nep-pol New Economics Papers
on Positive Political Economics
Issue of 2012‒02‒27
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Preference Representation and the Influence of Political Parties in Majoritarian vs. Proportional Systems: An Almost Ideal Empirical Test By David Stadelmann; Marco Portmann; Reiner Eichenberger
  2. Political economy of sub-national spending in India By Parag, Waknis
  3. Democratization and Civic Capital By Luigi Guiso; Paolo Pinotti
  4. Do Female Representatives Adhere More Closely to Citizens’ Preferences Than Male Representatives? By David Stadelmann; Marco Portmann; Reiner Eichenberger
  5. Impacts of Political Majorities on French Firms: Electoral Promises or Friendship Connections? By Renaud Coulomb; Marc Sangnier
  6. The Effects of Gender Quotas in Latin American National Elections By Kotsadam, Andreas; Nerman, Måns
  7. The law of survival of the political class: an analysis of the Italian Parliament (1946-2010) By Silvia Fedeli; Francesco Forte
  8. Leaders’ Impact on Public Spending Priorities: The Case of the German Laender By Bernd Hayo; Florian Neumeier
  9. Towards reason: political disputes, public attention and the use of expert knowledge in policymaking By Lundin, Martin; Öberg, PerOla
  10. Migration-induced Transfers of Norms. The case of Female Political Empowerment By Elisabetta LODIGIANI; Sara SALOMONE
  11. The Democratic Peace Unraveled: It’s the Economy By Michael Mousseau
  12. The returns to lobbying By Jordi Blanes i Vidal; Mirko Draca; Christian Fons-Rosen
  13. Preferences for redistribution around the world By Neher, Frank

  1. By: David Stadelmann; Marco Portmann; Reiner Eichenberger
    Abstract: Electoral systems determine the role party affiliations play in political representation. According to conventional expectations, politicians’ party affiliations should influence political representation when they are elected by proportional representation. In contrast, majoritarian systems force politicians to converge to the median position of their constituents, and party affiliation should play no or at least a much smaller role. We test these predictions with unique quasi-experimental data within a common party system by matching referenda decisions of constituents with voting behavior of their representatives, who are elected either by a majoritarian system or proportional representation.
    Keywords: Constituents' Preferences; Party Influence; Median Voter Model; Political Economy
    JEL: D7 H7
    Date: 2012–02
  2. By: Parag, Waknis
    Abstract: Many states in India have time and again elected a multiparty or a coalition government. Research so far has shown that these differences in political cohesiveness of the ruling political entity has influenced the spending choices of the state governments. However, the evidence is not completely conclusive. Different authors have used different measures of political fragmentation deriving opposite results for their effect on state government spending. There are also differences in the way economists and political scientists have dealt with the issue econometrically. This is coupled with a lack of a theoretical model of choice of public spending under alternative political regimes in the Indian context. I address these gaps in the literature by first building a theoretical model of spending policies of a state government. In this model, extensiveness and intensity of credit constraints influences equilibrium voting policies and hence the spending policies of governments in power. The resulting predictions are then comprehensively tested using data on seventeen Indian states over the period of twenty years. The econometric analysis provides substantive evidence for the importance of political factors in determining government spending. Specifically, we find that that politically less cohesive governments tend to spend more on education than their more cohesive counterparts. There is also some evidence on electoral cycles in health expenditure. Further, the analysis supports the model’s underlying notion of credit constrained voters determining the spending policies of the government via the degree of political cohesiveness of the government in power.
    Keywords: political economy; government spending; credit constraints and voting; differentiated election platforms; coalition governments in India
    JEL: E62 H72
    Date: 2012–02–20
  3. By: Luigi Guiso (EIEF and CEPR); Paolo Pinotti (Bocconi University and DONDENA)
    Abstract: We document a sharp reversal in electoral participation between the North and the South of Italy after the 1912 enfranchisement which extended voting rights from a limited élite to (almost) all adult males. When voting was restricted to the élite, electoral turnout was higher in the South but falls significantly below that in the North after the enfranchisement. Furthermore the new gap is never bridged over the following century and participation remains lower in the South despite the enrichment of democratic institutions and further extension of voting rights to the female population during the post war democratic republic. This pattern in the data is consistent with a simple model where individuals’ voting in political elections is affected by private benefits and by civic duty, only elites can grab private benefits from participation in politics and civic culture differs across communities. We also find that extension of voting rights to non-elites results in a significant transfer of power to their political organizations only among populations with a high sense of civic duties. Together with the very persistent gap in participation between North and South our findings suggest that democratization – a process of concession of democratic rights – can benefit non-elites only when the latter have already a high sense of civic capital and is unlikely to be a viable avenue for inducing norms of civic behavior.
    Date: 2012
  4. By: David Stadelmann; Marco Portmann; Reiner Eichenberger
    Abstract: We analyze whether female or male members of parliament adhere more closely to citizens’ revealed preferences with quasi-experimental data. By matching individual representatives’ voting behavior on legislative proposals with real referenda outcomes on the same issues, we identify the effect of gender on representatives’ responsiveness to revealed preferences of the majority of voters. Overall, female members of parliament tend to adhere less to citizens’ preferences than male parliamentarians. However, when party affiliation is controlled for, the effect of gender vanishes. These results are consistent with other evidence showing that women are more socially minded and tend to affiliate themselves more with left parties.
    Keywords: Gender; Discrimination; Voter Preferences; Political Economy
    JEL: D73 J16 J10
    Date: 2012–02
  5. By: Renaud Coulomb (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Marc Sangnier (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper analyzes the impact of changes in the winning chances of candidates running for the 2007 French presidential election on abnormal stock returns of firms that could benefit from a candidate's victory. We use prices formed by transactions on a political prediction market to reveal the probabilities of victory of S. Royal and N. Sarkozy. We find that changes in S. Royal's probability of victory have no impact on firms that should benefit from her party platform. On the opposite, abnormal returns of firms that should benefit from reforms announced by N. Sarkozy or that are directed or owned by his friends are positively correlated with changes in his probability of victory. Both effects appear to be independent and the network effect is fifty percents larger than the other one. All these results persist when we take into account specific characteristics of firms.
    Keywords: Political Majority ; Prediction Markets ; Firms Value ; Abnormal Returns ; Social Network ; Political Connections
    Date: 2012–02
  6. By: Kotsadam, Andreas (Dept of Economics, University of Oslo); Nerman, Måns (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This study investigates the effects of gender quotas in national elections on political participation, public policy, and corruption in Latin America. We are able to replicate the findings from previous research that women in politics do affect these outcomes, but only when we treat the number of women in parliament as exogenous. We argue, however, that the introduction of gender quotas caused an – in this context – exogenous increase in women’s representation, and while we find that quotas in Latin America increased the number of women in parliament, we find no substantial effects beyond mere representation. The mechanisms for these findings are scrutinized, and we find no indications that quota women are more marginalized than other elected women in Latin American parliaments. Hence, increasing women’s representation by means of gender quotas may not result in the same outcomes as an increased representation in non-quota elections.<p>
    Keywords: gender quotas; Latin America; women in parliament
    JEL: D72 H50 Z10
    Date: 2012–02–20
  7. By: Silvia Fedeli; Francesco Forte
    Abstract: Drawing on Alchian‟s and Schumpeter‟s theories about the market selection of entrepreneurs and on theories of the political class, we focus on the features characterizing the Italian post-war democratic Parliament, from 1946 to 2010. We analyse the survival of the members of the Italian Parliament, taking into account all available information concerning their individual characteristics and political affiliation. We apply the stratified Cox model, taking into consideration the order of re-election of the 15,357 repeated observations (representing 7,127 members of the Italian Parliament since 1946), who are followed as if they were “patients†in order to study their parliamentary survival.
    Keywords: Political enterprise, political class, survival analysis, Italian Parliament.
    JEL: D72 Z13
    Date: 2011–09
  8. By: Bernd Hayo (University of Marburg); Florian Neumeier (University of Marburg)
    Abstract: We examine determinants of the composition of public expenditure in the German Laender (states) over the period 1993–2008, as the Laender exhibit a high degree of institutional and political homogeneity and are endowed with extensive fiscal competences. Our prime contribution is an investigation into how political leaders’ socioeconomic background influences public spending priorities. Applying sociological theory, we link preferences for the composition of public spending to social status. In contrast to approaches relying on political budget cycles or partisan theory, we find strong and theory-consistent evidence that prime ministers tend to favour fiscal policies supporting the social class in which they are socialised. Governments led by prime ministers from a poor socioeconomic background spend significantly more on social security, education, health, infrastructure, and public safety.
    Keywords: Leadership, socioeconomic status, social rivalry, public expenditure composition.
    JEL: E62 H75 H76
    Date: 2012
  9. By: Lundin, Martin (IFAU - Institute for Labour Market Policy Evaluation); Öberg, PerOla (Department of government, Uppsala university)
    Abstract: This article examines expert knowledge utilization in public policy processes. We study how much expert knowledge is employed and the extent to which decision-makers deliberate on the information provided by the experts, under various conditions of political disputes and public attention. We suggest four hypotheses. It is proposed that expert knowledge will be used more, but that there will be less deliberation in situations of political disputes. It is also suggested that expert knowledge will be consulted more and the decision-makers will take a more deliberative approach when there is a lot of attention from citizens. Our empirical findings, based on original data from local politics in Sweden, are in line with the hypotheses. The findings highlight the importance of both studying the extent of expert knowledge use and the way expertise is utilized. Another important insight is that politics seem to matter in relation to the role expert knowledge plays in public policymaking.
    Keywords: Expert knowledge; Public policy; Political disputes; Public attention; Deliberation; Local government Sweden
    JEL: H70 H83
    Date: 2012–02–08
  10. By: Elisabetta LODIGIANI (DEAS, University of Milan and Centro Studi Luca d’Agliano); Sara SALOMONE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Tor Vergata University)
    Abstract: It is recognized that affirmative action, as anti-discriminatory policies whose aim is to benefit an underrepresented group, is a key driver of progress for women. However, the role of migrants in helping female voice from abroad has not been addressed yet. This paper empirically investigates the effect of international migration on the parliamentary participation of women left behind following the brand new strand of literature on ‘transfers of norms’. Panel data from 1960 to 2000 allows us to take into account selection due to women’s eligibility, observed and unobserved heterogeneity. After having controlled for traditional political and non political factors, we show that total international migration to countries with higher female political empowerment significantly increases the female parliamentary shares in sending countries
    Keywords: Women’s empowerment, Transfers of norms, International Migration, Panel Data, Sample Selection
    JEL: J16 D72 F22 C33
    Date: 2012–02–03
  11. By: Michael Mousseau (Koç University)
    Abstract: Recent research indicates that the democratic peace—the observation that democratic nations rarely fight each other—is spurious: that advanced capitalism accounts for both democracy and the democratic peace (Mousseau 2009). This is not a trivial prospect: if economic conditions explain the democratic peace, then a great deal of research on governing institutions and foreign policy is probably obsolete. This study addresses all the recent defenses of the democratic peace and reports new results using a new measure that directly gauges the causal mechanism of contract flows dependent on third-party enforcement. Analyses of most nations from 1961 to 2001 show contract-intensive "impersonal" economy to be the second most powerful variable in international conflict—following only contiguity—and, once considered, there is no evidence of causation from democracy to peace. It is impersonal economy, not democracy or unfettered markets, which appears to explain the democratic peace..
    Date: 2012–02
  12. By: Jordi Blanes i Vidal; Mirko Draca; Christian Fons-Rosen
    Abstract: Research by Mirko Draca and colleagues on Washington's 'revolving door' lobbyists gives an indication of the value of political connections in the UK.
    Date: 2012–02
  13. By: Neher, Frank
    Abstract: Gender, income, education and self-employment are robust predictors for individual support for redistribution in the OECD. In addition, considerations of social status, the fairness of the allocation mechanism, perceived moral worth of the poor and individual autonomy are important. The results for the OECD are compared to those for a large sample of non-OECD countries which also include less developed economies. Neither gender, nor self-employment, nor fairness considerations exhibit a robust association with preferences for redistribution. However, education, income, individual autonomy and moral worth of the poor remain important determinants. On average, preferences for redistribution indicate that within the OECD, there is no desire to change redistributive policies. In contrast, in the sample of non-OECD countries, on average there is a desire to redistribute less. --
    Keywords: preferences for redistribution,social rivalry effect,social identity,survey data,World Values Survey
    JEL: D0 H3
    Date: 2012

This nep-pol issue is ©2012 by Eugene Beaulieu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.