Local politics and economic geography
AbstractWe consider information aggregation in national and local elections when voters are mobile and might sort themselves into local districts. Using a standard model of private information for voters in elections in combination with a New Economic Geography model, agglomeration occurs for economic reasons whereas voter stratification occurs due to political preferences. We compare a national election, where full information equivalence is attained, with local elections in a three-district model. We show that full information equivalence holds at a stable equilibrium in only one of the three districts when transportation cost is low. The important comparative static is that full information equivalence is a casualty of free trade. When trade is more costly, people tend to agglomerate for economic reasons, resulting in full information equivalence in the political sector. Under free trade, people sort themselves into districts, most of which are polarized, resulting in no full information equivalence in these districts. We examine the implications of the model using data on corruption in the legislature of the state of Alabama and in the Japanese Diet.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 47002.
Date of creation: 15 May 2013
Date of revision:
information aggregation in elections; informative voting; new economic geography; local politics;
Other versions of this item:
- Berliant, Marcus & Tabuchi, Takatoshi, 2011. "Local Politics and Economic Geography," MPRA Paper 29771, University Library of Munich, Germany.
- Berliant, Marcus & Tabuchi, Takatoshi, 2012. "Local politics and economic geography," MPRA Paper 39596, University Library of Munich, Germany.
- Berliant, Marcus & Tabuchi, Takatoshi, 2012. "Local politics and economic geography," MPRA Paper 43086, University Library of Munich, Germany.
- Berliant, Marcus & Tabuchi, Takatoshi, 2011. "Local politics and economic geography," MPRA Paper 28120, University Library of Munich, Germany.
- Berliant, Marcus & Tabuchi, Takatoshi, 2011. "Local politics and economic geography," MPRA Paper 35169, University Library of Munich, Germany.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-19 (All new papers)
- NEP-CDM-2013-05-19 (Collective Decision-Making)
- NEP-CTA-2013-05-19 (Contract Theory & Applications)
- NEP-GEO-2013-05-19 (Economic Geography)
- NEP-MIC-2013-05-19 (Microeconomics)
- NEP-POL-2013-05-19 (Positive Political Economics)
- NEP-URE-2013-05-19 (Urban & Real Estate Economics)
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