nep-pol New Economics Papers
on Positive Political Economics
Issue of 2014‒11‒01
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Enfranchisement and Representation: Italy 1909-1913 By Valentino LARCINESE
  2. Superstars in politics: the role of the media in the rise and success of Junichiro Koizumi By Fabio Sabatini; Eiji Yamamura
  3. Inequality and the Politics of Redistribution By Tetsuo Ono
  4. Does Local Politics Matter? Quasi-experimental Evidence from Italian Municipal Elections By Roberto Basile; Valerio Filoso
  5. Political Corruption and Minority Capture By P. Giannoccolo; M. Lisciandra
  6. Capital Cities, Conflict, and Misgovernance: Theory and Evidence By Filipe R. Campante; Quoc-Anh Do; Bernardo Guimaraes
  7. Who monitors the monitor? : effect of party observers on electoral outcomes By Agustin Casas; Guillermo Díaz; Andre Trindade
  8. Voting behavior, coalitions and government strength through a complex network analysis By Carlo Dal Maso; Gabriele Pompa; Michelangelo Puliga; Gianni Riotta; Alessandro Chessa
  9. Voting to Tell Others By Gautam Rao; Stefano DellaVigna; John List; Ulrike Malmendier
  10. Coalition formation: the role of procedure and policy flexibility By Eligius Hendrix; Annelies De Ridder; Agnieszka Rusinowska; Elena Saiz
  11. The Political Sustainability of a Basic Income Scheme and Social Health Insurance By Kifmann, Mathias; Roeder, Kerstin
  12. Homemade Citizens: The Development of Political Interest during Adolescence and Young Adulthood By Anja Neundorf; Kaat Smets; Gema M. García-Albacete
  13. Indices, Institutions and Economic Growth: In Search of Reliable Indicators (recount) By Konstantin Yanovsky; Rinat Menyashev; Timofey Ginker
  14. Crony Capitalism, American Style: What Are We Talking About Here? By Malcolm S. Salter; (FULL NAME)

  1. By: Valentino LARCINESE (London School of Economics)
    Abstract: This paper presents evidence on the consequences of the 1912 introduction of quasi-universalmale su¤rage in Italy. The reform increased the electorate from slightly less than three million to 8,650,000 and left the electoral rules and the district boundaries unchanged. This allows us to exploit the heterogeneity in enfranchisement rates across electoral districts to identify the causal e¤ects of franchise extension on a number of political outcomes. The reform caused an increase in the vote share of social reformers (Socialists, Republicans and Radicals), together referred to as the Estrema. One standard deviation in the share of newly enfranchised voters over the total number of registered 1913 voters caused an increase of around 2% in votes for Estrema candidates but had no impact on their parliamentary net seat gains. Enfranchisement had also no impact on the parliamentary representation of aristocracy and traditional elites. Other outcomes (the chances of having candidates from the Estrema and the Her…ndel-Hirshman index of electoral competition) were also una¤ected, with the exception of turnout, which decreased. These …ndings show that de jure political equalization did not cause major changes to political representation, although the voting choices of the formerly and newly enfranchised citizens di¤ered on average. This apparent puzzle is the consequence of the heterogeneity of the e¤ect across a number of both social and political dimensions. The paper documents elites e¤ort to minimize the political impact of the reform.
    Keywords: democratization, voting, electoral competition, inequality, swing districts, political violence, Vatican, socialism
    Date: 2011–11
  2. By: Fabio Sabatini (University of Rome - La Sapienza); Eiji Yamamura (Seinan Gakuin University)
    Abstract: This paper explores the role of mass media in people's perceptions of charismatic leaders, focusing on the case of Junichiro Koizumi, Prime Minister of Japan from 2001 to 2006. Using survey data collected immediately after Koizumi's 2005 landslide electoral victory, this study empirically assesses the influence of television (TV) and newspapers on individuals' support for Koizumi and for the most distinctive policy action he announced during his campaign - the privatization of the postal service. The major findings are: (1) the frequency of exposure to mass media is positively related to the support for Koizumi but not for his principal policy and (2) a significant impact of TV is only observed among women. The habit of reading newspapers only slightly correlates with men's support for Koizumi. Our study's results suggest that compared to a political platform, charisma and attractiveness wield a greater influence on TV watchers of the opposite sex. Television apparently works as a powerful amplifier of leaders' appealing attributes. The resulting superstar effect may allow a charismatic candidate to win an election, even though his main agenda item (i.e., postal privatization) is strongly opposed by special interest groups and members of the ruling party.
    Keywords: mass media, television, newspapers, elections, Koizumi administration, Japan, superstar effect
    JEL: D72 L88 L82
    Date: 2014–09
  3. By: Tetsuo Ono (Graduate School of Economics, Osaka University)
    Abstract: This paper analyzes the political economy of public education and in-cash trans- fer in an overlapping generations model of a two-class society in which the dynamics of inequality is driven by the accumulation of human capital. The two redistributive policies are determined by voting, while private education that supplements public education is purchased individually. The model, which includes two-dimensional voting, demonstrates either of the following two types of stable steady-state equilib- ria, which are in line with the evidence: a high-inequality equilibrium with govern- ment expenditure favoring lump-sum transfer, or a low-inequality equilibrium with that favoring public education.
    Keywords: Public education, political economy, inequality
    JEL: D72 D91 I24
    Date: 2013–10
  4. By: Roberto Basile; Valerio Filoso
    Abstract: Do differently oriented political parties implement radically divergent policies which impact the citizens’s welfare? The overheated political debate notwithstanding, it is far from clear if this is really the case. Whereas current literature on this issue narrows the focus on specific policy outcomes and instruments, we use the real estate market to evaluate the impact of the whole spectrum of municipal policies. Using a novel dataset on Italian municipal elections for the years 2003–2011 and the corresponding changes in real estate market prices, we employ a regression discontinuity approach to detect the causal effect of a change in municipal majorities. We find robust evidence of no difference between the effects of the policies enacted by left-wing and right-wing parties after three, four, and five years since the election.
    Keywords: Political partisanship, Municipal politics, Real estate prices, Capitalization, Regression discontinuity.
    JEL: H11 H7
    Date: 2014–09–01
  5. By: P. Giannoccolo; M. Lisciandra
    Abstract: This analysis investigates a political corruption model that builds on previous literature on corruption in hierarchies. Our study enriches the literature on political corruption emphasizing the contrasting role of the minorities having a control role of the majorities. In particular, this paper provides a set-up for the conditions in which a briber can choose between either bribing only the majority and accepting the monitoring of the minority, or alternatively, bribing also the minority, which gives up to its control role and increases the probability of success of the illicit action. Minorities can exploit their typical monitoring role in modern democracies either to gain a reputational premium or to get involved in bribing and raising higher stakes. Thus, policy-makers face a sort of paradox when attempting to strengthen the control role of minorities and reduce corrupt behavior because this may cause the opposite effect of inducing the minorities to get involved into the illicit activity and, eventually, spread the corruption disease.
    JEL: D72 D73 K42
    Date: 2014–10
  6. By: Filipe R. Campante (Harvard University); Quoc-Anh Do (Département d'économie); Bernardo Guimaraes (Sao Paulo School of Economics)
    Abstract: We investigate the links between capital cities, conict, and the quality of governance, starting from the assumption that incumbent elites are constrained by the threat of insurrection, and that this threat is rendered less e_ective by distance from the seat of political power. We develop a model that delivers two key predictions: (i) conict is more likely to emerge (and to dislodge incumbents) closer to the capital, and (ii) isolated capital cities are associated with misgovernance. We show evidence that both patterns hold true robustly in the data, as do other ancillary predictions from the model.
    Keywords: Capital Cities; Governance; Institutions; Conflict; Civil War; Revolutions; Insurgencies; Population Concentration; Democracy; Power Sharing; Inefficient Institutions
    JEL: D02 D74 O18 R12
    Date: 2014–10
  7. By: Agustin Casas; Guillermo Díaz; Andre Trindade
    Abstract: We show that monitoring by individuals with preferences regarding the outcome of the supervised task interferes with the task's process: the monitors bias the results in favor of their own preferences. In particular, using an original dataset from the 2011 national elections in Argentina, we exploit a (quasi) natural experiment to show that electoral observers with partisan preferences cause a 1.7% to 7% increase in the vote count of the observers' preferred party. This bias, which appears under various electoral rules, concentrates in municipalities with lower civic capital (Guiso et al. (2010)) and weakens the accountability role of elections.
    Date: 2014–09
  8. By: Carlo Dal Maso (IMT Lucca Institute for Advanced Studies); Gabriele Pompa (IMT Lucca Institute for Advanced Studies); Michelangelo Puliga (IMT Lucca Institute for Advanced Studies); Gianni Riotta (Princeton University; IMT Lucca Institute for Advanced Studies); Alessandro Chessa (IMT Lucca Institute for Advanced Studies)
    Abstract: We analyze the network of relations between parliament members according to their voting behavior. In particular, we examine the emergent community structure with respect to political coalitions and government alliances. We rely on tools developed in the Complex Network literature to explore the core of these communities and use their topological features to develop new metrics for party polarization, internal coalition cohesiveness and government strength. As a case study, we focus on the Chamber of Deputies of the Italian Parliament, for which we are able to characterize the heterogeneity of the ruling coalition as well as parties specific contributions to the stability of the government over time. We find sharp contrast in the political debate which surprisingly does not imply a relevant structure based on establised parties. We take a closer look to changes in the community structure after parties split up and their effect on the position of single deputies within communities. Finally, we introduce a way to track the stability of the government coalition over time that is able to discern the contribution of each member along with the impact of its possible defection. While our case study relies on the Italian parliament, whose relevance has come into the international spotlight in the present economic downturn, the methods developed here are entirely general and can therefore be applied to a multitude of other scenarios.
    Keywords: Parliamentary Network, Party Cohesion, Government Strength
    JEL: D72
    Date: 2014–09
  9. By: Gautam Rao; Stefano DellaVigna; John List; Ulrike Malmendier
    Abstract: Why do people vote? We argue that social image plays a signiï¬cant role in explaining�turnout: people vote because others will ask. The expectation of being asked motivates�turnout if individuals derive pride from telling others that they voted, or feel shame from�admitting that they did not vote, provided that lying is costly. We design a ï¬eld experiment�to estimate the effect of social image concerns on voting. In a door-to-door survey about�election turnout, we experimentally vary (i) the informational content and use of a flyer pre-announcing the survey, (ii) the duration and payment for the survey, and (iii) the incentives�to lie about past voting. Our estimates suggest signiï¬cant social image concerns. For a�plausible range of lying costs, we estimate the monetary value of voting ‘because others willask’ to be in the range of $5-$15 for the 2010 Congressional election. In a complementary�get-out-the-vote experiment, we inform potential voters before the election that we will ask�them later whether they voted. We ï¬nd suggestive evidence that the treatment increases�turnout.
    Date: 2014–07
  10. By: Eligius Hendrix (Wageningen University, Logistics, Decision and Information Sciences - wageningen University); Annelies De Ridder (Nijmegen School of Management - Radboud university of Nijmegen); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Elena Saiz (Nijmegen School of Management - Radboud university of Nijmegen)
    Abstract: A spatial model of coalition formation is used together with data from Dutch elections and theoretical instances to study different procedures of coalition formation. The model shows that procedure plays an important role in reaching a coalition agreement and that political parties do not necessarily benefit from being a first-mover. Moreover, it is shown that a decrease in a party's flexibility can be (dis)advantageous in coalition negotiations. Furthermore, certain power sharing tactics appear not always to lead to an agreement that is in a party's advantage. The main message put forward is that the procedure of forming a coalition plays a more important role than is usually acknowledged in literature and practice.
    Keywords: Coalition formation ; Elections ; Maneuvering space ; Step-by-step procedure ; Simultaneous procedure ; Minimal winning coalition
    Date: 2013
  11. By: Kifmann, Mathias; Roeder, Kerstin
    Abstract: This paper studies how society votes on the payroll taxes of a basic income and a social health insurance scheme. Individuals differ along the two most important dimensions when it comes to the design of the two welfare schemes, namely, income and risk. Even though the introduction of a basic income scheme opens up the possibility for additional redistribution, it also crowds out social health insurance. We show that when both welfare schemes are open for debate, the political equilibrium is such that only the basic income scheme prevails. At the constitutional stage we determine which welfare scheme society agrees to implement behind the veil of ignorance and with a Rawlsian objective. Since social health insurance not only redistributes income from rich to poor but also from low-risk to high-risk agents, the doubly disadvantaged in society – low-income and high-risk agents – may lose out in the political process when a basic income scheme is in place. Depending on the amount of health care expenditure and the inequalities in income and risk, it may well be that a society will find it optimal to set up an institutional framework for a social health insurance scheme only.
    Keywords: Basic Income; Social Health Insurance; Income Taxation; Political Support
    JEL: D6 D7 H1 H2 H5
    Date: 2014–09–06
  12. By: Anja Neundorf; Kaat Smets; Gema M. García-Albacete
    Abstract: Despite being among the most important indicators of political participation, relatively little is known about the origins and the development of political interest over the life span. The formative years between childhood and adulthood are generally considered a crucial phase in which future electors form and strengthen political habits. The aim of this research is to better understand this important stage by examining the way in which parental socialization and lifecycle events affect the formation and growth of political interest during adolescence and young adulthood. While parental influences are expected to take place during childhood and persist over-time, life-cycle events are considered to influence development in early adulthood for those adolescents who did not grow up in a highly politicized environment. We assess these assumptions by applying latent growth curve modeling and using the German Socio-Economic Panel, which spans from 1984-2007. Our findings confirm strong parental socialization effects on interest levels during teenage years. While life-cycle events are not found to strongly affect the development of political interest during the formative years, the transition to adulthood is indeed a more critical period for those individuals who did not acquire high levels of interest from their family.
    Keywords: Political interest; young adulthood; parental socialization; life-cycle events; latent growth curve analysis; panel data
    Date: 2014
  13. By: Konstantin Yanovsky (Gaidar Institute for Economic Policy); Rinat Menyashev (National Research University Higher School of Economics); Timofey Ginker (Department of Economics Bar-Ilan University, Israel)
    Abstract: The ratings of economic and political institutions are well-known and widely used in the Social Science literature. These ratings are heavily relied on Experts' evaluations with subjective ordinal ranking (i.g., from -10 to 10 points). Such evaluations can be occasionally driven by ideological considerations. Much worse – they are essentially incompatible with each other, and therefore inapplicable in a comparative study at some one specific point in time chosen for observation (i.e., for a cross-section analysis). In this paper we propose two new indicators of institutional quality for 154 countries. These indicators are constructed in a way that minimizes the subjectivity of the evaluations. Only the presence or absence of a particular institutional phenomenon is identified. This puts much less weight on possible bias and makes it easy to verify. We show that these indices predict economic growth at least not worse, than those commonly used. The indicators proposed, include information about institutions that has been accumulated over a period of approximately two centuries and our expert’s evaluations are less vulnerable to political bias and provide better compatibility of the estimations of various experts for various countries.
    Keywords: Rule of Law, Democracy, Limited Government, Institutions, Indicators, Economic growth
    JEL: P50 N40 O43
    Date: 2014
  14. By: Malcolm S. Salter (Harvard Business School); (FULL NAME) ((SCHOOL NAME, UNIT NAME, DEPARTMENT NAME))
    Abstract: This paper seeks to reduce the ambiguity surrounding our understanding of what crony capitalism is, what it is not, what costs crony capitalism leaves in its wake, and how we might contain it.
    Keywords: Democracy, industrial governance, institutional corruption, crony capitalism, lobbying, campaign finance, the "revolving door," costs, cronyism, business ethics, campaign finance reform.
    Date: 2014–10

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