nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2023‒09‒04
three papers chosen by
Stan C. Weeber, McNeese State University

  1. The Electric Telegraph, News Coverage and Political Participation By Wang, Tianyi
  2. Voters, Bailouts, and the Size of the Firm By Schilling, Linda
  3. Ideological Ambiguity and Political Spectrum By Hector Galindo-Silva

  1. By: Wang, Tianyi (University of Toronto)
    Abstract: Using newly digitized data on the growth of the telegraph network in America during 1840-1852, the paper studies the impacts of the electric telegraph on national elections. I use proximity to daily newspapers with telegraphic connections to Washington to generate plausibly exogenous variation in access to telegraphed news from Washington. I find that access to Washington news with less delay significantly increased voter turnout in national elections. For mechanisms, I provide evidence that newspapers facilitated the dissemination of national news to local areas. In addition, text analysis on more than a hundred small-town weekly newspapers from the 1840s shows that the improved access to news from Washington led newspapers to cover more national political news, including coverage of Congress, the presidency, and sectional divisions involving slavery. The results suggest that the telegraph made newspapers less parochial, facilitated a national conversation and increased political participation. I find little evidence that access to telegraphed news from Washington affected party vote shares or Congressmen's roll call votes.
    Keywords: information technology, newspaper, election, economic history
    JEL: O3 L96 L82 D72 N71
    Date: 2023–07
  2. By: Schilling, Linda
    Abstract: I present a political economic theory, explaining bailouts for failing firms in the presence of non-voters (foreigners). The governing politician uses the bailout as a tool to sway voters for maximizing re-election chances. Bailouts partially leak to foreigners at the firm and are also financed by tax-paying foreigners outside the firm. I show, larger failing firms are granted larger bailouts even if the additional size is due to having more foreign stakeholders (``too-big-to-fail- lookalike''). Yet, among equally sized firms, the firm with more voting-stakeholders receives the larger bailout, contradicting social optimality. Besides firm size, also voting rights cause bailouts.
    Keywords: political finance, bailouts, economic voting, probabilistic voting, vote-share maximization, too-big-to-fail, socially optimal bailouts, partial suffrage
    JEL: D72 G3 G32 G33 G35 G38 P16
    Date: 2023–07–30
  3. By: Hector Galindo-Silva
    Abstract: This study examines the relationship between ambiguity and the ideological positioning of political parties across the political spectrum. We identify a strong non-monotonic (inverted U-shaped) relationship between party ideology and ambiguity within a sample of 202 European political parties. This pattern is observed across all ideological dimensions covered in the data. To explain this pattern, we propose a novel theory that suggests centrist parties are perceived as less risky by voters compared to extremist parties, giving them an advantage in employing ambiguity to attract more voters at a lower cost. We support our explanation with additional evidence from electoral outcomes and economic indicators in the respective party countries.
    Date: 2023–08

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