nep-pol New Economics Papers
on Positive Political Economics
Issue of 2014‒10‒13
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. The Political Economy of Growth, Inequality, the Size and Composition of Government Spending By Klaus Schmidt-Hebbel; José-Carlos Tello
  2. The Sustainable Cooperative Tariffs: a Political Economy Perspective By Racem MEHDI
  3. No News, Big News. The political consequences of entertainment TV By Ruben Durante; Paolo Pinotti; Andrea Tesei
  4. An Economic Model of the Apartheid State By Anton D. Lowenberg
  5. Social norms on rent seeking and preferences for redistribution By Fabio Sabatini; Francesco Sarracino; Eiji Yamamura
  6. BJP’s Demographic Dividend in the 2014 General Elections: An Empirical Analysis By Basu, Deepankar; Misra, Kartik
  7. Romes without Empires: Urban Concentration, Political Competition, and Economic Growth By Mehmet ULUBASOGLU; Cem KARAYALCIN
  8. Economics for Substantive Democracy By Manuel Couret Branco
  9. Cognitive Diversity, Binary Decisions, and Epistemic Democracy By John A Weymark
  10. The Campaign Casino: Elections Have Become a Get-Rich-Quick Scheme, and the Press Is Missing the Story By Aitken, Lee
  11. Women, Medieval Commerce, and the Education Gender Gap By Graziella Bertocchi; Monica Bozzano
  12. Factors influencing the formation of corruption in oil-rich countries By Masoome Fouladi; Hedieh Setayesh; Yazdan Goudarzi-Farahani
  13. Capitalizing on Partisan Politics: Expected Government Partisanship and Sector-Specific Redistribution in Germany By Roland FÜSS; Michael M. BECHTEL

  1. By: Klaus Schmidt-Hebbel (Catholic University of Chile); José-Carlos Tello (Catholic University of Peru)
    Abstract: This paper develops a dynamic general-equilibrium political-economy model for the optimal size and composition of public spending. An analytical solution is derived from majority voting for three government spending categories: public consumption goods and transfers (valued by households), as well as productive government services (complementing private capital in an endogenous-growth technology). Inequality is reflected by a discrete distribution of infinitely-lived agents that differ by their initial capital holdings. In contrast to the previous literature that derives monotonic (typically negative) relations between inequality and growth in one-dimensional voting environments, this paper establishes conditions, in an environment of multi-dimensional voting, under which a non-monotonic, inverted U-shape relation between inequality and growth is obtained. This more general result – that inequality and growth could be negatively or positively related – could be consistent with the ambiguous or inconclusive results documented in the empirical literature on the inequality-growth nexus. The paper also shows that the political-economy equilibrium obtained under multi-dimensional voting for the initial period is time-consistent.
    Keywords: inequality, endogenous growth, multidimensional voting, endogenous taxation
    JEL: D72 E62 H11 H31
    Date: 2014–09
  2. By: Racem MEHDI
  3. By: Ruben Durante; Paolo Pinotti; Andrea Tesei
    Abstract: We investigate the electoral effects of early exposure to Silvio BerlusconiÕs commercial television network, Mediaset, exploiting its staggered expansion across Italian munic- ipalities during the 1980s. We find that municipalities with access to Mediaset prior to 1985 exhibited greater support for BerlusconiÕs party in 1994, when he first ran for office, and in the four following elections. This effect cannot be attributed to pro- Berlusconi news bias since no news programs were broadcast on Mediaset until 1991, when access to the network was already ubiquitous. We discuss alternative channels through which exposure to non-news content may have influenced Mediaset viewersÕ political attitudes.
    Date: 2014–05
  4. By: Anton D. Lowenberg
    Abstract: Rather than a rigid racial ideology, it is argued that South African apartheid was a pragmatic response of a white oligarchy to changing economic and political constraints. Consequently, the degree to which apartheid principles were applied and enforced by the South African state varied over time. A public choice model is developed to explain apartheid as endogenous policy, the parameters of which are determined by political support-maximizing politicians. The model suggests that the enforcement of apartheid was responsive to changes in such exogenous variables as defence costs, the gold price and the reservation wage of black unskilled labour. Predictions of the model hold implications for the causes of the democratic transition of the 1990s, including the role played by international sanctions.
    Keywords: South Africa, apartheid, public choice
    JEL: N47 O55 P48 D78
    Date: 2014
  5. By: Fabio Sabatini (University of Rome - La Sapienza); Francesco Sarracino (Institut national de la statistique et des etudes economiques du Grand-Duche du Luxembourg (STATEC)); Eiji Yamamura (Seinan Gakuin University)
    Abstract: Empirical studies have shown that preferences for redistribution are sig- nificantly correlated with expectations of future mobility and the belief that society offers equal opportunities. We add to previous research by inves- tigating the role of individual and social norms on rent seeking. We find that the individual propensity for stigmatizing rent seeking significantly and positively affects preferences for redistribution. On the other hand, living in an area where most citizens do not stigmatize rent seeking, makes men more favourable to redistribution, which may be seen as a social equalizer in an unfair society that does not offer equal opportunities to all. This effect does not hold for women, whose preference for redistribution is negatively associated to the regional tolerance of rent seeking.
    Keywords: redistribution, welfare state, civic values, social norms, social capital
    JEL: D31 D39 D63 D64 D72 H26 Z13
    Date: 2014–09
  6. By: Basu, Deepankar (The University of Massachusetts at Amherst); Misra, Kartik (The University of Massachusetts at Amherst)
    Abstract: The Bharatiya Janata Party (BJP) swept the 2014 General Elections in India and emerged as a single party with absolute majority, a result not witnessed since 1984. Not only did it win a majority of seats, it also managed to increase its vote share in almost all states between 2009 and 2014. Using state-level data, we show that BJP’s extraordinary poll results relied crucially on attracting young, especially first time, electors.
    Keywords: Election, India, states
    JEL: D72 R19
    Date: 2014
  8. By: Manuel Couret Branco (Department of Economics, Universidade de Évora)
    Abstract: What is the scope of economics as a science, what is economics for? Real freedom or what we call substantive democracy has never been an objective of economics. In this perspective freedom, or the lack of it, would not be a purpose of a particular economic system, but at best one of its side effects. In this paper I sustain that economics’ discourse has become one the most substantial contributors to what could be called the erosion of democracy. The first argument used in this case against economics refers to its attempt to be considered a neo-naturalistic science; the second concerns the fact that economics considers democracy contradictory to the expression of its scientific rationality and; the third, that economics crowds out people from decision-making processes by pushing them into the hands of experts. What part should economics be called to play in this search for substantive democracy? This issue is all the more critical that economics has reached the status of a major political fact. Partisan political programs have essentially become economic programs, and economic variables have thereby become major global political issues. One of the ways for economics to contribute to substantive democracy is to propose an alternative discourse to mainstream economics. An economics favorable to substantive democracy should, thereby, be political rather than naturalistic, pluralist rather than monist and, instead of crowding out people from decisions processes, should aim at the co-production of economic knowledge with those concerned by the outcome of economic decisions.
    Keywords: Economic Theory; Political Economy; Democracy; Decision-Making.
    JEL: A13 B40 K00 P16
    Date: 2014
  9. By: John A Weymark (Vanderbilt University)
    Abstract: In Democratic Reason, Hélène Landemore has built a case for the epistemic virtues of inclusive deliberative democracy based on the cognitive diversity of the group engaged in making collective decisions. She supports her thesis by appealing to the Diversity Trumps Ability Theorem of Lu Hong and Scott Page. In practice, deliberative assemblies often restrict attention to situations with only two options. In this paper, it is shown that it is not possible to satisfy the assumptions of the Diversity Trumps Ability Theorem when decisions are binary. The relevance of this theorem for democratic decision-making in non-binary situations is also considered.
    Keywords: epistemic democracy, Diversity Trumps Ability Theorem
    JEL: D7 Y8
  10. By: Aitken, Lee
    Date: 2014
  11. By: Graziella Bertocchi; Monica Bozzano
    Abstract: We investigate the historical determinants of the education gender gap in Italy in the late nineteenth century, immediately following the country’s Unification. We use a comprehensive newly-assembled database including 69 provinces over twenty-year sub-samples covering the 1861-1901 period. We find robust evidence that female primary school attainment, relative to that of males, is positively associated with the medieval pattern of commerce, along the routes that connected Italian cities among themselves and with the rest of the world. The effect of medieval commerce is particularly strong at the non-compulsory upperprimary level and persists even after controlling for alternative long-term determinants reflecting the geographic, economic, political, and cultural differentiation of medieval Italy. The long-term influence of medieval commerce quickly dissipates after national compulsory primary schooling is imposed at Unification, suggesting that the channel of transmission was the larger provision of education for girls in commercial centers.
    Keywords: Education gender gap, medieval commerce, Italian Unification, political institutions, family types.
    JEL: E02 H75 I25 J16 N33 O15
    Date: 2013–02
  12. By: Masoome Fouladi; Hedieh Setayesh; Yazdan Goudarzi-Farahani
    Abstract: Corruption undermines economic development and therefore it is one of the major factors hindering economic growth and political stability, especially in the developing countries. Studies in recent years show that countries with rich natural resources have the potential to shape corruption. Several studies have been done about this subject and different factors have been considered that most important are mechanisms for transparency, good management, good governance, human development and the degree of state dependence on oil revenues. This paper examines the factors affecting the level of corruption in 31 oil countries. This study uses GMM method and the period of time is 2000 to 2010 The results indicate that the size of the oil sector, government size, inflation, private sector debt, liquidity and democracy have a direct relationship with the level of corruption in these countries. However, the added value of the agricultural and industrial sectors and human development, relationships are reversed. So that with an increase in these indicators, the level of corruption in these countries has declined.
    Keywords: Algeria, Angola, Argentina, Australia, Azerbaijan, Brazil, Canada, China, Ecuador, Egypt, India, Andvnzhy, Iran, Iraq, Kazakhstan, Kuwait, Libya, Malaysia, Mexico, Norway, Oman, Qatar, Russia, Saudi Arabia, Sudan, United Arabic Emirates, United Kingdom, America, Venezuela and Vietnam., Other issues, Socio-economic development
    Date: 2014–10–01
  13. By: Roland FÜSS; Michael M. BECHTEL

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