nep-pol New Economics Papers
on Positive Political Economics
Issue of 2014‒02‒21
nine papers chosen by
Eugene Beaulieu
University of Calgary

  1. Emergence and Persistence of Extreme Political Systems By Buchheim, Lukas; Ulbricht, Robert
  2. Biased Perceptions of Income Inequality and Redistribution By Engelhardt, Carina; Wagener, Andreas
  3. Political Selection in China: the Complementary Roles of Connections and Performance By Jia, Ruixue; Kudamatsu, Masayuki; Seim, David
  4. On the Challenge to Competitive Authoritarianism and Political Patronage in Malaysia By Johansson, Anders C.
  5. Deep Pockets, Extreme Preferences: Explaining Persistent Differences in Electoral Contributions Across Industries By Thomas Bassetti; Filippo Pavesi
  6. Consistent collective decisions under majorities based on differences By Mostapha Diss; Patrizia Pérez-Asurmendi
  7. Independent organizations in author-itarian regimes: Contradiction in terms or an effective instrument of developmental states By Ahrens, Joachim; Stark, Manuela
  8. Development, culture, and attitudes to America: country-level predictors of anti-Americanism By Kirill Zhirkov
  9. Serial Dictatorship with Infinitely Many Agents By Shino Takayama; Akira Yokotani

  1. By: Buchheim, Lukas; Ulbricht, Robert
    Abstract: We investigate the dynamics of political systems in a framework where transitions are driven by reforms and revolts, and where political systems are a priori unconstrained, ranging continuously from single-man dictatorships to full-scale democracies. The dynamics are governed by the likelihood of transitions and their outcome, which are both determined endogenously. We find that reforms and revolts result in extreme political systems|reforms by enfranchising the majority of the population leading to democracies, and revolts by installing autocracies. Reinforcing this polarization, extreme political systems are persistent across time: Democracies are intrinsically stable, leading to long episodes without political change. Autocracies, in contrast, are subject to frequent regime changes. Nevertheless they are persistent, since ensuing revolts lead to autocracies comparable to their predecessors. Taken together, our results suggest that the long-run distribution of political systems is bimodal with mass concentrated on the extremes. The dynamics are consistent with cross-country data.
    Keywords: Endogenous dynamics of political systems, invariant distribution, persistence of regime types, polarization, transition paths, unrestricted polity space.
    JEL: D74 D78 P16
    Date: 2014–02–01
  2. By: Engelhardt, Carina; Wagener, Andreas
    Abstract: When based on perceived rather than o n objective income distributions, the Meltzer- Richards hypothesis and the POUM hypothesis work quite well empirically: there exists a positive link between perceived inequality or perceived upward mobility and the extent of redistribution in democratic regimes - though such a link does not exist when objective measures of inequality and social mobility are used. These observations highlight that political preferences and choices might depend more on perceptions than on factual data.
    Keywords: Biased Perception, Majority Voting, Redistribution
    JEL: H53 D72 D31
    Date: 2014–02
  3. By: Jia, Ruixue (University of California San Diego); Kudamatsu, Masayuki (Institute for International Economic Studies); Seim, David (Department of Economics, University of Toronto)
    Abstract: Who becomes a top politician in China? We focus on provincial leaders a pool of candidates for top political office and examine how their chances of promotion depend on their performance in office and connections with top politicians. Our empirical analysis, based on the curriculum vitae of Chinese politicians, shows that connections and performance are complements in the Chinese political selection process. This complementarity is stronger the younger provincial leaders are relative to their connected top leaders. To provide one plausible interpretation of these empirical findings, we propose a simple theory in which the complementarity arises because connections foster loyalty of junior officials to senior ones, thereby allowing incumbent top politicians to select competent provincial leaders without risking being ousted. Auxiliary evidence suggests that the documented promotion pattern does not distort the allocation of talent. Our findings shed some light on why a political system known for patronage can still select competent leaders.
    Keywords: Political turnover; Economic performance; Personnel control; Social networks
    JEL: H11 H70 J63 P30
    Date: 2014–02–07
  4. By: Johansson, Anders C. (Stockholm China Economic Research Institute)
    Abstract: In March 2008, Malaysia’s political landscape was shaken by election results showing that the Barisan Nasional had won less than two thirds of the parliamentary seats and lost five states to the opposition. A two-thirds supermajority had been seen as a sacred threshold for the coalition to ensure its continued legitimacy. We conjecture that the 2008 election represented a challenge to the competitive authoritarian regime and that this had direct effects on firms with ties to the ruling coalition. Our empirical results show that firms with political patronage were adversely affected by the electoral outcome. More specifically, firms with close ties to the Barisan Nasional experienced a significant negative value effect. Firms characterized by political patronage also decreased their leverage levels significantly more than other firms after the 2008 election, suggesting that their access to debt capital had become more restricted. Moreover, this effect was mainly driven by changes in long-term debt. These results suggest a significant negative effect on connected firms as the political status quo was challenged in Malaysia.
    Keywords: Competitive authoritarianism; Political patronage; Political connections; Firm performance; Capital structure; Debt maturity; Malaysia
    JEL: D72 G14 G30 G32 G38
    Date: 2014–02–04
  5. By: Thomas Bassetti (University of Padova); Filippo Pavesi (Department of Economics (University of Verona))
    Abstract: When considering contributions to electoral campaigns in the U.S., a puzzling regularity is that some industries tend to spend significantly more than others. To explain this evidence, we present a simple theoretical model in which interest groups finance politicians that require funding for campaign advertising in exchange for policy favors. Our model predicts that interest groups with more extreme preferences will devote a greater amount of resources to campaign financing. The empirical evidence, based on data from the U.S. House elections between 2000 and 2004, strongly supports this finding.
    Keywords: Campaign Finance, Interest Groups, Elections, Extreme Preferences
    JEL: D72 P16
    Date: 2014–02
  6. By: Mostapha Diss (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I); Patrizia Pérez-Asurmendi (PRESAD - PReferencias, Elección Social y Ayuda a la Decisión - Universidad de Valladolid, SEED - Social Equilibrium and Economic Decisions - Universidad Pública de Navarra)
    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 di fference of votes; Majorities based on diff erence in support; Probability Transitivity; Triple-acyclicity
    Date: 2014–02–11
  7. By: Ahrens, Joachim; Stark, Manuela
    Abstract: This contribution explores the importance of independent organizations in authoritarian regimes. While some authoritarian governments delegate policy tasks to (relatively) autonomous agencies simply in order to improve their domestic or international image as modern political leaders or to build up democratic facades to conceal the actual nature of their regime, other political leaders do so in order to make their genuine commitment to economic growth and development more credible. This relates to the central questions of this paper: Why do political elites in authoritarian regimes craft, or accept the emergence of, (relatively) independent organizations? Which specific forms and functions of these organizations can be identified? The main observation of this paper is that authoritarian governments of so-called developmental states have effectively used (relatively) independent organizations in order to implement market-oriented reforms, to improve private-sector coordination, and to foster economic growth and development in the long run. --
    Keywords: Political Economy of Authoritarianism,Governance of State Capitalist Systems
    Date: 2014
  8. By: Kirill Zhirkov (National Research University Higher School of Economics)
    Abstract: The present study examines survey data from 45 countries by the means of factor and regression analyses in order to understand the nature and causes of anti-Americanism. Empirical results reveal a clear distinction between cultural and political anti-Americanism. The former involves negative attitudes towards American culture and its global spread, whereas the latter is specifically focused on disapproval of the U.S. foreign policies. The two forms of anti-Americanism also differ in their relationship to socioeconomic development. Cultural anti-Americanism is most widespread in countries with average levels of Human Development Index, whereas political anti-Americanism is stronger in the most developed societies. This study finds that Muslim societies are characterized by higher levels of both cultural and political anti-Americanism. On the whole, these findings indicate that anti-Americanism follows consistent country-level patterns and likely has universal roots which should be studied within a comparative framework.
    Keywords: anti-Americanism, socioeconomic development, culture, world politics
    JEL: Z
    Date: 2014
  9. By: Shino Takayama (School of Economics, The University of Queensland); Akira Yokotani (School of Economics, The University of Queensland)
    Abstract: This paper studies social choice correspondences assigning a set of choices to each pair consisting of a nonempty subset of the set of alternatives and a weak preference profile, which is called an extended social choice correspondence (ESCC). The ESCC satisfies unanimity if, when there is a weakly Pareto dominant alternative, the ESCC selects this alternative. Stability requires that the ESCC is immune to manipulation through withdrawal of some alternatives. Independence implies that the ESCC selects the same outcome from a subset of the set of alternatives for two preference profiles that are the same on this set. We characterize the ESCC satisfying the three axioms, when the set of alternatives is finite but includes more than three alternatives, and the set of voters can have any cardinality. Our main theorem establishes that the ESCC satisfying the three axioms is a serial dictatorship ala Eraslan and McLennan (2004). Our second theorem shows that a serial dictatorship includes ‘invisible serial dictators’ ala Kirman and Sondermann (1972).
    Date: 2014–02–17

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