Political Economy Meeting

November 19, 2010 -
Matthew Gentzkow, NBER and University of Chicago, and Francesco Trebbi, NBER and University of British Columbia, Organizers

Sandeep Baliga and Jeffrey Ely, Northwestern University

Baliga and Ely study torture as a mechanism for extracting information from a suspect who may or may not be informed. They show that the optimal use of torture is hindered by two commitment problems. First, the principal would benefit from a commitment to torture a victim he knows to be innocent. Second, the principal would benefit from a commitment to limit the amount of torture faced by the guilty. They analyze a dynamic model of torture in which the credibility of these threats and promises are endogenous. They show that these commitment problems dramatically reduce the value of torture and can even render it completely ineffective. They use the model to address questions such as the effect of enhanced interrogation techniques, rights against indefinite detention, and delegation of torture to specialists.

Abhijit Banerjee, MIT and NBER; Selvan C. Kumar, Yale University; Rohini Pande, Harvard University and NBER; and Felix Su, Harvard University Department of Economics
Do Informed Voters Make Better Choices? Experimental Evidence from Urban India

Disclosure laws for politicians exist in more than a hundred countries. But can public disclosures about politician performance and qualifications influence electoral accountability in settings characterized by weak institutions and less educated populations? In the run-up to the 2008 elections in Delhi, researchers Banerjee, Kumar, Pande, and Su implemented a field experiment in which they provided slum dwellers with newspapers containing report cards with information on candidate qualifications and legislator perform was worse. Access to report cards increased voter turnout; this effect was larger when incumbent performance was worse. The researchers also observe reductions in the incidence of cash-based vote buying and electoral gains for better performing incumbents. Finally, they observe significant voter sophistication in the use of information: voters make comparisons across spending categories and candidates to overcome political agency problems and to reward better performing incumbents.

Yosh Halberstam, University of Toronto, and Montagnes Pablo, University of Chicago
Information Contagion in Co-election Environments: Theory and Evidence from Entry and Exit of Senators

It is well-known that the electorate in mid-term elections is more ideologically extreme than the electorate in presidential elections; yet, surprisingly, Halberstam and Pablo find that U. S. senators elected in mid-term elections are consistently more ideologically moderate than those first elected in presidential elections. Furthermore, senators who are ousted or retire from office around presidential elections are significantly more ideologically moderate than those who exit around mid-term elections. The researchers propose a theory in which the presence of party labels enables voters to rationally update their beliefs about candidates across contemporaneous races for office. Wide support for a candidate in one race aids marginal candidates from the same party in other races. The model generates predictions that are consistent with these new findings, as well as a broad set of phenomena from the literature. They suggest that unbiased public signals, such as party labels, may have unexpected effects on the aggregation of private information and preferences. These findings illustrate that simple elements of institutional design may not be outcome-neutral and may profoundly affect the extent to which duly-elected representatives reflect their constituents' preferences.

Alessandra Casella, Columbia University and NBER; Aniol Llorente-Saguer, Max Planck Institute; and Thomas Palfrey, California Institute of Technology
Competitive Equilibrium in Markets for Votes

Casella, Llorente-Saguer, and Palfrey develop a competitive equilibrium theory of a market for votes. Before voting on a binary issue, individuals may buy and sell their votes with each other. The authors define ex ante vote-trading equilibrium, identify weak sufficient conditions for existence, and construct one such equilibrium. They show that this equilibrium must always result in dictatorship and the market generates welfare losses, relative to simple majority voting, if the committee is large enough. They test the theoretical implications by implementing a competitive vote market in the laboratory using a continuous open-book multi-unit double auction.

Efraim Benmelech, Harvard University and NBER, and Claude Berrebi and Esteban Klor, Hebrew University

Counter-Suicide-Terrorism: Evidence from House Demolitions (NBER Working Paper No. 16493)

Benmelech, Berrebi, and Klor examine whether house demolitions are an effective counter-terrorism tactic against suicide terrorism. They link original longitudinal micro-level data on houses demolished by the Israeli Defense Forces with data on the universe of suicide attacks against Israeli targets. By exploiting spatial and time variation in house demolitions and suicide terror attacks during the second Palestinian uprising, they show that punitive house demolitions (those targeting Palestinian suicide terrorists and terror operatives) cause an immediate, significant decrease in the number of suicide attacks. The effect dissipates over time and by geographic distance. In contrast, they observe that precautionary house demolitions (demolitions justified by the location of the house but not related to the identity or any action of the house's owner) cause a significant increase in the number of suicide terror attacks. These results are consistent with the view that selective violence is an effective tool to combat terrorist groups, whereas indiscriminate violence backfires.

David Jaeger, City University of New York; Esteban Klor, Hebrew University; Sami H. Miaari, University of Haifa; and Daniele Paserman, Boston University and NBER

The Struggle for Palestinian Hearts and Minds: Violence and Public Opinion in the Second Intifada (NBER Working Paper No. 13956)

Jaeger, Klor, Miaari, and Paserman examine how violence influences the political preferences of an aggrieved constituency that is purportedly represented by militant factions. Using public opinion poll micro-data of the Palestinian population linked to data on fatalities from the Second Intifada, they find that although Israeli violence discourages Palestinians from supporting moderate political positions, this "radicalization" is fleeting, and vanishes completely within 90 days. However, there is evidence suggesting that major political events in the Palestinian-Israeli conflict have had a longer-term impact on political preferences. Individuals who were teenagers during the period of the Oslo negotiations tend to have relatively moderate preferences, while those who were teenagers during the First Intifada tend to be relatively radical.