nep-pol New Economics Papers
on Positive Political Economics
Issue of 2016‒03‒06
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. How Political Parties Shape Electoral Competition By Motz, Nicolas
  2. MR. ROSSI, MR. HU AND POLITICS. THE ROLE OF IMMIGRATION IN SHAPING NATIVES’ VOTING BEHAVIOR By Guglielmo Barone; Alessio D’Ignazio; Guido de Blasio; Paolo Naticchioni
  3. Dynamics of Political Budget Cycle By Manjhi, Ganesh; Keswani Mehra, Meeta
  4. Great expectations, veto players, and the changing politics of banking crises By Jeffrey Chwieroth; Andrew Walter
  5. An Appraisal of History-bound Reelections By Gersbach, Hans
  6. Politics and investment: examining the territorial allocation of public investment in Greece By Psycharis, Yannis; Rodriguez-Pose, Andres; Tselios, Vassilis
  7. Civic engagement and its role in mitigating electoral violence in Nigeria: implications for the 2015 general elections By Aniekwe, Chika Charles; Agbiboa, Daniel Egiegba
  8. It’S Not the Economy Stupid! Is Russia-Us Trade Really Underdeveloped? A Test Using Gravity Models By Maxim Bratersky; Gunes Gokmen; Andrej Krickovic
  9. Epistemic democracy with correlated voters By Pivato, Marcus
  10. Correlation, Partitioning and the Probability of Casting a Decisive Vote under the Majority Rule By Le Breton, Michel; Lepelley, Dominique; Smaoui, Hatem
  11. The Condorcet Principle Implies the Proxy Voting Paradox By Le Breton, Michel
  12. Popular Referendum and Electoral Accountability By Le Bihan, Patrick
  13. Popular Attitudes Towards Markets and Democracy: Russia and United States Compared 25 Years Later By Maxim Boycko; Robert J. Shiller
  14. Media and Politics By Strömberg, David

  1. By: Motz, Nicolas
    Abstract: This paper provides a model of party formation that can explain the contrast observable in the US between highly competitive presidential elections and state election that are often dominated by one party. The puzzling aspect of this pattern is that the barriers to entry that seem to exist at the state level do not apply to the federal level. The explanation that the model provides rests on the career concerns of politicians: state politicians would like to advance their career to the federal level, but only have the opportunity of doing so as a member of a federally successful party. If politicians value such career opportunities sufficiently strongly, entry of additional parties at the state level does not occur. There then exists an equilibrium with two parties, one centre-left and one centre-right, where each party dominates some states. When career concerns are weak, on the other hand, the number of parties in equilibrium will be larger with a tendency towards parties with a narrower ideological profile. In addition to explaining the patterns observable in election results, the model also makes empirical predictions regarding the sorting of politicians into parties across different regions.
    Keywords: Political Parties, Electoral Competition
    JEL: D72
    Date: 2016–02
  2. By: Guglielmo Barone (Bank of Italy and RCEA); Alessio D’Ignazio (Bank of Italy); Guido de Blasio (Bank of Italy); Paolo Naticchioni (Roma Tre University and IZA)
    Abstract: Using Italian municipality-level data on national elections and IV estimation strategy, we find that immigration generates a sizable causal increase in votes for the centre-right coalition, which has a political platform less favorable to immigrants. Additional findings are: (i) the effect is heterogeneous across municipalities with different sizes; (ii) the gain in votes for the centreright coalition corresponds to a loss of votes for the centre and centre-left parties, a decrease in voter turnout, and a rise in protest votes; (iii) the relationship between immigration and electoral gains percolates to mayoral election at the municipality level; (iv) cultural diversity, competition in the labor market and for public services, and political competition are the most relevant channels at work.
    Keywords: Immigration, voting, political economy
    JEL: D72 P16 J61
    Date: 2015
  3. By: Manjhi, Ganesh; Keswani Mehra, Meeta
    Abstract: Using the method of optimal control, when an incumbent politician derives utility from voting support and dis-utility from budgetary deficit, the equilibrium time paths of both voting support and budgetary deficit are characterized in a finite time horizon under complete information. The incumbent politician may be an opportunist, in that she/ he is interested in garnering votes for herself/ himself, and manipulates budgetary deficit to achieve this, or else she/ he may be partisan, that is, characterized by heterogenous preferences, reflecting preferences for specific economic policies. The citizen-voters vote for the opportunist as well as the partisan incumbent. However, they reject the same when there is a sufficiently strong anti-incumbency in the opportunist case. The level of voting support obtained in case of both opportunist and partisan is found to be positive and rising over time, but running the budgetary deficit will be costlier for the economy in the former case than the latter. That is, per unit votes garnered by raising the budgetary deficit as compared to the benchmark deficit are lower when the incumbent is an opportunistic than when she/ he is partisan.
    Keywords: Opportunist Incumbent; Partisan Incumbent, Citizen Voters, Budgetary Deficit, Political Economy, Political Budget Cycles; Fiscal Policy; Anti-incumebency
    JEL: E3 E6 H3 H7
    Date: 2015–10–10
  4. By: Jeffrey Chwieroth; Andrew Walter
    Abstract: How have the politics of banking crises changed over the long run? Unlike existing static accounts, we offer a dynamic theory emphasizing how the emergence of voters’ “great expectations” after the 1930s concerning crisis prevention and mitigation reshaped the politics of banking crises in many democratic countries. We argue that both variations over time, centred on the emergence of these expectations, and variations within democratic countries, based on how veto players constrain policy change, exerted an important influence on the propensity of voters to punish incumbent political parties in the aftermath of banking crises. We find strong support for our argument using a new dataset of 100 democratic countries from 1831 – 2011. Political punishment in the aftermath of a banking crisis is mainly a modern phenomenon and is most evident in systems with polarized veto players.
    Keywords: Sovereign Default; Debt Crises; Political Survival; Networks; Voter Behavior.
    JEL: R21
    Date: 2015–01–08
  5. By: Gersbach, Hans
    Abstract: In this paper we introduce history-bound reelections. In their simplest form, they are embodied in a "Score-replication Rule". Under such rules an incumbent has to match the highest vote-share he/she has obtained in any previous election in order to be reelected. We develop a simple three-period model to examine Score-replication Rules. We show that suitable variants of such rules can improve welfare as they reduce the tendency of reelected incumbents to indulge in their own preferences. At the same time, they ensure that able office-holders are reelected. Candidates might offer their own Score-replication Rule in campaigns. We outline how political competition may be affected by such new forms of elections.
    Keywords: history-bound reelections; incumbency advantage; non-competitive elections; Score-replication Rule
    JEL: D7 D82 H4
    Date: 2016–02
  6. By: Psycharis, Yannis; Rodriguez-Pose, Andres; Tselios, Vassilis
    Abstract: This paper discusses how electoral politics shapes the regional allocation of public investment expenditures per capita in Greece. Using regional public investment data for 10 political periods (1975-2009), combined with electoral data by constituency, a model is proposed which captures the influence of politics on the regional distribution of public investment expenditures. The results of the analysis point to a strong relationship between electoral results and regional public investment spending. Greek governing parties have tended to reward those constituencies returning them to office. Moreover, an increase in both the absolute and relative electoral returns of the governing party in a region has traditionally been followed by greater public investment per capita in that region. Regions where the governing party (whether Liberal or Socialist) has held a monopoly of seats have been the greatest beneficiaries of this type of pork-barrel politics.
    Keywords: elections; Greece; political geography; pork-barrel politics; public investment
    JEL: H50 H77 R12 R58 Z18
    Date: 2015–02
  7. By: Aniekwe, Chika Charles; Agbiboa, Daniel Egiegba
    Abstract: In May 1999, Nigeria, Africa’s most populous country, made an epochal transition to democratic civilian rule following roughly thirty-three years of military dictatorship. Since 1999, Nigeria has held four successive elections, which have all been (more or less) undermined by electoral violence. Despite this recurrent and disturbing trend of electoral violence, few works have attempted to systematically engage with three key questions: why is electoral violence a recurrent phenomenon in Nigeria? Why have there been so few constitutional provisions to mitigate its recurrence? What lessons can be learned from Nigeria’s turbulent electoral past, especially with regards to the role of civic engagement? These are the core questions this paper seeks to address. This paper draws its data primarily from the International Foundation for Electoral Systems (IFES)-Electoral Violence Education and Resolution (EVER) programme, with which the authors were actively involved during the 2007 and 2011 general elections in Nigeria. To balance any inconsistencies, data derived from a content analysis of IFES reports and cumulative observations will be triangulated and cross-validated with reports of different Election Observation Missions to Nigeria (1999-2011), as well as reports from local and international observation teams and key International NGOs working in the areas of elections and democracy in Nigeria, including National Democratic Institute (NDI), Human Rights Watch (HRW) and International Republican Institute (IRI). The paper thus argues that as Nigeria prepares for 2015 elections, important lessons should be adapted from the IFES-EVER project to ensure robust civic engagement in preventing and mitigating electoral related violence. The use of electoral support networks, link with Nigerian police and other security agencies, constant engagement and information sharing between INEC and all relevant stakeholders as well as biweekly reportage and publication of incidents of electoral violence with names of perpetrators will go a long way in preventing and mitigating incidents of electoral violence in Nigeria 2015 General Elections. Furthermore, crucial attention should also be paid to Nigerian legal and constitutional provisions on electoral violence with the view to reviewing the standards and level of sanctions to perpetrators.
    Keywords: Nigeria; elections
    Date: 2015–01
  8. By: Maxim Bratersky (National Research University Higher School of Economics); Gunes Gokmen (National Research University Higher School of Economics); Andrej Krickovic (National Research University Higher School of Economics)
    Abstract: Politicians, pundits and experts in both Russia and the US frequently bemoan the “underdevelopment” of US-Russia trade, arguing that political factors have inhibited the development of economic ties. It is also often argued that political relations between the two countries would also be more cooperative and less conflictual if these ties developed up to their full potential. The paper seeks to test the conventional wisdom that the US-Russia trade is underdeveloped by employing a standard gravity model to measure where trade between the two countries “should” be. We find no evidence that the US-Russia trade is underdeveloped. In terms of its ability to live up to the predictions of the model, trade between the two countries is predicted by the standard determinants of trade, suggesting that there is nothing erratic about the US-Russia trade and it behaves like any average country pair. These findings suggest that US-Russia trade relations actually live up to their economic potential and that the commonly held idea that political relations between Russia and the US can be dramatically improved by tapping into the “unfulfilled” promise of improved trade relations is unfounded. Moreover, our analysis demonstrates that the sectorial structure of the two economies, factor endowments and comparative advantages do not seem to indicate that there is significant potential for increased trade, as the conventional wisdom would suggest. The conventional view argues that poor political relations have impeded the development of economic relations between the two states. But, in fact, the opposite may be true: relations between the US and Russia are characterized by rivalry and conflict because there is little solid economic grounds for more pacific relations
    Keywords: US-Russia Relations, International Trade, Gravity Models, Economic Interdependence
    JEL: F14
    Date: 2016
  9. By: Pivato, Marcus
    Abstract: We develop a general theory of epistemic democracy in large societies, which subsumes the classical Condorcet Jury Theorem, the Wisdom of Crowds, and other similar results. We show that a suitably chosen voting rule will converge to the correct answer in the large-population limit, even if there is significant correlation amongst voters, as long as the average correlation between voters becomes small as the population becomes large. Finally, we show that these hypotheses are consistent with models where voters are correlated via a social network, or through the DeGroot model of deliberation.
    Keywords: Condorcet Jury Theorem; Wisdom of Crowds; epistemic social choice; deliberation; social network; DeGroot.
    JEL: D71 D81
    Date: 2016–02–15
  10. By: Le Breton, Michel; Lepelley, Dominique; Smaoui, Hatem
    Abstract: The main purpose of this paper is to estimate the probability of casting a decisive vote under the majority rule for a class of random electorate models encompassing the celebrated Impartial Culture (IC) and Impartial Anonymous Culture (IAC) models. The emphasis is on the impact of correlation across votes on the order of magnitude of this event. Our proof techniques use arguments from probability theory on one hand and combinatorial and algorithmic tools for counting integer points inside convex polytopes on the other hand.
    Keywords: Elections, Power Measurement, Voting, Random Electorate.
    JEL: D71 D72
    Date: 2016–02
  11. By: Le Breton, Michel
    Abstract: In this note, we formulate a condition describing the vulnerability of a social choice function to a specific kind of strategic behavior and show that two well known classes of choice functions suffer from it.
    Keywords: Condorcet, Departing Voter Paradox, Backward Induction
    JEL: D71 D72
    Date: 2016–02
  12. By: Le Bihan, Patrick
    JEL: D72
    Date: 2015–09
  13. By: Maxim Boycko (Watson Institute, Brown University and Dept of Economics, Harvard University); Robert J. Shiller (Cowles Foundation, Yale University)
    Abstract: We repeat a survey we did in the waning days of the Soviet Union (Shiller, Boycko and Korobov, AER 1991) comparing attitudes towards free markets between Moscow and New York. Additional survey questions, from Gibson Duch and Tedin (J. Politics 1992) are added to compare attitudes towards democracy. Two comparisons are made: between countries, and through time, to explore the existence of international differences in allegiance to democratic free-market institutions, and the stability of these differences. While we find some differences in attitudes towards markets across countries and through time, we do not find most of the differences large or significant. Our evidence does not support a common view that the Russian personality is fundamentally illiberal or non-democratic.
    Keywords: free markets, democratic values, fair prices, income inequality, incentives, hostility towards business, Moscow, New York, transition economy
    JEL: P10 O57
    Date: 2016–02
  14. By: Strömberg, David
    Abstract: This article provides a review of recent literature in economics on the effect of mass media on politics. The focus is on the welfare effects of mass media. I also discuss the likely implications of existing behavioral theories of media effects, developed outside of economics.
    Keywords: bias; framing; media; policy; voting
    JEL: D03 D72 H5 L82
    Date: 2015–02

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