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on Positive Political Economics |
| By: | Mayda, Anna Maria (Georgetown University); Peri, Giovanni (University of California, Davis); Steingress, Walter (Banque de France) |
| Abstract: | We empirically analyze the impact of immigration to the U.S. on the share of votes to the Republicans and Democrats between 1994 and 2012. Our analysis is based on variation across states and years – using data from the Current Population Survey merged with election data – and addresses the endogeneity of immigrant flows using a novel set of instruments. On average across election types, immigration to the U.S. has a significant and negative impact on the Republican vote share, consistent with the typical view of political analysts in the U.S. This average effect – which is driven by elections in the House – works through two main channels. The impact of immigration on Republican votes in the House is negative when the share of naturalized migrants in the voting population increases. Yet, it can be positive when the share of non-citizen migrants out of the population goes up and the size of migration makes it a salient policy issue in voters' minds. These results are consistent with naturalized migrants being less likely to vote for the Republican Party than native voters and with native voters' political preferences moving towards the Republican Party because of high immigration of non-citizens. This second effect, however, is significant only for very high levels of immigrant presence. |
| Keywords: | elections, immigration, Republican Party, citizenship |
| JEL: | F22 J61 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9543&r=pol |
| By: | Klaus Schmidt-Hebbel; José Carlos Tello |
| Abstract: | This paper develops a dynamic general-equilibrium political-economy model for the optimal size and composition of public spending. An analytical solution is derived from majority voting for three government spending categories: public consumption goods and transfers (valued by households), as well as productive government services (complementing private capital in an endogenous-growth technology). Inequality is reflected by a discrete distribution of infinitely-lived agents that differ by their initial capital holdings. In contrast to the previous literature that derives monotonic (typically negative) relations between inequality and growth in one-dimensional voting environments, this paper establishes conditions, in an environment of multi-dimensional voting, under which a non-monotonic, inverted U-shape relation between inequality and growth is obtained. This more general result – that inequality and growth could be negatively or positively related – could be consistent with the ambiguous or inconclusive results documented in the empirical literature on the inequality-growth nexus. The paper also shows that the political-economy equilibrium obtained under multi-dimensional voting for the initial period is time-consistent. |
| JEL: | D72 E62 H11 H31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:453&r=pol |
| By: | Mayda, Anna Maria; Peri, Giovanni; Steingress, Walter |
| Abstract: | We empirically analyze the impact of immigration to the U.S. on the share of votes to the Republicans and Democrats between 1994 and 2012. Our analysis is based on variation across states and years – using data from the Current Population Survey merged with election data – and addresses the endogeneity of immigrant flows using a novel set of instruments. On average across election types, immigration to the U.S. has a significant and negative impact on the Republican vote share, consistent with the typical view of political analysts in the U.S.. This average effect – which is driven by elections in the House – works through two main channels. The impact of immigration on Republican votes in the House is negative when the share of naturalized migrants in the voting population increases. Yet, it can be positive when the share of non-citizen migrants out of the population goes up and the size of migration makes it a salient policy issue in voters’ minds. These results are consistent with naturalized migrants being less likely to vote for the Republican party than native voters and with native voters’ political preferences moving towards the Republican party because of high immigration of non-citizens. This second effect, however, is significant only for very high levels of immigrant presence. |
| Keywords: | Citizenship; Elections; Immigration; Republican Party |
| JEL: | F22 J61 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11001&r=pol |
| By: | Gavazza, Alessandro; Nardotto, Mattia; Valletti, Tommaso |
| Abstract: | We empirically study the effects of broadband internet diffusion on local election outcomes and on local government policies using rich data from the U.K. Our analysis suggests that the internet has displaced other media with greater news content (i.e., radio and newspapers), thereby decreasing voter turnout, most notably among less-educated and younger individuals. In turn, local government expenditures (and taxes) are lower in areas with greater broadband diffusion, particularly expenditures targeted at less-educated voters. Our findings corroborate the idea that voters' information plays a key role in determining electoral participation, government policies and government size. |
| Keywords: | media; voting |
| JEL: | D72 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10991&r=pol |
| By: | Gianmarco Daniele (University of Barcelona & IEB & Vrije Universiteit Brussel (VUB)); Benny Geys (Norwegian Business School BI) |
| Abstract: | Since 1991, the Italian national government can dissolve municipal councils when infiltration by organized crime is suspected (Law 164/1991). We exploit variation over time and space in the application of this law to study voters’ responses to politicians’ publicly exposed ties to criminal organizations. Using a difference-in-differences approach, we find that public exposure of ties to organized crime significantly depresses turnout in local elections, and negatively impacts the electoral performance of incumbents and purely local political parties. The breach in the local political principal-agent relationship also translates into citizens’ reduced willingness to contribute to the financing of local public goods. |
| Keywords: | Political accountability, voter turnout, elections, mafia, tax compliance |
| JEL: | K42 H89 O17 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2015-41&r=pol |
| By: | Askitas, Nikos (IZA) |
| Abstract: | In a bold and risky political move the Greek prime minister Alexis Tsipras called for a referendum on June 27 2015 quitting ongoing negotiations with Greece's creditors in Brussels. The referendum framed as a yes or no question asked the Greek voters to decide whether or not they approve or reject the latest take-it-or-leave-it proposal for "program continuation" by Greece's creditors. What followed was a chaotic week leading to the referendum with intense campaigning by the two camps. Due to tense debates and increasing polarisation it became increasingly impossible to rely on traditional polling. Even the first exit polls (performed by phone on Sunday evening) could only see a marginal lead for one or the other vote at different times. Quite possibly people were jumping party lines and were unwilling to reveal their preferences. Using Google Trends I could tap into voters' true and unbiased revealed preferences and nowcast hourly what the ratio of the No vote to the Yes vote is and called an over 60% No vote well ahead of the closing of the voting urns. In this paper I document this nowcasting exercise. |
| Keywords: | nowcasting, Greek Referendum, greferendum, exit polls, complexity, behaviour, data science, computational social science, complex systems |
| JEL: | D72 G34 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9569&r=pol |
| By: | Gianmarco Daniele (University of Barcelona & IEB & Vrije) |
| Abstract: | A central question in terms of political (self-)selection relates to the incentives leading high ability individuals to enter – or abstain from entering – into politics. In this article, we use data from Italian municipalities over the period 1985-2012 to empirically assess how changes in individuals’ expected payoffs affect political (self-)selection. Identification derives from murders of local politicians by the mafia, and indicates that such a negative shock to politicians’ expected payoffs induces a strong decrease in first-time elected politicians’ human capital. The effect is not limited to the municipality where a political murder takes place, but also extends to nearby municipalities. |
| Keywords: | Political selection, organized crime, politicians’ ability, human capital, spillover effects |
| JEL: | H7 D72 K42 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2015-37&r=pol |
| By: | Sriparna Ghosh (West Virginia University, Department of Economics); Joshua C. Hall (West Virginia University, Department of Economics) |
| Abstract: | There has been an increase in the prevalence of obesity in the United States over the past several decades. The academic literature has highlighted numerous possible causes, including the consumption of soda and other sugar-sweetened beverages. Soda taxes have been suggested as a way of reducing the consumption of sugar-sweetened beverages and a number of U.S. states disfavor" sugar-sweetened beverages relative to food in their tax code. In this note we employ a political economy model to explain the adoption of these soda taxes." We find that more Democratic states and those with a higher rate of adult obesity are more likely to have soda taxes and states with more convenience stores per capita are less likely to have adopted a tax. |
| Keywords: | soda, sugar-sweetened beverages, political economy, median voter, special interests |
| JEL: | D72 H75 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:15-50&r=pol |
| By: | Raphael Bruce; Rafael Costa Lima |
| Abstract: | Do people acquire more information when they are encouraged to participate in elections? This paper presents empirical evidence on the effects of compulsory voting laws on the consumption of TV news. In Brazil, the law determines that every literate citizen over the age of eighteen at the day of the election is subject to a number of penalties if they don't attend the ballots. This provides a natural experiment which allows us to identify the causal effect of being under a compulsory voting regime on information acquisition. Using national survey data on the consumption of media we find that compulsory voting has a significant and substantial positive impact on the probability of an individual to watch Brazil's main newscast. This result is restricted to young voters who just turned eighteen and is robust to different polynomials and bandwidth lengths. |
| Keywords: | Compulsory voting; Regression Discontinuity Design; Media; News |
| JEL: | D72 D83 L82 |
| Date: | 2015–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2015wpecon48&r=pol |
| By: | Jean-Francois Maystadt; Muhammad Kabir Salihu |
| Abstract: | Analysing the effect of opportunistic fiscal transfers on the electoral fortune of incumbent politicians can be very difficult due to problems of endogeneity. In this paper, we use oil windfalls as an exogenous variation in the political discretion an incumbent government can exert in rule-based transfers. Exploiting within-state variation between 2007 and 2015 in Nigeria, an increase in VAT transfers induced by higher oil windfalls is found to improve the electoral fortune of an incumbent government. Our results question the role of rule-based transfers as an efficient institutional arrangement in resource-abundant countries. |
| Keywords: | Intergovernmental transfers, ruled-based transfers, political manipulation, fiscal federalism, Nigeria |
| JEL: | H70 H77 P16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:100756558&r=pol |
| By: | Askitas, Nikos (IZA) |
| Abstract: | On February 20 2015 Irish Premier Enda Kenny confirmed that a "yes-no" referendum on same sex marriage would be held on May 22 of the same year. A yes vote would legalise same sex marriage in Ireland. As the Irish premier put it, the vote was about "tolerance, respect and sensitivity". The electoral outcome turned out to be 62.07% for the yes vote with voter turnout at 60.52% of the registered voters. Ireland thus became the first country in the world to legalise same sex marriage through a popular vote. Using hourly Google Search data one week prior to the Irish Referendum of May 22 2015 and a simple ratio of "vote yes" to "vote no" searches I demonstrate how the outcome could have been predicted on the nose. The method is used here successfully for the second time and is so far as I know the only one which forecasts popular vote with Google Search. |
| Keywords: | referendum, predicting, Google Trends, Google Search, complexity, behaviour, data science, computational social science, complex systems |
| JEL: | D72 G34 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9570&r=pol |
| By: | Feld, Lars P.; Fritz, Benedikt |
| Abstract: | This paper investigates the political economy of after merger effects of the large scale municipal amalgamations in the German state of Baden-Württemberg in the early 1970s. By exploiting the huge variance in the amalgamation process in terms of number of participating municipalities, municipality size or amalgamation strategy we identify considerable common pool effects. Amalgamations can create a common pool, as the former independent municipalities have now access to more resources. Common pool exploitation is stronger the more municipalities participate and when municipalities amalgamate by annexation. Additionally, voter involvement is lower in amalgamated municipalities. |
| Keywords: | Municipal Amalgamation,Public Debt,Common Pool,Difference in Difference |
| JEL: | D78 H11 H72 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:1510&r=pol |
| By: | Blaise Gnimassoun; Joseph Keneck |
| Abstract: | This paper aims to study the determinants of corruption by examining specificities relating to the region and the level of economic development. Starting from a cross-sectional study on 130 countries, we rely on the Bayesian Model Averaging (BMA) approach to address the issue of model uncertainty and identify the key determinants of corruption according to the level of development and the region.Our results highlight the need for specific remedies in the fight against corruption given the regional, sociocultural, economic and institutional specificities. Indeed, the key determinants of corruption in sub-Saharan Africa are not the most relevant in the East Asia and Pacific region. Similarly, the most important determinants in developed countries are not the most worrying in developing countries. |
| Keywords: | Bayesian model averaging, Corruption, Government, Political economy. |
| JEL: | C11 D73 H11 P16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2015-31&r=pol |
| By: | Luis Miller (School of Economics, University of the Basque Country); Maria Montero (Department of Economics, University of Hamburg); Luis Miller (Department of Economics, University of Heidelberg) |
| Abstract: | We study a legislative bargaining game in which failure to agree in a given round may result in a breakdown of negotiations. In that case, each player receives an exogenous `disagreement value'. We characterize the set of stationary subgame perfect equilibria under all q-majority rules. Under unanimity rule, equilibrium payoffs are strictly increasing in disagreement values. Under all less-than-unanimity rules, expected payoffs are either decreasing or first increasing and then decreasing in disagreement values. We conduct experiments involving three players using majority and unanimity rule finding support for these predictions. |
| Keywords: | legislative bargaining; majority rule; unanimity rule; risk of breakdown; experiments |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2015-24&r=pol |
| By: | Emara, Noha; Chiu, I-Ming |
| Abstract: | The main goal of this paper is to evaluate the impact of governance on economic growth using a group of 188 countries. Although our main focus is on the 21 Middle Eastern and North African (MENA) countries, our findings can be applied to the other countries as well. There are two main contributions in this paper. The first contribution is we are able to create a “composite governance index” (CGI) that summarizes the existing six governance measurements; the Worldwide Governance Indicators (WGI), using the Principal Components Analysis (PCA) method. The first principal component derived from the WGIs explains as large as 81% of the variations in the original six WGI measurements, which indicates that it can be used as a strong indicator for evaluating government’s managerial ability and effectiveness. Following the creation of CGI, the second contribution is we are able to quantify the marginal contribution of improvement in governance to economic performance using PPP adjusted constant per capita GDP data. We find that the per capita GDP would rise by about 2% if the CGI increases by one unit. Using the Rule of 70, the marginal estimate further indicates a mere five-unit improvement in CGI would double the country’s per capita GDP in seven years. Nonetheless, the effect of improvement of governance can not account for the higher than expected per capita GDP in most of the oil rich MENA countries. In other words, the majority of the MENA countries have achieved fragile levels of economic growth that does not depend on sound governance. |
| Keywords: | MENA; Governance; Composite Governance Index; Economic Growth |
| JEL: | N20 O16 O43 |
| Date: | 2015–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68603&r=pol |