nep-pol New Economics Papers
on Positive Political Economics
Issue of 2015‒12‒08
seventeen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Voting In Legislative Elections Under Plurality Rule By Hughes, Niall
  2. Religious Riots and Electoral Politics in India By Sriya Iyer, Anand Shrivastava
  3. Why did I prefer to vote for my political party? By Saxena, Stuti
  4. Invalid Ballots and Electoral Competition By Gani Aldashev; Giovanni Mastrobuoni
  5. Rent seeking, revolutionary threat and coups in non-democracies By Paul Maarek; Michael T. Dorsch
  6. Who do you blame in local finance? An analysis of municipal financing in Italy By Massimo Bordignon; Veronica Grembi; Santino Piazza
  7. History-bound Reelections By Hans Gersbach
  8. The performance of politicians. The effect of gender quotas By Michela Braga; Francesco Scervini
  9. Political Budget Cycles: Manipulation of Leaders or Bias from Research? A Meta-Regression Analysis By Pierre MANDON; Antoine CAZALS
  10. Aiding Women Candidates in Solomon Islands: Suggestions for Development Policy By Terence Wood
  11. The electoral migration cycle By Federico Revelli
  12. Awareness and AIDS :A Political Economy Perspective By Gani Aldashev; Jean-Marie Baland
  13. Electoral Incentives, Term Limits and the Sustainability of Peace By Nicolas Sahuguet; Paola Conconi; Maurizio Zanardi
  14. Internal migration and public policy By Giuranno, Michele; Biswas, Rongili
  15. The Political Economy of Mental Health in Vietnam: Key Lessons for Countries in Transition By Kelley Lee; Rebecca Zappelli; Elliot M. Goldner; Nguyen Cong Vu; Kitty K. Corbett; Jill Murphy
  16. Shifts of Distortion and Corruption over Local Political Cycles in China By Shawn Chen
  17. Exposure to media and corruption perceptions By Lucia Rizzica; Marco Tonello

  1. By: Hughes, Niall (University of Warwick)
    Abstract: Models of single district plurality elections show that with three parties anything can happen - extreme policies can win regardless of voter preferences. I show that when single district elections are used to fill a legislature we get back to a world where the median voter matters. An extreme policy will generally only come about if it is preferred to a more moderate policy by the median voter in a majority of districts. The mere existence of a centrist party can lead to moderate outcomes even if the party itself wins few seats. Furthermore, I show that while standard single district elections always have misaligned voting i.e. some voters do not vote for their preferred choice, equilibria of the legislative election exist with no misaligned voting in any district. Finally, I show that when parties are impatient, a fixed rule on how legislative bargaining occurs will lead to more coalition governments, while uncertainty will favour single party governments
    Keywords: Strategic Voting ; Legislative Elections ; Duverger's Law ; Plurality Rule ; Polarization ; Poisson Games JEL Classification Numbers: C71 ; C72 ; D71 ; D72 ; D78
    Date: 2015
  2. By: Sriya Iyer, Anand Shrivastava
    Abstract: The effect of ethnic violence on electoral results provides useful insights into voter behaviour in democratic societies. Religious riots have claimed more than 14,000 lives in India since 1950. We study the effect of Hindu-Muslim riots on election results in India. We combine data on riots, which have been geo-coded, with electoral data on state legislature elections and control variables on demographics and public goods provision to construct a unique panel data set for 16 large states in India over a 21 year period from 1981-2001. We suggest a new instrument that draws upon the random variation in the day of the week that important Hindu festivals fall on in each year, as set by a lunar calendar. The probability of a riot increases if a Hindu festival falls on a Friday, the holy day for Muslims. This allows us to isolate the causal effect of riots on electoral results. We also correct for under-reporting of riots and how they affect electoral outcomes in nearby districts. We find that riots occurring in the year preceding an election increases the vote share of the Bharatiya Janata Party by 5 to 7 percentage points in the election.
    JEL: Z12 D72 D74
    Date: 2015–11–21
  3. By: Saxena, Stuti
    Abstract: The case study revolves around discussions by a group of students of a popular university in a cafeteria. State elections in Uttar Pradesh had just finished and students were wondering as to how the election results were against their pre-conceived notions. They were discussing about the reasons as to why they voted for their preferred political party as first-time voters. Overall, this case study purports to assess the impact of political parties’ branding on voters’ decision-making. The case study seeks to raise three concerns: how does political parties’ branding influence voters’ decision-making?; what are the key factors which influence a voter in decision-making process?, and why is psephology so different in a multi-party system in developing economies’ contexts? A consumer-oriented approach is developed for assessing the impact of political parties’ branding on voters’ decision-making. It is concluded that voters’ decision-making is influenced by the political parties’ branding initiatives.
    Keywords: Political parties’ branding; Political marketing; Voters perception
    JEL: P48 Y2
    Date: 2015–12–05
  4. By: Gani Aldashev; Giovanni Mastrobuoni
    Abstract: In close elections, a sufficiently high share of invalid ballots - if driven by votermistakes or electoral fraud - can jeopardize the electoral outcome. We study how thecloseness of electoral race relates to the share of invalid ballots, under the traditionalpaper-ballot hand-counted voting technology. Using a large dataset from the Italianparliamentary elections in 1994-2001, we find a strong robust negative relationshipbetween the margin of victory of the leading candidate over the nearest rival andthe share of invalid ballots. We argue that this relationship is not driven by votermistakes, protest, or electoral fraud. The explanation that garners most supportis that of rational allocation of effort by election officers and party representatives,with higher rates of detection of invalid ballots in close elections.
    Keywords: vote counting; invalid ballots; election officers; party representatives
    JEL: D72 D73
    Date: 2015–10
  5. By: Paul Maarek; Michael T. Dorsch (Université de Cergy-Pontoise, THEMA)
    Abstract: This paper studies the political turnover process in autocracies due to coup d’états. We present a model in which autocratic rulers are politically constrained both by the elite and by the street. In the model, these political constraints are inter-related such that when leaders extract rent from the economy on behalf of the elite they increase the probability of facing a revolt in the street. We suppose that rulers di↵er in the efficiency with which they extract rents and citizens make inference about the ruler’s type when idiosyncratic shocks occur. Equilibria are characterized in which elite-led coups serve to reset citizens’ beliefs about the leader’s type and pre-empt revolutions during periods of popular unrest. We then investigate the theory’s empirical implications using panel data on popular unrest and coups in sub-Saharan Africa. We pursue a strategy to instrument for the intensity of popular unrest, the results of which support the causal mechanism highlighted in our theory.
    Date: 2015
  6. By: Massimo Bordignon (Università Cattolica, Milano); Veronica Grembi (Copenhagen Business School); Santino Piazza (IRES Piemonte)
    Abstract: In a political agency model, we study the effect of introducing a less transparent tax tool for the financing of local governments. We show that lower quality politicians would use more the less transparent tax tool to enhance their probability of re-election. This prediction is tested by studying a reform that in 1999 allowed Italian municipalities to partially substitute a more accountable source of tax revenue (the property tax) with a less transparent one (a surcharge on the personal income tax of residents). Using a Difference in Difference approach, we show that in line with theory, Mayors at their first term in power adopted a higher surcharge on the personal income tax and reduced the property tax rate significantly more than Mayors in their final term.
    Keywords: Fiscal federalism, tax transparency, agency Model, property tax
    JEL: H71 H77 D78
    Date: 2015–12
  7. By: Hans Gersbach (ETH Zurich, Switzerland)
    Abstract: Often political races are not really competitive, and the path to reelection is smooth for many incumbents. In two-candidate races for office we suggest the introduction of a new re-election rule, which we call the “Score-replication Rule.” This rule requires that, to be reelected, any incumbent has to obtain a percentage of votes that is at least as high as the highest vote-share he/she obtained in any previous election (reduced by some margin). Such a delimiter would restrain negative “incumbency advantages,” and render reelection competitive again. It could also reduce polarization in the United States Congress. Moreover, we suggest how history-bound reelections could be used in European-style proportional election systems.
    Keywords: History-bound Reelections, Competitive Elections, Incumbency Advantages, Score-replication Rule
    JEL: D7 D8
    Date: 2015–11
  8. By: Michela Braga (Università Bocconi, Milano); Francesco Scervini (Università di Pavia)
    Abstract: This paper investigates whether the gender of elected politicians af- fects the political municipal outcomes. Relying on Italian administra- tive data from 1991 to 2009, we are able to instrument the gender of elected politician using an institutional exogenous change: a gender quota in the candidacy list enforced only in a subsample of municipali- ties and for a short period of time. While the gender of politicians does not affect the general `quality of life', proxied by the internal migration rate, it does affect significantly both the efficacy of policies targeted to women and households, proxied by the fertility rate, and the efficiency of municipal administration, proxied by the size of administrative bod- ies. These results are robust to several specifications and robustness checks. Affirmative actions enhancing gender equality in political rep- resentation may be then beneficial not only in terms of social justice, but also from a political outcome perspective.
    Keywords: Gender, Municipal government, Political outcomes, Fertility
    JEL: D72 J13 J16 R23
    Date: 2015–12
  9. By: Pierre MANDON; Antoine CAZALS
    Abstract: Despite a long history of research on political budget cycles, their existence and magnitude are still in question. By conducting a systematic analysis of the existing literature we intend to clarify the debate. Based on data collected from over 1,700 regressions and 58 studies, our meta-analysis suggests that leaders do manipulate fiscal tools in order to be re-elected but to an extent that is significantly exaggerated by scholars. However, we show the incumbents' strategy differ depending on which tools they leverage. Finally, we discuss in further details how authors' methodological choices and country institutions affect political budget cycles.
    Keywords: Political cycles ; Budget manipulation ; Meta-analysis
    JEL: H0 E62 D78 D72 C82
    Date: 2015–12
  10. By: Terence Wood
    Abstract: This article discusses the poor performance of women candidates in Solomon Islands elections and potential aid policy responses. The article outlines women candidates' performance, details challenges faced by women, examines existing aid work designed to help women candidates and provides policy suggestions. The article argues that existing aid policy focused on candidate training and voter education has achieved little because the main impediments women candidates face are access to finance and local gatekeepers, alongside more subtle normative constraints. These are barriers that are not easily shifted by training or education programs. Meanwhile, for reasons of political economy, another area of aid-supported engagement, a parliamentary gender quota, is unlikely to be enacted. Reflecting this, and the nature of the challenges women candidates face, the article recommends donors also undertake work to help prospective women candidates engage with communities over time, building ties and reputations as providers of assistance.
    Keywords: gender;voting;politics;aid;Solomon Islands
    Date: 2015–09–09
  11. By: Federico Revelli
    Abstract: This paper puts forward a new test of Tiebout sorting that relies on the exogenous time structure of recurrent local elections. The test is based on the idea that the policy uncertainty that is associated with periodic competitive elections should be expected to induce delay of migration, thus generating an electoral migration cycle of relatively low rates of migration before the elec- tions, followed by relatively high rates of migration when electoral uncertainty is resolved. Conversely, interjurisdictional migration flows that are unrelated to local public service provision motives ought to be orthogonal to the timing of local elections. Empirically, I study sorting patterns across several thousands of peninsular Italy’s municipalities through the increasingly turbulent 2002-2013 decade. I find evidence of an electoral migration cycle in the sense that the timing of internal migration flows is systematically influenced by the schedule of recurrent mayoral elections.
    Keywords: Tiebout sorting, local elections, uncertainty
    JEL: D72 H77 C23
    Date: 2015–12
  12. By: Gani Aldashev; Jean-Marie Baland
    Abstract: At the height of HIV/AIDS epidemics, across African countries prevention policieswere unrelated to HIV/AIDS prevalence. Even when successful, they were often unsta-ble or reversed. To explain these puzzles, we propose a simple political economy modelthat examines joint determination of prevention policies and the epidemic dynamics.Prevention a¤ects both behavior and the perception of the role of policies in …ghtingAIDS. Behavioral changes induced by the policy, in turn, reduce the infection risk forsexually active agents, which creates political support for future policies. The two-wayrelationship between prevention policy and awareness generates two stable steady-stateequilibria. The low-prevalence equilibrium is fragile. Reduced transmission rates havean ambiguous impact on prevalence rates as they also imply less active preventionpolicies. An empirical analysis of the determinants of public support for HIV/AIDSpolicies using the 2005 Afrobarometer shows that high prevalence rates translate intopublic support for prevention policies only in countries which carried out active pre-vention campaigns in the past. Our framework extends to a large class of public healthpolicies under which awareness partly follows from the policies themselves.
    Keywords: HIV/AIDS; voting; public health; awareness
    JEL: I18 H51
    Date: 2015–10
  13. By: Nicolas Sahuguet; Paola Conconi; Maurizio Zanardi
    Keywords: interstate conflicts; democratic peace; elections; term limits
    JEL: C72 D72 F00
    Date: 2015–10
  14. By: Giuranno, Michele; Biswas, Rongili
    Abstract: This paper studies the relation between internal migration and public spending on public goods. We describe centralized public policy when a central government is comprised of elected representatives from local electoral districts. Internal migration determines the median voter in the districts. The median voters decide the equilibrium policy through bargaining. We find the conditions under which exogenous inter-jurisdictional migration results in larger or smaller public spending. The paper also studies whether and when inter-regional migration leads to the efficient policy outcome. We find that the efficient size of government spending depends on the way internal migration leads to convergence among the regional median incomes and the national average income.
    Date: 2015–12
  15. By: Kelley Lee; Rebecca Zappelli; Elliot M. Goldner; Nguyen Cong Vu; Kitty K. Corbett; Jill Murphy
    Abstract: Among low- and middle-income countries, there is evidence that populations experiencing rapid political and economic transition have particularly high burdens of disease and disability from mental health conditions. This paper undertakes a political economy analysis of mental health in Vietnam to enhance knowledge translation, notably how both explicit and tacit knowledge can be used to promote evidence-based policy making. It argues that Vietnam's experience illustrates the need to better understand, not only how transition transforms societies, but how it impacts on the mental health needs and care of populations. The political economy of transition in Vietnam has so far given highest priority to economic growth through integration with the world economy and public sector reform. There is a need to recognise that transition in Vietnam poses both a potential threat to the care of people with mental health needs, and an opportunity to develop mental health services appropriate to local contexts.
    Keywords: Vietnam;mental health;globalisation;political economy;knowledge translation
    Date: 2015–03–28
  16. By: Shawn Chen (Business School, University of Western Australia)
    Abstract: Do corrupt firms create negative externality and hurt less corrupt ones? I answer this question by exploring cross-industry distribution of taxation, credit, and corruption over local political cycles in China. It is known that capital-intensive firms are more likely to be corrupt. The paper argues that preferential treatment in taxation or credit allocation towards corrupt firms must result in detrimental treatment against others when governments face resource constraints, and that corruption is generally conducted through political network that expands and shrinks over political cycles. Using the variation in turnover of secretaries of the Chinese Communist Party in 275 prefectures between 2000 and 2007, I find that, as the tenure of the secretaries increases, enforcement of both VAT and corporate income tax as well as access to credit all change in favour of capital-intensive industries but to the detriment of labour-intensive counterparts. I then use the firm-level Entertainment and Travel Cost (ETC) as a proxy of corruption and find that the variation of cross-industry distribution of ETC over secretaries' tenure is in line with the variation in taxation and credit allocation. The finding suggests that corruption may not reduce overall distortions in the economy but only shifts distortions across economic agents.
    Date: 2015
  17. By: Lucia Rizzica (Bank of Italy); Marco Tonello (Bank of Italy)
    Abstract: We analyse the impact of exposure to corruption news on individuals’ perceptions about the extent of the phenomenon. To this purpose, we take information on individuals’ perceptions of the likelihood that corruption events may occur in everyday life and combine it with a dataset containing the number of news items related to corruption that appeared on the homepages of the websites of the 30 most widely read national and local newspapers on the day on which the individual was interviewed. Results show that increasing potential exposure to corruption news by one standard deviation causes an increase in corruption perception of about 3.5 per cent and a decrease in trust in justice effectiveness of about 5.2 per cent. We suggest that these effects are mainly driven by a persuasive mechanism rather than by a learning process so that individuals’ perceptions about corruption appear to be biased by media content.
    Keywords: corruption perceptions, media, newspapers
    JEL: D84 K42 K49
    Date: 2015–11

This nep-pol issue is ©2015 by Eugene Beaulieu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.