nep-pol New Economics Papers
on Positive Political Economics
Issue of 2012‒07‒08
five papers chosen by
Eugene Beaulieu
University of Calgary

  1. One more in my backyard? Insights from the 2011 Italian nuclear referendum By G. Pignataro; G. Prarolo
  2. Foreign aid and political influence of the development assistance committee countries By Pincin, Jared
  3. Country Stress Events: Does Governance Matter? By Carlos Caceres; Anna Kochanova
  4. Does an Elected Leader Have Incentives to Provide Public Goods with Future Returns? –Evidence from China By Shu, Youhua; Chowdhury, Shyamal K.; Harris, Michael
  5. Corruption, Rule of Law, and Economic Efficiency: Virginia vs. Chicago Public Choice Theories By Ladislava Grochova; Tomas Otahal

  1. By: G. Pignataro; G. Prarolo
    Abstract: This paper investigates the 2011 Italian referendum on nuclear power as a clean laboratory for recovering information on the spatial pattern of votes about the construction (or restoration) of nuclear facilities. Our results show that voting preferences on building nuclear facilities are sensible to proximity determined by a strong local component. Voters’opposition to nuclear installments tends to be even higher when the effect of both existing and proposed plants is taken into account. The study tracks the changes of risk perception and voting preferences finding a positive correlation between the distance-related perceived nuclear risk and the share of participation against nuclear power. The perceived risk and the consequent voting pattern are even higher in communities close to proposed nuclear plants compared to the existing ones. This holds even after taking into account local, regional and political features and several municipality characteristics which may influence preferences over nuclear power.
    JEL: D72 H41 Q48
    Date: 2012–06
  2. By: Pincin, Jared
    Abstract: This paper empirically examines whether voting coincidence in the United Nations General Assembly increases between donors and recipients after foreign aid is distributed. It extends previous literature by expanding the donor countries considered and by testing the long-run political influence of aid. The results show that Canada, France, Spain, and the United Kingdom exhibit a positive relationship between voting coincidence and aid distribution. The results also show a positive relationship between voting coincidence and aid for the United States, but only in the long run when the yearly panels are collapsed into three-year averages. The latter result may provide an explanation for why previous studies find mixed results as to whether the United States uses aid for political support. The results are robust to the inclusion of measures of economic power, military power, dependence on foreign support, and international trade patterns. Keywords
    Keywords: Official Development Assistance (ODA); UN General Assembly; voting coincidence
    JEL: F35
    Date: 2012–06–14
  3. By: Carlos Caceres; Anna Kochanova
    Abstract: This paper analyzes the linkages between governance quality and country stress events. It focuses on two types of events: fiscal and political stress events, for which two innovative stress indicators are introduced. The results suggest that weaker governance quality is associated with a higher incidence of both fiscal and political stress events. In particular, internal accountability, which measures the responsiveness of governments to improving the quality of the bureaucracy, public service provision, and respect for the institutional framework in place, is positively associated with fiscal stress events. However, external accountability, which captures government accountability before the public in general, through elections and the democratic process, seems to be more important for political stress events. These results hold when using balanced country samples where region, oil-exporter status, income level, and time are taken into account.
    Keywords: Financial crisis , Fiscal policy , Governance , Political economy ,
    Date: 2012–05–09
  4. By: Shu, Youhua; Chowdhury, Shyamal K.; Harris, Michael
    Abstract: This paper examines changes in the allocation of public funds between production related public goods (PRPGs) and labour augmenting public goods (LAPGs) once elected village leaders replaced an appointment system. We derive a two-period theoretical model in which the interest of appointed leaders in short economic development leads to allocate all public resources into PRPGs in the first period. In contrast, elected leaders have greater incentives to reflect the interest of electorates by allocating public resources to maximize their two-period revenues. The model predicts that elections lead to an increase in the provision level of LAPGs and a decrease in PRPGs in the first period, if the first-period allocation equilibrium of appointed leaders is away from the allocation mix in maximization of the two-period revenues. A panel dataset of 71 villages for the period of 1993-2000 is used to examine these two predictions. The results show that the elections increased the provision level of public health (LAPGs), but had no effects on irrigation facilities and paved roads (PRPGs).
    Keywords: Public economics, Development Economics, Community/Rural/Urban Development, Institutional and Behavioral Economics, Labor and Human Capital, Political Economy, Public Economics, D71, H41, P35,
    Date: 2012–06–14
  5. By: Ladislava Grochova (Department of Economics, Faculty of Business and Economics, Mendel University in Brno); Tomas Otahal (Department of Economics, Faculty of Business and Economics, Mendel University in Brno)
    Abstract: Can corruption improve economic efficiency? Classical political economists argue that corruption undermines the rule of law (Smith 2001, chap 5). The modern Public Choice proponents argue that corruption and lobbying might influence the efficiency of the rule of law. While Chicago Public Choice scholars model how legal lobbying, which is corruption in Virginia Public Choice perspective, improves efficiency of the rule of law and thus the overall economic efficiency, the Virginia Public Choice models explain how corruption reduces efficiency of the rule of law and thus the overall economic efficiency. In this short paper, we present a brief survey distinguishing between arguments of the Chicago Public Choice and Virginia Public Choice schools on how corruption influences economic efficiency. We argue that the Virginia Public Choice explanation is more realistic because it includes the influence of bureaucratic rent-seeking.
    Keywords: Bureaucracy, corruption, economic efficiency, Chicago Public Choice, Virginia Public Choice, rent-seeking, rule of law
    JEL: D74 K42 P3
    Date: 2012–06

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