nep-pol New Economics Papers
on Positive Political Economics
Issue of 2016‒04‒04
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. Strategic vote trading in power-sharing systems By Dimitrios Xefteris; Nicholas Ziros
  2. Religious Riots and Electoral Politics in India By Sriya Iyer; Anand Shrivastava; ;
  3. The Performance of Elected Officials: Evidence from State Supreme Courts By Elliott Ash; W. Bentley MacLeod
  4. Organized Crime, Violence, and Politics By Alberto Alesina; Salvatore Piccolo; Paolo Pinotti
  5. Exposure to Refugees and Voting for the Far-Right: (Unexpected) Results from Austria By Steinmayr, Andreas
  6. Democracy for Polarized Committees: The Tale of Blotto's Lieutenants By Alessandra Casella; Jean-François Laslier; Antonin Macé
  7. Effects of Welfare Reform on Women's Voting Participation By Dhaval M. Dave; Hope Corman; Nancy Reichman
  8. Religious Differences and Civil War By Metin M. Cosgel; Thomas J. Miceli; Sadullah Yıldırım
  9. Employment Protection Legislation and International Trade By Jayjit Roy
  10. Political Business Cycles 40 Years after Nordhaus By Eric Dubois

  1. By: Dimitrios Xefteris; Nicholas Ziros
    Abstract: This paper studies decentralized vote trading in a power-sharing system that follows the rules of strategic market games. In particular, we study a two-party election, in which prior to the voting stage voters are free to trade votes for money. Voters hold private information about both their ordinal and cardinal preferences, whereas their utilities are proportionally increasing in the vote share of their favorite party. In this framework we prove generic existence of a unique full trade equilibrium (an equilibrium in which nobody refrains from vote trading). We moreover argue that vote trading in such systems unambiguously improves voters' welfare.
    Keywords: vote trading, strategic market games, power sharing
    JEL: C72 D72 P16
    Date: 2016–03
  2. By: Sriya Iyer; Anand Shrivastava; ;
    Abstract: The effect of ethnic violence on electoral results provides useful insights into voter behaviour and the incentives for political parties in democratic societies. Religious riots have claimed more than 14,000 lives in India since 1950. We study the effect of Hindu-Muslim riots on election results in India. We combine data on riots with electoral data on state legislature elections and control variables on demographics and public goods provision to construct a unique panel data set for16 large states in India over a 25 year period commencing in 1977. We use anew instrument that draws upon the random variation in the day of the week that important Hindu festivals fall on in each year to isolate the causal effect of riots on electoral results. We find that riots occurring in the year preceding an election increase the vote share of the Bharatiya Janata Party in the election. We find suggestive evidence that communal polarisation is the likely mechanism driving our results.
    Date: 2015–10–01
  3. By: Elliott Ash; W. Bentley MacLeod
    Abstract: This paper provides evidence on the effect of electoral institutions on the performance of public officials. Using panel data on state supreme courts between 1947 and 1994, we measure the effects of changes in judicial electoral processes on judge work quality – as measured by citations by later judges. Judges selected by non-partisan elections write higher-quality opinions than judges selected by partisan elections. Judges selected by technocratic merit commissions write higher-quality opinions than either partisan-elected judges or non-partisan-elected judges. Election-year politics reduces judicial performance in both partisan and non-partisan election systems. Giving stronger tenure to non-partisan-selected judges improves performance, while giving stronger tenure to partisan-selected judges has no effect. These results are consistent with the view that technocratic merit commissions have better information about the quality of candidates than voters, and that political bias can reduce the quality of elected officials.
    JEL: J24 K4
    Date: 2016–03
  4. By: Alberto Alesina; Salvatore Piccolo; Paolo Pinotti
    Abstract: We investigate how criminal organizations strategically use violence to influence elections in order to get captured politicians elected. The model offers novel testable implications about the use of pre-electoral violence under different types of electoral systems and different degrees of electoral competition. We test these implications by exploiting data on homicide rates in Italy since 1887, comparing the extent of ‘electoral-violence cycles’ between areas with a higher and lower presence of organized crime, under democratic and non-democratic regimes, proportional and majoritarian elections, and between contested and non-contested districts. We provide additional evidence on the influence of organized crime on politics using parliamentary speeches of politicians elected in Sicily during the period 1945-2013.
    JEL: D72 K42
    Date: 2016–03
  5. By: Steinmayr, Andreas (University of Munich)
    Abstract: An important concern about the surge in the number of arriving refugees in Europe is increased support for far-right, nationalist, anti-immigration parties. This paper studies a natural experiment in an Austrian state to identify the causal effect of exposure to refugees in the neighborhood on the support for the far-right Freedom Party of Austria (FPOE). In the state elections in September 2015 the FPOE doubled its vote share with a fierce anti-asylum campaign. Since only 42 percent of Upper Austrian communities hosted refugees at the time of the election, direct exposure to refugees varied at the local level. To account for the potential endogeneity in the distribution of refugees, I use pre-existing group accommodations as instrumental variable. To cope with the sudden inflow of large numbers of refugees, these buildings were used for refugee accommodation and thus strongly increase the probability of refugee presence in the community. In line with the contact hypothesis I find that hosting refugees in the community dampens the positive overall trend and decreases FPOE support by 4.42 percentage points in state elections. Further analysis using exit poll data reveals a positive effect on the optimism in the population that the integration of refugees can be managed. Placebo tests show that there were no effects in elections prior to 2015.
    Keywords: immigration, refugees, political economy, voting
    JEL: D72 J15 P16
    Date: 2016–03
  6. By: Alessandra Casella (Columbia University, NBER and CEPR); Jean-François Laslier (Paris School of Economics and CNRS); Antonin Macé (Aix-Marseille Universit´e (Aix-Marseille School of Economics), CNRS and EHESS)
    Abstract: In a polarized committee, majority voting disenfranchises the minority. By allowing voters to spend freely a fixed budget of votes over multiple issues, Storable Votes restores some minority power. We study a model of Storable Votes that highlights the hide-and-seek nature of the strategic game. With communication, the game replicates a classic Colonel Blotto game with asymmetric forces. We call the game without communication a decentralized Blotto game. We characterize theoretical results for this case and test both versions of the game in the laboratory. We find that, despite subjects deviating from equilibrium strategies, the minority wins as frequently as theory predicts. Because subjects understand the logic of the game – minority voters must concentrate votes unpredictably – the exact choices are of secondary importance. The result is an endorsement of the robustness of the voting rule.
    Keywords: Storable Votes, Polarization, Colonel Blotto, Tyranny of the Majority, Committees
    JEL: D71 C72 C92
    Date: 2016–03–11
  7. By: Dhaval M. Dave; Hope Corman; Nancy Reichman
    Abstract: Voting is an important form of civic participation in democratic societies but a fundamental right that many citizens do not exercise. This study investigates the effects of welfare reform in the U.S. in the 1990s on voting of low income women. Using the November Current Population Surveys with the added Voting and Registration Supplement for the years 1990 through 2004 and exploiting changes in welfare policy across states and over time, we estimate the causal effects of welfare reform on women’s voting registration and voting participation during the period during which welfare reform unfolded. We find robust evidence that welfare reform increased the likelihood of voting by about 4 percentage points, which translates to about a 10% increase relative to the baseline mean. The effects were largely confined to Presidential elections, were stronger in Democratic than Republican states, were stronger in states with stronger work incentive policies, and appeared to operate through employment, education, and income.
    JEL: D72 H53 I38 J21
    Date: 2016–03
  8. By: Metin M. Cosgel (University of Connecticut); Thomas J. Miceli (University of Connecticut); Sadullah Yıldırım (University of Connecticut)
    Abstract: Civil wars of today have deep roots in political and religious history. We examine how a society’s geographic distance to religious centers and the consequent historical differences between political rulers and religious segments of the population contributed to current levels of civil war. The theory is based on a political economy model that is centered on legitimizing function that religion plays for rulers vis-à-vis citizens. We test the resulting hypotheses using a new dataset that includes annual information on the religious and political histories of today’s nations since the year 1000. The results show that civil wars in the post-1960 period have been more likely in societies that experienced higher incidents of historical differences between rulers and a significant religious group before 1960. The results hold when we control for the geographic, historical, and institutional characteristics of countries. We address endogeneity concerns between religious differences and civil wars by exploiting variation across countries in their geographic distance to religious “capitals” of the world. Instrumental variable analysis indicates that the presence of historical religious differences that could be exploited by rulers accounts for a substantial portion of civil wars between 1960 and 2014. The results reflect the deep root effects of religious differences on current conflict.
    Keywords: Civil war, conflict, religion, historical roots, political economy, grievance, geographic distance, religious difference
    JEL: D63 D74 J15 N30 O50 Z12
    Date: 2016–03
  9. By: Jayjit Roy
    Abstract: Analyzing the impact of domestic labor regulations on international trade is relevant, in part, because (i) trade negotiations may increasingly constrain countries’ ability to implement trade policies and (ii) concerns over international competition driving countries towards a ‘race to the bottom’ in labor standards are rampant. However, identification of this causal e§ect is challenging due to the potential endogeneity of regulations attributable to crucial unobservables and measurement error. In this light, we use data from more than 30 countries across 21 manufacturing sectors over the period 2001-2009 and examine the impact of employment protection legislation (EPL) on industry-level trade. While a di§erence-in-di§erences type approach controls for several potential confounders, we also employ an instrumental variables (IV) strategy. Across all specifications, EPL is found to significantly encourage imports in relatively labor-intensive industries. Further, the IV estimates uncover a more pronounced e§ect and find concerns over endogeneity to be relevant. Key Words: Employment Protection Legislation, International Trade
    JEL: C36 F16 J80
    Date: 2016
  10. By: Eric Dubois (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The aim of this article is to survey the huge literature that has emerged in the last four decades following Nordhaus's (1975) publication on political business cycles (PBCs). I first propose some developments in history of thought to examine the context in which this groundbreaking contribution saw the light of the day. I also present a simplified version of Nordhaus's model to highlight his key results. I detail some early critiques of this model and the fields of investigations to which they gave birth. I then focus on the institutional context and examine its influence on political business cycles, the actual research agenda. Finally, I derive some paths for future research.
    Keywords: political business cycles,politico-economic cycles,electoral cycles,opportunistic cycles,conditional political business cycles
    Date: 2016–02–01

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