nep-pol New Economics Papers
on Positive Political Economics
Issue of 2009‒10‒31
eight papers chosen by
Eugene Beaulieu
University of Calgary

  1. Electoral Participation and Communicative Voting in Europe By Sobbrio, Francesco
  2. Indirect Lobbying and Media Bias By Sobbrio, Francesco
  3. Demand for Redistribution, Support for the Welfare State, and Party Identification in Austria By Andreas Kuhn
  4. Institutional Investors and Proxy Voting on Compensation Plans: The Impact of the 2003 Mutual Fund Voting Disclosure Regulation By Martijn Cremers; Roberta Romano
  5. The European Union’s Emission Trading Scheme: Political Economy and Bureaucratic Rent-Seeking By Mallard, Graham
  6. Anti-Americanism and Public Opinion in the European Union By Lawson, Colin; Hudson, John
  7. Labor-market exposure as a determinant of attitudes toward immigration By Francesc Ortega; Javier G. Polavieja
  8. The Political Economy of Productivity in Argentina: Interpretation and Illustration By Santiago Urbiztondo; Marcela Cristini; Cynthia Moskovitz; Sebastian Saiegh

  1. By: Sobbrio, Francesco
    Abstract: This paper provides an empirical investigation of electoral participation and communicative voting in 14 European countries. We estimate a multi-level voting process where individuals face a participation decision (whether to vote or abstain) and a voting decision (whether to vote strategically for a likely winner party or as communicating for a sure loser party). Our main findings can be summarized as follows. First, individuals who are either independent or uninformed are less likely to turnout. However, being both independent and uninformed does not have any statistically significant effect on electoral participation. Thus, our results question the empirical relevance of the swing voter's curse theory in large elections. Second, the probability of voting as communicating is positively related with the level of education and the degree of dissatisfaction with the political system. Finally, political preferences and institutional features characterizing the functioning of the political system and of the media market have a significant effect both on electoral participation and on the voting decision.
    Keywords: Electoral turnout; Swing Voter's Curse; Communicative voting; Strategic voting; Multi-level qualitative choices
    JEL: D72 C25
    Date: 2009–10
  2. By: Sobbrio, Francesco
    Abstract: In this paper, we study a model where voters have state-contingent preferences over policies and lobbies engage in influence activities to affect the information that a media outlet collects on the state of the world. The media outlet acts as a "filter" between lobbies and voters. It has to decide what to communicate to voters given the information it collects and its idiosyncratic bias. We show that, by targeting voters, lobbies are able to indirectly influence the political outcome and thus create a distortion in the political process. When the media outlet has a small idiosyncratic bias the (unique) equilibrium is characterized by a large level of lobbies' influence activities and no "news-slanting" by the media outlet. When the media outlet's idiosyncratic bias is large, the (unique) equilibrium involves a low level of lobbies' influence activities and a high probability of "news-slanting" by the media outlet. Moreover, we show that a higher idiosyncratic bias of the media outlet may be associated with a lower policy distortion and a higher voters' welfare. On the other hand, public policy measures aimed at increasing the cost of lobbies' influence activities would decrease the distortion in the policy outcome and increase voters' welfare. Finally, asymmetries in lobbies' influence activities lead to different probabilities of "news-slanting" by different media outlet's types.
    Keywords: Indirect Lobbying; Media Bias; Influence Activities; Cheap-Talk
    JEL: D82 D72 D83
    Date: 2009–03
  3. By: Andreas Kuhn (Institute for Empirical Research in Economics, University of Zurich, Switzerland)
    Abstract: This paper describes subjective wage inequality and the demand for redistribution in Austria using individuals' estimates of occupational wages from the International Social Survey Program. Although these estimates differ widely across individuals, the data clearly show that most individuals would like to decrease wage inequality, relative to the level of inequality which they perceive to exist. The empirical analysis also shows that the demand for redistribution is strongly associated not only with variables describing self-interested motives for redistribution, but also with perceptions of and social norms with respect to inequality. Further, the demand for redistribution is a strong predictor for whether an individual is supportive of redistribution by the state. On the other hand, however, I find almost no evidence for an empirical association between the demand for redistribution and individuals' party identification.
    Keywords: subjective inequality measures, demand for redistribution, support for the welfare state, party identification
    JEL: D31 D63 H50
    Date: 2009–09
  4. By: Martijn Cremers; Roberta Romano
    Abstract: This paper examines the impact on shareholder voting of the mutual fund voting disclosure regulation adopted by the SEC in 2003, using a paired sample of management proposals on executive equity incentive compensation plans submitted before and after the rule change. While voting support for management has decreased over time, we find no evidence that mutual funds’ support for management declined after the rule change, as expected by advocates of disclosure. In fact, we find evidence of increased support for management by mutual funds after the change. There is some evidence that firms sponsoring such proposals both before and after the rule change differ from those sponsoring a proposal only before the change. For example, firms are more likely to sponsor a proposal both before and after the rule change if they have higher mutual fund ownership. Such endogeneity could partly explain our findings of increased support after the rule.
    JEL: G2 K22
    Date: 2009–10
  5. By: Mallard, Graham
    Abstract: A political economy model is presented that proposes an effective explanation as to why national allocation plans in the emissions trading scheme of the European Union have taken the form they have. The influence of the national bureaucracy, which is omitted in the majority of the related political economy literature, is shown to be potentially significant and costly – particularly through its interaction with the influence of the affected industrialists. The analysis suggests that the role of the national bureaucracy in the design of environmental policy should be carefully considered and structured, and suggests an avenue of potentially important and fruitful future research.
    Date: 2009
  6. By: Lawson, Colin; Hudson, John
    Abstract: The term “anti-Americanism” has become common coinage in public and academic debate, the more so since the election of President G. W. Bush, and especially since 9/11. Yet little is known of its causes and impact. Defining it as opposition to US policy, and using 2003 and 2005 Eurobarometer data we examine individuals` attitudes to the US in five policy dimensions for EU members. We find that over a third of EU voters either approved or disapproved of the US in all five dimensions. We also find there are differences in attitude to US policy related to age, policy preferences and nationality. And, although anti-Americanism is associated with a preference for greater European independence, perhaps surprisingly it is also linked to a desire for a less federal and hence less powerful Europe.
    Keywords: Federalism; anti-Americanism; European Union
    Date: 2009
  7. By: Francesc Ortega (Universitat Pompeu Fabra); Javier G. Polavieja (IMDEA Ciencias Sociales)
    Abstract: This paper re-examines the role of labor-market competition as a determinant of attitudes toward immigration. We claim two main contributions. First, we use more sophisticated measures of the degree of exposure to competition from immigrants than previously done. Specifically, we focus on the protection derived from investments in job-specific human capital and from specialization in communication-intensive jobs, in addition to formal education. Second, we explicitly account for the potential endogeneity arising from job search. Methodologically, we estimate, by instrumental variables, an econometric model that allows for heterogeneity at the individual, regional, and country level. Drawing on the 2004 European Social Survey, we obtain three main results. First, our estimates show that individuals that are currently employed in less exposed jobs are relatively more pro-immigration. This is true for both our new measures of exposure. Second, we show that the protection granted by job-specific human capital is clearly distinct from the protection granted by formal education. Yet the positive effect of education on pro-immigration attitudes is greatly reduced when we control for the degree of communication intensity of respondents\' occupations. Third, OLS estimates are biased in a direction that suggests that natives respond to immigration by switching to less exposed jobs. The latter finding provides indirect support for the endogenous job specialization hypothesis postulated by Peri and Sparber (2009).
    Keywords: immigration attitudes; labor market; job-specific human capital; communication skills; international migration
    JEL: F1 F22 J61 J31 R13
    Date: 2009–10–21
  8. By: Santiago Urbiztondo; Marcela Cristini; Cynthia Moskovitz; Sebastian Saiegh
    Abstract: This paper examines how the main characteristics of Argentina’s policymaking process (PMP) affect the productivity of its economy using the conceptual framework presented in Murillo, Scartascini and Tommasi (2008), Stein et al. (2008), Spiller and Tommasi (2007), and IDB (2005). First, the paper complements existing descriptions of the PMP by considering private agents and elaborating on structural characteristics possibly conducive to policymaking instability. Second, the paper illustrates the (negative) impact of Argentina’s lowquality and myopic PMP equilibrium on productivity by examining two key areas: provision of infrastructure services and agricultural policy. Finally, the paper explores the PMP at the local level of government (municipalities and local communities), finding that it mimics the flaws observed at the federal level.
    Keywords: Political economy, Productivity, Argentina
    JEL: P16 O43
    Date: 2009–10

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