nep-pol New Economics Papers
on Positive Political Economics
Issue of 2016‒07‒16
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. Mandated political representation and crimes against the low castes By Victoire Girard
  2. Law, Politics and the Quality of Government in Africa By Simplice Asongu; Jacinta C. Nwachukwu
  3. Perception vs Reality: How does the British electorate evaluate economic performance of incumbent governments in the post war period? By Jonathon M. Clegg
  4. The Effects of Higher Re-election Hurdles and Costs of Policy Change on Political Polarization By Gersbach, Hans; Muller, Philippe; Tejada, Oriol
  5. Fear and Political Participation: Evidence from Africa By Kevin M. Morrison; Marc Rockmore
  6. Do Political Connections Reduce Job Creation? Evidence from Lebanon By Diwan, Ishac; Jamal Ibrahim Haidar
  7. The EU budget and UK contribution By Iain Begg
  8. Voting for the environment: the importance of Democracy and education in Latin America By Danny García Callejas
  9. Do giant oilfield discoveries fuel internal armed conflicts? By Yu-Hsiang Lei; Guy Michaels
  10. How war affects political attitudes: evidence from eastern Ukraine By Huber, Martin; Tyahlo, Svitlana

  1. By: Victoire Girard
    Abstract: Mandated political representation over the last twenty years has had a different impact on the reporting of crime by the low castes than what is observed for the reporting of crime by women. I exploit the timing of the implementation of mandated political representation of the low castes to examine its effect on crime reports by these people. Mandated political representation of the low castes in India appears to affect the declaration of crime only for two very specific crime categories: identity-based crimes and murders. The increase in identity-based crimes (based on caste) is consistent either with better recording of existing crimes, or an increase in the incidence of committed crimes. The evolution of murders, which according to most specifications have increased after the implementation of political representation, is only consistent with an increase in incidence. This is all the more worrisome, given that the introduction of exclusive special courts, which were meant to further empower the low castes to report identity-based crimes, has not had the desired effect. A comforting observation is that crime disclosures do not increase during electoral years, contradicting the qualitative literature which points to incidents concerning reserved seats during elections. Nevertheless, mandated political representation has not had as strong an effect in giving voice to the low castes as has been documented earlier for women.
    Keywords: crime, justice, India, inequality, caste, political reservation, political quotas, discrimination; microsimulation, tax, transfer, distributional impact, Viet Nam
    Date: 2016
  2. By: Simplice Asongu (Yaoundé/Cameroun); Jacinta C. Nwachukwu (Coventry University)
    Abstract: This paper examines interconnections between law, politics and the quality of government in Africa. We investigate whether African democracies enjoy relatively better government quality compared to their counterparts with more autocratic inclinations. The empirical evidence is based on Instrumental variable Two-Stage-Least Squares and Fixed Effects with data from 38 African countries for the period 1994-2010. Political regimes of democracy, polity and autocracy are instrumented with income-levels, legal-origins, religious-dominations and press-freedom to account for government quality dynamics, of corruption-control, government-effectiveness, voice and accountability, political-stability, regulation quality and the rule of law. Findings show that democracy has an edge over autocracy while the latter and polity overlap. As a policy implication, democracy once initiated should be accelerated to edge the appeals of authoritarian regimes.
    Keywords: Law; Politics; Democracy; Government Policy; Development
    JEL: K00 O10 P16 P43 P50
    Date: 2016–03
  3. By: Jonathon M. Clegg (Faculty of History, University of Oxford)
    Abstract: Rational retrospective voting models have dominated the literature on election forecasting and the economic vote since they were first proposed by Anthony Downs in 1957. The theory views voters as appraisers of incumbent government’s past performance, which acts as the principal source of information individuals use when making their vote. Pure retrospective voting requires far less of the electorate in order to hold a government accountable and empirical work based on this theory has been very adept at predicting election outcomes and explaining individual voting decisions. In terms of the time period assessed to form judgements on past performance however, there is a surprising disconnect between the theoretical line of thought and actual testing. The sensible assumption of retrospective voting models is that voters, looking to judge a government’s past performance, should assess changes in their own welfare over an entire term of office, with little or no discounting of past events. The majority of empirical studies however, focus on economic performance over shorter time horizons, usually within a year of an election. There have only been a handful of studies attempting to empirically test the correct temporal relationship between changes in economic indicators and election outcomes, despite its importance for retrospective voting models and democratic accountability. This working paper empirically tests over which time horizons changes in macroeconomic fundamentals continue to have a significant bearing on election outcomes in Post War Britain. It finds that longer-term measures of economic change, over entire government terms, are better at predicting changes in incumbent’s vote shares than shorter-term measures, closer to the election period. This has important consequences for future voting models and is a promising result for democratic accountability.
    JEL: D72 C52
    Date: 2016–03–10
  4. By: Gersbach, Hans; Muller, Philippe; Tejada, Oriol
    Abstract: We develop and study a two-period model of political competition where (i) changes of policies impose costs on all individuals, and (ii) such costs increase linearly with the magnitude of the policy change. The contribution is two-fold. First, we show that intermediate marginal costs yield the lowest levels of policy polarization, welfare being a single-peaked function of the marginal cost. Second, we apply our model to the design of optimal re-election hurdles. We show that whatever the marginal cost of change, raising the vote-share needed for re-election above a half reduces policy polarization and increases welfare. We further prove the existence of a unique re-election hurdle that simultaneously maximizes welfare and minimizes policy polarization. The robustness of our results is studied for several extensions of the baseline model, notably for convex costs of change.
    Date: 2016–07
  5. By: Kevin M. Morrison (University of Pittsburgh); Marc Rockmore (Clark University, Worcester)
    Abstract: Research finds that personal exposure to violence or crime increases political participation. The effects of fear, however, have not been studied. Since the number of victims is much smaller than those who are afraid of becoming a victim, this suggests an important but unexplored channel from crime to political participation. Moreover, if people who experience violence or crime are also afraid of future exposure, existing estimates conflate the effects of past experience with those of fear of future exposure. We find that fear of crime accounts for 10-23 percent of the effect previously attributed to direct exposure. We further find important differences between the effects of fear and victimization on political attitudes. Whereas victims of crimes have more authoritarian political attitudes, people who are fearful of crime are more supportive of democracy and equality, and hold other attitudes that are normally associated with rule of law and democracy.
    Date: 2016–07
  6. By: Diwan, Ishac; Jamal Ibrahim Haidar
    Abstract: Using firm-level census data, we determine how politically-connected firms (PCFs) reduce job creation in Lebanon. After observing that large firms account for the bulk of net job creation, we find that PCFs are larger and create more jobs, but are also less productive, than non-PCFs in their sectors. On a net basis, at the sector-level, each additional PCF reduces jobs created by 7.2% and jobs created by non-PCFs by 11.3%. These findings support the notion that politically-connected firms are used for clientelistic purposes in Lebanon, exchanging privileges for jobs that benefit their patrons? supporters.
  7. By: Iain Begg
    Abstract: The European Union budget is small and fulfils only a limited range of functions, yet it provokes regular disputes among the Member States and institutions of the Union. This paper describes the structure of the budget and shows that standard theories, such as fiscal federalism, are not well-suited to analysing how the EU budget operates or the political economy behind it. The paper then looks at how much the UK contributes towards the EU budget and explains why some of the claims made about it in the public discourse are inaccurate.
    Keywords: European Union budget; fiscal federalism; UK referendum on EU; EU cohesion policy; common agricultural policy; own resources
    JEL: H11 H61
    Date: 2016–05–01
  8. By: Danny García Callejas
    Abstract: This study found that doubling the level of democracy in Latin America reduces CO2 emissions per capita by up to 6%. This relationship is estimated by using a fixed effects panel system of equations for 19 Latin American countries, between 1995 and 2008. Democracy acts as a conduit for increasing demands on environmental quality in Latin America, due to urban population growth and economic prosperity. Nevertheless, this study has, at least, two caveats: first it cannot unveil the long run relationship between democracy and environmental quality in the region; and, secondly, this study assumes that democracy entails positive outcomes for countries adopting this political system.
    Keywords: Democracy, Environmental Quality, CO2 Emissions per Capita, Latin America, Panel System of Equations.
    JEL: C33 N46 Q53 Q56
    Date: 2015–12–04
  9. By: Yu-Hsiang Lei; Guy Michaels
    Abstract: We use new data to examine the effects of giant oilfield discoveries around the world since 1946. On average, these discoveries increase per capita oil production and oil exports by up to 50%. But these giant oilfield discoveries also have a dark side: they increase the incidence of internal armed conflict by about 5-8 percentage points. This increased incidence of conflict due to giant oilfield discoveries is especially high for countries that had already experienced armed conflicts or coups in the decade prior to discovery.
    Keywords: natural resources; resource curse; petroleum; armed conflict; civil war
    JEL: O13 Q33 Q34
    Date: 2014–09
  10. By: Huber, Martin; Tyahlo, Svitlana
    Abstract: This study empirically evaluates the impact of the war in eastern Ukraine on the political attitudes and sentiments towards Ukraine and Russia among the population living close to the war zone on the territory controlled by the Ukrainian government. Exploiting unique survey data that were collected in early 2013 (13 months before the outbreak of the conflict) and early 2015 (11 months after the outbreak), we employ two strategies to infer how the war has affected two different groups defined by distance to the war zone. First, we apply a before-after analysis to examine intra-group changes in attitudes over time. Second, we use a difference-in-differences approach to investigate inter-group divergence over time. Under particular assumptions, the latter approach yields a lower absolute bound for the effect. We control for a range of observed characteristics and consider both parametric and semiparametric estimation based on inverse probability weighting. Our results suggest that one year of conflict negatively affected attitudes towards Russia, while mostly no statistically significant intra- or inter-group differences were found for sentiments towards Ukraine.
    Keywords: treatment effect; difference-in-differences; political attitudes; war; conflict; Ukraine; Russia
    JEL: P26 D74
    Date: 2016–07–07

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