nep-pol New Economics Papers
on Positive Political Economics
Issue of 2017‒05‒07
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Voters and Representatives: How Should Representatives Be Selected? By Thomas Braendle; Alois Stutzer
  2. The Imperfect Beliefs Voting Model By Benjamin Ogden
  3. A Model of Focusing in Political Choice By Salvatore Nunnari; Jan Zapal
  4. Social identity and political polarization: Evidence on the impact of identity on partisan voting trade By Duell, Dominik; Valasek, Justin Mattias
  5. A Model of Influence on Trade Policy in a Computable General Equilibrium Model By Franck Viroleau
  6. Who Voted for Brexit? A Comprehensive District-Level Analysis By Sascha O. Becker; Thiemo Fetzer; Dennis Novy
  7. Rise and fall in the Third Reich: Social mobility and Nazi membership By Blum, Matthias; De Bromhead, Alan
  8. Institutions as Causes and Effects: North African Electoral Systems during the Arab Spring By Carey, John M.; Masoud, Tarek; Reynolds, Andrew S.
  9. Economic and Political Cooperation between India and East Asia: The Emerging Perspective By Chakraborty, Anushree; Chakraborty, Debashis
  10. Ethnic Politics and Ebola Response in West Africa - Working Paper 453 By Souleymane Soumahoro
  11. The Political Economy of Heterogeneity and Conflict By Enrico Spolaore; Romain Wacziarg
  12. Fairness Concerns and Corrupt Decisions :an Experimental Approach By Lena Epp; Nastassia Leszczynska
  13. Rights to the forest, REDD+ and elections: mining in Guyana By Timothy Laing
  14. Nudging the electorate: what works and why? By Felix Koelle; Tom Lane; Daniele Nosenzo; Chris Starmer

  1. By: Thomas Braendle; Alois Stutzer
    Abstract: Institutions systematically affect which individuals gain positions in the different branches of democratic government. Given agents' discretion in decision-making, their characteristics matter for policy choices. This perspective of political selection replaces the representative political agent by a heterogeneous set of political decision makers with different skills and motivations. Selecting political agents becomes a means to align the interests of the elected delegates with those of the citizens. Our comparative analysis reviews demand- and supplyside conditions in the market for competent and honest politicians. On the demand side, parties and electoral rules (including reservations and quotas) play an important role in determining who is recruited, nominated and finally elected. On the supply side, we focus on the various types of compensations associated with political office. Finally, institutions affecting the attractiveness of a political mandate for people with a specific professional background are considered and related to policy outcomes.
    Keywords: Political selection; electoral rules; political parties; paying politicians; incompatibility; citizen-candidates model
    JEL: D72 D73 H11
    Date: 2017–04
  2. By: Benjamin Ogden
    Abstract: In real-life elections, voters do not have full information over the policy platforms proposed by political parties. Instead, they form (imprecise) beliefs. I propose a new model of partisan competition to represent the interaction of these beliefs with platform selection. Both parties gain more from appealing to the voters with more precise beliefs over their platform. Minority candidates viewed with less precision overall gain relatively more from outliers. Therefore, the Median Voter Theorem is recovered if and only if voters’ policy preferences are uncorrelated with the precision of their beliefs about each candidate, and preferences are distributed symmetrically. Otherwise, even election-motivated parties diverge away from each other. As the population becomes polarized in how they form beliefs about politics, they will become polarized on political grounds as well, providing a new explanation for recent political polarization in the United States which, under reasonable assumptions, is more in line with the stylized facts than models with perfect observability.
    Keywords: cultural distance; imperfect communication; inequality; polarization; policy divergence; redistribution; social groups; voter beliefs
    Date: 2017–04
  3. By: Salvatore Nunnari; Jan Zapal
    Abstract: This paper develops a theoretical model of voters' and politicians' behavior based on the notion that voters focus disproportionately on, and hence overweight, certain attributes of policies. We assume that policies have two attributes and that voters focus more on the attribute in which their options differ more. First, we consider exogenous policies and show that voters' focusing polarizes the electorate. Second, we consider the endogenous supply of policies by office-motivated politicians who take voters' distorted focus into account. We show that focusing leads to inefficient policies, which cater excessively to a subset of voters: social groups that are larger, have more distorted focus, are more moderate, and are more sensitive to changes in a single attribute are more in uential. Finally, we show that augmenting the classical models of voting and electoral competition with focusing can contribute to explain puzzling stylized facts as the inverse correlation between income inequality and redistribution or the backlash effect of extreme policies.
    Keywords: focus; attention; salience; political polarization; probabilistic voting model; electoral competition; behavioral political economy; income inequality; redistribution;
    JEL: D03 D72 D78
    Date: 2017–04
  4. By: Duell, Dominik; Valasek, Justin Mattias
    Abstract: While scholars and pundits alike have been pointing to a trend of increasing partisan affect in the US, there has been very little analysis as to how partisan affect impacts the decisions of voters. We hypothesize that affective polarization may effect voting both through an expressive channel, as voters become more likely to vote instinctively, and through an instrumental channel, as voters expect candidates to take decisions that are more favorable towards their partisan in-group. To explore this hypothesis, we conduct a laboratory experiment designed to separate between the expressive and instrumental impact of affective polarization, and find evidence that affect significantly impacts subjects' voting decision through both channels. Importantly, however, we show that the instrumental impact of affective polarization depends on the underlying degree of polarization in policy preferences. Additionally, in contrast to the existing literature, our study demonstrates that affective polarization has a clear negative impact on social welfare by decreasing the likelihood that high valence candidates win elections. Lastly, we compare the impact of affect between groups that are formed using a neutral prime (minimal groups) and groups that are formed using the subjects' stated partisan identity. Surprisingly, we find no difference in voting behavior between the two treatments, implying that among a group of individuals that are otherwise relatively homogenous (university students) the impact of partisan identity is no greater than an arbitrary label.
    Keywords: political polarization,social identity,affective polarization
    Date: 2017
  5. By: Franck Viroleau
    Abstract: This paper aims at making explicit the micro foundations of the government's preference function in an influence-driven political economy model. It also addresses the behavior functions of domestic and foreign firms in their attempts to gain policy favors. These favors are granted by means of subsidies. In our model, the government simultaneously chooses three interdependent policy instruments under the political influence of domestic and foreign firms. Thus, we create a political market characterized by utility-maximizing and profit-maximizing behaviors of its actors, which takes place in a computable general equilibrium model. Endowed with these features, this model fills a gap in the literature. However, our results demonstrate that the model is only valid under a reasonable set of constraints on its parameters. Finally, this paper formally shows the key role of the subsidy elasticity of political cost in limiting the distortions created by the influence of interest groups.
    Keywords: Lobbying, Public Policies, Computable General Equilibrium Model.
    JEL: C68 D72 D78 F13 H32 P16
    Date: 2017
  6. By: Sascha O. Becker; Thiemo Fetzer; Dennis Novy
    Abstract: On 23 June 2016, the British electorate voted to leave the European Union. We analyse vote and turnout shares across 380 local authority areas in the United Kingdom. We find that exposure to the EU in terms of immigration and trade provides relatively little explanatory power for the referendum vote. Instead, we find that fundamental characteristics of the voting population were key drivers of the Vote Leave share, in particular their education profiles, their historical dependence on manufacturing employment as well as low income and high unemployment. At the much finer level of wards within cities, we find that areas with deprivation in terms of education, income and employment were more likely to vote Leave. Our results indicate that a higher turnout of younger voters, who were more likely to vote Remain, would not have overturned the referendum result.
    Keywords: political economy, voting, referendum, migration, austerity
    JEL: D72 N44 R23 Z13
    Date: 2017–04
  7. By: Blum, Matthias; De Bromhead, Alan
    Abstract: This paper explores the relationship between Nazi membership and social mobility using a unique and highly detailed dataset of military conscripts 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
  8. By: Carey, John M. (Dartmouth College); Masoud, Tarek (Harvard University); Reynolds, Andrew S. (University of NC)
    Abstract: From late 2010 through 2011, popular uprisings toppled authoritarian regimes in Tunisia, Egypt, and Libya. In each country, a key component of the new regime's "founding moment" was the selection of rules for the first democratically elected assembly. This paper asks how the design of electoral systems affected the outcomes of the founding elections. We are interested in whether the rules of competition were consequential in determining winners and losers, and to the quality and trajectory of democratization. Our conclusions are based on analysis of district level results from the list proportional representation component of each election and on first person interviews with actors in who participated in the design of electoral rules.
    Date: 2015–08
  9. By: Chakraborty, Anushree; Chakraborty, Debashis
    Abstract: After initiating the economic liberalization policies in 1991, India adopted a ‘Look East Policy’ (LEP) with the dual objective of securing economic growth and maintaining maritime security. Cooperation with East Asia received further boost, when the ‘Act East Policy’ (AEP) came into effect during the maiden visit of Prime Minister Mr. Narendra Modi at the ASEAN-India Summit in 2014, which emphasizes on practicing more action-oriented policy towards ASEAN and the wider East Asia. As a result of the policy shift and through the other initiatives like Make-in-India, India’s trade and investment linkages with East Asia is on the rise. In 2015, the Prime Minister visited five East Asian countries at various occasions. There have been other high level diplomatic visits to the East, followed by the appropriate diplomatic channels. Therefore, AEP has brought a great sense of speed and priority in engaging with the East and Southeast Asian countries. On maritime front, China’s nine-dash line doctrine generated strategic concerns both in East and Southeast Asia and India has emerged as a strategic player in the region through joint naval exercises and capacity buildings with partner countries. Given the recent reservations expressed by Beijing against the ruling by the international tribunal in The Hague, India’s maritime security initiatives in East Asia is likely stay relevant in coming days. The current paper examines the future for India-East Asia relations in days to come, especially in the current geo-political set-up.
    Keywords: Trade Policy, Intra-Industry Trade, Maritime Security, India
    JEL: F14 F15
    Date: 2017–04–20
  10. By: Souleymane Soumahoro
    Abstract: In this paper, I examine the effects of power sharing on vulnerability to adverse shocks in a multiethnic setting. Combining a unique dataset on the allocation of ministerial posts across ethnicities with the spatial distribution of Ebola, I provide evidence that ethnic representation mitigated the transmission of Ebola in Guinea and Sierra Leone. The findings suggest that one percentage point increase in proportional cabinet shares reduced Ebola transmission by five percent, as reflected in the total number of confirmed cases. I also provide suggestive evidence that this relationship goes beyond a simple correlation and operates through public resource capture and trust in political institutions.
    Keywords: Political Institutions, Ethnic Politics, Power Sharing, Africa, Ebola
    Date: 2017–05
  11. By: Enrico Spolaore; Romain Wacziarg
    Abstract: We present a conceptual framework linking cultural heterogeneity to inter-group conflict. When conflict is about control of public goods, more heterogeneous groups are expected to fight more with each other. In contrast, when conflict is about rival goods, more similar groups are more likely to engage in war with each other. We formalize these ideas within an analytical model and discuss recent empirical studies that are consistent with the model's implications.
    JEL: D74 H56 N40
    Date: 2017–03
  12. By: Lena Epp; Nastassia Leszczynska
    Abstract: This study investigates the impact of a public officials' fairness considerations towards citizens in a petty corruption situation. Other-regarding preferences, and, more particularly, fairness concerns are widely acknowledged as crucial elements of individual economic decision-making. In petty corruption contexts, public officials are to a large extent aware of differences between citizens. Here, we experimentally investigate how fairness considerations may impact on corrupt behaviour. Our novel bribery game reveals that bribes are less frequently accepted when bribers are unequal in terms of endowments. These results suggest that fairness considerations can inflluence corrupt behaviour.
    Keywords: petty corruption; bribery; laboratory experiment; fairness; inequality
    JEL: C91 D63 D73 K42
    Date: 2017–04
  13. By: Timothy Laing
    Abstract: This paper examines the impact of electoral cycles and the introduction of Reducing Emissions from Deforestation and Degradation (REDD+) policy upon the holding of small-scale mining property rights in Guyana. Mining is both the major cause of deforestation and the main economic activity in the country. A simple model of the incentives to hold mining property rights is developed and tested using a unique data-set of small-scale mining property rights data. Econometric techniques are used to test the findings of the model, concluding that the number of mining rights issued fall after election years, with the number rescinded rising. The introduction of REDD+ in Guyana also seems to have increased the number of mining claims being relinquished, and reduce the number being issued. The findings highlight the importance of political economy events in the evolution of small-scale mining activity, and show some evidence that the introduction of a REDD+ framework in Guyana has impacted the main driver of deforestation, despite the absence of specific policy targeting the sector.
    Keywords: small-scale mining; REDD+; elections; property rights
    JEL: Q30 Q38 Q54 Q58
    Date: 2015–12
  14. By: Felix Koelle (Department of Economics, University of Cologne); Tom Lane (Department of Economics, University of Nottingham); Daniele Nosenzo (School of Economics, University of Nottingham); Chris Starmer (School of Economics, University of Nottingham)
    Abstract: We report two studies investigating whether, and if so how, different interventions affect voter registration rates. In a natural field experiment conducted before the 2015 UK General Election, we varied messages on a postcard sent by Oxford City Council to 7,679 unregistered student voters encouraging them to register to vote. Relative to a baseline, emphasising negative monetary incentives (the possibility of being fined) significantly increased registration rates, while positive monetary incentives (chances of winning a lottery) and purely non-monetary nudges had no overall effects. In the second study, we show that these differences can be partly explained by social norms.
    Keywords: Voter Registration; Voting; Field Experiment; Nudging; Social Norms; Fines; Rewards
    Date: 2017–05

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