nep-pol New Economics Papers
on Positive Political Economics
Issue of 2017‒09‒24
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Political participation and party capture in a dualized economy: A game theory approach By Kellermann, Kim Leonie
  2. Costly Voting: A Large-scale Real Effort Experiment By Marco Faravelli; Kenan Kalayci; Carlos Pimienta
  3. Political Alignment in the Time of Weak Parties: Electoral Advantages and Subnational Transfers in Colombia By Leonardo Bonilla-Mejía; Iván Higuera-Mendieta
  4. On the impact of indirect competition for political influence on environmental policy By Fabien Prieur; Benteng Zou
  5. Conformity Preferences and Information Gathering Effort in Collective Decision Making By Huihui Ding
  6. Poverty and the Colonial Origins of Elite Capture: Evidence from Philippine Provinces By Michael Batu
  7. Steam democracy up! Industrialization-led opposition in Napoleonic plebiscites By Jean Lacroix
  8. SNS Vs App campaigning: Candidateʼs self-presentation on Facebook and LINE in a mixed-gender election By Chen, Chi-Ying; Chang, Shao-Liang
  9. Protecting the environment during and after resource extraction By Ruth Greenspan Bell
  10. Who gains more power in the EU after Brexit? By Szczypinska, Agnieszka
  11. Reading Between the Lines: Prediction of Political Violence Using Newspaper Text By Hannes Mueller; Christopher Rauh
  12. Condorcet versus participation criterion in social welfare rules By Can, Burak; Ergin, Emre; Pourpouneh, Mohsen

  1. By: Kellermann, Kim Leonie
    Abstract: This paper examines the link of political participation and employment status in a dualized labor market. Both insiders and outsiders can actively take part in political decision-making, e.g. by voting for a certain party. Insiders only have the resources to also provide financial donations to policy-makers. Future policy outcomes are determined in a dynamic two-stage game. First, individuals choose their optimal quantity of support depending on policy strategies. Second, parties determine their optimal policy platform anticipating the individual behavior. In order to collect donations, parties are incentivized to occupy an insider-friendly position. Thereby, insiders are encouraged to participate in politics while outsiders are discouraged. Labor market dualization opens up a gap in political involvement which induces a reinforcement of economic segmentation. However, party capture by insiders is weaker, the more strongly a party is originally tied to outsiders. With two parties competing for support and donations, political inequality becomes firmly established since both parties fully adopt the insiders' preferences.
    JEL: D71 D72 J42 P16
    Date: 2017
  2. By: Marco Faravelli (School of Economics, University of Queensland, Brisbane, Australia.); Kenan Kalayci (School of Economics, University of Queensland, Brisbane, Australia.); Carlos Pimienta (School of Economics, UNSW Business School, UNSW, Sydney, Australia.)
    Abstract: We test the turnout predictions of the standard two-party, private value, costly voting model through a large-scale, real effort experiment. We do this by recruiting 1,200 participants through Amazon's Mechanical Turk and employing a 2 x 2 between subjects design encompassing small (N=30) and large (N=300) elections, as well as close and one-sided elections. We find partial evidence of selfish instrumental voting. Participants with a higher opportunity cost are less likely to vote (cost effect); turnout rate decreases as the electorate size increases (size effect) in one-sided elections and increases the closer the election is (competition effect) in large elections. Contrary to the theoretical predictions, in large one-sided elections the majority turns out to vote at a higher rate than the minority. We propose an alternative theory assuming that voters obtain a small non-monetary utility if they vote and their party wins.
    Keywords: Costly Voting, Turnout, Field Experiment, Real Effort, Amazon's Mechanical Turk
    JEL: C93 D72 C72
    Date: 2017–08
  3. By: Leonardo Bonilla-Mejía; Iván Higuera-Mendieta (Banco de la República)
    Abstract: This paper explores the effect of alignment between local and national politics in a context of weak parties. Based on a regression discontinuity design in close elections, we find that, in absence of strong parties, presidential coalitions become the focal point of political alignment in Colombia. In fact, while parties provide almost no electoral advantages to their members, candidates aspiring to national positions get significantly more votes in municipalities governed by mayors aligned with the incoming presidential coalitions. In turn, aligned mayors receive additional discretionary transfers from the National Government to finance road investments. These discretionary transfers, however, do not translate into local economic growth. Classification JEL: D72, H72, H77, R11
    Keywords: Political alignment, elections, subnational transfers, regression discontinuity
    Date: 2017–09
  4. By: Fabien Prieur (Université Paris Nanterre); Benteng Zou (CREA, Université du Luxembourg)
    Abstract: Motivated by the history of climate politics in the US over the last decades, this paper aims at studying the impact of indirect competition for political influence, through environmental awareness raising vs disinformation campaigns, on environmental and economic performance. The analysis of the game in which groups devote efforts to bring the majority’s concern closer to their views shows a strong asymmetry in the results. Strategic interaction may lead the economy to a better situation in the long run, compared to what would prevail in the absence of lobbying. But this only occurs when the environmental group exhibits a radical ideology and people’s awareness is initially closer to that of the industrial group. By contrast, economies with very aggressive conservative groups and with people originally well aware of environmental problems can never benefit from the outcome of the game of political influence. The latter result is reinforced when one accounts for different lobbying powers and supremacy of industrial groups. This may explain why the US have failed to take action on global warming up to now.
    Keywords: Public persuasion, environmentalists, industrialists, environmental awareness, information campaigns, disinformation, game of political influence
    JEL: D72 C73 Q54
    Date: 2017
  5. By: Huihui Ding
    Abstract: Our study concerns a collective decision-making model for the collection of information from two voters. Both voters, who tend to make the same voting choices because of their conformity preferences, collect information about the consequences of a project and then vote on the project. We focus on an informative equilibrium in which voters vote informatively using pure strategies. This is a symmetric Nash equilibrium. Our result is interesting as it shows that nonconformist voters exert less effort from a social perspective because of a positive externality that results in the free-rider problem, while conformity preferences can help to improve the sum of the votersâ expected payoffs from the social perspective. This is because conformity preferences may alleviate the free-rider problem associated with coordination (making the same vote). Specifically, conformity preferences give special importance to the correlation between votersâ signals, even if this correlation is unrelated to the accuracy of the signals. Furthermore, we present the exact conformity preference level which helps voters to exert an optimal effort level that maximizes the sum of the votersâ expected payoffs compared to the nonconformist case. In addition, we graphically illustrate comparative statics on effort levels in informative equilibria.
    JEL: D72 D82
    Date: 2017–08–28
  6. By: Michael Batu (Department of Economics, University of Windsor)
    Abstract: This paper offers new evidence on the causal link between poverty and elite capture within a democratic country. The extent of elite capture was derived from the names of 64,152 elected officials in four election cycles at the provincial and municipal levels in the Philippines. To identify the causal relationship between elite capture and poverty, this study exploits the exogenous variation in the number of churches constructed in the Philippines during the Spanish colonization period (1521-1898). These structures were built in locations where political families developed and persisted to the present. Using the number of colonial churches as an instrument in a two-stage least-squares regression, this study finds that poverty in Philippine provinces is inversely proportional to the percentage of positions controlled by elites and directly proportional to decreased competition among elites. Results are robust to the measure of poverty used as well as controlling for other plausible channels through which the presence of colonial churches may influence poverty in the Philippine provinces.
    Keywords: Political elites; elite capture; poverty; institutions
    JEL: D72 F54 I32
    Date: 2017–09
  7. By: Jean Lacroix
    Abstract: Which dimension of economic development spurred support to democracy? This study focuses on industrialization as the dimension triggering the process of “modernization”. It uses a new dataset on Napoleonic plebiscites under the second French Empire (1852-1870). The results in those plebiscites provide a detailed cross-départements (French main administrative units) measure of opposition to autocracy. This study uses the variations in the thriving French modernization to disentangle the effect of industrialization on the vote from the one of other dimensions of economic development. The results show that a ten-percent increase in industrialization reduced the share of “Yes” ballots by 0.4 to 0.7 percentage points in the 1870 plebiscite. An IV strategy using distance to the first city having adopted steam engines, access to coal and waterpower as instruments confirms causality. The baseline results are robust to controlling for other explanations of the vote and to using alternative specifications and estimation methods.
    Keywords: Industrialization; Modernization; Democratic consolidation
    JEL: N43 O14
    Date: 2017–09–15
  8. By: Chen, Chi-Ying; Chang, Shao-Liang
    Abstract: Although women are increasingly securing various political positions, stereotype exist in the public perception of male and female political candidates’ viability and credibility. The emergence of social networking service has increased the potential for candidates to present themselves actively by a full control over political messages and portray a well-crafted persona through coherently presented texts and images directly delivered to voters. Measures of self-presentation strategies and their influence are becoming vital to understand this new political social environment. Based on the functional theory of campaign discourse and political imagery, this research adopted a mixed method of quantitative and qualitative analysis to explore how candidates managed and presented both textual and pictorial information on Facebook and LINE during the Taiwanese presidential election in 2016 and analyze features of successful messages with an extremely great number of likes and shares. This research found that both female and male candidates employed a safe self-presentation strategy and their intention to reverse gender stereotype was not evident. Gender difference was demonstrated in strategies to attack the rival and defend themselves. Textual and pictorial features of successful messages were in common but different in topics between Facebook and LINE. We make two contributions to research and practice. First, we analyze the self-presentation strategies by candidates of different genders to draw a rich picture of how Facebook and LINE utilized as a communications channel. Second, we transcend previous studies by analyzing both text and imagery.
    Date: 2017
  9. By: Ruth Greenspan Bell
    Abstract: Natural resources extraction inevitably imposes environmental injuries including diversion of scarce water away from pressing local needs, disruption of fragile ecosystems, and longer-range and often irreparable harm. These fall most forcefully on the local populations at or near the extraction sites but also beyond. Effective regulation is critical to balance immediate needs with longer-term considerations. Unfortunately, much extraction takes place in countries with weak institutions and poor success rates in addressing any of their environmental challenges and often rampant corruption undercutting fair application of rules. Improving practices requires a long and sustained commitment for everyone involved—the countries and industry.
    Date: 2017
  10. By: Szczypinska, Agnieszka (Ministry of Finance)
    Abstract: Brexit implications are analysed in most cases from the macroeconomic, financial or legal point of view while these areas are not the only ones the economists or governments should pay attention to. In this article we focus on how Brexit influences application of the European procedures, i.e. the results of various voting scenarios in the Council of the European Union. Based on power indices we examine changes of power distribution within the European Union (EU) from the perspective of each EU Member State separately as well as potential coalitions. This analysis covers also projection of power distribution in 2030 and 2060 that takes into account population forecast prepared by the Ageing Working Group. We find that larger countries benefit from the new possible power distribution while the smaller ones lose their power. Moreover, power of coalitions built by the EU Member States, representing different groups of interests in particular voting, e.g. EU budget or enforcement of the EU rules, seems to be vulnerable to the implications of the decision of the United Kingdom to leave the EU. Brexit may influence the quality of institutional and macroeconomic policy, especially in terms of decisions on the strictness of the EU rules.
    Keywords: Brexit; power index; voting power; Council of the European Union; demographics
    JEL: C71 F15
    Date: 2017–03–21
  11. By: Hannes Mueller; Christopher Rauh
    Abstract: This article provides a new methodology to predict armed conflict by using newspaper text. Through machine learning, vast quantities of newspaper text are reduced to interpretable topics. These topics are then used in panel regressions to predict the onset of conflict. We propose the use of the within-country variation of these topics to predict the timing of conflict. This allows us to avoid the tendency of predicting conflict only in countries where it occurred before. We show that the within-country variation of topics is a good predictor of conflict and becomes particularly useful when risk in previously peaceful countries arises. Two aspects seem to be responsible for these features. Topics provide depth because they consist of changing, long lists of terms which makes them able to capture the changing context of conflict. At the same time topics provide width because they are summaries of the full text, including stabilizing factors.
    Keywords: Civil War, conflict, early-warning, topic model, forecasting, machine learning, news, prediction, panel regression
    JEL: O11 O43
    Date: 2017–09
  12. By: Can, Burak (General Economics 1 (Micro)); Ergin, Emre (General Economics 0 (Onderwijs)); Pourpouneh, Mohsen (sharif university of technology)
    Abstract: Moulin (1988) shows that there exists no social choice rule, that satisfies the following two criteria at the same time: the Condorcet criterion and the participation criterion, a.k.a., No Show Paradox. We extend these criteria to social welfare rules, i.e., rules that choose rankings for each preference profile. We show that the impossibility does not hold, and one particular rule, the Kemeny rule satisfies both the Condorcet and the participation criteria.
    Keywords: condorcet criterion, participation criterion, social choice rules, social welfare rules
    JEL: D71
    Date: 2017–09–14

This nep-pol issue is ©2017 by Eugene Beaulieu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.