nep-pol New Economics Papers
on Positive Political Economics
Issue of 2014‒03‒30
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Gender stereotypes in politics: What changes when a woman becomes the local political leader? By Arvate, Paulo; Firpo, Sergio; Pieri, Renan
  2. Partisan Optimism and Political Bargaining By Thomas Jensen; Andreas Madum
  3. Impact of Political Regime Shift on Stock Returns of Oligarch Firms By Zadorozhna Olha; Zaderey Natalia
  4. Media competition and electoral politics By Amedeo Piolatto; Florian Schuett
  5. Who turned their back on the SPD? Electoral disaffection with the German Social Democratic Party and the Hartz reforms. By Baptiste Françon
  6. Impact of Internal Migration on Political Participation in Turkey By Akarca, Ali T.; Tansel, Aysit
  7. Political environment a ground for public sector corruption? Evidence from a cross-country analysis By Kumara, Ajantha Sisira; Handapangoda, Wasana Sampath
  8. Fiscal Federalism and Legislative Malapportionment: Causal Evidence from Independent but Related Natural Experiments By Sebastian Galiani; Iván Torre; Gustavo Torrens
  9. Corruption and Informality: Complements or Substitutes? Qualitative Evidence from Barranquilla, Colombia By Mehling, Maxie-Lina; Boehm, Frédéric
  10. Democracy Does Cause Growth By Daron Acemoglu; Suresh Naidu; Pascual Restrepo; James A. Robinson
  11. Guns and Votes By Laurent Bouton; Paola Conconi; Francisco Pino; Maurizio Zanardi
  12. The political economy of child-related leave policies in OECD member states: key trends and the impact By Olivier Thévenon

  1. By: Arvate, Paulo; Firpo, Sergio; Pieri, Renan
    Abstract: This study documents how the presence of a woman in an executive political role affects the gender stereotype of women in politics. We use Brazilian electoral data and restrict our focus to close mayoral races (using an RDD design) in which the top two candidates are of opposite sexes. Our most important result was a reduction in the number of candidates and votes for female mayoral candidates after a woman is elected, regardless of her eligibility status for reelection. This negative result is linked only to the position of mayor and not to other political positions (councilor, state or federal deputy). In addition, our results may be interpreted as evidence that voters do not use their update on women as local leaders to change their beliefs on women’s ability to run for other political positions. Finally, female mayors do not appear to have a role model effect on younger cohorts of women. We also note that our results are not influenced by differences in mayoral policies (generally and specifically for women), which could influence voters’ gender stereotypes.
    Date: 2014–02–12
  2. By: Thomas Jensen (Department of Economics, Copenhagen University); Andreas Madum (Department of Economics, Copenhagen University)
    Abstract: Partisan voters are optimistic about electoral outcomes: their estimates of the probability of electoral success for their party or candidate are substantially higher than the average among the electorate. This has large potential implications for political bargaining. Optimism about future electoral outcomes can make costly bargaining delay look more favorable, which may induce partisans to punish their party for agreeing to a compromise rather than waiting, for example by not turning out to vote. Therefore, party decision makers should take optimism among partisans into account when bargaining. In this paper we use game theoretic modeling to explore the implications of partisan optimism for political bargaining. We show that increased optimism among a partisan group leads to a stronger bargaining position for their party, but may hurt its electoral prospects. Another main finding is that even high levels of partisan optimism do not necessarily cause inefficient bargaining delay.
    JEL: D72
    Date: 2014–02–06
  3. By: Zadorozhna Olha; Zaderey Natalia
    Abstract: We study the evolution of the stock prices of 17 politically connected firms around the time of the Orange revolution and two other crucial political events (2010 Presidential elections and the arrest of Yuliya Tymoshenko) in Ukraine. Using an event-study approach we find that political connections do matter in Ukraine. Companies that are strongly linked with the two major Ukrainian parties (Orange coalition and Party of Regions) are sensitive to shifts of the political regime.
    JEL: G14 P16 P34 D72 D73
    Date: 2013–07–05
  4. By: Amedeo Piolatto (Universitat de Barcelona & IEB); Florian Schuett (Tilburg University)
    Abstract: We build a framework linking competition in the media market to political participation. Media outlets report on the ability of candidates running for office and compete for audience through their choice of slant. Citizens consume news only if the expected utility of being informed about candidates' ability is sufficiently large for their group collectively. Our results can reconcile seemingly contradictory empirical evidence showing that entry in the media market can either increase or decrease turnout. While information pushes up independent turnout, partisans adjust their turnout to the ability of their preferred candidate, and on average they vote less when informed.
    Keywords: Demand for news, electoral turnout, group-rule utilitarianism, media bias
    JEL: D72 L82
    Date: 2014
  5. By: Baptiste Françon (Centre d'Economie de la Sorbonne)
    Abstract: This paper proposes an empirical analysis of the declining support for the German Social Democratic Party (SPD) during Schröder government's second term of office, which was marked by major reforms in the fields of unemployment insurance and labour market policy (Hartz reforms). Drawing on a panel of West Germans, we provide evidence that this disaffection was strongly related to a worker's occupation and that it involved electoral backlash from core blue-collar constituencies of the SPD. In comparison, the impact of other socio-economic characteristics such as the labour market status or the income was less pronounced. We further show that discontent grew stronger among occupations where the risk of unemployment was more prevalent. This suggests that opposition to specific measures that weakened status-securing principles of the unemployment insurance substantially drove electoral disaffection with the SPD during this period.
    Keywords: Political economy, economics of voting, social policy preferences, unemployment insurance, social-democracy, Germany.
    JEL: D01 D12 E26 C81
    Date: 2013–03
  6. By: Akarca, Ali T. (University of Illinois at Chicago); Tansel, Aysit (Middle East Technical University)
    Abstract: During last sixty years, Turkish population moved from one province to another at the rate of about 7-8 percent per five-year interval. As a consequence of this massive internal migration, population residing in a province other than the one they were born in increased from 12 percent in 1950 to 39 percent in 2011. Impact of this population instability on provincial turnout rates in 2011 parliamentary election is studied, controlling for the effects of other socio-economic, demographic, political and institutional factors. Consequences of migration both at destinations and origins are considered. According to robust regressions estimated, the relationship between turnout and education is inverse U-shaped, and between turnout and age, U-shaped. The latter reflects generational differences as well. Large population, large number parliament members to be elected from a constituency, participation by large number of parties, and existence of a dominant party depress the turnout rate. A percentage increase in the proportion of emigrants among the people born in a province reduces turnout rate in that province by 0.13 percentage points, while a percentage increase in the ratio of immigrants in the population of a province reduces it by 0.06 percentage points. However, at destinations where large numbers of immigrants from different regions are concentrated, the opportunity afforded to immigrants to elect one of their own, reduces the latter adverse impact significantly and in some cases turns it to positive.
    Keywords: election turnout, internal migration, political participation, Turkey, voter behavior
    JEL: D72 J61
    Date: 2014–03
  7. By: Kumara, Ajantha Sisira; Handapangoda, Wasana Sampath
    Abstract: This study employs the instrumental variable two-stage least squares regression approach for the data for 121 countries to explore the impact of a country’s political environment on its level of corruption. The study provides strong evidence that a higher degree of rule of law, press freedom, readiness and capacity to handle e-governance practices, and urbanization are associated with a lower level of public sector corruption across all 121 countries. The colonial dummies and having a presidential government are found to be valid instruments for rule of law in addressing the issue of endogeniety embedded in it. Further, to a certain degree, landlocked countries are relatively more corrupt than costal countries. Finally, policy implications are discussed based on the findings of the study.
    Keywords: Corruption, Political Environment, Endogeniety, Public Sector
    JEL: D72 D73 H11 K42
    Date: 2014–03–22
  8. By: Sebastian Galiani; Iván Torre; Gustavo Torrens
    Abstract: We exploit three natural experiments in Argentina in order to determine if legislative malapportionment is the cause of the biases existing in the country’s federal tax sharing scheme. We find that legislative malapportionment has had no significant effect on the federal tax sharing scheme during periods when democratic governments were in place; nor did we find any evidence that the tax sharing distribution pattern became less biased under centralized military governments. We argue that these results are attributable to two of Argentina’s institutional characteristics: first, the predominance of the executive branch over the legislature; and, second, the lack of any significant difference in the pattern of geographic representation in the executive branch under democratic and autocratic governments. Thus, the observed biases in the distribution of tax revenues among the Argentine provinces are not caused by legislative malapportionment, but are instead the result of a more structural political equilibrium that transcends the geographic distribution of legislative representation and even the nature of the political regime.
    JEL: D72 D78 H3
    Date: 2014–03
  9. By: Mehling, Maxie-Lina; Boehm, Frédéric
    Abstract: We present results of a qualitative study based on interviews with informal vendors and experts on informality carried out in Barranquilla, Colombia, in order to investigate whether corruption and informality are complements or substitutes. It was found that it is necessary to distinguish between bureaucratic and political corruption when examining the relation with informality, as the results can be opposite. In Barranquilla, bureaucratic corruption and informality seem to be substitutes, while political corruption and informality complement each other.
    Keywords: Corruption, Informality, Colombia
    JEL: K42 O17
    Date: 2014–03
  10. By: Daron Acemoglu; Suresh Naidu; Pascual Restrepo; James A. Robinson
    Abstract: We provide evidence that democracy has a significant and robust positive effect on GDP. Our empirical strategy relies on a dichotomous measure of democracy coded from several sources to reduce measurement error and controls for country fixed effects and the rich dynamics of GDP, which otherwise confound the effect of democracy on economic growth. Our baseline results use a linear model for GDP dynamics estimated using either a standard within estimator or various different Generalized Method of Moments estimators, and show that democratizations increase GDP per capita by about 20% in the long run. These results are confirmed when we use a semiparametric propensity score matching estimator to control for GDP dynamics. We also obtain similar results using regional waves of democratizations and reversals to instrument for country democracy. Our results suggest that democracy increases future GDP by encouraging investment, increasing schooling, inducing economic reforms, improving public good provision, and reducing social unrest. We find little support for the view that democracy is a constraint on economic growth for less developed economies.
    JEL: O10 P16
    Date: 2014–03
  11. By: Laurent Bouton; Paola Conconi; Francisco Pino; Maurizio Zanardi
    Keywords: elections; pandering; vocal minority; gun-control regulations
    JEL: D72 I18
    Date: 2013–11
  12. By: Olivier Thévenon (INED)
    Abstract: Abstract: A widespread expansion of leave entitlements has taken place over the past decades in OECD countries. Basic rights, set initially for mothers, have been complementedwith entitlements for both parents. This considerably prolonged the time period covered byparental leave entitlements, of which mothers remain the main users. As a consequence, cross-national differences in leave duration increased until the late 1990s, but they havedecreased slightly since the early 2000s without radically changing the picture. Yet, one main change has occurred with the provision of father-specific rights granted in a growing numberof countries. The effect of the recession has been quite limited, since cutbacks in leave-related benefits have observed up to now in a minority of countries. Against this background, weanalyse the effect of economic and political factors on the prolongation of maternity and parental leave, as well as on the provision of father-specific entitlements. We show that thedifferent types of leave respond differently to these factors, which suggests that a different rationale guides their respective evolution. Finally, we discuss the merits of the greaterflexibility introduced in the legislation of parental leave systems.
    Date: 2014

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