nep-pol New Economics Papers
on Positive Political Economics
Issue of 2015‒11‒01
fifteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. The stakes of politics and electoral administration : a comparative study of Southeast Asian democracies By Kawanaka, Takeshi
  2. The Political Economy of Cordon Tolls By Antonio Russo; Bruno De Borger
  3. Challenges to Political Parties in Emerging Democracy (Challenges to Jordanian Political Parties for Sustaine By Amin Ali Alazzam
  4. Youth Unemployment, Education and Political Instability: Evidence from Selected Developing Countries 1991-2009 By Therese F. Azeng; Thierry U. Yogo
  5. Identification and estimation of preference distributions when voters are ideological By Antonio Merlo; Áureo de Paula
  6. Electoral Cycles in Public Expenditures: Evidence from Czech Local Governments By Lenka Stastna
  7. Representation-Compatible Power Indices By Serguei Kaniovski; Sascha Kurz
  8. Emigration and Democracy By Elisabetta Lodigiani; Frédéric Docquier; Hillel Rapoport; Maurice Schiff
  9. Resource Discovery and Conflict in Africa: What do the data show? By Rabah Arezki; Sambit Bhattacharyya; Nemera Mamo
  10. Influencing the Political Administration of the People's Confidence Indicators By Ali Acar
  11. Finding your right (or left) partner to merge By Ronny Freier; Benjamin Bruns; Abel Schumann
  12. Endogenous Candidacy in Electoral Competition: A Survey By Damien Bol; Arnaud Dellis; Mandar oak
  13. The Political Economy of Mining regulations 2015: Spatial Inequality and Resource Curse in Two New States, India By Chakraborty, Lekha S; Garg, Shatakshi
  14. Economic, Institutional & Political Determinants of FDI Growth Effects in Emerging & Developing Countries By Shimaa Elkomy; Hilary Ingham; Robert Read
  15. Trading Votes for Votes. A Decentralized Matching Algorithm By Casella, Alessandra; Palfrey, Thomas R

  1. By: Kawanaka, Takeshi
    Abstract: Elections play a crucial role in political stability in post-democratization, and electoral administrations are the key to the electoral process. However, not all newly democratized countries have established reliable electoral administration. New democracies in Southeast Asia, such as the Philippines, Indonesia and Thailand, have independent election commissions which have different characteristics, especially in terms of neutrality. Based on three cases, this paper claims that the stakes of politics are the major determinant of the variations in neutrality. The high stakes of politics in Thailand brought about the partisan election commission, while the low stakes in Indonesia made the electoral system relatively neutral. Like Thailand, the high stakes of politics in the Philippines also cause political intervention in the electoral administration.
    Keywords: Southeast Asia, Philippines, Thailand, Indonesia, Democracy, Elections, Electoral administration, The stakes of politics
    JEL: D72
    Date: 2015–10
  2. By: Antonio Russo; Bruno De Borger
    Abstract: Political acceptability is the primary obstacle to implementation of road pricing in many cities. This paper studies the political economy of urban road pricing in its most common incarnation: cordon tolling. We relate voters? preferences for the road toll to its impact on the city?s land market. We consider a monocentric city inhabited by pure renters and resident landowners. The price of land within (resp. outside) the cordon increases (decreases) with the toll. Hence, tolling redistributes welfare not only from renters to landowners, but also within landowners. We show that the majority voting equilibrium depends both on the extent to which land is owned by residents and on which part of the city the majority owns land in. The equilibrium toll can be equal or higher than the socially optimal level only if the majority of city residents own land within the cordon. Otherwise, the majority always votes for a toll smaller than the optimal level or even no toll at all. If residents have heterogeneous wages, the above results are confirmed as long as the median individual has a smaller wage than the average.
    Keywords: cordon tolls; road pricing; voting; monocentric city
    JEL: R41 D78 H23
    Date: 2015–10
  3. By: Amin Ali Alazzam (Al al-Bayt University- Bayt Al-Hekmah (House of Wisdom))
    Abstract: Democracy has been defined by different researchers in various ways. However, almost all researchers agree that democracy refers to a form of government in which the people select their leaders and hold their leaders accountable for their policies and their actions or inaction. The citizens decide who will represent them in parliament and in government. They do so by choosing between competing parties by holding free and fair elections at regular intervals. In addition, it has been argued that no contemporary democracy has excelled without political parties. To meet the requirements of democracy, politics require social organizations that collect interests, and communicate them to the political and governmental institutions. Political parties, beside the other non-governmental organizations of the civil society, are such organizations that collect and aggregate social interests. Accordingly, this study aims at discussing the case of Jordan by identifying the main challenges that face the Jordanian political parties and prevent them from playing that role of collecting and aggregating social interests and prevent them from capturing political power through elections in order to influence policies and implement their programs. These challenges facing political parties have led in conclusion to lose their credibility.Accordingly, the basic questions that need to be answered in this study are: Are political parties considered one of the most important political organizations in politics in Jordan?; Are they have political power to do changes, or are they powerless?; what are the various challenges faced by political party? Are these challenges stem from the parties itself, or is it cultural obstacles, or is it the lack of political will of the political system to give political parties a role by preventing parties from drawing big attention and introducing its political position to gain new followers and members.?. The study concluded that Jordanian political parties facing many challenges-these challenges are considered obstacle to parties and Jordanian democracy alike- the most important are; poor finance, poor political integration, lack of coherent and internal cohesion, institutional and structural challenges, poor internal democracy, lack of political will, a credibility challenges, and social challenges particularly tribalism which keep individuals hesitating from joining other groups.
    Keywords: Political parties, Challenges, Democracy, Government, Obstacles.
    JEL: D72
  4. By: Therese F. Azeng (University of Yaoundé 2 (Cameroon)); Thierry U. Yogo (Centre d'Etudes et de Recherches sur le Développement International (CERDI) University of Auvergne)
    Abstract: This paper investigates the effects of youth unemployment on political instability in developing countries through three hypotheses. Firstly, youth unemployment has significant effects on risk of political instability. Secondly, we consider that the relationship between unemployment rate and political instability is conditional upon education levels. Finally, we examine whether youth unemployment can lead to anti-government demonstrations rather than global instability. Using a sample covering 40 developing countries over the period 1991-2009, we confirm the positive effect of youth unemployment on political violence. However the level of education lowers the magnitude of the effect. The effect of youth unemployment on coups d’état is significant but not robust. Finally, the results suggest that the relationship between youth unemployment and political instability is not robust. A possible explanation is that the main predictors of political instability are also determinants of unemployment. Therefore, youth unemployment can be a symptom rather than the illness and cannot alone explain political instability.
    Keywords: Unemployment, Political Instability, Coup d’état, Youth
    JEL: E24 F52 J64 O11 O43
    Date: 2015–10
  5. By: Antonio Merlo (Institute for Fiscal Studies); Áureo de Paula (Institute for Fiscal Studies and University College London)
    Abstract: This paper studies the nonparametric identification and estimation of voters' preferences when voters are ideological. We establish that voter preference distributions and other parameters of interest can be identified from aggregate electoral data. We also show that these objects can be consistently estimated and illustrate our analysis by performing an actual estimation using data from the 1999 European Parliament elections.
    Keywords: Voting; Voronoi tessellation; identification; nonparametric
    JEL: D72 C14
    Date: 2015–09
  6. By: Lenka Stastna
    Abstract: The paper analyzes local political cycle in Czech municipalities over the period between 1997 and 2013. We apply the system and the difference GMM estimators to detect electoral manipulation in current and capital expenditures in electoral and pre-electoral years. Primarily, we estimate the effects for expenditure levels but to check the robustness we re-estimate the model for spending shares. We have found that the size of municipalities matters, and unsurprisingly, small municipalities do not increase spending in such an extent as bigger municipalities, though big municipalities tend to have lower share of capital spending before elections. Leftist governments tend to attract votes by increasing current expenditures, while rightist governments increase rather capital expenditures. On the one hand, the share of votes of the mayor's party in previous elections increases pre-election capital spending, on the other hand, its winning margin works in the opposite direction. Finally, the more terms a mayor has been in office, the lower is capital spending in pre-electoral year.
    Keywords: political cycle; local government expenditures; municipalities
    JEL: H72 D72 R50
    Date: 2015–10
  7. By: Serguei Kaniovski (Austrian Institute of Economic Research (WIFO)); Sascha Kurz (Department of Mathematics, University of Bayreuth)
    Abstract: We use average representations of a weighted voting game to obtain four new indices of voting power for this type of voting games. The average representations are computed from weight and representation polytopes defined by the set of winning and losing coalitions of the game.These average representations come remarkably close to fulfilling the standard criteria for a coherent measure of voting power. They are symmetric, positive, efficient and strongly monotonic. The dummy property, which assigns zero power to powerless players, can be imposed by restricting the polytopes. The resulting restricted average representations are coherent measures of power.The defining property of the four new indices is representation compatibility, which ensures proportionality between power and weight. We believe that proportionality makes the new indices ideal measure of power for voting institutions, in which the votes are distributed to the voter based on their contribution to a fixed purse. Examples include shareholder voting in corporations and country member voting in the multilateral institutions of the Bretton Woods Accord (The World Bank, IMF).The practical significance of representation compatibility lies in institutional design. In a weighted voting game, the design is given by the voting weights and the voting rule, or the number of affirmative votes required to pass a decision. In institutions, in which the number of votes depends on the capital contributions of the voters to a purse of a given size, a voter wants to know which distributions of voting weights confer the desired power or that voter's expected share of the purse. A prime example of such an institution is the corporation. But the same principles can be used for designing any voting body, for example distributing parliamentary seats after a general election, and we provide examples for the German Bundestag and the Austrian Nationalrat.
    Keywords: average representation; power index; proportionality between weights and power
    JEL: D71 C71
  8. By: Elisabetta Lodigiani (Department of Economics, University Of Venice Cà Foscari); Frédéric Docquier (FNRS and IRES, Université Catholique de Louvain?); Hillel Rapoport (Paris School of Economics, University Paris 1 Pantheon-Sorbonne and Migration Policy Center, European University Institute); Maurice Schiff (IZA-Bonn, Institute for the Study of Labor)
    Abstract: International migration is an important determinant of institutions, not considered so far in the development literature. Using cross-section and panel analysis for a large sample of developing countries, we find that openness to emigration (as measured by the natives’ average emigration rate) has a positive effect on home-country institutional development (as measured by standard democracy indices). The results are robust to a wide range of specifications and identification methods. Remarkably, the cross-sectional estimates are fully in line with the implied long-run relationship from dynamic panel regressions.
    Keywords: Migration, Institutions, Democracy, Development
    JEL: O15 O43 F22
    Date: 2015
  9. By: Rabah Arezki; Sambit Bhattacharyya; Nemera Mamo
    Abstract: The empirical relationship between natural resources and conflict in Africa is not very well understood. Using a novel geocoded dataset on resource discovery and conflict we are able to construct a quasi-natural experiment to explore the causal effect of (giant and major) oil and mineral discoveries on conflict in Africa at the grid level corresponding to a spatial resolution of 0.5 x 0.5 degree covering the period 1946 to 2008. Contrary to conventional wisdom, we find no evidence of natural resources triggering conflict in Africa after controlling for grid-specific fixed factors and time varying common shocks. Resource discovery appears to have improved local income measured by nightlights which could be reducing the conflict likelihood. We observe little or no heterogeneity in the relationship across resource type, size of discovery, pre and post conclusion of the cold war, and institutional quality. The relationship remains unchanged at the regional and national levels.
    Keywords: Resource discovery; Conflict onset; Conflict incidence; Conflict intensity
    JEL: D72 O11
    Date: 2015
  10. By: Ali Acar (Selcuk University)
    Abstract: The many actions carried out by the Administration t be made public and it is importantto inform the public. However, the decisions taken and made application to there lated policies after creation to come before the public confidence in thepeople's political administration negative of these acts of etkilemektedir.dighand "details" of asking, asking that account and invisible in frontof the citizens who demand the accountability of management regardingapplications made walls are drawn.The principleof openness in management, the management approach has brought alongaccountable. One of the largest basis as a result of government openness andaccountability are at the core of democracy. Public administration whose publicneeds to know what they are doing and who takes what decisions.In the caseof the violation of rights and legal interests of individuals or non-state, thepublic has the right to ask the question account manager or managers. In thiscontext, accountability, just as the opening of the citizens in the work placecan be clearly seen how this process can be.Openness andaccountability in public administration is obliged to provide mutualinteraction. In order to ensure clarity in management, the effectivefunctioning accountability processes of accountability processes need to beopen and transparent policy to function effectively and efficiently.Rule oflaw" is a government that claims to be committed to the principle mustalso be assimilated government openness and accountability in order to berealized fully the principles involved, starting to be accepted widely in theworld of rule of law principles, and thus increase the awareness, governmentopenness and accountability It has been effective in terms of the transitionprocess.Today open(transparent), accountable, effective and efficient public administration tohave a longer version of the phenomenon has not a necessity or a luxury thatcan be left to the discretion of managers. Only recognition of the legality ofthe provision and management of the functioning of democracy, one of thefundamental principles of government openness and accountability should be madesovereign in terms of understanding the administration is not sufficientapplicability.In order tofulfill their function and purpose of the openness of the administrationitself, the regulations and the means to put into practice the principlesshould be implemented.ShortForming public policies in cooperation with various social actors, Focusing on participatory management, which can be transparent and accountable,Ethics and the creation of a sensitive political issue in corruption government policy can affect the public's confidence in the positive direction.
    Keywords: Manegement, oppeness, public
  11. By: Ronny Freier; Benjamin Bruns; 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 an extensive data set on the political decision makers as well as fiscal and socio-economic variables on the level of the individual municipality and on the level of individual mergers. 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 mattered significantly during the voluntary stage of the merger reform.
    Keywords: H10
    JEL: H11
    Date: 2015–10
  12. By: Damien Bol (King's College, London); Arnaud Dellis (Dept. of Economics,Université du Québec à Montréal); Mandar oak (School of Economics, University of Adelaide)
    Abstract: We survey the literature on electoral competition under plurality rule where candidacy decisions are endogenous. We organize the differentcontributions into three families based on the paradigm to which they belong and on the part of the set of candidates they endogenize. We argue that endoegenous candidacy offers both theoretical and empirical advantages over the standard Hotelling-Downs model. On the theoretical front, these models can provide a more satisfactory microfoundation for the emergence and/or stability of the two party system under plurality rule. On the empirical front these models offer a better account of the stylized facts about elections, particularly regarding Duverger's law and policy polarization. We also point to shortcomings of these models and propose some directions for future research.
    Keywords: Energy; Rebound Effect; Own-price Elasticity
    Date: 2015–10
  13. By: Chakraborty, Lekha S; Garg, Shatakshi
    Abstract: It is striking why the resource-rich States in India are income poor. This calls for analyzing the fiscal policy practices in the resource-rich new States, particularly the fiscal space created by the mining proceeds; and in turn what the fiscal space is used for. Inquiring the “use of mining fiscal space” has high policy relevance in India, against the backdrop of recent Mines and Minerals Development and Regulation (MMDR) Amendment Bill, 2015. Such policy imperatives are comparable to the global initiatives like “oil-to-cash policy”. This paper explores the plausible impacts of MMDR 2015 (9B), which stipulates a portion of mining royalty and auction proceeds to redress the resource curse. Though nebulous estimates from the coal auction proceeds are on board, ambiguity remains how the newly generated fiscal space would resolve spatial inequalities.
    Keywords: Political economy, Regulations, Mining, Industrial Policy, Fiscal Space, Inequality, Human Development
    JEL: H5 I3 L5 O2 Q3
    Date: 2015–02
  14. By: Shimaa Elkomy; Hilary Ingham; Robert Read
    Abstract: This study investigates the role of income levels, using the World Bank income classification, and political development, using EIU Democracy Index scores, in determining the magnitude of FDI growth effects for a panel of 61 emerging and developing countries for the period 1989 to 2013. It tests a baseline growth model incorporating these variables which is then extended to include FDI interaction effects with human capital, measured using secondary school enrolment data, and political development. The separate growth effects of FDI are then tested separately for each of the three lower World Bank income classifications (Upper-Middle, Lower-Middle and Low Income) followed by three categories of political regime type derived from Democracy Index. The effects of FDI are found to vary significantly between income classifications with the strongest growth effects in Low Income countries and weaker negative effects in Upper-Middle Income countries. The growth interaction effects between FDI and human capital are found to be strongly positive regardless of regime type. Political development in conjunction with FDI appears to suppress the growth effects of FDI in authoritarian countries while enhancing them in ‘hybrid’ democracies. For more democratic countries, human capital is a more important driver of growth than FDI but this is the outcome of strongly positive interaction effects between FDI and human capital outweighing negative effects for human capital on its own. The paper also provides some support for the view that a critical threshold of human capital is required to generate beneficial spillover growth effects from inflows of FDI. This paper provides new and more detailed insights into the growth effects of FDI with particular respect to income classification and political regime type in emerging and developing countries.
    Keywords: Foreign direct investment, economic growth, developing countries, income level, political development, panel analysis
    JEL: F23 O11 O14 O47
    Date: 2015
  15. By: Casella, Alessandra; Palfrey, Thomas R
    Abstract: Vote-trading is common practice in committees and group decision-making. Yet we know very little about its properties. Inspired by the similarity between the logic of sequential rounds of pairwise vote-trading and matching algorithms, we explore three central questions that have parallels in the matching literature: (1) Does a stable allocation of votes always exists? (2) Is it reachable through a decentralized algorithm? (3) What welfare properties does it possess? We prove that a stable allocation exists and is always reached in a finite number of trades, for any number of voters and issues, for any separable preferences, and for any rule on how trades are prioritized. Its welfare properties however are guaranteed to be desirable only under specific conditions. A laboratory experiment confirms that stability has predictive power on the vote allocation achieved via sequential pairwise trades, but lends only weak support to the dynamic algorithm itself.
    Keywords: algorithms; matching; vote trading; voting
    JEL: C92 D7 D72 P16
    Date: 2015–10

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