nep-pol New Economics Papers
on Positive Political Economics
Issue of 2015‒03‒13
eight papers chosen by
Eugene Beaulieu
University of Calgary

  1. Election and Divisiveness: Theory and Evidence By Elliott Ash; Massimo Morelli; Richard Van Weelden
  2. Polito-Economic Aspects of Renewable Energy: Voting on the Level of Renewable Energy Support By Vladimir Udalov
  3. Multicandidate Elections: Aggregate Uncertainty in the Laboratory By Bouton, Laurent; Castanheira, Micael; Llorente-Saguer, Aniol
  4. Deliberating Collective Decisions By Chan, Jimmy; Lizzeri, Alessandro; Suen, Wing; Yariv, Leeat
  5. Decomposing the effect of height on income in China: The role of market and political channels By Eiji Yamamura; Russell Smyth; Yan Zhang
  6. Participative Political Institutions and City Development 800Ð1800 By Fabian Wahl
  7. Political Capital in the 21st Century: An Electoral Theory of Going Public and Private By Klingler, Jonathan
  8. Ethnic divisions, political institutions and the duration of declines: A political economy theory of delayed recovery By Bluhm R; Thomsson K.M.

  1. By: Elliott Ash; Massimo Morelli; Richard Van Weelden
    Abstract: We analyze the effort allocation choices of incumbent politicians when voters are uncertain about politician preferences. There is a pervasive incentive to “posture” by overproviding effort to pursue divisive policies, even if all voters would strictly prefer to have a consensus policy implemented. As such, the desire of politicians to convince voters that their preferences are aligned with the majority of the electorate can lead them to choose strictly pareto dominated effort allocations. Transparency over the politicians’ effort choices can either mitigate or re-enforce the distortions depending on the strength of politicians’ office motivation and the capacity for the holder of the office in question to effect change. When re-election concerns are paramount transparency about effort choices can be bad for both incentivizing politicians to exert effort on socially efficient tasks and for allowing voters to select congruent politicians. We take our theoretical results to the data with an empirical analysis o f how U.S. Congressmen allocate time across issues. Consistent with the theory, we find evidence of political posturing due to elections (among U.S. Senators) and due to higher transparency (among U.S. House Members). Keywords: Posturing, Reputation, Transparency, Effort Allocation, Multi-task. JEL: D72, D78, D82.
    Date: 2015
  2. By: Vladimir Udalov (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: This paper investigates an intergenerational conflict arising from renewable energy support (RES). Using a simple polito-economic overlapping generations (OLG) model, it can be shown that old individuals unambiguously lose from renewable energy support and therefore vote for its minimum level. In contrast, young individuals benefit from positive environmental and consumption effects and, therefore, vote for a higher level of renewable energy support. The voting outcome is determined through a political process, whereby political parties converge to platforms that maximize the aggregate welfare of the electorate. Depending on the size of the exogenous parameters, the level of RES varies between the voting preferences of younger and older individuals. As a result, this model offers a good starting point for possible medium to long-term policy recommendations in order to increase the accepted level of RES.
    Keywords: overlapping generations, generational conflict, environmental policy, renewable energy, voting
    JEL: Q54 Q29 D60 D90 H23 D72
    Date: 2014–11
  3. By: Bouton, Laurent; Castanheira, Micael; Llorente-Saguer, Aniol
    Abstract: The rational-voter model is often criticized on the grounds that two of its central predictions (the paradox of voting and Duverger's law) are at odds with reality. Recent theoretical advances suggest that these empirically unsound predictions might be an artifact of an assumption in those models: the absence of aggregate uncertainty about the distribution of preferences in the electorate. In this paper, we propose the first direct empirical evidence of the effect of aggregate uncertainty in multicandidate elections. Adopting a theory-based experimental approach, we explore whether aggregate uncertainty indeed favors the emergence of non-Duverger's law equilibria in plurality elections. Our experimental results support the main theoretical predictions: sincere voting is a predominant strategy under aggregate uncertainty, whereas without aggregate uncertainty, voters massively coordinate their votes behind one candidate, who wins almost surely.
    Keywords: aggregate uncertainty; experiments; multicandidate elections; plurality; rational-voter model
    JEL: C92 D70
    Date: 2015–03
  4. By: Chan, Jimmy; Lizzeri, Alessandro; Suen, Wing; Yariv, Leeat
    Abstract: We present a dynamic model of sequential information acquisition by a heterogeneous committee. At each date agents decide whether to vote to adopt one of two alternatives or continue to collect more information. The process stops when a qualified majority vote for an alternative. Three main insights emerge from our analysis and match an array of stylized facts on committee decision making. First, majority rule is more fragile than super-majority rules to impatient committee members. Second, more diverse preferences, more consensual deliberation rules, or more unanimous de- cision voting rules lead to lengthier deliberation and more accurate decisions. Last, balanced committees unanimously prefer to delegate deliberation power to a moderate chairman rather than be governed by a deliberation rule such as unanimity.
    Keywords: collec- tive learning; optimal stopping; sequential likelihood ratio test; swing voters
    JEL: D71 D72 D83
    Date: 2015–03
  5. By: Eiji Yamamura; Russell Smyth; Yan Zhang
    Abstract: It is well known that height is positively associated with earnings. Based on individual level data, this paper investigates the channels through which height influences income in China. Our first key finding is that taller people are more likely to become members of the Communist Party, resulting in an increase in their income level. We label this the height premium in earnings through the political channel. Second, controlling for the political channel of the height premium, height is positively associated with income in the labor market. We label this the height premium through the market channel. Third, the height premium in earnings through the market channel is larger than that through the political channel.
    Date: 2015–03
  6. By: Fabian Wahl (University of Hohenheim)
    Abstract: This study investigates the effect of participative political institutions (PPIs) that emerged in many central European cities from the late 13th century. The empirical analysis of the paper is based on newly compiled long-run data for the existence of different types of PPIs in 104 cities in the Holy Roman Empire. The effect of both an overall index of participativeness of political institutions as well as of the individual PPIs is tested empirically. When pooled over all periods and observations, there seems to be a significant positive overall effect of PPIs in the German-speaking area but not in the Low Countries. The study founds considerable spatial and temporal heterogeneity in the effect of PPIs. Furthermore, the effect of different types of PPIs differs substantially and in general seems to be short-lived. That is, the results show that the positive initial effect of some PPIs declined the longer they existed and over time.
    Keywords: Medieval Period, Early-Modern Period, Central Europe, City Development, Political Institutions, Early Democracy, Guilds
    JEL: N44 N94 O10 R11 H11 D72
    Date: 2015–03
  7. By: Klingler, Jonathan
    Abstract: The Bush and Obama administrations have complemented their capacity to make public appeals by creating grassroots lobbying organizations with the explicit purpose of mobilizing supporters to pressure Congress to pass presidential policy priorities. This paper advances the study of organizations like Organizing for Action by considering their ability to make targeted appeals to the primary electorate of the president's party as well as orchestrate indirect mass persuasion campaigns. Furthermore, this paper defines the costs of lobbying in terms of those tactics' electoral costs. I present a model which predicts that targeted appeals will be more common under unified government and that mass persuasion attempts will be less common as the organizational capital of these organizations can be efficiently applied to electoral ends. The model also predicts that public appeals become less common as the time costs and relative electoral productivity of presidential time increase. I find empirical support for these hypotheses in data obtained from emails sent by Organizing for America/Organizing for Action to subscribers since its creation in early 2009 and in presidential primetime addresses made since 1957.
    Date: 2014–12
  8. By: Bluhm R; Thomsson K.M. (UNU-MERIT)
    Abstract: This paper analyzes the duration of large economic declines and provides a theory of delayed recovery. First, we develop a formal political economy model that illustrates a simple mechanism of how weak constraints on the political executive can lead to longer declines in ethnically heterogeneous countries. The model shows how uncertain post-recovery incomes and a winner-take-all threshold effect create a commitment problem rendering a cooperative equilibrium inaccessible. Holding out can benefit groups by reducing the threshold effects in subsequent periods, thus limiting the remaining uncertainty. Placing strong constraints on the executive solves this commitment problem by reducing the uncertainty from the threshold effects, which brings about cooperation earlier on. Second, we then test several empirical predictions from the model using standard data on linguistic heterogeneity and more detailed data on ethnic power configurations. We find that the partial correlations are consistent with the proposed theory. The effect of executive constraints on the length of declines is very large in heterogeneous countries, but practically disappears in ethnically homogeneous societies. The adverse effect of heterogeneity is driven by the number of groups; increasing political concentration works in the opposite direction.
    Keywords: Economics of Minorities, Races, and Immigrants; Non-labor Discrimination; Institutions and Growth;
    JEL: O43 J15
    Date: 2015

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