Razvan Vlaicu

Procedural Choice in Majoritarian Organizations

A puzzling feature of self-governing organizations is persistent majority support for restrictive, seemingly non-majoritarian, procedures, e.g., chairs and committees. This paper provides a theory of self-enforcing majoritarian commitment to restrictive procedures. We ask (i) why majorities consent to restrictive procedures in the first place, (ii) why restrictive procedures survive challenges thereafter, and (iii) with what policy consequences. In the model a risk-averse majority allocates procedural rights to increase procedural efficiency, i.e., reduce the procedural uncertainty of free-for-all bargaining. An equilibrium procedure is generally asymmetric and restrictive, generating non-majoritarian policy bias. Still, a majority may persist in endorsing it so as to avoid amplifying procedural and policy uncertainty.

Do Housing Bubbles Generate Fiscal Bubbles? Evidence from California Cities

This paper examines the effects of the most recent U.S. housing bubble on the fiscal policy of California cities. We use an instrumental variables approach that helps isolate fiscal consequences of house price appreciation by taking advantage of the influence of local topological constraints on the elasticity of house prices with respect to interest rates. Our analysis generates three main findings. First, despite Prop 13 fiscal constraints, rapid house price appreciation has a strong effect on property tax revenue. Second, the resulting increase in property tax revenue was largely offset by a reduction in other local tax revenue. This offsetting response leaves total city expenditure unrelated to local house prices. In that sense the housing bubble did not produce local fiscal bubbles. Third, we find that fiscal adjustments to house price appreciation depend on local political institutions.

MTEFs and fiscal performance: panel data evidence

In the last two decades more than 120 countries have adopted a version of a Medium-Term Expenditure Framework (MTEF). These are budget institutions whose rationale it is to enable the central government to make credible multi-year fiscal commitments. This paper analyzes a newly-collected dataset of worldwide MTEF adoptions during 1990-2008. It exploits within-country variation in MTEF adoption in a dynamic panel framework to estimate their impacts. The analysis finds that MTEFs strongly improve fiscal discipline, with more advanced MTEF phases having a larger impact. Higher-phase MTEFs also improve allocative efficiency. Only top-phase MTEFs have a significantly positive effect on technical efficiency.

A Bargaining Model of Endogenous Procedures

This paper endogenizes policymaking procedures in a multilateral bargaining framework. A procedure specifies players’ proposal power in bargaining over one-dimensional policies. In procedural bargaining players internalize the procedures’ effects on subsequent policy bargaining. In policy bargaining players’ utilities are continuous, strictly concave, and order-restricted. The paper provides equilibrium characterization, existence, and uniqueness results for this two-tier bargaining model. Although the procedural choice set is multidimensional, sequentially rational procedures feature “limited power sharing” and admit a total order. In equilibrium, endogenous procedures and policies are strategic complements.

A Structural Model of Electoral Accountability

This paper proposes a structural approach to measuring the effects of electoral accountability. We estimate a political agency model with imperfect information in order to identify and quantify discipline and selection effects, using data on U.S. governors for 1982-2012. We find that the possibility of reelection provides a significant incentive for incumbents to exert effort. We also find a selection effect, although it is weaker in terms of its effect on average governor performance. According to our model, the widely-used two-term regime improves voter welfare by 4.2% compared to a one-term regime, and find that a three-term regime may improve voter welfare even further.

Inequality, Participation, and Polarization

The upward co-movement of income inequality and partisan polarization in the U.S. is typically attributed to intensified class conflict or a political wealth bias. This paper formalizes a theory of polarization where changes in the income distribution do not affect citizens’ policy preferences, but instead change their patterns of political participation: aggregate voting decreases relative to aggregate giving, reducing the electoral penalty for partisan policies. By endogenizing party composition the model captures both the ideological and compositional dimensions of polarization, and addresses less-discussed polarization features, such as intra-party homogeneity and the increase in safe seats. According to the model, observed polarization patterns imply that parties have diverged more than candidates, and that the gap between party and candidate divergence has increased with income inequality.

A STRUCTURAL MODEL OF ELECTORAL ACCOUNTABILITY

This article proposes a structural approach to measuring the effects of electoral accountability. We estimate a political agency model with imperfect information in order to identify and quantify discipline and selection effects, using data on U.S. governors. We find that the possibility of reelection provides a significant incentive for incumbents to exert effort, that is, a disciplining effect. We also find a positive but weaker selection effect. According to our model, the widely used two‐term regime improves voter welfare by 4.2% compared to a one‐term regime, and better voter information about the effort of the governors would further increase voter welfare by up to 0.5%.

Vote Buying or Campaign Promises? Electoral Strategies When Party Credibility Is Limited

What explains the wide variation across countries in the use of vote buying and policy promises during election campaigns? We address this question, and account for a number of stylized facts and apparent anomalies regarding vote buying, using a model in which parties cannot fully commit to campaign promises. We find that high vote buying is associated with frequent reneging on campaign promises, strong electoral competition, and high policy rents. Frequent reneging and low party competence reduce campaign promises. If vote buying can be financed out of public resources, incumbents buy more votes and enjoy an electoral advantage, but they also promise more public goods. Vote buying has distributional consequences: voters targeted with vote buying pre-election may receive no government benefits post-election. The results point to obstacles to the democratic transition from clientelist to programmatic forms of electoral competition: parties may not benefit electorally from institutions that increase commitment.