nep-pol New Economics Papers
on Positive Political Economics
Issue of 2016‒05‒28
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Estimating the gender penalty in House of Representative elections using a regression discontinuity design By Anastasopoulos, Lefteris
  2. Bureaucrats or Politicians? Political Parties and Antidumping in the US By Aquilante, Tommaso
  3. The Political Agenda Effect and State Centralization By Daron Acemoglu; James A. Robinson; Ragnar Torvik
  4. Demographics and tax competition in political economy By Tadashi Morita; Yasuhiro Sato; Kazuhiro Yamamoto
  5. Corruption and Bicameral Reforms By Facchini, Giovanni; Testa, Cecilia
  6. Agglomeration economies, taxable rents, and government capture: evidence from a place-based policy By Daniel Rais
  7. "Demographics and Tax Competition in Political Economy" By Tadashi Morita; Yasuhiro Sato; Kazuhiro Yamamoto
  8. Delegation and Public Pressure in a Threshold Public Goods Game: Theory and Experimental Evidence By Doruk Iris; Jungmin Lee; Alessandro Tavoni
  9. Democracy for Polarized Committees: The Tale of Blotto's Lieutenants By Alessandra Casella; Jean Francois Laslier; Antonin Macé
  10. Preferences and Social Influence By Chaim Fershtman; Uzi Segal
  11. How does access to education influence political candidacy? Lessons from school openings in Sweden By Lindgren, Karl-Oskar; Oskarsson, Sven; Persson, Mikael
  12. The Political Economy of Financing the EU budget By Massimo Bordignon; Simona Scabrosetti

  1. By: Anastasopoulos, Lefteris
    Abstract: While the number of female candidates running for office in U.S. House of Representative elections has increased considerably since the 1980s, women continue to account for about only 20% of House members. Whether this gap in female representation can be explained by a gender penalty female candidates face as the result of discrimination on the part of voters or campaign donors remains uncertain. In this paper, I estimate the gender penalty in U.S. House of Representative general elections using a regression discontinuity design (RDD). Using this RDD, I am able to assess whether chance nomination of female candidates to run in the general election affected the amount of campaign funds raised, general election vote share and probability of victory in House elections between 1982-2012. I find no evidence of a gender penalty using these measures. These results suggest that the deficit of female representation in the House is more likely the result of barriers to entering politics as opposed to overt gender discrimination by voters and campaign donors.
    Keywords: regression discontinuity design, gender gap, gender discrimination, elections, American politics, campaign funds, vote share, campaign donations, female candidates, House of Representatives
    JEL: C01 D72 J16
    Date: 2016–04
  2. By: Aquilante, Tommaso
    Abstract: Antidumping (AD) is the most widely used contingent protection measure. In the United States, key decisions on AD are delegated to the International Trade Commission (ITC), an independent agency composed of six non-elected commissioners. Using a newly collected dataset, I study the determinants of all final ITC votes on AD during the 1980-2010 period. Contrary to the view that ITC commissioners are bureaucrats who simply follow technical rules, I find that their decisions crucially depend on which party has appointed them (the selection effect) and on the trade policy interests of key senators in that party (the pressure effect): whether (Democratic) Republican-appointed commissioners vote in favor of AD depends crucially on whether the petitioning industry is key (in terms of employment) in the states represented by leading (Democratic) Republican senators.
    Keywords: Antidumping policy, Political parties
    JEL: D72 F10 F13 F14 P16
    Date: 2015–11
  3. By: Daron Acemoglu; James A. Robinson; Ragnar Torvik
    Abstract: We provide a potential explanation for the absence of, and unwillingness to create, centralized power in the hands of a national state based on the political agenda effect. State centralization induces citizens of different backgrounds, interests, regions or ethnicities to coordinate their demands in the direction of more general-interest public goods, and away from parochial transfers. This political agenda effect raises the effectiveness of citizen demands and induces them to increase their investments in conflict capacity. In the absence of state centralization, citizens do not necessarily band together because of another force, the escalation effect, which refers to the fact that elites from different regions will join forces in response to the citizens doing so. Such escalation might hurt the citizen groups that have already solved their collective action problem (though it will benefit others). Anticipating the interplay of the political agenda and escalation effects, under some parameter configurations, political elites strategically opt for a non-centralized state. We show how the model generates non-monotonic comparative statics in response to the increase in the value or effectiveness of public goods (so that centralized states and public good provision are absent precisely when they are more beneficial for society). We also suggest how the formation of a social democratic party may sometimes induce state centralization (by removing the commitment value of a non-centralized state), and how elites may sometimes prefer partial state centralization.
    JEL: D70 H11 P48
    Date: 2016–05
  4. By: Tadashi Morita (Faculty of Economics, Kindai University,); Yasuhiro Sato (Faculty of Economics, University of Tokyo); Kazuhiro Yamamoto (Graduate School of Economics, Osaka University)
    Abstract: We examine possible impacts of demographics on outcomes of capital tax compe- tition in political economy. For this purpose, we develop an overlapping generations model wherein public good provision financed by capital tax is determined by majority voting. When a population is growing, younger people represent the majority, whereas when a population is decreasing, older people represent the majority. We show that the race to the bottom is likely to emerge in the population growing economy whereas the race to the top might emerge in the population decreasing economy.
    Keywords: tax competition, majority voter, fiscal externality, political externality
    JEL: H20 J11
    Date: 2016–05
  5. By: Facchini, Giovanni; Testa, Cecilia
    Abstract: During the last decade unicameral proposals have been put forward in fourteen US states. In this paper we analyze the effects of the proposed constitutional reforms, in a setting where decision making is subject to `hard time constraints', and lawmakers face the opposing interests of a lobby and the electorate. We show that bicameralism might lead to a decline in the lawmakers' bargaining power vis-a-vis the lobby, thus compromising their accountability to voters. Hence, bicameralism is not a panacea against the abuse of power by elected legislators and the proposed unicameral reforms could be effective in reducing corruption among elected representatives.
    Keywords: Bicameralism; Corruption; Lobbying
    JEL: D72 D73
    Date: 2016–05
  6. By: Daniel Rais
    Abstract: We study how industry-level agglomeration economies affect government policy. Using administrative data on firm subsidies in economically lagging regions of Great Britain, we test two alternative hypotheses. Economic geography models imply that firms at an industry’s core can sustain higher tax burdens or require lower subsidies than firms in more remote locations. Conversely, political economy models predict firms at the industry’s core to be more successful at lobbying government, particularly at the sub-national level, thus obtaining more favourable fiscal treatment. We find that local government agencies structure subsidy offers to favour pre-existing employment in locally agglomerated industries, behaviour more in line with theories of policy capture than with economic geography models.
    Date: 2014–12–01
  7. By: Tadashi Morita (Faculty of Economics, Kindai University); Yasuhiro Sato (Faculty of Economics, The University of Tokyo); Kazuhiro Yamamoto (Graduate School of Economics, Osaka University)
    Abstract: We examine possible impacts of demographics on outcomes of capital tax competition in political economy. For this purpose, we develop an overlapping generations model wherein public good provision financed by capital tax is determined by majority voting. When a population is growing, younger people represent the majority, whereas when a population is decreasing, older people represent the majority. We show that the race to the bottom is likely to emerge in the population growing economy whereas the race to the top might emerge in the population decreasing economy.
  8. By: Doruk Iris (Sogang University); Jungmin Lee (Sogang University and Institute for the Study of Labor (IZA)); Alessandro Tavoni (London School of Economics, Grantham Research Institute on Climate Change and Environment)
    Abstract: The provision of global public goods, such as climate change mitigation and managing fisheries to avoid overharvesting, requires the coordination of national contributions. The contributions are managed by elected governments who, in turn, are subject to public pressure on the matter. In an experimental setting, we randomly assign subjects into four teams, and ask them to elect a delegate by a secret vote. The elected delegates repeatedly play a one shot public goods game in which the aim is to avoid losses that can ensue if the sum of their contributions falls short of a threshold. Earnings are split evenly among the team members, including the delegate. We find that delegation causes a small reduction in the group contributions. Public pressure, in the form of teammates’ messages to their delegate, has a significant negative effect on contributions, even though the messages are designed to be payoff-inconsequential (i.e., cheap talk). The reason for the latter finding is that delegates tend to focus on the least ambitious suggestion. In other words, they focus on the lower of the two public good contributions preferred by their teammates. This finding is consistent with the prediction of our model, a modified version of regret theory.
    Keywords: Delegation, Cooperation, Threshold Public Goods Game, Climate Experiment, Regret Theory
    JEL: C72 C92 D81 H4 Q54
    Date: 2016–03
  9. By: Alessandra Casella; Jean Francois Laslier; Antonin Macé
    Abstract: In polarized committees, majority voting disenfranchises the minority. Allowing voters to spend freely a fixed budget of votes over multiple issues restores some minority power. However, it also creates a complex strategic scenario: a hide-and-seek game between majority and minority voters that corresponds to a decentralized version of the Colonel Blotto game. We offer theoretical results and bring the game to the laboratory. The minority wins as frequently as theory predicts, despite subjects deviating from equilibrium strategies. Because subjects understand the logic of the game — minority voters must concentrate votes unpredictably — the exact choices are of secondary importance, a result that vouches for the robustness of the voting rule to strategic mistakes.
    JEL: C72 C92 D71
    Date: 2016–05
  10. By: Chaim Fershtman (Tel Aviv University); Uzi Segal (Boston College)
    Abstract: Interaction between decision makers may affect their preferences. We consider a setup in which each individual is characterized by two sets of preferences: his unchanged core preferences and his behavioral preferences. Each individual has a social influence function that determines his behavioral preferences given his core preferences and the behavioral preferences of other individuals in his group. Decisions are made according to behavioral preferences. The paper considers different properties of these social influence functions and their effect on equilibrium behavior. We illustrate the applicability of our model by considering decision making by a committee that has a deliberation stage prior to voting.
    Keywords: Risk aversion, social influence, behavioral preferences
    JEL: D81
    Date: 2016–05–20
  11. By: Lindgren, Karl-Oskar (IFAU - Institute for Evaluation of Labour Market and Education Policy); Oskarsson, Sven (Uppsala universitet); Persson, Mikael (Göteborgs universitet)
    Abstract: How does availability of education affect who becomes a political representative? Theorists have pointed out access to education as a key to a well-functioning democracy, but few empirical studies have examined how changes in the access to education influence the chances of becoming a politician. In this paper we analyze the effects of a substantial series of school openings during the early 20th century in Sweden which provided adolescents with better access to secondary education. We use unique administrative data pertaining to the entire Swedish population born between 1916 and 1945. According to our empirical results the opening of a new lower secondary school in a municipality increased the baseline probability of running for political office by more than 10 percent and the probability of holding office by more than 20 percent.
    Keywords: education; political representation; elections
    JEL: H70 I20
    Date: 2016–04–12
  12. By: Massimo Bordignon (Università Cattolica, Milano); Simona Scabrosetti (Università di Pavia)
    Abstract: By adopting a more specific political economy perspective, this paper aims at contributing to the debate on reforming the actual system of funding the EU budget. We argue that the present debate is often ill focused and that what is really at stake is the nature of the European Union, whether this is just a club of sovereign states or a true federation directly affecting European citizens, who have then the right to be represented even on matters concerning the EU budget. We also argue that the main reason to reform the present system lies in the legitimacy crisis the EU is currently facing and that proposed reforms should be assessed on the basis of their ability to address this problem. Also, a dynamic perspective, asking how a budget reform would affect the bargaining positions of the different European institutions, is essential to understand the forces at play and to assess the possibility that a reform will take place.
    Keywords: own resources, EU budget, EU tax, EU institutions
    JEL: H1 H6 H7

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