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on Positive Political Economics |
| By: | Enrique Gilles |
| Abstract: | This paper proposes a political economy explanation of bailouts to declining industries. A model of probabilistic voting is developed, in which two candidates compete for the vote of two groups of the society through tactical redistribution. We allow politicians to have core support groups they understand better, this im- plies politicians are more or less effective to deliver favors to some groups. This setting is suited to reproduce pork barrels or machine politics and patronage. We use this model to illustrate the case of an economy with both an efficient industry and a declining one, in which workers elect their government. We present the con- ditions under which the political process ends up with the lagged-behind industry being allowed to survive. |
| Date: | 2010–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:007180&r=pol |
| By: | Ozgur Erkan |
| Abstract: | In contrast to the attention devoted to the rejection of the EU Constitutional Treaty at French and Dutch referenda; the Spanish referendum, where this Treaty was ratified, remained under-researched by political scientists. This paper analyses the voting behaviour at the Spanish referendum on the EU Constitutional Treaty with the use of quantitative methods and the concept of first and second-order elections. This paper finds that the Spanish referendum was a second-order referendum, because the effects of domestic political issues in Spain had a greater impact on the electoral behaviour of Spanish voters than had genuinely European issues. This finding raises doubts over the suitability of using direct democracy in the EU in order to raise the legitimacy and democratic accountability of the European project. |
| Keywords: | Spain, EU, referendum, European Constitutional Treaty, first and second-order elections |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:eiq:eileqs:25&r=pol |
| By: | Henry S. Farber |
| Abstract: | The standard theoretical solution to the observation of substantial turnout in large elections is that individuals receive utility from the act of voting. However, this leaves open the question of whether or not there is a significant margin on which individuals consider the effect of their vote on the outcome in deciding whether or not to vote. In order to address this issue, I study turnout in union representation elections in the U.S. (government supervised secret ballot elections, generally held at the workplace, on the question of whether the workers would like to be represented by a union). These elections provide a particularly good laboratory to study voter behavior because many of the elections have sufficiently few eligible voters that individuals can have a substantial probability of being pivotal. I develop a rational choice model of turnout in these elections, and I implement this model empirically using data on over 75,000 of these elections held from 1972-2009. The results suggest that most individuals (over 80 percent) vote in these elections independent of consideration of the likelihood that they will be pivotal. Among the remainder, the probability of voting is related to variables that influence the probability of a vote being pivotal (election size and expected closeness of the election). These findings are consistent with the standard rational choice model. |
| JEL: | D72 J51 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16160&r=pol |
| By: | Thomas Braendle; Alois Stutzer (University of Basel) |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:1520&r=pol |
| By: | Wilfred J. Ethier (Department of Economics, University of Pennsylvania) |
| Abstract: | This paper offers a selective, interpretative survey of the literature on the political economy of international trade policy. Unilateral trade policy and multilateral trade agreements are covered, but preferential trading arrangements are not. Much of the literature is characterized either by a discrepancy between what policymakers say they are doing and how the theory models their actions (the Cognitive Dissonance issue) or by a lack of a detailed microeconomic foundation (the Black Box issue). |
| Keywords: | Political support function, Protection For Sale, trade agreements, exchange of market access |
| JEL: | F02 F13 |
| Date: | 2010–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:10-022&r=pol |
| By: | Chi, Feng; Yang, Nathan |
| Abstract: | The paper provides some support in favor of Twitter adoption being driven by outreach reasons, rather than the well-popularized transparency motive. Furthermore, outreach considerations factor into a Republican's perceived benefit more than a Democrat's. |
| Keywords: | Government communication; diffusion of technology; political marketing; social media. |
| JEL: | O30 M30 |
| Date: | 2010–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23597&r=pol |
| By: | Facundo Albornoz; Esther Hauk |
| Abstract: | We study a symmetric information bargaining model of civil war where a third (foreign) party can affect the probabilities of winning the conflict and the size of the post conflict spoils. We show that the possible alliance with a third party makes peaceful agreements difficult to reach and might lead to new commitment problems that trigger war. Also, we argue that the foreign party is likely to induce persistent informational asymmetries which might explain long lasting civil wars. We explore both political and economic incentives for a third party to intervene. The explicit consideration of political incentives leads to two predictions that allow for identifying the influence of foreign intervention on civil war incidence. Both predictions are confirmed for the case of the U.S. as a potential intervening nation: (i) civil wars around the world are more likely under Republican governments and (ii) the probability of civil wars decreases with U.S. presidential approval rates. |
| Date: | 2010–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:836.10&r=pol |
| By: | Sakurai, Sergio Naruhiko; Menezes, Naercio |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:ibm:ibmecp:wpe_205&r=pol |
| By: | Arvate, Paulo; Mattos, Enlinson; Ponczek, Vladimir |
| Abstract: | This paper investigates the causes of municipalities secession in Brazil. The theoretical modelproposes that the median voter is not fully informed about the efficiency effect of secession on publicgood provision and uses the break up decision undertaken by neighbor’s municipalities within thestate to account for his voting. Our empirical results confirms that prediction. |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:225&r=pol |
| By: | Christopoulos, Dimitris; Siourounis, Gregorios; Vlachaki, Irene |
| Abstract: | We construct an endogenous growth model and we employ empirical analysis to investigate the link between foreign aid and production efficiency in the presence of different political orientations of the recipient country. Using a panel of 124 countries from 1971 to 2007 and the production frontier toolbox, we document that regardless of income stratum, decade and type, foreign aid is associated with higher production inefficiency and that this inefficiency is reduced considerably if countries switch to democratic governance. Our study contributes to the aid literature by pointing to the institutional enhancement of the recipient countries through initially the adoption of democratic ruling practices. |
| Keywords: | Democratic reforms, foreign aid, production inefficiency, translog function |
| JEL: | F35 O43 D24 C01 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23562&r=pol |
| By: | Christopoulos, Dimitris; Siourounis, Gregorios; Vlachaki, Irene |
| Abstract: | We construct an endogenous growth model and we employ empirical analysis to investigate the link between foreign aid and production efficiency in the presence of different political orientations of the recipient country. Using a panel of 124 countries from 1971 to 2007 and the production frontier toolbox, we document that regardless of income stratum, decade and type, foreign aid is associated with higher production inefficiency and that this inefficiency is reduced considerably if countries switch to democratic governance. Our study contributes to the aid literature by pointing to the institutional enhancement of the recipient countries through initially the adoption of democratic ruling practices. |
| Keywords: | Democratic reforms, foreign aid, production inefficiency, translog function |
| JEL: | F35 O43 D24 C01 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23607&r=pol |
| By: | Arvate, Paulo; Pereira, Carlos |
| Abstract: | This manuscript demonstrates that voters have nothing to be afraid of when new hard budgetconstraint legislation is implemented. Our claim is that this kind of legislation reduces theasymmetry of information between voters and incumbents over the budget and, as aconsequence, the latter have incentives to increase the supply of public goods. As anationwide institutional innovation, the Fiscal Responsibility Law (FRL) is exogenous to allmunicipalities; therefore, there is no self-selection bias in its implementation. We show thatpublic goods expenditure increases after the FRL. Second, this increase occurs inmunicipalities located in the country’s poorest region. Third, our findings can be extended tothe supply of public goods because the higher the expenditure with health and education, thegreater the probability of incumbents being re-elected. Finally, there exists a “de facto”higher supply of public goods in education (number of per capita classrooms) after the FRL. |
| Date: | 2010–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:232&r=pol |