nep-pol New Economics Papers
on Positive Political Economics
Issue of 2009‒06‒17
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. Government Transfers and Political Support By Marco Manacorda; Edward Miguel; Andrea Vigorito
  2. Higher Vote Thresholds for Incumbents, Effort and Selection By Gersbach, Hans
  3. Centralization of Decentralized Governance - Evidence from West Bengal Panchayat By Misra, Jaydev
  4. Does legislative turnover adversely affect state expenditure policy? Evidence from Indian state elections By Uppal, Yogesh
  5. Is a Federal European Constitution for an Enlarged European Union Necessary? Some Preliminary Suggestions using Public Choice Analysis By Friedrich Schneider
  6. A missing spatial link in institutional quality By Peter Claeys; Fabio Manca
  7. Education and Democratic Preferences By Alberto Chong; Mark Gradstein
  8. Does democracy reduce terrorism in developing nations? By Subhayu Bandyopadhyay; Javed Younas
  9. Integrated Political Strategy By John M. de Figueiredo
  10. The design of electoral rules and their impact on economic growth: the Italian case By M.Rosaria Alfano; A. Laura Baraldi

  1. By: Marco Manacorda; Edward Miguel; Andrea Vigorito
    Abstract: We estimate the impact of a large anti-poverty program - the Uruguayan PANES - on political support for thegovernment that implemented it. The program mainly consisted of a monthly cash transfer for a period ofroughly two and half years. Using the discontinuity in program assignment based on a pre-treatment score, wefind that beneficiary households are 21 to 28 percentage points more likely to favor the current government(relative to the previous government). Impacts on political support are larger among poorer households and forthose near the center of the political spectrum, consistent with the probabilistic voting model in politicaleconomy. Effects persist after the cash transfer program ends. We estimate that the annual cost of increasinggovernment political support by 1 percentage point is roughly 0.9% of annual government social expenditures.
    Keywords: Conditional cash transfers, redistributive politics, voting, regression discontinuity
    JEL: I38 D72
    Date: 2009–03
  2. By: Gersbach, Hans
    Abstract: The election mechanism has difficulties in selecting the most able candidates and deselecting less able ones. In a simple model we show that the power of elections as a selection and incentive device can be improved by requiring higher vote thresholds than 50% for incumbents. A higher vote threshold makes it impossible for office-holders of low ability to pool with more able office-holders in order to be reelected. As a consequence, the average ability of reelected politicians and the average effort level tends to increase. The socially optimal threshold can be set by the public. Alternatively, one could allow candidates to compete with individual vote thresholds.
    Keywords: effort; elections; incumbents; political contracts; selection; vote-share thresholds
    JEL: D7 D82 H4
    Date: 2009–06
  3. By: Misra, Jaydev
    Abstract: Democratic decentralization in the state of West Bengal, of its own, are not producing systems that are more effective or more accountable to local needs and interests. The formal mechanisms matter less than the informal institutions that underpin local political economies. And the understanding of it by the poor may have been reflected in the ballot box of last Panchayat election held in 2008. If 'only alternative of the left is better left', then the left strategy of democratic decentralization must have to be replaced by alternative model with more accountability, less corruption and abolition of those clientilsm.
    Keywords: Democratic decentralization; participation; access; control; sustainable development; clientelism
    JEL: R58 R0
    Date: 2008–06
  4. By: Uppal, Yogesh
    Abstract: I examine the effect of legislative turnover on the size and composition of government expenditures in Indian state elections during 1980-2000. The paper finds that excessive turnover in Indian state elections results in an inefficient government expenditure policy. First, the higher the turnover, the larger is the size of government. Second, excessive turnover affects the allocative efficiency of the government expenditure by skewing the composition of government spending towards pure consumption expenditure and away from more productive investment expenditure. The findings imply that a lack of a proper commitment mechanism in political markets could be a source of inefficiency in government policy.
    Keywords: Legislative turnover; Indian elections; government spending
    JEL: E62 H11 H7 H5
    Date: 2009–06–02
  5. By: Friedrich Schneider
    Abstract: In order to guarantee a further successful functioning of the enlarged European Union a Federal European Constitution is proposed. Six basic elements of a future European federal constitution are developed: the European commission should be turned into an European government and the European legislation should consist of a two chamber system with full responsibility over all federal items. Three further key elements are the subsidiarity principle, federalism and the secession right, which are best suited to limiting the domain of the central European authority to which certain tasks are given, such as defense, foreign and environmental policy. Another important feature is direct democracy, which provides the possibility for European voters to participate actively in the political decision making, to break political and interest group cartels, and to prevent an unwanted shifting of responsibilities from EU member states to the European federal level.
    JEL: D72 D78 H7 H11
    Date: 2009–05–28
  6. By: Peter Claeys (Faculty of Economics, University of Barcelona); Fabio Manca (Faculty of Economics, University of Barcelona)
    Abstract: History tells that institutions evolve gradually over time, pushing new ideas across borders and cultures. Globalisation is argued to accelerate this process. We examine the spatial links of different political institutions across borders. Applying various tests for spatial proximity, we do not find evidence of contemporaneous spatial links. This result is robust to various measures of distance and of cultural proximity across countries. Instead, when we analyse long run dynamics diffusion of institutions seems to occur only gradually.
    Keywords: Institutions, spatial econometrics, spillover
    Date: 2009–06
  7. By: Alberto Chong; Mark Gradstein
    Abstract: This paper examines the causal link between education and democracy. Motivated by a model whereby educated individuals are in a better position to assess the effects of public policies and hence favor democracy where their opinions matter, the empirical analysis uses World Values Surveys to study the link between education and democratic attitudes. Controlling for a variety of characteristics, the paper finds that higher education levels tend to result in rodemocracy views. These results hold across countries with different levels of democracy, thus rejecting the hypothesis that indoctrination through education is an effective tool in non-democratic countries.
    Keywords: Education, democracy
    JEL: I20 I30 Y80
    Date: 2009–06
  8. By: Subhayu Bandyopadhyay; Javed Younas
    Abstract: Understanding the causes of terrorism is important in predicting it and in developing an effective counterterrorism strategy. Data on the incidence of terrorist attacks and casualties suggest that domestic terrorism poses a substantially larger threat than transnational terrorism in developing countries. In spite of this fact, research has focused mostly on the latter. In analyzing both types, we find that political freedom and civil liberties affect domestic terrorism in a non monotonic way. Countries with either authoritarian regimes or with mature democratic systems experience less terrorism. This result has important policy implications: It suggests that one needs to be patient in the path to democracy, because the transition is likely to be associated with more violence. Interestingly, more religious fractionalization is associated with less terrorism in most of our specifications, while ethnic fractionalization raises domestic terrorism. On the other hand, poverty and lack of education do not appear to directly influence either domestic or transnational terrorism. All specifications show that “rule of law” reduces terrorism.
    Keywords: Terrorism
    Date: 2009
  9. By: John M. de Figueiredo
    Abstract: This paper reviews the literature on corporate political strategy and identifies a number of open research questions and streams for potential investigation. The paper develops a framework to explain why, when, and how a firm will pursue multi-forum political action as part of its non-market and integrated strategy.
    JEL: K23 P16
    Date: 2009–06
  10. By: M.Rosaria Alfano; A. Laura Baraldi (Dipartimento di Diritto ed Economia, Seconda Università di Napoli)
    Keywords: Economic Growth, Electoral System, Corruption, Public expenditure, Education
    Date: 2008–03

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