nep-pol New Economics Papers
on Positive Political Economics
Issue of 2011‒07‒02
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Inequality Aversion and Voting on Redistribution By Wolfgang Höchtl; Rupert Sausgruber; Jean-Robert Tyran
  2. The politics of power : the political economy of rent-seeking in electric utilities in the Philippines By Hasnain, Zahid; Matsuda, Yasuhiko
  3. The men who weren't even there: Legislative voting with absentees By László Á. Kóczy; Miklós Pintér
  4. What Counts in US Politics: Voters or Interest Groups? By Abramowitz, Alan; Domhoff, William
  5. Corruption scandals, press reporting, and accountability. Evidence from Spanish mayors. By Elena Costas; Albert Sole-Olle; Pilar Sorribas-Navarro
  6. Liberalization-Privatization Paths: Policies and Politics By Filippo Belloc; Antonio Nicita
  7. When quantity matters: Activity levels and re-election prospects of Members of the European Parliament By Emmanuel Sigalas
  8. Forecasting Spanish Elections By Pedro C. Magalhães; Luís Francisco Aguiar; Michael S. Lewis-Beck
  9. Together we will : experimental evidence on female voting behavior in Pakistan By Gine, Xavier; Mansuri, Ghazala
  10. Partisan cycles and the consumption volatility puzzle By Marina Azzimonti; Matthew Talbert
  11. The Effects of Corruption Control and Political Stability on the Environmental Kuznets Curve of Deforestation-Induced Carbon Dioxide Emissions By Gregmar Galinato; Suzette Galinato
  12. Discrete-Choice-Experimente zur Ermittlung der Präferenzen für Umverteilung By Pfarr, Christian; Ulrich, Volker
  13. How does corruption influence perceptions of the risk of nuclear accidents?: cross-country analysis after the 2011 Fukushima disaster in Japan. By Yamamura, Eiji

  1. By: Wolfgang Höchtl (University of Innsbruck); Rupert Sausgruber (University of Innsbruck); Jean-Robert Tyran (University of Vienna)
    Abstract: Some people have a concern for a fair distribution of incomes while others do not. Does such a concern matter for majority voting on redistribution? Fairness preferences are relevant for redistribution outcomes only if fair-minded voters are pivotal. Pivotality, in turn, depends on the structure of income classes. We experimentally study voting on redistribution between two income classes and show that the effect of inequality aversion is asymmetric. Inequality aversion is more likely to matter if the “rich” are in majority. With a “poor” majority, we find that redistribution outcomes look as if all voters were exclusively motivated by self-interest.
    Keywords: redistribution; self interest; inequality aversion; median voter; experiment
    JEL: A13 C9 D72
    Date: 2011–06
  2. By: Hasnain, Zahid; Matsuda, Yasuhiko
    Abstract: This paper takes advantage of unique intra-country variation in the Philippines power sector to examine under what conditions politicians have an incentive to"capture"an electric utility and use it for the purposes of rent-seeking. The authors hypothesize that the level of capture is determined by the incentives of, and the interactions between, local and national politicians, where the concepts of"local"and"national"are context specific. A local politician is defined as one whose electoral jurisdiction lies within the utility’s catchment area; by contrast, a national politician is defined as one whose electoral jurisdiction includes two or more utility catchment areas. These jurisdictional differences imply different motivations for local and national politicians: because of"spillover"effects, local politicians have a greater incentive to use the utility for rent-seeking than a national politician as they capture only a portion of the political gains from utility performance improvements as some of the benefits of improved service will go to other electoral jurisdictions within the utility’s catchment area. The authors posit that three variables impact the magnitude of these incentives of local and national politicians: (i) the local economic context, specifically the scale of rents that can be extracted from an electricity cooperative (ii) the degree of competitiveness of local politics; and (iii) the political salience of an electricity cooperative’s catchment area for national politicians. The authors illustrate this framework through case studies of specific power utilities, and suggest some policy implications.
    Keywords: Public Sector Corruption&Anticorruption Measures,Political Systems and Analysis,Politics and Government,Political Economy,Economic Theory&Research
    Date: 2011–06–01
  3. By: László Á. Kóczy (Óbuda University); Miklós Pintér (Corvinus University)
    Abstract: Voting power in voting situations is measured by the probability of changing decisions by altering the cast `yes' or `no' votes. Recently this analysis has been extended by strategic abstention. Abstention, just as `yes' or `no' votes can change decisions. This theory is often applied to weighted voting situations, where voters can cast multiple votes. Measuring the power of a party in a national assembly seems to fit this model, but in fact its power comprises of votes of individual representatives each having a single vote. These representatives may vote yes or no, or may abstain, but in some cases they are not even there to vote. We look at absentees not due to a conscious decision, but due to illness, for instance. Formally voters will be absent, say, ill, with a certain probability and only present otherwise. As in general not all voters will be present, a thin majority may quickly melt away making a coalition that is winning in theory a losing one in practice. A simple model allows us to differentiate between winning and more winning and losing and less losing coalitions reflected by a voting game that is not any more simple. We use data from Scotland, Hungary and a number of other countries both to illustrate the relation of theoretical and effective power and show our results working in the practice.
    Keywords: a priori voting power; power index; being absent from voting; minority; Shapley-Shubik index; Shapley value; a priori voting power; power index; being absent from voting; minority; Shapley-Shubik index; Shapley value
    Date: 2011
  4. By: Abramowitz, Alan; Domhoff, William
    Abstract: Alan Abramowitz trains his lens on the disappearing center in US politics. He surmises that the polarization in politics has long historical roots and has only increased under both the George W. Bush and Barack Obama Administrations. The divergence between parties is at historic highs according to Congressional vote tallies. It is largely due to ideological shifts to the right especially within the Republican Party. The Democratic Party is substantially the same but has lost the Southern wing of its support. The polarization is consistent among politicians, party activists, funders and the media. It reflects economic change, rising educational status, workforce composition and changes in the nature of families. He ends his talk by noting that the 2012 elections can be won by either party and this will have huge implications for public policy. William Domhoff considers the historic background of the two-party system in national politics. He maintains that it is important to understand US politics within power structures and to focus in on how voters are mobilized and demobilized by rival interest groups. He describes the two primary interest groups today as corporate conservative versus liberal labor admitting that this is an oversimplification. In particular, the Democratic Party has been a coalition of out-groups since its formation by Southern planters in a dynamic modernizing free labor economy. The Republicans were the party of in-groups from their formation as an Anglophile Protestant industrializing faction. He considers how these parties changed in social composition over time but were blown apart by the election of 1964 which has resulted in the polarizing alignments that have taken root today. He concludes his narrative with a discussion of the electoral system noting the near impossibility of an enduring third party.
    Keywords: American Politics, Political Science
    Date: 2011–03–07
  5. By: Elena Costas; Albert Sole-Olle; Pilar Sorribas-Navarro (Universitat de Barcelona)
    Abstract: We analyse the effects of local corruption on electoral outcomes with Spanish data. Based upon press reports published between 1996 and 2009, we are able to construct a novel database on corruption scandals and news related to bribe-taking in exchange for amendments to land use plans. Our data show that local corruption scandals first emerged during the 1999-2003 term, but that they peaked just before the 2007 elections. We estimate an equation for the incumbents vote share at this electoral contest and find the average vote loss after a corruption scandal to be around 4%, and the effect to be greater for cases receiving wide newspaper coverage (up to 9%). The effects found for the 2003 elections are much lower. When we consider cases in which the incumbent has been charged with corruption and press coverage has been extensive the vote loss can rise to 12%. However, press reports have a negative impact on the vote even when no judicial charges have been brought.
    Keywords: voting, corruption, accountability
    JEL: D72 P16
    Date: 2011
  6. By: Filippo Belloc; Antonio Nicita
    Abstract: We empirically investigate the political determinants of deregulation policies in six network industries of 30 OECD countries over 1975-2007. We unbundle privatization and liberalization and propose an econometric study in which we allow for the joint adoption of the two policies by governments. We find, contrary to conventional wisdom, that right-wing executives tend to privatize more and to liberalize less, relative to left-wing governments. Thus, we show that ideological cleavages affect the ‘structure’ of deregulation, i.e. the way in which liberalization and privatization are combined. This result may shed new lights on the analysis of the political determinants of market-oriented policy, and suggest new issues for further theoretical and empirical research
    Keywords: Liberalization; Privatization; Network Industries; Partisanship.
    JEL: D72 L50 P16 C23
    Date: 2011–03
  7. By: Emmanuel Sigalas
    Abstract: After each European election nearly half of the outgoing Members of the European Parliament re-enter the EP for an additional legislative term. Despite this being a persistent phenomenon, the reasons behind it are still unclear. In this paper I test the hypothesis that the work of an MEP in the EP affects their chances for re-election. I argue that there are reasons both in favour and against the link between MEP activity and performance and re-election. On the one hand, European elections are second-order, which means that citizens’ criteria largely concentrate on domestic issues, thus constraining incentives to maximise MEPs’ performance in the EP. On the other, MEPs may wish to prove to their European political group, their national party and their constituents that they are hard-working parliamentarians who deserve to be re-elected and climb the EP hierarchy.The paper focuses on the quantitative aspect of MEPs’ work in the EP. As sensationalist evidence on MEPs performance is more likely to resonate with the public, crude quantitative indicators cannot be dismissed light-heartedly. National media have often picked up how many reports, resolutions and questions MEPs have drafted in order to distinguish between ‘top’ and ‘bottom’ performers, and MEPs have proven particularly sensitive in this respect. Furthermore, increased activity in the EP implies expertise and political experience which may be valued by the national parties. The data analysis confirms that MEP output and re-election are associated.
    Keywords: European elections; European Parliament; MEPs
    Date: 2011–06–15
  8. By: Pedro C. Magalhães (University of Lisbon, Social Sciences Institute); Luís Francisco Aguiar (Universidade do Minho - NIPE); Michael S. Lewis-Beck (University of Iowa)
    Abstract: The behavior of the individual Spanish voter has come to be rather well-understood, thanks to a growing research literature. However, no models have appeared to explain, or to forecast, national election outcomes. The presence of this research gap contrasts sharply with the extensive election forecasting work done on other leading Western democracies. Here we fill this gap. The model, developed from core political economy theory, is parsimonious but statistically robust. Further, it promises considerable prediction accuracy of Spanish general election outcomes, six months before the contest actually occurs. After presenting the model, and carrying out extensive regression diagnostics, we offer an ex ante forecast of the 2012 general election.
    Date: 2011
  9. By: Gine, Xavier; Mansuri, Ghazala
    Abstract: In many emerging democracies women are less likely to vote than men and, when they do vote, are more likely to follow the wishes of household males. The authors assess the impact of a voter awareness campaign on female turnout and candidate choice. Geographic clusters within villages were randomly assigned to treatment or control, and within treated clusters, some households were left untreated. Compared with women in control clusters, both treated and untreated women in treated clusters are 12 percentage points more likely to vote, and are also more likely to exercise independence in candidate choice, indicating large spillovers. Data from polling stations suggest that treating 10 women increased turnout by about 9 votes, resulting in a cost per vote of US$ 2.3. Finally, a 10 percent increase in the share of treated women at the polling station led to a 6 percent decrease in the share of votes of the winning party.
    Keywords: Population Policies,Parliamentary Government,Gender and Health,Gender and Law,Agricultural Knowledge&Information Systems
    Date: 2011–06–01
  10. By: Marina Azzimonti; Matthew Talbert
    Abstract: Standard real business cycle theory predicts that consumption should be smoother than output, as observed in developed countries. In emerging economies, however, consumption is more volatile than income. In this paper the authors provide a novel explanation of this phenomenon, the ‘consumption volatility puzzle,’ based on political frictions. They develop a dynamic stochastic political economy model where parties that disagree on the size of government (right-wing and left-wing) alternate in power and face aggregate uncertainty. While productivity shocks affect only consumption through responses to output, political shocks (switches in political ideology) change the composition between private and public consumption for a given output size via changes in the level of taxes. Since emerging economies are characterized by less stable governments and more polarized societies, the effects of political shocks are more pronounced. For a reasonable set of parameters the authors confirm the empirical relationship between political polarization and the ratio of consumption volatility to output volatility across countries.
    Keywords: Business cycles ; Developing countries
    Date: 2011
  11. By: Gregmar Galinato; Suzette Galinato (School of Economic Sciences, Washington State University)
    Abstract: This article formulates a structural empirical model that measures the short run and long run effect of economic growth, political stability and corruption control on carbon dioxide (CO2) emissions from deforestation. Income has a negative effect on forest cover in the short run but it does not have any long run effect. In contrast, political stability and corruption have relatively smaller effects on forest cover in the short run but they have lingering long run effects. We derive a U-shaped forest-income curve where political stability and corruption control do not significantly affect the income turning point but both variables shift the curve up or down. The resulting CO2 emission-income curve is downward sloping and is based on changes in the levels of variables affecting forest cover. Increased political stability flattens the CO2 emissions-income curve leading to smaller changes of CO2 emissions per unit change in income.
    Keywords: Deforestation, Environmental Kuznets Curve, Political stability
    JEL: O10 Q23
    Date: 2010–06
  12. By: Pfarr, Christian; Ulrich, Volker
    Abstract: As in most industrialized countries, the inequality regarding the distribution of house-hold incomes in Germany has steadily increased. By collecting taxes and granting mon-etary transfers, the government tries to affect the personal distribution of incomes. Whereas the supply of redistribution is relatively easy to determine, it is rather difficult to identify the determinants of the citizens’ demand for redistribution. Most of the lit-erature concerning the individuals’ preferences for redistribution relies on survey based analysis. A shortcoming of these studies is the failure of imposing a budget con-straint. Discrete-Choice-Experiments (DCE) solve this problem by forcing individuals to take the consequences of their decisions with respect to their own income into ac-count. This study aims at developing a theory based approach to elicit individuals’ preferences for redistribution using DCEs. For the specific case of Germany, we show how to design and implement such a DCE. In particular, we discuss how the price at-tribute in a DCE should be specified and which levels adequately define the price an individual is willing to pay for redistribution. We are able to demonstrate that even for a highly complex topic such as redistribution a correctly applied DCE can provide au-thoritative results. This allows deriving policy implications on how to design redistribu-tive policies which are in line with citizens’ preferences.
    Keywords: Discrete-Choice Experimente; stated preferences; Umverteilung
    JEL: C35 D60
    Date: 2011–04
  13. By: Yamamura, Eiji
    Abstract: Japan’s 2011 natural disasters were accompanied by a devastating nuclear disaster in Fukushima. This paper used cross-country data obtained immediately after the Japanese disaster to explore how, and the extent to which, corruption affects the perception of citizens regarding the risk of nuclear accidents. Endogeneity bias was controlled for using instrumental variables. The cross-country analysis showed that citizens in less corrupt countries tend to perceive there to be a lower possibility of nuclear accident.
    Keywords: Natural disaster; Nuclear accident; Corruption; Japan
    JEL: D73 Q48 D82 Q54
    Date: 2011–06–10

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