nep-pol New Economics Papers
on Positive Political Economics
Issue of 2015‒07‒11
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Lobbying over Exhaustible-Resource Extraction By Achim Voss; Mark Schopf
  2. Voter Reaction to Government Incompetence and Corruption Related to the 1999 Earthquakes in Turkey By Akarca, Ali T.; Tansel, Aysit
  3. On ignorant voters and busy politicians By Aytimur, R. Emre; Bruns, Christian
  4. One Mandarin Benefits the Whole Clan: Hometown Favoritism in an Authoritarian Regime By Quoc-Anh Do; Kieu-Trang Nguyen; Anh N. Tran
  5. May There Be Victory: Government Election Performance and the World's Largest Public-Works Program By Zimmermann, Laura V
  6. Richer (and Holier) than Thou? The Effect of Relative Income Improvements on Demand for Redistribution By Mounir Karadja; Johanna Mollerstrom; David Seim
  7. The Political Economy of Early and College Education - Can Voting Bend the Great Gatsby Curve? By Christopher Rauh
  8. What Greek political elites think about Europe and the crisis? An exploratory analysis By Yannis Tsirbas; Dimitri Sotiropoulos
  9. Public Governance and Political Corruption: A Framework for Anticorruption Policy By Glória Texeira; Ary Ferreira da Cunha
  10. Coercive Trade Policy By Anesi, Vincent; Facchini, Giovanni
  11. A Model of Dynamic Conflict in Ethnocracies By Bakshi, Dripto; Dasgupta, Indraneel
  12. From expert to lay theories about corruption By Gabrielle Poeschl; Raquel Esteves; Marta Ferreira

  1. By: Achim Voss (University of Muenster); Mark Schopf (University of Paderborn)
    Abstract: Republished as CIE Working Paper 2014-06
    Keywords: Environmental Policy, Exhaustible Resources, Political Economy, Lobbying, Nash Bargaining, Dynamic Programming
    JEL: D72 Q31 Q38 Q58
    Date: 2015–03
  2. By: Akarca, Ali T. (University of Illinois at Chicago); Tansel, Aysit (Middle East Technical University)
    Abstract: Two major earthquakes which struck northwestern Turkey in 1999 exposed rampant corruption involving construction and zoning code violations. The government's relief efforts were tainted by corruption as well, and exhibited a great deal of incompetence. How voters responded to these in the next election held in 2002 is investigated. The fact that different group of parties were responsible for the construction of the shoddy buildings, and for the corruption and mismanagement related to relief, provided us with a unique opportunity to determine whether and how the electorate punished the culprits for each of these. Vote equations are estimated for the seven major political parties. These are fitted to cross-provincial data individually, using OLS, Robust Regression methods, and Seemingly Unrelated Regressions procedures. The same picture emerges from each of these methods. Not just those ruling at the time of the earthquakes, but also other parties which were in power when the substandard buildings, were built were held accountable by the electorate. Furthermore, the Turkish voters appear to have allocated the blame rationally, taking into consideration the division of labor in the central government, and the relative influences the parties had on local administrations. Reaction of the voters to government incompetence and corruption was one of the factors which resulted in the emergence of a new party system. In 2002, the AKP, established only a year before, captured almost all of the far-right Islamist, about half of the far-right nationalist, and more than half of the center-right votes in 2002.
    Keywords: natural disaster, corruption, disaster aid, governance, election, voter behavior, voter turnout, Turkey
    JEL: D72 D73 H84 Q54
    Date: 2015–06
  3. By: Aytimur, R. Emre; Bruns, Christian
    Abstract: We show that a large electorate of ignorant voters can succeed in establishing high levels of electoral accountability. In our model an incumbent politician is confronted with a large number of voters who receive very noisy signals about her performance. We find that the accountability problem can be solved well in the sense that the incumbent exerts effort as if she faced a social planner who receives a perfect signal about her performance. Our results thus shed light on another potential blessing of large electorates in addition to information aggregation as postulated by the jury theorem.
    Keywords: accountability,elections,information,jury theorem
    JEL: D72 D82 H41
    Date: 2015
  4. By: Quoc-Anh Do (Département d'économie); Kieu-Trang Nguyen (London School of Economics); Anh N. Tran (Indiana University Bloomington)
    Abstract: We study patronage politics in authoritarian Vietnam, using an exhaustive panel of ranking officials from 2000 to 2010 to estimate their promotions’ impact on infrastructure in their patrilineal hometowns. Favoritism is pervasive across all ranks, even among officials without budget authority. Promotions of officials strongly improve hometown infrastructure including roads, marketplaces, and irrigation. In contrast to democracies’ pork-barrel politics, elected legislators are not influential. Favoritism is likely motivated by officials’ social preferences for hometowns rather than by political considerations, because favors are narrowly targeted to small communes, and are stronger where local culture emphasizes the family bond.
    Keywords: Favoritism; Patronage; Authoritarian Regime; Political Connection; Hometown; Infrastructure
    JEL: O12 D72 H72
    Date: 2013–10
  5. By: Zimmermann, Laura V (University of Georgia)
    Abstract: A number of developing country governments have introduced ambitious anti-poverty programs in recent years, but the dynamic effects of these initiatives on governments' election performance remain poorly understood. Especially in contexts with low program implementation quality, public support for government interventions may be high initially but decline over time as citizens observe the actual program benefits. This paper analyzes the election impacts of the largest public-works program in the world, the Indian NREGS. Using a regression-discontinuity framework, the results suggest that length of program exposure and implementation quality matter: voter support in low implementation quality areas declines with longer program access. This effect is muted in well-implemented areas, where voter turnout is higher and incumbents of any party affiliation also benefit. The government payoff from implementing a large anti-poverty program may therefore be short-lived unless implementation challenges are resolved.
    Keywords: NREGS, election outcomes, India, anti-poverty programs, voting behavior
    JEL: D72 H53 I38
    Date: 2015–06
  6. By: Mounir Karadja (Institute of International Economic Studies, Stockholm University); Johanna Mollerstrom (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); David Seim (Department of Economics, University of Toronto)
    Abstract: We study the extent to which people are misinformed about their relative position in the income distribution and the effects on preferences for redistribution of correcting faulty beliefs. We implement a tailor-made survey in Sweden and document that a vast majority of Swedes believe that they are poorer, relative to others, than they actually are. This is true across groups, but younger, poorer, less cognitively able and less educated individuals have perceptions that are further from reality. Using a second survey, we conduct an experiment by randomly informing a subsample about their true relative income position. Respondents who learn that they are richer than they thought demand less redistribution and increase their support for the Conservative Party. This result is entirely driven by prior right-of-center political preferences and not by altruism or moral values about redistribution. Moreover, the effect can be reconciled by people with political preferences to the right-of-center being more likely to view taxes as distortive and believe that it is personal effort rather than luck that is most influential for individual economic success. Length: 48
    Keywords: fairness, responsibility, option luck, brute luck, experiment
    JEL: C91 D63 D81 H23
    Date: 2014–10
  7. By: Christopher Rauh (University of Cambridge)
    Abstract: High earnings inequality goes hand in hand with low intergenerational earnings mobility across developed countries. Public expenditure on education, which could mitigate this relationship, is negatively correlated with inequality across countries. In an overlapping generations model, which I calibrate to the US, early and college education policies are endogenized via probabilistic voting. I investigate two channels, a technological and a political explanation. First, considering differences across countries in tertiary education characteristics account for 65% of the differences in inequality. The higher college premium in the US translates into increased incentives to invest in early education due to dynamic complementarities, and also increases the gap between parents' ability to finance education. Second, I exploit cross-country variations in the bias in voter turnout towards the educated. Thereby, I replicate the negative relation between inequality and public education expenditure and account for nearly one-quarter of the differences in inequality and mobility. For the US, I find that compulsory voting could foster mobility, whereas the effect on pre-tax inequality is low.
    Date: 2015
  8. By: Yannis Tsirbas; Dimitri Sotiropoulos
    Abstract: In this paper the views of a sample of 74 Greek Members of Parliament (MPs) on European integration and the handling of the economic crisis by the EU are discussed and interpreted. The survey of MPs, which was conducted in 2014, is a replication of a comparable study conducted in 2007. Greek MPs continue to be attached to Europe, but evaluate negatively EU’s institutions’ role during the economic crisis. Overall, three groups of parliamentarians, namely pro-government MPs, parliamentarians self-placed at the centre of the left-right spectrum and more experienced MPs, tended to have more pro-European views and attitudes than MPs of the opposition, left-wing MPs and less experienced MPs. The dominant dimension of conflict for Greek political elites is the issue of the Memoranda of Understanding (MoUs). The SYRIZA-ANEL government that was formed after the January 2015 elections was not a surprise given the close proximity of these two parties on their stance towards the MoUs and the EU.
    Date: 2015–07
  9. By: Glória Texeira (Faculty of Law, University of Porto, Centre for Legal and Economic Research); Ary Ferreira da Cunha (Faculty of Law, University of Porto, Centre for Legal and Economic Research, Observatory of Economy and Management of Fraud)
    Abstract: In this paper we propose a framework of policies against political corruption. Though we have frameworks explaining the causes of corruption – mainly based on agency theory – and though many authors have considered the role of good governance in fighting corruption or the effectiveness of different anticorruption policies, we see that these branches of literature have yet not entered in dialogue to construct a framework for curbing political corruption. The framework is based on the contributions of agency theory to the field of corruption over the past decades. After all, if discretion, information asymmetries and non-coincidence of interests are the elements of agency contributing to corruption they must also be the fundamentals targeted by anticorruption policies. Based on an extensive literature survey we gather a large array of good governance policies shown to be effective against political corruption and consider how they fit in the framework. This framework may help decision makers, policy advisors, and civil society stakeholders understand and visualize their options, contributing to the construction of more comprehensive strategies.
    Keywords: Anticorruption Policy; Public Governance; Political Corruption
    JEL: O29 K42
    Date: 2015–02
  10. By: Anesi, Vincent; Facchini, Giovanni
    Abstract: Empirical evidence suggests trade coercion exercised unilaterally is significantly less likely to induce concessions than coercion exercised through an international organization. In this paper we build a two-country model of coercion that can provide a rationale for this finding, and for how ``weak'' international institutions might be effective, even if their rulings cannot be directly enforced. In particular we show that if coercion is unilateral, the country requesting the policy change will demand a concession so substantial to make it unacceptable to its partner, and a trade war will ensue. If the parties can instead commit to an international organization (IO), compliance is more likely, because the potential IO ruling places a cap on the Foreign government's incentives to signal its resolve.
    Keywords: Dispute Settlement; GATT; Political Economy; WTO
    JEL: F12 F16 L11
    Date: 2015–07
  11. By: Bakshi, Dripto (Indian Statistical Institute); Dasgupta, Indraneel (Indian Statistical Institute)
    Abstract: We model an infinitely repeated Tullock contest, over the sharing of some given resource, between two ethnic groups. The resource is allocated by a composite state institution according to relative ethnic control; hence the ethnic groups contest the extent of institutional ethnic bias. The contest yields the per-period relative influence over institutions, which partly spills over into the next period, by affecting relative conflict efficiency. Our model generates non-monotone evolution of both conflict and distribution. Results suggest that external interventions, when effective in reducing current conflict and protecting weaker groups, may end up sowing the seeds of greater future conflict.
    Keywords: ethnocracy, ethnic conflict, dynamic contest, rent-seeking, inter-temporal productivity carryover
    JEL: D72 D74 O10 O20
    Date: 2015–06
  12. By: Gabrielle Poeschl (Faculdade de Psicologia e de Ciências da Educação, Universidade do Porto); Raquel Esteves (Faculdade de Psicologia e de Ciências da Educação, Universidade do Porto); Marta Ferreira (Faculdade de Psicologia e de Ciências da Educação, Universidade do Porto)
    Abstract: In order to compare expert with lay theories about corruption we asked 388 Portuguese adults, 204 men and 184 women, to fill out one of three questionnaires, which had a common part and were made up of one task of word association and several opinion scales. The main results show that lay people (a) strongly associate politics to corruption; (b) view some behaviors as more condemnable than others and as deserving of different types of punishment; (c) are aware of the different consequences of corruption; however, only the negative effect of corruption on social organization predicts the degree to which corrupt practices are considered as condemnable; (d) view Angola as presenting higher levels of corruption, namely of petty corruption, than Portugal, and as suffering more from its consequences; however, contrary to what was expected, the experience of living in a country with higher levels of corruption leads to the formation of less negative, rather than more negative, opinions about the consequences of corruption. These different aspects of lay people’s theories about corruption are discussed and synthesized.
    Keywords: corruption, lay theories, condemnability, punishment, consequences
    JEL: Z19
    Date: 2015–02

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