nep-pol New Economics Papers
on Positive Political Economics
Issue of 2014‒12‒13
eleven papers chosen by
Eugene Beaulieu
University of Calgary

  1. Voter Turnout and City Performance By Anna Lo Prete; Federico Revelli
  2. Unauthorized Immigration and Electoral Outcomes By Baerg, Nicole Rae; Hotchkiss, Julie L.; Quispe-Agnoli, Myriam
  3. Isolated Capital Cities, Accountability and Corruption: Evidence from US States By Campante, Filipe Robin; Do, Quoc-Anh
  4. Incumbency Advantage in Non-Democracies By Georgy Egorov; Konstantin Sonin
  5. Military careers of politicians matter for national security policy By David Stadelmann; Marco Portmann; Reiner Eichenberger
  6. Commodity Price Shocks, Conflict and Growth: The Role of Institutional Quality and Political Violence By Musayev, Vusal
  7. Generalised Trust, Institutional and Political Constraints on the Executive and Deregulation of Markets By Markus Leibrecht; Hans Pitlik
  8. Storable Votes and Judicial Nominations in the U.S. Senate By Alessandra Casella; Sébastien Turban; Gregory J. Wawro
  9. Political stability, regulation and investment in the African mobile markets By Moshi, Goodiel; Mitomo, Hitoshi
  10. The Power of the Street: Evidence from Egypt's Arab Spring By Daron Acemoglu; Tarek A. Hassan; Ahmed Tahoun
  11. Rents and the Political Economy of Development Aid By Hagen, Rune Jansen

  1. By: Anna Lo Prete (Department of Economics and Statistics, University of Torino); Federico Revelli (Department of Economics and Statistics, University of Torino)
    Abstract: We study the impact of exogenous variation in Italian municipal elections'voter turnout rates on city performance scores and elected mayors' indicators of valence. First, we build a simple model of voluntary and costly expressive voting, where the relative weight of ideology and valence issues over voting costs determines how people vote, and if they actually turn out to vote. We show that the cost of voting depresses voter turnout, yet can raise the chances of selecting higher valence candidates and thereby improve government performance. Em- pirically, city performance is measured along a number of dimensions including a unique index of overall urban environmental quality, and mayors'valence is proxied by variables reflecting their professional experience and competence. The staggered nature of the municipal election schedule allows us to exploit exogenous variation in voter turnout rates through the 2000s due to the pres- ence of concomitant regional, general and European parliament elections, and to weather conditions (rainfall) on the election day. The results from a number of specifications and quality of policy-making indicators consistently point to a negative impact of voter turnout rates on the performance of cities and the valence of mayors.
    Keywords: local elections, voter turnout, urban environmental quality, weather
    JEL: D72 H72 C26
    Date: 2014–11
  2. By: Baerg, Nicole Rae; Hotchkiss, Julie L.; Quispe-Agnoli, Myriam
    Abstract: How do inflows of unauthorized immigrants shape elections? Political economy theories often yield competing predictions and mixed empirical results. The main hurdle of empirically evaluating the impact of unauthorized immigrants on election outcomes is finding reliable data that can measure unauthorized immigration flows over time. Using a unique methodology for identifying undocumented workers across counties in the state of Georgia in the United States, we find a positive relationship between the share of the county's workforce that is unauthorized and the share of votes going to Republicans in elections. Furthermore, we show that this effect is more pronounced for the presence of unauthorized immigrants than Hispanics; is stronger in counties with higher median household income; and is substantively larger in U.S. Congressional elections than Gubernatorial or Senatorial elections. We discuss which political economy theories are most consistent with this set of findings.
    Keywords: Elections, International Migration, Undocumented, Unauthorized
    JEL: J15
    Date: 2014–11
  3. By: Campante, Filipe Robin; Do, Quoc-Anh
    Abstract: We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms: newspapers cover state politics more when readers are closer to the capital, voters who live far from the capital are less knowledgeable and interested in state politics, and they turn out less in state elections. We also find that isolated capitals are associated with more money in state-level campaigns, and worse public good provision.
    Date: 2014
  4. By: Georgy Egorov; Konstantin Sonin
    Abstract: In elections that take place in a less-than-perfect democracy, incumbency advantages are different from those in mature democracies. The incumbent can prevent credible challengers from running, organize vote fraud, or even physically eliminate his main opponents. At the same time, formally winning the election does not guarantee staying in power. We present a unified model of elections and mass protests where the purpose of competitive elections is to reveal information about the relative popularity of the incumbent and the opposition. Citizens are heterogenous in their attitudes toward the dictator, and these individual preferences serve as private signals about the aggregate distribution of preferences; this ensures a unique equilibrium for any information the incumbent may reveal. We show that the most competent or popular dictators run in competitive elections, mediocre ones prevent credible opponents from running or cancel elections, and the least competent ones use outright repressions. A strong opposition makes competitive elections more likely but also increases the probability of repression. A totalitarian regime, where repression is cheaper, will have more repression, but even in the absence of repression, competitive elections will be rarer. A crueler, say, military, regime, where protesting is costly, makes repression less likely and, surprisingly, competitive elections more likely.
    JEL: D72 D82 H00
    Date: 2014–09
  5. By: David Stadelmann; Marco Portmann; Reiner Eichenberger
    Abstract: Do politicians with a military background decide differently on military affairs? We investigate the informative institutional setting of the Swiss conscription army. Politicians who served in the military have a higher probability of accepting pro-military legislative proposals, even when controlling for party affiliations and revealed preferences of constituents that politicians are supposed to represent. While conscription requires all able-bodied man to serve at least as soldiers, we can exploit variation in exposure to enforced and voluntary service. This allows us to provide indicative evidence that motivation for the military, instead of compulsory service, plays a substantial role for explaining legislative decisions on military affairs.
    Keywords: Military; Legislative voting; Constituents� preferences JEL Classification: J16; D72
    JEL: J16 D72
    Date: 2014–11
  6. By: Musayev, Vusal
    Abstract: This analysis empirically investigates the relationships between resource windfalls, political regimes, conflict and economic growth using recent advances in panel estimation methods and a distinctive commodity price shock measurement. The paper clarifies many of the ambiguous outcomes of the existing literature, particularly showing that resource windfalls have significant impact on conflict only in politically unstable autocracies, which itself is heterogeneous in the response conditional on a country’s initial political violence level. The findings also demonstrate that resource shocks are positively associated with economic performance in democracies and in politically stable autocracies, while significantly deteriorating growth for politically unstable autocracies.
    Keywords: Commodity Price Shocks; Economic Growth; Political Regimes; Conflict; Political Violence.
    JEL: H56 O43 Q34
    Date: 2014–04
  7. By: Markus Leibrecht; Hans Pitlik (WIFO)
    Abstract: It is frequently claimed that high levels of generalised trust are conducive for economic reforms. In contrast, the "traditional view" on institutional and political constraints on the executive (IPCE) postulates that high IPCE tend to paralyse the decision-making process, thus blocking required policy changes. By stressing credibility issues of economic reforms and transaction cost for special interest groups, a more positive view however sees IPCE as potentially conducive to reforms. This paper empirically explores the significance of these claims for the case of economic deregulation. In particular, it elaborates on the hypotheses that IPCE do not impact on economic reforms in an environment of high generalised trust and that the positive impact of trust increases with the extent of IPCE. The results provide evidence in favour of the traditional view on IPCE. However, it is also shown that IPCE are an obstacle for economic policy liberalisation only in relatively low trusting environments. In contrast, a robust positive correlation of generalised trust with the extent of economic deregulation is isolated, and trust unfolds a particular strength with increasing levels of IPCE.
    Date: 2014–10–29
  8. By: Alessandra Casella; Sébastien Turban; Gregory J. Wawro
    Abstract: We model a procedural reform aimed at restoring a proper role for the minority in the confirmation process of judicial nominations in the U.S. Senate. We analyze a proposal that would call for nominations to the same level court to be collected in periodic lists and voted upon individually with Storable Votes, allowing each senator to allocate freely a fixed number of total votes. Although each nomination is decided by simple majority, storable votes make it possible for the minority to win occasionally, but only when the relative importance its members assign to a nomination is higher than the relative importance assigned by the majority. Numerical simulations, motivated by a game theoretic model, show that under plausible assumptions a minority of 45 senators would be able to block between 20 and 35 percent of nominees. For most parameter values, the possibility of minority victories increases aggregate welfare.
    JEL: D72 H11 K40
    Date: 2014–09
  9. By: Moshi, Goodiel; Mitomo, Hitoshi
    Abstract: This study attempted to analyze the effect of regulation and political stability in allocation of mobile telecommunication investments in the African continent between year 2001 and 2011. In order to better understand the dynamics of investment in telecommunications, a framework was developed to understand the factors that determine investments in telecom industry at country and industry level, particularly: institutions, market size/demand level, market structure and investing cost. The results show that investments in the telecommunications industry are positively dependent on liberalization that opened the market to private sector; however, no statistical evidence was found on the effect of political stability measured by the democratic process. Further, the study has shown that market structure especially competition, and market size and cost of investing in a country are important factors for investments allocation in mobile telecommunications industry among African countries.
    Keywords: mobile telecommunication,investment, political stability,liberalization,African countries
    JEL: L51 L1 C23 C26 D43
    Date: 2014
  10. By: Daron Acemoglu; Tarek A. Hassan; Ahmed Tahoun
    Abstract: During Egypt's Arab Spring, unprecedented popular mobilization and protests brought down Hosni Mubarak's government and ushered in an era of competition between three groups: elites associated with Mubarak's National Democratic Party (NDP), the military, and the Islamist Muslim Brotherhood. Street protests continued to play an important role during this power struggle. We show that these protests are associated with differential stock market returns for firms connected to the three groups. Using daily variation in the number of protesters, we document that more intense protests in Tahrir Square are associated with lower stock market valuations for firms connected to the group currently in power relative to non-connected firms, but have no impact on the relative valuations of firms connected to other powerful groups. We further show that activity on social media may have played an important role in mobilizing protesters, but had no direct effect on relative valuations. According to our preferred interpretation, these events provide evidence that, under weak institutions, popular mobilization and protests have a role in restricting the ability of connected firms to capture excess rents.
    JEL: E02 G12 G3 O11 O43 O53
    Date: 2014–11
  11. By: Hagen, Rune Jansen (Department of Economics, University of Bergen)
    Abstract: Empirical studies suggest little impact of foreign aid on growth on average. As aid can be viewed as a sovereign rent akin to natural resource rents, it is likely that rent seeking plays a role in explaining this disappointing outcome. The analytic starting point of this paper is the long chain of agents connecting donors in rich countries with beneficiaries in poor countries, making aid a contestable rent for recipients at both the international and the domestic levels. Thus, rent seeking can distract attention and divert resources from more important sources of long-term progress. Moreover, there are serious incentive problems on the donor side of the relationship. Empirically, the effects seem quite heterogeneous and hence more research is needed to further our understanding of this complex system.
    Keywords: Aid effectiveness; Donor motives; Rent seeking; Governance; Resource diversion; Development distraction; Non-government organizations; Aid organizations; World Bank
    JEL: F35
    Date: 2014–11–06

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