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The modern Condorcet jury theorem states that under weak conditions, when voters have common interests, elections will aggregate information when the population is large, in any equilibrium. Here, we study the performance of large elections with population uncertainty. We find that the modern Condorcet jury theorem holds if and only if the expected number of voters is independent of the state. If the expected number of voters depends on the state, then additional equilibria exist in which information is not aggregated. The main driving force is that, everything else equal, voters are more likely to be pivotal if the population is small.

Prozent-Hürden führen normalerweise dazu, dass Stimmen verfallen, was der Gleichheit der Wahl widerspricht und die Chancen kleinerer sowie neuer Parteien mindert. Es gibt mehrere mögliche Auswege, z. B. durch Präferenzwahl. Noch einfacher ist es, wenn jede Partei angibt, an welche andere Partei ihre Stimmen gehen sollen, falls sie selbst an der Prozent-Hürde scheitert. Electoral thresholds usually cause votes to lapse, which contradicts the equality of votes and reduces the chances of smaller and new parties. There are several possible ways out, e.g. by preferential voting. An even easier solution is that each party specifies which other party should get its votes if it fails to meet the electoral threshold.

Under simple majority voting an absolute majority of voters may choose policies that are harmful to minorities. It is the purpose of sub- and super-majority rules to protect legitimate minority interests. We study how voting rules are chosen under the veil of ignorance. In our experiment, individuals choose voting rules for given distributions of gains and losses that can arise from a policy, but before learning their own valuation of the policy. We find that subjects on average adjust the voting rule in line with the skewness of the distribution. As a result, a higher share of the achievable surplus can be extracted with the suggested rules than with exogenously given simple majority voting. The rule choices, however, imperfectly re ect the distributions of benefits and costs, in expectation leading to only 63% of the surplus being extracted. Both under-protection and over-protection of minorities contribute to the loss. Voting insincerely leads to a further surplus loss of 5-15%. We classify subjects according to their rule choices and show that most subjects' rule choices follow the incentives embedded in the distributions. For a few participants, however, this is not the case, which leads to a large part of the surplus loss.

We consider voting rules on a multidimensional policy space for a continuum of voters with elliptic preferences. Assuming continuity, gamma-strategy-proofness-meaning that coalitions of size smaller or equal to a small number gamma cannot manipulate-and unanimity, we show that such rules are decomposable into one-dimensional rules. Requiring, additionally, anonymity leads to an impossibility result. The paper can be seen as an extension of the model of Border and Jordan (1983) to a continuum of voters. Contrary, however, to their finite case where single voters are atoms, in our model with nonatomic voters even a small amount of strategy-proofness leads to an impossibility.

Zusammenfassung Der Beitrag untersucht die Wirkung von fiskalischer Aquivalenz bei Mehrheitsentscheiden. Betrachtet wird die Bereitstellung von offentlichen Gutern mit Spillover-Effekten. Fiskalische Aquivalenz wird dabei so interpretiert, dass alle von der Bereitstellung profitierenden Burger auch uber deren Hohe entscheiden. Wenn die Individuen keine Aquivalenzsteuern zahlen, wird gezeigt, dass fiskalische Aquivalenz nicht automatisch zu einer effizienten Allokation fuhrt. Insofern sollten Reformen der Kompetenzverteilung in einem Bundesstaat auch mogliche Verzerrungen politischer Entscheidungen berucksichtigen. Abstract The paper analyses the effect of fiscal equivalence under majority voting. It considers the provision of public goods with spillover effects. Fiscal equivalence is taken to mean that all those who benefit from the public goods vote on the provision level. When taxes are not benefit taxes, it is shown that fiscal equivalence does not automatically lead to an efficient provision of public...

The rational-voter model is often criticized on the grounds that two of its central predictions (the paradox of voting and Duverger's Law) are at odds with reality. Recent theoretical advances suggest that these empirically unsound predictions might be an artifact of an (arguably unrealistic) assumption: the absence of aggregate uncertainty about the distribution of preferences in the electorate. In this paper, we propose direct empirical evidence of the effect of aggregate uncertainty in multicandidate elections. Adopting a theory-based experimental approach, we explore whether aggregate uncertainty indeed favors the emergence of non-Duverger's law equilibria in plurality elections. Our experimental results support the main theoretical predictions: sincere voting is a predominant strategy under aggregate uncertainty, whereas without aggregate uncertainty, voters massively coordinate their votes behind one candidate, who wins almost surely.

Gemessen an ihrer Bevölkerungszahl sind die kleinen Staaten gegenwärtig im Ministerrat der EU bei Abstimmungen übervertreten. Welche Auswirkungen ergeben sich hieraus für die Machtverteilung im Ministerrat? Wie ändern sich die Verhältnisse durch die Erweiterung der Europäische Union?

We examine how the final say in a sequence of proposals for local public project provision, financing, and redistribution can be channeled towards socially desirable outcomes, thereby breaking the dictatorial power of the last agenda-setter. Individuals are heterogeneous with some citizens benefiting from the public project (winners) and the rest losing (losers) relative to per-capita costs. Our main insight is that a simple ban on subsidies for the proposal-makers can achieve the purpose whenever the first proposal-maker is a winner and the second proposal-maker is a loser. Such a ban induces project winners to make efficient public project proposals that are however coupled with socially undesirable subsidy schemes. The best possible amendment for project losers is then to match the project proposal and to eliminate all subsidies. We further show that two-round proposal-making constitutes the minimal form of political competition yielding first-best outcomes and that restrictions on tax schemes are socially desirable., Economics Working Paper Series, 12/164 (164)

The main purpose of the present paper is to disentangle the mix-up of the notions of success and satisfaction which is prevailing in the voting power literature. We demonstrate that both notions are conceptually distinct, and discuss their relationship and measurement. We show that satisfaction contains success as one component, and that both coincide under the canonical set-up of a simultaneous decision-making mechanism as it is predominant in the voting power literature. However, we provide two examples of sequential decision-making mechanisms in order to illustrate the difference between success and satisfaction. In the context of the discussion of both notions we also address their relationship to different types of luck.

This paper both theoretically and experimentally studies the properties of plurality and approval voting when the majority is divided as a result of information imperfections. The minority backs a third alternative, which the majority views as strictly inferior. The majority thus faces two problems: aggregating information and coordinating to defeat the minority candidate. Two types of equilibria coexist under plurality: either voters aggregate information, but this requires splitting their votes, or they coordinate but cannot aggregate information. With approval voting, expected welfare is strictly higher, because some voters multiple vote to achieve both goals at once. In the laboratory, we observe both types of equilibrium under plurality. Which one is selected depends on the size of the minority. Approval voting vastly outperforms plurality. Finally, subject behavior suggests the need to study asymmetric equilibria.

In this paper we address several issues related to collective dichotomous decision-making by means of quaternary voting rules, i.e., when voters may choose between four actions: voting yes, voting no, abstaining and not turning up - which are aggregated by a voting rule into a dichotomous decision: acceptance or rejection of a proposal. In particular we study the links between the actions and preferences of the actors. We show that quaternary rules (unlike binary rules, where only two actions -yes or no- are possible) leave room for manipulability (i.e., strategic behaviour). Thus a preference profile does not in general determine an action profile. We also deal with the notions of success and decisiveness and their ex ante assessment for quaternary voting rules, and discuss the role of information and coordination in this context.

We thank an anonymous referee whose comments and suggestions helped us to write a better paper. The work of G. Bergantiños is partially supported by research grant ECO2008-03484-C02-01 from the Spanish Ministry of Science and Innovation and FEDER. Support for the research of J. Massó was received through the prize "ICREA Acadèmia" for excellence in research, funded by the Generalitat de Catalunya. He also acknowledges the support of MOVE (where he is an affiliated researcher), of the Barcelona Graduate School of Economics (where he is an affiliated professor), and of the Government of Catalonia, through grant SGR2009-419. His work is also supported by the Spanish Ministry of Science and Innovation through grants ECO2008-04756 (Grupo Consolidado-C) and CONSOLIDER-INGENIO 2010 (CDS2006-00016). The work of A. Neme is partially supported by the Universidad Nacional de San Luis through grant 319502 and by the Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET) through grant PICT-02114. Altres ajuts: UNSL/319502 Altres ajuts: PICT-02114 The division problem consists of allocating a given amount of an homogeneous and perfectly divisible good among a group of agents with single-peaked preferences on the set of their potential shares. A rule proposes a vector of shares for each division problem. Most of the literature has implicitly assumed that all divisions are feasible. In this paper we consider the division problem when each agent has a maximal capacity due to an objective and verifiable feasibility constraint which imposes an upper bound on his share. Then each agent has a feasible interval of shares where his preferences are single-peaked. A rule has to propose to each agent a feasible share.We focus mainly on strategy-proof, efficient and consistent rules and provide alternative characterizations of the extension of the uniform rule that deals explicitly with agents' maximal capacity constraints

We consider a standard social choice environment with linear utilities and independent, one-dimensional, private values. We provide a short and constructive proof that for any Bayesian incentive compatible mechanism there exists an equivalent dominant strategy incentive compatible mechanism that delivers the same interim expected utilities for all agents. We demonstrate the usefulness and applicability of our approach with several examples. Finally, we show that the equivalence between Bayesian and dominant strategy implementation breaks down when utilities are non-linear or when values are interdependent, multi-dimensional, or correlated.

This paper presents results on the transitivity of the majority relation and the existence of a median representative ordering. Building on the notion of intermediate preferences indexed by a median graph, the analysis extends well-known results obtained when the underlying graph is a line. In contrast with other types of restrictions such as single-peakedness, intermediate pref- erences allow for a clear distinction between restrictions on the set of preferences characteristics and those on the set of alternatives.

This paper studies the assignment of decision makers to two committees that make decisions by a simple majority rule. There is an even number of decision makers at each of various skill levels and each committee has an odd number of members. Surprisingly, even with the symmetric assumptions in the spirit of Condorcet, a symmetric composition of committees is not always optimal. In other words, decision makers with different skill levels should not generally be evenly divided among the committees. However, in the special case of only two skill levels, it is optimal to compose the committees evenly.

Unanimous voting as the fundamental procedural source of political legitimacy grants veto power to each individual. We present an axiomatic characterization of a class of bidding processes to spell out the underlying egalitarian values for collective projects of a productive state. At heart of such procedures is the determination of payments for all possible bid vectors such that equal profits according to bids emerge. Along with other intuitive requirements this characterizes procedurally fair bidding rules for advantageous projects of a collectivity.

This paper aims at discovering the decision rule the Governing Council of the ECB uses to set interest rates. We construct a Taylor rule for each member of the council and for the euro area as a whole, and aggregate the interest rates they produce using several classes of decision-making mechanisms: chairman dominance, bargaining, consensus, voting, and voting with a chairman. We test alternative scenarios in which individual members of the council pursue either a national or a federal objective. We then compare the interest-rate path predicted by each scenario with the observed euro area's interest rate. We find that scenarios in which all members of the Governing Council are assumed to pursue Euro-area-wide objectives are dominated by scenarios in which decisions are made collectively by a council consisting of members pursuing national objectives. The best-performing scenario is the one in which individual members of the Governing Council follow national objectives, bargain over the interest rate, and their weights are based on their country's share of the zone's GDP.

We theoretically and experimentally study voter behavior in a setting characterized by plurality rule and mandatory voting, where voters choose from three options. We are interested in the occurrence of strategic voting in an environment where Condorcet cycles may occur. In particular, we focus on how information about the distribution of preferences affects strategic behavior. We also vary the relative importance of the second preferred option to investigate how this affects the strategic vote. Quantal response equilibrium analysis is used to analyze the game and proves to be a good predictor for the experimental data. Our results indeed show that strategic voting arises, the extent of which depends on (i) the availability of information; (ii) the relative importance of the intermediate candidate; (iii) the electorate's relative support for one's preferred candidate; and (iv) the relative position of the plurality-supported candidate in a voter's preference ordering. Our results show that information serves as a coordination device where strategic voting does not harm the plurality-preferred candidate's chances of winning.

We consider the problem of choosing a level of a public good on an interval of the real line among a group of agents. A probabilistic rule chooses a probability distribution over the interval for each preference profile. We investigate strategy-proof probabilistic rules in the case where distributions are compared based on stochastic dominance relations. First, on a minimally rich domain, we characterize the so-called probabilistic generalized median rules (Ehlers et al., 2002, Journal of Economic Theory 105: 408-434) by means of stochastic-dominance (sd) strategy-proofness and ontoness. Next, we study how much we can enlarge a domain to allow for the existence of sd-strategy-proof probabilistic rules that satisfy ontoness and the no-vetoer condition. We establish that the domain of convex preferences is the unique maximal domain including a minimally rich domain for these properties.

We investigate whether the simple plurality rule aggregates information efficiently in a large election with three alternatives. The environment is the same as in the Condorcet Jury Theorem (Condorcet (1785)). Voters have common preferences that depend on the unknown state of nature, and they receive imprecise private signals about the state of nature prior tovoting. With two alternatives and strategic voters, the simple plurality rule aggregates information efficiently in elections with two alternatives (e.g., Myerson (1998)). We show that there always exists an efficient equilibrium under the simple plurality rule when there are three alternatives as well. We characterize the set of inefficient equilibria with two alternatives and the condition under which they exist. There is only one type of inefficient equilibrium with two alternatives. In this equilibrium, voters vote unresponsively because they all vote for the same alternative. Under the same condition, the same type of equilibrium exists with three alternatives. However, we show that the number and types of coordination failures increase with three alternatives, and that this leads to the existence of other types of inefficient equilibria as well, including those in which voters vote informatively.

In this paper we examine the potential of democratic constitutions for the provision of divisible public goods in a large economy. Our main insights are as follows: When aggregate shocks are absent, the combination of the following rules yields first-best allocations: a supermajority rule, equal taxation, exemption of the agenda setter from taxation, and a ban on subsidies. In the presence of aggregate shocks to benefits or to costs of public-good provision, tax-sensitive majority rules, where the size of the required majority depends on the aggregate tax revenues, yield first-best allocations if a monotonicity condition is met. Finally, we explore the potential of first-best constitutions to induce voluntary participation by compensating agents belonging to the minority.

Many voting rules and, in particular, the plurality rule and Condorcet-consistent voting rules satisfy the simple-majority decisiveness property. The problem implied by such decisiveness, namely, the universal disregard of the preferences of the minority, can be ameliorated by applying unbiased scoring rules such as the classical Borda rule, but such amelioration has a price; it implies erosion in the implementation of the widely accepted 'majority principle'. Furthermore, the problems of majority decisiveness and of the erosion in the majority principle are not necessarily severe when one takes into account the likelihood of their occurrence. This paper focuses on the evaluation of the severity of the two problems, comparing simple-majoritarian voting rules that allow the decisiveness of the smallest majority larger than 1/2 and the classical Borda method of counts. Our analysis culminates in the derivation of the conditions that determine, in terms of the number of alternatives k, the number of voters n and the relative (subjective) weight assigned to the severity of the two problems, which of these rules is superior in light of the dual majoritarian approach.

In this paper we analyze a legislative bargaining game in which parties privately informed about their preferences bargain over an ideological and a distributive decision. Communication takes place before a proposal is offered and majority rule voting determines the outcome. When the private information pertains to the ideological intensities but the ideological positions are publicly known, it may not be possible to have informative communication from the legislator who is ideologically distant from the proposer, but the more moderate legislator can communicate whether he would 'compromise' or 'fight' on ideology. If instead the private information pertains to the ideological positions, then all parties may convey whether they will 'cooperate', 'compromise', or 'fight' on ideology. When the uncertainty is about ideological intensity, the proposer is always better off making proposals for the two dimensions together despite separable preferences, but when the uncertainty is about ideological positions, bundling can result in informational loss which hurts the proposer.

This paper experimentally analyzes the effects if signatories to an international environmental agreement (IEA) apply different voting schemes to determine the terms of the agreement. To this end, unanimity, qualified majority voting, and simple majority voting are compared with respect to the resulting pollution abatement level and social welfare. At first sight in line with theoretical predictions, the experiment shows that the change of the voting scheme implemented in an IEA does not significantly change social welfare. However, changing the majority required to determine the terms of an IEA alters the 'depth and breadth' of cooperation. The coalitions under the unanimity rule are relatively large and implement moderate effort levels while the coalitions with majority votes implement very high effort levels but attract only few participants.

We analyze the ECB Governing Council's voting procedures. The literature has by now discussed numerous aspects of the rotation model but does not account for many institutional aspects of the voting procedure of the GC. Using the randomization scheme based on the multilinear extension (MLE) of games, we try to close three of these gaps. First, we integrate specific preferences of national central bank presidents, i.e. their desired interest rates. Second, we address the agenda-setting power of the ECB president. Third, we do not simulate an average of the decisions but look at every relevant point in time separately. In der vorliegenden Arbeit wird das Abstimmungsverhalten der Mitglieder des zentralen Entscheidungsorgans der Europäischen Zentralbank (EZB), des EZB-Rats analysiert. Eine Reform der Abstimmungsmodalitäten träger der kommenden Erweiterung der Eurozone Rechnung. Zentraler Bestandteil dieser Reform ist die Rotation der Stimmrechte innerhalb von vorab definierten Gruppen. Bisher wurde das so genannte Rotationsmodell in der Literatur ohne die Berücksichtigung wichtiger Eigenschaften der Abstimmungsmodalitäten diskutiert. Mit Hilfe einer spieltheoretischen Machtindexanalyse können mehrere dieser Aspekte in dieser Arbeit mit einbezogen werden. Hierbei handelt es sich erstens um die Berücksichtigung der Präferenzen der Mitglieder des Gremiums. Zweitens wird die Tatsache beachtet, dass der Präsident der EZB als primus inter pares den Abstimmungsinhalt der Treffen festlegen kann, also über die so genannte agenda-setting power verfügt. Schliesslich nimmt unsere Analyse von den bisherigen durchschnittlichen Betrachtungen Abstand und misst die Verteilung der Macht in mehreren vorstellbaren Zeitpunkten.

The European Union used to make decisions by unanimity or near unanimity. After a series of extensions, with 27 member states the present decision making mechanisms have become very slow and assigned power to the members in an arbitrary way. The new decision rules accepted as part of the Lisbon Treaty did not only make decision making far easier, but streamlined the process by removing the most controversial element: the voting weights. The new system relies entirely on population data. We look at the immediate impact of the reform as well as the long term effects of the dfferent demographic trends in the 27 member states. We find that the Lisbon rules benefit the largest member states, while medium sized countries, especially Central Eastern European countries suffer the biggest losses.

We develop a model of legislative lobbying where policy proposals are endogenous. We show that a policy proposer with preferences tilted towards one lobby may be induced by an increase in that interest group’s size to propose policies geared towards the opposing lobby. Hence, a larger lobby size can have adverse effects on policy outcomes for this same lobby. This provides another rationale as to why some interests do not organize. Moreover, we find that a second-mover advantage in Groseclose and Snyder (1996)-type lobbying models with exogenous policy proposals can turn into a second-mover disadvantage when the proposal is endogenous., Economics Working Paper Series, 10/126

I discuss instances where a committee wants to deviate from the simple majority rule by adopting an alternative voting scheme for two consecutive binary ballots. The alternative voting rule, called Minority Voting as an Exception (MVE), works as follows: In the first ballot a b-majority rule is used, where b < 1/2 is equal to the minority fraction that favors some project, say project 1. This allows the minority to induce the adoption of project 1. After the first ballot all voting winners, i.e. the minority of project winners, lose their voting rights for the upcoming second ballot, where the simple majority rule is used. Hence, MVE may benefit both project losers and winners and may thus be unanimously accepted. The analysis of this short-term deviation is presented with a potential application in the sphere of communal politics.

This article incorporates a political decision process into an urban land use model to predict the likely location of a public good. It fills an important gap in the literature by modeling the endogenous location of open space. The article compares open space decisions made under a majority-rules voting scheme with welfare-improving criterion and finds households tied to a location in space compete against each other for public goods located nearer them. Significant differences emerge between the two decision criteria, indicating that requiring referenda for open space decisions is likely to lead to inefficient outcomes. Specifically, many open space votes are likely to fail that would lead to welfare improvements, and any open space decisions that do pass will require amenities larger than needed to achieve the social optimum. The more dispersed and large the population, the larger is the gap between the socially efficient level and the level needed for a public referendum to pass.

In many organizations, decisions are taken by unanimity giving each member veto power. We analyze a model of an organization in which members with heterogenous productivity privately contribute to a common good. Under unanimity, the least efficient member imposes her preferred effort choice on the entire organization. In the presence of externalities and an incomplete charter, the threat of forming an inner organization can undermine the veto power of the less efficient members and coerce them to exert more effort. We also identify the conditions under which the threat of forming an inner organization is executed. Finally, we show that majority rules effectively prevent the emergence of inner organizations.

The political blessings of federalism are the core of our discussion. These benefits are operationalized as the decrease in the number of outvoted in a federal system with majority voting as an important source of regime satisfaction. The approach originates from the work of Roland Pennock who developed a similar methodology exactly 50 years ago although he applied it to a slightly different topic. First, we show that decentralized decision-making is advantageous in the majority of logical cases since the expected value of the number of outvoted is lower compared to centralized decision-making. Comparing different cases, we conclude that the political force of the decentralization-theorem (Oates) is a sole and inverse function of the population size of the nation: Next, the question is addressed how the gains from federalism react to variations in the number of regions: The complementary question what happens to the gains of federalism when increasing the number of alternatives to vote for is more difficult to answer for set-ups with more than 2 alternatives. In our special case with 2 regions and 3 alternatives, the model shows that augmenting the number of alternatives exerts a negative effect on the gains of federalism if we use our first indicator - the share of the sum of the highest number of outvoted. If instead we employ the shares of the average number of outvoted, then there is still a slight increase in the gains of federalism. Using the last indicator, a case-related comparison of both effects shows that an increase in the number of regions has a stronger positive impact on the gains than letting the number of alternatives grow. Employing the other indicator of the share of the sum of the highest number of outvoted, then there is clearly a positive effect of the number of regions. But the effect of the number of alternatives is negative, implying that this last indicator underestimates the gains of federalism to a certain extent. Our integrative model explaining the gains of federalism reconfirms these interdependencies with the share of the sum of the highest numbers of outvoted: The first derivative is positive for more than 2 regions and the same holds for the size of the population at the national level in an unrestricted manner. separating positive and negative effects. Finally, we return to the opening question by analyzing the cumulative frequency distributions of the number of outvoted: Here, even if federalization is preferable as a whole, centralized decision-making is more advantageous for low numbers of outvoted, implying that the domain of decentralized decision-making seems to be connected to higher levels of the outvoted.

Committee decision making is examined in this study focusing on the role assigned to the committee members. In particular, we are concerned about the comparison between committee performance under specialization and non-specialization of the decision makers.

We compare single ballot vs dual ballot elections under plurality rule, assuming sincere voting and allowing for partly endogenous party formation. Under the dual ballot, the number of parties is larger but the influence of extremist voters on equilibrium policy is smaller, because their bargaining power is reduced compared to a single ballot election. The predictions on the number of parties and on policy volatility are consistent with data on municipal elections in Italy, where cities with more (less) than 15,000 inhabitants have dual (single) ballots respectively.

Fair representation of voters in a committee representing different voters' groups is being broadly discussed during last few years. Assuming we know what the fair representation is, there exists a problem of optimal quota: given a fair distribution of voting weights, how to set up voting rule (quota) in such a way that distribution of relative a priori voting power is as close as possible to distribution of relative voting weights. Together with optimal quota problem a problem of trade-off between fairness and efficiency (ability of a voting body to change status quo) is formalized by a fairness-efficiency matrix.

Domains of individual preferences for which the well-known impossibility Theorems of Gibbard-Satterthwaite and Muller-Satterthwaite do not hold are studied. First, we introduce necessary and sufficient conditions for a domain to admit non-dictatorial, Pareto efficient and either strategy-proof or Maskin monotonic social choice rules. Next, to comprehend the limitations the two Theorems imply for social choice rules, we search for the largest domains that are possible. Put differently, we look for the minimal restrictions that have to be imposed on the unrestricted domain to recover possibility results. It turns out that, for such domains, the conditions of inseparable pair and of inseparable set yield the only maximal domains on which there exist non-dictatorial, Pareto efficient and strategy-proof social choice rules. Next, we characterize the maximal domains which allow for Maskin monotonic, non-dictatorial and Pareto-optimal social choice rules.

This paper deals with the design of voting rules in the EU Council. Both internal and external impact of the voting rules are examined. Internal impact affects the distribution of power among the member states and external impact affects power relations between the main decision-making bodies in the EU. One of the main lessons of the analysis is that voting rules matter. This clearly explains why the design of Council voting rules has required so much bargaining and cumbersome marathon negotiations. The internal decisionmaking rules in the Council have substantial impact on both the national distribution of power in the Council and inter-institutional power between the EU's decision-making bodies.

Ten Central European countries became members of the European Union in the years 2004 - 2007. They constitute 20% of the EU's total population; and even though their economic output is much lower, it rises dynamically. New members' impact on the EU policies has nevertheless been limited. This is due not only to the arcane voting rules within the EU, but also to the lack of a common agenda among the Central European countries. Our paper illustrates that the new members rarely vote together and that their influence is thus fairly limited. We argue that as the EU seemingly lacks energy to implement further reforms that would stimulate its economy, impetus for change may come from Central European countries. To that end, however, they have to coordinate their voting and become a more coherent voting group than they are now.

Vote-buying is widely used by parties in developing countries to influence the outcome of elections. We examine the impact of vote-buying on growth. We consider a model with a poverty trap where redistribution can promote growth. We show that vote-buying contributes to the persistence of poverty as taxed wealthy people buy votes from poor people. We then show that there exists a democratic constitution that breaks vote buying and promotes growth. Such a constitution involves rotating agenda setting, a taxpayer-protection rule and repeated voting. The latter rule makes vote buying prohibitively costly.

This paper deals with the voting rules in the EU Council. Both internal and external impact of the voting rules are evaluated. Internal impact affects the distribution of power among the member states and external impact affects power relations between the main decision-making bodies in the EU. One of the main lessons of the analysis is clearly to explain why the design of Council voting rules has required so much bargaining and cumbersome marathon negotiations.

This paper revisits the fiscal decentralization theorem, by relaxing the role of the assumption that governments are benevolent, while retaining the assumption of policy uniformity. If instead, decisions are made by direct majority voting, (i) centralization can welfare-dominate decentralization even if there are no externalities and regions are heterogenous; (ii) decentralization can welfare-dominate centralization even if there are positive externalities and regions are homogenous. The intuition is that the insensitivity of majority voting to preference intensity interacts with the different inefficiencies in the two fiscal regimes to give second-best results. Similar results obtain when governments are benevolent, but subject to lobbying, because now decisions are too sensitive to the preferences of the organised group.

In this paper we propose minority voting as a scheme that can partially protect individuals from the risk of repeated exploitation. We consider a committee that meets twice to decide about projects where the first-period project may have a long-lasting impact. In the first period a simple open majority voting scheme takes place. Voting splits the committee into three groups: voting winners, voting losers, and absentees. Under minority voting only voting losers keep the voting right in the second period. We show that as soon as absolute risk aversion exceeds a threshold value minority voting is superior to repeated application of the simple majority rule.

Power indices suggest that adding new members to a voting body may increase the power of an existing member, even if the number of votes of all existing members and the decision rule remain constant. This phenomenon is known as the paradox of new members. This paper shows that the paradox has theoretically occurred in the EU using the leading model of legislative bargaining. Furthermore, it is possible for a majority of members to be in favor of enlargement, even if voters are bargaining over a fixed budget.

When making collektive desicions, principals (voters or districts) typically benefit by strategically delegating their bargaining and voting power to representatives different from themselves. There are conflicting views in the literature, however, of whether such a delegate should be conservative (status quo biased) or instead progressive relative to his principal. I show how the answer depends on the political system in general, and the majority requirement in particular. A larger majority requirement leads to conservative delegation, but sincere delegation is always achieved by the optimal voting rule.

Where does the balance of power lie in a policy-making institution with an external agenda setter, legislators, and lobbies? In a multiple round majority rule game with sophisticated actors, we show that the agenda setter obtains its most preferred policy outcome even if all lobbies and legislators prefer the status quo to the proposal (i.e., the proposal lies in the covered set). A lobby with the ability to recruit supermajorities can counterbalance this power. If contributions are conditional on the entire voting profile, such a 'transnational lobby' can veto any proposal at no cost. If contributions are conditional on the votes of each recipient legislator, the transnational lobby has only to possess a greater willingness to pay than the median national lobby to achieve this result. We use our formal model to explain external tariff policies in the European Union following the creation of an internal market.

We report the results of an experimental study that compares voting mechanisms in the provision of public goods. Subjects can freely decide how much they want to contribute. Whether the public good is finally provided is decided by a referendum under full information about all contributions. If provision is rejected, contributions are reduced by a fee and reimbursed. We compare unanimity with majority voting and both to the baseline of cheap talk. Contributions are highest under unanimity. Yet, results concerning overall efficiency are mixed. When provision occurs, only unanimity enhances efficiency. Overall, however, unanimity leads to too many rejections.

I study necessary and sufficient conditions for a choice function to be rationalised in the following sense: there exists a complete asymmetric relation T (a tournament) such that for each feasible (finite) choice situation, the choice coincides with the uncovered set of T. This notion of rationality explains not only cyclical and context dependent choices observed in practice, but also provides testable restrictions on observable choice behavior.

This paper studies the advantages that a coalition of agents obtains by forming a voting bloc to pool their votes and cast them all together. We identify the necessary and sufficient conditions for an agent to benefit from the formation of the voting bloc, both if the agent is a member of the bloc and if the agent is not part of the bloc. We also determine whether individual agents prefer to participate in or step out of the bloc, and we find the different optimal internal voting rules that aggregate preferences within the coalition.

The paper studies a simple voting system that has the potential to increase the power of minorities without sacrificing aggregate efficiency. Storable votes grant each voter a stock of votes to spend as desired over a series of binary decisions. By accumulating votes on issues that it deems most important, the minority can win occasionally. But because the majority typically can outvote it, the minority wins only if its strength of preference is high and the majority's strength of preference is low. The result is that with storable votes, aggregate efficiency either falls little or in fact rises. The theoretical predictions of our model are confirmed by a series of experiments: the frequency of minority victories, the relative payoff of the minority versus the majority, and the aggregate payoffs all match the theory.

Die Reform der Abstimmungsregeln im EZB-Rat kann bei Aufnahme von neuen Mitgliedstaaten in die Währungsunion Auswirkungen auf die Geldpolitik haben. Welche Konsequenzen sind für die in einem solchen erweiterten Rat präferierte Inflationsrate im Vergleich zum Status quo zu erwarten? Wie sind alternative Abstimmungsregeln zu beurteilen? Wie hätten sich die Vorschläge für die elf bzw. derzeit zwölf Euro-Länder ausgewirkt, wenn sie bereits 1999 implementiert worden wären?

Interest groups are introduced in a spatial model of electoral competition between two political parties. We show that the presence of these interest groups increases the winning set, which is the set of policy platforms for the challenger that will defeat the incumbent. Therefore interest groups enhance the probability of the challenger winning the election.