nep-pol New Economics Papers
on Positive Political Economics
Issue of 2017‒07‒09
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Costly voting, turnout, and candidate valence By Lo Prete, Anna; Revelli, Federico
  2. The Provision of Local Public Goods in Proportional Representation Electoral Systems with Closed and Open Party Lists. By Raul A. Ponce-Rodriguez; Charles R. Hankla; Jorge Martinez-Vazquez; Eunice Heredia-Ortiz
  3. Condorcet Consistency and the strong no show paradoxes By Kasper, Laura; Peters, Hans; Vermeulen, Dries
  4. Who are the ‘ghost’ MPs? Evidence from the French Parliament By Nicolas Gavoille
  5. Political Institutions and Federalism: A “Strong” Decentralization Theorem By Raul A. Ponce-Rodriguez; Charles R. Hankla; Jorge Martinez-Vazquez; Eunice Heredia-Ortiz
  6. A Shut Mouth Catches No Flies: Consideration of Issues and Voting By Salvador Barberà; Anke Gerber
  7. Political legacies of Italian entertainment TV By Ruben Durante; Paolo Pinotti; Andrea Tesei
  8. Perception of Corruption and Public Support for Redistribution in Latin America By Esther Hauk; Monica Oviedo; Xavier Ramos
  9. To bribe or not to bribe? Corruption uncertainty and corporate practices By Hanousek, Jan; Shamshur, Anastasiya; Tresl, Jiri
  10. Countering Public Opposition to Immigration: The impact of information campaigns By Giovanni FACCHINI; Yotam MARGALIT; NAKATA Hiroyuki
  11. Strong State, Weak Managers: How Firms Cope with Autocracy in Hungary By Dorottya Sallai; Gerhard Schnyder
  12. How Vatican II influenced female enfranchisement: A story of rapid cultural change By Anna Maria Koukal
  13. Attitudes towards Immigration in an Ageing Society: Evidence from Japan By NAKATA Hiroyuki
  14. Corruption and International Trade: A Comprehensive Analysis with Gravity By Salvador Gil-Pareja; Rafael Llorca-Rivero; José Antonio Martínez-Serrano

  1. By: Lo Prete, Anna; Revelli, Federico (University of Turin)
    Abstract: We build a model of voluntary and costly expressive voting, where the relative weight of ideology and valence issues over voting costs determines how people vote and if they actually turn out to vote. In line with the conventional rational calculus approach, the model predicts that the cost of voting depresses voter turnout. Against the conventional wisdom, though, high voting cost/low turnout elections tend to have a larger share of voters for whom the common value signal on candidates’ valence matches their private value views, thus raising the chances that high valence candidates are elected.
    Date: 2017–06
  2. By: Raul A. Ponce-Rodriguez (Department of Economics, Universidad Autónoma de Ciudad Juárez); Charles R. Hankla (Department of Political Science, Georgia State University); Jorge Martinez-Vazquez (Department of Economics, Andrew Young School of Policy Studies, Georgia State University); Eunice Heredia-Ortiz (Development Alternatives Inc., DAI)
    Abstract: In this paper we find that the institutional set up of proportional representation systems matters for the welfare properties related with the ideal structure of government providing local public goods. In particular, we study the role of party centralization vs party decentralization in the provision of local public goods. In this paper, we show that the provision of local public goods with inter-regional spillovers by a system of local governments (welfare) dominates the fiscally centralized provision in economies with a proportional representation electoral system and closed party lists. We call this outcome the strong decentralization theorem. For this type of economies, the conventional decentralization theorem (originally identified by Oates 1972) is also satisfied. For economies with a proportional representation and open party lists systems the strong decentralization theorem is satisfied only when party centralization (i.e., the ability of party leaders to nominate candidates in the party’s lists) plays a dominant role in determining the policy platforms of candidates. However, if there is party decentralization (parties lack the ability to influence policy through the nomination process in the party’s list) the strong decentralization theorem is not satisfied. Lastly, the conventional decentralization theorem is satisfied in economies with proportional representation electoral systems and open party lists in both type of party systems: centralized and decentralized.
    Date: 2017–06
  3. By: Kasper, Laura (saarland university); Peters, Hans (QE / Mathematical economics and game the); Vermeulen, Dries (QE / Operations research)
    Abstract: We consider voting correspondences that are, besides Condorcet Consistent, immune against the two strong no show paradoxes. That is, it cannot happen that if an additional voter ranks a winning alternative on top then that alternative becomes loosing, and that if an additional voter ranks a loosing alternative at bottom then that alternative becomes winning. This immunity is called the Top Property in the first case and the Bottom Property in the second case. We establish the voting correspondence satisfying Condorcet Consistency and the Top Property, which is maximal in the following strong sense: it is the union of all smaller voting correspondences with these two properties. The result remains true if we add the Bottom Property but not if we replace the Top Property by the Bottom Property. This voting correspondence contains the Minimax Rule but it is strictly larger. In particular, voting functions (single-valued voting correspondences) that are Condorcet Consistent and immune against the two paradoxes must select from this maximal correspondence, and we demonstrate several ways in which this can or cannot be done.
    Keywords: Condorcet Consistency, strong no show paradoxes, Minimax Rule
    JEL: D71 D72
    Date: 2017–06–25
  4. By: Nicolas Gavoille (Stockholm School of Economics in Riga, Latvia - Condorcet Center for Political Economy, CREM CNRS UMR6211, University Rennes 1, France)
    Abstract: This paper studies the characteristics of the ghost deputies of the French National Assembly, i.e. deputies who do not have any official recorded activity over a whole year. Using a rich dataset providing various information about all deputies from 1959 to 2012, the results indicate that the typical ghost deputy is an old man with a low level of schooling, member of a large party which does not support the government and who is elected in jurisdiction with a low level of political competition. However, personal characteristics are less and less correlated with performance over the years. Finally, ghost deputies face more difficulties to achieve reelection, but are penalized only at the first round, voters exclusively considering national factors at the second round.
    Keywords: Bad politicians, Legislative activity, French politicians, Leg-islative elections, Vote-Popularity function
    JEL: D72 J45
    Date: 2017–06
  5. By: Raul A. Ponce-Rodriguez (Department of Economics, Universidad Autónoma de Ciudad Juárez); Charles R. Hankla (Department of Political Science, Georgia State University); Jorge Martinez-Vazquez (Department of Economics, Andrew Young School of Policy Studies, Georgia State University); Eunice Heredia-Ortiz (Development Alternatives Inc., DAI)
    Abstract: In this article, we investigate how differences in the political institutions necessary for implementing decentralization reform may affect the efficiency and welfare properties of decentralization itself. We incorporate insights from political science and economics into a rigorous and formal extension of the influential “decentralization theorem” first developed by Oates in 1972. In our analysis, we go beyond Oates by producing a strong decentralization theorem that identifies the political conditions under which democratic decentralization dominates centralization even in the presence of interjurisdictional spillovers. More specifically, we find that beneficial outcomes for public service delivery will obtain when democratic decentralization (i.e. the creation of popularly elected sub-national governments) is combined with party centralization (i.e. the power of national party leaders to nominate candidates for sub-national office). We also find that the participation rules of primaries, whether closed or open, have important implications for the expected gains from decentralization. Most notably, we find that, when primaries are closed, even Oates’ conventional decentralization theorem does not hold. In summary, our theory shows that political institutions matter considerably in determining the welfare gains of decentralization outcomes.
    Date: 2017–06
  6. By: Salvador Barberà; Anke Gerber
    Abstract: We study collective decision-making procedures involving the formation of an agenda of issues and the subsequent vote on the position for each issue on the agenda. Issues that are not on the agenda remain unsettled. We use a protocol-free equilibrium concept introduced by Dutta et al. (2004) and show that in equilibrium, and under general conditions, any subset of issues may be excluded from the agenda in equilibrium whenever the voting rule belongs to one of two prominent families. What is voted upon and what is not depends on the voters preferences in a subtle manner, suggesting a high degree of instability. We also discuss further conditions under which this “anything goes” result may be qualified. In particular, we study those cases where all issues will be put in the agenda.
    Keywords: agenda formation, issues, voting, anything goes, equilibrium continuation agendas, voting by quota, amendment procedures, manipulation
    Date: 2017–06
  7. By: Ruben Durante; Paolo Pinotti; Andrea Tesei
    Abstract: To what extent are the media to blame for the rise of populist political leaders? Andrea Tesei and colleagues explore the impact of the light entertainment served up by Silvio Berlusconi's commercial TV network, Mediaset, on his later electoral success.
    Keywords: entertainment TV, voting, cognitive abilities, civic engagement
    JEL: L82 D72 Z13
    Date: 2017–07
  8. By: Esther Hauk; Monica Oviedo; Xavier Ramos
    Abstract: This paper studies the relationship between people's beliefs about the quality of their institutions, as measured by corruption perceptions, and preferences for redistribution in Latin America. Our empirical study is guided by a theoretical model which introduces taxes into Foellmi and Oechslin's (2007) general equilibrium model of non-collusive corruption. In this model perceived corruption influences people's preferences for redistribution through two channels. On the one hand it undermines trust in government, which reduces people's support for redistribution. On the other hand, more corruption decreases own wealth relative to average wealth of below-average-wealth individuals leading to a higher demand for redistribution. Thus, the effect of perceived corruption on redistribution cannot be signed a priori. Our novel empirical findings for Latin America suggest that perceiving corruption in the public sector increases people's support for redistribution. Although the positive channel dominates in the data, we also find evidence for the negative channel from corruption to demand for redistribution via reduced trust.
    Keywords: preference for redistribution, perception of corruption, political trust, bribery, Latin America
    JEL: D31 D63 H1 H2 P16
    Date: 2017–06
  9. By: Hanousek, Jan; Shamshur, Anastasiya; Tresl, Jiri
    Abstract: Using a large sample of private firms over the period from 2001 to 2013, we study the effect of corruption uncertainty on corporate investments and cash holdings. We find that a higher uncertainty about the level of corruption is associated with lower corporate investments and lower cash holdings. These results are sensitive to the ownership structure of a firm. Firms with no foreign majority ownership appear to be more sensitive to corruption-induced uncertainty than majority-controlled foreign firms. They significantly decrease their investments and cash holdings. We hypothesize that they move their cash off-balance-sheet to create cash reserves as the uncertainty of when, whom, and how much to bribe increases.
    Keywords: cash holdings; corporate investment; Corruption; Europe; firms; panel data; uncertainty
    Date: 2017–06
  10. By: Giovanni FACCHINI; Yotam MARGALIT; NAKATA Hiroyuki
    Abstract: Popular sentiment toward immigration is often antagonistic, making the integration of migrants one of the most important yet daunting challenges facing societies in advanced economies. Can information campaigns decrease public opposition to immigration? This paper reports results from a large-scale experiment conducted in Japan, a country with highly restrictive immigration laws and widespread anti-immigration sentiment. We exposed a large national sample of citizens to information pertaining to potential social and economic benefits from immigration. Depending on the treatment, we find that this exposure led to increased support for allowing more immigrants into the country by 12-21 percentage points, or over 70% above the baseline rate. The treatments also motivated citizens to take political action in support of a more open immigration policy. Notably, while smaller in magnitude, many effects also persisted 10-12 days after the treatment. The results highlight the potential value of combating enmity to incoming foreigners with campaigns that inform the public about the key positive impacts of immigration.
    Date: 2017–06
  11. By: Dorottya Sallai; Gerhard Schnyder
    Abstract: This paper investigates how companies manage risk associated with political ties in the context of the 'return of state capitalism'. We show that findings from previous studies of firms' copying strategies under autocratic regimes are of limited relevance in the context of Hungary, because they lack a sophisticated, theoretically underpinned conceptualisation of 'the state'. We develop a more fine-grained analysis of the role of the state in emerging markets. We then show that the type of 'state capitalism' that is emerging in Hungary poses unique challenges to companies with implications for existing theories of companies' political 'buffering strategies'. Based on interviews with business leaders in Hungary, we identify two coping strategies: responsiveness –whereby firms accommodate state pressures by giving in to them – and a non-responsive strategy of 'dormancy', which consists in firms putting forward-looking activities on hold and focussing on survival. We discuss implications for theories of corporate political risk management.
    Keywords: State capitalism, political ties, corporate strategies, clan state, post-socialism, autocracy
    JEL: P16 P26 H13
    Date: 2015–12
  12. By: Anna Maria Koukal
    Abstract: The importance of culture for human behavior is well established in the economic literature. So far, most authors have emphasized the long persistence of cultural traits. In contrast, this paper deals with an important case of a rapid update of culturally rooted beliefs and behavior. Using a newly composed historical dataset (1919-1984), this paper provides evidence that the Second Vatican Council (1962–1965) had a rapid effect on Catholics’ voting behavior pertaining to female enfranchisement in Switzerland. In various difference-in-differences settings, the Second Vatican Council turns out to increase the acceptance of women’s suffrage in Catholic municipalities, when compared to Protestant municipalities.
    Keywords: Catholic Church; Second Vatican Council; rapid cultural change; female enfranchisement
    JEL: N34 Z12 D72
    Date: 2017–06
  13. By: NAKATA Hiroyuki
    Abstract: This paper studies the impacts of heterogeneity such as age, gender, and education on the attitude towards immigration and the effectiveness of information campaigns based on a large-scale experiment conducted in Japan. The experiment randomly exposes a large national sample of citizens to information pertaining to potential social and economic benefits from immigration embedded in a comprehension study. The results complement the companion paper (Facchini, Margalit and Nakata, 2016), which shows that the overall effectiveness of such campaigns does not vary much across different groups, while there is a substantial generational gap in the level of support towards immigration. Also, tertiary education has a positive impact amongst female respondents, which is missing amongst the male counterparts.
    Date: 2017–06
  14. By: Salvador Gil-Pareja (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Rafael Llorca-Rivero (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); José Antonio Martínez-Serrano (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: The aim of this paper is to analyze the impact of corruption on trade. To this end, we estimate gravity equations using a wide sample of countries for a long period of time and three different measures of corruption: Corruption Perception Index (CPI), Control of Corruption Index (CCI) and a Structural Corruption Index (SCI). Our results show that perception-based indexes (CPI and CCI) give quite different results with respect to the Structural index (SCI) and that the detected impacts are somewhat sensitive to the formation of regional trade agreements or the level of per-capita income of the trade partners. In particular, when using the CCI index and there is at least one middle or low income country in the pair a positive effect of corruption on trade appears. Moreover, the negative impact of differences in the level of corruption detected with the SCI index appears to be much more relevant when the two countries are high income.
    Keywords: Corruption, Gravity equation, Income level, International trade, Regional Trade Agreements
    JEL: F14 F15
    Date: 2017–05

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