nep-pol New Economics Papers
on Positive Political Economics
Issue of 2013‒06‒16
nineteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Vote Self-Prediction Hardly Predicts Who Will Vote, and Is (Misleadingly) Unbiased By Rogers, Todd; Aida, Masa
  2. Democracy, Dictatorship and the Cultural Transmission of Political Values By Davide Ticchi; Thierry Verdier; Andrea Vindigni
  3. Redistribution and the political support of free entry policy in the Schumpeterian model with heterogenous agents By Dmitry A. Veselov
  4. Pandering, Faith and Electoral Competition. By Gabriele Gratton
  5. Politics 2.0: The Multifaceted Effect of Broadband Internet on Political Participation By Campante, Filipe; Durante, Ruben; Sobbrio, Francesco
  6. The Sound of Silence: Anti-Defamation Law and Political Corruption By Gabriele Gratton
  7. Social Crisis Prevention: A Political Alert Index for the Israel-Palestine Conflict By André De Palma,; Federico Perali; Nathalie Picard; Roberto Ricciuti; Alexandrina Scorbureanu
  8. A re-characterization of the Kemeny distance By Storcken A.J.A.; Can B.
  9. Scoring Rules: A Game-Theoretical Analysis. By Francesco De Sinopoli; Giovanna Iannantuoni; Carlos Pimienta
  10. Arabs Want Redistribution, So Why Don't They Vote Left? Theory and Evidence from Egypt By Masoud, Tarek
  11. Political determinants of fossil fuel pricing By van Beers, Cees; Strand, Jon
  12. Aid and Democracy Redux By Erasmus Kersting; Kilby, Christopher
  13. Can Inaccurate Beliefs about Incumbents be Changed? And Can Reframing Change Votes? By Rogers, Todd; Nickerson, David W.
  14. What is European Integration Really About? A Political Guide for Economists By Enrico Spolaore
  15. A Folk Theorem for Repeated Elections with Adverse Selection By John Duggan
  16. How significant is yardstick competition among governments? Three reasons to dig deeper By Pierre Salmon
  17. A new look at the effect of the determinants of government institutions: A cross-sectional analysis By Kalonda-Kanyama, Isaac
  18. Rational Partisan Theory with fiscal policy and an independent central bank By Ferré Carracedo, Montserrat; Manzano, Carolina
  19. Inequality and Growth: The Role of Beliefs and Culture By Strieborny, Martin

  1. By: Rogers, Todd (Harvard University and Analyst Institute, Washington, DC); Aida, Masa (Greenberg Quinlan Rosner Research)
    Abstract: Public opinion researchers, campaigns, and political scientists often rely on self-predicted vote to measure political engagement, allocate resources, and forecast turnout. Despite its importance, little research has examined the accuracy of self-predicted vote responses. Seven pre-election surveys with post-election vote validation from three elections (N = 29,403) reveal several patterns. First, many self-predicted voters do not actually vote (flake-out). Second, many self-predicted nonvoters do actually vote (flake-in). This is the first robust measurement of flake-in. Third, actual voting is more accurately predicted by past voting (from voter file or recalled) than by self-predicted voting. Finally, self-predicted voters differ from actual voters demographically. Actual voters are more likely to be white (and not black), older, and partisan than actual nonvoters (i.e., participatory bias), but self-predicted voters and self-predicted nonvoters do not differ much. Vote self-prediction is "biased" in that it misleadingly suggests that there is no participatory bias.
    Date: 2013–04
  2. By: Davide Ticchi; Thierry Verdier; Andrea Vindigni
    Abstract: We develop a theory of endogenous regimes transitions (with a focus on democratic consolidation), which emphasizes the role of political culture and of its interaction with political institutions. Political culture re?flects the extent of individual commitment across citizens to defend democracy against a potential military coup, and it is an endogenous state variable of the model along with formal political institutions. We focus on two agencies of political socialization: the family and the state. Parents invest resources in order to transmit their own political values (commitment to democracy) to their children. The state invests resources in public indoctrination infrastructures. The model displays two-way complementarities between political regimes and political culture diffusion. Consolidated democracy emerges when sufficiently many people are committed to democracy. Otherwise the model features persistent ?uctuations in and out of democracy as well as cycles of political culture. Importantly, the politico-economic equilibrium may exhibit a persistent (although declining) incongruence between political institutions and political culture, which tends to evolve more slowly than formal institutions.
    Keywords: political culture, socialization, democracy, military, nondemocracy, politi- cal economy, political transitions, institutional consolidation, path dependency.
    JEL: P16 H11 H26 H41
    Date: 2013
  3. By: Dmitry A. Veselov (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, National Research University Higher School of Economics - Laboratory of Macroeconomic Analysis)
    Abstract: We consider the problem of finding sufficient conditions for political support of liberal, growth-enhancing policy in a quality-ladders model with heterogeneous agents differing in their endowment of wealth and skills. The policy set is two-dimensional: Agents vote for the level of redistribution as well as for the level of entry barriers preventing the creation of more efficient firms. We show that under the majority voting rule there are three possible stable political outcomes: full redistribution and low barriers to entry ("liberal" order), high redistribution and high barriers to entry ("corporatism"). We show that key variables determining the political outcome are the expected gain from technological adoption, the ratio of total profits to total wages, and the skewness of human capital distribution.
    Keywords: Barriers to entry; majority voting; quality-ladders model; wealth inequality; talent inequality; economic growth
    Date: 2013–05
  4. By: Gabriele Gratton (School of Economics, The University of New South Wales)
    Abstract: We study an election with two perfectly informed candidates. Voters share common values over the policy outcome of the election, but possess arbitrarily little information about which policy is best for them. Voters elect one of the candidates, effectively choosing between the two policies proposed by the candidates. We explore under which conditions candidates always propose the ex-post optimal policy for the voters. The model is extended to include strategic voting, policy-motivated candidates, imperfectly informed candidates, and heterogeneous preferences.
    Keywords: pandering; elections; information aggregation
    JEL: D72 D82
    Date: 2013–01
  5. By: Campante, Filipe (Harvard University); Durante, Ruben (Sciences Po); Sobbrio, Francesco (European University Institute, Florence)
    Abstract: We investigate the impact of the diffusion of high-speed Internet on different forms of political participation, using data from Italy. We exploit differences in the availability of ADSL broadband technology across municipalities, using the exogenous variation induced by the fact that the cost of providing ADSL-based Internet services in a given municipality depends on its relative position in the pre-existing voice telecommunications infrastructure. We first show that broadband Internet had a substantial negative effect on turnout in parliamentary elections between 1996 and 2008. However, we also find that it was positively associated with other forms of political participation, both online and offline: the emergence of local online grassroots protest movements, and turnout in national referenda (largely opposed by mainstream parties). We then show that the negative effect of Internet on turnout in parliamentary elections is essentially reversed after 2008, when the local grassroots movements coalesce into the Five-Star Movement (M5S) electoral list. Our findings are consistent with the view that: 1) the effect of Internet availability on political participation changes across different forms of engagement; 2) it also changes over time, as new political actors emerge who can take advantage of the new technology to tap into the existence of a disenchanted or demobilized contingent of voters; and 3) these new forms of mobilization eventually feed back into the mainstream electoral process, converting "exit" back into "voice".
    JEL: D72 L82 L86
    Date: 2013–05
  6. By: Gabriele Gratton (School of Economics, The University of New South Wales)
    Abstract: Voters use the press to keep politicians accountable. By endogenizing the response of the voters, this paper provides a theoretical foundation to disentangle the effects of media regulation on corruption and clarify under which circumstances regulation reduces or increases corruption. The analysis shows that libel laws can reduce political corruption only if the moral hazard problem dominates adverse selection and the punishment for the defamer is large enough to deter the publication of well-founded scandals. In this case, libel laws act as a substitute for an optimal re-election rule to which voters commit ex ante.
    Keywords: media and democracy; corruption; defamation; chilling effect.
    JEL: D7 K4
    Date: 2013–04
  7. By: André De Palma,; Federico Perali; Nathalie Picard; Roberto Ricciuti; Alexandrina Scorbureanu (Ecole Normale Supérieure de Cachan; University of Verona and CHILD; Universite de Cergy-Pontoise; University of Verona and CESifo; University of Verona)
    Abstract: This study presents a novel approach to crisis prevention based on data on premonitory political and religious events and the international media coverage of publicly sensitive circumstances. We implement our method to the Israel-Palestine conflict. First we identify two main political scenarios associated with "good" and "bad" political times of low or high levels of political unrest using a hierarchical clustering technique. Then we construct a political alert index to predict the probability of occurrence of good and bad times. Bad times are positively and significantly associated with the number of Israeli victims at the checkpoints, the number of homeless or injured Palestinians and with the number of demolitions. The number of Palestinian prisoners and injured Israelis negatively affect the probability of occurrence of a bad time. Media coverage is positively and significantly associated with the transition to bad times. Our results show that our statistical tool can be a reliable method for early warning of social crisis and can be effectively replicated to other social crisis situations.
    Keywords: crisis prevention, alert index, news, Israel, Palestine
    JEL: D74 F51 P48
    Date: 2013
  8. By: Storcken A.J.A.; Can B. (GSBE)
    Abstract: The well-known swap distance (Kemeny (1959); Kendall (1938); Hamming (1950)) is analyzed. On weak preferences, this function was characterized by Kemeny (1959) with five conditions; metric, betweenness, neutrality, reducibility, and normalization. We show that the same result can be achieved without the reducibility condition, therefore, the original five conditions are not logically independent. We provide a new and logically independent characterization of the Kemeny distance and provide some insight to further analyze distance functions on preferences.
    Keywords: Equity, Justice, Inequality, and Other Normative Criteria and Measurement; Social Choice; Clubs; Committees; Associations; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior;
    JEL: D63 D71 D72
    Date: 2013
  9. By: Francesco De Sinopoli (University of Verona); Giovanna Iannantuoni (University of Milano-Bicocca); Carlos Pimienta (University of New South Wales)
    Abstract: We prove two results on the generic determinacy of Nash equilibrium in voting games. The first one is for negative plurality games. The second one is for approval games under the condition that the number of candidates is equal to three. These results are combined with the analogous one obtained in De Sinopoli (2001) for plurality rule to show that, for generic utilities, three of the most well-known scoring rules, plurality, negative plurality and approval, induce finite sets of equilibrium outcomes in their corresponding derived games—at least when the number of candidates is equal to three. This is a necessary requirement for the development of a systematic comparison amongst these three voting rules and a useful aid to compute the stable sets of equilibria (Mertens, 1989) of the induced voting games. To conclude, we provide some examples of voting environments with three candidates where we carry out this this comparison.
    Keywords: Approval voting, Plurality voting, Negative plurality, Sophisticated voting, Mertens Stability
    JEL: C72 D72
    Date: 2012–09
  10. By: Masoud, Tarek (Harvard University)
    Abstract: Though Egyptian voters clearly evince a desire for Islamic law (however defined), public opinion research shows that they also want robust welfare states and significant redistribution. Though the application of Islamic law is the special province of Islamist parties, it is left-leaning, labor-based parties who are the primary champions of the economic policies that Egyptians seem to desire. Why, then, do Egyptian voters select the former over the latter? This article argues that the answer lies not in the political unsophistication of voters, the subordination of economic interests to spiritual ones, or the bureaucratic and organizational shortcomings of leftist parties, but in the ways in which the social landscape shapes the opportunities of parties in newly democratized systems to reach potential voters. Dense networks of religious solidary organizations, in which Islamist activists are often embedded, and which encompass large numbers of voters, provide Islamist parties with opportunities for linkage that are unavailable to leftists, who are embedded in much more limited networks of labor activism. As a result, despite the fact that Islamist attitudes toward redistribution and the state's role in providing welfare are more ambiguous than those of leftists, Islamist candidates have far greater opportunities to convince voters that they in fact share their economic views. The theory is tested with a combination of aggregate and individual evidence from Egypt after the Arab Spring.
    Date: 2013–04
  11. By: van Beers, Cees; Strand, Jon
    Abstract: This paper provides an empirical analysis of economic and political determinants of gasoline and diesel prices for about 200 countries over the period 1991-2010. A range of both political and economic variables are found to systematically influence fuel prices, and in ways that differ systematically with countries’ per-capita income levels. For democracies, the analysis finds that fuel prices correlate positively with both duration of democracy and tenure of democratic leaders. In non-democratic societies there is more often no such relationship or it is the opposite of that for democracies. Regime switches -- transitions from non-democratic to democratic government, or vice versa -- reduce fuel prices. Fuel prices are also lower for more corrupt, or more centralized, governments. Higher levels of gross domestic product per capita lead to higher fuel prices, while export income from selling fossil fuels reduces these prices dramatically. Higher motor fuel consumption also appears to reduce fuel prices, most for gasoline. Absolute"pass-through"of crude oil price changes to fuel prices is found to be high on average.
    Keywords: Energy Production and Transportation,Transport Economics Policy&Planning,Economic Theory&Research,Emerging Markets,Transport and Environment
    Date: 2013–05–01
  12. By: Erasmus Kersting (Department of Economics and Statistics, Villanova School of Business, Villanova University); Kilby, Christopher (Department of Economics and Statistics, Villanova School of Business, Villanova University)
    Abstract: This paper uses Freedom House ratings to assess the impact of foreign aid on democracy. We employ an interval regression to account for Freedom House's method of rating countries. A cross-sectional analysis examining the long run effect of aid on democracy in 122 countries between 1972 and 2011 finds a significant positive relationship that survives various tests for endogeneity. A short run annual panel analysis of 156 countries between 1985 and 2011 explores whether aid operates through leverage and conditionality. We present evidence that i) donors allocate aid in response to democratization and ii) recipient countries respond to this incentive for democratic reform. Our identification strategy relies on the reduced importance of democratization in the allocation of aid to geopolitically important countries.
    Keywords: Democracy; Freedom House; Foreign Aid; Political Reform
    JEL: F35
    Date: 2013–06
  13. By: Rogers, Todd (Harvard University); Nickerson, David W. (University of Notre Dame)
    Abstract: Can independent groups change voters' beliefs about an incumbent's positions? And, does reframing how candidates' are perceived by changing beliefs about their positions influence actual vote choices? Past laboratory and observational research suggests that candidate reframing is difficult and of little consequence because the messages must be believed despite competing messages, counter-framing and misinformation. We report the results of a field experiment conducted during a highly competitive 2008 US Senate election showing that independent organizations can meaningfully reframe candidates, and that reframing can affect vote choice. Two pro-choice organizations administered an inexpensive mail and phone intervention correcting a prevalent false belief that the incumbent was pro-choice. This modest reframing intervention enduringly corrected the beliefs of one-third of misinformed participants, and induced a sizable proportion to align their vote choices with their policy priorities.
    Date: 2013–05
  14. By: Enrico Spolaore
    Abstract: Europe’s monetary union is part of a broader process of integration that started in the aftermath of World War II. In this “political guide for economists” we look at the creation of the euro within the bigger picture of European integration. How and why were European institutions established? What are the goals and determinants of European Integration? What is European integration really about? We address these questions from a political-economy perspective, building on ideas and results from the economic literature on the formation of states and political unions. Specifically, we look at the motivations, assumptions, and limitations of the European strategy, initiated by Jean Monnet and his collaborators, of partially integrating policy functions in a few areas, with the expectation that more integration will follow in other areas, in a sort of chain reaction towards an “ever-closer union.” The euro with its current problems is a child of that strategy and its limits.
    JEL: F15 F50 F55 H40 H77 N44
    Date: 2013–06
  15. By: John Duggan (W. Allen Wallis Institute of Political Economy, 107 Harkness Hall, University of Rochester, Rochester, NY 14627-0158)
    Abstract: I establish a folk theorem for a model of repeated elections with adverse selection: when citizens are sufficiently patient, arbitrary policy paths through arbitrarily large regions of the policy space can be supported by a refinement of perfect Bayesian equilibrium. Politicians are policy-motivated (so office benefits cannot be used to incentivize policy choices), the policy space is one-dimensional (limiting the dimensionality of the set of utility imputations), and politicians’ preferences are private information (so punishments cannot be targeted to a specific type). The equilibrium construction relies critically on differentiability and strict concavity of citizens’ utility functions. An extension of the arguments allows policy paths to depend on the office holder’s type, subject to incentive compatibility constraints.
    Date: 2013–05
  16. By: Pierre Salmon (LEG - Laboratoire d'Economie et de Gestion - CNRS : UMR5118 - Université de Bourgogne)
    Abstract: The significance of yardstick competition among governments is now confirmed with regard to fiscal variables. This is an important result but the significance of the mechanism must also be sought in a context broader than that of fiscal federalism and without limitation to relations and processes fully observable. Three points are made. Even in the case of governments trying to mimic each other over a single variable, additional variables are involved in an important way. Yardstick competition can be latent without being ineffective. Its major effect, then, is to set bounds to the choices that office-holders could think of making. Finally, the mechanism is a hidden albeit essential component of the political and economic system, which would look quite different if voters could not make comparisons across jurisdictions and there were thus no yardstick competition, even of the latent variety.
    Keywords: political yardstick competition ; federalism ; decentralization ; systems
    Date: 2013–04–13
  17. By: Kalonda-Kanyama, Isaac
    Abstract: Many papers have found mixed results in studying the relationship between institutional quality and some of its determinants, namely openness to trade, GDP per capita and economic globalization. This paper reexamines the relationship between government institutions and these factors. The main findings in this paper is that the three factors have a threshold effect on institutional quality. Specifically, there exists a significant nonlinear relationship between three measures of government institutions (government efficiency, political stability and the rule of law) and trade. Moreover, GDP per capita has a significant nonlinear effect on government effectiveness, political stability, regulatory quality, rule of law and control of corruption. Finally, there is a significant nonlinear relationship between each of the six measures of institutional quality and globalization. Some of the findings are robust to controlling for average IQ levels and regional grouping of countries while others are not. Specifically, the results show that the nonlinear relationship was robust only two measures of institutional quality both for trade and GDP per capita. Accounting for the level of IQ revealed a significant nonlinear relationship between Voice and Accountability and both trade and GDP per capita.
    Keywords: governance, institutions, trade, globalization
    JEL: D7 D73 I2
    Date: 2012–01
  18. By: Ferré Carracedo, Montserrat; Manzano, Carolina
    Abstract: The empirical evidence testing the validity of the rational partisan theory (RPT) has been mixed. In this article, we argue that the inclusion of other macroeconomic policies and the presence of an independent central bank can partly contribute to explain this inconclusiveness. This article expands Alesina s (1987) RPT model to include an extra policy and an independent central bank. With these extensions, the implications of RPT are altered signi ficantly. In particular, when the central bank is more concerned about output than public spending (an assumption made by many papers in this literature), then the direct relationship between in flation and output derived in Alesina (1987) never holds. Keywords: central bank, conservativeness, political uncertainty. JEL Classi fication: E58, E63.
    Keywords: Bancs centrals, Política monetària, Política fiscal, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus,
    Date: 2013
  19. By: Strieborny, Martin (Department of Economics, Lund University)
    Abstract: Governments perpetually align their policies to satisfy shifts in voters' relative demand for economic growth versus social equality. Following such shifts, increases (decreases) in government interventions lower (raise) both inequality and growth. This mechanism generates a positive co-movement between inequality and growth. The pattern is weaker in countries where a culturally determined belief that the rich are deserving renders equality a less important objective in the first place. I develop this analytical result in the theoretical framework of Alesina and Angeletos (2005), and I provide robust empirical support for it in a panel of 38 countries over the period 1964-2004.
    Keywords: culture; inequality; growth
    JEL: O15 O40 P16 Z10
    Date: 2013–04–24

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