nep-pol New Economics Papers
on Positive Political Economics
Issue of 2011‒08‒29
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. A Political Theory of Populism By Daron Acemoglu; Georgy Egorov; Konstantin Sonin
  2. Politics and the geographic allocation of public funds in a semi-democracy. The case of Ghana, 1996-2004 By Pierre André; Sandrine Mesplé-Somps
  3. Ethnicity and Election Outcomes in Ghana By Thomas Bossuroy
  4. Political economy of the petroleum sector in Nigeria By Gboyega, Alex; Soreide, Tina; Le, Tuan Minh; Shukla, G. P.
  5. Incumbency as the Major Advantage: The Electoral Advantage for Parties of Incumbent Mayors By Ronny Freier
  6. Political Preferences and Public Sector Outsourcing By Elinder, Mikael; Jordahl, Henrik
  7. People‘s Attitudes and the Eff ects of Immigration to Australia By Mathias Sinning; Matthias Vorell
  8. Economic and Political Causes of Genocidal Violence: A comparison with findings on the causes of civil war By Frances Stewart
  9. Why Do Populist-Outsiders Get Elected? A Model of Strategic Populists By Sebastian Miller
  10. Greek ricochet? What drove Poles' attitudes to the euro in 2009-2010 By Andrzej Torój; Joanna Osińska

  1. By: Daron Acemoglu; Georgy Egorov; Konstantin Sonin
    Abstract: When voters fear that politicians may have a right-wing bias or that they may be influenced or corrupted by the rich elite, signals of true left-wing conviction are valuable. As a consequence, even a moderate politician seeking reelection chooses “populist’ policies - i.e., policies to the left of the median voter - as a way of signaling that he is not from the right. Truly right-wing politicians respond by choosing more moderate, or even left-of-center policies. This populist bias of policy is greater when the value of remaining in office is higher for the politician; when there is greater polarization between the policy preferences of the median voter and right-wing politicians; when politicians are indeed more likely to have a hidden right-wing agenda; when there is an intermediate amount of noise in the information that voters receive; when politicians are more forward-looking; and when there is greater uncertainty about the type of the incumbent. We show that similar results apply when some politicians can be corrupted or influenced through other non-electoral means by the rich elite. We also show that ‘soft term limits’ may exacerbate, rather than reduce, the populist bias of policies.
    JEL: C71 D71 D74
    Date: 2011–08
  2. By: Pierre André (Université de Cergy-Pontoise, THEMA); Sandrine Mesplé-Somps (DIAL, IRD, Paris)
    Abstract: The body of literature on purely democratic countries can sometimes fail to explain the behavior of government in semi-democratic African countries. Empirical and theoretical political economic papers find that public funds target ruling party supporters and swing districts. Our results, however, suggest that the opposite was true of Ghana. We observe that pro-government districts received less public investment when the NDC was in power. We posit that this finding is partially driven by the government's will to curry favor with opposition politicians. Indeed, in addition to pursuing its electoral objectives, the government of an emerging democracy may fear political instability and keep the lid on potential unrest by bargaining with opposition leaders. Our analysis also shows that, when controlling for votes and other covariates (including wealth, urbanization and density), public goods allocation is not driven by ethnic group targeting either. _________________________________ La littérature économique portant sur la compréhension des comportements distributifs des gouvernements de pays démocratiques peut échouer à comprendre les mécanismes distributifs à l’oeuvre dans des pays semi-démocratiques africains. Les travaux théoriques et empiriques d’économie politique trouvent généralement que les partis au pouvoir ciblent les fonds publics soit vers les populations qui les soutiennent fortement, soit vers les endroits où les résultats des élections antérieures sont en ballotage séré. Cependant, nous montrons le contraire dans le cas du Ghana. Nous observons que, lorsque le parti NDC était au pouvoir, les districts les plus pro-gouvernementaux ont reçus moins de biens publics que les autres districts. De même nous ne décelons pas de ciblage vers les districts en ballotage. Nous soutenons qu’un tel phénomène est en partie du au fait que le gouvernement, pour rester en place, souhaite avoir les bonnes grâces de l’opposition. C’est ainsi que dans un pays semi-démocratique tel que le Ghana, le gouvernement tout en poursuivant des objectifs électoralistes craint l’instabilité politique et tente de maitriser toute agitation politique potentielle en négociant avec les leadeurs de l’opposition. Notre analyse montre aussi qu’en contrôlant par les votes et autres co-variables telles que le taux d’urbanisation, le niveau de richesse et la densité de population, les allocations de fonds publics ne sont pas fonction de considérations ethniques.
    Keywords: Public goods, Elections, Politics, Ghana.
    JEL: D72 O55 R53
    Date: 2011–03
  3. By: Thomas Bossuroy (SALDRU, University of Cape Town, South Africa UMR DIAL-Paris-Dauphine)
    Abstract: Is ethnicity the critical determinant of election results in Africa? We investigate this question empirically on the 2004 presidential poll in Ghana. We use variables from several data sources matched at the district level, and perform econometric analysis on the turnout rate and party vote shares, and on their evolution between two similar polls. We test the accuracy of two alternate models of voting, an ethnic model and a non-ethnic one that includes variables such as education, occupation or wealth. We provide robust evidence that the ethnic factor is a slightly better explaining factor for the structure of votes in Ghana, but does not rule out the significance of the non-ethnic model. We then show that the ethnic model fails to account accurately for the evolution of votes between two polls, which appears as the result of evaluative votes. Since a changeover of political power has occurred repeatedly in Ghana, the analysis of the motives of the pivotal voter is crucial. Our results show that non-ethnic determinants may ultimately drive election outcomes. _________________________________ L’ethnicité est-elle le déterminant majeur des résultats électoraux en Afrique? Nous étudions empiriquement cette question pour le scrutin présidentiel de 2004 au Ghana, en utilisant des données provenant de sources variées, assemblées au niveau du district. Nous conduisons une analyse économétrique du taux de participation et des résultats des partis politiques, ainsi que de leur évolution entre deux élections similaires. Nous testons la précision de deux modèles alternatifs de vote, un modèle ethnique et un non-ethnique qui inclut des variables telles que l’éducation, la profession ou la richesse. Nous montrons que le facteur ethnique surpasse légèrement le modèle non-ethnique pour expliquer la structure des votes au Ghana, même si ce dernier reste statistiquement valide. Mais le modèle ethnique explique très mal l’évolution des votes entre deux élections, qui apparaît comme le résultat d’un vote d’évaluation politique non ethnique. Comme des alternances se sont produites au Ghana plusieurs fois, les motivations de l’électeur pivot sont cruciales. Nos résultats montrent donc que les facteurs non-ethniques semblent déterminer les résultats des élections.
    Keywords: Vote, Ethnicity, Elections, Africa.
    JEL: D72 O1
    Date: 2011–04
  4. By: Gboyega, Alex; Soreide, Tina; Le, Tuan Minh; Shukla, G. P.
    Abstract: The relatively slow pace of Nigeria's development has often been attributed to the phenomenon of the resource curse whereby the nature of the state as a"rentier"dilutes accountability for development and political actors are able to manipulate institutions to sustain poor governance. The impact of the political elite's resource-control and allocation of revenues on core democratic mechanisms is central to understand the obstacles to development and governance failure. Given that problems of petroleum sector governance are extremely entrenched in Nigeria, the key question is whether and how it is possible to get out of a poor equilibrium after fifty years of oil production. This paper uses a political economy perspective to analyze the governance weaknesses along the petroleum sector value chain and attempts to establish the links between challenges in sector regulation and the following major political and economic attributes: (i) strong executive control on petroleum governance in a political environment of weak checks and balances; (ii) regulatory and operating roles bundled into one institution, thereby creating conflict of interest; and (iii) manipulation of elections and political appointments. The restoration of democratic government has helped improve transparency and management of oil revenue and reforms at the federal level and proposed reforms of the petroleum sector hold much promise. At the same time, the judiciary has started to restore confidence that it will serve as a check and balance on the executive and the electoral process. Yet, these reforms are fragile and need to be deepened and institutionalized. They must be addressed not as purely technocratic matters but as issues of political economy and vested interests that must, through regulation and reform, be aligned with the public interest and a vision of Nigerian development.
    Keywords: National Governance,Environmental Economics&Policies,Oil Refining&Gas Industry,Energy Production and Transportation,Public Sector Corruption&Anticorruption Measures
    Date: 2011–08–01
  5. By: Ronny Freier
    Abstract: This paper provides empirical evidence on the party incumbency advantage in mayoral elections in Germany. Using a regression discontinuity design on a data set of about 25,000 elections, I estimate a causal incumbency effect of 38-40 percentage points in the probability of winning the next mayor election. The electoral advantage is larger for fulltime mayors, increasing in municipality size, independent of the specific partisanship of the mayor and constant between 1945 and 2010. Moreover, it increases with local spending hikes and it is independent of municipal debt. I also illustrate the causal dynamic effects of the incumbent status on distant future elections and therefore evaluate the global properties of the LATE estimate. Finally, I show that the total effect is due to an effect on the probability that the party participates in the next election (about 40% of the total effect) and an effect on the vote share (about 60%).
    Keywords: Mayor elections, regression discontinuity design party incumbency advantage
    JEL: H10 H11 H77
    Date: 2011
  6. By: Elinder, Mikael (Research Institute of Industrial Economics (IFN)); Jordahl, Henrik (Research Institute of Industrial Economics (IFN))
    Abstract: There are several theoretical accounts of public sector outsourcing. We note that leading theories give different predictions of the influence of political variables and test the predictions on a Swedish data set in which outsourcing varies between municipalities and over time as well as between services. Our identification strategy focuses on two services with similar contracting problems and local market conditions: preschools and primary schools. We study a period in which Swedish municipalities had full discretion in the provision of preschools, while their influence on the provision of primary education was limited by a national voucher system. The comparison of preschools and primary schools in a difference-in-differences model suggests that the political color of the ruling majority matters for outsourcing, which is consistent with the citizen candidate model of representative democracy.
    Keywords: Outsourcing; Ideology; Public provision; Contracting out
    JEL: D23 H11 H40 L33
    Date: 2011–07–04
  7. By: Mathias Sinning; Matthias Vorell
    Abstract: This paper compares the eff ects of immigration fl ows on economic outcomes and crime levels to the public opinion about these eff ects using individual and regional data for Australia. We employ an instrumental variables strategy to account for non-random location choices of immigrants and fi nd that immigration has no adverse eff ects on regional unemployment rates, median incomes, or crime levels. This result is in line with the economic eff ects that people typically expect but does not confi rm the public opinion about the contribution of immigration to higher crime levels, suggesting that Australians overestimate the eff ect of immigration on crime.
    Keywords: International migration; eff ects of immigration; attitudes towards immigrants
    JEL: F22 J61
    Date: 2011–07
  8. By: Frances Stewart
    Abstract: Genocide is different from civil war: it usually involves deaths on a much larger scale and targets particular groups – mostly civilians - often with the aim of exterminating them. The violence is one-sided, and, fortunately, genocides are much rarer than civil wars. Although with genocide, as with civil wars, it is possible to identify underlying political and economic patterns that make genocide more likely, there have been two distinct strands of investigation by social scientists: studies of the economic and political causes of ‘normal’ civil war; and those studying genocide. This paper contrasts the findings of the two strands of investigation, focussing on quantitative investigations, exploring the main differences in findings, and pointing to policy conclusions that emerge. It finds that civil wars tend to be higher in low income countries and in intermediate regimes, whereas genocides tend to be higher in low and middle income countries and in authoritarian regimes. Both, however, are more common during political upheaval and transition. In the case of genocides, civil wars themselves are one important predisposing condition. Hence policies to prevent civil wars may also contribute to preventing genocide. Once a situation has evolved in which there are high risks or actual episodes, any policy advice about preventative action is likely to fall on deaf ears. What is important is that appropriate policies should be in place in every multiethnic society to avoid a high risk situation emerging.
    Date: 2011
  9. By: Sebastian Miller
    Abstract: The existence of populist regimes led by outsiders is not new in history. In this paper a simple framework is presented that shows how and why a populist outsider can be elected to office, and under what conditions he is more likely to be elected. The results show that countries with a higher income and wealth concentration are more likely to elect populist outsiders than countries where income and wealth are more equally distributed. It is also shown that elections with a runoff are less likely to bring these populist outsiders into office.
    JEL: D72 D31
    Date: 2011–05
  10. By: Andrzej Torój (Ministry of Finance, Poland); Joanna Osińska (Ministry of Finance in Poland)
    Abstract: We investigate the determinants of support for the euro adoption in Poland in 2009 and 2010. Using two unique survey datasets, collected in December 2009 and June 2010, we estimate ordered and unordered logit models explaining the respondents' attitude to the introduction of the common currency. Whereas the public support has generally declined over this period, probably against the background of sovereign debt crises in the euro area, this decline was concentrated along some dimensions. We find that the declared level of information about the euro is a key driver of this support, both in 2009 and -- even more so -- in 2010, as well-informed respondents tend to be significantly more supportive of the common currency than badly-informed ones. We also find some evidence that political views influence the attitude towards the euro, but they are by no means its main determinant. During the crisis, the conviction of euro being a “strong, stable currency” has faded; instead, a negative attitude started to result from low income, high age and low economic knowledge. Surprisingly, in 2010 a more negative attitude was represented by students, white-collar workers and big city residents. All in all, the public perception of the euro does not seem to be fixed, but evolves with economic and political developments, so that new concerns appear.
    Keywords: EMU, attitudes towards the euro, public opinion, ordered logit, unordered logit
    JEL: C25 F33
    Date: 2011–08–17

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