nep-pol New Economics Papers
on Positive Political Economics
Issue of 2017‒03‒05
fifteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. The Influence of Party Affiliations on Representation of Voter Preferences in Majoritarian vs. Proportional Systems By Stadelmann, David; Portmann, Marco; Eichenberger, Reiner
  2. Migrating Extremists By Ochsner, Christian; Roesel, Felix
  3. Matching Pennies on the Campaign Trail: An Empirical Study of Senate Elections and Media Coverage By Camilo García-Jimeno; Pinar Yildirim
  4. The Effect of Far Right Parties on the Location Choice of Immigrants: Evidence from Lega Nord Mayors By Emanuele Bracco; Colin Peter Green; Maria De Paola; Vincenzo Scoppa
  5. Measuring political rivalry and estimating its effect on economic growth By Elena Sochirca; Francisco José Veiga
  6. Politicians under Investigation: The News Media’s Effect on the Likelihood of Resignation By Sörensen, Jil; Garz, Marcel
  7. Democracy and Growth: Evidence of a new measurement By Krieger, Tommy; Gründler, Klaus
  8. When do the poor vote for the right-wing and why: Status inequality and vote choice in the Indian states By Pavithra Suryanarayan
  9. Rapacious Oil Exploration in face of Regime Switches: Breakthrough Renewable Energy and Dynamic Resource Wars By Frederick van der Ploeg
  10. Do politicians gratify core supporters? Evidence from a discretionary grant program By Kauder, Björn; Björn, Kauder; Niklas, Potrafke; Markus, Reischmann
  11. Political economy and governance By Evelyn Dietsche
  12. When to expect a coup d’état? An extreme bounds analysis of coup determinants By Martin Gassebner; Jerg Gutmann; Stefan Voigt
  13. Punitive inclusion: the political economy of irregular migration in the margins of Europe By Leonidas K. Cheliotis
  14. Opinion dynamics via search engines (and other algorithmic gatekeepers) By Fabrizio Germano; Francesco Sobbrio
  15. Political Preferences of (Un)happy Voters By Jong A Pin, Richard; Lam

  1. By: Stadelmann, David; Portmann, Marco; Eichenberger, Reiner
    Abstract: Electoral systems determine the role party affiliations play in political representation. According to conventional expectations, politicians’ party affiliations should influence political representation when they are elected under a proportional system. In contrast, majoritarian systems force politicians to converge to the median position of their constituency, thus, muting the role of party affiliations to some extent. Using unique data, we test these predictions within a common party system by matching referenda decisions of constituents with voting behavior of their representatives, who are elected either by a majoritarian or proportional system.
    JEL: D72 D78 H70
    Date: 2016
  2. By: Ochsner, Christian; Roesel, Felix
    Abstract: We show that migrating extremists shape political landscapes toward their ideology in the long run. We exploit the unexpected division of the state of Upper Austria into a US and a Soviet occupation zone after WWII. Zoning prompts large-scale Nazi migration to US occupied regions. Regions that witnessed a Nazi influx exhibit significantly higher voting shares for the right-wing Freedom Party of Austria (FPÖ) throughout the entire post-WWII period, but not before WWII. We can exclude other channels that may have affected post-war elections, including differences in US and Soviet denazification and occupation policies, bomb attacks, Volksdeutsche refugees and suppression by other political parties. We show that extremism is transmitted through family ties and local party branches. We find that the surnames of FPÖ local election candidates in 2015 in the former US zone are more prevalent in 1942 phonebook data (Reichstelefonbuch) of the former Soviet zone compared to other parties.
    JEL: R23 D72 N94
    Date: 2016
  3. By: Camilo García-Jimeno; Pinar Yildirim
    Abstract: We study the strategic interaction between the media and Senate candidates during elections. While the media is instrumental for candidates to communicate with voters, candidates and media outlets have conflicting preferences over the contents of the reporting. In competitive electoral environments such as most US Senate races, this can lead to a strategic environment resembling a matching pennies game. Based on this observation, we develop a model of bipartisan races where media outlets report about candidates, and candidates make decisions on the type of constituencies to target with their statements along the campaign trail. We develop a methodology to classify news content as suggestive of the target audience of candidate speech, and show how data on media reports and poll results, together with the behavioral implications of the model, can be used to estimate its parameters. We implement this methodology on US Senatorial races for the period 1980-2012, and find that Democratic candidates have stronger incentives to target their messages towards turning out their core supporters than Republicans. We also find that the cost in swing-voter support from targeting core supporters is larger for Democrats than for Republicans. These effects balance each other, making media outlets willing to cover candidates from both parties at similar rates.
    JEL: C50 C7 D72
    Date: 2017–02
  4. By: Emanuele Bracco; Colin Peter Green; Maria De Paola; Vincenzo Scoppa
    Abstract: Immigration has increasingly taken centre-stage in the political landscape. Part of this has been rise in far-right, anti-immigration parties in a range of countries. Existing evidence suggests that the presence of immigrants has a substantial effect on the political views of the electorate, generating an advantage to these parties with anti-immigration or nationalist platforms. This paper explores a closely related issue but overlooked issue: how immigrant behavior is influenced by these parties. We focus on immigrant location decisions in Northern Italy which has seen the rise of the anti-immigration party Lega Nord. We construct a dataset of mayoral elections in Italy for the years 2002-2014, and calculate the effect of electing a mayor belonging to, or supported by Lega Nord. To identify this relationship we focus on mayors who have been elected with narrow margins of victory in a Regression Discontinuity framework. The election of Lega Nord mayor discourages immigrants from moving into the municipality.
    Keywords: Immigration, Geographical Mobility, Voting Behavior, Political economy, Regression Discontinuity Design
    JEL: J15 J61 D72
    Date: 2017
  5. By: Elena Sochirca (NIPE, University of Minho); Francisco José Veiga (Department of Economics/NIPE, University of Minho)
    Abstract: In this paper we construct a composite indicator of political rivalry using factor analysis and then build a panel dataset of political rivalry levels for 125 countries during the 1984-2012 period. According to the factor analysis results, while specific institutional quality aspects are fundamental for defining the degree of political rivalry, political regime specific variables and natural resources rents do not appear significant. A preliminary analysis of the constructed indicator shows that political rivalry is clearly inversely related to the level of development, and that there are significant differences in political rivalry levels among countries, depending on their income and geographical location. The results of system-GMM estimations of the effect of political rivalry on economic growth clearly indicate a negative effect, which is equally maintained when other political and institutional variables are simultaneously considered, and when the model is tested on a number of restricted samples, thus confirming the robustness of the baseline results. Additionally, regression results for the restricted samples suggest that the negative effect of political rivalry on growth weakens as the development level increases.
    Date: 2017
  6. By: Sörensen, Jil; Garz, Marcel
    Abstract: This paper studies the effect of news media on the probability of resignation from office of politicians being subject to criminal investigation. Using data on cases in which the political immunity of German representatives was lifted, we find that resignations are more common when the media covers the case intensely. The amounts of this news coverage, in turn, depend on the availability of other newsworthy, exogenous events. Therefore, we instrument for coverage of lifts of immunity with the overall news pressure. We estimate the causal effect and find that a 1 standard deviation increase in the amount of the coverage raises the likelihood of resignation by 22.3 percentage points.
    Keywords: news media; political accountability; prosecution; resignation
    JEL: K14 L82 P16
    Date: 2016
  7. By: Krieger, Tommy; Gründler, Klaus
    Abstract: We present a novel approach for measuring democracy based on Support Vector Machines, a mathematical algorithm for pattern recognition. The Support Vector Machines Democracy Index (SVMDI) is continuous on the 0-1-interval and enables very detailed and sensitive measurement of democracy for 185 countries in the period between 1981 and 2011. Application of the SVMDI highlights a robust positive relationship between democracy and economic growth. We argue that the ambiguity in recent studies mainly originates from the lack of sensitivity of traditional democracy indicators. Analyzing transmission channels through which democracy exerts its influence on growth, we conclude that democratic countries have better educated populations, higher investment shares, and lower fertility rates, but not necessarily higher levels of redistribution.
    JEL: P16 O11 C43
    Date: 2016
  8. By: Pavithra Suryanarayan
    Abstract: What explains the popularity of right-wing parties amongst the poor? This paper argues that in hierarchical societies with high social-status inequality, poor high-status voters may ally with rich high-status voters if they believe their social-status is under threat. I demonstrate this in the context of the Indian states by exploiting an announcement by the Government of India in 1990 to implement affirmative action for lower castes—an intervention that threatened to weaken the social-status of upper-caste Brahmans. Using unique data from the 1931 census, this paper shows that areas where Brahmans were more dominant in the 1930s experienced a higher surge in rightwing voting after this announcement than other areas. Using survey data, I find that both wealthy and poor Brahmans voted for the right-wing where Brahmans were dominant in 1931. The paper shows how concerns about social-status may make the poor open to appeals by anti-redistribution parties.
    Date: 2017
  9. By: Frederick van der Ploeg (University of Oxford)
    Abstract: Rapacious fossil fuel extraction occurs if fossil fuel producers fear that there is a probability that their under-the-ground assets becomes worth less. They show that rapacious depletion of oil reserves occurs if there is a probability of a breakthrough renewable energy coming to the market or a probability of climate policy finally becoming seriously ambitious. These are examples of one-way regime switches leading to the so-called Green Paradox. Two-way regimes switches also lead to rapacious oil depletion. They occur if there is a chance of being removed from office in a partisan political context with perennial election cycles or if there are dynamic resource wars with the hazard of being removed from office dependent on fighting efforts. This rapacity effect is stronger in societies with bad institutions and lack of political cohesiveness.
    Keywords: D81, H20, Q31, Q38
    Date: 2017–02–21
  10. By: Kauder, Björn; Björn, Kauder; Niklas, Potrafke; Markus, Reischmann
    Abstract: We investigate whether politicians award intergovernmental grants to core supporters. Our new dataset contains information on discretionary project grants from a German state government to municipalities over the period 2008-2011. The results show that discretionary grants were awarded to municipalities with many core supporters of the incumbent state government. Discretionary grants per capita increased by about 1.4 percent when the vote share of the incumbent party in the state election increased by one percentage point. We propose to trim discretionary project grants to the benefit of formula-based grants.
    JEL: D72 H72 H77
    Date: 2016
  11. By: Evelyn Dietsche
    Abstract: This paper reviews the political economy of extractive resources and the associated resources sector governance agenda. The consensus that good sector governance improves the developmental impacts of extractive resources exploitation is premised on the understanding that institutions matter for development. However, there is no straightforward answer to the question of what exactly ‘institutions’ are, how they change, or how they can be made to change to become more supportive of an extractives-led development agenda. The paper suggests reframing the political economy of extractive resources away from the negative question how can poor outcomes be prevented? and towards the positive question how can positive institutional change for better outcomes be brought about?. It organizes and presents the main strands of a substantial body of literature that can help to inform answers to these questions.
    Date: 2017
  12. By: Martin Gassebner (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Jerg Gutmann (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Stefan Voigt (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Over the last several decades, both economists and political scientists have shown interest in coups d’état. Numerous studies have been dedicated to understanding the causes of coups. However, model uncertainty still looms large. About one hundred potential determinants of coups have been proposed, but no consensus has emerged on an established baseline model for analyzing coups. We address this problem by testing the sensitivity of inferences to over three million model permutations in an extreme bounds analysis. Overall, we test the robustness of 66 factors proposed in the empirical literature based on a monthly sample of 164 countries that covers the years 1952 to 2011. We find that slow economic growth rates, previous coup experiences, and other forms of political violence to be particularly conducive to inciting coups.
    Keywords: Coups d'état, Military coups, Coup-proofing, Extreme bounds analysis
    Date: 2016–08
  13. By: Leonidas K. Cheliotis
    Abstract: Focusing on the treatment irregular migrants have received in Greece since the early 1990s, this article seeks to advance critical scholarship on how European countries have responded to migration from impoverished or otherwise disadvantaged parts of the globe over recent decades. The article first draws attention to ways in which purportedly exclusionary approaches to irregular migration control may be imperfect by design, insofar as restrictions are imposed on outflows to secure an exploitable workforce that serves important labour market needs and, by extension, dominant political interests in the ‘host’ state. Moving on to address the precise ways in which labour exploitation of irregular migrants is brought into effect, the article demonstrates how seemingly unrelated state policies and practices regarding matters of migration, welfare, employment and criminal justice, as well as certain manifestations of anti-migrant violence by non-state actors, may act in combination with one another to this end.
    JEL: N0
    Date: 2017–01–01
  14. By: Fabrizio Germano; Francesco Sobbrio
    Abstract: This paper presents a stylized model to evaluate the effects of a search engine’s ranking algorithm on opinion dynamics and asymptotic learning. We focus on three key components of the ranking algorithm, namely, the initial ranking of websites, the updating of the ranking as a function of the popularity of the different websites, and the possibility to personalize search results according to users’ characteristics. At the same time, we consider two empirically grounded assumptions on individuals’ online search behavior, namely, the presence of a search cost and of a preference for like-minded websites. We then study how the ranking algorithm interacts with the individuals’ search behavior to determine the ranking of websites and the evolution of individuals’ opinions. We first show how several empirical regularities concerning the pattern of website traffic can be explained by the interaction of the search engine’s algorithm with the individuals’ search cost (rich get richer dynamic, concentration at the top) and with the preference for like-minded websites (long-tail in the distribution of website traffic). At the same time, fewer websites reporting a minority opinion might increase the ranking of those websites and consequently the overall probability of individuals accessing any one of them than if there were more (advantage of the fewer). As a consequence, a lower ex-ante accuracy of websites’ content might actually enhance asymptotic learning. Finally, when considering personalization of search results we see that it may lead to belief polarization and inhibit asymptotic learning.
    Keywords: Search Engines, Ranking Algorithm, Search Behavior, Opinion Dynamics, Information Aggregation, Asymptotic Learning, Misinformation, Polarization, Websites Traffic.
    JEL: D83 L86
    Date: 2016–12
  15. By: Jong A Pin, Richard; Lam (Groningen University)
    Date: 2017

This nep-pol issue is ©2017 by Eugene Beaulieu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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