|
on Positive Political Economics |
| By: | Gerdes, Christer (SOFI, Stockholm University); Wadensjö, Eskil (Stockholm University) |
| Abstract: | In this paper we study the effects on support for different political parties due to an increase in the immigrant share in Danish municipalities during the period 1989-2001. We find that the immigrant share has some notable effects. The anti-immigration parties are among those that win votes when the immigrant share increases, but a pro-immigration party on the left also gains from an increase in the immigrant share. The non-socialist party that is most pro-immigration, however, loses votes when the immigrant share increases. Our results indicate that in the elections some Danish voters voice their displeasure about immigration in their own neighbourhood. But we find no clear indication of a general decline in support for the welfare state on account of immigration, as several scholars have been predicting. |
| Keywords: | immigration, immigrants, elections, racism, xenophobia |
| JEL: | J15 J61 D72 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3586&r=pol |
| By: | Facchini, Giovanni (University of Essex); Mayda, Anna Maria (Georgetown University) |
| Abstract: | In democratic societies individual attitudes of voters represent the foundations of policy making. We start by analyzing patterns in public opinion on migration and find that, across countries of different income levels, only a small minority of voters favour more open migration policies. Next we investigate the determinants of voters' preferences towards immigration from a theoretical and empirical point of view. Our analysis supports the role played by economic channels (labour market, welfare state, efficiency gains) using both the 1995 and 2003 rounds of the ISSP survey. The second part of the paper examines how attitudes translate into a migration policy outcome. We consider two alternative political-economy frameworks: the median voter and the interest groups model. On the one hand, the restrictive policies in place across destination countries and the very low fractions of voters favouring immigration are consistent with the median voter framework. At the same time, given the extent of individual-level opposition to immigration that appears in the data, it is somewhat puzzling, in a median-voter perspective, that migration flows take place at all. Interest-groups dynamics have the potential to explain this puzzle. We find evidence from regression analysis supporting both political-economy frameworks. |
| Keywords: | immigration policy, political economy, interest groups, median voter, immigration |
| JEL: | F22 J61 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3512&r=pol |
| By: | Grosjean, Pauline (University of California, Berkeley); Senik, Claudia (University of Paris IV Sorbonne, PSE) |
| Abstract: | Using a new set of micro evidence from an original survey of 28 transition countries, we show that democracy increases citizens’ support for the market by guaranteeing income redistribution to inequality-averse agents. Our identification strategy relies on the restriction of the sample to inhabitants of open borders between formerly integrated countries, where people face the same level of market development and economic inequality, as well as the same historically inherited politico-economic culture. Democratic rights increase popular support for the market. This is true, in particular, of inequality-averse agents, provided that they trust political institutions. Our findings suggest that one solution to the recent electoral backlash of reformist parties in the former socialist block lies in a deepening of democracy. |
| Keywords: | democracy, income inequality, redistribution, market liberalization, trust |
| JEL: | D63 H1 H53 I38 O1 P26 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3527&r=pol |
| By: | Facchini, Giovanni; Mayda, Anna Maria; Mishra, Prachi |
| Abstract: | While anecdotal evidence suggests that interest groups play a key role in shaping immigration policy, there is no systematic empirical analysis of this issue. In this paper, we construct an industry-level dataset for the United States, by combining information on the number of temporary work visas with data on lobbying activity associated with immigration. We find robust evidence that both pro- and anti-immigration interest groups play a statistically significant and economically relevant role in shaping migration across sectors. Barriers to migration are lower in sectors in which business interest groups incur larger lobby expenditures and higher in sectors where labour unions are more important. |
| Keywords: | Immigration; Immigration Policy; Interest Groups; Political Economy |
| JEL: | F22 J61 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6898&r=pol |
| By: | Dave Colander |
| Abstract: | This paper argues that Bryan Caplan’s Myth of the Rational Voter overstates in case against democracy by not dealing with what might be called the historical/instrumentalist argument for democracy. It argues that the case for democracy that he attacks is primarily an academic exercise, which makes his argument against that case also an academic exercise. It further argues that the supposed policy choice that Caplan presents between the market and democracy is not the correct choice, and that his proposals that economists should be given more voting weight in the democratic decision process is inappropriate. |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:0807&r=pol |
| By: | Falkinger, Josef (University of Zurich) |
| Abstract: | Advertisements provide consumers with knowledge about private products, whereas political information is required to provide voters with knowledge of public issues. Modern information technologies and globalization are increasing the exposure of individuals to information. Goods advertising is competing with political information for people's attention. This paper presents a politico-economic equilibrium model in which the tension between private and public agendas can be analysed. It is shown that in an information-rich society, international goods market integration tends to reduce the quality of public policy. Complementing economic integration with political integration can increase the gains from globalisation, though not in all cases. |
| Keywords: | globalisation, agenda-setting, information-rich societies, scarcity of attention, advertising |
| JEL: | D83 L86 H11 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3524&r=pol |
| By: | Vindigni, Andrea (Princeton University) |
| Abstract: | This paper investigates the role that idiosyncratic uncertainty plays in shaping social preferences over the degree of labor market flexibility, in a general equilibrium model of dynamic labor demand where the productivity of firms evolves over time as a Geometric Brownian motion. A key result demonstrated is that how the economy responds to shocks, i.e. unexpected changes in the drift and standard deviation of the stochastic process describing the dynamics of productivity, depends on the power of labor to extract rents and on the status quo level of firing costs. In particular, we show that when firing costs are relatively low to begin with, a transition to a rigid labor market is favored by all and only the employed workers with idiosyncratic productivity below some threshold value. A more volatile environment, and a lower rate of productivity growth, i.e. “bad times,” increase the political support for more labor market rigidity only where labor appropriates of relatively large rents. Moreover, we demonstrate that when the status quo level of firing costs is relatively high, the preservation of a rigid labor market is favored by the employed with intermediate productivity, whereas all other workers favor more flexibility. The coming of better economic conditions need not favor the demise of high firing costs in rigid high-rents economies, because “good times” cut down the support for flexibility among the least productive employed workers. The model described provides some new insights on the comparative dynamics of labor market institutions in the U.S. and in Europe over the last few decades, shedding some new light both on the reasons for the original build-up of “Eurosclerosis,” and for its the persistence up to the present day. |
| Keywords: | employment protection, firing costs, productivity, political economy, rents, volatility, growth, institutional divergence |
| JEL: | D71 D72 E24 J41 J63 J65 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3509&r=pol |
| By: | Philippe Martin (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Thierry Mayer (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Mathias Thoenig (Université de Genève - Université de Genève) |
| Abstract: | This article analyzes empirically the relationship between civil wars and international trade. We first show that trade destruction due to civil wars is very large and persistent and increases with the severity of the conflict. We then identify two effects that trade can have on the risk of civil conflicts: It may act as a deterrent if trade gains are put at risk during civil wars, but it may also act as an insurance if international trade provides a substitute to internal trade during civil wars. We find support for the presence of these two mechanisms and conclude that trade openness may deter the most severe civil wars (those that destroy the largest amount of trade) but may increase the risk of lower-scale conflicts. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00293024_v1&r=pol |
| By: | Price V. Fishback; Rebecca Holmes; Samuel Allen |
| Abstract: | One of the most difficult problems in the social sciences is measuring the policy climate in societies. Prior to the 1930s the vast majority of labor regulations in the U.S. were enacted at the state level. In this paper we develop several summary measures of labor regulation that document the changes in labor regulation across states and over time during the Progressive Era. The measures include an Employer-Share-Weighted Index (ESWI) that weights regulations by the share of workers affected and builds up the overall index from 17 categories of regulation; the number of pages of laws; appropriations for spending on labor issues per worker; and two nonparametric COORDINATES that summarize locations in a policy space. We describe the pluses and minuses of the measures, how strongly they are correlated, and show the stories that they tell about the changes in labor regulation during the progressive era. We then provide preliminary evidence on the extent to which the labor regulation measures are associated with political and economic correlates identified as important in histories of industrial relations and labor markets. |
| JEL: | J18 K31 N31 N32 N41 N42 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14167&r=pol |