nep-pol New Economics Papers
on Positive Political Economics
Issue of 2015‒02‒11
eighteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Who’s Favored by Evaluative Voting ? An Experiment Conducted During the 2012 French Presidential Election By Antoinette Baujard; Frédéric Gavrel; Herrade Igersheim; Jean-François Laslier; Isabelle Lebon
  2. Policy experimentation, political competition, and heterogeneous beliefs By Antony Millner; Hélène Ollivier; Leo Simon
  3. Political Activism and Firm Innovation By Ovtchinnikov , Alexei; Reza , Syed
  4. Voter Turnout and City Performance. By Lo Prete, Anna; Revelli, Federico
  5. The Effect of the Proportionality Degree of Electoral Systems on Corruption By Maria Rosaria Alfano; Anna Laura Baraldi; Erasmo Papagni
  6. Reward from public office and selection of politicians by parties By L. Deidda; F. Cerina
  7. On the Timing of Political Regime Changes: Theory and Application to the Arab Spring By Raouf Boucekkine; Fabien Prieur; Klarizze Puzon
  8. The political economy of inclusive rural growth By Michael Carter; John Morrow
  9. Expertise in an Age of Polarization: Evaluating Scientists? Political Awareness and Communication Behaviors By Nisbet, Matthew C; Ezra Markowitz
  10. Happiness Before and After an Election: An Analysis Based on a Daily Survey around Japan's 2009 Election By Yusuke Kinari; Fumio Ohtake; Miles Kimball; Shoko Morimoto; Yoshiro Tsutsui
  11. Dictatorships (actually) redistribute more By Pantelis Kammas; Vassilis Sarantides
  12. Do The Right Thing. A comparison of politicians' incentives across constitutional systems By Giovanna Iannantuoni; Elena Manzoni
  13. Does an informal sector reduce the economic dividends of political stability? Empirical evidence. By Mazhar, Ummad; Jafri, Juvaria
  14. Network geometry and the scope of the median voter theorem By Stefano Vannucci
  15. Political Economy of Macroeconomic Policymaking: Economic Crises and Technocratic Governance By Stephen B. Kaplan
  16. Russian Political Economy from Utopia to Social Engineering: An Introduction By Akhabbar, Amanar; Allisson, Francois
  17. A Model of Market and Political Power Interactions for Southern Europe By Kollintzas, Tryphon; Papageorgiou, Dimitris; Vassilatos, Vanghelis
  18. Dynamic Behavior and Player Types in Majoritarian Multi-Battle Contests By Alan Gelder; Dan Kovenock

  1. By: Antoinette Baujard; Frédéric Gavrel (CREM (UMR CNRS 6211), University of Caen Basse-Normandie, 14 000 Caen, France); Herrade Igersheim (CNRS and Beta (UMR CNRS 7522), University of Strasbourg, 67 085 Strasbourg, France); Jean-François Laslier (CNRS and PJSE (UMR CNRS 8545), 75014 Paris, France); Isabelle Lebon (CREM (UMR CNRS 6211), University of Caen Basse-Normandie, 14 000 Caen, France)
    Abstract: Under evaluative voting, the voter freely grades each candidate on a numerical scale, with the winning candidate being determined by the sum of the grades they receive. This paper compares evaluative voting with the two-round system, reporting on an experiment, conducted during the 2012 French presidential election, which attracted 2,340 participants. Here we show that the two-round system favors “exclusive” candidates, that is candidates who elicit strong feelings, while evaluative rules favor “inclusive” candidates, that is candidates who attract the support of a large span of the electorate. These differences are explained by two complementary reasons : the opportunity for the voter to support several candidates under evaluative voting rules, and the specific pattern of strategic voting under the two-round voting rule.
    Keywords: Voting, In Situ Experiment, Evaluative Voting, Approval Voting, Two-round system
    JEL: D72 C93
    Date: 2014
  2. By: Antony Millner; Hélène Ollivier; Leo Simon
    Keywords: beliefs; learning; political economy
    JEL: D72 D83 H40 P48
    Date: 2014–09–07
  3. By: Ovtchinnikov , Alexei; Reza , Syed
    Abstract: Political activism positively affects firm innovation. Firms that support more politicians, politicians on Congressional committees with jurisdictional authority over the firms’ industries and politicians who join those committees innovate more. The authors employ instrumental variables estimation and a natural experiment to show a causal effect of political activism on innovation. The results are consistent with the hypothesis that political activism is valuable because it helps reduce policy uncertainty, which, in turn, fosters firm innovation. Also consistent with this hypothesis, we show that politically active firms successfully time future legislation and set their innovation strategies in expectation of future legislative changes.
    Keywords: political contributions; innovation; investment policy; policy uncertainty
    JEL: D72 D80 G31 G38 O31 O38
    Date: 2014–07–24
  4. By: Lo Prete, Anna; Revelli, Federico (University of Turin)
    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. Empirically, 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 refecting 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 presence of concomitant regional, general and European parliament elections, and to weather conditions (rainfall) on the election day. The results from a number of speciÖcations 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.
    Date: 2014–10
  5. By: Maria Rosaria Alfano; Anna Laura Baraldi; Erasmo Papagni
    Abstract: This work provides a new way to analyze of the effect of electoral system and corruption: through its degree of proportionality. It seems the correct way to consider them because their proportionality degree varies under the same PR, plurality and mixed system. Results show that those degrees of proportionality which allow both voters’ and opponents’ monitors to exercise their power, induce politicians to avoid corrupt behaviour. This happens when we increase plurality elements into PR. But it is beneficial only up to certain proportionality degrees, after which the corresponding level of corruption begins to grow. For governors the choice of their proportionality degree becomes, therefore, fundamental.
    Keywords: Electoral Systems, corruption, proportionality degree, semi-parametric methods.
    JEL: D72 C23
    Date: 2015–01–03
  6. By: L. Deidda; F. Cerina
    Abstract: We investigate the relationship between quality of politicians and reward from public office in a game between parties and citizens, in which parties play a crucial role in the selection of candidates. Citizens who wish to become politicians have to become party activists first. Parties produce information about the quality of potential candidates. An increase in the reward from public offices leads to two opposing effects on the average quality of politicians - 1) A selection effect, whereby more skilled citizens enter politics, leading to an increase in average quality; 2) An information manipulation effect such that unskilled activists will have a higher probability to be elected since parties find convenient to increase the degree of costly information manipulation leading to a decrease in average quality. We find that, for a plausible range of parameters values, the information manipulation effect dominates the selection effect when - 1) The cost of manipulating information is low enough; 2) The amount of information that parties can provide at no cost is low enough; 3) The net gains from becoming a politicians for unskilled citizens is sufficiently larger than that for skilled citizens. These findings provide a rational for the ambiguous sign of the empirical correlation (relationship) between quality and pay of politicians.
    Keywords: Selection, Quality of politicians, Public office rewards, Political parties, Information manipulation
    JEL: J33 H70 D72
    Date: 2014
  7. By: Raouf Boucekkine (Aix-Marseille University); Fabien Prieur (University of Montpellier I and INRA); Klarizze Puzon (University of Montpellier I)
    Abstract: We develop a continuous time dynamic game to provide with a benchmark theory of Arab Spring-type events. We consider a resource-dependent economy with two interacting groups, the elite vs. the citizens, and two political regimes, dictatorship vs. a freer regime. Transition to the freer regime can only be achieved if citizens decide to revolt given the concession/repression policy of the elite. Departing from the related literature, the revolution optimal timing is an explicit control variable in the hands of citizens. The elite is the strategic leader: she ultimately chooses her policy knowing the reaction function of citizens. In this framework, we provide with a full equilibrium analysis of the political regime switching game and notably emphasize the role of the direct switching cost of the citizens and of the elite's self-preservation options. In particular, we show how the incorporation of explicit revolution timing may change the conventional wisdom in the related institutional change literature. Finally, we emphasize how the theory may help explaining some key features of the Arab Spring.
    Keywords: Political Transitions, Revolution, Natural Resources, Optimal Timing, Regime Switching, Dynamic Game
    JEL: C61 D74 Q34
    Date: 2014–12
  8. By: Michael Carter; John Morrow
    Abstract: Abstract Commentators on the `East Asian Miracle' of inclusive growth have often pointed toward shared rural growth policies. But why were these policies not chosen elsewhere? This paper models voters who invest in either subsistence or a complex technology in which public goods complement private capital. Investment and technology choices vary with wealth and the level of public goods enforced by political lobbies. Outcomes depend on the strength of the incipient middle class who bolster political incentives through contributions. Economies with a stronger middle class due to lower inequality or lower risk may thereby sustain higher productivity through public good provision.
    Keywords: Poverty traps; political economy; inequality; lobby formation
    JEL: D2 H4 O1 Q1
    Date: 2014–02
  9. By: Nisbet, Matthew C; Ezra Markowitz
    Abstract: During the George W. Bush administration, intense debate focused on the Administration?s interference with the work of government scientists. In this study, analyzing a May/June 2009 survey of members of the American Association for the Advancement of Science (AAAS), we evaluate the factors during this period that influenced scientists? awareness of political interference and their media outreach and communication activities. Controlling for demographic and professional-level influences, those members who were more liberal in their political outlook, who were frequent blog readers, and who felt strongly about global warming were substantially more likely to have heard ?a lot? about political interference. However, neither ideology, partisanship, nor opinion-intensity were predictive of the various media and communication behaviors assessed. Instead, the strongest predictor was the belief that media coverage was important for an individual?s career advancement. Implications for evaluating the expert community?s participation in future political debates are discussed.
  10. By: Yusuke Kinari; Fumio Ohtake; Miles Kimball; Shoko Morimoto; Yoshiro Tsutsui
    Abstract: This paper investigates whether the Japanese voters became happy and/or unhappy due to the results of the General Election in 2009. We conducted a daily web survey for seven days before and after the election, obtaining 1068 responses. Estimating a fixed effects model, we found that supporters of the Democratic Party of Japan (DPJ), the winner, became significantly happier, and supporters of the Liberal Democratic Party of Japan (LDP) and New Komeito, the losers, became significantly unhappier on the day following the election. However, happiness returned to the previous level in one or two days, implying people adapted to the news very quickly. Dividing those who support the policies of DPJ into two groups, those who expect material benefits from the victory of DPJ and those who do not, we demonstrated that the reason why the supporters of the winner (DPJ) felt happy was not because they obtained material benefits from the change of government. We also found that the happiness level of those whose expectation of the election results were realized did not change, while that of those whose expectation differed from the reality changed substantially. In a word, only unexpected results matter.
    Date: 2015–01
  11. By: Pantelis Kammas (University of Ioannina); Vassilis Sarantides (University of Sheffield)
    Abstract: This paper seeks to examine the effect of political regimes on actual fiscal redistribution. We first use a simplified theoretical framework which allows us to formalize the testable implications of the relevant literature. Subsequently, employing data on Gini coefficients before and after taxes and transfers we develop a measure of fiscal redistribution which allows us to capture the targeting of government transfers. Then, our empirical analysis examines the impact of the political regime on realized fiscal redistribution for a panel of 133 developed and developing countries between 1960 and 2010. Our results suggest that dictatorial regimes redistribute more than democracies through fiscal policies. Moreover, our analysis suggests that the positive impact of the dictatorial regime on fiscal redistribution is mitigating after some years of regime’s stability and finally becomes negative. Our empirical findings remain robust across several different specifications and estimation techniques.
    Keywords: democracy, fiscal redistribution
    JEL: P16 H5
    Date: 2015–01
  12. By: Giovanna Iannantuoni; Elena Manzoni
    Abstract: Constitutional structures shape politicians' behaviour and hence policy outcomes through the different incentive schemes at work. In this paper we analyse these mechanisms in parliamentary and presidential systems. Such a comparison is carried over by analysing how the two systems are able to select the efficient policy in presence of asymmetric information. The constitutional structures differ in that the policy proposal in parliamentary democracies is observable and confidence-dependent. The main findings suggest that the parliament responds to the incentive scheme better in presidential systems due to less uncertainty that legislators face over their term limit. However, the parliamentary system induces the executive to behave more efficiently due to selection and disciplining effeects.
    Keywords: presidential system, parliamentary system, confidence vote, hierarchical accountability
    JEL: C72 D72
    Date: 2015–01
  13. By: Mazhar, Ummad; Jafri, Juvaria
    Abstract: Political stability is generally hailed as an asset that yields positive economic dividends. In particular, the macroeconomic environment is likely to benefit from political stability. On the other hand, the existence of a sizeable shadow (or informal) economy represents institutional weaknesses and may undermine the macroeconomic environment. The latter effect is more likely if the shadow economy reduces the government’s tax revenues and disturbs the balance of demand and supply for formal businesses. This paper tests these contradictory tendencies. Circumventing the issues related to reverse causality and endogeneity of the informal sector, we define a qualitative variable for the size of the informal sector. The qualitative variable assumes a value of 1 for all the countries having an informal sector exceeding 25 percent of GDP on average over our sample period. Using a large data set of 162 countries over the 1999 to 2007 period we find that an informal sector can undermine the positive effect of political stability. The results are robust against alternative specifications and satisfy the usual assumptions of valid empirical analysis.
    Keywords: Political stability; Informal sector or shadow economy; Inflation; Openness; tax revenue.
    JEL: E6 E61
    Date: 2014
  14. By: Stefano Vannucci
    Abstract: It is shown that the median voter theorem for committee-decisions holds over a full unimodal preference domain whenever (i) the underlying median interval space satisfi?es interval antiexchange and (ii) unimodality is defi?ned with respect to the incidence-geometry of the relevant outcome space or network. Thus, in particular, the interval spaces canonically induced by trees do support the median voter theorem on their own full unimodal preference domains. Conversely, validity of the median voter theorem on the full unimodal preference domain of a certain median interval space on a discrete outcome space requires that the graph canonically induced by that interval space be precisely a tree.
    JEL: D71
    Date: 2015–01
  15. By: Stephen B. Kaplan (Department of Economics/Institute for International Economic Policy, George Washington University)
    Abstract: How do economic crisis a§ect national-level policy choices? Are technocratic advisors more likely to enter government during periods of severe economic volatility? If so, how does such governance a§ect economic policymaking and social responsiveness? In this paper, I evaluate the role of technocratic advisors on Latin American reforms. Building on the political psy- chology literature, I argue that collective crisis memories in technocratic communities have a disproportionate inaÌuence on elite-level policymaking. Employing an originally constructed data index, the Index of Economic Advisors, I conduct a large-N cross-national test from 1960-2011 to examine whether economic crises lead to more technocrats serving in presidential cabinets, and Önd that crises often professionalize presidential teams. The statistical results also show that technocratsiÌgovernance approaches are conditioned by the nature of past shocks. An in- aÌationary crisis history makes budget austerity more likely. DeaÌationary spirals have been far less common in Latin America, but comparative case study evidence of Argentina in the early 2000s shows that these shocks often catalyze sustained Öscal expansion. This investigation has signiÖcant implications for the study of democracy and development. Technocratic governance might help provide economic stability following crises, but an enduring political focus on past crises can limit policy aÌexibility and social responsiveness.
    Keywords: Political Economy, Development, Austerity, Latin America, Economic Crises, Political Psychology, Technocrats, Fiscal Policy, Macroeconomic Policy
    JEL: B22 E31 E60 E62 E65 H30 H60 N16 O54 O57
  16. By: Akhabbar, Amanar; Allisson, Francois
    Abstract: In September 2009, the editors of this special issue organized at Lausanne University a Workshop on the History of Russian Political Economy and Statistics at the turn of the 20th century. When preparing a call for paper for this journal, the editors realized that papers presented at the Lausanne Workshop addressed implicitly or explicitly questions about how to combine Economic Theory, Social Engineering and Utopia. The contributions contained in this issue suggest various possible configurations between these three categories of scientific inquiry.
    Keywords: Russia; Russian Political Economy;Political Economy; Utopia; Social Engineering;
    JEL: B1 B2 B3 B4
    Date: 2014–01
  17. By: Kollintzas, Tryphon; Papageorgiou, Dimitris; Vassilatos, Vanghelis
    Abstract: In recent years the growth pattern of most Southern European countries has been disturbed, as those countries are suffering from economic crises that go beyond the usual business cycle. In this paper, we develop a dynamic general equilibrium model of market and political power interactions that explains this growth reversal. Moreover, the model is consistent with several stylized facts of those countries, where wages in the public sector relative to the private sector are high and these wage differentials correlate negatively with public sector employment over total employment, total factor productivity, and output growth. The model is a synthesis of the insiders-outsiders labor market structure and the concept of an elite government. Outsiders form a group of workers that supply labor to a competitive private sector. And, insiders form a group of workers that enjoy market power in supplying labor to the public sector and influence the policy decisions of government, including those that affect the development and maintenance of public sector infrastructures.
    Keywords: Growth; Insiders - Outsiders; Politicoeconomic Equilibrium; Public Sector Wage Premium; Southern European Economies
    JEL: J45 O43 O52 P16
    Date: 2015–01
  18. By: Alan Gelder (Economic Science Institute, Chapman University); Dan Kovenock (Economic Science Institute, Chapman University)
    Abstract: In a dynamic contest where it is costly to compete, a player who is behind must decide whether to surrender or to keep fighting in the face of bleak odds. We experimentally examine the game theoretic prediction of last stand behavior in a multi-battle contest with a winning prize and losing penalty, as well as the contrasting prediction of surrendering in the corresponding contest with no penalty. We find varied evidence in support of these hypotheses in the aggregated data, but more conclusive evidence when scrutinizing individual player behavior. Players’ realized strategies tend to conform to one of several “types”. We develop a taxonomy to classify player types and study how these types interact and how their incidence varies across treatments. Contrary to the theoretical prediction, escalation is the predominant behavior, but last stand and surrendering behaviors also arise at rates responsive to the importance of losing penalties.
    Keywords: Dynamic Contest, Multi-Battle Contest, Player Type, Experiment, All-Pay Auction, Escalation, Last Stand, Maximin
    JEL: C73 C92 D44 D72 D74
    Date: 2015

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