Economic Affairs
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Time preferences may explain public opinion about a wide range of long-term policy problems whose costs and benefits will be realized in the distant future. However, mass publics may discount these costs and benefits because they are later or because they are more uncertain. Standard methods to elicit individual-level time preferences tend to conflate attitudes toward risk and time and are susceptible to social desirability bias. A potential solution relies on a costly lab-experimental method, convex time budgets (CTB). We present and experimentally validate an affordable version of this approach for implementation in mass surveys. We find that the theoretically preferred CTB patience measure predicts attitudes toward a local, delayed investment problem but fails to predict support for more complex, future-oriented policies. These results have implications for studying the mass politics of dynamic policy problems.

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Michael M. Bechtel
Amalie Jensen
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Many international policy problems, including climate change, have been characterized as global public goods. We adopt this theoretical framework to identify the baseline determinants of individual opinion about climate policy. The model implies that support for climate action will be increasing in future benefits, their timing, and the probability that a given country's contribution will make a difference while decreasing in expected costs. Utilizing original surveys in France, Germany, the United Kingdom, and the United States, we provide evidence that expected benefits, costs, and the probability of successful provision as measured by the contribution of other nations are critical for explaining support for climate action. Notably, we find no evidence that the temporality of benefits shapes support for climate action. These results indicate that climate change may be better understood as a static rather than a dynamic public goods problem and suggest strategies for designing policies that facilitate climate cooperation.

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Michael Bechtel
Elisabeth van Lieshout
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What makes an asset a “safe” asset? We study a model where two countries each issue sovereign bonds to satisfy investors’ safe asset demands. The countries differ in the float of their bonds and the fun-damental resources available to rollover debts. A sovereign’s debt is safer if its fundamentals are strong relative to other possible safe assets, not merely strong on an absolute basis. If demand for safe assets is high, a large float enhances safety through a market depth benefit. If demand for safe assets is low, then large debt size is a negative as rollover risk looms large.

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American Economic Review
Authors
Zhiguo He
Arvind Krishnamurthy
Konstantin Milbradt
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109(4)
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This workshop is part of the Economic History Workshop series in the Department of Economics and is co-sponsored by The Europe Center.

351 Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072

Fabio Braggion Tilburg University
Seminars
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Recent experimental evidence finds that the decision maker in a collective decision making entity with proposal power attracts a disproportionate amount of the blame or reward by those materially affected by these decisions. In the case of coalition governments evidence suggests that voters have heuristics for assigning responsibility for economic outcomes to individual parties and that they tend to disproportionately direct the economic vote toward the Prime Minister party. This essay demonstrates that voters also identify the Finance Minister party as an agenda setter on economic issues depending on whether the coalition context exaggerates or mutes its perceived agenda power. We define cabinet context as the extent to which coalition parties take issue ownership for particular policy areas. We find that when decision making is compartmentalized, voters perceive the finance minister as having agenda power and hence it receives a relatively larger economic vote; in more “diffuse” cabinet contexts it is the PM Party that is attributed responsibility for the economy.

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Ray Duch

Raymond Duch is an Official Fellow at Nuffield College, University of Oxford, and the Director of the Nuffield Centre for Experimental Social Sciences (CESS), which currently has centres in Oxford (UK), Santiago (Chile), Tianjin (China) and Pune (India). Prior to assuming these positions, he was the Senator Don Henderson Scholar in Political Science at the University of Houston. He received his BA (Honours) from the University of Manitoba in Canada and his MA and PhD from the University of Rochester. In addition, he has held visiting appointments at the Universitat Pompeu Fabra, Barcelona; the Hoover Institute and the Graduate School of Management, Stanford University; the Institute for Social Research Oslo; the Université de Montréal; and the Wissenschaftszentrum Berlin für Sozialforschung. He is currently the Long Term Visiting Professor at the Institute for Advanced Studies at the Toulouse School of Economics.

He draws on theory, experiments and public opinion analysis to understand how citizens solve decision-making challenges. This includes looking at how citizens use information shortcuts to make decisions. For example in ‘Context and Economic Expectations: When Do Voters get it Right?’ (British Journal of Political Science, 2010), he demonstrates how information shortcuts result in quite accurate expectations regarding price fluctuations in 12 European countries. One of his current areas of interest is the micro-foundations of cheating and unethical behaviour. He has run real effort tax compliance experiments designed to understand who cheats at taxes, the results of which are summarized in ‘Why We Cheat?’ (currently under review). An extension of this project examines tax compliance in different tax regimes.

Ray has served as Associate Editor of the American Journal of Political Science and the Journal of Experimental Political Science. He is one of the founders of the European Political Science Association and the International Meeting on Behavioural Science (IMESBESS), and he is currently Vice President of the Midwest Political Science Association. In 2015, Ray was selected as a member of the UK Cabinet Office Cross-Whitehall Trial Advice Panel to offer Whitehall departments technical support in designing and implementing controlled experiments to assess policy effectiveness. He was recently nominated to the Evidence in Governance and Politics network.

This event is co-sponsored by the Hoover Institution.

 

Raymond Duch speaker Nuffield College, University of Oxford
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Romain Wacziarg is a professor of economics at the UCLA Anderson School of Management and a research associate at the National Bureau of Economic Research (NBER). The paper that he will be presenting is co-authored by Guillaume Blanc, Brown University.

This talk is part of the Economic History Seminar Series, and is co-sponsored by The Europe Center.

Change and Persistence in the Age of Modernization: Saint-Germain-d’Anxure, 1730-1895
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Economics Building
Room 351

Romain Wacziarg Professor of Economics Speaker UCLA Anderson School of Management
Seminars
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A large literature is focused on governments’ fiscal policy making under the disciplining force of fiscal rules. That literature is devoted to map governments’ incentives for (non)compliance, but widely ignores the role of fiscal rule enforcement. This is remarkable, given the situation in the European Union, where we observe frequent breaches of the fiscal rules in the absence of sanctions. This paper focuses therefore on the incentives of the European Commission as enforcer of the Stability and Growth Pact (SGP) and on how individual governments take these incentives into account. Based on actual cases and literature on international agreements we distinguish rationales which make the Commission lenient. Accordingly, we present a game theoretical model to map the interaction between the Commission and governments under incomplete information. We find that unforeseen fiscal needs stemming from crises or other contingencies enhance enforcement costs for the Commission. Given that crises require additional public expenditures, our model shows that some enforcement costs are welfare enhancing. We also find that governments have an incentive to emphasize the fiscal impact of crises to increase the Commission’s enforcement costs. Moreover, governments might even overstate crises’ fiscal impact to hide other expenditures. In doing so, governments exploit their informational advantage over their budget allocation and crisis solving costs. Finally, we provide examples related to Europe’s migrant crisis and national security to support our theoretical findings.

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Sebastiaan Wijsman
Christophe Crombez
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