nep-pol New Economics Papers
on Positive Political Economics
Issue of 2017‒08‒20
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. Facts, Alternative Facts, and Fact Checking in Times of Post-Truth Politics By Barrera, Oscar; Guriev, Sergei; Henry, Emeric; Zhuravskaya, Ekaterina
  2. Can Television Bring Down a Dictator? Evidence from Chile’s “No” Campaign By González, Felipe; Prem, Mounu
  3. The Political Economy of Transportation Investment By Glaeser, Edward L; Ponzetto, Giacomo AM
  4. Fundamental Errors in the Voting Booth By Glaeser, Edward L; Ponzetto, Giacomo AM
  5. A rationale for unanimity in committees By Breitmoser, Yves; Valasek, Justin
  6. On the effect of business and economic university education on political ideology : An empirical note By Delis, Manthos D.; Hasan, Iftekhar; Iosifidi, Maria
  7. Electoral Systems, Taxation and Immigration Policies: Which System Builds a Wall first? By Morelli, Massimo; Negri, Margherita
  8. Surging Populism around the Globe: Do we see a reversal? By K M, SIBY
  9. Corruption and cooperation By Justin Buffat; Julien Senn
  10. The Political Economy of Development: A Critical Assessment of Balochistan, Pakistan By Ahmed, Manzoor; Baloch, Akhtar

  1. By: Barrera, Oscar; Guriev, Sergei; Henry, Emeric; Zhuravskaya, Ekaterina
    Abstract: How persuasive are "alternative facts" i.e., false statements by populist politicians, in convincing voters? How effective is fact checking in countervailing alternative facts? We conduct a randomized online experiment to evaluate the impact of alternative facts and fact checking on knowledge, beliefs, and political preferences of voters in the context of the 2017 French presidential election campaign. Marine Le Pen (MLP), the extreme-right candidate who reached the runoff, regularly used alternative facts in support of her policy proposals, to which mainstream media responded with systematic fact checking. We expose randomly selected subgroups of a sample of 2480 voting-age French to quotes from MLP and/or real facts. The results are as follows. First, alternative facts are highly persuasive. Second, fact checking improves factual knowledge of voters, but does not have an impact on voters' policy conclusions or support for MLP. Third, providing only the true facts backfires by increasing political support for MLP compared to a control group, although to a smaller extent than alternative facts. Finally, heterogeneity of voters with respect to prior voting choices and prior knowledge is important for the effect of treatments on political preferences.
    Keywords: alternative facts; elections; fact checking; fake news; voting
    Date: 2017–08
  2. By: González, Felipe; Prem, Mounu
    Abstract: Can televised political advertising change voting behavior in elections held in authoritarian regimes? We study the case of Chile, where the opposition used television campaigns weeks before the election that ended the Pinochet regime. We show that after campaigns were launched, firms linked to Pinochet lost stock market value, confirming the contemporaneous importance of television. Using national surveys conducted before the election and administrative electoral data, we provide evidence of a positive effect of television exposure on opposition votes. These results suggest that televised political campaigns can help to defeat dictators at the polls.
    Keywords: Television, dictatorship, elections, transition
    JEL: D72 P26
    Date: 2017–08–08
  3. By: Glaeser, Edward L; Ponzetto, Giacomo AM
    Abstract: Will politics lead to over-building or under-building of transportation projects? In this paper, we develop a model of infrastructure policy in which politicians overdo things that have hidden costs and underperform tasks whose costs voters readily perceive. Consequently, national funding of transportation leads to overspending, since voters more readily perceive the upside of new projects than the future taxes that will be paid for distant highways. Yet when local voters are well-informed, the highly salient nuisances of local construction, including land taking and noise, lead to under-building. This framework explains the decline of urban mega-projects in the US (Altshuler and Luberoff 2003) as the result of increasingly educated and organized urban voters. Our framework also predicts more per capita transportation spending in low-density and less educated areas, which seems to be empirically correct.
    Keywords: elections; imperfect information; infrastructure; Nuisance mitigation; political economy; Transportation investment
    JEL: D72 D82 H54 H76 R42 R53
    Date: 2017–08
  4. By: Glaeser, Edward L; Ponzetto, Giacomo AM
    Abstract: Psychologists have long documented that we over-attribute people's actions to innate characteristics, rather than to luck or circumstances. Similarly, economists have found that both politicians and businessmen are rewarded for luck. In this paper, we introduce this "Fundamental Attribution Error" into two benchmark political economy models. In both models, voter irrationality can improve politicians' behavior, because voters attribute good behavior to fixed attributes that merit reelection. This upside of irrationality is countered by suboptimal leader selection, including electing leaders who emphasize objectives that are beyond their control. The error has particularly adverse consequences for institutional choice, where it generates too little demand for a free press, too much demand for dictatorship, and responding to endemic corruption by electing new supposedly honest leaders, instead of investing in institutional reform.
    Keywords: Fundamental attribution error; political economy
    JEL: D72
    Date: 2017–08
  5. By: Breitmoser, Yves; Valasek, Justin
    Abstract: Existing theoretical and experimental studies have established that unanimity is a poor decision rule for promoting information aggregation. Despite this, unanimity is frequently used in committees making decisions on behalf of society. This paper shows that when committee members are exposed to "idiosyncratic" payoffs that condition on their individual vote, unanimity can facilitate truthful communication and optimal information aggregation. Theoretically, we show that since agents" votes are not always pivotal, majority rule suffers from a free-rider problem. Unanimity mitigates free-riding since responsibility for the committee's decision is equally distributed across all agents. We test our predictions in a controlled laboratory experiment. As predicted, if unanimity is required, subjects are more truthful, respond more to others' messages, and are ultimately more likely to make the optimal decision. Idiosyncratic payoffs such as a moral bias thus present a rationale for the widespread use of unanimous voting.
    Keywords: committees,incomplete information,decision rules,cheap talk,information aggregation,laboratory experiment
    JEL: D71 D72 C90
    Date: 2017
  6. By: Delis, Manthos D.; Hasan, Iftekhar; Iosifidi, Maria
    Abstract: We empirically test the hypothesis that a major in economics, management, business administration or accounting (for simplicity referred to as business/economics) leads to more-conservative (right-wing) political views. We use a panel dataset of individuals (repeated observations for the same individuals over time) living in the Netherlands, drawing data from the Longitudinal Internet Studies for the Social Sciences from 2008 through 2013. Our results show that when using a simple fixed effects model, which fully controls for individuals’ time-invariant traits, any statistically and quantitatively significant effect of a major in business/economics on the political ideology of these individuals disappears. We posit that, at least in our sample, there is no evidence for a causal effect of a major in business/economics on individuals’ political ideology.
    JEL: I21 M2 D72
    Date: 2017–08–11
  7. By: Morelli, Massimo; Negri, Margherita
    Abstract: When exposed to similar migration flows, countries with different institutional systems may respond with different levels of openness. We study in particular the different responses determined by different electoral systems. We find that Winner Take All countries would tend to be more open than countries with PR when all other policies are kept constant, but, crucially, if we consider the endogenous differences in redistribution levels across systems, then the openness ranking may switch.
    Keywords: Median voter; migration; Occupational choice; Proportional representation; taxation; Walls
    JEL: D72 F22
    Date: 2017–08
  8. By: K M, SIBY
    Abstract: Populism has been a buzzword around the world today. Various recent elections in industrialized parts of the world turned out to be a hot arena of debate on surging populism and demagogues made the best use of their populist agenda to reap rich dividend in electoral mandates. Once they come into power, they retract on their populist rhetoric and act on ways that endanger the underpinnings of the very democracy that begets them. The present article tries to analyse the causes of surging populism around the world and examines a reversal trend in populism in the year 2017.
    Keywords: Populism,neoliberalism,globalisation,absolute and relative inequalities
    Date: 2017–08–07
  9. By: Justin Buffat; Julien Senn
    Abstract: Corruption is a widespread phenomenon. Nevertheless, causal evidence on the effects of corruption is still lacking. In this paper, we assess whether and how corruption affects cooperation using a public good game experiment. Overall, contributions to the public good are reduced by 30% when participants have the possibility to bribe the punishment authority. Two concurrent channels lead to lower levels of cooperation. First, the punishment of low contributors decreases both at the intensive and the extensive margin. Second, bribery discourages initially high contributors, who gradually decrease their contributions down to the level of initially low contributors.
    Keywords: Corruption, bribery, cooperation, public good, institutions
    JEL: C91 D73 K42
    Date: 2017–08
  10. By: Ahmed, Manzoor; Baloch, Akhtar
    Abstract: This study aims at examining the political economy of the province of Balochistan, Pakistan and the underlying causes of social and economic under-development of the province. After presenting a brief and critical account on the historical development of the people of Balochistan, the paper argues that the province of Balochistan notwithstanding having a huge and resourceful land has failed to keep the pace of socio-economic development and modernity with other fellow provinces in the federation of Pakistan. After the independence of Pakistan and the formation of Balochistan as a province of, the people of Balochistan because of their political disorganization and segregation and economic backwardness failed to exert them within the political economy realm of Pakistan in order to grab their due resource share. The saga of economic and social backwardness of Balochistan province is a multifaceted puzzle. A section of the Balochistan political elite and scholars believe that the centralist nature of Pakistani federation is such that small nationalities like the Baloch and Pashtoon would find it hard to get their due share within the federation. That is because, the resource distribution and representation to both elected bodies and state institutions are based upon population, and Balochistan in spite of having 44% of Pakistan territory accommodates only 5% of country’s total population, whereas, another section is in the view that the nature of geo-economics and historical perspective of the province hinder the pace of economic development. The paper also touches the geostrategic importance of Balochistan and underlines its economic difficulty in terms of the dearth of human resources, physical infrastructure, economic autonomy, and productivity among others.
    Keywords: Political Economy; Development; Resource Distribution; Balochistan; Pakistan
    JEL: E6 J1 J15 J18 K30 O1
    Date: 2017–06–20

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