Deviations from a policy rule underpin empirical identification of monetary policy shocks. We cast light on how deviations arise by analyzing internal policy deliberations of the Federal Open Market Committee (FOMC). We show that policymakers’ beliefs about higher-order moments of economic...

Zur Umsetzung einer Verkehrsverlagerung vom autozentrierten Individualverkehr auf den (elektrifizierten) Schienenverkehr bedarf es unter anderem einer neuen Schwerpunktsetzung in der Infrastrukturplanung. Die Erarbeitung von Projektvorschlägen für den Bundesverkehrswegeplan 2030 auf der Ebene...

Before the middle of the nineteenth century most laws enacted in the United States were special bills that granted favors to specific individuals, groups, or localities. This fundamentally inegalitarian system provided political elites with important tools that they could use to reward...

We investigate whether ideology drives the sentiments of parliamentarians when they speak to the central bank they hold accountable. To this end, we collect textual data on the quarterly hearings of the ECB President before the European Parliament from 1999 to 2019. We apply sentiment analysis...

Motivated by the need for more flexible decision-making mechanisms in the European Union, the paper proposes a simple but novel voting scheme for binary decisions taken by committees that meet regularly over time. At each meeting, committee members are allowed to store their vote for future use;...

Six years have passed since the so-called “long summer of migration” of 2015, and the numbers of newly arriving asylum-seekers in Germany have flattened. However, as one of the main receiving countries of refugees, other challenges are coming into focus. Besides labour market participation...

This paper proposes a model of a legislature, formed by several parties, which has to vote for or against a certain bill in the presence of a lobbyist interested in a certain vote outcome. We show that the ease with which the lobbyist can manipulate a legislature decision increases with the...

Almost all countries announced fiscal support programs once COVID-19 hit. However, there was significant diversity in the magnitude and composition of these fiscal stimulus programs. These differences were determined by myriad political, financial, social, and economic factors - these factors...

Despite the wide variety of agendas used in legislative settings, the literature on sophisticated voting has focused on two formats, the so-called Euro-Latin and Anglo-American agendas. In the current paper, I introduce a broad class of agendas whose defining structural features,...

An enabling environment for the social and solidarity economy (SSE) largely depends on policy co-construction with stakeholders, and their commitment to implement policy across all levels of government, especially at the local level. The city of Durban is emerging as an exemplar for creating an...

The thesis of this paper is that more transparent, rule-bound and subtle mechanisms for policy coordination will be needed to ensure the success of an enlarged European Union. A common policy is a public good with distributional implications. Economists have developed a large number of plausible...

This paper questions the link between the establishment of a common currency among several countries and the necessity of political coordination. It begins by discussing why conducting a single monetary policy is thought to be easier within a single political unit. It then proceeds to enquire...

While representation in the U.S. House is based upon state population, each state has an equal number (two) of U.S. Senators. Thus, relative to the state delegations in the U.S. House, small population states are provided disproportionate bargaining power in the U.S. Senate. This paper provides...

The existing literature has shown that special interest groups can have both growth enhancing and retarding effects on an economy. In either case it is always assumed that the nature of the special interest groups remains constant over time. The hypothesis of this paper is that a dynamic...

Using voting data from the Bank of England, we show that different individual assessments of the economy strongly influence votes after controlling for individual policy preferences. We estimate that internal members form more precise assessments than externals and are also more hawkish, though...

This paper presents a new model of interest groups and policy formation in the legislature. In our setting, the already given party ideological predispositions and power distribution determine the expected policy outcome. Our analysis applies to the case of unenforced or enforced party...

No voters cast their votes based on perfect information, but better educated and richer voters are on average better informed than others. We develop a model where the voting mistakes resulting from low political knowledge reduce the weight of poor voters, and cause parties to choose political...

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....

In this paper, we analyze a class of models in which there are interjurisdictional spillovers among heterogeneous jurisdictions, as illustrated for instance by CO2 emissions that affect the global environment. Each jurisdiction's emissions depend upon the local stock of private capital. Capital...

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...

This paper analyzes the a priori influence of the European Parliament (EP) and the Council of Ministers (CM) on legislation of the European Union adopted under its codecision procedure. In contrast to studies which use conventional power indices, both institutions are assumed to act...

The European Union (EU) has moved towards bicameralism, making the codecision procedure its most important mechanism for decision making. To gauge if European Parliament (EP) and Council of Ministers (CM) are equally powerful "codecision makers", understanding of the final stage of the procedure...

To reduce the chances of policy failures, policy makers need information about the effects of policies. Sometimes, policy makers can rely on agents who already possess the information. Often, the information has yet to be produced. This raises two problems. First, for a policy maker it is hard...

This paper examines how neutral the current EU decision-making procedures are to membership and how well they obey certain transparent general constitutional principles. The paper evaluates the performance of the procedures by strategic and classical power indices. The main emphasis in the...

In contrast to parliamentary systems, the Council of Ministers, the main legislative body of the European Union, consists of different formations in which national ministers with similar sectoral portfolios participate. This decision-making structure has led to a "loss of coherence". In this...

When politicians are short-term oriented or future elections do not sufficiently reflect the success of past policies, democratic elections cannot motivate politicians to undertake long-term socially beneficial projects. When politicians can offer incentive contracts which become effective upon...

This paper constructs a simple model to examine decisions on public and private health spending under majority voting. In the model, agents with heterogeneous incomes choose how much to consume and spend on health care and vote for public health expenditure. The health status of an agent is...

This paper develops an infinite horizon model of public spending and taxation in which policydecisions are determined by legislative bargaining. The policy space incorporates both productiveand distributive public spending and distortionary taxation. The productive spending is investing ina...

Does bounded rationality make paternalism more attractive? This Essay argues that errors will be larger when suppliers have stronger incentives or lower costs of persuasion and when consumers have weaker incentives to learn the truth. These comparative statics suggest that bounded rationality...

Discretionary policymaking can foster strategic complementarities between private sector decisions, thus leading to multiple equilibria. This article studies a simple example, originating with Kydland and Prescott, of a government which must decide whether to build a dam to prevent adverse...

The chapter describes - based on Giulio Andreotti’s personal papers - the decision by the Italian government of the day, taken in the course of the extraordinary council of 27-28 October 1990 in Rome during the semester under the Italian presidency, to agree to the adoption of a single...

In particular, the government should turn way from party politics and trying to justify its redistribution policies, and make efforts to persuade the people in a prudent manner. Efforts are also needed to encourage stakeholders and experts to participate in the policymaking process to ensure...

This article surveys the theoretical literature on legislative bargaining with endogenous status-quo. These are the legislative bargaining situations in which in each period a new policy is decided and the policy implemented in the event of no agreement is endogenously determined by the outcome...

Whom should an interest group lobby in a legislature? I develop a model of informational lobbying in which a legislature must decide on the allocation of a local publicly-provided good across districts. An interest group chooses sequentially to search and provide information on districts'...

In the wake of 25 UN Climate Change Conferences of the Parties (and counting), international cooperation on mitigating greenhouse gas emissions to avoid substantial and potentially irreversible climate change remains an important challenge. The limited impact that the Kyoto Protocol and its...