nep-pol New Economics Papers
on Positive Political Economics
Issue of 2017‒10‒08
fifteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Clientelism beyond Borders? The Political-Electoral Reform of Extending Voting Rights Abroad in Mexico By Yuriko Takahashi
  2. Reluctant to Reform? A Note on Risk-Loving Politicians and Bureaucrats By Tobias Thomas; Moritz Heß; Gert G. Wagner
  3. Fiscal regimes in resource dependent African states: a political economy game By Temitope J. Laniran
  4. Legislators' behaviour and electoral rules: evidence from an Italian reform By Giuseppe Albanese; Marika Cioffi; Pietro Tommasino
  5. Power Politics: Electoral Cycles in German Electricity Prices By Englmaier, Florian; Roider, Andreas; Stowasser, Till; Hinreiner, Lisa
  6. Poverty, Clientelism and Democratic Accountability in Mexico By Yuriko Takahashi
  7. Violent conflicts in ARMM: Probing the factors related to local political, identity, and shadow-economy hostilities By Joseph J. Capuno
  8. Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters By Gold, Robert; Dippel, Christian; Heblich, Stephan; Pinto, Rodrigo
  9. Information, perceived education level, and attitudes toward refugees: Evidence from a randomized survey experiment By Simon, Lisa; Piopiunik, Marc; Lergetporer, Philipp
  10. Legislative TermLimits and Government Spending: Theory and Evidence from the United States By Yasushi Asako; Tetsuya Matsubayashi; Michiko Ueda
  11. Candidate Religion and Individual Voting Behavior in Indonesia By Rahma Nida; Mohamad Fahmi
  12. Dutch Municipalities are Becoming Greener: Some Political and Institutional Explanations By Raymond (R.H.J.M.) Gradus; Elbert (E.) Dijkgraaf
  13. Institutional shocks and economic outcomes : Allende's election, Pinochet's coup and the Santiago stock market By Daniele Girardi; Samuel Bowles
  14. Democratization and Human Development By Susumu Annaka; Masaaki Higashijima
  15. Electoral Externalities in Federations - Evidence from German Opinion Polls By Frei, Xenia; Langer, Sebastian; Lehmann, Robert; Rösel, Felix

  1. By: Yuriko Takahashi (Faculty of Political Science and Economics, Waseda University)
    Abstract: This research note provides a tentative analysis of the causes and consequences of Mexico’s political-electoral reform in 2014 with a special focus on the extension of voting rights to Mexicans living abroad. The reform significantly modified the rules and procedures for electing and forming a government in Mexico. Specifically, I am presenting the following arguments. Democratization via increasing electoral competition promoted the reform of extending voting rights abroad as a way of enhancing the democratic representation of Mexican migrants in foreign countries. On the other hand, the usage of postal and internet voting in a context of weak monitoring mechanisms entails the risk of “exporting” clientelism beyond borders, because politicians may have a greater incentive to cultivate support from migrants to survive competitive elections. Since clientelism erodes electoral integrity, the reform of voting rights in Mexico, which was driven by increasing electoral competition, is a double-edged sword. Based on primary and secondary sources, I provide partial evidence to support these claims and propose a viable empirical strategy to rigorously verify the validity of them.
    Keywords: clientelism, substantive voting rights, Mexico, democratization, voting rights abroad, the 2014 political-electoral reform
  2. By: Tobias Thomas; Moritz Heß; Gert G. Wagner
    Abstract: As from a political economy perspective, politicians often fail to implement structural reforms, we investigate if the resistance to reform is based on the differences in the risk preferences of voters, politicians, and bureaucrats. Based on the empirical results of a survey of the population in Germany, 175 members of the Federal German Parliament (Bundestag), and 106 officials (“bureaucrats”) from German ministries, this is not the case. Since both politicians and bureaucrats have a higher risk appetite than the general population, their risk preferences cannot be seen as an explanation for the resistance to structural reform. Hence, it must be caused by other reasons. These can be for instance – as public choice scholars argue – interventions by veto players, wars of attrition by powerful interest groups, or reform logjams initiated. However, another point of view could be that modern democracies are doing better than many believe. During times of populist campaigns, the election process can put forth candidates with very high risk appetites, but the constitutions of democracies turn out to be rather smart if hazardous actions and measures by political rookies and gamblers are inhibited by checks and balances.
    Keywords: Political reforms, political decision-making, principal agent-theory, risk aversion, German, SOEP
    JEL: D71 D78 H11 H70 P16 Z13
    Date: 2017
  3. By: Temitope J. Laniran (University of Bradford, UK)
    Abstract: Policy reform debates in African economies often focus on poverty alleviation programs, liberalisation of trade and market and social service provisions. These reforms are heavily dependent on funding from either foreign sources or natural resource wealth, accompanied with concessions from the East and conditionality laden Western sources. They rarely optimally explore the internal fiscal revenue sources of their economy and as such undermines the fiscal prowess of their economies. Despite the less desirable situation, most resource-dependent African economies have found themselves, the elite political class in these countries still engage in wasteful expenditure pattern. The question of demand for accountability and good governance is rather ambiguous to the majority of the electorate as there is often a weakfiscal contract between them and the elite political class. The acknowledgement of this gives politicians an \"incentive\" to perpetuate corrupt activities which enrich the elite class at the expense and well-being of the masses and widens the inequality gap. This scenario is rather worse off in natural resource-endowed developing economies. The elite classis faced with a game-like situation, where the payoffs can either be beneficial to the elite class at the expense of the electorate or beneficial to the electorate at the expense of the elite class.This study expands the discussion on how an effective fiscal regime can help improve accountability and welfare of citizens in natural resource-endowed African states.
    Keywords: Accountability, Natural Resources, Fiscal Regimes
    JEL: D72 O10 Q30
    Date: 2017–09
  4. By: Giuseppe Albanese (Bank of Italy); Marika Cioffi (Bank of Italy); Pietro Tommasino (Bank of Italy)
    Abstract: We explore how electoral rules and cultural traits (namely, the degree of civicness) interact in shaping elected officials' behaviour. We use a dataset that includes the expenditure proposals sponsored by members of the Italian Senate from 1993 to 2012 (as well as other individual and district characteristics) and exploit the 2005 electoral reform that transformed a mainly majoritarian system into a proportional one. As a first step, we can confirm previous empirical findings: legislators elected in first-past-the-post districts show a higher propensity to sponsor locally oriented bills and to put effort into legislative activity than those elected with a closed-list proportional system. More importantly, however, we find that the effects of the change in the electoral rules are muted in areas with a high degree of civicness. We also propose a simple probabilistic voting model with altruistic preferences that is able to rationalize this finding.
    Keywords: electoral rules, provision of public goods, political economy, civicness
    JEL: D72 H41 Z10
    Date: 2017–09
  5. By: Englmaier, Florian; Roider, Andreas; Stowasser, Till; Hinreiner, Lisa
    Abstract: We provide evidence that German public energy providers, over which municipality-level politicians hold substantial sway, systematically adjust the pricing of electric energy in response to local electoral cycles. The documented pattern is in line with both, an artificial reduction in prices before an election that needs to be countermanded by future price increases, and an artificial postponement of market-driven price increases until after the election is over.
    JEL: D72 D73 H44 H72 H76 K23 L33 L94
    Date: 2017
  6. By: Yuriko Takahashi (Faculty of Political Science and Economics, Waseda University)
    Abstract: Does democracy dampen clientelism and enhance accountability in social policy making? The conventional answer to this question is that democracy is more likely to redistribute income in favor of the poor. However, recent scholarly works present evidence that the distributive politics in emerging democracies often induces office-seeking politicians to manipulate social spending for electoral gain, which make social policy less accountable to impoverished citizens. This study provides some texture to the latter argument to show that policy-oriented and institutional reforms enacted in tandem with democratization work to constrain the clientelist distribution of social spending, and help promote programmatic redistribution in favor of the poor. Focusing on the case of Mexico, I demonstrate that the introduction of conditional cash transfer programs and the development of monitoring institutions over social programs tied politicians’ hands by developing institutional constraints on discretionary spending. Using an original dataset, I compare the geographic distribution of Pronasol (Programa Nacional de Solidaridad, 1988-1994) and Progresa (Programa de Educación, Salud y Alimentación) (1997-2002), and Oportunidades (2002-2006), and demonstrate that Mexico’s anti-poverty programs became increasingly pro-poor and less clientelist over time.
    Keywords: democracy, clientelism, poverty alleviation, poverty, accountability, Mexico, Pronasol, Progresa, Oportunidades
  7. By: Joseph J. Capuno (School of Economics, University of the Philippines Diliman)
    Abstract: The Philippines has a long history of internecine warfare or conflicts, especially in Mindanao where the secessionist conflicts alone since the 1970s have resulted in enormous human and economic costs. That violent social discords remain varied and widespread in Mindanao underscores the need for a better understanding of their causes to guide policy. Applying regression analysis on a panel dataset for 2011-2014, we examine the factors behind the municipal- and city-level incidence of violent conflicts related to political, identity and shadow-economy issues in the Autonomous Region of Muslim Mindanao. Indicating that geography matters, we find evidence that conflicts spill over between neighboring localities, although the type of conflicts in one locality may not be same as that in its neighbors. Having many neighbors makes a locality more susceptible to political or identity conflicts, while those lying along the coast are more prone to shadow-economy conflicts. Indicating the importance of the quality of local governance, there are fewer cases of identity conflicts in localities where the mayor was re-elected, but more cases of shadow-economy and identity conflicts where the mayor and the vice-mayor or the district representative to Congress are relatives or belong to the same political clan. Also, we find the level of local government fiscal resources to be associated with lower incidence of identity conflicts, but also with higher incidence of disputes related to the underground economy. Moreover, the incidence of identity or shadow economy conflicts is higher in cities and in highly-urbanized provincial capitals than in municipalities. Finally, we find that political conflicts are indeed more frequent in 2013 (election year), and that both identity and shadow economy conflicts have become prevalent in 2014 than in 2011. These results identify some critical areas for interventions to reduce the occurrence or spread of violent discords in ARMM.
    Keywords: Political conflicts; identity conflicts; shadow economy; local governments; negative binomial model; Mindanao
    JEL: O17 O18 R10 H77
    Date: 2017–09
  8. By: Gold, Robert; Dippel, Christian; Heblich, Stephan; Pinto, Rodrigo
    Abstract: We identify how German voters responded to the labor market turmoil caused by increasing trade with low-wage manufacturing countries. We first establish that import competition increased voters’ support for only extreme (right) parties. We then decompose this populist ‘total effect’ of trade on voting into a ‘mediated effect’ running through labor market adjustments and an independent ‘direct effect’. Our Causal Mediation Analysis reveals that direct and indirect effect work in opposite directions.
    JEL: C36 D72 F16
    Date: 2017
  9. By: Simon, Lisa; Piopiunik, Marc; Lergetporer, Philipp
    Abstract: From 2014 onwards, Europe has witnessed an unprecedented influx of refugees. We conducted a survey experiment with almost 5,000 university students in Germany in which we randomly shifted the perception of refugees’ education level through information provision. We find that the perceived education level significantly affects respondents’ concerns regarding labor market competition, but these concerns do not translate into general attitudes toward refugees.
    JEL: H12 H53 I38 D83 D72 P16
    Date: 2017
  10. By: Yasushi Asako (School of Political Science and Economics, Waseda University); Tetsuya Matsubayashi (Osaka School of International Public Policy, Osaka University); Michiko Ueda (Department of Political Science, Syracuse University)
    Abstract: What are the fiscal consequences of legislative term limits? To answer this question, we first develop a legislative bargaining model that describes negotiations over the allocation of distributive projects among legislators with different levels of seniority. Building on several predictions from the model, we develop two hypotheses for empirical testing. First, the adoption of term limits that results in a larger reduction in the variance of seniority within a legislature increases the amount of government spending. Second, legislatures that adopt stricter term limits increase the amount of government spending, while legislatures that adopt moderate term limits show no change in the amount. We provide evidence for these hypotheses using panel data for 49 US state legislatures between 1980 and 2010
    Keywords: Legislature; seniority; term limits; government spending; elections
    JEL: C72 D72 H72
  11. By: Rahma Nida (Department of Economics, Padjadjaran University); Mohamad Fahmi (Department of Economics, Padjadjaran University)
    Abstract: The one of the factors that becomes an important indicator for voting a candidate in an election is the candidate religion. Many literatures founds that the candidate religion becomes more important than the achievements or platform offered by the candidate. In addition, in voting candidates, an individual may also be influenced by the social context. This study aims to measure whether there is influence of differences in individual social characteristics and differences in social characteristics of the community in voting candidate based on the same religion. We use multilevel logistics analysis method to answer this research. Required data is retrieved from IFLS 5 from household books and community books. Our findings are a muslim women, older Muslims, and Muslims living in the neighborhood of more Muslim percentages will tend to vote for candidates based on the same religion. However, an individual with a high level of education does not have a tendency to vote on the candidate's religion.
    Keywords: voting behavior, religion, Indonesia
    JEL: Z1
    Date: 2017–09
  12. By: Raymond (R.H.J.M.) Gradus (School of Business and Economics, Vrije Universiteit Amsterdam; Tinbergen Institute, The Netherlands); Elbert (E.) Dijkgraaf (Erasmus)
    Abstract: This paper analyzes whether Dutch municipalities became greener between 1999 and 2014 by investigating whether they implement different unit-based pricing systems. Based on their incentive, systems are ranged from green ('weight' ) to less green ('volume' ), or not green ('flat rate' ). In one-third of the municipalities, shifts took place, with 83 percent becoming greener and 17 percent less green. Political fragmentation (measured in three ways) plays a key role in explaining these shifts. There is less evidence for political motivation. Particularly, Conservative Liberals are not in favor of unit-based pricing, whereas Social Liberals are in favor. In addition, municipalities in rural and shrinking areas are more in favor of unit-based pricing.
    Keywords: local government; unit-based waste pricing; greener; less green; ideological motivation
    JEL: D72 H76 H79
    Date: 2017–09–22
  13. By: Daniele Girardi (University of Massachusetts Amherst); Samuel Bowles (Santa Fe Institute)
    Abstract: To study the effect of political and institutional changes on the economy, we look at share prices in the Santiago exchange during the tumultuous political events that characterized Chile in the early 1970s. We use a transparent empirical strategy, deploying previously unused daily data and exploiting two largely unexpected shocks which involved substantial variation in policies and institutions, providing a rare natural experiment. Allende's election and subsequent socialist experiment decreased share values, while the military coup and dictatorship that replaced him boosted them, in both cases by magnitudes unprecedented in the literature.
    Keywords: institutional shocks, natural experiment, share prices, Chile, socialism, military coup, elections
    JEL: P00 P16 D02 E02 N2
    Date: 2017
  14. By: Susumu Annaka (Ph.D. Candidate of Political Science in the Graduate School of Political Science at Waseda University); Masaaki Higashijima (Political Science in the Graduate School of Information Sciences at Tohoku University)
    Abstract: Comparativists have long debated whether democracy advances human development. Recent studies suggest that the stock of democracy is more important than the current level of democracy to predict infant mortality rates, an often-used measure of human welfare. The “stock” argument, however, does not explore whether a democratic regime change at a point in time affects people’s welfare thereafter. Moreover, the extant crossnational work encounters three problems in panel regression analysis: They do not correct for historical trends in infant mortality and the number of democracies, employ country-fixed effects on data with a short time-horizon mostly starting from 1960, and do not deal with possible endogeneity between democracy and human development. Using a newly collected panel data of infant mortality covering from 1800 to 2015, we revisit this debate. Applying the Error Correction Models (ECM) with Instrumental Variables (IV) estimation, we find that democratization has only a long-run effect on reducing infant mortality.
  15. By: Frei, Xenia; Langer, Sebastian; Lehmann, Robert; Rösel, Felix
    Abstract: Der Erfolg von Parteien unterschiedlicher politischer Ebenen ist stark voneinander abhängig. Föderale Wahlen beeinflussen regionale Wahlentscheidungen und umgekehrt (Wahlexternalitäten). In diesem Aufsatz identifizieren wir Wahlexternalitäten zwischen Deutschland insgesamt und Berlin für vier Parteien. Dafür benutzen wir Wahlumfragen. Wahlexternalitäten erklären zwischen 10% und 30% der Variation der jeweils anderen politischen Ebene. Die Effekte sind höchst heterogen zwischen den Parteien.
    JEL: C32 D72 H77
    Date: 2017

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