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on Positive Political Economics |
| By: | Kristel Jacquier (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | We use survey data from ISSP 2013 to explore how conflicts over European integration interact with the dimensions of contestation that structure politics in five EU countries. Multinomial estimates allow the distinction between support, rejection and ambivalence vis-à-vis the EI. The empirical analysis shows that ambivalence and rejection of the European Union have the same determinants. We find that far-right political ideology is the only robust predictor of genuine anti-EU attitudes |
| Keywords: | European integration; political parties; survey analysis |
| JEL: | D72 F02 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:15083&r=pol |
| By: | Francisco Jose Veiga; Linda Goncalves Veiga; Atsuyoshi Morozumi |
| Abstract: | This paper examines the effects of elections on the conduct of central governments’ fiscal policies. To do so, it uses a unique panel database that includes disaggregated spending and revenue series at the central government level for multiple countries over the 1975-2010 period. After examining political environments under which incumbent governments generate political budget cycles (PBCs), we compare the relative importance of factors influencing cycles. Media freedom is identified as the factor that plays the most critical role. Specifically, we find robust evidence that the electoral effect on budget deficits under low media freedom is significantly larger than under high freedom, even when other determinants of PBCs are controlled for. We then show that what drives the election-year rise in budget deficits under low media freedom is an increase in the current, not capital, component of public expenditure. |
| Keywords: | Political budget cycles; Central government; Voter information; Media Freedom; Fiscal policy composition |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcfc:15/14&r=pol |
| By: | Éric Langlais; Marie Obidzinski |
| Abstract: | In this paper, we analyze how political competition affects the designof public law enforcement policies. Assuming that the cost of enforcement is linear, criminals'type is uniformally distributed, and society's wealth is large enough, the article arrives at two main conclusions: 1) electoral competition entails no loss of efficiency at equilibrium for both minor and major offenses (e.g. minor offenses are not enforced, while major ones are fully deterred); 2) different distortions arises at equilibrium for the intermediate offenses: enforcement expenditures for small offenses are lower than the optimal level, such that the issue of under-deterrence is exacerbated; in contrast, for larger offenses, enforcement measures are higher, and there is more deterrence than what efficiency requires. We show that these results also holds under more general assumptions (convex costs of enforcement, a general cdf of illegal bene.ts, a lower society's wealth), excepted that full deterrence of major offenses is not achievable. |
| Keywords: | public law enforcement, deterrence, monetary sanctions, electoral competition. |
| JEL: | D72 D73 H1 K14 K23 K4 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2015-40&r=pol |
| By: | Matthew Dimick; Daniel Stegmueller |
| Abstract: | This paper argues for the central role of risk aversion in shaping political ideology. We develop a political economy model, which makes explicit the link between risk aversion, the labor market, government policy, and ideology. Our model distinguishes the effects of risk aversion from unemployment risk and our evidence sheds light on debates over explanations for the welfare state. We test our model using a large-scale household panel with an experimentally validated measure of risk aversion. We find that risk aversion is a systematic and important determinant of political-economic attitudes and is at least as important as, if not more so, an individual’s position in the income distribution. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp809&r=pol |
| By: | Marie-Louise Leroux; Dario Maldonado; Pierre Pestieau |
| Abstract: | We consider a political economy model in which agents have the possibility to hide part of their earnings in order to avoid taxation. Taxation is exclusively used to finance a pension system. If the pension system is implemented, agents in their old age receive a benefit which includes both a Bismarkian and a Beveridgian component. We show that in the absence of compliance costs, agents are indifferent to the tax rate level as in response, they can perfectly adapt their level of compliance. The public pension system is found to be at least partially contributory in order to increase compliance and thus to increase the tax base. When compliance costs are introduced, perfect substitutability between compliance and taxation breaks down. Depending on the relative returns from public pensions and private savings as well as on the elasticity of compliance to income, we obtain that the preferred tax rate should be increasing or decreasing in income. The majority voting tax rate is more likely to be positive when the median income is low and when the return from public pensions dominates that of private savings. The level of the Bismarkian pillar will now be chosen so as to account for increased political support, for increased direct redistribution toward the worst-off agent, and increased tax base. |
| Keywords: | Compliance costs, majority voting, public pensions, tax evasion, |
| JEL: | H55 I13 D91 |
| Date: | 2015–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2015s-52&r=pol |
| By: | Mostapha Diss (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Patrizia Pérez-Asurmendi (PRESAD - PReferencias, Elección Social y Ayuda a la Decisión - UNIVERSIDAD DE VALLADOLID, SEED - Social Equilibrium and Economic Decisions - Universidad Pública de Navarra) |
| Abstract: | The main criticism to the aggregation of individual preferences under majority rules refers to the possibility of reaching inconsistent collective decisions from the election process. In these cases, the collective preference includes cycles and even could prevent the election of any alternative as the collective choice. The likelihood of consistent outcomes under a class of majority rules constitutes the aim of this paper. Specifically, we focus on majority rules that require certain consensus in individual preferences to declare an alternative as the winner. Under majorities based on difference of votes, the requirement asks to the winner alternative to obtain a difference in votes with respect to the loser alternative taking into account that individuals are endowed with weak preference orderings. Same requirement is asked to the restriction of these rules to individual linear preferences.. Abstract The main criticism to the aggregation of individual preferences under majority rules refers to the possibility of reaching inconsistent collective decisions from the election process. In these cases, the collective preference includes cycles and even could prevent the election of any alternative as the collective choice. The likelihood of consistent outcomes under a class of majority rules constitutes the aim of this paper. Specifically, we focus on majority rules that require certain consensus in individual preferences to declare an alternative as the winner. Under majorities based on difference of votes, the requirement asks to the winner alternative to obtain a difference in votes with respect to the loser alternative taking into account that individuals are endowed with weak preference orderings. Same requirement is asked to the restriction of these rules to individual linear preferences. Keywords Majorities based on difference of votes · Probability · Transitivity · Triple-acyclicity. |
| Keywords: | Majorities based on difference of votes,Probability,Transitivity,Triple-acyclicity |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01241996&r=pol |
| By: | Myerson,Roger B. |
| Abstract: | A review of the history of the United States from its colonial origins shows how America's successful development has always been guided by two basic principles: representative democracy, and a proper division of power between national and subnational governments. The United States of America was established as an independent nation by a congress of delegates from 13 provincial assemblies, each of which consisted of representatives elected by their communities. Since colonial times, local democratic rights have attracted immigrants to help build new towns in the growing nation. Responsible local governments in America have had the power and the incentive to make local public investments for developing prosperous communities. Democratic competition in America has been strengthened by the ability of successful local leaders to become competitive candidates for higher offices. But in spite of America's example, many nations since the French Revolution have instead been drawn to centralized democracy, as national elites may prefer to centralize power around themselves. America's successful growth ultimately depended on its citizens'basic understanding that their welfare and security were enhanced by a balanced federal division of power between their elected local governments and the higher sovereign government of their nation. |
| Keywords: | Parliamentary Government,Political Systems and Analysis,Population Policies,Politics and Government,Public Sector Corruption&Anticorruption Measures |
| Date: | 2015–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7512&r=pol |
| By: | Andrew T. Young (West Virginia University, Department of Economics) |
| Abstract: | Good government requires a constitution that demarcates what political agents can and cannot do, and such a constitution must be self-enforcing. The medieval West was characterized by the estates system, where the political power of monarchs was roughly balanced by that of a landed and militarized nobility. This rough balance of power contributed to a Western tradition of limited government and constitutional bargaining. I argue that this balance has important roots in the fifth and sixth century barbarian settlements that occurred within the frontiers of the declining Western Roman Empire. These settlements provided barbarians with allotments consisting of lands or claims to taxes due from those lands. These allotments aligned the incentives of barbarian warriors and Roman landowners; they also realigned (or newly aligned) the incentives of barbarian warriors and leadership elite as their roving confederacies became stationary kingdoms. Barbarian military forces became decentralized and the warriors became political powerful shareholders of the realm. |
| Keywords: | constitutional political economy, polycentric sovereignty, shareholder states, collective action problems, governance institutions, state emergence |
| JEL: | H10 P16 P48 N40 N43 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:15-41&r=pol |
| By: | Peter J. Boettke (George Mason University, Department of Economics); Joshua C. Hall (West Virginia University, Department of Economics); Kathleen M. Sheehan (Creighton University, Heider College of Business) |
| Abstract: | Adam Smith famously argued that increased competition in religion would result in more religious tolerance and that the benefits of competition in the marketplace would also be seen in religious instruction when many religious sects are tolerated. We use a cross-section of a maximum of 167 countries to explore whether increased religious competition results in less governmental regulation of religion and less governmental favoritism of religion. Our measure of religious regulation and favoritism comes from the Association of Religion Data Archives. Our empirical analysis also explores the influence of economic and political factors, including the size of the economy, openness of trade, legal origins, education, the amount of checks and balances on the government and the role of democracy. |
| Keywords: | religious freedom, regulation, democracy |
| JEL: | Z12 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:15-47&r=pol |
| By: | Revelli, Federico (University of Turin) |
| 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 elections, 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. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201548&r=pol |
| By: | Rossi, Stefano; Yun, Hayong |
| Abstract: | We investigate economic and political theories of financial reform to analyze state-level adoption of municipal bankruptcy laws (Chapter 9). Using a dynamic Cox hazard model, we find that interest group factors related to the relative strength of potential losers (labor unions) and winners (bond investors), courts’ efficiency, and trust in non-opportunistic behavior by local government explain the timing of Chapter 9 adoptions between 1980 and 2012. Similar factors also explain congressional voting on municipal bankruptcy law. After Chapter 9 adoption, municipal bond spreads decrease and firms experience higher revenues, profits, and investments, particularly in states in which more bond proceeds are used by the private sector. Our findings support political and economic theories of financial reform, and highlight a novel spillover channel from the public to the private sector. |
| Keywords: | bankruptcy; Chapter 9; judicial efficiency; labor union; municipal bonds |
| JEL: | D86 G33 G34 K22 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10984&r=pol |
| By: | Denise Laroze (University of Essex); David Hugh-Jones (University of East Anglia); Arndt Leininger (Hertie School of Governance) |
| Abstract: | Bargaining and coalition building is a central part of modern politics. Typically, game-theoretic models cannot predict a unique equilibrium. One possibility is that coalitions are formed on the basis of social identity loyalty to a gender, ethnic or political in-group. We test the effect of gender, race and ideological distance on coalition formation in a majority-rule bargaining experiment. Despite the absence of any incentives to do so, we find that ideological distance significantly affects offers made to potential coalition partners. As a result, coalitions tend to be ideologically coherent, even though there is no ideological policy output. We conclude that social identity considerations can determine equilibria in coalition formation. |
| Keywords: | coalition formation, laboratory experiments, Baron and Ferejon model, legislative bargaining, social identity |
| Date: | 2015–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaeco:2015_03&r=pol |
| By: | Christa Brunnschweiler (University of East Anglia); Paivi Lujala (Norwegian University of Science and Technology) |
| Abstract: | We propose that relative economic backwardness contributes to the build-up of social tension and the incidence of both nonviolent and violent forms of opposition to the current political regime. We take inspiration from Gerschenkron's (1962) essay on economic backwardness and more recent findings on international comparisons and status-seeking to develop a testable hypothesis. We use information on a large number of countries and years from a new dataset on episodes of organized mass movements and find that greater economic backwardness is indeed consistently linked to a higher probability of seeing both violent and nonviolent forms of civil unrest. IV estimations using three different instruments, including distance to either London or Washington, D.C., and mailing speeds and telegram charges around 1900, suggest that this relationship is causal. |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:uea:aepppr:2012_72&r=pol |
| By: | Sandro Brusco; Jaideep Roy |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:nys:sunysb:15-04&r=pol |