nep-pol New Economics Papers
on Positive Political Economics
Issue of 2010‒10‒02
eleven papers chosen by
Eugene Beaulieu
University of Calgary

  1. Ecological Inference for the characterization of electoral turnout: The Portuguese Case By Castela, Eugénia; Villardón, Purificación
  2. The limited power of voting to limit power By Hong Geng; Arne Robert Weiss; Irenaeus Wolff
  3. Why Green Parties Should Fear Successful International Climate Agreements By Patrick Laurency; Dirk Schindler
  4. Recovery and Reinvestment Act Spending at the State Level: Keynesian Stimulus or Distributive Politics? By Russell S. Sobel; Andrew Young
  5. Revolving Door Lobbyists By Jordi Blanes i Vidal; Mirko Draca; Christian Fons-Rosen
  6. Institutions, Famine and Inequality By Pasquale Tridico; Francesco Burchi
  7. One dollar, one vote By Karabarbounis, Loukas
  8. Democracy and Reforms: Evidence from a New Dataset By Prachi Mishra; Paola Giuliano; Antonio Spilimbergo
  9. Regulatory Schemes and Political Capture in a Local Public Sector By Gagnepain, Philippe; Ivaldi, Marc
  10. Race of Recipient and Support for Welfare in Canada By Allison Harell; Stuart Soroka
  11. The worldwide governance indicators : methodology and analytical issues By Kaufmann, Daniel; Kraay, Aart; Mastruzzi, Massimo

  1. By: Castela, Eugénia (University of Algarve); Villardón, Purificación (University of Salamanca)
    Abstract: Ecological Inference (IE) is a set of statistical methods that estimate the cells of a contingency table when only the marginal totals are known. Based on King’s model (1997) and considering the legislative elections in Portugal between the years 2002 and 2005, we try to find the stability coefficients (the citizens who, keep the same attitude towards voting in both elections, i.e., they opt for vote or abstention in two consecutive elections) and electoral instability (the citizens who vote in one election and opt for abstention on the other, regardless of the order) for every and each of the municipalities in Portugal. In the Portuguese case, King’s method did not give good estimations. Therefore, in order to find spatial homogeneity in terms of the main political tendencies on the elections under study, we propose territorial “reorganization” based on an abstention pattern arising from the HJ-Biplot method (Galindo, 1986). The territorial “reorganisation” has provided 6 groups of provinces to which King’s model was applied in order to find the percentage of electors who voted or chose abstention in both elections, as well as the percentage of floating electors, i.e., the electors who voted in one election and not on the other.
    Keywords: Ecological Inference; HJ-Biplot; Territorial Organization; Portuguese Elections
    JEL: C00
    Date: 2010–07–30
  2. By: Hong Geng; Arne Robert Weiss; Irenaeus Wolff
    Abstract: In this paper, we experimentally approach the question of which aspects of a voting procedure are able to restrict elected candidates' willingness to use their power in an opportunistic way. For this purpose, we rule out reelection concerns and analyse whether the presence of a vote by itself matters for the exercise of power. We compare two kinds of electoral campaigns: self-descriptions of personality and promises regarding prospective in-office behaviour. We find that social approval as conveyed by a vote does not suffice to induce pro-social choices by elected candidates. On the other hand, when campaigns are promise-based, elected candidates transfer more to their recipients than candidates selected by a random draw even though promises do not differ. This refutes explanations based on a taste for consistency or costs of lying. In contrast, the fact that the correlation between dictators' promises and their beliefs on voter expectations is considerably strengthened in the presence of a vote offers support to a guilt-aversion hypothesis. However, this support is qualified by the correlation between dicators' second-order beliefs and their choices, which is weaker than predicted. Overall, our results suggest the power of voting to limit the self-oriented exertion of power is limited and context-specific.
    Keywords: Elections; Electoral campaigns; Promises; Guilt-aversion; Costs of lying; Dictator game; Social distance; Entitlement; Experiment
    Date: 2010
  3. By: Patrick Laurency; Dirk Schindler
    Abstract: In recent years, differences between traditional and green parties have been leveled with respect to climate protection. We show that this convergence in party platforms can be explained by successful international climate agreements. We set up a voting model where political parties differ in their preferences for climate protection and where climate protection causes both resource costs and distortions in the international allocation of production. Successful international agreements, which increase climate protection, reduce effective abatement costs and affect traditional parties in a different way than green parties, since a lower preference for climate protection implies a higher price (cost) elasticity of demand. Furthermore, we point out that increasing flexibility and efficiency in abatement mechanisms is preferable to forming a climate coalition that focuses directly on emission reduction commitments.
    Keywords: Climate Protection, Political Economy, Platform Convergence
    Date: 2010
  4. By: Russell S. Sobel (Department of Economics, West Virginia University); Andrew Young (Department of Economics, West Virginia University)
    Abstract: We examine the US state-level pattern of American Recovery and Reinvestment Act (ARRA) spending. We relate spending to (1) Keynesian determinants of countercyclical policy, (2) congressional power and dominance, and (3) presidential electoral vote importance. We find that the ARRA is, in practice, poorly-designed countercyclical stimulus. After controlling for political variables, coefficients on Keynesian variables are often statistically insignificant. When they are statistically significant they are often the “incorrect” sign. On the other hand, statistically significant effects associated with political variables are almost always of the sign predicted by public choice theory. One striking result is that the elasticity of ARRA spending with respect to the pre-ARRA levels of federal grants and payments to state and local governments is between 0.254 and 0.361. States previously capturing large amounts of federal funds continue to do so under the ARRA stimulus.
    Keywords: fiscal stimulus, fiscal policy, political economy, public choice, congressional dominance model, American recovery and reinvestment act
    JEL: D7 H5 E6
    Date: 2010
  5. By: Jordi Blanes i Vidal; Mirko Draca; Christian Fons-Rosen
    Abstract: Washington's `revolving door' - the movement from government service into the lobbyingindustry- is regarded as a major concern for policy-making. We study how ex-governmentstaffers benefit from the personal connections acquired during their public service. Lobbyistswith experience in the office of a US Senator suffer a 24% drop in generated revenue whenthat Senator leaves office. The effect is immediate, discontinuous around the exit period andlong-lasting. Consistent with the notion that lobbyists sell access to powerful politicians, thedrop in revenue is increasing in the seniority of and committee assignments power held bythe exiting politician.
    Keywords: Lobbying, revolving door, US Congress, political connections, political elites
    JEL: H11 J24 J45
    Date: 2010–08
  6. By: Pasquale Tridico; Francesco Burchi
    Abstract: In this paper we analyze whether and which political institutions are important for famine prevention and for keeping the levels of inequality low. While famines are sudden crises hitting a country, inequality is a structural problem. As a consequence, the institutions needed might be very different. The econometric exercises realized on a group of emerging and developing countries confirm the validity of Amartya Sen’s “democracy prevents famine” argument, while democracy is not a significant determinant of income inequality. These results are in line with previous ones, suggesting an unclear role of democratic institutions in facing other structural problems, such as hunger and poverty. Moreover, two main institutional indicators, computed by the World Bank, “control of corruption” and “government effectiveness” are negatively correlated with famine mortality, suggesting that the policy environment, the level of bureaucracy, governmental capacity to take decisions and implement them in a short period are relevant factors for reducing famine mortality. In contrast, political stability explains better income inequality in our sample of countries. Social peace and cohesion are deterrent for inequality, but the direction of the relationship should be investigated further.
    Keywords: Famine; Inequality; Institutions; Democracy; Cross-country analysis
    JEL: I39 D63
    Date: 2010–09
  7. By: Karabarbounis, Loukas
    Abstract: This paper revisits the relationship between inequality and redistribution in a panel of advanced OECD countries. Using panel data methods that hold constant a variety of determinants of redistributive spending, I find a non-monotonic relationship between pre-tax-and transfer distribution of income and redistribution. Relative to mean income, a more affluent rich and middle class are associated with less redistribution and a richer poor class is associated with more redistribution. These results are consistent with a one dollar, one vote politico-economic equilibrium: When the income of a group of citizens increases, aggregate redistributive policies tilt towards this group’s most preferred policies.
    Keywords: Inequality; Distribution; Redistribution
    JEL: H50 D31 C23 P16
    Date: 2010–09–21
  8. By: Prachi Mishra; Paola Giuliano; Antonio Spilimbergo
    Abstract: Empirical evidence on the relationship between democracy and economic reforms is limited to few reforms, countries, and years. This paper studies the impact of democracy on the adoption of economic reforms using a new dataset on reforms in the financial, capital and banking sectors, product markets, agriculture, and trade for 150 countries over the period 1960 - 2004. Democracy has a positive and significant impact on the adoption of economic reforms but there is no evidence that economic reforms foster democracy. Our results are robust to the inclusion of a large variety of controls and estimation strategies.
    Keywords: Cross country analysis , Agricultural policy , Capital account liberalization , Political economy , Trade policy , Financial sector , Economic reforms ,
    Date: 2010–07–27
  9. By: Gagnepain, Philippe; Ivaldi, Marc
    Abstract: We consider a framework of contractual interactions between urban transport authorities and transport operators. We estimate simultaneously the choice of contract by the authorities and the effect of regulation on the cost reducing activity of the operators. We test whether regulatory schemes currently implemented in the industry are the observable items of a more general menu of second best contracts. We suggest that the generation process of the data we have in hand is better explained by the political aspects of regulation. Moreover, the cost reducing effort of the operators is greater under fixed-price regimes, compared to the cost-plus case.
    Date: 2010–05
  10. By: Allison Harell; Stuart Soroka
    Abstract: Drawing on a unique experimental design, this paper examines the ways in which racialized images influence attitudes toward redistributive policy. While work in the US points to a strong racialization of welfare attitudes, little research explores the ways in which race may structure attitudes about welfare elsewhere. In the Canadian context, our results suggest that support for redistribution is lower when recipients are Aboriginal than when they are portrayed as white or from another racial minority. As we have seen in the US, then, support for welfare is related to perceptions about the race of the recipient, as well as the type of benefit received. <P>Cet article utilise une approche expérimentale novatrice pour examiner la façon dont les images racisées influencent les attitudes à l’endroit de l’État providence. Alors que des recherches américaines pointent une forte racialisation dans les attitudes en faveur des politiques de redistribution et de l’assistance sociale, de telles études demeurent encore rares au sein d’autres réalités nationales. Dans le contexte canadien, nos résultats suggèrent que le soutien à l’endroit des politiques de redistribution est moins élevé lorsque les bénéficiaires appartiennent aux autochtones (plutôt qu’aux blancs ou à d’autres groupes raciaux). Ainsi, comme aux Etats-Unis, les opinions face à l’assistance sociale sont étroitement liées à la perception de la race des bénéficiaires, ainsi qu’au type de l’avantage reçu.
    Keywords: Social assistance, Aboriginals, Race and Ethnicity, Welfare, Public Opinion, Assistance sociale, autochtones, race et ethnie, opinion publique
    Date: 2010–09–01
  11. By: Kaufmann, Daniel; Kraay, Aart; Mastruzzi, Massimo
    Abstract: This paper summarizes the methodology of the Worldwide Governance Indicators (WGI) project, and related analytical issues. The WGI cover over 200 countries and territories, measuring six dimensions of governance starting in 1996: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. The aggregate indicatorsare based on several hundred individual underlying variables, taken from a wide variety of existing data sources. The data reflect the views on governance of survey respondents and public, private, and NGO sector experts worldwide. The WGI also explicitly report margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. Even after taking these margins of error into account, the WGI permit meaningful cross-country and over-time comparisons. The aggregate indicators, together with the disaggregated underlying source data, are available at
    Keywords: Governance Indicators,National Governance,Public Sector Corruption&Anticorruption Measures,Economic Policy, Institutions and Governance,Statistical&Mathematical Sciences
    Date: 2010–09–01

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