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on Positive Political Economics |
| By: | Keefer, Philip |
| Abstract: | Broad consensus exists that the ability of political actors to make credible commitments is key to development. An important and little-explored determinant of the credibility of political commitments is the existence of organizations that facilitate citizen collective action to sanction political actors who renege. This paper focuses on one essential organization, the political party. Three measures of political parties are used to assess cross-country differences in the degree to which politicians facilitate the ability of citizens to act in their collective interest. Each of these measures is associated with superior development outcomes, above and beyond the effects of competitive elections. These results have implications for understanding the extraordinary economic success of some East Asian countries and notable lags among others: East Asian non-democracies exhibit more institutionalized ruling parties than other non-democracies, while East Asian democracies exhibit equally or less institutionalized parties. The evidence suggests that greater research and policy emphasis be placed on the organizational characteristics of countries that allow citizens to hold leaders accountable. |
| Keywords: | Parliamentary Government,Political Systems and Analysis,Politics and Government,Corporate Law,E-Government |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5676&r=pol |
| By: | Jung, Florian; Sunde, Uwe |
| Abstract: | This paper studies the endogenous emergence of political regimes in societies in which productive resources are distributed unequally and institutions do not ensure political commitments. The results imply that for any level of development there exists a distribution of resources such that democracy emerges in equilibrium, but there are distributions of resources for which democracy is infeasible in equilibrium irrespective of the level of development. The model also delivers results on the stability of democracy with regard to changes in the economic and demographic environment. The results are consistent with the different political regimes that emerged in Germany after 1871. |
| Keywords: | Coalition Formation; Democracy; Development; Income inequality |
| JEL: | H10 O10 P16 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8406&r=pol |
| By: | Bonfiglioli, Alessandra; Gancia, Gino A |
| Abstract: | This paper formalizes in a fully-rational model the popular idea that politicians perceive an electoral cost in adopting costly reforms with future benefits and reconciles it with the evidence that reformist governments are not punished by voters. To do so, it proposes a model of elections where political ability is ex-ante unknown and investment in reforms is unobservable. On the one hand, elections improve accountability and allow to keep well-performing incumbents. On the other, politicians make too little reforms in an attempt to signal high ability and increase their reappointment probability. Although in a rational expectation equilibrium voters cannot be fooled and hence reelection does not depend on reforms, the strategy of underinvesting in reforms is nonetheless sustained by out-of-equilibrium beliefs. Contrary to the conventional wisdom, uncertainty makes reforms more politically viable and may, under some conditions, increase social welfare. The model is then used to study how political rewards can be set so as to maximize social welfare and the desirability of imposing a one-term limit to governments. The predictions of this theory are consistent with a number of empirical regularities on the determinants of reforms and reelection. They are also consistent with a new stylized fact documented in this paper: economic uncertainty is associated to more reforms in a panel of 20 OECD countries. |
| Keywords: | Asymmetric Information; Elections; Reforms; Uncertainty |
| JEL: | E6 H3 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8421&r=pol |
| By: | Andreas Madestam; David Yanagizawa-Drott |
| Abstract: | Do childhood events shape adult political views and behavior? This paper investigates the impact of Fourth of July celebrations in the US during childhood on partisanship and participation later in life. Using daily precipitation data to proxy for exogenous variation in participation on Fourth of July as a child, we examine the role of the celebrations for people born in 1920-1990. We find that days without rain on Fourth of July in childhood have lifelong effects. In particular, they shift adult views and behavior in favor of the Republicans and increase later-life political participation. Our estimates are significant: one Fourth of July without rain before age 18 raises the likelihood of identifying as a Republican by 2 percent and voting for the Republican candidate by 4 percent. It also increases voter turnout by 0.9 percent and boosts political campaign contributions by 3 percent. Taken together, the evidence suggests that important childhood events can have persistent effects on political beliefs and participation and that Fourth of July celebrations in the US affect the nation’s political landscape. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:399&r=pol |
| By: | Ladislava Grochová (Department of Economics, FBE MENDELU in Brno); Luděk Kouba (Department of Economics, FBE MENDELU in Brno) |
| Abstract: | The growth theory of new political economics defines some factors that are necessary for economic growth among which political stability. There are distinguished two types of political instability – elite and non-elite – in topical literature. While non-elite political instability concerns about violent coups, riots or civil wars, elite political instability is represented with “soft changes” such as government breakdowns, fragile majority or minority governments. We don ́t doubt the importance of general political stability for successful economic development. Nevertheless, we don ́t agree that elite political instability can be understood as an insuperable obstacle for it. The aim of the paper is to disprove the hypothesis that elite political stability is a necessary condition for economic growth. Equally with other papers, a number of government changes is used as a proxy of elite political instability. The disproof of the hypothesis is demonstrated on data from the Baltic states where a number of government changes takes place and still fast economic growth could be seen within last two decades. The model has a form of augmented production function and includes growth rates of investments, exports, and labour as independent variables and government changes as an elite political instability dummy variable. The data resulting from estimations applying GMM and GLS because of endogeneity and autocorrelation problems are statistically significant for all three countries and confirm our hypothesis that elite political stability is a necessary condition for economic growth. |
| Keywords: | new political economics, political instability, elite political instability, production function, single equation, Baltic states |
| JEL: | B59 C20 O52 P26 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:01_2010&r=pol |
| By: | Fabio Sabatini |
| Abstract: | This paper contributes to the literature by carrying out the first econometric investigation into the role of television in the formation of political consensus in Italy. Based on probit and instrumental variables estimates, we find trust in television to be the most significant predictor of trust in the Italian prime minister. The latter is also strongly and negatively correlated with trust in the judicial system and tolerance towards immigrants. |
| Keywords: | Trust; institutions; democracy; television; media; social capital; Italy; instrumental variables. |
| JEL: | D72 D83 H8 L82 Z1 Z13 |
| Date: | 2011–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2011_08&r=pol |
| By: | Oskar Nupia |
| Abstract: | Using a comprehensive data set for Colombian municipalities between 2002 and 2010, in this paper we study the effects of large anti-poverty programs on presidential election outcomes. In particular, we test for two of the main assumptions on voters’ behavior adopted by the political economics literature. First, we examine whether the incumbent governing coalition has been politically rewarded due to the expansion exhibited by the program during the last decade. Second, we test whether voters have been willing to tradeoff their ideological attachments in exchange of a higher level of income – obtained through the cash transfer payments provided by the program. Our estimates correct for potential simultaneity problems previously identified by the literature in this field. Our results provide empirical support for both hypotheses and open the discussion on how to prevent the use of large anti-poverty programs for political purposes. |
| Date: | 2011–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:008743&r=pol |
| By: | Alesina, Alberto F; Giuliano, Paola; Nunn, Nathan |
| Abstract: | This paper seeks to better understand the historical origins of current differences in norms and beliefs about the appropriate role of women in society. We test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution and persistence of gender norms. We find that, consistent with existing hypotheses, the descendants of societies that traditionally practiced plough agriculture, today have lower rates of female participation in the workplace, in politics, and in entrepreneurial activities, as well as a greater prevalence of attitudes favoring gender inequality. We identify the causal impact of traditional plough use by exploiting variation in the historical geo-climatic suitability of the environment for growing crops that differentially benefited from the adoption of the plough. Our IV estimates, based on this variation, support the findings from OLS. To isolate the importance of cultural transmission as a mechanism, we examine female labor force participation of second-generation immigrants living within the US. |
| Keywords: | beliefs; Culture; gender roles.; values |
| JEL: | J16 N30 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8418&r=pol |
| By: | Speijcken, Renée (Maastricht Graduate School of Governance, Maastricht University, and UNU-MERIT) |
| Abstract: | Donors in development cooperation increasingly emphasize the importance of public accountability in developing countries for the good functioning of democratic institutions, governance and the effectiveness of their aid. Political parties are prime actors in a democratic society that have essential roles to fulfil in public accountability. However, only few donors work with them. As a result, there is relatively little knowledge and experience available. This paper aims to contribute to this body of knowledge by assessing how and to what extent a new approach of so called 'Centre's for Multiparty Democracy', national platforms for and by political parties, assist parties in their key roles between citizen and state to enhance public accountability. This is done in a case study on Kenya. The paper also explores the main constraints to public accountability and to what extent cooperation between parties and civil society has been enhanced. A new conceptual framework that differentiates political party's roles in public accountability in four domains and three phases of the accountability process is used to assess CMD-Kenya's contribution. The paper concludes that CMDs' approach explores interesting new ways to strengthen the roles of parties in public accountability. Its main contribution lies in enhancing mutual trust and strengthening politicians' awareness of the value that parties have to add to a democratic society in providing them with a platform that helped them to establish their identities as parties. At the same time societal trust in parties was strengthened by organizing joint projects between parties and civil society actors. Considering its recent set up in 2004, CMD-K has been relatively successful in initiating modest changes in some of the formal practices and policies of parties and to some extent in the behaviour of individual politicians. On the other hand deeper changes in the underlying 'rules of the game', in parties' stability and their added value to society, have hardly been realized as strong traditional informal power relations, donor dependency, institutional governance problems and managing multiple accountabilities on multiple levels pose serious threats to CMD-Kenya's functioning and therefore to its clout and relevance in the future. |
| Keywords: | Public Accountability, Political Parties , Development Cooperation, Political Party Assistance, Democratization, Impact evaluation, Political Economy Analysis |
| JEL: | D72 F35 H83 O43 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2011017&r=pol |
| By: | Nicolás Porteiro (Department of Economics, Universidad Pablo de Olavide); Antonio Villar (Department of Economics, Universidad Pablo de Olavide & IVIE) |
| Abstract: | This paper proposes a mechanism to overcome the possibility that political parties may block the nomination of High-Court judges when the Parliament is involved in their nomination and their mandate expires on a fixed date. This possibility arises when the default option is that the judge whose mandate expires holds office until an agreement is reached. Our proposal consists of changing the default option by a weighted lottery. We show that this mechanism is capable of solving the problem and implementing the socially optimal solution. |
| Keywords: | Negotiation, Political Competition, random protocols, legislative bargaining. |
| JEL: | D72 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:11.05&r=pol |
| By: | Alessandro Riboni (Department of Economics, University of Montreal); Francisco J. Ruge-Murcia (Department of Economics, University of Montreal and Rimini Centre for Economic Analysis (RCEA)) |
| Abstract: | Voting records indicate that dissents in monetary policy committees are frequent and predictability regressions show that they help forecast future policy decisions. In order to study whether the latter relation is causal, we construct a model of committee decision making and dissent where members' decisions are not a function of past dissents. The model is estimated using voting data from the Bank of England and the Riksbank. Stochastic simulations show that the decision-making frictions in our model help account for the predictive power of current dissents. The eect of institutional characteristics and structural parameters on dissent rates is examined using simulations as well. |
| Keywords: | Committees, voting models, political economy of central banking |
| JEL: | D7 E5 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:27_11&r=pol |
| By: | Christian Ebeke (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Mireille Ntsama Etoundi (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | This paper investigates whether the exam success rate in Africa increases significantly in the months prior to the occurrence of the presidential elections. It hypothesizes that the incumbent is tempted to increase the exam success rate to retain a form of social cohesion and to 'buy' votes. A sample of 15 francophone African countries observed from 1990 to 2009 yields three findings. First, post-exam presidential elections significantly increase the exam success rate by six percentage points. Second, the manipulation of the exam success rate is positively correlated with the re-election of the incumbent. Third, these results do not hold when elections occur before the exam dates or when the incumbent or a member of his/her party do not run for the presidential seat. |
| Keywords: | Sub-Saharan Africa;Exam success rate;Presidential elections |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00597521&r=pol |
| By: | Mireille NTSAMA ETOUNDI; Christian EBEKE |
| Abstract: | This paper investigates whether the exam success rate in Africa increases significantly in the months prior to the occurrence of the presidential elections. It hypothesizes that the incumbent is tempted to increase the exam success rate to retain a form of social cohesion and to ‘buy' votes. A sample of 15 francophone African countries observed from 1990 to 2009 yields three findings. First, post-exam presidential elections significantly increase the exam success rate by six percentage points. Second, the manipulation of the exam success rate is positively correlated with the re-election of the incumbent. Third, these results do not hold when elections occur before the exam dates or when the incumbent or a member of his/her party do not run for the presidential seat. |
| Keywords: | Sub-Saharan Africa, Exam success rate, Presidential elections |
| JEL: | O15 I2 D72 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1261&r=pol |
| By: | Paul J Burke |
| Abstract: | Using data for 160 countries for the period 1963-2001, this paper examines the short-run relationship between economic growth and changes in national leader. To address the potential endogeneity of economic growth, I use exogenous variation in commodity export prices, export partner incomes, precipitation, and temperature to instrument for a country's rate of economic growth. The results indicate that more rapid economic growth increases the short-run likelihood that national leaders will retain their positions. The findings are similar for both democracies and autocracies and indicate that faster economic growth reduces the likelihoods of both regular leader exits and irregular leader exits such as coups. The results also suggest that stronger economic growth reduces the likelihood that national leaders employ oppressive tactics against opponents. |
| Keywords: | economic growth, politics, political survival, political change, leader turnover |
| JEL: | D72 O40 P16 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2011-06&r=pol |
| By: | Bruno Tinel (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | The financial crisis has turned into a real economic crisis and then into a public finance crisis: its political and social implications show very obviously, even to the most unaware people, how much economic matters are a social and political phenomenon. Is political economy going to be more influential on economic policy and in the public debate? It depends on the evolution of social and political struggles in the society as a whole. But it also depends on our ability to built an alternative view of the situation and credible alternative solutions. In order to promote our ideas in the future, we have to deal urgently with our own institutional reproduction. What is happening in France on this issue? |
| Keywords: | political economy; academic reproduction; crisis of economic science |
| Date: | 2011–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00596253&r=pol |
| By: | Ladislava Grochová (Department of Economics, FBE MENDELU in Brno); Tomáš Otáhal (Department of Economics, FBE MENDELU in Brno) |
| Abstract: | Did the EU pressure improve legal enforcement in the Czech and Slovak Republics? The paper analyzes the current state of the Czech and Slovak quality of legal enforcement in a context of the European Union accession. We looked at different kinds of corruption indicator data, such as statistics of revealed and clarified malfeasance connected with corruption per 100 capita and the composite indexes. These indicators suggest that the quality of the legal enforcement in the Czech and Slovak Republics has not improved after joining the European Union. More precisely, it can be argued that in spite of implementation of anti-corruption public policies proposed by EU institutions, perceived corruption of public officials has remained the same, which means that trustworthiness of legal enforcement responsible for deterrence and reduction of corruption remained the same as well. Therefore, in order to improve the quality of the legal enforcement, reduction of barriers to entry and deeper legal reforms is suggested. |
| Keywords: | Anti-corruption public policy, corruption, Czech Republic, EU accession, Slovak Republic |
| JEL: | D74 K42 P3 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:04_2011&r=pol |