nep-pol New Economics Papers
on Positive Political Economics
Issue of 2011‒06‒18
nine papers chosen by
Eugene Beaulieu
University of Calgary

  1. Do Politicians’ Preferences Matter for Voters’ Voting Decisions? By Dahlberg, Matz; Mörk, Eva; Sorribas Navarro, Pilar
  2. Immigration and voting on the size and the composition of public spending By Karin Mayr
  3. Buying Votes and International Organizations By Axel Dreher; James Raymond Vreeland
  4. Electing Displacement: Political Cleansing in Apartadó, Colombia By Abbey Steele
  5. Individual attitudes towards trade: Stolper-Samuelson revisited By Jäkel, Ina C.; Smolka, Marcel
  6. The dynamics of legitimation - Why the study of political legitimacy needs more realism By Daniel Gaus
  7. Do Migrants Improve Governance at Home? Evidence from a Voting Experiment By Catia Batista; Pedro C. Vicente
  8. The Political Economy of Global Financial Liberalisation in Historical Perspective By Rui P. Esteves
  9. Firm Characteristics and Influence on Government Rule-Making: theory and evidence By Emma Aisbett; Carol McAusland

  1. By: Dahlberg, Matz (Department of Economics); Mörk, Eva (Department of Economics); Sorribas Navarro, Pilar (Universitat de Barcelona and Institut d’Economia de Barcelona)
    Abstract: Using unique survey data that allows us to observe both voters’ and politicians’ preferences for local public spending as well as voting decisions, this paper tests if voters typically support parties in which the politicians’ preferences are closest to their own. Doing so would be rational for the voters to do if politicians’ preferences matter for policy outcomes, as is the case in e.g. the citizen-candidate model. It is found that this is indeed the case. This finding is in line with theoretical models such as the citizen-candidate model arguing that politicians cannot credibly commit to election platforms that differ from their true policy preferences.
    Keywords: Elections; voting; preferences for public services
    JEL: H71 P16
    Date: 2011–05–16
  2. By: Karin Mayr (University of Vienna)
    Abstract: This paper develops a model to analyze the effects of immigration by skill on the outcome of a majority vote among natives on both the size as well as the composition of public spending. Public spending can be of two types, spending on rival goods (transfers) and on non-rival goods (public goods). I find that the effect of immigration on public spending depends on preferences for the different types of spending. In particular, immigrants of either skill can increase (decrease) the size of total public spending, if natives have a relative preference for spending on public goods (spending on transfers). I provide some illustration of spending patterns in OECD countries during 1980 - 2010.
    Keywords: immigration, political economy, transfers, public goods
    JEL: F2 H4 H5
    Date: 2011–01
  3. By: Axel Dreher; James Raymond Vreeland
    Abstract: This study explores a basic idea in political economy: Trading money for political influence. Our focus is at the level of international institutions, where governments may exploit their influence in one organization to gain leverage over another. In particular, we consider the lending activities of the International Monetary Fund (IMF) and voting behavior at the United Nations Security Council (UNSC). Analyzing an original dataset on the successful and failed resolutions of the UNSC, we find evidence of vote-buying.
    Keywords: IMF, UN Security Council, Voting, Aid
    JEL: O19 O11 F35
    Date: 2011–05–18
  4. By: Abbey Steele
    Abstract: This article highlights a nefarious effect of elections during civil wars by demonstrating that they can facilitate the displacement of civilians. This occurs through two main mechanisms: they reveal information about civilians' loyalties directly to armed groups; and they threaten the status quo of local elites' power, motivating them to ally with outside armed groups in order to regain it. Armed groups strategically displace civilians identified as "disloyal" in order to gain control over a territory. I test implications of the argument with original, micro-level quantitative and qualitative data from northwest Colombia. Using voter censuses and disaggregated electoral returns from 1991-1998, I show that residents in urban neighborhoods that supported the insurgent-backed political party, the Patriotic Union (UP), were more likely to leave the city of Apartadó than neighbors in other districts. However, residents of the nearby rural communities that supported the UP were the least likely to leave. I trace the patterns of violence across the communities using local archival materials and interviews to assess how well the argument accounts for the variation observed, and to explore the unexpected outcome in the rural area. While I find that counterinsurgents attempted strategic displacement in both the city and the mountains, they only succeeded in the urban areas because residents of the rural hamlets were uniquely able to overcome the collective action problem that strategic displacement generates. The findings demonstrate that that political identities are relevant for patterns of violence, and that political cleansing resembles ethnic cleansing.
    Date: 2011–03–08
  5. By: Jäkel, Ina C.; Smolka, Marcel
    Abstract: This paper studies to what extent individuals form their preferences towards trade policies along the lines of the Stolper-Samuelson logic. We employ a novel international survey data set with an extensive coverage of high-, middle-, and low-income countries, address a subtle methodological shortcoming in previous studies and condition on aspects of individualenlightenment. We find statistically significant and economically large Stolper-Samuelson effects. In the United States, being high-skilled increases an individual's probability of favoring free trade by up to twelve percentage points, other things equal. In Ethiopia, the effect amounts to eight percentage points, but in exactly the opposite direction. --
    Keywords: Trade policy,Voter preferences,Political economy
    JEL: F11 F13
    Date: 2011
  6. By: Daniel Gaus
    Abstract: The paper suggests a practice turn in the analysis of political legitimacy. Current social science research on political legitimacy suffers twofold. First, it shows an undue (silent) impact of an ethics-first perspective. Second, empirical approaches to political legitimacy mostly focus on societal constellations of citizens’ beliefs. The dynamic character of political legitimacy as a concept referring to an ongoing societal practice of legitimation is missed. Understanding legitimacy in terms of legitimation practice suggests a broadened research agenda that a) reserves a greater role to hermeneutical approaches and that b) acknowledges the systematic relation of political theory, the sociology of knowledge and the history of ideas in that matter.
    Keywords: democracy; legitimacy; methodological issues; political science; normative political theory
    Date: 2011–05–15
  7. By: Catia Batista (Trinity College Dublin and IZA); Pedro C. Vicente (Trinity College Dublin, University of Oxford - Centre for the Study of African Economies (CSAE) and)
    Abstract: Can international migration promote better institutions at home by raising the demand for political accountability? In order to examine this question, we designed a behavioral measure of the population’s desire for better governance. A postcard was distributed to households with the pledge that, if enough postcards were mailed back, results from a survey module on perceived corruption would be made public in the national media. Using data from a tailored household survey, we examine the determinants of our behavioral measure of demand for political accountability (i.e. of undertaking the costly action of mailing the postcard), and isolate the positive effect of international emigration using locality level variation. The estimated effects are robust to the use of instrumental variables, including both past migration and macro shocks in the migrant destination countries. We find that the estimated effects can be mainly attributed to those who emigrated to countries with better governance, especially return migrants.
    Keywords: international migration, governance, political accountability, institutions, effects of emigration in origin countries, household survey, Cape Verde, sub-Saharan Africa.
    JEL: F22 O12 O15 O43 P16
    Date: 2011–01
  8. By: Rui P. Esteves (Department of Economics and Brasenose College, University of Oxford,)
    Abstract: This paper is a first attempt to garner the theory and evidence on the political economy of the first wave of financial liberalisation during the nineteenth and early twentieth century, and of its demise after World War I. Not everyone gained from the process of globalisation (of trade, labour, and finance), which brought about important changes in the structure of the economy and the distribution of income in nations across the world. This paper explores how the economic incentives generated by these dislocations translated, through the political system, into choices about openness to foreign capital and financial integration. The period before World War I is remarkable by the almost absence of restrictions on cross-border capital flows, which may explain the little attention it has received in the historical literature, compared to the extensive study of trade protectionism in this period. After the War, many countries experimented with capital controls which varied in nature and intensity and were intensified during the Depression. Despite the attempt made here to reconcile these stylized facts to models of political economy, the analysis requires a better empirical foundation and some suggestions for further research are also proposed.
    Keywords: political economy, financial liberalisation, capital controls, pre-war
    JEL: F4 G18 N20
    Date: 2011–06–01
  9. By: Emma Aisbett; Carol McAusland
    Abstract: An adversarial game is used to model the amount of influence a firm has over a government regulator, and its equilibrium level of regulation, as a function of firm fundamentals. The effective influence of a firm is identified as comprising both intrinsic and exerted components; where the latter involves distorting regulation via a transfer to the regulator. Understanding the source of a firm's high influence is found to be important for -among other things - predicting whether it faces higher or lower regulatory constraint than other firms. Data from the World Business Environment Survey provides strong evidence in support of model hypotheses across a wide range of government agents, countries, and regulatory areas. Of particular relevance to public debate, large firms are found to be more likely to be influential, but also more likely to experience regulatory constraint than smaller firms.
    Keywords: Political Economy; Regulation; Influence
    Date: 2011–02

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