Abstracts

• Trade and The Timing of Elections
  Do trade-transmitted international business cycles affect the timing of national elections? This paper shows that export expansions do not differ substantively from booms in aggregate output in inviting opportunistic governments to call elections, especially as their terms mature. Further analysis confirms two ancillary implications of this relationship: (a) that clusters of countries tend to hold elections in periods of international economic expansion and (b) that national election cycles, much like business cycles, have become more correlated over time, most prominently in Europe. The findings in this paper raise implications for continued economic integration: freer movement of goods, services, and capital may imply more correlated business and, by extension, election cycles.



• Who Surfs, Who Manipulates? The Determinants of Opportunistic Election Timing and Electorally Motivated Economic Intervention
  In this paper, I develop a career concerns model of government policy choice within a dynamic optimal stopping framework to predict the degree of surfing (opportunistic timing) and manipulation (politically motivated economic intervention) under alternate institutional structures. Among other results, I find that the likelihood of opportunistic elections rises with exogenous economic performance, with longer maximum term lengths, with future electoral uncertainty, and with economic volatility but diminishes in the value of office-holding; manipulation increases with the maximum term length and with the value of office-holding but decreases with exogenous economic performance and with economic volatility. The model suggests that single-party governments should be highly opportunistic in calling elections and that countries that allow opportunistic election timing should experience less economically distortionary political intervention than their fixed-timing counterparts.



• Majoritarian Electoral Systems and Consumer Power: Price-Level Evidence from the OECD Countries. With Ronald Rogowski.
  A straightforward extension of the standard Stigler-Peltzman model of regulation, coupled with the Taagepera-Shugart analysis of electoral-system effects, suggests: (a) that the greater seat-vote elasticities of majoritarian electoral systems will tilt policy in favor of consumers, while proportional systems should strengthen producers; and (b) that the pro-consumer bias of majoritarian systems should be manifested in systematically lower prices. Empirical tests, controlling for the structural determinants of national price levels established in the earlier "law of one price" literature, establish majoritarian electoral systems as a significant and robust predictor, lowering national price levels in the mean OECD country by between ten and seventeen percent.



• Electoral Systems and Real Prices: Panel Evidence for the OECD Countries 1970-2000. With Ronald Rogowski and Eric C.C. Chang.
  Rogowski and Kayser (2002) posited that electoral systems, because they modify the balance of consumer-producer power, also modify price levels. Cross-sectional analysis of OECD countries in 1990 demonstrated that majoritarian electoral systems lower real price levels by approximately 10 percent. This paper now extends that empirical analysis to panel data for twenty-three OECD countries over the period 1970-2000, taking advantage of the numerous changes in electoral systems during that period (France, Italy, Japan, New Zealand). The finding that majoritarian electoral systems lead to lower real prices is shown to be remarkably resilient, surviving demanding robustness tests. The short-run effect of switching to an SMD from a PR system in a given country is a reduction of about 1.2 index points; the long-run effect of having an SMD electoral system, in the average OECD country, is a reduction in real prices of at least 10 per cent.



• The Price-Level Effect of Electoral Competitiveness
  A direct implication of the price model in Rogowski and Kayser (2002) is that majoritarian electoral systems suppress real price levels by an increasing margin over their proportional counterparts as two parties more evenly divide the vote. Electoral competitiveness should constrain real prices more under single member district (SMD) than proportional systems. This paper develops three measures of electoral competitiveness and tests their effects on real prices in a panel of 23 OECD countries, 1970 to 2000. Strong downward effects on real price levels emerge from one measure of electoral competitiveness under both electoral systems but effects in proportional systems exceed those under SMD. We attribute this to lower variation in real price levels among SMD countries and identify several other estimation issues. Time-series estimation of real price levels in India, confirms that the two-party vote margin, the competitiveness measure employed in the formal model, lowers prices where the data better match the model’s assumptions.