nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2022‒07‒25
six papers chosen by
Stan C. Weeber, McNeese State University

  1. Electoral Competition, Voter Bias, and Women in Politics By Thomas Le Barbanchon; Julien Sauvagnat
  2. The Political Economy of Technocratic Governments By Guido Merzoni; Federico Trombetta
  3. Local Economic and Political Effects of Trade Deals: Evidence from NAFTA By Jiwon Choi; Ilyana Kuziemko; Ebonya L. Washington; Gavin Wright
  4. Fighting Populism on Its Own Turf: Experimental Evidence By Vincenzo Galasso; Massimo Morelli; Tommaso Nannicini; Piero Stanig
  5. Voting Right Rotation, Behavior of Committee Members and Financial Market Reactions: Evidence from the U.S. Federal Open Market Committee By Michael Ehrmann; Robin Tietz; Bauke Visser
  6. The Effect of Labor Market Liberalization on Political Behavior and Free Market Norms By Ran Abramitzky; Netanel Ben-Porath; Shahar Lahad; Victor Lavy; Michal Palgi

  1. By: Thomas Le Barbanchon (Bocconi University [Milan, Italy]); Julien Sauvagnat (Bocconi University [Milan, Italy])
    Abstract: Only a quarter of the members of the world's national parliaments are women. Despite significant progress in recent years, women remain largely under-represented among elected politicians. This study provides some explanations for the under-representation of women in politics using data from the past seven French legislative elections. On the one hand, the analyses suggest that there is a preference bias among voters towards male candidates. In addition, political parties contribute to reproducing the under-representation of women in elected office by running fewer female candidates in constituencies where voter bias is high. To promote women's access to political office, the 2000 law to promote equal access of women and men to electoral mandates and elective offices, also known as the parity law, requires French political parties to nominate women as 50% of their candidates or face financial penalties. As expected, the application of this law has led to an increase in the proportion of women candidates. However, this proportion is relatively lower in electoral districts where the vote is close compared to those where a majority is more easily obtained. In these competitive districts, paying a fine for not complying with the parity rule is more advantageous than the risk of losing the election by running a woman rather than a man. This suggests that parties still prefer to put forward male rather than female candidates to increase their chances of winning.
    Date: 2022–03
  2. By: Guido Merzoni; Federico Trombetta
    Abstract: This paper proposes the first game theoretical model of technocratic governments, i.e. cases where a non political technocrat is put in charge by political parties. Based on the literature on post-electoral politics and agenda setting, we show conditions for the existence of a technocratic government equilibrium, where both parties agree to delegate the agenda setting power to technocrats, committed to maximize social welfare. Such an equilibrium exists only if the technocrats have a superior competence with respect to the majority party/coalition, or if the country is in a sufficiently important economic crisis. Furthermore, it is more likely to exist in countries with unstable parliament (i.e. one where the governing coalition is not always able to impose its will) and where parties care about the common value dimension, vis-a-vis the ideological one. Finally, we show that polarization increases the set of parameters where the technocratic government equilibrium exists, when parliament is unstable.
    JEL: C78 D72 D73 D78
    Date: 2022
  3. By: Jiwon Choi (Princeton University); Ilyana Kuziemko (Princeton University); Ebonya L. Washington (Yale University); Gavin Wright (Stanford University)
    Abstract: Why have white, less educated voters left the Democratic Party over the past few decades? Scholars have proposed ethnocentrism, social issues and deindustrialization as potential answers. We highlight the role played by the 1994 North American Free Trade Agreement (NAFTA). In event-study analysis, we demonstrate that counties whose 1990 employment depended on industries vulnerable to NAFTA suffered large and persistent employment losses relative to other counties. These losses begin in the mid-1990s and are only modestly offset by transfer programs. While exposed counties historically voted Democratic, in the mid-1990s they turn away from the party of the president (Bill Clinton) who ushered in the agreement and by 2000 vote majority Republican in House elections. Employing a variety of micro-data sources, including 1992-1994 respondent-level panel data, we show that protectionist views predict movement toward the GOP in the years that NAFTA is debated and implemented. This shift among protectionist respondents is larger for whites (especially men and those without a college degree) and those with conservative social views, suggesting an interactive effect whereby racial identity and social issue positions mediate reactions to economic policies.
    Keywords: NAFTA, trade, politics
    JEL: D72 F16 H5 J2
    Date: 2021–11
  4. By: Vincenzo Galasso; Massimo Morelli; Tommaso Nannicini; Piero Stanig
    Abstract: We evaluate how traditional parties may respond to populist parties on issues that are particularly fitting for populist messages. The testing ground is the 2020 Italian referendum on the reduction of members of Parliament. We implement a large-scale field experiment, with almost one million impressions of programmatic advertising, and a survey experiment. Our treatments are an informative video on the likely costs of cutting MPs, aimed at deconstructing the populist narrative, and a reducing trust video aimed at attacking the credibility of populist politicians. Our field experiment shows that the latter video is more effective at capturing the viewers’ attention. It decreases the turnout rate and, albeit less, the “Yes” votes (in favor of cutting MPs). We present a theoretical framework based on trust in traditional parties and information acquisition to account for our findings and provide additional predictions. In the survey experiment, both (unskippable) videos reduce the “Yes” votes and increase the share of undecided. Confirming the theory, for voters of traditional parties the effects are concentrated among people with low information, while for voters of populist parties previous information plays no role. Our findings show that campaign messages should target not only demographic characteristics but also trust attitudes.
    Keywords: field experiment, programmatic advertisement, electoral campaign
    JEL: D72 C93
    Date: 2022
  5. By: Michael Ehrmann; Robin Tietz; Bauke Visser
    Abstract: Which Federal Reserve Bank presidents vote on the U.S. monetary policy committee depends on a mechanical, yearly rotation scheme. Rotation is without exclusion: nonvoting presidents do attend and participate in the meetings of the committee. We test two hypotheses about the dependence of presidents' behavior on voting status. (i) Loss compensation: presidents compensate the loss of the right to vote with an increased use of speeches and contributions. (ii) Motivation: presidents complement the right to vote with an increased use of speeches and contributions. The evidence favors the motivation hypothesis. Also, in years that presidents vote, their speeches move financial markets less than in years they do not vote. We argue that this vote discount is consistent with presidents’ communication behavior.
    Keywords: voting right rotation; monetary policy committee; central bank communication; FOMC; financial market response; motivation hypothesis; communication behavior; presidents vote; FOMC meeting; Fed president; voting status; Unemployment; Unemployment rate; Inflation; Financial sector; Asset prices
    Date: 2022–05–27
  6. By: Ran Abramitzky; Netanel Ben-Porath; Shahar Lahad; Victor Lavy; Michal Palgi
    Abstract: We study the effects of labor market liberalization on political behavior and attitudes towards free-market capitalism and socialism, exploiting a reform whereby the Israeli socialist communities called kibbutzim shifted from equal sharing to market-based wages. Our identification strategy relies on this reform's sharp and staggered implementation in different kibbutzim. We first examine changes in behavior associated with this labor market liberalization and document that the reform led to a shift in electoral voting patterns, resulting in decreased support for left-wing political parties and increased support for the center and right parties in national elections. Using annual survey data on attitudes over 25 years, we show that the reform led to increased support for free-market policies such as full privatization and differential wages. Moreover, it decreased support for socialist policies such as the joint ownership of production means. Yet, the reform increased support for the safety net to support weak members through mutual guarantee. These effects appear to be driven by an increase in living standards and work ethics that resulted from the reform. We conclude that introducing market-based wages led to a shift in attitudes towards a market economy with compassion, revealing a change in members’ support from their traditional democratic socialist model to a social democratic model.
    JEL: B14 J5
    Date: 2022–06

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