nep-pol New Economics Papers
on Positive Political Economics
Issue of 2016‒02‒29
eleven papers chosen by
Eugene Beaulieu
University of Calgary

  1. Political Institutions and Preference Evolution By WU, JIABIN
  2. Voting on Embryonic Stem Cell Research: Citizens More Supportive than Politicians By David Stadelmann; Benno Torgler
  3. Ideological Congruence and Citizen Satisfaction: Evidence from 25 Advanced Democracies By Mayne, Quinton; Hakhverdian, Armen
  4. An Empirical Analysis of Trade-Related Redistribution and the Political Viability of Free Trade By James Lake; Daniel L. Millimet
  5. Pork barrel as a signaling tool: the case of US environmental policy By Hélia Costa
  6. The cyclical social choice of primary vs. general election candidates: A note on the US 2016 presidential election By Kurrild-Klitgaard, Peter
  7. Political Parties, Clientelism, and Bureaucratic Reform By Cesi Cruz; Philip Keefer
  8. Local Government Proliferation, Diversity, and Conflict By Samuel Bazzi; Matthew Gudgeon
  9. Corruption, fatigued democracy and bad governance: Are they codeterminants of poverty risk and social exclusion in Europe? A cross-country macro-level comparison By Bruno, Bosco
  10. Policy Unbundling and Special Interest Politics By Landa, Dimitri; Le Bihan, Patrick
  11. Voting over Selfishly Optimal Nonlinear Income Tax Schedules with a Minimum-Utility Constraint By Craig Brett; John A Weymark

  1. By: WU, JIABIN
    Abstract: This paper argues that political institutions play an important role in shaping the evolutionary trajectory of preferences. We consider a population with two preference groups. A political institution provides the platform and a set of rules for the two groups to battle over the relative representativeness of their preference traits for the high positions in the social hierarchy. This political process affects the economic outcomes of the two groups, subsequently the intergenerational transmission of preferences. We study how conducive different political institutions are to spreading preference traits that induce better economic outcomes. We find that any preference trait can be prevalent under "exclusive" political institutions. Therefore, a society can be trapped in a state in which preference traits associated with unfavorable economic outcomes persist. On the other hand, preference evolution under "inclusive" political institutions has stronger selection power and only the preference traits that result in the largest comparative advantage in holding a high position can be prevalent.
    Keywords: Preference evolution, Political institutions, Evolutionary Game Theory
    JEL: C72 C73 D72 Z10 Z13
    Date: 2016–02–18
  2. By: David Stadelmann; Benno Torgler
    Abstract: As the public debate over stem cell research continues, the observable voting behaviour in Switzerland offers a unique opportunity to compare the voting behaviour of politicians with that of voters. In this paper, by analysing the outcomes of a referendum on a liberal new bill regulating such research, we reveal an almost 10 percentage point lower probability of the bill being accepted by politicians than by a representative sample of voters. Whereas the politicians’ behaviour is driven almost entirely by party affiliation, citizen votes are driven not only by party attachment but also by church attendance. Seldom or never attending church increases the probability of bill acceptance by over 23 percentage points, while supporting the Christian Democratic Party makes supporting the bill less likely for voters, suggesting that religious observance is important. The observance of these tendencies in Switzerland – an environment that promotes discussion through direct democratic rights – strongly suggests that citizens see the benefits of stem cell research.
    Keywords: Representation; Stem Cells; Innovation
    JEL: D72 I10
    Date: 2016–01
  3. By: Mayne, Quinton; Hakhverdian, Armen
    Abstract: Ideological congruence is an important and popular measure of the quality of political representation. The closer the match between the preferences of the public and those of elected elites, the better representative democracy is thought to function. Relatively little attention has been paid however to the effects of ideological congruence on political judgement. We address this gap by examining whether citizens use egocentric or sociotropic judgments of congruence to evaluate democratic performance. Using a variety of congruence measures, we find that citizens are unmoved by sociotropic congruence; however, our analyses provide clear evidence that egocentric congruence boosts citizen satisfaction, especially among political sophisticates. We conclude by discussing the implications of these findings for the study of ideological congruence and political representation.
    Date: 2016
  4. By: James Lake (Southern Methodist University); Daniel L. Millimet (Southern Methodist University)
    Abstract: Even if free trade creates net welfare gains for a country as a whole, the associated distributional implications can undermine the political viability of free trade. We show that trade-related redistribution -- as presently constituted -- modestly increases the political viability of free trade in the US. We do so by assessing the causal effect of expected redistribution associated with the US Trade Adjustment Assistance program on US Congressional voting behavior on eleven Free Trade Agreements (FTAs) between 2003 and 2011. We find that a one standard deviation increase in expected redistribution leads to an average increase in the probability of voting in favor of an FTA of 1.8 percentage points. Although this is a modest impact on average, we find significant heterogeneities; in particular, the effect is larger when a representative's constituents are more at risk or the representative faces greater re-election risk.
    Keywords: Free Trade Agreements, Trade Adjustment Assistance, Political Economy, Redistribution
    JEL: F13 H50 J65
    Date: 2014–05
  5. By: Hélia Costa
    Abstract: Are environmental policies affected by the political cycle? This paper investigates if environmental spending is used as pork barrel with signaling purposes. It develops a two-period model of electoral competition where politicians use current policies to signal their preferences to rational, forward-looking voters. There exists an equilibrium where incumbents use pork barrel spending for signaling in majoritarian systems. Results show that it is directed towards ideologically homogeneous groups, and is mitigated if the incumbent is a “lame duck†or has a high discount rate. The predictions of the model are tested using data on US state level environmental expenditures. The empirical results show support for the signaling motive as a central mechanism in generating pork barrel towards the environment.
    Date: 2016–02
  6. By: Kurrild-Klitgaard, Peter
    Abstract: The manner in which US presidential elections are organized make them ripe for empirical manifestations of the “voting paradoxes” identified by social choice theorists. This note illustrates the general point with polling data involving the two leading Democrats and the three leading Republicans at the beginning of the 2016 presidential primaries, suggesting that all five candidates may be alternatives in one or more cyclical majorities, i.e., where no candidate cannot be beaten by at least one other candidate.
    Keywords: Social choice; Condorcet paradox; Borda paradox; US presidential election 2016; Hillary Clinton; Bernard Sanders; Donald Trump; Ted Cruz; Marco Rubio.
    JEL: D7 D71 D72
    Date: 2016–02–01
  7. By: Cesi Cruz; Philip Keefer
    Abstract: The challenge of public administration reform is well-known: politicians often have little interest in the efficient implementation of government policy. Using new data from 439 World Bank public sector reform loans in 109 countries, we demonstrate that such reforms are significantly less likely to succeed in the presence of non-programmatic political parties. Earlier research uses evidence from a small group of countries to conclude that clientelistic politicians resist reforms that restrict their patronage powers. We support this conclusion with new evidence from many countries, allowing us to rule out alternative explanations, including the effect of electoral and political institutions. We also examine reforms that have not been the subject of prior research: those that make public sector financial management more transparent. Here, we identify a second mechanism through which non-programmatic parties undermine public sector reform: clientelistic politicians have weaker incentives to exercise oversight of policy implementation by the executive branch.
    Keywords: Public Administration & Policy Making, Clientelism, Political parties, Public sector reform
    Date: 2015–06
  8. By: Samuel Bazzi (Boston University and BREAD); Matthew Gudgeon (Boston University)
    Abstract: A key feature of decentralization in developing countries has been the creation of new local governments. The implications of this process for violent conflict are not well understood. On the one hand, bringing representative government closer to the electorate can reduce heterogeneity in preferences, thereby mitigating conflict. On the other hand, creating local government institutions also leads to a large increase in rents that may be contested violently. Group cleavages can determine which of these two effects prevails. Identifying these distinct channels empirically has proven difficult. This paper resolves these challenges by exploiting a natural experiment in the ethnically and religiously diverse context of post-authoritarian Indonesia where rapid decentralization was accompanied by dramatic growth in the number of new districts and a resulting decline in ethnolinguistic fractionalization. We use new microdata on conflict from 2000–2014 and leverage the plausibly exogenous timing of redistricting due to a government moratorium. Overall, redistricting has small and insignificant average effects on conflict. However, areas that experience greater ethnolinguistic and religious homogenization as a result of splitting experience a significant reduction in conflict. At the same time, we find a differential increase in violence in areas that receive a new government and are also ethnically polarized. These differential increases in violence are most pronounced around the time of the first election and for types of violence associated with contestation of public resources and institutions. These results suggest that allowing for redistricting along group lines can reduce conflict, but the benefits of reduced diversity may be undone if the newly governed population is highly polarized. In such cases, conflict may then simply shift from the original seats of government to newly created ones.
    Keywords: Conflict, Polarization, Ethnic Diversity, Decentralization
    JEL: D72 D74 H41 H77 O13 Q34
    Date: 2015–12
  9. By: Bruno, Bosco
    Abstract: Using a macro panel of 31 European countries, this paper explores the hypothesis that crossâ€country differences in the exposition to the risk of poverty or social exclusion (as defined by the Europe 2020 antiâ€poverty strategy) are strongly affected by countries’ political, institutional and legal characteristics and particularly by the level of perceived corruption in the public and political sectors. As expected, the results show that economic growth, income distribution, public expenditure and investment, as well as education but not technical development, have strong effects on poverty reduction. This notwithstanding, results indicate that corruption and poor institutional quality significantly interact with economic co-factors and threaten the positive effects of growth on poverty. Altogether, the results signal the need for reassessment of the Euro 2020 strategy, which mainly relies on economic instruments alone.
    Keywords: Poverty, Social Exclusion, Corruption, Governance
    JEL: D72 D73 O15
    Date: 2016–01–18
  10. By: Landa, Dimitri; Le Bihan, Patrick
    Date: 2015–09
  11. By: Craig Brett (Mount Allison University); John A Weymark (Vanderbilt University)
    Abstract: Pairwise majority voting over alternative nonlinear income tax schedules is considered when there is a continuum of individuals who differ in their labor productivities, which is private information, but share the same quasilinear-in-consumption preferences for labor and consumption. Voting is restricted to those schedules that are selfishly optimal for some individual. The analysis extends that of Brett and Weymark (Games and Economic Behavior, forthcoming) by adding a minimum-utility constraint to their incentive-compatibility and government budget constraints. It also extends the analysis of Röell (unpublished manuscript, 2012) and Bohn and Stuart (unpublished manuscript, 2013) by providing a complete characterization of the selfishly optimal tax schedules. It is shown that individuals have single-peaked preferences over the set of selfishly optimal tax schedules, and so the schedule proposed by the median skill type is a Condorcet winner.
    Keywords: Mirrlees tax problem, nonlinear income taxation, political economy of taxation, redistributive taxation, voting over tax schedules
    JEL: H2 D7
    Date: 2016–02–12

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