Deck 28: Governments and Politics

Question 1

The "Anything-Can-Happen" theorem doesn't really imply "anything can happen" in a democratic process with multiple issues; rather, it implies that political outcomes can be manipulated, and some political institutions are better at constraining the degree to which this can be done than others.Do you agree or disagree with this statement? Why?

Answer 1

Taken literally, the theorem does say that pretty much any policy can be implemented through majority rule. But it probably should not be take literally -- because the real world is full of institutional constraints that bind agenda setters and keep them from behaving as the theorem would predict. This then provides the rationale for studying different political institutions -- and how effective they are at constraining agenda setter powers.

Question 2

Suppose voter preferences over a public good funded through a proportional income tax are single peaked.If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.

Answer 2

False

Question 3

Arrow suggests that any social choice process should be applicable to any set of preferences for individuals -- because we can't be sure individual preferences are always rational.

Answer 3

False

Question 4

It is possible to come up with a democratic social choice process that satisfies Arrow's axioms as long as we are willing to let go of the No Dictatorship axiom.

Question 5

In an election in which there is no policy which can defeat all other policies, the sequence of the votes determine​s the outcome, even under majority rule.

Question 6

If a coalition D is decisive over a pair of social outcomes (x,y) under a social choice process that satisfies Arrow's axioms, then another coalition C (that differs from D) cannot be decisive over a different pair (a,b) of social outcomes.

Question 7

Suppose voter preferences over a public good funded through a head tax are single peaked.If everyone has the same tastes and the public good is a normal good, then ideal points for higher income individuals will lie to the right of ideal points of lower income individuals.

Question 8

A presidential candidate once famously said about a particular policy: "I voted for it before I voted against it." How might such a statement make sense in the context of sophisticated voting along agendas.

Question 9

Voting in large elections is irrational unless people get something like a "warm glow" from having voted.

Question 10

Consider voter preferences over a public good y that is being funded by a proportional income tax.
a.Illustrate how this might lead to single peaked voter preferences.
b.Suppose there exists a privately available good x that is substitute for y.How does this introduce non-single peakedness?
c.Now suppose x is relatively complementary to y.What would you expect to happen to voter preferences as this complementarity gets stronger?

Question 11

Suppose there are 3 voters in a legislature, and two projects are up for consideration.Project A creates benefits of 3 for district 1 but benefit of -1 in district 2 and -3 in district 3.Project B creates benefits of 3 in district 2, -1 in district 1 and -3 in district 3.
a.Would either of these projects be implemented under simple majority rule voting (where each project is approved or not approved on its own)?
b.How would your answer to (a) change if the projects can be bundled?
c.Is it efficient to fund these projects?
d.Suppose the Coase Theorem applies to legislatures -- i.e.suppose legislators can create alternatives with cash side-payments.What might voter 3 do to prevent the outcome in (b)?
e.True or False: If transactions costs are low and side-payments are allowed, only efficient projects will pass under vote trading.

Question 12

Discuss how a politicians "policy differentiation" from his opponent in an election softens the competition over how much in political rents the politician will be able to collect.

Question 13

A democratic (majority rule) decision over a multi-dimensional issue can be manipulated by an agenda setter only if voter tastes are not single-peaked.

Question 14

Vote trading in legislatures can lead to efficient outcomes that might otherwise not have been reached.

Question 15

The Pareto Unanimity axiom in Arrow's theorem implies that Arrow believes social choice processes should choose only pareto efficient outcomes.

Question 16

If oil executives control the governmental agency which regulates oil companies, regulatory capture has occurred.

Question 17

In settings where the policy space is single dimensional, non-single peaked preferences by some implies there is no Condorcet winner.

Question 18

Median voters in settings where the policy space is single dimensional and everyone has single peaked preferences are Arrow Dictators.

Question 19

In 2000, three candidates appeared on virtually all ballots in the US Presidential election: George W.Bush, Al Gore and Ralph Nadar.Bush arguably won the election by 537 votes in Florida where Ralph Nadar received nearly 100,000 votes.It is often argued that Al Gore would have won the election had Ralph Nadar not been on the ballot in Florida.Discuss how this suggests that the social choice process the US uses to elect Presidents does not satisfy the Independence of Irrelevant Alternatives (IIA) assumption in Arrow's theorem.