nep-pol New Economics Papers
on Positive Political Economics
Issue of 2012‒10‒13
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Conditional cash transfers, political participation, and voting behavior By Baez, Javier E.; Camacho, Adriana; Conover, Emily; Zarate, Roman A.
  2. Uncertainty, Electoral Incentives and Political Myopia By Alessandra Bonfiglioli; Gino Gancia
  3. The Internet, News Consumption, and Political Attitudes By Liang, Che-Yuan; Nordin, Mattias
  4. Achieving political acceptability for new transport infrastructure in congested urban regions By Westin , Jonas; Basck, Pierre; Franklin, Joel P.; Proost , Stef; Raux , Charles
  6. The Composition of Government Expenditure with Alternative Choice Mechanisms By Creedy, John; Moslehi, Solmaz
  7. How accurate are surveyed preferences for public policies? Evidence from a unique institutional setup By Patricia Funk
  8. Regional Party Politics and the Right to Food in India By Shareen Hertel; Corinne Tagliarina
  9. International Environmental Policies and Environmental Lobbying in the Presence of Eco-industry By Masakazu Maezuru
  10. Shrouded Costs of Government: Political Economy of State and Local Public Pensions Data By Edward L. Glaeser; Giacomo Ponzetto
  11. Fair apportionment of voting districts in Hungary? By László Á. Kóczy; Péter Biró; Balázs Sziklai
  12. "My friends: it would be an error to accept": Communication and group identity in a bargaining setting By Alexander Elbittar; Andrei Gomberg

  1. By: Baez, Javier E.; Camacho, Adriana; Conover, Emily; Zarate, Roman A.
    Abstract: This paper estimates the effect of enrollment in a large scale anti-poverty program in Colombia, Familias en Accion, on intent to vote, turnout and electoral choice. For identification the analysis uses discontinuities in program eligibility and variation in program enrollment across voting booths. It finds that Familias en Accion had a positive effect on political participation in the 2010 presidential elections by increasing the probability that program beneficiaries registered to vote and cast a ballot, particularly among women. Regarding voter's choice, the authors find that program participants expressed a stronger preference for the official party that implemented and expanded the program. Overall, the findings show that voters respond to targeted transfers and that these transfers can foster support for incumbents, thus making the case for designing political and legislative mechanisms, as the laws recently passed by the Colombian government, that avoid successful anti-poverty schemes from being captured by political patronage.
    Keywords: Parliamentary Government,Population Policies,Politics and Government,Political Systems and Analysis,E-Government
    Date: 2012–10–01
  2. By: Alessandra Bonfiglioli; Gino Gancia
    Abstract: In this paper, we study the determinants of political myopia in a rational model of electoral accountability where the key elements are informational frictions and uncertainty. We build a framework where political ability is ex-ante unknown and policy choices are not perfectly observable. On the one hand, elections improve accountability and allow to keep well-performing incumbents. On the other, politicians invest too little in costly policies with future returns in an attempt to signal high ability and increase their reelection probability. Contrary to the conventional wisdom, uncertainty reduces political myopia and may, under some conditions, increase social welfare. We use the model to study how political rewards can be set so as to maximise social welfare and the desirability of imposing a one-term limit to governments. The predictions of our theory are consistent with a number of stylised facts and with a new empirical observation documented in this paper: aggregate uncertainty, measured by economic volatility, is associated to better ...scal discipline in a panel of 20 OECD countries.
    JEL: E6 H3
    Date: 2012–10–05
  3. By: Liang, Che-Yuan (Department of Economics); Nordin, Mattias (Department of Economics)
    Abstract: We investigate the effects of the rise of the Internet as an additional mass medium on news consumption patterns and political attitudes. We use Swedish survey data from 2002 to 2007, the period during which online news media emerged. We find that broadband access is associated with online media consumption which, to some extent, crowds out offline consumption. Furthermore, these altered news consumption patterns have no or small effects on political attitudes
    Keywords: news; the Internet; political attitudes
    JEL: D72 D83
    Date: 2012–07–17
  4. By: Westin , Jonas (KTH); Basck, Pierre (LET, Université de Lyon); Franklin, Joel P. (KTH); Proost , Stef (CES, KU Leuven); Raux , Charles (LET, Université de Lyon)
    Abstract: The paper analyzes the political acceptability of policies targeted at relieving urban congestion. The paper combines a stylized model of an urban transport network with a somewhat more detailed model of the political process that incorporates interactions between voters, special interest groups and politicians to explore the possibilities to reach political acceptability for efficient transport policies. In a case study of a proposed bypass in Lyon, France, the paper compares a set of potential policies in terms of efficiency, equity and political acceptability. A possible explanation for the difficulty of achieving political support for efficient transport policies is that since urban road pricing policies are characterized by conflicting interest, the political decision making process must balance different interests against each other to reach an efficient outcome. The analysis suggest that the difficulty to achieve political support for efficient road pricing policies is not a lack of political acceptability; instead the difficulty arises because of low political feasibility for efficient transport pricing since non-efficient transport policies are seen as more attractive to the decision makers.
    Keywords: User charges; Political economy; Transport infrastructure; Welfare effects; Acceptability of transport pricing
    JEL: H76 R42 R48 R48 R53
    Date: 2012–10–02
  5. By: Luis Diaz-Serrano; Andrés Rodríguez-Pose
    Abstract: This paper analyses whether the different powers and resources at the disposal of local and regional governments across Europe deliver greater satisfaction with political institutions and lead to greater personal happiness. The analysis uses microdata from the four available waves of the European social survey (2002, 2004, 2006 and 2008), including more than 160,000 observations of individuals living in 29 European countries. Our results reveal that fiscal and some forms of political decentralization have a positive and significant effect on the overall subjective well-being of individuals. However, fiscal decentralization has a different effect on the perception of institutions depending on whether we consider subnational expenditure or revenues. Similarly, the effect of political decentralization on the level of satisfaction with institutions also varies depending on whether the capacity of local governments to influence national politics or to exert authority over their own citizens is considered. The results also show that citizens seem to be happier with the actual capacity of their local governments to deliver than with the general principle that they can have a say on their daily politics and policies. Keywords: Happiness, subjective well-being, satisfaction, fiscal and political decentralization, Europe. JEL codes: H11, H77
    Date: 2012–10
  6. By: Creedy, John; Moslehi, Solmaz
    Abstract: This paper investigates the choice of the composition of government expenditure using both positive and normative approaches. The former involves aggregation over selfish voters (simple majority voting and stochastic voting are examined), while the latter involves the choice by a single disinterested individual (considered to maximise a social welfare function). The approach allows direct comparisons of the choice mechanisms. The structures examined include a transfer payment combined with a pure public good, and a transfer payment with tax-financed education. Explicit solutions are obtained for the choice of expenditure components, and these are shown to depend on the proportional difference between the arithmetic mean and another measure of location of incomes, where the latter depends on the choice mechanism. In each case the expenditure composition depends on an inequality measure defined in terms of the proportional difference between a measure of location of the income distribution and the arithmetic mean, where the location measure depends on the decision mechanism.
    Keywords: Government expenditure, Majority voting, Stochastic voting, Public goods, Social welfare,
    Date: 2012–09–24
  7. By: Patricia Funk
    Abstract: Opinion polls are widely used to capture public sentiments on a variety of issues. If citizens are unwilling to reveal certain policy preferences to others, opinion polls may fail to characterize population preferences accurately. The innovation of this paper is to use unique data to measure biases in opinion polls for a broad range of policies. I combine data on 184 referenda held in Switzerland between 1987 and 2007, with postballot surveys that ask for each proposal how the citizens voted. The difference between stated preferences in the survey and revealed preferences at the ballot box provides a direct measure of bias in opinion polls. I find that these biases vary by policy areas, with the largest ones occurring in policies on immigration, international integration, and votes involving liberal/conservative attitudes. Also, citizens show a tendency to respond in accordance to the majority.
    Keywords: Opinion polls, Biases, Preference Falsification, Direct Democracy
    JEL: D03 Z
    Date: 2012–09
  8. By: Shareen Hertel (University of Connecticut); Corinne Tagliarina (University of Connecticut)
    Abstract: This paper explores the complex relationship between social movements, courts, and political parties in the recognition and fulfillment of human rights. We analyze social mobilization around the right to food in India since 2001, on the recent emergence of political parties' attention to the issue of contemporary food security. Drawing on original datasets (i.e., of media coverage and PILs over multiple decades), original interviews conducted in India in 2012, and analysis of multiple Indian political party platforms, we argue that the attention contemporary political parties are giving to food security did not emerge in a vacuum but that the "Right to Food" social movement has influenced the evolution of contemporary Indian party politics. Translating that influence into concrete policy reform nationally, however, remains an incomplete process.
    Keywords: Right to food, India, rights-based development
    JEL: K0 O1
    Date: 2012–09
  9. By: Masakazu Maezuru
    Abstract: This paper analyses the political economy of environmental policies in the presence of an eco-industry pressure group. Previous studies have dealt with two types of lobbies: capitalists and environmentalists. We introduce a third pressure group representing the eco-industry sector. Under this type of economy, the incumbent government maximizes its chances of being re-elected. Its objective functions include social welfare as well as political contributions. The introduction of the eco-industry lobby introduces a new political contribution and modifies the incentives of the traditional lobbies. Furthermore, we underline the conditions under which environmentalists and eco-industries can become political allies. We also explain that, considering the overall profit of a vertical structure, an industrial lobby group can be favourable to a more stringent environmental policy. Next, we assume an open economy. In two countries, two polluting sectors are subject to an environmental policy. Therefore, an eco-industry sector which supplies pollution abatement goods and services arises. Abatement goods and services are assumed to be internationally traded, creating the only industrial interaction between both countries. The pollution, which can be transboundary or purely local, affects consumers in both countries; we analyse both cases. Our main findings can be summarized as follows. First, eco-industries lobby in favour of more stringent environmental policies, except if the impact of foreign competition more than compensates the turnover increase induced by a tighter environmental policy. Polluting firms always lobby against tighter environmental policies. However, an industrial pressure group, representing the industry as a whole and considering upstream and downstream profits, can sometimes be favourable to an increase in the environmental policy, as it leads to increased profits. We also show that an environmental pressure group can ask for a decrease in the environmental policy at home to decrease pollution abroad. This result does not rely on interactions between countries within the polluting sector. Interaction within the eco-industry sector is a sufficient condition for demonstrating that environmentalists can be favourable to a decrease in the local environmental policy. The impact of lobbying activities on the politically optimal environmental policy is ambiguous and depends on the relative concentration of each pressure group. Keywords: political economy, eco-industry, pollution abatement subsidies JEL classification: F12, H23, Q58
    Date: 2012–10
  10. By: Edward L. Glaeser; Giacomo Ponzetto
    Abstract: Credit card companies and hotels have charged "shrouded" fees that were difficult for most consumers to assess at the first point of purchase (Gabaix and Laibson 2006). States and localities commit to pension obligations that are similarly difficult for voters to assess. Novy- Marx and Rauh (2010) argue that states and localities have underestimated the shortfall in pension funding by trillions of dollars because of aggressive assumptions about returns on pension investments, and the continuing debate over their conclusions reinforces the point that pension promises are hard to evaluate (Mitchell and McCarthy 1999). How does the difficulty of evaluating the costs of future obligations impact the level of public wages and benefits, and what institutions lead to better outcomes for taxpayers and public-sector workers?
    Keywords: public pensions, state and local government, imperfect information, elections, public sector unions
    JEL: D72 D83 H75 H77
    Date: 2012–09
  11. By: László Á. Kóczy (Óbuda University); Péter Biró (MTA Közgazdasági és Regionális Tudományi Kutatóközpont); Balázs Sziklai (MTA Közgazdasági és Regionális Tudományi Kutatóközpont)
    Abstract: One of the aims of the new electoral law of Hungary has been to define a fairer apportionment into voting districts. This is ensured by a set of rules slightly more premissive than those laid out in the Code of Good Practice in Electoral Matters of the Venice Commission. These rules fix the average size of the voting districts, require voting districts not to split smaller towns and villages and not to cross county borders. We show that such an apportionment is mathematically impossible. We make suggestions both to the theoretical approach to resolve this problem, study the properties of our approach and using our efficient algorithm and the data of the 2010 national elections we determine the optimal apportionment. We also study the expected effect of demographic changes and formulate recommendations to adhere to the rules over the long term: increase the number of voting districts to about 130, allow the number of voting districts to change flexibly at each revision of the districts and base the districts on regions rather than counties.
    Keywords: social choice theory, apportionment, electoral law, Venice Commission, one man-one vote, Alabama paradox, population paradox, Hare quota JEL Codes: D72, D78, D62
    Date: 2012–10
  12. By: Alexander Elbittar (Centro de Investigación y Docencia Económica (CIDE)); Andrei Gomberg (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))
    Abstract: In this paper we introduce communication into intergroup ultimatum bargaining in a lab. The responder groups vote whether to accept the proposals with unanimity required either for acceptance or for rejection. In contrast with the no-communication results reported in our previous study (Elbittar, Gomberg and Sour 2011), the group decision rule does affect the individual voting behavior when subjects are allowed to exchange messages before voting. In fact, when acceptance is the default, subjects become substantially more likely to vote to reject an offer. As a result, the formal group decision-making rule turns out to have little impact on group decisions, which follow the behavior of the more confronational subjects, as predicted by the "group discontinuity hypothesis" of the psychological literature.
    Keywords: Bargaining games, group decision making, communication and experiments
    JEL: C92 D44 D82
    Date: 2012

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