CHAPTER 6 Political Economy Copyright ? 2010 by the McGraw-panies, Inc. All rights reserved. McGraw-Hill/Irwin 6-2 Direct Democracy-Unanimity Rules r per year 0 0’ Adam ’ s share (S A) Eve ’ s share (S E)D r A The Lindahl Model D r Er* S* 6-3 Feasibility of Unanimity Rules ? Reaching equilibrium ? Practical problems – Strategic behavior – Time to reach equilibrium 6-4 Direct Democracy-Majority Voting Rules ? Majority voting rule – one more than half of the voters must favor a measure for it to be approved Voter Choice Brad Jen Angelina First ACB Second BBC Third CAA 6-5 Direct Democracy-Majority Voting Rules ? Voting Paradox – community preferences can be inconsistent even though individual ’ s preferences are consistent ? Agenda Manipulation – process anizing order of votes to ensure a favorable e ? Cycling – when paired voting on more than two possibilities goes on indefinitely without a conclusion ever being reached Voter Choice Brad Jen Angelina First ACB Second BAC Third CBA 6-6 Graphing Preferences Missiles Utility A BC Brad Jen Angelina Single-peaked preferences Double-peaked preferences 6-7 Practical Importance of Double- Peaked Preferences ? Availability of private substitutes ? Issues ranked along single dimension 6-8 Direct Democracy - The Median Voter Theorem Voter Expenditure Donald $5 Daisy 100 Huey 150 Dewey 160 Louie 700 6-9 Direct Democracy - Logrolling I Voter Project Melanie Rhett Scarlet Benefits Hospital 200 -50 -55 95 Library -40 150 -30 80 Pool -120 -60 400 220 6- 10 Direct Democracy - Logrolling II Voter Project Melanie Rhett Scarlet Benefits Hospital 200 -110 -105 -15 Library -40 150 -120 -10 Pool -270 -140 400 -10
