nep-pol New Economics Papers
on Positive Political Economics
Issue of 2005‒12‒20
eight papers chosen by
Eugene Beaulieu
University of Calgary

  1. Myths and Realities of American Political Geography By Edward L. Glaeser; Bryce A. Ward
  2. Political Careers or Career Politicians? By Andrea Mattozzi; Antonio Merlo
  3. Whither Political Economy? Theories, Facts and Issues By Antonio Merlo
  4. Can Ambiguity in Electoral Competition be Explained by Projection Effects in Voters' Perceptions? By Thomas Jensen
  5. Provincial Interests and Political Integration: Voting in the French Maastricht Referendum By Andrew Austin
  6. Labour market regulation and retirement age By M. Magnani
  7. The Case for Managed Judges: Learning from Japan after the Political Upheaval of 1993 By J. Mark Ramseyer
  8. Ignorance in Congressional Voting? Evidence from Policy Reversal on the Endangered Species Act By Edward J. Lopez; Daniel Sutter

  1. By: Edward L. Glaeser; Bryce A. Ward
    Abstract: The division of America into red states and blue states misleadingly suggests that states are split into two camps, but along most dimensions, like political orientation, states are on a continuum. By historical standards, the number of swing states is not particularly low, and America's cultural divisions are not increasing. But despite the flaws of the red state/blue state framework, it does contain two profound truths. First, the heterogeneity of beliefs and attitudes across the United States is enormous and has always been so. Second, political divisions are becoming increasingly religious and cultural. The rise of religious politics is not without precedent, but rather returns us to the pre-New Deal norm. Religious political divisions are so common because religious groups provide politicians the opportunity to send targeted messages that excite their base.
    JEL: H7
    Date: 2005–12
  2. By: Andrea Mattozzi (Division of Humanities and Social Sciences, California Institute of Technology); Antonio Merlo (Department of Economics, University of Pennsylvania)
    Abstract: Two main career paths are prevalent among politicians in modern democracies: there are career politicians (i.e., politicians who work in the political sector until retirement), and political careers (i.e., there are politicians who leave politics before retirement and work in the private sector). In this paper, we propose a dynamic equilibrium model of the careers of politicians in a political economy with a private sector and a political sector, where individuals are heterogeneous with respect to their market ability and political skills. We characterize the conditions under which the two career paths emerge in equilibrium, and investigate the effects of monetary incentives and other features of the political-economic environment on the quality of politicians and their careers. Our analysis also provides a rationale for the existence and the survival of political parties.
    Keywords: politicians, parties, careers in politics
    JEL: D72 J44 J45
    Date: 2005–07–01
  3. By: Antonio Merlo (Department of Economics, University of Pennsylvania)
    Abstract: In this paper, I discuss recent developments in political economy. By focusing on the microeconomic side of the discipline, I present an overview of current research on four of the fundamental institutions of a political economy: voters, politicians, parties and governments. For each of these topics, I identify and discuss some of the salient questions that have been posed and addressed in the literature, present some stylized models and examples, and summarize the main theoretical findings. Furthermore, I describe the available data, review the relevant empirical evidence, and discuss some of the challenges for empirical research in political economy.
    Keywords: microeconomics of political economy, voters, politicians, parties, governments
    JEL: D72 D78 H11
    Date: 2005–08–01
  4. By: Thomas Jensen (Department of Economics, University of Copenhagen)
    Abstract: Studies in political science and psychology suggest that voters' perceptions of political positions depend on their personal views of the candidates. A voter who likes/dislikes a candidate will perceive his position as closer to/further from his own than it really is (projection). Clearly these effects should be most pronounced when candidate positions are ambiguous. Thus a generally well liked candidate will have an incentive to take an ambiguous position. In this paper we construct a simple model to see under which conditions this incentive survives in the strategic setting of electoral competition, even if voters dislike ambiguity per se.
    Keywords: electoral competition; ambiguity; voter perception; cognitive balance; projection
    JEL: D72 D83 C72
    Date: 2005–12
  5. By: Andrew Austin
    Abstract: In September 1992 French voters in a national referendum approved the Maastrict Treaty, which instituted several provisions for closer European integration including creation of the Eurozone. This paper analyzes political and economic forces that affected French voters, and the links between the progress of European integration and changes in redistributive spending. Conventional wisdom ascribes the persistence of the Common Agricultural Program subsidies to the political power of farmers, although direct evidence of this has been sparse. The statistical analysis here finds that support for European integration is weaker, other things equal, in areas where farmers were most affected by the MacSharry reforms, which reduced some support prices and began the process of `decoupling' agricultural subsidies from production. Results also show previous support for European integration and pro-European politicians are correlated with stronger support for ratification, as are higher incomes and higher proportions of non-natives. The results are consistent with the view that European integration provides voters and taxpayers with a way to limit the influence of interest groups by shifting decisionmaking from a national to a supranational arena.
    Keywords: Referendum, agricultural subsidies, European integration, voting.
    JEL: H23 D72
    Date: 2005–11
  6. By: M. Magnani
    Abstract: Pension system and labor market reforms are widely debated issues in all industrialized countries and especially in Europe; any change over these two aspects of the Social Security System indeed, can affect heavily the functioning of the whole economy.A preminent role in this sense is played by employment protection regulation and by the mandatory retirement age; in this paper I focus on the political economy of such social policies jointly and consider the interaction between the choice over the protection of the employees in the labour market and that over retirement age. In particular, I look at the effects of the turnover generated either by temporary, selective exits due to the dynamic of the labour market or by permanent, non-selective exits due to retirements. The degree of employment protection and the mandatory retirement age emerge as a result of the political bargaining between three social groups: young, high and low prductivity old. Workforce composition in this setting defines the efficiency of the economy and determine the rise of a social consensus towards different assets of the Social Security System
    Keywords: social security, turnover on the labor market, political equilibria, employment protection, retirement age
    JEL: D72 H55 J63
    Date: 2005
  7. By: J. Mark Ramseyer (Harvard Law School)
    Abstract: Although the executive branch appoints Japanese Supreme Court justices as it does in the United States, a personnel office under the control of the Supreme Court rotates lower court Japanese judges through a variety of posts. This creates the possibility that politicians might indirectly use the postings to reward or punish judges. For forty years, the Liberal Democratic Party (LDP) controlled the legislature and appointed the Supreme Court justices who in turn controlled the careers of these lower-court judges. In 1993, it temporarily lost control. We use regression analysis to examine whether the end of the LDP’s electoral lock changed the court’s promotion system, and find surprisingly little change. Whether before or after 1993, the Supreme Court used the personnel office to 'manage' the careers of lower court judges. The result: uniform and predictable judgments that economize on litigation costs by facilitating out-of-court settlements.
    Keywords: judges, Japan, supreme court, political economy
    JEL: K
    Date: 2005–12–12
  8. By: Edward J. Lopez (San Jose State University); Daniel Sutter (University of Oklahoma)
    Abstract: Objective: In 1978 Congress weakened several key provisions of the Endangered Species Act (ESA), which had been enacted only five years earlier. The objective is to compare alternative explanations for this policy reversal. Methods: Probit and multinomial logit models are used to explain empirically how senators voted in both 1973 and 1978, and to investigate why many senators switched their vote from supporting ESA to weakening it. Results: The findings here indicate that party affiliation and policymaker preferences were not important to the 1973 vote, but they were key variables in the 1978 votes and the vote-switching decision. Proxies for unexpected economic impacts of ESA on individual states have little explanatory power. Conclusions: Ignorance, as measured here, does not appear to explain this policy reversal. Rather, an influx of relatively conservative Democrats between 1973 and 1978 presents itself as the leading explanation.
    Keywords: endangered species act, congressional voting
    JEL: D1 D2 D3 D4
    Date: 2005–12–12

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