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on Positive Political Economics |
| By: | De Benedetto, Marco Alberto (Birkbeck, University of London); De Paola, Maria (University of Calabria) |
| Abstract: | We analyze how having an incumbent among candidates affects electoral turnout. We use a rich data set providing information on the electoral results of Italian municipal elections over the period 1993-2011. Endogeneity issues are handled through an instrumental variable approach using the mayor term-limit as an instrument for the presence of the incumbent mayor among candidates. Controlling for electoral competition, we find that the impact of incumbency is heterogeneous across geographical areas: incumbency increases turnout in the South of Italy, whereas we do not find any statistically significant effect in the North. As the positive effect holds true only for southern municipalities endowed with low levels of social capital we speculate that this is the result of incumbent politicians using their resources to establish clienteles. |
| Keywords: | incumbency, political participation, electoral turnout, social capital |
| JEL: | D72 D78 J71 J16 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7612&r=pol |
| By: | P. Amorós; Ricardo Martínez; M. Socorro Puy |
| Abstract: | The top-two primary recently approved in states like Washington, California, and Alaska eliminates the closed party primaries and creates instead a single ballot in which the first and second place winners pass to the general election. We compare the electoral consequences of the top-two primary with those of the closed primaries. We present a model where each primary procedure induce a sequential game with three stages: candidate-entry stage, primary election, and general election. We analyze the equilibria of these games and show that the top-two primary contributes to political moderation and may increase the number of swing states. |
| Keywords: | Voting system, Closed primaries, Open primaries, Top-two primary, Political moderation, Sequential voting |
| JEL: | C72 D72 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we1319&r=pol |
| By: | Daniel Lema; Jorge M. Streb |
| Abstract: | The links between subnational political budget cycles (PBCs) and the national government in federal countries have seldom been studied. We study the behavior of the budget balance, public expenditures, and revenues in Argentine provinces during the 1985–2001 period. We find that in election years public expenditures increase, but revenues also do — a result exactly contrary to the predictions of rational opportunistic models of aggregate PBCs — and the budget deficit does not increase significantly. Since the increase in provincial revenues is due to larger federal transfers, we incorporate the influence of party alignment between governors and president. Public expenditures in election years increase in aligned provinces because of larger federal transfers, without affecting the budget deficit; in contrast, the budget deficit tends to increase in unaligned provinces. The federal government thus plays a key role in subnational PBCs, with an electoral cycle in the allocation of federal transfers. |
| Keywords: | political budget cycles, federal countries, discretional transfers, tactical allocation, party alignment, distributive politics |
| JEL: | D72 E62 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:520&r=pol |
| By: | Bambang Suharnoko Sjahrir; Krisztina Kis-Katos; Guenther G. Schulze (Department of International Economic Policy, University of Freiburg) |
| Abstract: | We analyze the determinants of the excessive administrative spending of local governments in Indonesia. In an unbalanced panel data set of 399 districts for 2001‐2009, we show that the proliferation of districts has not led to increased administrative spending; instead a lack of political accountability is responsible for this excess. The degree of political competition influences the level of administrative spending significantly; newly introduced direct elections of district heads, however, did not curtail the waste. |
| Keywords: | administrative expenditures, decentralization, direct elections, Indonesia |
| JEL: | D73 H76 H11 R51 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:fre:wpaper:24&r=pol |
| By: | Tetsuo Ono (Graduate School of Economics, Osaka University) |
| Abstract: | This paper develops an overlapping-generations model with altruism towards children. The paper characterizes a Markov perfect political equilibrium of voting over two policy issues, public education for the young and social security for the old. The model potentially generates two types of political equilibria, and one of them is selected by the government from the viewpoint of maximizing its objective. The paper shows that (i) longevity affects equilibrium selection and relevant policy choices; and (ii) private education as an alternative to public education as well as the concept of Markov perfect political equilibrium are the keys to generate the two types of equilibria. |
| Keywords: | Public education; Social security; Intergenerational conflict |
| JEL: | H52 H55 I22 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1306r&r=pol |
| By: | Asongu Simplice (Yaoundé/Cameroun); Oasis Kodila-Tedika (Kinshasa, Democratic Republic of Congo) |
| Abstract: | This paper assesses the determinants of state fragility in sub-Saharan Africa using hitherto unexplored variables in the literature. The previously missing dimension of nation building is integrated and the hypothesis of state fragility being a function of rent seeking and/or lobbying by de facto power holders is tested. The resulting interesting finding is that, political interference, rent seeking and lobbying increase the probability of state fragility by mitigating the effectiveness of governance capacity. This relationship (after controlling for a range of economic, institutional and demographic factors) is consistent with a plethora of models and specifications. The validity of the hypothesis is confirmed in a scenario of extreme state fragility. Moreover, the interaction between political interferences and revolutions mitigate the probability of state fragility while the interaction between natural resources and political interferences breeds the probability of extreme state fragility. As a policy implication, there is a ‘sub-Saharan African specificity’ in ‘nation building’ and prevention of conflicts. Blanket fragility oriented policies will be misplaced unless they are contingent on the degree of fragility, since ‘fragile’ and ‘extreme fragile’ countries respond differently to economic, institutional and demographic characteristics of state fragility. |
| Keywords: | State fragility; rent seeking; lobbying; nation building; Africa |
| JEL: | C43 H11 O20 O43 O55 |
| Date: | 2013–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:13/019&r=pol |
| By: | Spenkuch, Jörg |
| Abstract: | Social scientists have long speculated about individuals' tendencies to misrepresent their preferences in order to affect the outcome of social choice mechanisms. The fact that preference orderings are generally unobserved, however, has made it very difficult to document strategic behavior empirically. Exploiting the incentive structure of Germany's voting system to solve the fundamental identification problem, this paper estimates the extent of strategic voting in large, real-world elections. The evidence indicates that approximately 35% of voters abandon their most preferred candidate if she is not in contention for victory. As predicted by theory, tactical behavior has a non-trivial impact on individual races. Yet, as one aggregates across districts, these distortions partially offset each other, resulting in considerably more modest effects on the overall distribution of seats. |
| Keywords: | voting, strategic voting, strategyproofness in social choice, elections, Germany |
| JEL: | D7 D71 D72 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50198&r=pol |
| By: | Matsuoka, Tarishi; Naito, Katsuyuki; Nishida, Keigo |
| Abstract: | This paper proposes a simple analytical model to examine conditions in which a government policy to improve imperfect credit markets is practiced through a democratic political process, and analyzes interactions between the politically implemented policy and economic development. Individuals who support the policy are those who can start new investments only after the implementation of it. High income inequality and the low level of capital make the policy hard to implement, which is likely to cause the economy to fall into a poverty trap. |
| Keywords: | financial development, economic development, income inequality, majority voting |
| JEL: | D72 G18 O11 O15 O16 |
| Date: | 2013–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:50181&r=pol |
| By: | De Borger, Bruno; Proost, Stef |
| Abstract: | This paper studies the political economy of pricing and investment for excludable and congestible public goods in a federal state. Currently, we observe a wide variety of practices, ranging from federal gasoline taxes and road investment to the local supply of -- and sometimes free access to -- libraries, parking spaces and public swimming pools. The two-region model we develop allows for spill-overs between regions, it takes into account congestion, and it captures both heterogeneity between and within regions. Regional decisions are taken by majority voting; decisions at the federal level are taken either according to the principle of a minimum winning coalition or through cooperative bargaining. We have the following results. First, when users form the majority in at least one region, decentralized decision making performs certainly better than centralized decision making if spill-overs are not too large. Centralized decisions may yield higher welfare than decentralization only if users have a large majority and the infrastructure in a given region is intensively used by both local and outside users. Second, if non-users form a majority in both regions, centralized and decentralized decision making yield the same socially undesirable outcome, with prices that are much too high. Third, both bargaining and imposing uniform price restrictions across regions improve the performance of centralized decisions. Fourth, the performance of decentralized supply is strongly enhanced by local self-financing rules; it prevents potential exploitation of users within regions. Self-financing rules at the central level are not necessarily welfare-improving. Finally, the results of this paper contribute to a better understanding of actual policy-making. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2013020&r=pol |