INSTRUCTOR: Brad DeLong
LOCATION: 639 Evans Hall
TIME: Monday, 2:00 - 3:30 pm
Papers will be presented each week on various aspects of Economic History.
In this paper we investigate the e�ect of the absence of a secret ballot on electoral outcomes and resource allocation. Once voting behavior is observable, votes can be bought and sold in a `market for votes'. We distinguish between direct vote buying, where individuals sell their own votes to political parties, and indirect vote buying, where people also sell the votes of others and we characterized the circumstances in which vote buying changes the electoral outcome. We then provide a microfoundation for indirect vote buying, which usually takes the form of employers selling the votes of their employees. This can oc- cur when the employment relationship involves rents since employers can use the threat of withdrawal of these rents to control the political behavior of their work- ers. This increases the demand for labor and generates an added incentive to own land, increasing the price of land. We test the predictions of the model by examining in detail the eff�ects of the introduction of the secret ballot in Chile in 1958. We show that this change in political institutions had implications for voting behavior and land prices which are consistent with the predictions of our model.
The rapid decline of German emigration before World War I constitutes a puzzle that traditional explanations (decrease in the international wage gap, growing industrialization, fall in the fertility or international competition with other migrants) can only partly solve. It therefore seems necessary to go more deeply into the question, in particular by looking into the social legislation implemented by Bismarck during the 1880s. Actually, the German insurance system was one of the most developed in the pre-1914 world and it probably contributed to deterring labor outflows. The main explanation is that candidates for migration consider not only the gap between direct wages in sending and receiving countries, but also the differential in “indirect wages”, that is, social benefits. As a matter of fact, the existence of such benefits constitutes a form of social remuneration that partly offsets low levels of wage rates in sending countries. In that perspective, the econometric tests run in the paper show that the increase in German indirect wages after 1885 was accompanied by a significant decrease in emigration rates.