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on Positive Political Economics |
| By: | Korthals R.A.; Levels M. (ROA) |
| Abstract: | This paper introduces a technique to elicit voter preferences, by integrating multiattribute compositional analyses Macs with a voting advice application VAA. The technique requires users to make trade-offs between different positions on a single issue, and between different issues. MacVAAs more closely resemble the electoral decision-making process in elections in which more than two parties participate than classic VAAs. MacVAAs also overcomes the assumption of issue orthogonality and assumption of rationality that classic VAA erroneously make. Results of a field application of the technique during the 2012 Dutch parliamentary elections in 2012 are presented. Advantages and disadvantages are discussed. |
| Keywords: | Economic Methodology: General; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior; |
| JEL: | B40 D72 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2016004&r=pol |
| By: | Schötz, Lukas |
| Abstract: | The pursuit of individual rents by political representatives is recognized as one of the major shortcomings of political systems. While both legal and illegal types of rents are distributed by political decisions, research has focused primarily on illegal rent-seeking by politicians. This article examines the extent to which elected Bavarian mayors are provided with legal political rents. As independently elected councils determine the remuneration of mayors in Bavarian municipalities, an examination of this process is used to determine whether evidence exists that strong political competition limits rent allocation in the political system. Results from this quasi-experimental regression discontinuity design (RDD) approach show that political competition and party considerations have a significant impact on the allocation of legal rents to local leaders. However, this effect is not present in cases where rents received by mayors were already high prior to the election. |
| Keywords: | political rents,local affairs,regression discontinuity design |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:upadvr:v7016&r=pol |
| By: | Gancia, Gino A; Ponzetto, Giacomo AM; Ventura, Jaume |
| Abstract: | The first wave of globalization (1830-1914) was accompanied by a decline in the number of countries from 125 to 54. The second wave of globalization (1950-present) has led instead to an increase in the number of countries to a record high of more than 190. This paper develops a theoretical framework to study the interaction between globalization and political structure. We show that political structure adapts to expanding trade opportunities in a non-monotonic way. Borders hamper trade. In its early stages, the political response to globalization consists of removing borders by increasing country size. In its later stages, however, the political response to globalization is to remove borders by creating economic unions, and this leads to a reduction in country size. |
| Keywords: | Globalization; international unions; political structure; size of countries |
| JEL: | D71 F15 F55 H77 O57 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11159&r=pol |
| By: | Blaise Gnimassoun; Joseph Keneck Massil |
| 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: | Corruption, Political Economy, Public Economics, Bayesian Model Averaging, Cross-Sectional Models. |
| JEL: | D73 P16 P35 C11 C31 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2016-12&r=pol |
| By: | Oasis Kodila-Tedika (Université de Kinshasa Département d’Eco); Martin Mulunda Kabange (University of KwaZulu-Natal) |
| Abstract: | This article discusses the relationship between the identity of the rulers of the executive and reform. Thus, we enrich the literature on the determinants of reform and the result of the executive. This is a new and very important literature, as these are the reforms that allow progress. We use a sample of 141 countries over the period 2003-2013 to investigate the link between the age of politicians and regulatory reforms. We created an ad hoc database for the age of politicians and for reform, we use micro-reform data. An econometric model is used to discover if the age of a political leader in office can be a driving force that is more or less likely to bring about regulatory reforms. Our results suggest that the age of politicians has a positive incidence on the reform that they bring about. The results are robust for the reform measures and techniques used. The results also indicate that older politicians implement more reforms than the young ones. More precisely, the paper found that older politicians who are in their sixties bring about the most regulatory reforms than politicians of any other age ranges. |
| Keywords: | Age of politicians, Regulation, Reforms |
| JEL: | P11 P16 K20 L51 D78 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:16/003&r=pol |
| By: | Fuchs, Andreas |
| Abstract: | This article reviews the literature on the linkages between political tensions, economic diplomacy and international trade in the light of China’s rise in the global economy. The existing scholarly work suggests that economic diplomacy should be more pivotal in economic exchange with China than with Western market economies. In an econometric test, I analyze how diplomatic tensions, measured through foreign dignitaries’ meetings with the Dalai Lama, affect the likelihood of an official visit from a Chinese leader. The results show that the likelihood of the Chinese leadership traveling to a country is 13.6 percent lower if the country’s government receives the Dalai Lama in a given year but increases in the following year, supposedly to restore ties. This finding underlines that economic diplomacy is an important channel linking political climate and economic exchange between nations. |
| Keywords: | economic diplomacy; international trade; embassies; political climate; state visits; leadership travel; emerging economies; China; Dalai Lama; Tibet |
| Date: | 2016–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0609&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); Ahmed Doghmi (Université de Rabat) |
| Abstract: | The goal of this paper is to propose a comparison of four multi-winner voting rules, k-Plurality, k-Negative Plurality, k-Borda, and Bloc, which can be considered as generalisations of well-known single-winner scoring rules. The first comparison is based on the Condorcet committee efficiency which is defined as the conditional probability that a given voting rule picks out the Condorcet committee, given that such a committee exists. The second comparison is based on the likelihood of two paradoxes of committee elections: The Prior Successor Paradox and the Leaving Member Paradox which occur when a member of an elected committee leaves. In doing so, using the well-known Impartial Anonymous Culture condition, we extend the results of Kamwa and Merlin (2015) in two directions. First, our paper is concerned with the probability of the paradoxes no matter the ranking of the leaving candidate. Second, we do not only focus on the occurrence of these paradoxes when one wishes to select a committee of size k = 2 out of m = 4 candidates but we consider more values of k and m. Abstract The goal of this paper is to propose a comparison of four multi-winner voting rules, k−Plurality, k−Negative Plurality, k−Borda, and Bloc, which can be considered as generalisations of well-known single-winner scoring rules. The first comparison is based on the Condorcet committee efficiency which is defined as the conditional probability that a given voting rule picks out the Condorcet committee, given that such a committee exists. The second comparison is based on the likelihood of two paradoxes of committee elections: The Prior Successor Paradox and the Leaving Member Paradox which occur when a member of an elected committee leaves. In doing so, using the well-known Impartial Anonymous Culture condition, we extend the results of Kamwa and Merlin (2015) in two directions. First, our paper is concerned with the probability of the paradoxes no matter the ranking of the leaving candidate. Second, we do not only focus on the occurrence of these paradoxes when one wishes to select a committee of size k = 2 out of m = 4 candidates but we consider more values of k and m. |
| Keywords: | Multi-winner voting rules,committee,Condorcet committee efficiency,paradoxes |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01285526&r=pol |
| By: | Alessandro Dovis; Mikhail Golosov; Ali Shourideh |
| Abstract: | We study optimal fiscal and redistributive policies in an open economy without commitment. Due to its redistributive motives, the government’s incentive to default on its external debt is affected by inequality. We show that in equilibrium the economy endogenously fluctuates between two regimes. In the first regime, the government borrows from abroad, spends generously on transfers and keeps the inequality low. In the second regime, it implements austerity-like policies by cutting transfers, reducing foreign debt and increasing the inequality. The equilibrium dynamics resembles the populist cycles documented in many developing countries. |
| JEL: | E60 F30 F34 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21948&r=pol |
| By: | Mavridis, Christos; Díaz, Guillermo; Casas, Agustin |
| Abstract: | We show how an institutional provision designed to increase accountability of local legislature officials can lead to a distribution of power within the legislature which is not consistent with voters' true preferences. The cause of this inconsistency is the ballot design which asymmetrically affects the officials listed on it. We analyze the case of the Lima's 2013 city legislature recall referendum and show that, controlling for the legislators' individual characteristics, the design of the referendum ballot had adverse and significant effects on the composition of the Lima's city legislature, and examine the counterfactuals of different ballot designs. We show that the election results with more "neutral" ballot designs would have been significantly different, and the composition of the new council would have been more representative of voters' preferences. |
| Date: | 2016–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:22539&r=pol |
| By: | Philippe Aghion; Ufuk Akcigit; Julia Cagé; William R. Kerr |
| Abstract: | We build an endogenous growth model to analyze the relationships between taxation, corruption, and economic growth. Entrepreneurs lie at the center of the model and face disincentive effects from taxation but acquire positive benefits from public infrastructure. Political corruption governs the efficiency with which tax revenues are translated into infrastructure. The model predicts an inverted-U relationship between taxation and growth, with corruption reducing the optimal taxation level. We find evidence consistent with these predictions and the entrepreneurial channel using data from the Longitudinal Business Database of the US Census Bureau. The marginal effect of taxation for growth for a state at the 10th or 25th percentile of corruption is significantly positive; on the other hand, the marginal effects of taxation for growth for a state at the 90th percentile of corruption are much lower across the board. We make progress towards causality through Granger-style tests and by considering periphery counties where effective tax policy is largely driven by bordering states. Finally, we calibrate our model and find that the calibrated taxation rate of 37% is fairly close to the model's estimated welfare maximizing taxation rate of 42%. Reducing corruption provides the largest potential impact for welfare gain through its impact on the uses of tax revenues. |
| JEL: | H11 H21 H25 H41 H71 H72 M13 O11 O12 O40 R11 R12 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21928&r=pol |
| By: | Ahlfeldt, Gabriel; Möller, Kristoffer; Waights, Sevrin; Wendland, Nicolai |
| Abstract: | We develop and test a simple theory of the conservation area designation process in which we postulate that the level of designation is chosen to comply with interests of local homeowners. Conservation areas provide benefits to local homeowners by reducing uncertainty regarding the future of their area. At the same time, the restrictions impose a cost by limiting the degree to which properties can be altered. In line with our model predictions we find that an increase in preferences for historic character by the local pop-ulation increases the likelihood of a designation, and that new designations at the margin are not associat-ed with significant house price capitalisation effects. |
| Keywords: | Designation; Difference-in-Differences; England; Gentrification; Heritage; Property Value |
| JEL: | H23 H31 R40 R58 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11146&r=pol |
| By: | Ivo Bischoff (University of Kassel); Nataliya Kusa (University of Kassel) |
| Abstract: | We provide a comprehensive empirical study on the factors that drive citizens’ policy preferences regarding inheritance taxation. It builds on a representative survey among more than 1.000 German citizens in 2014 and 2015. Support for inheritance taxation is found to be driven by monetary self-interest and redistributive preferences. It is lower among females and among subjects who overestimate the tax burden. We look beyond the narrow scope of inheritances and account for other forms of transfers in the family, in particular the provision of longterm care. More than 75 percent of our respondents consider it fair that family members who provided long-term care receive higher inheritances in exchange. This fairness preference does not drive policy preferences, but acceptance for inheritance taxation is higher among subjects who expect the typical German family to reward intrafamilial care-giving through a higher inheritance. |
| Keywords: | inheritance taxation, intergenerational transfers, citizens’ preferences, longterm care, vignettes |
| JEL: | H27 D31 D72 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201531&r=pol |
| By: | Krenz, Astrid |
| Abstract: | The past literature presents ambiguous evidence about the bidirectional and causal influences between countries´ institutional framework and their trading activity. In our analysis, we investigate the relationship between institutions and trade constructing a measure of institutions from the information given by the International Country Risk Guide and using a methodology that can control for omitted variables bias, endogeneity in the regressors, as well as cross-country heterogeneity. We examine the long-run effects of the political institutional framework on trade for a panel of 87 countries for the period from 1990 to 2007. We employ recent panel econometric methods for testing and estimating in the presence of non-stationarity, investigate panel causality and use methods that are robust to slope heterogeneity. Our results imply that an improved political institutional framework is a cause of increased trading activity. |
| Keywords: | political institutions,international trade,panel co-integration,cross-country heterogeneity |
| JEL: | F14 C10 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:276&r=pol |