nep-pol New Economics Papers
on Positive Political Economics
Issue of 2012‒07‒29
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Voters elect politicians who closely matched their preferences By Marco Portmann; David Stadelmann; Reiner Eichenberger
  2. Political and Public Acceptability of Congestion Pricing: Ideology and Self Interest By Bjorn Harsman; John Quigley
  3. Is Fiscal Policy Procyclical in Resource-Rich Countries? By Ilkin Aliyev
  4. Bounded Rationality and Voting Decisions Exploring a 160-Year Period By David Stadelmann; Benno Torgler
  5. Competition and Ideological Diversity: Historical Evidence from US Newspapers By Matthew Gentzkow; Jesse M. Shapiro; Michael Sinkinson
  6. Redistributive Preferences, Redistribution, and Inequality: Evidence from a Panel of OECD Countries By Kuhn, Andreas
  7. Who believes in fiscal and monetary stimulus? By Amdur, David
  8. Is there an electoral-motivated crime rate cycle? Evidence from Argentina By Meloni, Osvaldo
  9. The Graying of the Median Voter By Hollanders, D.A.; Koster, F.
  10. New Regression Models with Egocentric Social Network Data: An analysis of political party preference in Japan By YAMAGUCHI Kazuo
  11. Direct democracy and resource allocation : experimental evidence from Afghanistan By Beath, Andrew; Christia, Fotini; Enikolopov, Ruben
  12. How beliefs about the impact of immigration shape policy preferences: Evidence from Europe By Jérôme Héricourt; Gilles Spielvogel
  13. How close is your government to its people ? worldwide indicators on localization and decentralization By Ivanyna, Maksym; Shah, Anwar

  1. By: Marco Portmann; David Stadelmann; Reiner Eichenberger
    Abstract: What determines political candidates? election prospects? We match roll call votes of candidates for the majority elected upper house of parliament who were previously in the lower house with revealed preferences of their constituency. Thereby, we obtain a direct measure of past congruence. Politicians have a significantly and quantitatively important higher probability of election when they more closely matched the preferences of their constituency. This pr ovides evidence for the direct retrospective voting rule that voters elect politicians who represented their preferences well.
    Keywords: Retrospective Voting; Voting Behavior; Representation; Constituents? Preferences
    JEL: D72 D70
    Date: 2012–07
  2. By: Bjorn Harsman; John Quigley
    Abstract: Studies of the “stated preferences” of households generally report public and political opposition by urban commuters to congestion pricing. It is thought that this opposition inhibits or precludes tolls and pricing systems that would enhance efficiency in the use of scarce roadways. This paper analyzes the only case in which road pricing was decided by a citizen referendum on the basis of experience with a specific pricing system. The city of Stockholm introduced a toll system for seven months in 2006, after which citizens voted on its permanent adoption. We match precinct voting records to citizen commute times and costs by traffic zone, and we analyze patterns of voting in response to economic and political incentives. We document political and ideological incentives for citizen choice, but we also find that the pattern of time savings and incremental costs exerts a powerful influence on voting behavior. In this instance, at least, citizen voters behave as if they value commute time highly. When they have experienced first-hand the out-of-pocket costs and time-savings of a specific pricing scheme, they are prepared to adopt freely policies which reduce congestion on urban motorways.
    Date: 2011–09
  3. By: Ilkin Aliyev
    Abstract: We analyze fiscal policy procyclicality in resource-rich countries. We obtain a strong U-shaped relationship between the procyclicality of government capital expenditures and the resource richness measure comprised of the mineral exports share in total merchandise exports for developing countries. Such a relationship is robust to different methodologies and various checks. We consider two hypotheses: first, the political economy hypothesis, and second, the borrowing constraints hypothesis. Empirical observations appear to be consistent with the hypotheses. We build a model able to generate a U-shape effect combining political economy and borrowing constraint hypotheses. We argue that with a model of simple settings such a U-shape relationship can be obtained and interpreted.
    Keywords: borrowing constraints; developing countries; fiscal policy; political economy; procyclicality; resource-rich;
    JEL: E62 F34 F41 O23 Q32
    Date: 2012–07
  4. By: David Stadelmann; Benno Torgler
    Abstract: Using a natural voting experiment in Switzerland that encompasses a 160-year period (1848-2009), we investigate whether a higher level of complexity leads to increased reliance on expert knowledge. We find that when more referenda are held on the same day, constituents are more likely to refer to parliamentary recommendations in making their decisions. This finding holds true even when we narrow our focus to referenda with a relatively lower voter turnout on days on which more than one referendum was held. We also show that when constituents face a higher level of complexity, they listen to parliament rather than interest groups.
    Keywords: Bounded rationality; voting; referenda attention; rules of thumb
    JEL: D03 D72 D83 H70
    Date: 2012–07
  5. By: Matthew Gentzkow; Jesse M. Shapiro; Michael Sinkinson
    Abstract: We use data on US newspapers from the early 20th century to study the economic incentives that shape ideological diversity in the media. We show that households prefer newspapers whose political content agrees with their own ideology, that newspapers with the same political content are closer substitutes than newspapers with different political content, and that newspapers seek both to cater to household tastes and to differentiate from their competitors. We estimate a model of newspaper demand, entry and affiliation choice that captures these forces. We show that competitive incentives greatly enhance the extent of ideological diversity in local news markets, and we evaluate the impact of policies designed to increase such diversity.
    JEL: L11 L52 L82
    Date: 2012–07
  6. By: Kuhn, Andreas (University of Zurich)
    Abstract: This paper describes individuals’ inequality perceptions, distributional norms, and redistributive preferences in a panel of OECD countries, primarily focusing on the association between these subjective measures and the effective level of inequality and redistribution. Not surprisingly, the effective level of redistribution (after tax-and-transfer inequality) is positively (negatively) correlated with redistributive preferences. There is also evidence showing that the subjective and objective dimension of inequality and redistribution are, at least partially, linked with individuals’ political preferences and their voting behavior. The association between objective and subjective measures of inequality and redistribution vanishes, however, once more fundamental country characteristics are taken into account. This suggests that these characteristics explain both redistributive preferences as well as the effective level of redistribution and after tax-and-transfer inequality.
    Keywords: inequality perceptions, distributional norms, redistributive preferences, inequality, redistribution, political preferences
    JEL: D31 D63 J31
    Date: 2012–07
  7. By: Amdur, David
    Abstract: Does the public believe that fiscal and monetary stimulus reduce unemployment? I present survey evidence on this question from a random sample of Pennsylvania residents. Few respondents express a consistently Keynesian view of fiscal and monetary stimulus. In fact, the typical respondent believes that an increase in government spending makes unemployment worse. Views on monetary stimulus depend on how the question is framed. The typical respondent believes that Fed money creation worsens unemployment while a Fed interest rate cut improves it. I show how opinion varies by political party, educational attainment, income, and other demographic characteristics. Favorable opinions about government spending are strongly associated with support for President Obama's economic policies, even after controlling for political party and for respondents' opinions about the current state and trajectory of the economy.
    Keywords: Opinion survey; fiscal stimulus; monetary stimulus; unemployment; Keynesian economics
    JEL: E62 E12 A20 E52
    Date: 2012–07
  8. By: Meloni, Osvaldo
    Abstract: In the last three decades Argentina tripled its crime rate boosting safety at the top of mayor concerns of Argentineans which leaves open the question about the behavior of incumbent governors of the 23 provinces about anti-crime measures in the proximity of elections. How do incumbent governors react to escalating crime as elections come closer? This paper investigates electorally-motivated crime rate fluctuations in Argentina for the period 1984-2007. District–level dynamic panel data reveals the existence of an electoral cycle in the total crime rate as well as in property crimes.
    Keywords: Crime; Electoral cycles; Dynamic Panel Data; Argentina
    JEL: K42 D72 P16
    Date: 2012–06–19
  9. By: Hollanders, D.A.; Koster, F. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: Analyzing 30 OECD-countries in 1980-2005, this paper documents the effect of an aging electorate on pension expenditure. The first outcome is that an increase in the age of the median voter leads to less generous pension benefits. The second outcome is that an older median voter is not significantly associated with an increase in pension expenditure relative to GDP. These results do not change when health care costs are considered instead of pension expenditure. The results contradict the main prediction of median voter models that an older median voter will successfully push for higher individual benefits. An alternative specification with the dependency ratio as the operationalization of aging, does show a positive and significant effect of aging on pension expenditure. A positive effect of aging on the generosity of pensions can however also not be found in this case.
    Keywords: aging;retirement;political economy.
    JEL: C23 H55 J18
    Date: 2012
  10. By: YAMAGUCHI Kazuo
    Abstract: This paper introduces some regression models for a categorical dependent variable with data from egocentric social networks as covariates to analyze the determinants of the outcome for the subject and those of the extent of agreement or disagreement between the outcomes for the subject and the persons to whom he/she is directly connected. The merits of those models are their wide applicability to surveys that collect data on egocentric social networks and their capacity to identify the determinants of agreement between the subject's and his/her friends' attitudinal or behavioral outcomes, controlling for the tendency to agree due to homophily in the choice of friends. An illustrative application using data from the 2004 Japanese General Social Survey shows that several substantively distinct characteristics of egocentric networks affect the subject's political party preference and the extent of agreement in the preference between the subject and that of his/her significant others.
    Date: 2012–07
  11. By: Beath, Andrew; Christia, Fotini; Enikolopov, Ruben
    Abstract: Direct democracy is designed to better align public resource allocation decisions with citizen preferences. Using a randomized field experiment in 250 villages across Afghanistan, this paper compares outcomes of secret-ballot referenda with those of consultation meetings, which adhere to customary decision-making practices. Elites are found to exert influence over meeting outcomes, but not over referenda outcomes, which are driven primarily by citizen preferences. Referenda are also found to improve public satisfaction, whereas elite domination of allocation processes has a negative effect. The results indicate that the use of direct democracy in public resource allocation results in more legitimate outcomes than those produced by customary processes.
    Keywords: Housing&Human Habitats,Social Accountability,Rural Urban Linkages,Peri-Urban Communities,Parliamentary Government
    Date: 2012–07–01
  12. By: Jérôme Héricourt (EQUIPPE, Universités de Lille, Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne); Gilles Spielvogel (Université Paris 1 Panthéon-Sorbonne, UMR 201)
    Abstract: This paper studies the joint determination of beliefs about the economic impact of immigration and immigration policy preferences, using data from the five waves of the European Social Survey (2002- 2010). In addition to standard socioeconomic characteristics, this analysis takes into account individual media consumption as a determinant of opinion about immigration. Our results stress the important role of the endogenous determination of beliefs, which appear as a major determinant of policy preferences. Besides, media exposure appears as a key determinant of beliefs: individuals spending more time to get informed on social and political matters through newspapers and radio have a better opinion on the economic impact of immigration relatively to individuals which devote time to other types of contents. _________________________________ Cet article étudie la détermination conjointe des croyances concernant l'impact économique de l'immigration et des préférences en matière de politiques migratoires, en utilisant les données provenant des cinq vagues de l'European Social Survey (2002-2010). En plus des caractéristiques socio-économiques classiques, cette analyse prend en compte l'exposition aux médias en tant que déterminant de l'opinion sur l'immigration. Nos résultats soulignent le rôle clé de la formation endogène des croyances, qui apparaissent comme un déterminant majeur de préférences en matière de politiques migratoires. Par ailleurs, l'exposition aux médias est un déterminant important des croyances: les individus passant plus de temps à s'informer sur les questions sociales et politiques à travers la presse écrite et la radio ont une opinion plus positive de l'impact économique de l'immigration, relativement aux individus qui consacrent du temps à d'autres types de contenu.
    Keywords: International migration, beliefs, preferences, attitudes, media, Migrations internationales, croyances, préférences, opinion, médias.
    JEL: F22 D72 D83 J15
    Date: 2012–06
  13. By: Ivanyna, Maksym; Shah, Anwar
    Abstract: This paper is intended to provide an assessment of the impact of the silent revolution of the last three decades on moving governments closer to people to establish fair, accountable, incorruptible and responsive governance. To accomplish this, a unique data set is constructed for 182 countries by compiling data from a wide variety of sources to examine success toward decentralized decision making across the globe. An important feature of this data set is that, for comparative purposes, it measures government decision making at the local level rather than at the sub-national levels used in the existing literature. The data are used to rank countries on political, fiscal and administrative dimensions of decentralization and localization. These sub-indexes are aggregated and adjusted for heterogeneity to develop an overall ranking of countries on the closeness of their government to the people. The resulting rankings provide a useful explanation of the Arab Spring and other recent political movements and waves of dissatisfaction with governance around the world.
    Keywords: National Governance,Subnational Economic Development,Parliamentary Government,Debt Markets,Public Finance Decentralization and Poverty Reduction
    Date: 2012–07–01

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