We show that simple majority rule satisfies four standard< and attractive properties—the Pareto property, anonymity, neutrality, and (generic) transitivity—on a bigger class of preference domains than (essentially) any other voting rule. Hence, in this sense, it is the most robust voting rule. If we replace neutrality in the above list of properties with the weaker property, independence of irrelevant alternatives, then the corresponding robustness conclusion holds for unanimity rule (rule by consensus).
Jean-Jacques Laffont, economist extraordinaire and visionary founder of the
Institut d'Économie Industrielle ( IDEI ) in Toulouse, died at his home in Colomiers on
May 1 after a valiant battle against cancer. He was fifty-seven years old.
Does fiscal decentralization lead to more efficient governance, better public goods, and higher economic growth? This paper tests hypotheses of the theoretical literature that results of decentralization depend on features of political institutions. Using data from up to 95 countries for 25 years we show that the effect of fiscal decentralization strongly depends on two aspects of political centralization: 1) strength of national party system (measured by the age of main parties and fractionalization of government parties) and 2) subordination (whether local and state executives are appointed or elected). We find solid support for Riker’s theory (1964): in developing countries, strong parties significantly improve the results of fiscal decentralization for economic growth, quality of government, and public goods provision. There is also some evidence from developing countries that administrative subordination of local to higher-level authorities improves decentralization results.
How does regulatory capture affect growth? We construct measures of the political power of
firms and regional regulatory capture using micro-level data on the preferential treatment of firms
through regional laws and regulations in Russia during the period 1992-2000. Using these measures,
we find that: 1) politically powerful firms perform better on average; 2) a high level of regulatory
capture hurts the performance of firms that have no political connections and boosts the
performance of politically connected firms; 3) capture adversely affects small business growth and
the tax capacity of the state; 4) there is no evidence that capture affects aggregate growth.