|
on Positive Political Economics |
| By: | Bruce M. Owen (Stanford University) |
| Abstract: | Lawful political corruption is a costly feature of modern American politics, and a failure of Madisonian democracy. The propensity of political agents to self-service at the expense of the peoples’ well-being may not have changed much since 1787, but that propensity is now applied to a vast government that touches virtually every aspect of our lives. After examining conventional solutions to the problem of political corruption, this paper explores possible Madisonian remedies—that is, remedies invoking rivalrous political institutions. The paper con-cludes with a proposal for the addition of an "umpire" function to U.S. constitutional structure. Officials performing this function would have the power to veto legislation that significantly re-duces aggregate well-being or that produces regressive redistribution. Historical precedents, illustrative details, and impediments are discussed. |
| Keywords: | Madisonian democracy, political economy, constitutional law, corruption, Citizens United. |
| JEL: | H1 K1 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:sip:dpaper:15-006&r=pol |
| By: | Strömberg, David |
| Abstract: | This chapter investigates how media coverage filters information and how this affects political accountability and policy. I first present a baseline model of media coverage and its affect political accountability. The model is used to discuss the welfare consequences of private provision of news. It shows how media regulation and public broadcasting may correct market failures, notably the under-provision of news. The model also supplies an array of testable implications, used to organize the existing empirical work. The key empirical questions are: what drives media coverage of politics; how does this coverage influence the information levels and the voting behavior of the general public, the actions and selection of politicians and government policy? |
| Keywords: | media; policy; regulation; voting |
| JEL: | D03 D72 H5 L82 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10638&r=pol |
| By: | Benjamin Michallet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS); Giuseppe Gaeta (University of Naples); François Facchini (UP11 - Université Paris-Sud - Paris 11, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS) |
| 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. |
| Date: | 2015–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01154006&r=pol |
| By: | Michael Wahman (London School of Economics); Matthias Basedau (GIGA German Institute of Global and Area Studies) |
| Abstract: | Building on theoretical insights from research on the rentier state and the “resource curse,” several studies have supported the argument that oil hinders democracy. However, previous research on the rentier state has neglected the global surge of multiparty autocracies or “electoral authoritarian” regimes since the end of the Cold War. No systematic study has been carried out on the question of whether or not and how oil affects electoral contests in nondemocratic regimes. In this paper we contribute to filling this gap by combing the literature on multiparty autocracy and the political economy of the rentier state. As oil production creates substantial, nontransparent revenue streams to national and subnational governments, we hypothesize that oil production has a negative effect on electoral competitiveness, both cross- and subnationally, in multiparty autocracies. Consequently, the democratic “resource curse” emphasized in earlier work on the rentier state is likely to persist even after the introduction of multipartyism in cases where oil production predates democratic institutions. The paper tests the hypothesis cross-nationally, using data on all multiparty elections held in the world in the period 1975–2010, and subnationally, using a new data set on subnational election results and oil production in Nigeria. Our results confirm that oil impedes electoral competitiveness, both cross- and subnationally, in multiparty autocracies. |
| Keywords: | oil, authoritarianism, elections, Nigeria, competition, Africa |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:272&r=pol |
| By: | Michael Wahman (London School of Economics) |
| Abstract: | The African party literature, especially research prescribing to the long-dominant ethnic voting thesis, has asserted that African party systems exhibit low levels of party nationali-zation. However, systematic research on nationalization across parties and party systems is still lacking. This study argues that the prospects for building nationalized parties vary substantially between incumbent and opposition parties. Incumbent parties, with their access to state resources, have been successful in creating nationwide operations, even in countries where geographical factors have been unfavorable and ethnic fractionalization is high. The analysis utilizes a new data set of disaggregate election results for 26 African countries to calculate nationalization scores for 77 parties and study the correlates of party nationalization. The results show that factors like ethnic fractionalization, the size of the geographical area, and urbanization affect party nationalization, but only in the case of opposition parties. Incumbent parties, on the other hand, generally remain nationalized despite unfavorable structural conditions. |
| Keywords: | Africa, parties, nationalization, opposition, incumbent, ethnicity |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:270&r=pol |
| By: | Westberg, Nina Bruvik (School of Economics and Business, Norwegian University of Life Sciences) |
| Abstract: | Several countries have made targeted input subsidy programs an integral part of their policies for improving food security. Given the programs' often centralized structure and targeting of private goods nation-wide, these may also serve as instruments for garnering electoral support. I investigate to what extent distributions from such a program was altered leading up to the 2009 Malawian presidential election, comparing the allocations of fertilizer vouchers in the last season prior to this relative to other seasons. I do not nd evidence of targeting at the incumbent's core supporters, whereas swing supporters receive on average more fertilizer vouchers in the 2008/09 season relative to other seasons. This increase comes at the expense of the main opponents' core supporters, whom receive on average fewer vouchers. These ndings add to the broader set of questions of whether targeted subsidies is the right approach for improving food security, and if so how. |
| Keywords: | fertilizer subsidies; elections; Malawi |
| JEL: | D72 H53 O13 Q18 |
| Date: | 2015–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nlsseb:2015_012&r=pol |
| By: | Marina Dodlova (GIGA German Institute of Global and Area Studies); Anna Giolbas (GIGA German Institute of Global and Area Studies) |
| Abstract: | The debate on whether democracy and inequality increase the level of redistribution in a country is still ongoing. We construct a model that predicts a higher probability of redis-tribution in democracies than in autocracies. Further, with higher initial inequality, there should be more redistribution in democracies but not necessarily in autocracies. We test these predictions using data on social transfers in developing countries for the period 1960–2010. We con?rm that democracy increases redistribution and, to some extent, that there is more redistribution with rising inequality. Hence, on the basis of a direct measure of redistribution, we present evidence to con?rm the median voter theorem. |
| Keywords: | regime type, inequality, redistribution, median voter theorem |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:273&r=pol |
| By: | Dmitry A. Veselov (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, National Research University Higher School of Economics - Laboratory of Macroeconomic Analysis) |
| Abstract: | We propose a simple quality-ladder model with heterogeneous agents differing in their skills and wealth endowment to explain the persistence of barriers to entry in new democracies. In the model agents vote for a rate of redistribution and for the level of barriers to entry, which protect the incumbent firms from competition with new entrants. We show that even if a society democratizes, under certain conditions this leads only to the rise of redistribution, rather than to the elimination of barriers to entry. We show that this argument is particularly relevant for countries with a low level of human capital and high inequality in incomes and in skills. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01158139&r=pol |
| By: | Falagiarda, Matteo; Gregori, Wildmer Daniel |
| Abstract: | This paper attempts to evaluate the impact of fiscal policy announcements by the Italian government on the long-term sovereign bond spread of Italy relative to Germany. After collecting data on relevant fiscal policy announcements, we perform an econometric comparative analysis between the three administrations that followed one another during the period 2009-2013. The results indicate that only fiscal policy announcements made by members of Monti's cabinet had a significant impact on the Italian spread. We argue that these findings may be partly explained by a credibility gap between Monti's technocratic administration and Berlusconi's and Letta's governments. JEL Classification: E43, E62, G01, G12 |
| Keywords: | fiscal policy announcements, GARCH models, interest rate spread, political communication, sovereign debt crisis |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20151782&r=pol |
| By: | Philipp Jäger; Torsten Schmidt |
| Abstract: | Time preferences vary by age. Notably, according to experimental studies, senior citizens tend to discount future payoffs more heavily than working-age individuals. Based on these findings, we hypothesize that demographic change has contributed to the cut-back in government-financed investment that many advanced economies experienced over the last four decades. We demonstrate for a panel of 13 OECD countries between 1971 and 2007 that the share of elderly voters and public investment rates are cointegrated, indicating a long-run relationship between them. Estimating this cointegration relationship via pooled dynamic OLS (D-OLS) and fully modified OLS (FM-OLS) we find a negative and significant effect of population aging on public investment. Moreover, the estimation of an error correction model reveals long-run Granger causality running exclusively from aging to investment. Our results are robust to the inclusion of additional control variables typically considered in literature on the determinants of public investment. |
| Keywords: | Public investment; population aging; panel cointegration |
| JEL: | H54 D72 J11 J14 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0557&r=pol |
| By: | Ngoie, Ruffin-Benoît M.; Savadogo, Zoïnabo; Ulungu, Berthold E.-L. |
| Abstract: | Impossibility theorems expose inconsistencies and paradoxes related to voting systems. Recently, Michel Balinski and Rida Laraki proposed a new voting theory called Majority Judgment which tries to circumvent this limitation. In Majority Judgment, voters are invited to evaluate candidates in terms taken in a well-known common language. The winner is then the one that obtains the highest median. Since the Majority Judgment proposal was made, authors have detected insufficiencies with this new voting system. This article aims at reducing these insufficiencies by proposing a voting system to decide between the median-based voting and the mean-based one. It proposes, moreover, a new tie-breaking method computing intermedian ranks mean. |
| Keywords: | Borda Majority Count, Majority Judgment, Mean-Median Compromise Method |
| JEL: | C7 D71 D72 |
| Date: | 2014–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64731&r=pol |
| By: | Karlsson, Charlie (Centre of Excellence for Science and Innovation Studies and Jönköping International Business School) |
| Abstract: | In recent years and not least after the latest financial and economic crisis, we have seen a strongly renewed interest for industrial policy to get the developed economies growing again. The political entrepreneurs, i.e. the politicians and their experts and advisers have been hunting desperately for new approaches to industrial policy. With political entrepreneurs, we here understand politicians/bureaucrats/civil servants/authorities within publically financed activities that with different methods try to stimulate entrepreneurship and self-employment with the overall goal to increase employment and economic growth. The renewed interest for industrial policy and the increased importance of political entrepreneurs motivate that we once again ask the fundamental question about what shall be the proper focus, measures and extent of industrial policy. Shall the industrial policy be vertical and focus at specific industries and even specific companies or shall it be horizontal and focus at improving the general conditions for all industries and firms? However, there is a related and partly more controversial question, namely, what is the proper spatial scale for the policy interventions by the political entrepreneurs? Shall the industrial policy focus at certain places and possibly focus at existing and/or emerging industrial clusters or shall it be spatially neutral and not try to discriminate between different regions and places? The purpose of this paper is to throw some light over all above questions but with some extra focus at the questions concerning the spatial aspects. The above questions are by no means new but there are today very good reasons to throw new light at them not least against the back¬ground of EU´s new industrial and regional policy that aims at achieving ‘smart specialization’, what that now may be. |
| Keywords: | Political entrepreneurship; industrial policy; clusters; smart specialization; regional growth |
| JEL: | L38 L52 L53 R11 R58 |
| Date: | 2015–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0407&r=pol |
| By: | Gebhard Kirchgässner |
| Abstract: | This paper discusses several problems of direct popular decisions. In the first part, we consid- er problems related to the functioning of direct democracy. As a political system it only makes sense if there exists a continuous process and not if only occasional single questions are brought to a referendum. Then, the relation between direct democracy and the rule of unanim- ity is discussed, a subject of special relevance to the European Union, before we consider the role of quorums. In the second part, some areas are considered in which conflicts might arise. Results of initiatives might be incompatible with individual human rights or might endanger fiscal sustainability, and referenda might impede economic reforms. All these problems, how- ever, do not justify a general re jection of direct popular rights . Thus, we conclude by listing several points that should be observed to safeguard the well-functioning of direct democracy. |
| Keywords: | Direct democracy; referendum; initiative; human rights; economic re- forms; fiscal sustainability |
| JEL: | H11 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2015-09&r=pol |
| By: | Kirchgaessner, Gebhard |
| Abstract: | This paper discusses several problems of direct popular decisions. In the first part, we consider problems related to the functioning of direct democracy. As a political system it only makes sense if there exists a continuous process and not if only occasional single questions are brought to a referendum. Then, the relation between direct democracy and the rule of unanimity is discussed, a subject of special relevance to the European Union, before we consider the role of quorums. In the second part, some areas are considered in which conflicts might arise. Results of initiatives might be incompatible with individual human rights or might endanger fiscal sustainability, and referenda might impede economic reforms. All these problems, how-ever, do not justify a general rejection of direct popular rights. Thus, we conclude by listing several points that should be observed to safeguard the well-functioning of direct democracy. |
| Keywords: | Direct democracy, referendum, initiative, human rights, economic re-forms, fiscal sustainability |
| JEL: | H11 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2015:13&r=pol |
| By: | Shino Takayama (School of Economics, The University of Queensland); Yuki Tamura (School of Economics, The University of Queensland) |
| Abstract: | Since the introduction of better-reply security by Reny (1999), the literature studying the existence of a pure strategy Nash equilibrium (PSNE) in discontinuous games has grown substantially. In this paper, we introduce a weak notion of better-reply security, which is applicable to both quasiconcave and nonquasiconcave games. Our conditions for feeble better-reply security are simple, easy to verify and particularly useful in electoral competition games. We also provide necessary and sufficient conditions for the existence of a PSNE in a canonical electoral competition game. Finally, this paper demonstrates why a PSNE fails to exist when a particular type of discontinuity exists in a model. |
| Keywords: | Noncooperative games, discontinuous payoffs, pure strategy Nash equilibrium, existence of equilibrium, better-reply security, electoral competitions |
| Date: | 2015–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:546&r=pol |