nep-pol New Economics Papers
on Positive Political Economics
Issue of 2018‒03‒26
nine papers chosen by
Eugene Beaulieu
University of Calgary

  1. Guns, Environment, and Abortion: How Single-Minded Voters Shape Politicians’ Decisions* By Laurent Bouton; Paola Conconi; Francisco Pino; Maurizio Zanardi
  2. The Political Economy of Collective Memories: Evidence from Russian Politics By Alessandro Belmonte; Michael Rochlitz
  3. Political Alignment, Attitudes Toward Government and Tax Evasion By Julie Berry Cullen; Nicholas Turner; Ebonya Washington
  4. On the Political Economy of Income Taxation By Berliant, Marcus; Gouveia, Miguel
  5. Implementation by vote-buying mechanisms By Jon X. Eguia; Dimitrios Xefteris
  6. Fake News and Indifference to Truth: Dissecting Tweets and State of the Union Addresses by Presidents Obama and Trump By David E. Allen; Michael McAleer; David M. Reid
  7. A Model of Ideological Thinking By Le Yaouanq, Yves
  8. The culture of overconfidence By Bhaskar, Venkataraman; Thomas, Caroline
  9. Democratic Tipping Points By Antonio Ciccone

  1. By: Laurent Bouton; Paola Conconi; Francisco Pino; Maurizio Zanardi
    Abstract: We study how electoral incentives a.ect policy choices on secondary issues, which only minorities of voters care intensely about. We develop a model in which o.ce and policy motivated politicians choose to support or oppose regulations on these issues. We derive conditions under which politicians .ip-.op, voting according to their policy preferences at the beginning of their terms, but in line with the preferences of single-issue minorities as they approach re-election. To assess the evidence, we study U.S. senators’ votes on gun control, environment, and reproductive rights. In line with our model’s predictions, election proximity has a pro-gun e.ect on Democratic senators and a pro-environment e.ect on Republican senators. These e.ects only arise for non-retiring senators, who represent states where the single-issue minority is of intermediate size. Also in line with our theory, election proximity has no impact on senators’ decisions on reproductive rights, because of the presence of single-issue minorities on both sides.
    Keywords: Electoral Incentives, Environnent, Gun Control, Reproductive Rights
    Date: 2018–03
  2. By: Alessandro Belmonte (IMT Institute for Advanced Studies); Michael Rochlitz (National Research University Higher School of Economics)
    Abstract: How do political elites exploit salient historical events to reactivate collective memories and entrench their power? We study this question using data from the Russian Federation under Putin. We document a substantial recollection campaign of the traumatic transition the Russian population experienced during the 1990s, starting with the year 2003. We combine this time discontinuity in the recollection of negative collective memories with regional-level information about traumatic experiences of the 1990s. Our results show that Russians vote more for the government, and less for the liberal political opposition, in regions that suffered more during the transition period, once memories from the period are recalled on state-controlled media. We then provide additional evidence on the mechanism and nd, using a text analysis of local newspapers, that in those regions where local newspapers more intensively recall the chaotic 1990s, electoral support for the government is higher. Finally, we show that in regions in which the media is less independent from the state, this recollection campaign is more effective.
    Keywords: collective memory, recollection of the past, voting, Russia.
    JEL: D74 D83 P16 Z13
    Date: 2018
  3. By: Julie Berry Cullen; Nicholas Turner; Ebonya Washington
    Abstract: We ask whether attitudes toward government play a causal role in the evasion of U.S. personal income taxes. We first use individual-level survey data to demonstrate a link between sharing the party of the president and trust in the administration generally and opinions on taxation and spending policy, more specifically. Next, we move to the county level, and measure tax behavior as elections, decided by the voting behavior in swing-states, push voters in partisan counties into and out of alignment with the party of the president. Using IRS data, we find that reported taxable income increases as a county moves into alignment, with the increases concentrated in income sources that are easily evaded, due to lack of third-party reporting. Corroborating the view that evasion falls, potentially suspect EITC claims and audit rates also fall. Our results provide real-world evidence that a positive outlook on government lowers tax evasion.
    Keywords: tax evasion, tax morale
    JEL: D72 H24 H26 H30
    Date: 2018
  4. By: Berliant, Marcus; Gouveia, Miguel
    Abstract: The literatures dealing with voting, optimal income taxation, and implementation are integrated here to address the problem of voting over income taxes. In contrast with previous articles, general nonlinear income taxes that affect the labor-leisure decisions of consumers who work and vote are allowed. Uncertainty plays an important role in that the government does not know the true realizations of the abilities of consumers drawn from a known distribution, but must meet the realization-dependent budget. Even though the space of alternatives is infinite dimensional, conditions on tax requirements such that a majority rule equilibrium exists are found. Finally, conditions are found to assure existence of a majority rule equilibrium when agents vote over both a public good and income taxes to finance it.
    Keywords: Voting; Income taxation; Public good
    JEL: D72 D82 H21 H41
    Date: 2018–02–07
  5. By: Jon X. Eguia; Dimitrios Xefteris
    Abstract: A vote-buying mechanism is such that each agent buys a quantity of votes x to cast for an alternative of her choosing, at a cost c(x), and the outcome is determined by the total number of votes cast for each alternative. In the context of binary decisions, we prove that the choice rules that can be implemented by vote-buying mechanisms in large societies are parameterized by a positive parameter rho, which measures the importance of individual preference intensities on the social choice: The limit with rho= 0 is majority rule, rho = 1 is utilitarianism, and rho?8 is the Rawlsian maximin rule. We show that any vote-buying mechanism with limit cost elasticity (1 rho)/rho as x?0 implements the choice rule defined by rho. The utilitarian efficiency of quadratic voting (Lalley and Weyl, 2016) follows as a special case.
    Keywords: implementation; mechanism design; vote-buying; social welfare; utilitarianism; quadratic voting
    JEL: D72 D71 D61
    Date: 2018–03
  6. By: David E. Allen (University of Sydney, Asia University, Edith Cowan University); Michael McAleer (Asia University, University of Sydney Business School, Yokohama National University); David M. Reid (Seattle University)
    Abstract: State of the Union Addresses (SOUA) by two recent US Presidents, President Obama (2016) and President Trump (2018), and a series of recent of tweets by President Trump, are analysed by means of the data mining technique, sentiment analysis. The intention is to explore the contents and sentiments of the messages contained, the degree to which they differ, and their potential implications for the national mood and state of the economy. President Trump's 2018 SOUA and his sample tweets are identified as being more positive in sentiment than President Obama's 2016 SOUA. This is confirmed by bootstrapped t tests and non-parametric sign tests on components of the respective sentiment scores. The issue of whether overly positive pronouncements amount to self-promotion, rather than intrinsic merit or sentiment, is a topic for future research.
    Keywords: Sentiment Analysis; Polarity; Bootstrapped t tests; Sign tests,
    JEL: A1 C88 C44 Z0
    Date: 2018–03–07
  7. By: Le Yaouanq, Yves (LMU)
    Abstract: This paper develops a theory in which heterogeneity in political preferences produces a partisan disagreement about objective facts. A political decision involving both idiosyncratic preferences and scientific knowledge is considered. Voters form motivated beliefs in order to improve their subjective anticipation of the future political outcome. In equilibrium, they tend to deny the scientific arguments advocating the political orientations that run counter to their interests. Collective denial is the strongest in societies where contingent policy is the least likely to be implemented, either because of voters\' intrinsic preferences or because of rigidities in the political process. The theory predicts that providing mixed evidence produces a temporary polarization of beliefs, but that disclosing unequivocal information eliminates the disagreement.
    Keywords: beliefs; ideology; cognition; disagreement; polarization;
    JEL: D72 D81 D83 D84 Z13
    Date: 2018–03–19
  8. By: Bhaskar, Venkataraman; Thomas, Caroline
    Abstract: Why do political leaders or managers persist with their pet projects and policies despite bad news? When project continuation is a more informative experiment than project termination, a reputationally concerned leader is biased towards continuation, as it enables her to disclose her private information. Perceived overconfidence on the part of the leader aggravates this tendency, even when the leader is not, in fact, overconfident. Higher-order beliefs regarding overconfidence can induce inefficient equilibrium selection even when it is ``almost common knowledge" that the leader is not overconfident. Thus, a culture where leaders are expected to be overconfident can have undesirable effects even upon leaders who have correct beliefs.
    Keywords: Higher-order beliefs; Mis-specified models; Non-common priors; overconfidence; Policy persistence
    JEL: C73 D72 D82
    Date: 2018–02
  9. By: Antonio Ciccone
    Abstract: I examine whether transitory events can tip the scales against authoritarian regimes and lead to persistent democratization. I think of situations where this is a possibility as democratic tipping points. The transitory events I focus on are rainfall shocks in the most agricultural countries in the world. I show that while these shocks only affect agricultural output contemporaneously, they have persistent effects on political institutions. Authoritarian regimes experiencing negative rainfall shocks are more likely to be democratic three, five, and ten years later.
    Keywords: transitory events, persistent democratization
    JEL: E02 O1 Q1
    Date: 2018–03

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