Local politics and economic geography

Marcus Berliant and Takatoshi Tabuchi

MPRA Paper from University Library of Munich, Germany

Abstract: We 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.

Keywords: information aggregation in elections; informative voting; new economic geography; local politics (search for similar items in EconPapers)
JEL-codes: D72 D82 R12 (search for similar items in EconPapers)
Date: 2012-12-04
New Economics Papers: this item is included in nep-cta, nep-geo, nep-mic, nep-pol and nep-ure
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Related works:
Working Paper: Local politics and economic geography (2013)
Working Paper: Local politics and economic geography (2012)
Working Paper: Local politics and economic geography (2011)
Working Paper: Local Politics and Economic Geography (2011)
Working Paper: Local politics and economic geography (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:43086

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