCIENCE

Abstract: Much of the literature explaining both mass incarceration and increasingly harsh punishment policies has been dominated by a focus on factors external to prisons, such as macrolevel explanations that point to political factors (like a popular rhetoric of governing through crime) or social structures (like the presence or absence of a strong welfare state). Where scholarship has focused on factors internal to prisons, explanations have often focused less on individual actors or correctional influence and more on processes, such as routinization, legalization, and risk management. This article argues for the importance of an additional explanatory factor in understanding the phenomenon of mass incarceration: the internal and relatively individualized influence of correctional officials, especially mid-level bureaucrats, who exercise autonomy and authority not only over prisoners and prison policy implementation but over policy initiation.

Titles for me but not for thee: transitional gains trap of property rights extension in Colombia

November 2018 By in Derecho, Ciencia Política, Economía

PERRY FERRELL

PUBLIC CHOICE

Abstract: I apply Tullock’s transitional gains trap to the formalization of property titles in Latin America to understand public choice problems in mending institutions. In an area where land is owned by formal and informal institutions, policies to extend property rights will not be supported by voters holding legal title because it will devalue their property. To test this I use data from Colombia where a peace deal to end a 50-year conflict with Revolutionary Armed Forces of Colombia rebels was reached in 2016 and put to a public referendum. The deal included formalization of property titles across the nation as well as an end to the conflict. Using municipal-level data on voting and property ownership and controlling for conflict history, I find potential losses to formal property holders pushed median voter preferences toward dissension. A 1% increase in legally titled land increases dissenting vote share by 3% points. These results are relevant to institutional reforms anywhere with corrupted property rights.

Arbitration in classical Athens

November 2018 By in History, Law

BRYAN C. MCCANNON

CONSTITUTIONAL POLITICAL ECONOMY

Abstract: The Classical Athenians developed two formal arbitration procedures. They assigned low stakes disputes to a panel of arbitrators, while high stakes cases were handled by a single arbitrator. Given the information aggregation benefit of collective decision making, one would have expected more individuals to be assigned to more important cases. I develop a theoretical model to provide an explanation for their design. Recognizing that arbitrator competence is endogenous, effort put into making a good decision takes time and effort. In larger groups free riding is a concern. Consequently, there exists environments where the free-riding loss is magnified in higher stakes disputes to the point where the socially optimal panel size is inversely related to the stakes involved.

Racial Bias in Bail Decisions

November 2018 By in Economics, Law

DAVID ARNOLD, WILL DOBBIE, CRYSTAL S. YANG

THE QUARTERLY JOURNAL OF ECONOMICS

Abstract: This article develops a new test for identifying racial bias in the context of bail decisions—a high-stakes setting with large disparities between white and black defendants. We motivate our analysis using Becker’s model of racial bias, which predicts that rates of pretrial misconduct will be identical for marginal white and marginal black defendants if bail judges are racially unbiased. In contrast, marginal white defendants will have higher rates of misconduct than marginal black defendants if bail judges are racially biased, whether that bias is driven by racial animus, inaccurate racial stereotypes, or any other form of bias. To test the model, we use the release tendencies of quasi-randomly assigned bail judges to identify the relevant race-specific misconduct rates. Estimates from Miami and Philadelphia show that bail judges are racially biased against black defendants, with substantially more racial bias among both inexperienced and part-time judges. We find suggestive evidence that this racial bias is driven by bail judges relying on inaccurate stereotypes that exaggerate the relative danger of releasing black defendants.