The Demand for Power Diffusion: A Case Study of the 2005 Constitutional Referendum Voting in Kenya

Recent studies on the history of economic development demonstrate that concentration of power on a monarch or a ruling coalition impedes economic growth and that institutional changes that diffuse power, though beneficial to the society in general, are opposed by some social groups. In November 2005, Kenyans rejected a proposed constitution primarily because it did not reduce the powers of the executive to any significant degree. Using data of voting patterns in the constitutional referendum and following the rational choice framework, I estimate a model of the demand for power diffusion and demonstrate that groups voting decisions depend on expected gains and likelihood of monopolizing power. The results also reveal the importance of ethnic divisions in hindering the power diffusion process, and therefore the study establishes a channel through which ethnic fragmentation impacts on economic development.

The Political Economy of Constitutional Choice: A Study of the 2005 Kenyan Constitutional Referendum

Recent studies of the linkages between the wealth of nations and the institutions of governance suggest that concentrating political power in a monarchy or a ruling coalition impedes economic growth and, moreover, that while power-diffusing reforms can enhance the wellbeing of society in general, opposition by groups benefitting from the status quo is predictable. In November 2005, Kenyans rejected a proposed constitution that, despite promises made by their new chief executive, would not have lessened the powers of the presidency. Using a unique, constituency-level dataset on the referendum vote, we estimate a model of the demand for power diffusion and find that ethnic groups' voting decisions are influenced by their expected gains and losses from constitutional change. The results also highlights the importance of ethnic divisions in hindering the power-diffusion process, and thus establish a channel through which ethnic fragmentation adversely impacts economic development.

A Bootstrap-Regression Procedure to Capture Unit Specific Effects in Data Envelopment Analysis

The Data Envelopment Analysis (DEA) efficiency score obtained for an individual firm is a point estimate without any confidence interval around it. In recent years, researchers have resorted to bootstrapping in order to generate empirical distributions of efficiency scores. This procedure assumes that all firms have the same probability of getting an efficiency score from any specified interval within the [0,1] range. We propose a bootstrap procedure that empirically generates the conditional distribution of efficiency for each individual firm given systematic factors that influence its efficiency. Instead of resampling directly from the pooled DEA scores, we first regress these scores on a set of explanatory variables not included at the DEA stage and bootstrap the residuals from this regression. These pseudo-efficiency scores incorporate the systematic effects of unit-specific factors along with the contribution of the randomly drawn residual. Data from the U.S. airline industry are utilized in an empirical application.