SIOE @ ASSA: Economic and Political Analysis of Institutions and Organizations

By Jens Prüfer

Together with the American Economic Association (AEA) and other 55 associations in related disciplines, jointly known as the Allied Social Sciences Associations (ASSA), SIOE participates in a three-day meeting each January to present papers on general economics topics. The upcoming ASSA conference will take place in Chicago from January 6-8, 2017.

One highlight of the conference will be the SIOE session, on " Economic and Political Analysis of Institutions and Organizations ,"which is organized by Bob Gibbons and to which all scholars interested in institutions and organizations are welcome. Below, you'll find the details:

Saturday, Jan. 7, 2017 8:00 AM – 10:00 AM Swissotel Chicago, Zurich C

Chair: Robert Gibbons, Massachusetts Institute of Technology

  • The Emergence of Weak, Despotic, and Inclusive States

by Daron Acemoglu (MIT) and James A. Robinson (Chicago)

This paper studies the evolution of state institutions and their relationship to civil society. The state is modeled as being controlled by a group which can invest resources to increase the power of the state, while civil society (the rest of society) can also invest to increase its defensive power. The powers of the state and civil society determine both the size of the national pie and its division, and the dynamic game between these two actors determines how state-civil society relations evolve over time. We show that, under the assumption that building the power of either the state or civil society is more difficult starting from very low levels, this dynamic game has three asymptotically stable steady-state equilibria. One corresponds to a despotic state which is relatively powerful against a very weak civil society; one to a weak state which is very weak being strongly constrained by a relatively powerful civil; and one, which we refer to as an inclusive state, where state and civil society have equal powers. In this last case, notably, the strength of the state is greater than in the despotic state equilibrium, but it is constrained by civil society. The dynamics of investments converging to this steady-state equilibrium have the flavor of a “red queen effect” whereby both sides are choosing high levels of investment to keep up with each other.

  • Policy Advice in a Complicated World

by Steven Callander (Stanford), Nicholas Lambert (Stanford), and Niko Matouschek (Northwestern)

The internal organization of political and economic institutions is often predicated on enhancing the flow and use of expert information. In modeling expertise, however, the canonical representation of expertise takes a very simple form; namely the expert is presumed to know a single piece of information that the non-expert does not. In this paper we argue for a richer conception of expertise in which the expert's advantage is knowledge of a continuum of correlated variables. In a simple sender-receiver game with verifiable information, we show that this richer, more realistic, representation of expertise changes the structure of equilibrium communication. We identify a new form of equilibrium in which the expert conveys many pieces of information and that this strictly increases the expert's leverage over the non-expert. We explore the implications of this equilibrium for the nature of policy advice, policy choice, and organizational form.

  • Expressed Demands and the Emergence of Organizational Sub-Units: How Petitions Formed Congressional Committees, 1789-1865

by Daniel Carpenter, Tobias Resch, Benjamin Schneer, and Maggie McKinley (Harvard)

Complex organizations form when networks of delegation relationships emerge within the boundaries of the organization, encapsulating a division of labor. This process rarely results from de novo organizational design, and the process of learning by which this takes place has rarely been theorized or studied. Using a new dataset on petitions submitted to the United States Congress from 1789-1865, we advance and test the hypothesis that petitions and their disposition form a central and underexplored reason for the emergence, staffing and functioning of early congressional committees.

The committee system of the U. S. Congress has attracted central attention in institutional political science for over a century. As yet unanswered in this history are critical questions. From which legislative practices did congressional committees emerge? How did congresses make the transition from select to standing committees? In the period before standing committees, how did legislators acquire the expertise and experience that positioned them as candidates to serve on standing committees once the latter were established? The chambers of the U.S. Congress started their lives without committees and only instituted them in incremental fashion thereafter.

Drawing upon House and Senate journals – analyzed both by human coders and by statistical text extraction, with human codings forming the basis for supervised statistical text analysis – and a combination of new algorithms for statistical text analysis, we identify early American petitions to Congress and study their floor disposition (tabled, referred to members or to committees) and their post-floor disposition.

Our paper will offer the most granular approach yet taken to how particular themes, bills and proposals concatenated into jurisdictions bundled with networks, and how these jurisdiction-network bundles formed the basis for committee institutions. In so doing, we will lay the foundation for addressing other theoretical questions such as institutional learning and organizational formation.

  • Corruption in World Bank Aid: A Kenyan Case Study

by Jean Ensminger (California Institute of Technology)

The design of effective aid and development mechanisms is incomplete without information about the role that corruption networks play in the process, the level of resources siphoned off, and the harm done with those ill-gotten gains. This case study explores these issues with data from a World Bank project in Kenya. New diagnostic techniques for catching fraud in development data are presented in the form of digit analysis.

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