nep-pol New Economics Papers
on Positive Political Economics
Issue of 2015‒10‒17
fifteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Competing for the Same Value Segments: Explaining the Volatile Dutch Political Landscape By van Herk, H.; Schoonees, P.C.; Groenen, P.J.F.; van Rosmalen, J.M.
  2. Determinants of Voting Behavior on the Keystone XL Pipeline By Joshua C. Hall; Chris Shultz
  3. Electoral Incentives, Term Limits and the Sustainability of Peace By Conconi, Paola; Sahuguet, Nicolas; Zanardi, Maurizio
  4. The Political Economy of Dynamic Elections: A Survey and Some New Results By John Duggan; Cesar Martinelli
  5. Electoral Accountability and Responsive Democracy By John Duggan; Cesar Martinelli
  6. Violence and political outcomes in Ukraine – Evidence from Sloviansk and Kramatorsk By Tom Coupe; Maksym Obrizan
  7. The Politics of Priority Setting in Health: A Political Economy Perspective - Working Paper 414 By Katharina Hauck, Peter C. Smith
  8. A dirty deed done dirt cheap: reporting the blame of a national reform on local politicians By Cassette, Aurélie; Farvaque, Etienne
  9. What Drives Public Health Care Expenditure Growth? Evidence from Swiss Cantons, 1970-2012 By Thomas Braendle; Carsten Colombier
  10. Does foreign aid harm political institutions? By Sam Jones; Finn Tarp
  11. Does the field of study influence students' political attitudes? By Mira Fischer; Björn Kauder; Niklas Potrafke; Heinrich W. Ursprung
  12. The Probability of Legislative Shirking: Estimation and Validation By Serguei Kaniovski; David Stadelmann
  13. On the Political Economy of Privacy: Information Sharing between Friends and Foes By Roger D. Congleton
  14. The Political Economy of Local Fracking Bans By Joshua C. Hall; Christopher Shultz; E. Frank Stephenson
  15. Autocracy and the public: Mass revolts, winning coalitions, and policy control in dictatorships By Apolte, Thomas

  1. By: van Herk, H.; Schoonees, P.C.; Groenen, P.J.F.; van Rosmalen, J.M.
    Abstract: Abstract Human values drive dierent kinds of abstract behaviour, while established value scales are pervasive in survey research. We focus on analyzing the relationship between human values and voting in elections, introducing a new methodology to analyze how value profiles relate to political support over time. To illustrate our procedure, we investigate the Dutch multi-party political system. Values measured using rating scales over five waves of the European Social Survey, spanning 2002 until 2010, are analysed. Whilst previous research have focused on values separately, we (1) relate all political parties participating in the election to human values using a segmentation approach in which value profiles are used instead of individual values; (2) compare voting over time; (3) include non-voters; and (4) adjust for individual dierences in response style. The adjustment for response styles allow us to uncover valid insights into the relationship between values and voting. We find evidence that specific value profiles are related to voting for certain political parties and that non-voters can also be distinguished by unique value profiles.
    Keywords: human values, response styles, politics, segmentation, biplots
    Date: 2015–09–16
  2. By: Joshua C. Hall (West Virginia University, Department of Economics); Chris Shultz (West Virginia University, Agricultural & Natural Resource Economics)
    Abstract: After lengthy debate, the Keystone XL Pipeline bill passed in January 2015. We use this event to better understand the determinants of Senator voting behavior. Specifically, this paper attempts to examine the relative impacts of political and economic influences. This is accomplished through the use of a binary logit regression model with legislator vote as the dependent variable. Results indicate that while legislators do appear to be representing their political constituency, the role of campaign funding plays an important role as well. The economic effect of such funding, controlling for other factors, is quantitatively small.
    Keywords: Keystone XL, Keystone Pipeline, voting behavior, campaign financing
    JEL: D72 D73
    Date: 2015–08
  3. By: Conconi, Paola; Sahuguet, Nicolas; Zanardi, Maurizio
    Abstract: One of the few stylized facts in international relations is that democracies, unlike autocracies, almost never fight each other. We develop a theoretical model to examine the sustainability of international peace between democracies and autocracies, where the crucial difference between these two political regimes is whether or not policymakers are subject to periodic elections. We show that the fear of losing office can make it less tempting for democratic leaders to wage war against other countries. Crucially, this discipline effect can only be at work if incumbent leaders can be re-elected, suggesting that democracies with term limits should be more conflict prone, particularly when the executive is serving the last possible term. These results rationalize recent empirical findings on how term limits affect the propensity of democracies to engage in conflicts.
    Keywords: Democratic Peace; Elections; Interstate Conflicts; Term Limits.
    JEL: C72 D72 F00
    Date: 2015–10
  4. By: John Duggan (Department of Political Science, University of Rochester); Cesar Martinelli (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: We survey and synthesize the political economy literature on dynamic elections in the two traditional settings, spatial preferences and rent-seeking, under perfect and imperfect monitoring of politicians’ actions. We define the notion of stationary electoral equilibrium, which encompasses previous approaches to equilibrium in dynamic elections since the pioneering work of Barro (1973), Ferejohn (1986), and Banks and Sundaram (1998). We show that repeated elections mitigate the commitment problems of both politicians and voters, so that a responsive democracy result holds in a variety of circumstances; thus, elections can serve as mechanisms of accountability that successfully align the incentives of politicians with those of voters. In the presence of term limits, however, the possibilities for responsiveness are attenuated. We also touch on related applied work, and we point to areas for fruitful future research, including the connection between dynamic models of politics and dynamic models of the economy.
    Keywords: dynamic elections, electoral accountability, median voter, political agency, responsiveness
    Date: 2015–10
  5. By: John Duggan (Department of Political Science, University of Rochester); Cesar Martinelli (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: We consider a canonical two-period model of elections with adverse selection (hidden preferences) and moral hazard (hidden actions), in which neither voters nor politicians can commit to future choices. We prove existence of electoral equilibria, and we show that office holders mix between “taking it easy†and “going for broke†in the first period. Even in the presence of a finite horizon, we establish that increasing office motivation leads to arbitrarily high expected policy outcomes. We conclude that the mechanism of electoral accountability has the potential to achieve responsiveness of democratic politics when electoral incentives are sufficiently large.
    Date: 2015–10
  6. By: Tom Coupe (Kyiv School of Economics); Maksym Obrizan (Kyiv School of Economics and University of Duisburg-Essen and CINCH)
    Abstract: In this paper, we study the effects of violence on political outcomes using a survey of respondents in Sloviansk and Kramatorsk – two cities that were affected heavily by the conflict in Eastern Ukraine. We show that experiencing physical damage goes together with lower turnout, a higher probability of considering elections irrelevant and a lower probability of knowing one’s local representatives. We also find that property damage is associated with greater support for pro-Western parties, lower support for keeping Donbas in Ukraine and lower support for compromise as a way to stop the conflict. Our paper thus shows the importance of investigating the impact of different kinds of victimization, as different degrees of victimization can have different, sometimes even conflicting outcomes. Our paper also suggests that one of the more optimistic conclusions of previous studies, that victimization can increase political participation, does not necessarily carry over to Ukraine, which illustrates the importance of country and context-specific studies.
    Keywords: Ukraine, violence, turnout, war
    JEL: P26 D72
    Date: 2015–10
  7. By: Katharina Hauck, Peter C. Smith
    Abstract: Many health improving interventions in low-income countries are extremely good value for money. So why has it often proven difficult to obtain political backing for highly cost-effective interventions such as vaccinations, treatments against diarrhoeal disease in children, and preventive policies such as improved access to clean water, or policies curtailing tobacco consumption? We use economic models of public choice, supported by examples, to explain how powerful interests groups, politicians or bureaucrats who pursue their own objectives, or voting and institutional arrangements in countries have shaped health priority setting. We show that it may be perfectly rational for policy makers to accommodate these constraints in their decisions, even if it implies departing from welfare maximizing solutions.
    Keywords: health, priority setting, politics, vaccinations
    JEL: I18 H51 D72 D61
    Date: 2015–09
  8. By: Cassette, Aurélie; Farvaque, Etienne
    Abstract: This paper tests the hypothesis that upper-level governments can transfer the accountability of the costs of a reform to a lower one. The reform of the school rhythm in France provides the ground for a verification of this hypothesis, as it was nationally decided and locally implemented, right before a municipal election. The results confirm that local incumbents have taken the blame of the reform, especially in larger cities and if they belong to the governing coalition. In this case, thus, the cost of the reform is borne twice by the lower level of government, financially and politically, offering a double gain to the government. That mayors who have announced a boycott of the reform have received electoral gains confirms the perception of the local cost of the reform.
    Keywords: Reforms, Elections, Municipalities, Reform
    JEL: D04 D72 D78 H77 I28
    Date: 2015–08–20
  9. By: Thomas Braendle; Carsten Colombier (University of Basel)
    Abstract: <span style="font-size:10.0pt; font-family: CMR10" lang="EN-US">A better understanding of the determinants of public health care expenditures is key to designing effective health policies. We integrate supply and demand-side determinants, factors from political economy and health policy reforms into an empirical analysis of the highly decentralized Swiss health care system. We compile a novel data set of the cantonal health care expenditure in Switzerland spanning the period 1970 - 2012. Using dynamic panel estimation methods, we find that per capita income, the unemployment rate and the share of foreigners are positively related to public health care expenditure growth. With regard to political economy aspects, public health care expenditures increase with the share of women elected to parliament. However, institutional restrictions for politicians, such as fiscal rules and mandatory fiscal referenda, do not appear to limit public health care expenditure growth.</span>
    Keywords: Public health care expenditure, Panel data, Fiscal rules, Political selection
    JEL: H75 D72 C23 I18
    Date: 2015
  10. By: Sam Jones; Finn Tarp
    Abstract: The notion that foreign aid harms the institutions of recipient governments remains prevalent. We combine new disaggregated aid data and various metrics of political institutions to re-examine this relationship. Long-run cross-section and alternative dynamic panel estimators show a small positive net effect of total aid on political institutions. Distinguishing between types of aid according to their frequency domain and stated objectives, we find this aggregate net effect is driven primarily by the positive contribution of more stable inflows of .governance aid.. We conclude the data do not support the view that aid has had a systematic negative effect on political institutions
    Keywords: foreign aid, governance, institutions, government quality
    Date: 2015
  11. By: Mira Fischer (Department of Management, University of Köln, Germany); Björn Kauder (Center of Public Finance and POlitical Economy, Ifo, Germany); Niklas Potrafke (Center of Public Finance and POlitical Economy, Ifo, Germany); Heinrich W. Ursprung (Department of Economics, University of Konstanz, Germany)
    Abstract: We investigate whether the field of study influences university students’ political attitudes. To disentangle self-selection from learning effects, we first investigate whether the fields of study chosen by the incoming students correlate with their political attitudes. In a second step we explore how the political attitudes change as the students progress in their studies. Our results are based on a German pseudo-panel survey, the sample size of which exceeds that of comparable student surveys by an order of magnitude. We find systematic differences between the students’ political attitudes across eight fields of study. These differences can in most cases be attributed to self-selection. A notable exception is economics. Even though self-selection is also important, training in economics has an unambiguous influence on the political attitudes: by the time of graduation, economics students are about 6.2 percentage points more likely than they were as freshmen to agree with liberal-democratic policy positions.
    Keywords: Indoctrination, Nature versus nurture, Field of study, Political socialization, Political attitudes, Economics
    JEL: A13 A22 D72 Z13
    Date: 2015–09–28
  12. By: Serguei Kaniovski; David Stadelmann
    Abstract: We introduce a binomial mixture model for estimating the probability of legislative shirking. The estimated probability strongly correlates with the observed frequency of shirking obtained by matching parliamentary roll-call votes with the will of the median voter revealed in national referenda on identical legislative proposals. Since our estimation method requires the roll-call votes as sole input, it can be used even if the will of the median voter is unknown.
    Keywords: binomial mixture model; legislative shirking; referenda
    JEL: C13 D72
    Date: 2015–10
  13. By: Roger D. Congleton (West Virginia University, Department of Economics)
    Abstract: This paper analyzes the personal demand for privacy and its implications for election-driven public policy. Privacy is multidimensional, which makes the demand for it and its opposite, fame, more complex than it might at first appear. It is also a product of social interactions and technology, and so only partially a matter of personal choice. When a person walks through a village, town, or city, his or her exact location is revealed to every one that sees that person pass by. At this level of analysis, privacy is the joint product of a decision to work through the village undisguised and of the decisions of others to watch and remember what they observe.
    Keywords: privacy, information sharing
    Date: 2015–03
  14. By: Joshua C. Hall (West Virginia University, Department of Economics); Christopher Shultz (West Virginia University, Department of Agricultural and Natural Resource Economics); E. Frank Stephenson (Berry College, Department of Economics)
    Abstract: Concerns about harmful effects arising from the increased use of hydraulic fracturing (fracking) to extract underground fuel resources has led to efforts to ban the practice. Many townships in western New York, which lies above the gas-rich Marcellus shale formation, have enacted bans or moratoria. Using spatial econometric techniques, we examine factors related to townships' choice to adopt fracking bans and document the importance of spatial dependence when analyzing fracking bans. We find education levels, the poverty rate, and veterans groups are associated with an increased probability of a township banning or putting a moratorium on fracking.
    Keywords: fracking bans, spatial autocorrelation
    JEL: H73 Q48 R52
    Date: 2015–09
  15. By: Apolte, Thomas
    Abstract: Threats of mass revolts could effectively constrain a dictator's public policy if it were not for the collective-action problem. Mass revolts nevertheless happen, but they follow a stochastic pattern. We describe this pattern in a threshold model of collective action and integrate it into an agency model which demonstrates how mass revolts can impact on a winning coalition's incentives to keep backing an incumbent dictator. Having observed public policy and found a sufficiently high posterior probability of the dictator to be of a "bad" character, the winning coalition's members may exploit an incidentally happening mass revolt for escaping a loyalty trap that had otherwise prevented them from switching to disloyalty. While this explains why mass revolts sometimes happen to oust a dictator, the arising policy constraints in dictatorships may nevertheless be weak in practice.
    Keywords: Autocracy,Revolutions,Threshold Models,Selectorate Theory
    JEL: D02 H11 D74
    Date: 2015

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