nep-pol New Economics Papers
on Positive Political Economics
Issue of 2009‒08‒08
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. Ethnicity and Elections under Authoritarianism: The Case of Kazakhstan By Oka, Natsuko
  2. The determinants of public deficit volatility. By Luca Agnello; Ricardo M. Sousa
  3. Lobbying of Firms by Voters By Matthias Dahm; Robert Dur; Amihai Glazer
  4. Elites, Education and Reforms By Mina Baliamoune
  5. Altruism, Turnout and Strategic Voting Behavior By Ozgur Evren
  6. Constitutional Review and Democratic Consolidation: A Literature Review By Hazama, Yasushi
  8. Explicating social action: arguing or bargaining By Erik Oddvar Eriksen
  9. The evolution of ideology, fairness and redistribution By Alberto Alesina; Guido Cozzi; Noemi Mantovan
  10. Crime, Corruption and Institutions By Ishita Chatterjee; Ranjan Ray

  1. By: Oka, Natsuko
    Abstract: Despite the ethnicisation of power since independence in 1991, Kazakhstan has managed to maintain political stability without experiencing large-scale mobilisation to oppose Kazakh domination. This paper examines government strategy to avoid ethnic voting in an attempt to explain why ethnic divisions were rarely reflected in the struggle for power in the republic. While the arbitrary use of legal provisions considerably limited participation in elections by ethnic leaders, powerful pro-president parties that exhibited a cross-ethnic character were created to curtail ethnically based movements. The control strategy in elections aimed not simply at ethnicising the parliament in favour of Kazakhs, but at having loyal Russians and other minorities represented in the legislature through nomination by the president and catch-all pro-regime parties, or through the presidential consultative body—Assembly of the People of Kazakhstan. This well-controlled representation of minorities served not only to placate non-Kazakhs but also to provide legitimacy for the Kazakh-dominated leadership by projecting the image of cross-ethnic support for the president and some degree of power-sharing.
    Keywords: Ethnic minority, Election, Kazakhstan, Minority Ethnic group, Politics
    Date: 2009–03
  2. By: Luca Agnello (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Ricardo M. Sousa (University of Minho, Department of Economics and Economic Policies Research Unit (NIPE), Campus of Gualtar, 4710-057 Braga, Portugal.)
    Abstract: This paper empirically analyzes the political, institutional and economic sources of public deficit volatility. Using the system-GMM estimator for linear dynamic panel data models and a sample of 125 countries analyzed from 1980 to 2006, we show that higher public deficit volatility is typically associated with higher levels of political instability and less democracy. In addition, public deficit volatility tends to be magnified for small countries, in the outcome of hyper-inflation episodes and for countries with a high degree of openness. JEL Classification: E31, E63.
    Keywords: Public deficit, volatility, political instability, institutions.
    Date: 2009–04
  3. By: Matthias Dahm (d'Economia, Universitat Rovira i Virgili); Robert Dur (Department of Economics, Erasmus University); Amihai Glazer (Department of Economics, University of California-Irvine)
    Abstract: A firm may induce voters or elected politicians to support a policy it favors by suggesting that it is more likely to invest in a district whose voters or representatives support the policy. In equilibrium, no one vote may be decisive, and the policy may gain strong support though the majority of districts suffer from adoption of the program. When votes reveal information about the district, the firm's implicit promise or threat can be credible.
    Keywords: Lobbying; Inefficient policies; Signaling
    JEL: D72 D82
    Date: 2009–07
  4. By: Mina Baliamoune
    Abstract: We analyze the interplay of political elites’ de facto power, democracy and education based on a theoretical framework inspired by the model in Acemoglu and Robinson (2006). We identify conditions under which the elite may overcompensate the loss of de jure power (as a result of political reform) by investing too much in de facto power so that the probability to have de facto power is higher under democracy than under non-democracy. The analysis also shows that depending on whether the income effect of education is strong or weak and whether citizens’ education has increasing or decreasing returns, the elite may or may not support education subsidy under democracy. We show that under certain assumptions the political elites may treat democracy and spending on citizens’ education as substitutes. We comment on the implications of the results for understanding why countries that started from comparable initial conditions may follow divergent development paths.
    Date: 2009–07
  5. By: Ozgur Evren
    Date: 2009–07–28
  6. By: Hazama, Yasushi
    Abstract: This paper reviews the literature on the prevalence of constitutional review across the world, and particularly in emerging democracies, during the last two decades. Two major questions should be addressed in this regard. First, why has the judiciary been empowered and what factors affect judicial activism? Second, does constitutional review ensure an effective self-enforcing function? In sum, the literature shows that constitutional review can make democracy self-enforcing if there is sufficient competition among political parties or between the legislature and the executive branch of government. In a more sophisticated case, political balance within the court can also ensure the observance of court decisions.
    Keywords: Judiciary, Constitutional review, Democracy, Politics
    Date: 2009
  7. By: Paresh Narayan; Seema Narayan; Russell Smyth
    Abstract: This paper examines the relationship between democracy and economic growth in 30 Sub-Saharan African countries. As our proxy for democracy we first use the democracy index constructed by Freedom House and then check the sensitivity of our findings using, as an alternative proxy for democracy, the Legislative Index of Electoral Competitiveness (LIEC). We find support for the Lipset hypothesis - in the long run, real GDP Granger causes democracy and an increase in GDP results in an improvement in democracy – in Botswana and Niger with both datasets, for Chad with the Freedom House data only and for Cote d’Ivoire and Gabon with the LIEC data only. Support for the compatibility hypothesis - in the long run democracy Granger causes real income and an increase in democracy has a positive effect on real income - is found for Botswana with the Freedom House data and for Madagascar, Rwanda, South Africa and Swaziland with the LIEC data. Support for the conflict hypothesis - in the long run democracy Granger causes real income and an increase in democracy has a negative effect on real income - is found for Gabon with the Freedom House data and Sierra Leone with the LIEC data.
    Keywords: Causality, Democracy, Economic Growth, Sub-Saharan Africa.
    JEL: O1 O4
    Date: 2009–08
  8. By: Erik Oddvar Eriksen
    Abstract: Jon Elster has a clear view of the role of norms and impartiality in collective decision making processes, but does not ascribe to them the power to explain action. Hence, the paradox: If it is only public reasons that can justify outcomes, how can private desires be the causes of the same outcomes? Reasons and norms must be given explanatory force, but this requires methodological individualism expanded to methodological interactionism. Here promises appear not merely as bargaining chips, arguing more than an aggregation device and normative questions not as irrational. Because both arguing and strategic communication exist, and it is as hard to identify the former as the latter, one should not let one take precedence over the other on theoretical grounds. The problem is not theoretical, but methodological.
    Keywords: collective bargaining; common interest; deliberative democracy; discourse; functionalism; institutionalism; legitimacy; methodological issues; normative political theory
    Date: 2009–08–15
  9. By: Alberto Alesina; Guido Cozzi; Noemi Mantovan
    Abstract: Ideas about what is "fair" above and beyond the individuals' position in the income ladder determine preferences for redistribution. We study the dynamic evolution of different economies in which redistributive policies, perception of fairness, inequality and growth are jointly determined. We show how including fairness explains various observed relationship between inequality, redistribution and growth. We also show how different beliefs about fairness can keep two otherwise identical countries in different development paths for a very long time.
    Keywords: Inequality, Fairness, Redistribution, Ideology.
    JEL: D31 E62 H2 P16
    Date: 2009–07
  10. By: Ishita Chatterjee; Ranjan Ray
    Abstract: This paper explores the link between crime and corruption, compares their magnitudes, determinants and their effects on growth rates. The study uses a large cross country data set containing individual responses to questions on crime and corruption along with information on the respondents’ characteristics. This data set is supplemented by country level indicators from a variety of sources on a range of macro variables and on institutions in the respondent’s country of residence. A methodological contribution of this study is the estimation of an ordered probit model based on outcomes defined as combinations of crime and bribe victimisation. The principal results include the evidence that while a male is more likely to be a corruption victim, a female is more exposed to crime, especially, serious crime. Older individuals and those living in the smaller towns and cities are less exposed to crime and corruption due presumably to their ability to form informal networks that act as protective mechanisms. With increasing levels of income and education, an individual is more likely to report both crime and bribe victimisation. A crime victim is more likely than a non victim to report receiving demands for a bribe. The results suggest that variables such as inequality, unemployment rate and population size have a strong effect on the country’s crime and corruption statistics though the sign and significance of the country effects are not always robust. However, the paper does provide robust evidence that a stronger legal system and a happier society result in a reduction in both crime and corruption. While the study finds that both crime and corruption rates decline as a country becomes more affluent, as measured by its per capita GNP at PPP, there is no evidence of a strong and uniformly negative impact of either crime or corruption on a country’s growth rate. There is limited OLS based evidence of a non linear relationship between growth and corruption rates, though the significance of the corruption effect on growth disappears on the use of IV estimation. The paper also provides evidence that there has been a decline in both crime and corruption during the latter half of the 1990s. This is true even after controlling for the individual and country characteristics.
    Keywords: Crime Victimisation, Institutions, Happiness, Ordered Probit, Rule of Law.
    JEL: C13 D63 H80 I31 K42
    Date: 2009–08

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