nep-pol New Economics Papers
on Positive Political Economics
Issue of 2009‒12‒19
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Political Economy of Director's Law: How Sincere Voters Decide on Cash and In-kind Redistribution in a Costly Political Framework By Francesco Scervini
  2. Bias at the Ballot Box? Testing Whether Candidates' Gender Affects Their Vote By Amy King; Andrew Leigh
  3. The Political Economy of Immigration Policy By Facchini, Giovanni; Mayda, Anna Maria
  4. The Political Economy of Social Security and Public Goods Provision in a Borrowing-constrained Economy By Ryo Arawatari; Tetsuo Ono
  5. How Would your Kids Vote if I Open my Doors? Evidence from Venezuela By Rodriguez, Francisco; Wagner, Rodrigo
  6. A Theory of Ethnic Diversity and Income Distribution By Fusako Tsuchimoto
  7. Does Terrorism Work? By Gould, Eric D.; Klor, Esteban F.
  8. The Evolution of Ideology, Fairness and Redistribution By Alberto F. Alesina; Guido Cozzi; Noemi Mantovan
  9. Individual attitudes towards skilled migration: an empirical analysis across countries By Facchini, Giovanni; Mayda, Anna Maria
  10. Illegal immigration and media exposure: Evidence on individual attitudes By Facchini, Giovanni; Mayda, Anna Maria; Puglisi, Riccardo
  11. Family systems, political systems, and Asia's'missing girls': the construction of son preference and its unraveling By Das Gupta, Monica
  12. Democratisation via elections in an African 'narco state'? The case of Guinea-Bissau By Kohnert, Dirk
  13. Understanding Attitudes Towards Migrants A Broader Perspective By Kleemans, Marieke; Klugman, Jeni

  1. By: Francesco Scervini (University of Torino)
    Abstract: The amount of taxes and public expenditures seems to be uncorrelated to the level of market inequality in OECD countries. This empirical evidence is diffcult to be rationalized in a standard median voter theorem setting, where individuals rationally choose their preferred redistribution scheme. This paper reconciles theory and evidence by introducing a source of political asymmetry, that is income inequality: assuming that political activity is costly, income distribution can be a determinant of political asymmetry, provided that some classes of individuals are not able to satisfy their political budget constraint. The political framework consists of a bi-dimensional policy space where preferences over cash redistribution are monotonically decreasing with income, while those over in-kind redistribution depend on the middle class position, according to Director's law. The result is that the elected policy maker is increasingly biased toward rich classes of population as far as market income inequality increases.
    Keywords: Income distribution, Redistribution, Political process, Publicly provided goods
    JEL: D31 D72 H42
    Date: 2009–11
  2. By: Amy King; Andrew Leigh
    Abstract: Using data from all elections to the Australian House of Representatives between 1903 and 2004, we examine the relationship between candidates’ gender and their share of the vote. We find that the vote share of female candidates is 0.6 percentage points smaller than that of male candidates (for major parties, the gap widens to 1½ percentage points), but find little evidence that the party preselection system is responsible for the voting bias against women. Over time, the gap between male and female candidates has shrunk considerably as a result of changes in social norms (as proxied by the gender pay gap and attitudinal data) and the share of female candidates running nationwide. We find little evidence that party-based affirmative action policies have reduced the gender penalty against female candidates.
    Keywords: economics of gender, elections, voting behaviour
    JEL: D72 J16
    Date: 2009–11
  3. By: Facchini, Giovanni; Mayda, Anna Maria
    Abstract: We analyze a newly available dataset of migration policy decisions reported by governments to the United Nations Department of Economic and Social Affairs between 1976 and 2007. We find evidence indicating that most governments have policies aimed at either maintaining the status quo or at lowering the level of migration. We also document variation in migration policy over time and across countries of different regions and income levels. Finally, we examine patterns in various aspects of destination countries’ migration policies (policies towards family reunification, temporary vs. permanent migration, high-skilled migration). This analysis leads us to investigate the determinants of migration policy in a destination country. We develop a political economy framework in which voter attitudes represent a key component. We survey the literature on the determinants of public opinion towards immigrants and examine the link between these attitudes and governments’ policy decisions. While we find evidence broadly consistent with the median voter model, we conclude that this framework is not sufficient to understand actual migration policies. We discuss evidence which suggests that interest-groups dynamics may play a very important role.
    Keywords: immigration; immigration policy; median voter; interest groups; political economy
    JEL: J6 Z1 F5 O15
    Date: 2009–04–01
  4. By: Ryo Arawatari (Faculty of Economics, Shinshu University); Tetsuo Ono (Graduate School of Economics, Osaka University)
    Abstract: This paper introduces an overlapping generations model with earnings heterogeneity and borrowing constraints. The labor income tax and the allocation of tax revenue across social security and public goods provision are determined in a bidimensional majoritarian voting game played by successive generations. The political equilibrium is characterized by an ends-against-the-middle equilibrium where lowand high-income individuals form a coalition in favor of a low tax rate and less social security while middle-income individuals favor a high tax rate and greater social security. Government spending then shifts from social security to public goods provision if either: (i) higher wage inequality is associated with the borrowing constraint and a low intertemporal elasticity of substitution, or (ii) the population growth rate becomes lower.
    Keywords: Borrowing constraint; Social security; Public goods provision; Structureinduced equilibrium; Ends-against-the-middle equilibrium; Wage inequality; Population aging
    JEL: H41 H55 D72
    Date: 2009–11
  5. By: Rodriguez, Francisco; Wagner, Rodrigo
    Abstract: For how long does cultural heritage persist? Do the culturally inherited values of immigrants dilute as generations pass? We answer these question by studying the relationship between revealed political behavior of immigrant families and the culture of the place where they migrated from, either one or many generations ago. Using surnames as indicators of region of origin of Italians in Venezuela, we study the effect of cultural heritage on two indicators of revealed political behavior: (i) propensity for civic engagement, and (ii) propensity for redistribution. A well established literature documents greater propensity for civic engagement and lower propensity for redistribution among Northern Italians. In Venezuela, we measure the former by turnout before the era of political polarization and the latter by signing behavior against Hugo Chávez in the 2004 recall referendum drive. Despite the fact that the wave of Italian immigration to Venezuela occurred more than half a century before the events studied in this paper, we do not find a greater propensity for civic engagement nor preference against redistribution among descendants from Northern as opposed to Southern Italians, suggesting that cultural assimilation may be a strong determinant of political behavior in the long run.
    Keywords: Social capital; political incorporation of immigrants; family economics; redistribution; political preferences; civic engagement; Latin America
    JEL: F22 Z1 P26
    Date: 2009–08–01
  6. By: Fusako Tsuchimoto
    Abstract: In this paper, how the two dimensions of heterogeneity of people in society, income disparity and ethnic diversity, affect the reallocation of the income is examined. Specifically a legislative bargaining model is constructed to investigate how the political parties whose platforms are distinguished by ethnicity and income group, form a coalition and enter a government to implement their preferred fiscal policy is analyzed. The result of the model suggests, that the preferred partner for coalition is the group with smaller population size (cheaper to buy) and lower income level (easier to tax). Combined with the idea of Kuznets curve, this result suggests that in poor countries ethnic coalitions tend to occur and in the middle and high income countries, class coalitions are likely to occur. Further I extend the model such that the member in the coalition gets per-capita transfer equally to overcome the shortcomings of the conventional model. The extended model shows that if the rich is in the majority, forming an oversized coalition might be the optimal strategy, which is consistent with empirical findings in some developed countries, such as Denmark or Sweden.
    Keywords: Political Economy, diversity, legislative bargaining.
    JEL: P16 D30 D72
    Date: 2009–11
  7. By: Gould, Eric D.; Klor, Esteban F.
    Abstract: This paper examines whether terrorism is an effective tool to achieve political goals. By exploiting variation in terror attacks over time and across locations in Israel from 1988 to 2006, we show that local terror attacks cause Israelis to be: (i) more willing to grant territorial concessions to the Palestinians; (ii) more willing to accept a Palestinian state; (iii) and less likely to identify oneself as being right-wing. These effects are especially pronounced within demographic groups that are traditionally right-wing in their political views. However, terror attacks beyond a certain threshold are less effective, and may reach levels which cause Israelis to adopt a less-accommodating position. In addition, we show that terror induces Israelis to vote increasingly for right-wing parties, as the right-wing parties move to the left in response to terror. Hence, terrorism appears to be an effective strategy in terms of shifting the entire Israeli political landscape to the left. These findings may shed light on the causes underlying the spread of global terrorism in the last few decades.
    Keywords: Political Views; Terrorism
    JEL: D72 D74
    Date: 2009–12
  8. By: Alberto F. Alesina; Guido Cozzi; Noemi Mantovan
    Abstract: Ideas about what is "fair" above and beyond the individual's position in the income ladder influence preferences for redistribution. We study the dynamic evolution of different economies in which redistributive policies, perceptions of fairness, inequality and growth are jointly determined. We show how including fairness explains various observed correlations 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.
    JEL: H0 H1
    Date: 2009–12
  9. By: Facchini, Giovanni; Mayda, Anna Maria
    Abstract: It is commonly argued that skilled immigration benefits the destination country through several channels. Yet, only a small group of countries reports to have policies in place aimed at increasing the intake of skilled immigrants. Why? In this paper we analyze the factors that affect a direct measure of individual attitudes towards skilled migration, focusing on two main channels: the labor market and the welfare state. We find that more educated natives are less likely to favor skilled immigration - consistent with the labor-market channel - while richer people are more likely to do so - in accordance with the welfare state channel under the tax adjustment model. Our findings thus suggest that the labor market competition threat perceived by skilled natives in the host countries might be driving the observed cautious policies.
    Keywords: attitudes; immigration policy; political economy; skilled immigration
    JEL: F22 J61
    Date: 2009–12
  10. By: Facchini, Giovanni; Mayda, Anna Maria; Puglisi, Riccardo
    Abstract: Illegal immigration has been the focus of much debate in receiving countries, but little is known about what drives individual attitudes towards illegal immigrants. To study this question, we use the CCES survey, which was carried out in 2006 in the United States. We find evidence that - in addition to standard labor market and welfare state considerations - media exposure is significantly correlated with public opinion on illegal immigration. Controlling for education, income and ideology, individuals watching Fox News are 9 percentage points more likely than CBS viewers to oppose the legalization of undocumented immigrants. We find an effect of the same size and direction for CNN viewers, whereas individuals watching PBS are instead more likely to support legalization. Ideological self-selection into different news programs plays an important role, but cannot entirely explain the correlation between media exposure and attitudes about illegal immigration.
    Keywords: attitudes; illegal immigration; immigration; media; preferences
    JEL: F1 F22 J61
    Date: 2009–12
  11. By: Das Gupta, Monica
    Abstract: Son preference is known to be found in certain types of cultures, that is patrilineal cultures. But what explains the fact that China, South Korea, and Northwest India manifest such extreme child sex ratios compared with other patrilineal societies? This paper argues that what makes these societies unique is that their pre-modern political and administrative systems used patrilineages to organize and administer their citizens. The interplay of culture, state, and political processes generated uniquely rigid patriliny and son preference. The paper also argues that the advent of the modern state in these settings has unraveled the underpinnings of the rigid patrilineal rules, and unleashed a variety of forces that reduce son preference. Firstly, the modern state has powerful tools for incorporating and managing its citizenry, rendering patrilineages a threat rather than an asset for the state. Secondly, the modern state has brought in political, social, and legal reforms aimed to challenge traditional social hierarchies, including the age and gender hierarchies of the kinship system. Thirdly, industrialization and urbanization have ushered in new modes of social organization, which reduce the hold of clans and lineages. Studies of the impact of the media suggest that states can accelerate the resultant decline in son preference, through media efforts to help parents perceive that daughters can now be as valuable as sons.
    Keywords: Population Policies,Gender and Law,Anthropology,Population&Development,Gender and Development
    Date: 2009–12–01
  12. By: Kohnert, Dirk
    Abstract: Recent development cooperation with Guinea-Bissau, focussing on good governance, state-building and conflict prevention, did not contribute to democratization nor to the stabilization of volatile political, military and economic structures. Both the portrayal of Guinea-Bissau as failed ‘narco state' as well as Western aid meant to stabilize this state are based on doubtful concepts. Certainly, the impact of drug trafficking could endanger democratization and state-building if continued unchecked. However, the most pressing need is not state-building, facilitated by external aid, yet poorly rooted in the social and political fabric of the country, but nation-building by national reconciliation, as a pre-condition for the creation of viable state institutions.
    Keywords: elections; democratization; informal institutions; aid; failed states; nation-building; institution building; drug trafficking; Guinea-Bissau; Africa;
    JEL: N47 Z1 O17 E26 H76 D72 K14
    Date: 2009–12–01
  13. By: Kleemans, Marieke; Klugman, Jeni
    Abstract: Migration is a controversial issue. Reading of the popular media in virtually any country, alongside an array of opinion polls suggest that residents see controls on immigration as essential and that people would prefer to see existing rules on entry tightened rather than relaxed. This stands in contrast to the evidence which points to significant gains for movers and, in many cases, benefits also for destination and origin countries – as reviewed in the forthcoming Human Development Report 2009. This paper makes several important contributions to an already rich literature about public opinion and migration. It highlights that attitudes are not as monochrome as might initially appear. A more detailed analysis of the nature, patterns and correlates of opinions toward migration in both developed and developing countries shows that values favourable toward diversity are in fact widely held, albeit with important variations. We also cast important light on how policies toward migration and underlying structural characteristics affect attitudes. Moreover, as many migrants do not end up in developed or OECD countries, public opinions in developing countries are of interest. As far as we are aware, this paper is the first published attempt to explore attitudes in countries in all parts of the human development spectrum. While the data investigated is largely drawn from 2005/2006, we frame key questions in both a longer term perspective, and highlight attitudes towards migrants when jobs are scarce, which has heightened relevance during periods of recession.
    Keywords: Immigration; human development; public opinion
    JEL: F22 O15 J15
    Date: 2009–10–01

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