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REVEALED POLITICAL POWER

Authors

  • JINHUI H. BAI,

    1. Georgetown University, U.S.A.
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  • ROGER LAGUNOFF

    1. Georgetown University, U.S.A.
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    • We thank seminar participants at Cal Tech, Indiana, Maryland, Northwestern, Stanford, Towson, UC Santa Barbara, Wisconsin, Warwick, The PIER (Penn) Conference, the SED Conference, the Summer Econometric Society Meetings, the Stanford-Kingston Political Economy Conference, the Midwest Theory Conference, the Summer NBER, the Paris Dauphine Workshop on Economic Theory, and the LSU Bargaining Conference, and especially Roland Bénabou for helpful comments and suggestions on an earlier draft of this article. We also thank Jan Eeckout and three anonymous referees for their many helpful recommendations. Please address correspondence to: Roger Lagunoff, Department of Economics, Georgetown University, 580 Intercultural Center, Washington, DC 20057. Phone: +1-202-687-1510. Fax: +1-202-687-6102. E-mail: lagunofr@gmail.com or lagunofr@georgetown.edu.


Abstract

When is a polity biased? Consider an “outsider” who observes policy data but observes neither citizens’ preferences nor the underlying distribution of political power. He views political power as if it were derived from wealth-weighted voting, where the weights determine the wealth bias. Positive weights favor the rich whereas negative ones favor the poor. We show that any policy data is rationalized by any wealth-weighted system. However, policy and polling observations together imply explicit bounds on the set of rationalizing biases. Accumulated data narrows this band. The inferential model is consistent with models of political competition for campaign contributions.

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