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Revealed Political Power

  • JINHUI H. BAI
  • ROGER LAGUNOFF

This paper adopts a revealed preference" approach to the question of what can be inferred about bias in a political system. We model an economy and its political system from the point of view of an outside observer." The observer sees a finite sequence of policy data, but does not observe either the citizens' preference profile or underlying distribution of political power that produced the policies. The observer makes inferences about distribution of political power as if political power were derived from a wealth-weighted voting system with weights that can vary with the state of the economy. The weights determine the nature and magnitude of the wealth bias. Positive weights on relative income in any period indicate an elitist" bias in the political system whereas negative weights indicate a populist" one. As a benchmark, any policy data is shown to be rationalized by any system of wealthweighted voting. However, by augmenting the observer's observations with polling data, nontrivial inference is possible. We show that joint restrictions resulting from the policy and polling data together imply upper and lower bounds on the set of rationalizing biases. These bounds can be explicitly calculated and can be used to discern instances of elitist bias; in other times they show populist bias. Additional restrictions on the preference domain can rule out the unbiased benchmark case of equal representation.

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Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 54 (2013)
Issue (Month): (November)
Pages: 1085-1115

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Handle: RePEc:wly:iecrev:v:54:y:2013:i::p:1085-1115
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