Essays in political economy and public policy

My dissertation is comprised of essays on various topics in political economy and public policy.; In the first essay (Ch. 2), I address the question, does a more open primary system improve the electoral prospects of the relatively moderate candidates? To assess this issue, I develop a two-stage model of political competition that explicitly accounts for the intra-party as well as the inter-party conflict. It is shown that in the presence of a minimal level of intra-party conflict, crossover voters have a moderating influence on the party who receives their votes. However, due to a lack of coordination, it is still possible that such a crossover leads to a greater degree of extremism in the party to which the crossover voters belong. It is also shown that the system of semi-open primaries has an unambiguously moderating effect. These results help explain certain empirical findings related to the differences in the primary systems across the states in the US.; In the second essay (Ch. 3, based on a work with A. Dellis), we study a voting system called Approval Voting. We construct a model of political competition to examine the claims in favor of Approval Voting, namely, (1) Approval Voting encourages sincere voting behavior and (2) Approval Voting leads to a more centrist electoral outcome as compared to the plurality rule. Our analysis shows that even though Approval Voting is prone to same kind of problems that are present under the plurality system, the above claims are indeed valid.; In my third essay (Ch. 4, based on a work with R. Jayaraman), we study the role played by a local currency (like the Ithaca Hours) in the development of the local economy. We argue that the introduction of a local currency may serve as a signal of demand for local goods. Where demand uncertainty deters firms from investing in more productive technologies, such a signal improves the chances that the technology choice will be optimal. We thus show that the introduction of a local currency therefore always improves ex-ante efficiency and may lead to ex-post efficiency, with strictly higher levels of productivity and welfare.