nep-pol New Economics Papers
on Positive Political Economics
Issue of 2017‒04‒02
eighteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Does Political Party Matter? Evidence from Close Races for Mais Médicos para o Brasil By Rafael Alves de Albuquerque Tavares
  2. Estimation of Unobserved Dynamics of Individual Partisanship: A Bayesian Approach By Okabe, Tomohito; Nogiwa, Daisuke
  3. Economic development, democratic institutions, and repression in non-democratic regimes: Theory and evidence By Kemnitz, Alexander; Roessler, Martin
  4. Choosing a Public-Spirited Leader. An experimental investigation of political selection By Thomas Markussen; Jean-Robert Tyran
  5. The effect of news on the radicalization of public opinion towards immigration By Massimiliano Agovino; Maria Rosaria Carillo; Nicola Spagnolo
  6. Cooperation, framing and political attitudes By Toke R. Fosgaard; Lars G. Hansen; Erik Wengström
  7. Inequality, redistribution and cultural integration in the Welfare State By Bisin, Alberto; Verdier, Thierry
  8. Sanctions and public opinion : the case of the Russia-Ukraine gas disputes By Seitz, William; Presbitero, Andrea; Zazzaro, Alberto
  9. Preaching Democracy By Andersen, Thomas Barnebeck; Jensen, Peter Sandholt
  10. In Defense of Majoritarianism By Stanley L. Winer
  11. The politics of promoting social protection in Zambia By Kate Pruce; Wilson Prichard; Sam Hickey
  12. The relation between public manager compensation and members of parliament’s salary across OECD countries: explorative analysis and possible determinants with public policy implications By Benati Igor; Coccia Mario
  13. Democracy and Trade—Evidence along the Distribution of Trading Activity By Astrid Krenz; Ana Abeliansky
  14. Do authoritarian regimes receive more Chinese development finance than democratic ones? Empirical evidence for Africa. By Broich, Tobias
  15. Rise and Fall in the Third Reich: Social Mobility and Nazi Membership By Matthias Blum; Alan de Bromhead
  16. External Threats, Political Stability and Fiscal Capacity By Hector Galindo-Silva
  17. Emerging challenges to long-term peace and security in Mozambique By Adedokun, Ayokunu
  18. Political Activism in Generation Y: A Global Phenomenon By Ali, Shazad; Asghar, Ali; Mamoon, Dawood

  1. By: Rafael Alves de Albuquerque Tavares
    Abstract: Does the federal government prioritize its local’s allies on the provision of public resources? Using a regression discontinuity design in close elections and data of the Projeto Mais Médicos para o Brasil − an ongoing program from the Brazilian Ministry of Health that targets the provision of basic health services and the increase of the physicians per capita rate by transferring professionals to the Brazilian municipalities −, this paper assesses the impact of the political alignment between federal and local governments on the number of physicians transferred to municipalities and the municipalities’ probability of participation. The results suggest that the current federal government does not prioritize same-party municipalities nor penalizes the ones governed by the opposition parties. Evidence also indicate poor targeting of the program and the existence of party alignment effect on municipal participation among municipalities governed by second term mayors.
    Keywords: Political Economy; Fiscal Federalism; Intergovernmental Transfers; Regression Discontinuity
    JEL: D72 D78 H77
    Date: 2017–03–21
  2. By: Okabe, Tomohito; Nogiwa, Daisuke
    Abstract: Political party preference is a crucial element in the analysis of economics and political science. However, it is often di cult to investigate the dynamic properties of the individual partisanship due to inaccessibility to panel data. This study proposes a Bayesian approach for estimating Markov dynamics of individual-level partisanship with repeated cross-section data in which the history of respondents' choice of favored party cannot be observed. The proposed approach identifies individual heterogeneities that affect transitional patterns of partisanship, and replicates the dynamic patterns of individual partisan mobility. Using the proposed method with American survey data, the study shows that age, education and race significantly influence partisan dynamics among Americans for three decades from 1972.
    Keywords: Party Identification, Repeated Cross-Section Data, Markov Chain, Bayesian Microeconometrics
    JEL: C25 D39 D72
    Date: 2017–03
  3. By: Kemnitz, Alexander; Roessler, Martin
    Abstract: This paper analyzes the utilization of repression and democratic institutions by a non-democratic government striving for political power and private rents. We find that economic development has different impacts on policy choices, depending on whether it appears in the form of rises in income or in education: A higher income level reduces democracy, whereas more education leads to both more democracy and more repression. These theoretical findings are corroborated by panel data regressions.
    Keywords: Modernization Theory,Democracy,Repression,Non-democratic Government
    JEL: C33 D72 H11 O10
    Date: 2017
  4. By: Thomas Markussen (epartment of Economics, University of Copenhagen); Jean-Robert Tyran (Department of Economics, University of Copenhagen)
    Abstract: In this experiment, voters select a leader who can either act in the public interest, i.e. make efficient and equitable policy choices, or act in a corrupt way, i.e. use public funds for private gain. Voters can observe candidates’ pro-social behavior and their score in a cognitive ability test prior to the election, and this fact is known to candidates. Therefore, self-interested candidates have incentives to act in a pro-social manner, i.e. to pretend to be public-spirited leaders. We find that both truly pro-social and egoistic leaders co-exist, but that political selection is ineffective in choosing public-spirited leaders. The main reason is that egoistic candidates strategically pretend to be pro-social to increase their chances of winning the election.
    Keywords: political selection, pro-social behavior, social dilemma, corruption, voting
    JEL: C92 C91 D03 D72 H41
    Date: 2017–03–24
  5. By: Massimiliano Agovino; Maria Rosaria Carillo; Nicola Spagnolo (-)
    Abstract: This paper analyses the effects of newspaper coverage and the tone of news on immigration on the attitude of natives towards immigration in 19 countries (World Values Survey Database) for the period 2005-2009. The results can be summarised as follows: coverage and the negative tone of news have a significant effect in reducing the attitudes towards immigration for people with high trust in the media; for those with low trust in the media, news on immigration has no significant effects. In the latter case coverage and the negative tone of news radicalizes individuals’ prior preferences and prejudices on immigration, where the latter are proxied by individual political orientations.
    Keywords: Fuzzy analysis, Immigration, News
    JEL: H89 J15 Z19
    Date: 2016–09–01
  6. By: Toke R. Fosgaard (Department of Food and Resource Economics, University of Copenhagen); Lars G. Hansen (Department of Food and Resource Economics, University of Copenhagen); Erik Wengström (Department of Economics, Lund University; Department of Economics, University of Copenhagen)
    Abstract: This paper shows that political attitudes are linked to cooperative behavior in an incentivized experiment with a large sample randomly drawn from the Danish population. However, this relationship depends on the way the experiment is framed. In the standard game in which subjects give to a public good, contributions are the same regardless of political attitudes. In an economically equivalent version, in which subjects take from a public good, left-wingers cooperate significantly more than subjects in the middle or to the right of the political spectrum. Through simulation techniques we find that this difference in the framing effect across political point of views is to some extent explained by differences in beliefs and basic cooperation preferences.
    Keywords: Cooperation, Social Dilemma, Political Ideology, Experiment, Simulation
    JEL: H41 C90 D03
    Date: 2017–03
  7. By: Bisin, Alberto; Verdier, Thierry
    Abstract: This paper constructs a simple theoretical political economy model to analyze the dynamic interactions between redistribution, public good provision and cultural integration of minority groups. Cultural differentiation erodes the support for general public good provision and vertical redistribution, reducing in turn the attractiveness of adoption of the mainstream culture by the minority groups. Our model shows the possibility for multiple politico-cultural steady state trajectories depending strongly on the initial degree of cultural differentiation in the society. An exogenous increase in income inequality is shown to increase the likelihood of multiple steady state trajectories. In a context with multiple minority groups, culltural fragmentation favors integration into the mainstream culture.
    Keywords: cultural integration; inequality; political economy; redistribution
    JEL: J13 J15 Z10
    Date: 2017–03
  8. By: Seitz, William; Presbitero, Andrea; Zazzaro, Alberto
    Abstract: Economic sanctions usually fail, sometimes even provoking the opposite of the intended outcome. Why are sanctions so often ineffective? One prominent view is that sanctions generate popular support for the targeted government; an outcome referred to as the rally-around-the-flag effect. But despite substantial anecdotal evidence, the lack of suitable data gathered during sanction events has prevented direct study of the rally-around-the-flag effect. We address this gap using a panel household survey in Ukraine that collected data on political and economic preferences before and after a major trade dispute with the Russian Federation. The dispute led to a cut in gas exports to Ukraine and dramatically increasing gas prices for consumers. Our findings show that people more directly affected by the sharp increase in gas prices were substantially more likely to change their political views in a "pro-Western" direction and in support of a more open democratic system. We identify a similar effect regarding economic policies, leading to more than a doubling in the likelihood of supporting liberal market views. Suggestive but less conclusive evidence also suggests that Ukrainians who were more directly affected by the dispute were more likely to support joining the European Union.
    Keywords: Foreign relations, Natural gas, Eastern Europe, Russia, Ukraine, Sanctions, Gas Dispute, Rally-Around-the-Flag, Economic sanctions
    JEL: F13 F51
    Date: 2017–03
  9. By: Andersen, Thomas Barnebeck (Department of Business and Economics); Jensen, Peter Sandholt (Department of Business and Economics)
    Abstract: This paper presents evidence that the Second Vatican Council (1962-65) exerted a critical influence on the evolution of democracy worldwide, a view first advanced in the seminal work of Huntington (1991). We gather qualitative case-study evidence on how the Catholic Church influenced the post-Conciliar democratization process in different national contexts. We also adopt a difference-in-difference estimation strategy to show that Vatican II strongly predicts different measures of democracy. Taken together, the evidence substantiates Huntington’s dictum that the third wave of democratization was a Catholic wave.
    Keywords: Democracy; third wave; religion; Catholic Church; Second Vatican Council; causal-process observations; difference-in-difference estimation
    JEL: N40 P16
    Date: 2017–03–23
  10. By: Stanley L. Winer (Department of Economics, Carleton University)
    Abstract: The majoritarian parliamentary electoral system of Canada has been in existence in the same form since the founding of the modern state in 1867. In this short paper I offer a defense of Majoritarianism when the alternative is some form of Proportional Representation. While the individual arguments I employ are well known, the train of reasoning here is, to my knowledge, unusual in the current Canadian context. These remarks were prepared as an opening statement for a debate on electoral reform at a Faculty of Public Affairs conference in honor of Carleton University's 75th anniversary, March 3, 2017. The debate arose because of the Prime Minister's announced intention to replace the current system with some other during the election campaign that led to his victory in 2015. The debate occurred several months after the release of a lengthy report on electoral reform by a special all-party committee of the House of Commons. A few weeks before the debate, the Prime Minister announced (independently of the debate, of course) that his government would no longer pursue electoral reform, perhaps because it looked like he would not be able to avoid a referendum, a process which is hard to control. In any event, and especially in the light of recent attempts to change the electoral system both at the federal level and in some provinces, I think it is important for people to understand why the existing electoral system is a sensible one that likely will continue to serve us reasonably well.
    Keywords: electoral reform, Canada, majoritarianism, proportional representation, index of proportionality, principle of representation, principle of responsibility, good government, leap of faith
    JEL: D70 D72
    Date: 2017–03–29
  11. By: Kate Pruce; Wilson Prichard; Sam Hickey
    Abstract: This paper examines the rise of the social protection agenda in Zambia, and demonstrates that this has two alternative drivers: shifting dynamics within Zambia’s political settlement and the promotional efforts of a transnational policy coalition. We compare the cases of social cash transfers and social health insurance to investigate how the interplay of these drivers has shaped the uneven commitment to the respective policies. Social protection has yet to displace existing interests, ideas, and rent-allocation practices. However, cash transfers are gaining localized support. What matters now is the way in which such transfers become integrated within Zambia’s distributional regime.
    Keywords: cash transfers, ideas, political settlements, social health insurance, social protection, Zambia
    Date: 2016
  12. By: Benati Igor (CNR - National Research Council of Italy, Turin, Italy); Coccia Mario (Arizona State University, Center for Social Dynamics and Complexity, Interdisciplinary Science and Technology Building 1 CNR - National Research Council of Italy, Turin, Italy)
    Abstract: The compensation for central government senior managers has been the focus of considerable attention from the public, media and academia in recent years. In several countries, the average compensation of public managers, especially top level ones, has risen in a way that public considers disproportionate and inequitable. In this context, there is a hot debate that the government senior managers are overpaid. A growing literature has analysed the possible determinants of com-pensation in public and private organizations. However, some political and institutional factors af-fecting public managers’ compensation are hardly known. Here, we show that the average compen-sation for central government senior managers seems to be positively associated to average salary of members of parliament (MPs), standardized with GDP per capita of countries. In addition, results show that higher levels of compensation for central government senior managers are mainly in countries based on Mixed Executive. We also show that higher public manager compensations are associated to countries with lower freedom of expression, freedom of association, free media, lower quality of contract enforcement, property rights and corruption control. These results can provide fruitful insights to support reforms and best practices that improve the efficiency of public administration, mainly in latecomer countries.
    Keywords: Compensation, Rewards, Wage for politicians, Pay for politicians, Bureaucracy, Public Managers; Executive, Public Administration, Public Policy.
    JEL: D72 H0 J3 J45
    Date: 2017–02
  13. By: Astrid Krenz; Ana Abeliansky
    Abstract: This paper analyzes the impact of democracy on trade along the distribution of countries' trading activity. We find a stronger relationship between democracy and trade at the lower quantiles of the trading activity, especially for the importing activity. Our results imply that the impact of democratization on trade is more important at a lower level of trading activity. Democratization's marginal benefit decreases over the distribution of the trading activity. We specially focus on a widely neglected issue in the literature: economies with higher trading activity are not necessarily the most democratic countries in the world. We find particular differences in the case of China, Malaysia, Mexico and Russia. Quantile regressions offer a powerful tool to detect these interdependencies. Using a conditional mean estimation methodology only leads to the wrong conclusion that the relationship between democracy and trade remains the same across the distribution of the trading activity and across different countries. See above See above
    Keywords: NA, Trade issues, Trade issues
    Date: 2015–07–01
  14. By: Broich, Tobias (UNU-MERIT, and Maastricht University)
    Abstract: This study is part of an emerging literature that aims to shed light on China's development finance activities in Africa using quantitative estimation techniques. This paper empirically investigates whether African authoritarian regimes receive more Chinese development assistance than democratic ones, both in absolute and relative terms. I use three different measures of democracy/autocracy which allows me to check whether my results depend on the specific indicator chosen. The OLS results suggest that Chinese development finance does not systematically flow to more authoritarian countries, controlling for strategic, economic, political, institutional and geographic confounding factors. The results are not driven by the specific democracy indicator used in the analysis. The findings remain virtually unchanged if I reduce the sample to Sub-Saharan Africa only. Furthermore, the results stand up to several robustness checks, including FE, RE and instrumental variable estimation.
    Keywords: Development Finance, Foreign Aid, China, Africa, Autocracy, Democracy
    JEL: F35 H10 O11 O55
    Date: 2017–02–15
  15. By: Matthias Blum; Alan de Bromhead
    Abstract: This paper explores the relationship between Nazi membership and social mobility using a unique and highly detailed dataset of military con- scripts and volunteers during the Third Reich. We find that membership of a Nazi organisation is positively related to social mobility when measured by the difference between fathers' and sons' occupations. This relationship is stronger for the more 'elite' NS organisations, the NSDAP and the SS. However, we find that this observed difference in upward mobility is driven by individuals with different characteristics self-selecting into these organisations, rather than from a direct reward to membership. These results are confirmed by a series of robustness tests. In addition, we employ our highly-detailed dataset to explore the determinants of Nazi membership. We find that NS membership is associated with higher socio-economic background and human capital levels.
    Keywords: National Socialism, Third Reich, Social Mobility, Nazi Membership, Second World War, Political Economy, Germany, Economic History
    JEL: J62 N24 N44 P16
    Date: 2017–03
  16. By: Hector Galindo-Silva
    Abstract: In most of the recent literature on state building, the signi cance of war relies on the assumption that interstate disputes and civil wars are two independent types of con icts, with opposing effects on the development of state capacity; while external con icts imply unity and consensus, internal wars are divisive and destructive. This paper contributes to this literature by developing an alternative explanation based on the idea that the actors in these two types of con icts might be linked. A rst result shows that the strength of this link determines whether con icts fought against internal adversaries (i.e. civil wars) or external enemies (i.e. interstate disputes) complement or substitute each other, leading to larger or smaller investments in scal capacity. The theory also predicts that political stability plays a non-trivial role in channelling the relation between both kinds of con icts and scal capacity. A second result shows that while less political stability translates into less scal capacity, more stability does not automatically imply more state-building. The exact relation depends on how cohesive institutions are. A novel mechanism through which more political stability might imply less state-building is proposed. Finally, I show that correlations in cross-country data are consistent with the theory.
    Keywords: Fiscal capacity, political stability, interstate conicts, civil war
    JEL: H41 O17
    Date: 2017–03–02
  17. By: Adedokun, Ayokunu (UNU-MERIT, and Maastricht University)
    Abstract: Mozambique's transition from civil war to peace is often considered among the most successful implementations of a peace agreement in the post-Cold War era. Following the signing of the 1992 Rome General Peace Accords (GPA), the country has not experienced any large-scale recurrence of war. Instead, Mozambique has made impressive progress in economic growth, poverty reduction, improved security, regional cooperation and post-war democratisation. Mozambique has also made significant strides in the provision of primary healthcare, and steady progress towards achieving the Millennium Development Goals. Notwithstanding these stellar achievements, Mozambique still faces a large number of political, social and economic problems: poverty, unemployment, natural resource boom, increasing political exclusion, dependence on foreign aid, and low access to social and economic services and facilities. This paper unpacks these challenges and the implications for Mozambique's long-term peace and security.
    Keywords: Peacebuilding, Poverty, Political Exclusion, Security Sector Reform, Mozambique, Natural Resource Boom
    JEL: D72 D74 F52 N47 O55
    Date: 2017–03–10
  18. By: Ali, Shazad; Asghar, Ali; Mamoon, Dawood
    Abstract: Generation Y, born between 1978 and 2000, is now ready to affect their general surroundings. And that not only involves social rather other aspects such as business and in particular politics. The recent research on generation Y shows an increasing emphasis on a unique behavioral manifestation of political activism in generation Y which is not limited to a specific ethnic, social or cultural class rather has been observed all over the world. This research, therefore, establishes the proposition that political activism among generation Y is a global phenomenon. Taking the critical realist ontological stance, this research substantiate the recent empirical evidences from Malaysia, Pakistan, Hong Kong, Turkey, USA, Quebec, UK, and Chile to analyze its proposition. The research concludes that its proposition is valid; therefore, further research using different scientific methods must be conducted for further breadth and rigor of this area of knowledge.
    Keywords: Generation Y, Political Activism, Globalization
    JEL: J1 J11
    Date: 2017–03

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