nep-pol New Economics Papers
on Positive Political Economics
Issue of 2013‒04‒27
fifteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Does Political Reservation Affect Voting Behavior? Empirical Evidence from India By Mori, Yuko; Kurosaki, Takashi
  2. Seat competitiveness and redistricting: Evidence from voting on municipal mergers By Janne Tukiainen; Tuukka Saarimaa
  3. Adding Ideology to the Equation: New Predictions for Election Results under Compulsory Voting By Fernanda L L de Leon
  4. Tactical Voting and Voter’s Sophistication in British Elections By St´ephane Dupraz; Daniel Muller; Lionel Page
  5. How Do Voters Respond to Information? Evidence from a Randomized Campaign By Kendall, Chad; Nannicini, Tommaso; Trebbi, Francesco
  6. Benchmarking Politicians By Antonio Estache; Renaud Foucart
  7. The Persistence of de Facto Power: Elites and Economic Development in the US South, 1840-1960 By Philipp Ager
  8. A Political Theory of Populism By Daron Acemoglu; Georgy Egorov; Konstantin Sonin
  9. Shrouded Costs of Government: The Political Economy of State and Local Public Pensions By Edward L. Glaeser; Giacomo A. M. Ponzetto
  10. Majority Vote on Educational Standards By Robert Schwager
  11. On two-valued nonsovereign strategy-proof voting rules By Stefano Vannucci
  12. Political Selection and the Relative Age Effect By Daniel Muller; Lionel Page
  13. Economy-wide impacts of REDD when there is political influence By Timothy Laing; Charles Palmer
  14. Institutional Quality and Debt Relief: A Political Economy Approach By William Akoto
  15. The role of bribes in rural governance: The case of India By Raghbendra Jha; Hari Nagarajan; Kailash C.Pradhan

  1. By: Mori, Yuko; Kurosaki, Takashi
    Abstract: This paper empirically examines the impact of political reservation for disadvantaged groups on voting behavior. Using microdata from the National Election Study of the 2004 parliamentary elections in India, we find that in a reserved constituency, where only members of the disadvantaged castes can stand for election, voters of the disadvantaged castes are encouraged to vote. On the other hand, the system of constituency reservation does not have any impact on the turnout of voters belonging to other groups, including relatively upper caste voters. This finding suggests that political reservation does not crowd out the electoral participation of other groups. These voters, however, tend to vote for the right-wing political party in reserved constituencies. This implies a possibility that the political reservation might provoke a social cleavage along castes in Indian politics.
    Keywords: political reservation, affirmative action, voter turnout, political economy
    JEL: J15 J38 D72
    Date: 2013–01
  2. By: Janne Tukiainen; Tuukka Saarimaa
    Abstract: We analyze how (anticipated) changes in the competitiveness of the seats of municipal councilors affect their voting behavior over municipal mergers. The competitiveness of the seats changes because the merger changes the composition of political competitors and the number of available seats in the next election. We use this variation for identification and find that the smaller the increase in the competitiveness of a councilor's seat, the more likely he is to vote for the merger. These effects are not related to the behavioral responses of the voters, but arise from the councilors? desire to avoid electoral competition.
    Keywords: Seat competitiveness, local politics, municipal mergers
    JEL: D72 C36 C35 C34 H77 H11
    Date: 2013–03–24
  3. By: Fernanda L L de Leon (University of East Anglia)
    Abstract: This paper provides new predictions for compulsory elections, taking into consideration the differences in ideological views between compulsory and voluntary voters. Having explored Brazil's dual voting system, I predict changes in Americans' preferences and estimate a voting model applied to US senatorial elections. I find that, if the current voting population had ideological preferences of a compulsory electorate, Democrats would gain 8.7 percentage points in their vote shares and win 68% of the elections. Moreover, candidates that are voted for less would be the ones that gain more votes under compulsory elections, while this system would be most detrimental for highly voted-for candidates. Another consequence includes the candidates' reaction while converging in the ideological spectrum.
    Date: 2013–04
  4. By: St´ephane Dupraz; Daniel Muller; Lionel Page
    Abstract: Although tactical voting attracts a great deal of attention, it is very hard to measure as it requires knowledge of both individuals’ voting choices as well as their unobserved preferences. In this paper, we present a simple empirical strategy to nonparametrically identify tactical voting patterns directly from balloting results. This approach allows us to study the magnitude and direction of strategic voting as well as to verify which information voters and parties take into account to determine marginal constituencies. We show that tactical voting played a significant role in the 2010 election, mainly for Liberal-Democratic voters supporting Labour. Moreover, our results suggest that voters seem to form their expectations based on a national swing in vote shares rather than newspaper guides published in the main media outlets or previous election outcomes. We also present some evidence that suggests that campaign spending is not driving tactical voting.
    Date: 2013–04–18
  5. By: Kendall, Chad (University of British Columbia, Vancouver); Nannicini, Tommaso (Bocconi University); Trebbi, Francesco (University of British Columbia, Vancouver)
    Abstract: Rational voters update their subjective beliefs about candidates' attributes with the arrival of information, and subsequently base their votes on these beliefs. Information accrual is, however, endogenous to voters' types and difficult to identify in observational studies. In a large scale randomized trial conducted during an actual mayoral campaign in Italy, we expose different areas of the polity to controlled informational treatments about the valence and ideology of the incumbent through verifiable informative messages sent by the incumbent reelection campaign. Our treatments affect both actual vote shares at the precinct level and vote declarations at the individual level. We explicitly investigate the process of belief updating by comparing the elicited priors and posteriors of voters, finding heterogeneous responses to information. Based on the elicited beliefs, we are able to structurally assess the relative weights voters place upon a candidate's valence and ideology. We find that both valence and ideological messages affect the first and second moments of the belief distribution, but only campaigning on valence brings more votes to the incumbent. With respect to ideology, cross-learning occurs, as voters who receive information about the incumbent also update their beliefs about the opponent. Finally, we illustrate how to perform counterfactual campaigns based upon the structural model.
    Keywords: voting, information, beliefs elicitation, randomized controlled trial
    JEL: D72 D83
    Date: 2013–04
  6. By: Antonio Estache; Renaud Foucart
    Abstract: We study a political system in which voters can optimally pick between political platforms,but cannot screen the quality of individual politicians associated with these platforms.A bad individual achievement can correspond to either incompetence (adverse selection) orcorruption (moral hazard). Information could improve, if independent experts assess achievementsas compared to commitments, allowing independent judges to investigate possible corruption.We find that while good experts are always beneficial as they increase transparency,the impact of the quality of judges is ambiguous. Above a threshold, with risk-averse socialplanners, good judges increase the incentive-compatible punishment of politicians, at the costof possible judiciary mistakes.
    Date: 2013–04
  7. By: Philipp Ager (Universitat Pompeu Fabra)
    Abstract: Wealthy elites may end up retarding economic development for their own interests. This paper examines how the historical planter elite of the Southern US affected economic development at the county level between 1840 and 1960. To capture the planter elite’s potential to exercise de facto power, I construct a new dataset on the personal wealth of the richest Southern planters before the American Civil War. I find that counties with a relatively wealthier planter elite before the Civil War performed significantly worse in the post-war decades and even after World War II. I argue that this is the likely consequence of the planter elite’s lack of support for mass schooling. My results suggest that when during Reconstruction the US government abolished slavery and enfranchised the freedmen, the planter elite used their de facto power to maintain their influence over the political system and preserve a plantation economy based on low-skilled labor. In fact, I find that the planter elite was better able to sustain land prices and the production of plantation crops during Reconstruction in counties where they had more de facto power.
    Keywords: Long-Run Economic Development, Wealth Inequality, Elites and Development, de Facto and de Jure Power, US South
    Date: 2013–04
  8. By: Daron Acemoglu; Georgy Egorov; Konstantin Sonin
    Date: 2013–04–11
  9. By: Edward L. Glaeser; Giacomo A. M. Ponzetto
    Abstract: Why are public-sector workers so heavily compensated with pensions and other non-pecuniary benefits? In this paper, we present a political economy model of shrouded compensation in which politicians compete for taxpayers' and public employees' votes by promising compensation packages, but some voters cannot evaluate every aspect of compensation. If pension packages are "shrouded," meaning that public-sector workers better understand their value than ordinary taxpayers, then compensation will be inefficiently back-loaded. In equilibrium, the welfare of public-sector workers could be improved, holding total public sector costs constant, if they received higher wages and lower pensions. Central control over dispersed municipal pensions has two offsetting effects on pension generosity: more state-level media attention helps taxpayers better understand pension costs, which reduces pension generosity; but a larger share of public sector workers will live within the jurisdiction, which increases pension generosity. We discuss pension arrangements in two decentralized states (California and Pennsylvania) and two centralized states (Massachusetts and Ohio) and find that in these cases, centralization appears to have modestly reduced pension arrangements; but, as the model suggests, this finding is unlikely to be universal.
    JEL: H55 H75
    Date: 2013–04
  10. By: Robert Schwager (Georg-August University, Göttingen, Germany)
    Abstract: The direct democratic choice of an examination standard, i.e., a performance level required to graduate, is evaluated against a utilitarian welfare function. It is shown that the median preferred standard is inefficiently low if the marginal cost of reaching a higher performance reacts more sensitively to ability for high than for low abilities, and if the right tail of the ability distribution is longer than the left tail. Moreover, a high number of agents who choose not to graduate may imply that the median preferred standard is inefficiently low even if these conditions fail.
    Keywords: examination, school, drop-outs, democracy, median voter.
    JEL: I21 D72 I28
    Date: 2013–03
  11. By: Stefano Vannucci
    Abstract: It is shown that a two-valued and nonsovereign voting rule is strategy-proof on any preference domain that includes all pro?les of total preorders with a unique maximum if and only if votes for noneligible feasible alternatives are only available to dummy voters. It follows that dummy-free two-valued nonsovereign strategy-proof voting rules with a suitably restricted ballot domain do exist and essentially correspond to dummy-free sovereign strategy-proof voting rules for binary outcome spaces or, equivalently, to ordered transversal pairs of order ?lters of the coalition poset, and are also coalitionally strategy-proof. Moreover, it turns out that two-valued nonsovereign strategy-proof voting rules with full ballot domain do not exist.
    JEL: D71
    Date: 2013–04
  12. By: Daniel Muller; Lionel Page
    Abstract: We present substantial evidence for the existence of a bias in the distribution of births of leading US politicians in favor of those who were the eldest in their cohort at school. The result is robust to both parametric and nonparametric tests and is not driven by measurement error, redshirting or a sorting effect of highly educated parents. The magnitude of the effect we estimate is larger than what other studies on ‘relative age effects’ find for broader (adult) populations, but is in general consistent with research that looks at high-competition environments. The findings are in line with a multiplier effect of early human capital acquisition (Cunha and Heckman, 2007) whereby early skill accumulation lowers the cost of further investments.
    Keywords: relative age effect, political selection, regression discontinuity design, school entry cut–off dates, leadership
    Date: 2013–04–18
  13. By: Timothy Laing; Charles Palmer
    Abstract: National-level strategies for Reducing Emissions from Deforestation and Degradation (REDD), financed by international transfers, have begun to emerge. A three-sector model is developed to explore the economy-wide effects of two policies, incentive payments and taxes, implemented by a government participating in REDD. Two sectors utilise forest as an input to production, one in which forest is substitutable for labour and one in which forest and labour are complements. The government factors in two opposing types of general equilibrium effect when determining the efficient payment level: one that changes the relative price of forest and one that results from the income transfer related to the payment. Unlike taxes, payments result in unequal income transfers and a shift in relative prices. With political influence, the forestusing sectors may lobby for lower payments in order to create a larger international
    Date: 2013–04
  14. By: William Akoto
    Abstract: Recent shifts in the global debt relief architecture has meant that countries with superior institutions are often rewarded with increasinf aid and debt relied, an incentive for debtor countries to strategically improve their institutions prior to seeking debt relief. This paper contributes to the literature by developing and empirically testing a political economy model of the possible impact of this shift on the motivations of politicians and bureaucrats in debtor countries. The findings suggest that debtor countries have quickloy adapted to the shift by strategically improving in key areas of institutional governance prior to applying for dect relief.
    Keywords: Debt relief, Aid, Institutional Quality, HIPC, Development
    JEL: F33 F34 F35 F55 H6
    Date: 2013
  15. By: Raghbendra Jha; Hari Nagarajan; Kailash C.Pradhan
    Abstract: Given that the phenomenon of capture of public programs by sections the population is rampant in developing countries, households can indulge in a strategy to improve their participating in public programs by bribing the suppliers of such programs. This is an important issue affecting both the supply of local public goods and the incidence of corruption. To the best of our knowledge there is no analysis of the impact of bribery on participating in a local public goods program, anywhere. Using a unique data set for rural India this paper addresses the question of whether households bribe elected officials responsible for assuring such supply to improve their access to local public goods. We find considerable evidence of such bribing. We also model the welfare effects of such bribing on groups of households as well as the impact of bribery on aggregate welfare. Several policy conclusions are advanced.
    Keywords: Bribery, Program Capture, Welfare Effects, Rural India.
    JEL: D31 D63 D73 O12
    Date: 2013

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