nep-pol New Economics Papers
on Positive Political Economics
Issue of 2015‒04‒11
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Voting behavior in Indonesia from 1999 to 2014 : religious cleavage or economic performance? By Higashikata, Takayuki; Kawamura, Koichi
  2. Do Politicians Change Public Attitudes? By Magnus Carlsson; Gordon B. Dahl; Dan-Olof Rooth
  3. Greening up or not? The determinants of political parties’ environmental concern: an empirical analysis based on European data (1970-2008) By Michallet, Benjamin; Gaeta, Giuseppe Lucio; Facchini, Francois
  4. The political economy of bank bailouts By Behn, Markus; Haselmann, Rainer; Kick, Thomas; Vig, Vikrant
  5. Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections By Do, Quoc-Anh; Lee, Yen-Teik; Nguyen, Bang Dang
  6. The Partisan Effects of Voter Turnout: How Conservatives Profit from Rainy Election Days By Felix Arnold; Ronny Freier
  7. Making Democracy Work: Culture, Social Capital and Elections in China By Gerard Padró i Miquel; Nancy Qian; Yiqing Xu; Yang Yao
  8. Bangladesh’s Democractic Challenge By Quibria, M.G.
  9. Finding Your Right (or Left) Partner to Merge By Benjamin Bruns; Ronny Freier; Abel Schumann
  10. Democrats and Unions By Louis-Philippe Beland; Bulent Unel
  11. Links of interest of Swiss MPs: a comprehensive dataset By Martin Péclat; Stefano Puddu
  12. Authoritarianism and labor market : preference of labor policies in the Arab Gulf countries By Matsuo, Masaki

  1. By: Higashikata, Takayuki; Kawamura, Koichi
    Abstract: In this study, we examine the voting behavior in Indonesian parliamentary elections from 1999 to 2014. After summarizing the changes in Indonesian parties' share of the vote from a historical standpoint, we investigate the voting behavior with simple regression models to analyze the effect of regional characteristics on Islamic/secular parties' vote share, using aggregated panel data at the district level. Then, we also test the hypothesis of retrospective economic voting. The results show that districts which formerly stood strongly behind Islamic parties continued to select those parties, or gave preference to abstention over the parties in some elections. From the point of view of retrospective economic voting, we found that districts which experienced higher per capita economic growth gave more support to the ruling parties, although our results remain tentative because information on 2014 is not yet available.
    Keywords: Indonesia, Elections, Political parties, Politics, Religion, Election, Political party, Voting behavior, Electoral volatility, Effective number of parties, Religious cleavage voting, Retrospective economic voting
    JEL: D72
    Date: 2015–03
  2. By: Magnus Carlsson; Gordon B. Dahl; Dan-Olof Rooth
    Abstract: A large theoretical and empirical literature explores whether politicians and political parties change their policy positions in response to voters' preferences. This paper asks the opposite question: do political parties affect public attitudes on important policy issues? Problems of reverse causality and omitted variable bias make this a difficult question to answer empirically. We study attitudes towards nuclear energy and immigration in Sweden using panel data from 290 municipal election areas. To identify causal effects, we take advantage of large nonlinearities in the function which assigns council seats, comparing otherwise similar elections where one party either barely wins or loses an additional seat. We estimate that a one seat increase for the anti-nuclear party reduces support for nuclear energy in that municipality by 18%. In contrast, when an anti-immigration politician gets elected, negative attitudes towards immigration decrease by 7%, which is opposite the party's policy position. Consistent with the estimated changes in attitudes, the anti-nuclear party receives more votes in the next election after gaining a seat, while the anti-immigrant party experiences no such incumbency advantage. The rise of the anti-immigration party is recent enough to permit an exploration of possible mechanisms using several ancillary data sources. We find causal evidence that gaining an extra seat draws in lower quality politicians, reduces negotiated refugee quotas, and increases negative newspaper coverage of the anti-immigrant party at the local level. Our finding that politicians can shape public attitudes has important implications for the theory and estimation of how voter preferences enter into electoral and political economy models.
    JEL: D72 D8 L82
    Date: 2015–04
  3. By: Michallet, Benjamin; Gaeta, Giuseppe Lucio; Facchini, Francois
    Abstract: Why do parties offer environmental policies in their political programs? While a number of papers examine the determinants of citizens’ pro-environmental behaviour, we know little about the extent to which political parties adjust their platform towards environmentalism. We investigate this process through data provided by the Manifesto Project Dataset (CMP) for 20 European countries over the period 1970-2008. Following the literature on public concern towards environment, we examine economic, environmental and political determinants. Our findings provide evidence that political parties’ environmental concern is strongly correlated with their political ideology and with country-level economic conditions.
    Keywords: environmental concern, environmental attitudes, political parties, electoral manifestos
    JEL: D78 Q58 Z13
    Date: 2015–03–30
  4. By: Behn, Markus; Haselmann, Rainer; Kick, Thomas; Vig, Vikrant
    Abstract: In this paper, we examine how the institutional design affects the outcome of bank bailout decisions. In the German savings bank sector, distress events can be resolved by local politicians or a state-level association. We show that decisions by local politicians with close links to the bank are distorted by personal considerations: While distress events per se are not related to the electoral cycle, the probability of local politicians injecting taxpayers' money into a bank in distress is 30 percent lower in the year directly preceding an election. Using the electoral cycle as an instrument, we show that banks that are bailed out by local politicians experience less restructuring and perform considerably worse than banks that are supported by the savings bank association. Our findings illustrate that larger distance between banks and decision makers reduces distortions in the decision making process, which has implications for the design of bank regulation and supervision.
    Keywords: political economy,bailouts,state-owned enterprises,elections
    JEL: G21 G28 D72 D73
    Date: 2015
  5. By: Do, Quoc-Anh; Lee, Yen-Teik; Nguyen, Bang Dang
    Abstract: Using the regression discontinuity design of close gubernatorial elections in the U.S., we identify a significant and positive impact of the social networks of corporate directors and politicians on firm value. Firms connected to elected governors increase their value by 3.89%. Political connections are more valuable for firms connected to winning challengers, for smaller and financially dependent firms, in more corrupt states, in states of connected firms’ headquarters and operations, and in closer, smaller, and active networks. Post-election, firms connected to the winner receive significantly more state procurement contracts and invest more than do firms connected to the loser.
    Keywords: close gubernatorial election; corruption; firm value; political connection; procurement; regression discontinuity design; social networks
    JEL: D72 D73 G28 G30 G34 G38 H57
    Date: 2015–04
  6. By: Felix Arnold; Ronny Freier
    Abstract: In this short note, we use data from different elections in the German state of North-Rhine Westphalia between 1975 and 2010 to show that the social democrats generally profit from higher voter turnout at the expense of the conservatives. We deal with the endogeneity of voter turnout by using election day rain as an instrumental variable. Our particular contribution is the comparison of municipal and state elections.
    Keywords: Turnout, Partisan effects, rain, Germany, municipalities, elections
    JEL: D72 H70
    Date: 2015
  7. By: Gerard Padró i Miquel; Nancy Qian; Yiqing Xu; Yang Yao
    Abstract: This paper aims to show that culture is an important determinant of the effectiveness of formal democratic institutions, such as elections. We collect new data to document the presence of voluntary and social organizations and the history of electoral reforms in Chinese villages. We use the presence of village temples to proxy for culture, or more specifically, for social (civic) capital and show that their presence greatly enhances the increase in public goods due to the introduction of elections. These results support the view that social capital complements democratic institutions such as elections.
    JEL: H41 P16
    Date: 2015–04
  8. By: Quibria, M.G.
    Abstract: Bangladesh is currently in the midst of a deadly political crisis. When Bangladesh was born forty-plus years ago, it was generally thought that the Achilles heel of this newly minted country will be its economy. History has, however, proved it wrong. Though the proximate cause of this current political crisis is the controversial parliamentary election of 2014 and the legitimacy of the incumbent government, its history dates back to the birth of the country. Designing a neutral institutional mechanism for holding elections, ensuring smooth transfer of power and establishing intra-party democracy—these are the obvious first steps for a procedural democracy . They will extinguish the immediate fire, but do not address the root cause of the recurrent democratic crises in the country.
    Keywords: Democracy, Bangladesh, Economic Development
    JEL: O12 O38 O53 P47 P48
    Date: 2015–03
  9. By: Benjamin Bruns; Ronny Freier; Abel Schumann
    Abstract: We study political determinants of municipality amalgamations during a boundary reform in the German state of Brandenburg, which reduced the number of municipalities from 1,489 to 421. The analysis is conducted using data on the political decision makers as well as fiscal and socio-economic variables for the municipalities. We ask whether party representation in the town council influences the merger decision. To identify the effect, we follow a dual approach and make use of different stages in the reform process. First, municipalities were initially free to choose partners. In a later phase of the reform the state legislature forced municipalities to amalgamate. We can, thus, compare voluntary to forced units. Second, we simulate potential mergers from the map of municipalities and compare voluntary mergers to those simulated units. Both approaches show that political representation matters significantly during the voluntary stage of the merger reform.
    Keywords: municipality mergers, political decision makers probit analysis, geospatial analysis
    JEL: H10 H11 H77
    Date: 2015
  10. By: Louis-Philippe Beland; Bulent Unel
    Abstract: This paper investigates whether the Democratic Party has any significant effects on unions. Employing Regression Discontinuity (RD) approach on gubernatorial elections in U.S. states over the last three decades, we investigate causal effects of Democratic governors on unionization of workers, and unionized workers' working hours and earnings. Surprisingly, we find no significant impact from Democratic governors on union membership and union members' labor-market outcomes.
  11. By: Martin Péclat (Institute of economic research IRENE, Faculty of Economics and Business, University of Neuchâtel, Switzerland); Stefano Puddu (Institute of economic research IRENE, Faculty of Economics and Business, University of Neuchâtel, Switzerland)
    Abstract: This study provides a comprehensive, accurate and ready-to-use dataset on the relationships between the members of the Swiss Parliament and groups of interests. We capture politicians' linkages exploiting (1) their mandates in legal entities; (2) the enterprises, associations or other organizations related to the people they invite for attending parliamentary sessions; and (3) their occupations. Using NOGA 2008 and SSCO 2000 codes, legal entities and professions are categorized into 28 categories. The dataset obtained by combining this information documents \textit{ties} intensity, which is measured by the number of occurrences an MP has in a particular category. The results show that there are substantial differences between the two chambers, and across the main parliamentary groups. The three types of information employed provide complementary information.
    Keywords: Groups of pressure, lobbies, special interests, Swiss Parliament, voting behaviour.
    JEL: D7 H7
    Date: 2015–03
  12. By: Matsuo, Masaki
    Abstract: Migrant and labor issues are a primary concern in the Arab Gulf countries. With focus on the economic and political conditions that influence actors' decisions when framing labor policies, this study analyzes how preferences of such policies are formed and explains why the governments of the Arab Gulf countries attempt to implement less economical policies. The findings suggest that governments avoid concessions for enterprises required to implement more economical policies and chose uneconomical ones to maintain authoritarian regimes.
    Keywords: Gulf Countries, Labor market, Migrant labor, Migration, Authoritarianism, Labor policy, Arab Gulf countries
    JEL: F22 J31 J61 N35
    Date: 2015–03

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