Political Economy Workshop (Gov 3007)

Date: 

Monday, February 2, 2015, 12:00pm to 2:00pm

Location: 

K354
Presentations given by Arthur Silve - "Democratic spillovers – rent-seeking elites, mobile assets, and the coevolution of political institutions," Mauricio Fernandez Duque - "Anticipating Others Wrongly: Pluralistic Ignorance and Underestimating Embarrassment," Abstract for "Democratic spillovers – rent-seeking elites, mobile assets, and the coevolution of political institutions" This paper discusses the political consequences of international asset mobility. Within a given country, the elite can extract rents from the pro- duction sector, and they also produce themselves. The rents extracted are distortive, and the elite face a tradeoff between extractive or efficient poli- cies. Factor mobility favors more efficient, and less extractive policies. The model yields several predictions. When the masses are mobile, political in- clusiveness spills over from abroad, and rents are limited. Conversely, if the elite are mobile, but the masses are captive, political inclusiveness abroad buttresses the elite and favors political polarization. Such a model provides interesting insights in the role of liberal democracies abroad. First, they set up an international context in which patrimonial regimes thrive, and in which their own economic and political outcomes are negatively affected. Second, tax evasion is shown to be a necessary outcome of asymmetric asset mobility in big countries. Such countries, including but not limited to OECD coun- tries, favor the emergence and stability of tax havens, with negative political consequences at home. Abstract for "Anticipating Others Wrongly: Pluralistic Ignorance and Underestimating Embarrassment": Pluralistic ignorance is a situation in which individuals are act- ing in a certain way out of their misconceived notions of what others want. Although the concept was developed by psychologists, it has been used in political science to explain the sudden outbreak of rev- olutions and persistent public opinions. In this paper, I argue that past models of pluralistic ignorance have ignored a crucial element: that individuals are acting out of perceived social expectations, which are themselves formed through observed actions. I introduce a novel game-theoretic model of pluralistic ignorance with this feature, and argue that it poses a puzzle: the likelihood of pluralistic ignorance vanishes as the number of individuals increases. In order to explain how pluralistic ignorance can be maintained in large populations, I introduce an inferential bias that is often alluded to in the psychol- ogy literature: individuals underestimate others’ embarassment when making their decisions.