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on Positive Political Economics |
| By: | Francesco De Sinopoli; Giovanna Iannantuoni; Elena Manzoni |
| Abstract: | In this paper we propose a model with uncertainty in which strategic voters vote, under poportional rule, for a Parliament and parties bargain to form a government. We prove that only consensus government form and only extreme parties take votes. |
| Keywords: | Proportional Election, Strategic Voting, Legislative Bargaining |
| JEL: | C72 D72 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:240&r=pol |
| By: | Bracco, Emanuele (University of Lancaster); Porcelli, Francesco (University of Warwick); Redoano, Michela (University of Warwick) |
| Abstract: | This paper argues that high political competition does not necessarily induce policy makers to perform better as previous research has shown. We develop a political economy model and we show that when political competition is tight, and elected politicians can rely on more tax instruments, they will substitute salient taxes with less salient ones, which are not necessarily preferable. These predictions are largely confirmed using a dataset on Italian municipal elections and taxes. |
| Keywords: | Political Competition, Government, Accountability, Tax Salience. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:125&r=pol |
| By: | Leopoldo Fergusson; Juan F. Vargas |
| Abstract: | This paper studies the effect of strengthening democracy, as captured by an increase in voting rights, on the incidence of violent civil conflict in nineteenth-century Colombia. Empirically studying the relationship between democracy and conflict is challenging, not only because of conceptual problems in defining and measuring democracy, but also because political institutions and violence are jointly determined. We take advantage of an experiment of history to examine the impact of one simple, measurable dimension of democracy (the size of the franchise) on conflict, while at the same time attempting to overcome the identification problem. In 1853, Colombia established universal male suffrage. Using a simple difference-indifferences specification at the municipal level, we find that municipalities where more voters were enfranchised relative to their population experienced fewer violent political battles while the reform was in effect. The results are robust to including a number of additional controls. Moreover, we investigate the potential mechanisms driving the results. In particular, we look at which components of the proportion of new voters in 1853 explain the results, and we examine if results are stronger in places with more political competition and state capacity. We interpret our findings as suggesting that violence in nineteenth-century Colombia was a technology for political elites to compete for the rents from power, and that democracy constituted an alternative way to compete which substituted violence. |
| Date: | 2013–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:010584&r=pol |
| By: | Tim Willems |
| Abstract: | In an environment where voters face an inference problem on the competence level of policy makers, this paper shows how subjecting these policy makers to reelection can reduce the degree of policy experimentation to the benefit of the status quo. This may be a reason why some notable policy experiments were implemented by non-accountable regimes (cf. Chile and China). Whether experimentation in representative democracies is suboptimally low, depends on society's degree of risk aversion relative to that of the decision maker. If the level of experimentation is suboptimal, taking decisions by direct democracy, or electing risk-loving politicians could improve welfare. Interestingly, risk-lovers also seem to be overrepresented among Presidents of various countries. |
| Keywords: | Policy experimentation, learning, political economy, reform, status quo bias, career concerns |
| JEL: | D72 D83 |
| Date: | 2013–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:647&r=pol |
| By: | Fernando, Estrada; Mihai, Mutascu; Aviral Kumar, Tiwari |
| Abstract: | The present study is, in particular, an attempt to test the relationship between tax level and political stability by using some economic control variables and to see the relationship among government effectiveness, corruption, and GDP. For the purpose, we used the Vector Autoregression (VAR) approach in the panel framework, using a country-level panel data from 59 countries for the period 2002 to 2008. The salient features of this model are: (a) simplicity is based on a limited number of variables(five) are categorical or continuous and not dependent on complex interactions or nonlinear effects. (b) accuracy: a low level of errors, the model achieves a high percentage of accuracy in distinguishing countries with inclination to political instability, compared to countries with political stability, (c) generality: the model allows to distinguish types of political instability, both resulting from acts of violence and failure of democracies to show, and (d) novelty: the model incorporates a tool that helps evaluate and exclude many variables used by the conventional literature. This approach is mainly based on the recognition of state structures and the relations between elites and parties. |
| Keywords: | Taxation, Political Stability, Connection, Effects, Panel VAR analysis |
| JEL: | H2 H21 H23 H26 H3 H4 H44 H7 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:45226&r=pol |
| By: | Biavaschi, Costanza (IZA) |
| Abstract: | Immigration authorities have seldom collected data on the out-migration of the foreign-born. As a consequence, several indirect approaches have been proposed to measure and study out-migration. This paper adds to the literature by using official statistics that directly identify the out-migration by demographic and socio-economic characteristics. Using time series and panel methods on the composition of U.S. out-migration between 1908 and 1957, the paper asks two questions. First, how did the out-migrants compare with in-migrants and permanent settlers? Second, did the economic and political events of the 1900s have any impact on the composition of this outflow? Results show that the out-migrants were primarily unskilled workers, but selection has become more positive over time. The economic and political shocks of the first half of the 20th century impacted the composition of the outflow, however, the more restrictive immigration policies have been associated primarily with longer stays. These findings complements the results based on indirect measures of out-migration, and are interestingly in line with analyses of out-migrant selectivity and impact of border controls on out-migrant behavior in later periods. |
| Keywords: | return migration, out-migration, self-selection, quotas |
| JEL: | F22 J61 N12 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7258&r=pol |
| By: | Roland Hodler |
| Abstract: | The Arab Spring has led to very different outcomes across the Arab world. I present a highly stylized model of the Arab Spring to better understand these differences. In this model, dictators from the ethnic or religious majority group concede power if their country is oil-poor, but can stay in power by bribing the people if their country is oil-rich. Dictators from the minority group often rely on other members of their group to repress protests and to fight the majority group if necessary. These predictions are consistent with observed outcomes in Egypt, Libya, Saudi Arabia, Syria, Tunisia, and elsewhere. |
| Keywords: | Arab Spring, political transitions, repression, civil conflict, oil, divided societies |
| JEL: | D72 D74 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:101&r=pol |