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on Positive Political Economics |
| By: | Gianmarco León |
| Abstract: | I combine a field experiment with a change in voting laws reducing the fine for abstention to assess the effect of monetary incentives to encourage voter participation. I estimate that the elasticity of voting with respect to the cost is -0.21. As predicted by the model, the reduction in turnout is driven by centrist voters, those who hold less political information, and are less interested in politics. The increase in abstention does not change preferences for specific policies, on average, or lower information acquisition. Finally, the incidence of vote buying is unaffected, but the price of a vote increases. |
| Keywords: | voting behavior, incentives to vote, public choice, Peru |
| JEL: | D71 D72 O53 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:691&r=pol |
| By: | Soeren Enkelmann (Department of Economics, Leuphana University Lueneburg, Germany); Markus Leibrecht (Austrian Institute of Economic Research) |
| Abstract: | Through disaggregating public expenditures by economic functions this paper offers a new perspective on the existence and effectiveness of electorally motivated expenditure policy. The aim of the paper is to provide more detailed information on the specific expenditure categories by which politicians try to affect election results. Based on COFOG data for 32 OECD and Eastern European countries over the years 1990-2010, it is shown that political expenditure cycles in total expenditures as well as in specific expenditure categories mainly exist in newly democratized Eastern European countries. However, the paper also provides evidence that these electorally motivated spending policies are ineffective means to enhance the reelection probability. |
| Keywords: | political expenditure cycle, political economy, re-election probability, COFOG |
| JEL: | H11 H30 H50 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:275&r=pol |
| By: | Tetsuo Ono (Graduate School of Economics, Osaka University) |
| Abstract: | This paper develops an overlapping-generations model with uncertain lifetimes and altruism towards children. The paper characterizes a Markov perfect political equilibrium of voting over two conflicting policy issues, public education for the young and social security for the elderly. The model derives multiple indeterminate political equilibria and demonstrates that the difference between the two equilibria in terms of policies and lifetime utility depends on longevity. In particular, the model prediction with respect to the differences in policies and longevity is consistent with the empirical evidence in developed countries. |
| Keywords: | Public education; Social security; Intergenerational conflict |
| JEL: | H52 H55 I22 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1306&r=pol |
| By: | Baptiste Françon (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Michaël Zemmour (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne) |
| Abstract: | Degressivity of unemployment benefits is a major feature of social protection in most industrialised countries: the replacement rate (the ratio between the level of welfare benefits and the previous income) typically declines with the length of the unemployment spell. Moreover degressivity of unemployment benefits has significant distributive effects as the risk of long-term unemployment varies from one individual to another. This paper proposes a formal model of political support for unemployment insurance that takes into account the decrease in the level of benefits over time. A discount factor is introduced that diminishes the level of benefits for long-term unemployed. The main predictions of our model are the following: i) Unemployment insurance size negatively depends on both the average level and the heterogeneity of unemployment risk ii) The degressivity increases with the average level and the heterogeneity in the individual level of employability defined as the probability of finding a job when unemployed. These predictions are then tested using a dataset of 24 OECD countries. Empirical results are consistent with the model. |
| Keywords: | Long-term unemployment; political economy; replacement rate; risk heterogeneity; unemployment insurance; voting behaviour |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00821083&r=pol |
| By: | Baris Yoruk |
| Abstract: | Policymakers in the Unites States and many other countries encourage charitable giving through various subsidies. In the United States, for instance, charitable contributions can be deducted from taxable income making the price of giving inversely related to the marginal tax rate. However, the net effects of such subsidies can be better understood by exploring the relationship between generosity and other types of prosocial behavior. This paper investigates the spillover effects of charitable subsidies on voting behavior using four surveys of charitable giving in the United States conducted from 1992 to 2001. Understanding the relationship between these two prosocial behaviors may be quite important given the ongoing debates about designing alternative policies to increase voter turnout rates. The results show that charitable giving and voting are complements. Increasing the price of giving not only decreases the probability of giving and contribution amount but also the probability of voting in presidential elections with an implied elasticity of the propensity of vote with respect to the tax price of giving as much as -0.4. This effect is robust under different specifications and with different sets of instrumental variables. These results highlight the positive externalities created by charitable subsidies and have important implications for economic models of voting and charitable giving. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:nya:albaec:13-10&r=pol |
| By: | Baris Yoruk |
| Abstract: | In the United States, charitable contributions can be deducted from taxable income making the price of giving inversely related to the marginal tax rate. However, several other types of contributions such as donations to political organizations are not tax deductible. This paper investigates the spillover effects of charitable subsidies on political giving using five independent surveys of charitable and political giving in the United States conducted from 1990 to 2001. The results show that charitable and political giving are complements. Compared with non-donors, charitable donors are more likely to donate and give more to political organizations. Increasing the price of charitable giving decreases not only charitable giving but also the probability of giving and the amount of donations to political organizations. The implied elasticity of the amount of political contributions with respect to the tax price of charitable giving is as much as -0.88. This effect is robust under different specifications and with different sets of instrumental variables. These results highlight the positive externalities created by charitable subsidies and have important implications for economic models of political and charitable giving. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:nya:albaec:13-09&r=pol |
| By: | Soeren Enkelmann (Department of Economics, Leuphana University Lueneburg, Germany) |
| Abstract: | This is one of the first studies to estimate a popularity function at the micro-level. Using German micro-level data (GGSS/ALLBUS) for the years 1991, 1992, 1998, and 2008, we show that a positive assessment of the economy significantly improves government popularity while negative evaluations decrease satisfaction with the government. Voters take the (current and expected) national and personal economic situation into account. We find no evidence for a grievance asymmetry, i.e. voters punish the government for a bad economy but also reward them in good times. Finally, we show that popularity functions are only very crude proxies for vote functions, with the latter being mostly driven by party identification. |
| Keywords: | vote function, popularity function, micro data, Germany |
| JEL: | D72 H11 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:274&r=pol |
| By: | Soeren Enkelmann (Department of Economics, Leuphana University Lueneburg, Germany); Michael Berlemann (Helmut-Schmidt-University Hamburg, Germany) |
| Abstract: | Even after four decades of research it remains unclear, whether presidential popularity depends on the state of the economy. While about half of all studies for the United States find a significant effect of unemployment and inflation on presidential popularity, the others do not. Additional economic issues have rarely been studied. In this survey article we study the likely causes for the inconclusive findings. While various factors have an influence on the results, especially the choice of the sample period is of crucial importance. While in the very long run we find unemployment, inflation and the budget deficit to have a robust effect on presidential approval, this holds not true for shorter sub-periods. This result might indicate that the popularity function is instable over time. However, the findings might also be taken as an indication that the most often employed linear estimation approach is inadequate. Further research on these issues is necessary. |
| Keywords: | presidential popularity, approval, unemployment, inflation |
| JEL: | D72 H11 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:272&r=pol |