nep-pol New Economics Papers
on Positive Political Economics
Issue of 2017‒03‒26
fifteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Targeted campaign competition, loyal voters, and supermajorities By Pierre C. Boyer; Kai A. Konrad; Brian Roberson
  2. Exposing corruption: Can electoral competition discipline politicians? By Afridi, Farzana; Dhillon, Amrita; Solan, Eilon
  3. The Voting Rights of Ex-Felons and Election Outcomes in the United States By Klumpp, Tilman; Mialon, Hugo M.; Williams, Michael A.
  4. Procedural Fairness and Economic Voting By Pedro C. Magalhães; Luís Aguiar-Conraria
  5. The Economic Determinants of Political Islam: an Empirical Investigation of the Arab Spring in Egypt By May Attallah
  6. How economic, humanitarian, and religious concerns shape European attitudes toward asylum seekers By Kirk Bansak; Jens Hainmueller; Dominik Hangartner
  7. Secrecy and State Capacity: A Look Behind the Iron Curtain By Harrison, Mark
  8. Impacts of Fiscal Legal Setting and Institutions on Budget Outcomes in the Rentire State of Kuwait By Abbas Al-Mejren
  9. Is the Internet Causing Political Polarization? Evidence from Demographics By Levi Boxell; Matthew Gentzkow; Jesse M. Shapiro
  10. Gendering the Costs and Benefits of the Arab Uprisings in Tunisia and Egypt Using the Gallup Surveys By Rania Salem
  11. Direct democracy and government size: evidence from Spain By Carlos Sanz
  12. Changed Regimes, Changed Priorities? Economic and Social Policies after the 2011 Elections in Tunisia and Egypt By Eberhard Kienle
  13. News consumption, political preferences, and accurate views on inflation By David-Jan Jansen; Matthias Neuenkirch
  14. Electoral Turnout and State Redistribution: A Cross-National Study of 14 Developed Countries By Vincent Mahler; David Jesuit; Piotr Paradowski
  15. Does the Strength of Incentives Matter for Elected Officials? A Look at Tax Collectors By Sutirtha Bagchi

  1. By: Pierre C. Boyer (CREST, Ecole Polytechnique, Universit´e Paris-Saclay, Route de Saclay, 91128 Palaiseau, France); Kai A. Konrad (Max Planck Institute for Tax Law and Public Finance); Brian Roberson (Purdue University, Department of Economics, Krannert School of Management)
    Abstract: We consider campaign competition in which candidates compete for votes among a continuum of voters by engaging in persuasive efforts that are targetable. Each individual voter is persuaded by campaign effort and votes for the candidate who targets more persuasive effort to this voter. Each candidate chooses a level of total campaign effort and allocates their effort among the set of voters. We completely characterize equilibrium for the majoritarian objective game and compare that to the vote-share maximizing game. If the candidates are symmetric ex ante, both types of electoral competition dissipate the rents from office in expectation. However, the equilibria arising under the two electoral objectives qualitatively differ. In majoritarian elections, candidates randomize over their level of total campaign effort, which provides support for the puzzling phenomenon of the emergence of supermajorities in majoritarian systems. Vote-share maximization leads to an equilibrium in which both candidates make deterministic budget choices and reach a precise fifty-fifty split of vote shares. We also study how asymmetry between the candidates affects the equilibrium. If some share of the voters is loyal to one of the candidates, then both candidates expend the same expected efforts in equilibrium, but the advantaged candidate wins with higher probability for majoritarian voting or a higher share of voters for vote-share maximization.
    Keywords: Campaign competition; continuous General Lotto game; vote buying; flexible budgets; supermajorities, loyal voters.
    JEL: D72 D78 D82
    Date: 2017
  2. By: Afridi, Farzana (Economics and Planning Unit, Indian Statistical Institute, Delhi and IZA, Bonn); Dhillon, Amrita (Department of Political Economy, Kings College, London, and CAGE, University of Warwick.); Solan, Eilon (School of Mathematical Sciences, Tel Aviv University)
    Abstract: In developing countries with weak institutions, there is implicitly a large reliance on elections to instil norms of accountability and reduce corruption. In this paper we show that electoral discipline may be ineffective in reducing corruption when political competition is too high or too low. We first build a simple game theoretic model to capture the effect of electoral competition on corruption. We show that in equilibrium, corruption has a U-shaped relationship with electoral competition. If the election is safe for the incumbent (low competition) or if it is extremely fragile (high competition) then corruption is higher, and for intermediate levels of competition, corruption is lower. We also predict that when there are different types of corruption, then incumbents increase corruption in the components that voters care less about regardless of competition. We test the model’s predictions using data gathered on audit findings of leakages from a large public program in Indian villages belonging to the state of Andhra Pradesh during 2006-10 and on elections to the village council headship in 2006. Our results largely confirm the theoretical results that competition has a non-linear effect on corruption, and that the impact of electoral competition varies by whether theft is from the public or private component of the service delivery. Overall, our results suggest that over-reliance on elections to discipline politicians is misplaced.
    Keywords: Corruption, Electoral Competition, Audit, Social Acountability. JEL Classification: D72, D82, H75, O43, C72
    Date: 2016
  3. By: Klumpp, Tilman (University of Alberta, Department of Economics); Mialon, Hugo M. (Emory University); Williams, Michael A. (Competition Economics)
    Abstract: Approximately one in forty adult U.S. citizens has lost their right to vote, either temporarily or permanently, as a result of a felony conviction. Because laws restricting voting by felons and ex-felons disproportionately affect minorities, and minorities tend to vote for Democratic candidates, it has been hypothesized that felony disenfranchisement hurts Democratic candidates in elections, thus helping Republican candidates. We test this hypothesis using variation in felony disenfranchisement laws across U.S. states and over time. During the 2000s, a number of states restored the voting rights of ex-felons. Using difference-in-differences regressions, we estimate the effect of laws reenfranchising ex-felons on the vote shares of major party candidates in elections for seats to the U.S. House of Representatives. We argue that the regression estimates provide an upper bound for the true effect of restoring voting rights to ex-felons on the vote shares of major party candidates. Using this upper bound, no House majority would have been reversed in any year between 1998 and 2012, had all states allowed ex-felons to vote.
    Keywords: Voting rights; election law; felony disenfranchisement; U.S. Congress
    JEL: D72 K19
    Date: 2017–03–14
  4. By: Pedro C. Magalhães (ICS-University of Lisbon); Luís Aguiar-Conraria (Department of Economics/NIPE, University of Minho)
    Abstract: What accounts for the instability of economic voting? Contextual factors assumed so far to affect this relationship include the degree of control over the economy exerted by governments, their partisan-ideological composition, or even voters’ experience with democratic elections. In this paper, we provide an alternative account. Based on a vast literature originating in social and organizational psychology, we propose the existence of a process-outcome interaction: short-term outcomes matter, but the weight voters assign to them depends on the extent to which governance is perceived to adhere to principles of procedural fairness. Based on data on twenty years of elections in the OECD countries, we show that the strength of the relationship between GDP growth and the share of the vote for the incumbent parties does depends on the perceived procedural fairness in governance. We conduct extensive robustness tests, including the use of alternative indicators of fairness and survey data.
    Date: 2017
  5. By: May Attallah (CREM-University of Rennes 1)
    Abstract: This paper empirically studies the voting outcomes of the first post-revolution presidential elections in Egypt. In light of the strong success of Islamist candidate Mohamed Morsi, I identify three dimensions which can affect voting outcomes: human capital stock, wealth and employment structure. I find that less educated, poorer and more unequal districts support more Islamists. I also find an effect of the employment structure of a district on voting. I test the results by comparing the voting outcomes of the presidential elections to those of the 2011 and 2012 constitutional referendum.
    Date: 2015–09
  6. By: Kirk Bansak; Jens Hainmueller; Dominik Hangartner
    Abstract: What types of asylum seekers are Europeans willing to accept? We conducted a conjoint experiment asking 18,000 eligible voters in 15 European countries to evaluate 180,000 profiles of asylum seekers that randomly varied on nine attributes. Asylum seekers who have higher employability, have more consistent asylum testimonies and severe vulnerabilities, and are Christian rather than Muslim received the greatest public support. These results suggest that public preferences over asylum seekers are shaped by sociotropic evaluations of their potential economic contributions, humanitarian concerns about the deservingness of their claims, and anti-Muslim bias. These preferences are similar across respondents of different age, education, income, and political ideology, as well as across the surveyed countries. This public consensus on what types of asylum seekers to accept has important implications for theory and policy.
    JEL: N0
    Date: 2016–10–14
  7. By: Harrison, Mark (The University of Warwick)
    Abstract: This paper reviews two decades of research on the political economy of secrecy, based on the records of former Soviet state and party archives. Secrecy was an element of Soviet state capacity, particularly its capacity for decisiveness, free of the pressures and demands for accountability that might have arisen from a better informed citizenry. But secrecy was double-edged. Its uses also incurred substantial costs that weakened the capacity of the Soviet state to direct and decide. The paper details the costs of secrecy associated with “conspirative” government business processes, adverse selection of management personnel, everyday abuses of authority, and an uninformed leadership.
    Keywords: abuse of authority, adverse selection, censorship, military outlays, secrecy, state capacity, transaction costs, trust JEL Classification: N44, P37
    Date: 2017
  8. By: Abbas Al-Mejren (Kuwait University)
    Abstract: This study addresses the impact of the legislative setting, institutions, and political structure on the public budget in the State of Kuwait. This is an issue that has gained sizable attention, from both theoretical and empirical dimensions, in recent decades. In this respect, Kuwait represents a special case among her peers of rentier states in the GCC region because it is adopting a semi-democratic political structure, which simultaneously combines features of presidential and parliamentary systems. This structure is influenced by the prevailing interests and dynamic relationships between the limbs. The study focuses, systematically, on three thematic areas: legislative, institutional, and evolution of public revenues and public spending. Through this approach, the study attempts to dig out the effects and consequences of the institutional settings on the country’s fiscal outcomes. The public budget and fiscal account data used for this purpose cover the period from FY 1970/71 to FY 2013/14.
    Date: 2015–06
  9. By: Levi Boxell; Matthew Gentzkow; Jesse M. Shapiro
    Abstract: We combine nine previously proposed measures to construct an index of political polarization among US adults. We find that the growth in polarization in recent years is largest for the demographic groups least likely to use the internet and social media. For example, our overall index and eight of the nine individual measures show greater increases for those older than 75 than for those aged 18–39. These facts argue against the hypothesis that the internet is a primary driver of rising political polarization.
    JEL: D72
    Date: 2017–03
  10. By: Rania Salem (University of Toronto)
    Abstract: The literature on gender and the Arab “Spring” has documented the role of female activists in the uprisings and analyzed the implications of Islamists’ electoral successes for women. However, little is known about how ordinary women have experienced the changes that accompanied the uprisings and how this compares with men’s experiences. The removal of authoritarian rulers may have improved satisfaction with public institutions or decreased perceived corruption, but for some the uprisings may have resulted in higher perceived or reported crime and deeper material hardship. This paper analyzes gender differences between Tunisians’ and Egyptians’ perceptions of prevailing economic and political circumstances using nationally-representative samples surveyed before, during, and after the uprisings of the Arab “Spring.” Descriptive results indicate that Egyptians’ ratings of three indices of economic conditions are lower overall, although Tunisians perceive a steeper deterioration in economic circumstances in the post-uprising period. In both countries, these economic losses have not been compensated for by political gains, as measured by four indices. While women and men’s economic and political attitudes follow a similar trajectory in each country, there are clear differences per the gender of the respondent, particularly when it comes to political attitudes. This gender difference is largely confirmed by multivariate analysis. Women are more likely than men to report favorable economic conditions in both countries. In the realm of politics, Egyptian and Tunisian women express greater dissatisfaction with law and order and with national institutions. At the same time, men perceive higher levels of corruption than do women in both countries.
    Date: 2015–05
  11. By: Carlos Sanz (Banco de España)
    Abstract: Direct democracy is spreading across the world, but little is known about its effects on policy. I provide evidence from a unique scenario. In Spain, national law determines that municipalities follow either direct or representative democracy, depending on their population. Regression discontinuity estimates indicate that direct democracy leads to smaller government, reducing public spending by around 8%. Public revenue decreases by a similar amount and, therefore, there is no effect on budget defi cits. These fi ndings can be explained by a model in which direct democracy allows voters to enforce lower specialinterest spending.
    Keywords: public finance, political economy, direct democracy, government spending,deficits, budget, regression discontinuity
    JEL: D7 H
    Date: 2017–03
  12. By: Eberhard Kienle (CNRS Paris/ Ifpo Beirut)
    Abstract: This paper seeks to examine the economic and social policies that key political actors in Tunisia and Egypt advocated and partly implemented after the departure of the former authoritarian rulers, Zin al-Abdin Bin Ali and Husni Mubarak. The paper focuses on actors strong enough to directly influence policy choices: parties that were part of however informal parliamentary majorities, governments, and, in the case of Egypt, the president of the republic, who in line with constitutional arrangements, wielded important powers. The paper first summarizes the economic and social policies publicly advocated by the parties and individuals who dominated elected assemblies and executives after the fall of former autocrats. It then discusses the policies that the new Islamist rulers implemented from their election in late 2011 until the summer of 2013 (subsequent publications will cover longer periods of time). In a third step, both policy statements and decisions are examined in the light of assumptions about the origins of the Arab Spring and compared with policies under the old regimes and their effects.
    Date: 2015–07
  13. By: David-Jan Jansen; Matthias Neuenkirch
    Abstract: Using three waves of a customised survey among Dutch households, this paper studies the variation in people's views on inflation. Based on a range of panel regressions, we find that accurate perceptions of recent price changes are an important determinant of the accuracy of next-year inflation expectations. The realism of inflation perceptions is, in turn, related to the intensity of newspaper consumption and also affected by the broadness of a person's political preferences. However, more frequent newspaper usage does not necessarily reduce errors in inflation perceptions.
    Keywords: inflation expectations; inflation perceptions; newspaper readership; political preferences; household survey data
    JEL: D12 D83 D84 E31 E58
    Date: 2017–03
  14. By: Vincent Mahler; David Jesuit; Piotr Paradowski
    Abstract: This study explores the relationship between electoral participation and income redistribution by way of social transfers, using data from the European Social Survey, the Comparative Study of Electoral Systems and the Luxembourg Income Study. It extends previous research by measuring the income skew of turnout rather than using average turnout as a proxy for its income bias. We find that a larger income skew in turnout is negatively related to transfer redistribution and that higher electoral participation by income groups, especially those in the low and middle parts of the income distribution, is associated with greater redistribution in their favor.
    Date: 2015–04
  15. By: Sutirtha Bagchi (Department of Economics, Villanova School of Business, Villanova University)
    Abstract: In Pennsylvania local property taxes are collected by elected officials, known as tax collectors, whose compensation varies widely in both structure and level across municipalities. This paper analyses the existence of a pay-performance relationship for these officials. Using data on the percentage of real estate taxes that are actually collected at the municipal level, the paper finds that as the compensation tax collectors receive goes up, they collect more in taxes. This relationship is however true only for collectors who are compensated on a commission basis and not for collectors compensated on the basis of a flat salary. The paper also finds no relationship between the share of votes received by the tax collector and the percentage of property taxes collected during the previous term. This observation may account for the lack of a positive relationship between pay and performance for collectors compensated on the basis of a salary.
    Keywords: Tax Collectors; Politician Salary; Productivity; Pay for Performance
    JEL: H70 J45 J33 D72 M52
    Date: 2017–03

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