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on Positive Political Economics |
| By: | Prato, Carlo; Wolton, Stephane |
| Abstract: | Scholars have long deplored voters' lack of interest in politics and argue greater political engagement would improve the performance of democracy. We consider a model of elections where successful communication of political messages during campaigns requires efforts by politicians and a representative voter. The voter's incentive to pay attention to politics affects the effectiveness of the electoral process as screening and disciplining device. The performance of the electoral process and the voter's level of political activity are low when the voter cares little about politics--this is the curse of the apathetic voter--, or cares a lot about politics--this is the curse of the engaged voter. Consequently, an engaged voter is not always an active voter and fostering political engagement (e.g., by lowering the cost of political information or facilitating policy changes) might have negative consequences on voter's attention to politics and welfare. |
| Keywords: | Political Apathy, Political Engagement, Elections, Campaigns, Policy Change, Institutional Design, Political Information |
| JEL: | D72 D78 D83 |
| Date: | 2014–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53482&r=pol |
| By: | Dolmas, Jim |
| Abstract: | I illustrate by example a way in which equilibria under probabilistic voting are fragile with respect to assumptions about the non-policy components of voter preferences. I also offer intuition for the fragility using the social welfare functions which also describe the equilibria. |
| Keywords: | Probabilistic voting; political economy |
| JEL: | D72 D78 |
| Date: | 2014–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53628&r=pol |
| By: | Powdthavee, Nattavudh (London School of Economics); Oswald, Andrew J (Department of Economics, University of Warwick) |
| Abstract: | The causes of people’s political attitudes are largely unknown. We study this issue by exploiting longitudinal data on lottery winners. Comparing people before and after a lottery windfall, we show that winners tend to switch towards support for a right-wing political party and to become less egalitarian. The larger the win, the more people tilt to the right. This relationship is robust to (i) different ways of defining right-wing, (ii) a variety of estimation methods, and (iii) methods that condition on the person previously having voted left. It is strongest for males. Our findings are consistent with the view that voting is driven partly by human self-interest. Money apparently makes people more right-wing Key words: Voting; gender ; lottery wins ; political preferences ; income ; attitudes JEL classification: D1 ; D72 ; H1 ; J7 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1039&r=pol |
| By: | Konstantin Yanovskiy (Gaidar Institute for Economic Policy); Sergey Shulgin (RANEPA) |
| Abstract: | In this paper we tested the hypothesis of the "political" basis for the "economic" rights. We constructed our own variables of political regimes' classification for years 1820-2000. We found significant positive interdependencies between the Democracy's indicators and Economic Growth. Protection of the Private property rights requires, first and foremost, due guaranties for the personal immunity as a key precondition. Power to arrest discretionary undermines any formal guaranties of private property, low taxation benefits etc. Personal immunity should be defended even for "unpleasant" person (say, H. Ford or W. Gates) or for the chieftains' challengers (to make "rights of the meanest … respectable to the greatest"). It means the free speech; religious freedom and other "political rights" should be respected. Democracy, as political competition system weakens governments' power to break personal freedoms and property rights. |
| Keywords: | : Rule of Law, Rule of Force, Personal Rights, Private Property Protection, Economic Growth |
| JEL: | P16 P50 N40 O43 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gai:wpaper:0082&r=pol |
| By: | Straub, Stéphane |
| Abstract: | In 2008, an opposition coalition defeated the Paraguayan Colorado Party, which had been in power for 61 years, including 35 years of the longest dictatorship in South America. Using data of all the public procurement transactions from 2004 through 2011 and the political connections of the 700 largest public providers, this paper documents how the volume of contracts received by connected firms evolved after this landmark political change. It shows that firms connected with the first ring of power were punished and that there were efficiency gains, mostly in the form of institutions shifting to bigger and more competitive contracts, but that these gains were constrained by the scarcity of entrepreneurs able to step in to replace firms connected to the previous regime. This demonstrates that the potential economic benefits of democratization are hampered by the perverse rent-seeking entrepreneurial incentives created by a long-term single-party authoritarian regime. |
| Keywords: | Procurement, Political Connections, Rent-seeking, Democratization, Authoritarian regimes. |
| JEL: | D72 H57 O5 |
| Date: | 2014–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:27862&r=pol |
| By: | Mostapha Diss (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France, Université Jean Monnet, Saint-Etienne, F-42000, France); Patrizia Pérez-Asurmendi (Grupo de investigacion PRESAD, Universidad de Valladolid, Avda. Valle de Esgueva 6,47011, Valladolid, Spain & Grupo de investigacion SEED, Universidad Publica de Navarra, Campus de Arrosadia, 31006, Pamplona, Spain) |
| Abstract: | The main criticism to the aggregation of individual preferences under majority rules refers to the possibility of reaching inconsistent collective decisions from the election process. In these cases, the collective preference includes cycles and even could prevent the election of any alternative as the collective choice. The likelihood of consistent outcomes under two classes of majority rules constitutes the aim of this paper. Specifically, we focus on majority rules that require certain consensus in individual preferences to declare an alternative as the winner. In the case of majorities based on difference of votes, such requirement asks to the winner alternative to obtain a difference in votes with respect to the loser alternative taken into account that individuals are endowed with weak preference orderings. Same requirement is asked to the restriction of these rules to individual linear preferences, whereas in the case of majorities based on difference in support, the requirement has to do with the difference in the sum of the intensities for the alternatives in contest. |
| Keywords: | Majorities based on difference of votes, Majorities based on difference in support, Probability, Transitivity, Triple-acyclicity |
| JEL: | D72 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1402&r=pol |
| By: | Benhabib, Jess (New York University); Corvalen, Alejandro (Universidad Diego Portales); Spiegel, Mark M. (Federal Reserve Bank of San Francisco) |
| Abstract: | We reassess the empirical evidence for a positive relationship between income and democracy, commonly known as the “modernization hypothesis,” using discrete democracy measures. While discrete measures have been advocated in the literature, they pose estimation problems under fixed effects due to incidental parameter issues. We use two methods to address these issues, the bias-correction method of Fernandez-Val, which directly computes the marginal effects, and the parameterized Wooldridge method. Estimation under the Fernandez-Val method consistently indicates a statistically and economically important role for income in democracy, while under the Wooldridge method we obtain much smaller and not always statistically significant coefficients. A likelihood ratio test rejects the pooled full sample used under the Wooldridge estimation method against the smaller fixed effects sample that only admits observations with changing democracy measures. Our analysis therefore favors a positive role for income in promoting democracy, but does not preclude a role for institutions in determining democratic status as the omitted countries under Fernandez Val-fixed effect method appear to differ systematically by institutional quality measures which have a positive impact on democratization. |
| Keywords: | Income; Democracy; Modernization Theory; Sample selection; Dynamic panel |
| JEL: | O10 O11 P16 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2014-01&r=pol |
| By: | Patricia Esteve-González; Bernd Theilen |
| Abstract: | In this paper we examine the influence of economic factors on partisan support for European integration over the last three decades. We find that partisan support is larger in ‘poorer’ countries with direct economic benefits from EU membership. On the other hand, parties in countries affected by the Maastricht criteria are more Euro-sceptical. We also find weak evidence for larger partisan support in countries with more developed welfare states, and that the support for European integration fluctuates in parallel with the business cycle. Finally, our results indicate that the importance of economic factors in determining partisan support for European integration has grown in recent periods. |
| Keywords: | European Integration; Partisan Ideology; Maastricht Criteria; European Budget; Benefits from Trade |
| JEL: | F42 F53 F55 H60 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:eiq:eileqs:71&r=pol |
| By: | Rana, Arslan Tariq; Kebewar, Mazen |
| Abstract: | There is considerable debate whether the domestic political institutions (specifically, the country’s level of democracy) of the host developing country toward foreign investors are effective in establishing the credibility of commitments are still underway, researchers have also analyzed the effect of international institutions such as (GATT-WTO) membership and Bilateral Investment treaties (BIT) in their role of establishing the credibility of commitment to attract foreign investments. In addition, most recent studies have examined the effect of International Trade Agreements (TAs) on FDI flows as they contain separate investment chapters and dispute settlement mechanism, thus providing confidence to investor regarding the security of their investments. We argue that there are qualitative differences among various types of trade agreements and full-fledged trade agreements (FTA-CU) provide credibility to foreign investors and democracy level in the host country conditions this effect whereas the partial scope agreements (PSA) are not sufficient in providing credibility of commitments and not moderated by democracy. This paper analyses the impact of heterogeneous TAs, and their interaction with domestic institutions, on FDI inflows. Statistical analyses for 122 developing countries from 1970 to 2005 support this argument. The method adopted relies on fixed effects estimator which is robust to control endogeneity on a large panel dataset. The strict erogeneity of results by using a method suggested by Baier and Bergstrand (2007) and no feedback effect found in sample. The results state that (1) More the FTA-CU concluded, larger the amount of FDI inflows are attracted into the developing countries and PSA are insignificant in determining the FDI inflow; (2) FTA CU are complementary to democratic regime whereas the conditional effect of PSA with democracy on levels of FDI inflows is insignificant -- |
| Keywords: | foreign direct investment,free trade agreements,partial scope agreements,domestic institutions |
| JEL: | F21 F55 F59 |
| Date: | 2014–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:91501&r=pol |
| By: | Docquier, Frédéric; Lodigiani, Elisabetta; Rapoport, Hillel; Schiff, Maurice |
| Abstract: | International migration is an important determinant of institutions, not considered so far in the empirical growth literature. Using cross-section and panel analysis for a large sample of developing countries, we find that openness to emigration (as measured by the general emigration rate) has a positive effect on home-country institutional development (as measured by standard democracy indices). The results are robust to a wide range of specifications and estimation methods. Remarkably, the cross-sectional estimates are fully in line with the implied long-run relationship from dynamic panel regressions. |
| Keywords: | Migration; Institutions; Democracy; Development |
| JEL: | O15 O43 F22 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1406&r=pol |