Research Ideas From a Mexican Reader

A reader called HDT writes to say:

I live in Mexico and have often wondered why more American economists and students of economics don’t often venture down here because the country offers what seems, to me at least, a treasure trove of economic oddities that should fascinate anyone interested in how markets work.

* As Mexico is heading toward what’s likely to be the second most important election in its history, the subject of vote-buying is of particular interest if for no other reason than that it’s practiced fairly openly, especially in rural areas. I know that during the last elections, here in Yucatan, votes were being bought, in cash, for around $80. (Pigs and cows were also exchanged for votes, but I wasn’t ever able to find out what the “going rate” was for those particular transactions.) There are, of course, people employed by the major political parties who specialize in determining what votes are worth throughout the country. I imagine they’re easier to find, and talk to, than you might expect.

* There’s also the rather intriguing issue of how Mexican real estate agents determine a reasonable price for any given property they’re hoping to sell. The problem is that it’s customary to decrease the tax burden on the sale of a home by getting the buyer to lie about how much he paid. In other words, the sales prices stated in government records are almost never accurate. Everyone knows this. And yet, properties regularly change hands and real estate agents do manage to make a living. But how?

Any takers?

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  1. bagdu says:

    Poor people are paid money and food to attend political rallies in India but we don’t offer hear about the economics or finances of these rallies while this is the principal outlet for spending money to buy political influence. Even an otherwise active Election Commission does little about this Vote buying.

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    • melissa says:

      There have been incidents of people being paid to attend political rallies in the US too. I don’t think it’s illegal, and is certainly not in the same ballpark as buying actual votes.

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  2. Santiago says:

    During the last couple of years, the explanation is probably based on security issues. Many cities in Mexico, are right now insecure.

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  3. Juzer says:

    The practice of vote buying is not new to my country(Pakistan) either, political parties whether in powere or not regularly engage in such activities, the case in point, Banazir Income Support Programme, BISP for short, was started as soon as the current political party came into power, BISP is simply the most prolific example of giving people of a specific area direct cash because they voted the current party in power, it used money from our national funds, because of which money was not available for other more important programs like education and research.
    I have a very firm believe, vote buying and political contributions (thus forcing a Govt. to adopt your policy) are two of the big draw backs of democracy. I would like feedback on how political contributions, specifically in States is effecting the world in large.

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    • Art says:

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      • Rob says:

        You took the words right out of my mouth. By comparison, paying people $80 for their vote sounds like a bargain!

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      • Bruce says:

        It’s never been more blatant (to my eyes) than under Obama. He’s almost like a Sesame Street lesson on corrupt govt.

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  4. juda says:

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  5. BrotherMouzone says:

    The marked-down house pricing model is the same here in Indonesia; everybody states an official price of about 50-70% of the real price they paid to reduce the tax burden to both parties.

    It doesn’t have any serious impact on housing prices though; there is still an active market. Houses are advertised at their full prices and it is only when the transaction takes place that there is any shiftiness. Estate agents do not need to rely on government figures because there is a proliferation of pricing information available through the internet, talking to neighbours, and the general rumour mill.

    If anything, this system puts even more power in the hands of the estate agent because uninformed sellers have to rely on what the estate agent tells them. In the west, we can just look at recent declared house sale prices online but here people still have to rely on the expertise of the agent.

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  6. Alberto Serdan-Rosales says:

    Here you can find an interview regarding electoral use of social programs and clientelism in 2006 Presidential Elections in Mexico. The webpage is in Spanish, but I used Google Translator just in case:

    http://bit.ly/tYnvGt

    Unfortunately I’m now involved in education reform and I won’t be able to do the same as I did in 2006. Hopefully somebody here is interested.

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  7. Becca Said says:

    That’s really interesting – especially about the estate agents. In Spain, it is customary to sign one set of documents stating one price, and then move to a different room to sign a completely different set of documents for the tax man.

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  8. gopihoods@gmail.com says:

    The same is true in India as well. I’m surprised to see a partner in crime at this level!

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