nep-pol New Economics Papers
on Positive Political Economics
Issue of 2014‒07‒28
eight papers chosen by
Eugene Beaulieu
University of Calgary

  1. Political corruption and voter turnout: mobilization or disaffection? By Elena Costas-Pérez
  2. Central Targets and local Agendas: Missing Lisbon 2010 By Maria Alessandra Antonelli; Veronica Grembi
  3. The Transmission of Democracy: From the Village to the Nation-State By Giuliano, Paola; Nunn, Nathan
  4. An Econometric Evaluation of Competing Explanations for The Midterm Gap By Brian G. Knight
  5. Legal Corruption, Politically Connected Corporate Governance and Firm Performance By Domadenik, Polona; Prašnikar, Janez; Svejnar, Jan
  6. Does corruption erode trust in government? Evidence from a recent surge of local scandals in Spain By Albert Solé-Ollé; Pilar Sorribas-Navarro
  7. Commercial Imperialism? Political Influence and Trade during the Cold War By Berger, Daniel; Easterly, William; Nunn, Nathan; Satyanath, Shanker
  8. The Year in Elections, 2013: The World's Flawed and Failed Contests By Frank, Richard W.; Norris, Pippa; Martinez i Coma, Ferran

  1. By: Elena Costas-Pérez (Universitat de Barcelona & IEB)
    Abstract: Corruption may affect voter turnout either by mobilizing citizens to go to the polls or by promoting voter disaffection. Using Spanish local and survey data, we study whether these effects depend on partisan leanings or the timing of scandals. Our results show that repeated episodes of corruption increase the boost abstentionism. Independent voters – those with no political attachments – are the only group that that abstains in response to corruption. The incumbent’s core supporters fail to recognise corruption within their party, while both independent voters and the opposition’s core supporters report higher corruption perceptions in response to a scandal.
    Keywords: Electoral turnout, accountability, corruption
    JEL: P16 D72 D73
    Date: 2014
  2. By: Maria Alessandra Antonelli (Sapienza University of Rome); Veronica Grembi (Copenhagen Business School)
    Abstract: In a decentralized setting, are policy targets imposed by the central government on local elected officials effective? And when? We address these questions in Italy, where the central government has set a target for childcare coverage at the municipal level for Southern regions since 2007. We first implement a difference-in-differences estimator where the municipalities already complying with the target comprise the control group. We then implement a triple-difference estimator with the additional control group of municipalities in the bordering Central regions. Our results show that elected officials comply with the target mainly when it is coherent with voters’ preferences (as measured by the characteristics of the resident female population) and in reaction to political incentives (as measured by partisan alignment among levels of government).
    Keywords: Central targets, Political Incentives, Local Politicians, Difference-in- Difference-in-Difference
    JEL: H42 H72 H75 H77
    Date: 2014–07
  3. By: Giuliano, Paola; Nunn, Nathan
    Abstract: We provide evidence that a tradition of village democracy is associated with the presence of national democracy today. We also show that a tradition of local democracy is associated with attitudes which are more supportive of democracy, with better quality institutions and with higher levels of economic development. Our findings indicate persistence in democratic institutions over time, and suggest the importance of traditional local institutions for well-functioning national-level institutions.
    Date: 2013
  4. By: Brian G. Knight
    Abstract: This paper provides a unified theoretical and empirical analysis of three longstanding explanations for the consistent loss of support for the President's party in midterm Congressional elections: (1) a Presidential penalty, defined as a preference for supporting the opposition during midterm years, (2) a surge and decline in voter turnout, and (3) a reversion to the mean in voter ideology. To quantify the contribution of each of these factors, we build an econometric model in which voters jointly choose whether or not to participate and which party to support in both House and Presidential elections. Estimated using ANES data from both Presidential and midterm years, the model can fully explain the observed midterm gaps, and counterfactual simulations demonstrate that each factor makes a sizeable contribution towards the midterm gap, with the Presidential penalty playing the largest role.
    JEL: D7
    Date: 2014–07
  5. By: Domadenik, Polona (University of Ljubljana); Prašnikar, Janez (University of Ljubljana); Svejnar, Jan (Columbia University)
    Abstract: In this paper we present and test a theory of how political corruption, found in many transition and emerging market economies, affects corporate governance and productive efficiency of firms. Our model predicts that underdeveloped democratic institutions that do not punish political corruption result in political connectedness of firms that in turn has a negative effect on performance. We test this prediction on an almost complete population of Slovenian joint stock companies with 100 or more employees. Using the supervisory board structure, together with balance sheet and income statement data for 2000-2010, we show that a higher share of politically connected supervisory board members leads to lower productivity.
    Keywords: corruption, corporate governance, productivity, politicians, state owned enterprises
    JEL: D2 D21 D73 G34 L32
    Date: 2014–07
  6. By: Albert Solé-Ollé (Universitat de Barcelona & IEB); Pilar Sorribas-Navarro (Universitat de Barcelona & IEB)
    Abstract: We examine whether a corruption scandal in which the incumbent is implicated undermines trust in local government. We use a novel dataset containing information on local corruption scandals reported in Spain during the period 1999-2009, and data on the level of trust expressed in local politicians drawn from a new survey conducted in late 2009. We use matching methods to improve the identification of the effect of corruption scandals on trust, comparing municipalities affected by a scandal with those presenting similar traits but in which no scandal had been reported. We find that corruption scandals have a marked negative effect on trust in local politicians. This effect is even more marked in the case of individuals that have no ideological attachment to the party accused of corruption and/or who obtain their information from the media. Several falsification tests, based on a sample of corruption scandals reported after the survey had been conducted, confirm the causal interpretation of these results.
    Keywords: Corruption, trust
    JEL: P16 D72
    Date: 2014
  7. By: Berger, Daniel; Easterly, William; Nunn, Nathan; Satyanath, Shanker
    Abstract: We provide evidence that increased political influence, arising from CIA interventions during the Cold War, was used to create a larger foreign market for American products. Following CIA interventions, imports from the US increased dramatically, while total exports to the US were unaffected. The surge in imports was concentrated in industries in which the US had a comparative disadvantage, not a comparative advantage. Our analysis is able to rule out decreased trade costs, changing political ideology, and an increase in US loans and grants as alternative explanations. We provide evidence that the increased imports arose through direct purchases of American products by foreign governments.
    Date: 2013
  8. By: Frank, Richard W.; Norris, Pippa; Martinez i Coma, Ferran
    Abstract: In many countries, polling day ends with disputes about ballot-box fraud, corruption, and flawed registers. Which claims are accurate? And which are false complaints from sore losers? New evidence gathered by the Electoral Integrity Project has just been released in an annual report which compares the risks of flawed and failed elections, and how far countries around the world meet international standards. The EIP is an independent research project based at the University of Sydney and Harvard University, under the direction of Professor Pippa Norris. This annual report evaluates all national parliamentary and presidential contests occurring in 66 countries worldwide holding 73 election from 1 July 2012 to 31 December 2013 (excluding smaller states with a population below 100,000), from Albania to Zimbabwe. Data is derived from a global survey of 855 election experts. Immediately after each contest, the survey asks domestic and international experts to monitor the quality based on 49 indicators. These responses are then clustered into eleven stages occurring during the electoral cycle and summed to construct an overall 100-point expert Perception of Electoral Integrity (PEI) index and ranking.
    Date: 2014

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