nep-pol New Economics Papers
on Positive Political Economics
Issue of 2017‒11‒26
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. Taxation, social protection, and governance decentralization By Epstein, Gil S.; Gang, Ira N.
  2. Determinants and Effects of Negative Advertising in Politics By Danilo P. Souza; Marcos Y. Nakaguma
  3. A Friend Who Was Supposed to Lose: How Donald Trump Was Portrayed in the Russian Media? By Anastasia Kazun; Anton Kazun
  4. Political Uncertainty and Innovation in China By Feng, Xunan; Johansson, Anders C.
  5. Policy representation by the 2017 Bundestag By Tangian, Andranik S.
  6. ‘It’s not ideal’: reconsidering ‘anger’ and ‘apathy’ in the Brexit vote among an invisible working class By McKenzie, Lisa
  7. The Political Economy of Heterogeneity and Conflict By Enrico Spolaore; Romain Wacziarg
  8. Policy representation by German parties at the 2017 federal election By Tangian, Andranik S.
  9. Voting behavior and public employment in Nazi Germany By Maurer, Stephan E.
  10. Country Reputation and Trade Policy Preferences - Using the News of the Election of Donald Trump as an Instrument By Tom Coupe; Oleksandr Shepotylo

  1. By: Epstein, Gil S.; Gang, Ira N.
    Abstract: Governments do not have perfect information regarding constituent priorities and needs. This lack of knowledge opens the door for groups to lobby in order to affect the government’s taxation levels. We examine the political economy of decentralized revenue-raising authority in light of social protection expenditures by constructing a theoretical model of hierarchical contests and comparing the implications of centralized with decentralized governance. Increasing information available to the government may generate additional expenditures by interest groups trying to affect government taxation decisions. We show the potential existence of a poverty trap as a result of decentralization in taxation decisions.
    Keywords: governance,decentralization,economic-models-of-political-processes,contests,rentseeking,intergovernmental-relations
    JEL: H77 D72 H73
    Date: 2017
  2. By: Danilo P. Souza; Marcos Y. Nakaguma
    Abstract: This paper assesses the determinants of negative advertising between candidates in electoral races ruled by majority vote, and also the effects of this type of advertising in the voter’s behavior. We evaluate, for example, how the number of candidates and how electoral rules (single-ballot versus runoff election) affects the negativity level of campaigns. We use data from Brazil’s Judiciary system for 2012 mayors election, which allows us to assess how these determinants affect differently the decision of going negative when attacker-attacked candidates were 1st-2nd or 2nd-3rd, for example, in the final vote share.
    Keywords: elections; negative advertising; political advertising
    JEL: D72 D79 C29
    Date: 2017–10–30
  3. By: Anastasia Kazun (National Research University Higher School of Economics); Anton Kazun (National Research University Higher School of Economics)
    Abstract: Donald Trump and his team have often been accused of having close ties to Russia and Russians expressed much greater support for Trump than residents of other countries. This article provides the first systematic analysis of Russian media coverage of Trump's activities during and after the election campaign. It concludes, on the basis of a sentiment analysis of relevant articles and network agendas of 500 Russian magazines and 250 leading federal newspapers, that Trump's media portrayal was not necessarily positive. During the election, Trump was portrayed by the Russian media not as Russia's favorite candidate, but as Hillary Clinton's opponent and a critic of U.S. recent policies. Only for a short period after Trump's victory in the elections, did the Russian media represent him as a friend of Russia, since there was hope that the new president would lift political and economic sanctions. Trump's policies failed to meet the expectations of the Russian people, and from the beginning of 2017, media coverage of Trump has become critical, hopes for lifting of political sanctions have weakened, and public opinion about the U.S. president has turned negative
    Keywords: Media, Donald Trump, Hillary Clinton, U.S. Presidential Election, public opinion, network agenda
    JEL: D72 L82
    Date: 2017
  4. By: Feng, Xunan (Southwestern University of Finance and Economics); Johansson, Anders C. (Stockholm China Economic Research Institute)
    Abstract: We hypothesize that political uncertainty has an adverse effect on investments in activities related to innovation. Combining two hand-collected data sets on changes in local government officials and research and development (R&D) activity at the firm level in China, we examine how political turnover influences investments in R&D. We find that a change in local political leaders is associated with a significant decrease in R&D activity. This result is robust to various robustness tests. The decrease is larger when the new political leader is promoted from outside the city in question. Moreover, the decrease is significantly larger for privately controlled firms, firms operating in regions characterized by weak economic institutions, and firms within R&D-intensive industries. Our findings suggest that political uncertainty constitutes an important channel through which the local political process influences activities related to innovation.
    Keywords: Innovation; R&D expenditures; Political turnover; Political uncertainty; Local officials; China
    JEL: G18 G32 G38 O30 O31 O32
    Date: 2017–11–15
  5. By: Tangian, Andranik S.
    Abstract: The paper estimates the policy representation of 34 German parties that have participated in the 2017 Bundestag (federal) election. For this purpose, the party positions on 31 topical issues are compared with the results of recent public opinion polls. Then we construct the party indices of popularity (the average percentage of the population represented) and universality (frequency in representing a majority). Regarding policy representation, the election winner, the conservative union CDU/CSU is ranked only 27th. The most representative among six Bundestag parties is the GRÜNE, constituting the smallest faction. In turn, the Bundestag indices of representativeness are about 40%, meaning that it is non-representative rather than representative. However, if the Bundestag were elected using 'the third vote', i.e. if the size of the Bundestag factions were made proportional to the indices of representativeness, it could significantly gain in policy representation.
    Keywords: policy representation,representative democracy,direct democracy,elections,coalitions
    JEL: D71
    Date: 2017
  6. By: McKenzie, Lisa
    Abstract: Media commentary has characterized the working class ‘leave’ voters in the UK’s EU referendum in terms of anger, apathy and frustration. There have been very few genuine attempts to document and interpret the meaning of the ‘leave’ vote among underprivileged voters who seemed to have voted for an outcome that harms their own interests. This article explores accounts and narratives from working class ‘leave’ voters through an ethnographic study of the political and social viewpoints of working class communities of East London and of ex-mining towns of Nottinghamshire. The article puts into fuller context the anger and apathy of being ‘left out’, arguing that being ‘left out’ has been part of working class political narratives for over 30 years. Going beyond frustration and apathy, a significant part of the narrative of working people was of ‘not existing’, suggesting certain important linkages with ongoing debates about new ways of conceptualizing class differences and class structures. The article shows how macro-stage political events such as a referendum about Europe can often be usefully illuminated by taking seriously the micro experiences on the ground.
    Keywords: working class; Brexit; ethnography; inequality
    JEL: N0
    Date: 2017–06–01
  7. By: Enrico Spolaore; Romain Wacziarg
    Abstract: In this paper 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.
    Keywords: rival goods, public goods, war, conflict, heterogeneity, cultural distance
    JEL: D74
    Date: 2016
  8. By: Tangian, Andranik S.
    Abstract: The paper estimates the policy representation of 34 German parties that participate in the 2017 Bundestag (federal) election. For this purpose, the party positions on 31 topical issues are compared with the results of recent public opinion polls. Then we construct the party indices of popularity (the average percentage of the population represented) and universality (frequency in representing a majority). We find that the currently governing conservative union CDU/CSU and the social-democratic SPD are ranked only 27th and 22nd, respectively, being least representative among the four parties in the 2013 Bundestag. The most representative Bundestag faction is the GRÜNE - the smallest one. The current Bundestag representativeness is about 50%, as if the correspondence with the electorate's preference on every policy issue is being decided by tossing a coin, meaning that the 2013 Bundestag is practically unrelated to public opinion.
    Keywords: policy representation,representative democracy,direct democracy,elections,coalitions
    JEL: D71
    Date: 2017
  9. By: Maurer, Stephan E.
    Abstract: This paper analyzes whether the German National Socialists used economic policies to reward their voters after coming to power in 1933. Using newly-collected data on public employment from the German censuses in 1925, 1933, and 1939 and addressing the potential endogeneity of the NSDAP vote share in 1933 by way of an instrumental variables strategy based on a similar party in Imperial Germany, I find that cities with higher NSDAP vote shares experienced a relative increase in public employment: for every additional percentage point in the vote share, the number of public employment jobs increased by around 2.5 percent.
    JEL: N0
    Date: 2017–07–14
  10. By: Tom Coupe (University of Canterbury); Oleksandr Shepotylo
    Abstract: Using quasi-experimental data, a survey that was held immediately before and after the November 8th, 2016 USA elections, we analyse the impact of reputation on trade policy preference and find that the unexpected election of Donald Trump as 45th president of the USA had a sizeable negative effect on the reputation of the USA in Europe, as measured by the expectations of EU citizens about the future evolution of the USA. But this negative reputational shock seems to have affected in a positive (though not always significant) way the support for future economic cooperation with the USA, as measured by the support of EU citizens for a free trade and investment treaty with the USA. This provides some support for the idea that reputation and formal institutions are substitutes.
    Keywords: Reputation, Trade agreements, Trump, TTIP
    JEL: F14 F55 C26 F50
    Date: 2017–11–01

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