nep-pol New Economics Papers
on Positive Political Economics
Issue of 2018‒04‒16
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. The role of local voting rights for foreign citizens – a catalyst for integration? By Engdahl, Mattias; Lindgren, Karl-Oskar; Rosenqvist, Olof
  2. A Swing-State Theorem, with Evidence By Xiangjun Ma; John McLaren
  3. Immigration and Electoral Support for the Far-Left and the Far-Right By Anthony Edo; Yvonne Giesing; Jonathan Öztunc; Panu Poutvaara
  4. Minority Groups and Success in Election Primaries By Epstein, Gil S.; Heizler (Cohen), Odelia
  5. Geschichte und Politökonomie deutscher Theatersubventionen By Achten-Gozdowski, Jennifer
  6. Debt in Political Campaigns By Ovtchinnikov, Alexei V.; Valta, Philip
  7. Media, Fake News, and Debunking By Ngo Van Long; Martin Richardson; Frank Stähler
  8. A Theory of Small Campaign Contributions By Laurent Bouton; Micael Castanheira; Allan Drazen
  9. The Political Economy of Ideas By Mukand, Sharun W.; Rodrik, Dani
  10. Corruption, Political Instability and Development Nexus in Africa: A Call for Sequential Policies Reforms By Adefeso, Hammed
  11. Defining Political Risk in International Affairs By Violeta Iftinchi
  12. Peculiarities of cyber security management in the process of internet voting implementation By Tadas Limba; Konstantin Agafonov; Linas Paukštė; Martynas Damkus; Tomas Plėta
  13. The Impact of Population Aging on the Global Value System and Political Dynamics By Korotaev, Andrey; Shulgin, Sergey; Zinkina, Yulia; Novikov, Kirill

  1. By: Engdahl, Mattias (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindgren, Karl-Oskar (IFAU - Institute for Evaluation of Labour Market and Education Policy); Rosenqvist, Olof (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: We study the short- and long-term impact of local enfranchisement of foreign citizens born outside the EU on political integration outcomes. Local voting rights for foreigners were introduced in the Swedish electoral system in 1976. This right to vote is conditional on having spent at least three years in Sweden prior to the election. Until 1998 Swedish elections at all levels were held every three years; since then they have been held every four years. The wait time before the first opportunity to vote thus differs substantially for immigrants immigrating just before this cutoff date versus just after. Our analysis shows that immigrants whose timing of arrival makes them eligible to vote after slightly more than three years in the country are not more likely to naturalize or vote in later elections compared to immigrants whose timing of arrival means they must wait six or seven years to vote. The results suggest that earlier opportunities for political participation do not improve subsequent political integration of immigrants as measured by naturalization and voting.
    Keywords: Local election; voting rights; noncitizens; integration; naturalization; turnout;
    JEL: D02 D72 J15
    Date: 2018–04–06
  2. By: Xiangjun Ma; John McLaren
    Abstract: We study the effects of local partisanship in a model of electoral competition. Voters care about policy, but they also care about the identity of the party in power. These party preferences vary from person to person, but they are also correlated within each state. As a result, most states are biased toward one party or the other (in popular parlance, most states are either ‘red’ or ‘blue’). We show that, under a large portion of the parameter space, electoral competition leads to maximization of welfare with an extra weight on citizens of the ‘swing state:’ the one that is not biased toward either party. The theory applies to all areas of policy, but since import tariffs are well-measured they allow a clean test. We show empirically that the US tariff structure is systematically biased toward industries located in swing states, after controlling for other factors. Our best estimate is that the US political process treats a voter living in a non-swing state as being worth 77% as much as a voter in a swing state. This represents a policy bias orders of magnitude greater than the bias found in studies of protection for sale.
    JEL: D72 F13
    Date: 2018–03
  3. By: Anthony Edo; Yvonne Giesing; Jonathan Öztunc; Panu Poutvaara
    Abstract: Immigration has become one of the most divisive political issues in the United States, the United Kingdom, France and several other Western countries. We estimate the impact of immigration on voting for far-left and far-right candidates in France, using panel data on presidential elections from 1988 to 2017. To derive causal estimates, we instrument more recent immigration flows by past settlement patterns in 1968. We find that immigration increases support for far-right candidates and has no robust effect on far-left voting. The increased support for far-right candidates is driven by low educated immigrants from non-Western countries.
    Keywords: voting, immigration, political economy
    JEL: D72 F22 J15 P16
    Date: 2017
  4. By: Epstein, Gil S. (Bar-Ilan University); Heizler (Cohen), Odelia (Academic College of Tel-Aviv Yaffo)
    Abstract: In this paper, we focus on the effect of belonging to one or more minority groups on the probability of success in primary elections. Using a unique dataset of candidates in Israeli primaries, we find that while being a new immigrant, a woman or a Muslim decreases the chances of electoral success, candidates who belong to two minority groups have an advantage in the race. In some cases of candidates belonging to two minority groups, their chances of success are not only higher than for a candidate from one minority group, but also than for a candidate from the majority.
    Keywords: primary elections, success, minority groups, majority groups
    JEL: J15 D72
    Date: 2018–02
  5. By: Achten-Gozdowski, Jennifer
    Abstract: Public theatres and operas in Germany currently receive an annual funding of 2 – 2,5 billion Euros by the German Laender and municipalities. The presented monograph shows that this special kind of cultural subsidy can be traced back to the Late Middle Ages, and that theatres and operas have always been subsidized for political reasons. Employing a panel data set, the empirical analysis also demonstrates clearly that since German reunification, a higher propor-tion of center-right party members in the Laender parliaments entails higher subsidies for theatres and operas. In addition, a classical political budget cycle can be observed, with higher subsidies being granted in election years.
    Keywords: Public Subsidies for Theatres and Operas, Political Economy, Political Budget Cycle, Cultural Economics, German Economic History
    JEL: D72 H72 Z11
    Date: 2018–03
  6. By: Ovtchinnikov, Alexei V.; Valta, Philip
    Abstract: Debt is a significant source of funding of political campaigns, with almost half of all campaigns relying on some form of debt. We analyze the incentives created by this type of debt financing. We show that indebted politicians raise more funds in subsequent elections, especially from special interest groups. Consistent with votes-for-money arrangements, indebted politicians vote for the benefit of those interest groups that help funding their reelection campaigns. The findings support the hypothesis that debt creates distortions, as it forces indebted politicians to take policy positions that are not aligned with the local constituents’ interests.
    Keywords: Debt financing; Political campaigns; Voting behavior
    JEL: D72 G32 G38 L51
    Date: 2018–07–01
  7. By: Ngo Van Long; Martin Richardson; Frank Stähler
    Abstract: We construct a Hotelling-type model of two media providers, each of whom can issue fake and/or real news and each of whom can invest in the debunking of their rival’s fake news. The model assumes that consumers have an innate preference for one provider or the other and value real news. However, that valuation varies according to their bias favoring one provider or the other. We demonstrate a unique subgame perfect Nash equilibrium in which only one firm issues fake news and we show, in this setting, that increased polarization of consumers - represented by a wider distribution - increases the prevalence of both fake news and debunking expenditures and is welfare reducing. We also show, inter alia, that a stronger preference by consumers for their preferred provider lowers both fake news and debunking. Finally, we compare monopoly and duopoly market structures in terms of “fake news” provision and show that a public news provider can be welfare improving.
    Keywords: fake news, media, debunking
    JEL: D21 L15 L82
    Date: 2018
  8. By: Laurent Bouton; Micael Castanheira; Allan Drazen
    Abstract: We present a model of electorally-motivated, small campaign contributions. The analysis uncovers interesting interactions among small donors and has novel implications for the effect of income inequality on total contributions and election outcomes. Moreover, it helps explain a number of empirical observations that seem anomalous when contributions are driven by the consumption or the influence motives. We also study the impact of different forms of campaign finance laws on contribution behavior, probabilities of electoral outcomes, and welfare. Our results are consistent with more behaviorally motivated donors when contributions are driven by the parties' strategic solicitation of funds. We also indicate how the model and its results may have important implications for empirical work on campaign contributions.
    JEL: D72
    Date: 2018–03
  9. By: Mukand, Sharun W. (University of Warwick); Rodrik, Dani (Harvard University)
    Abstract: We develop a conceptual framework to highlight the role of ideas as a catalyst for policy and institutional change. We make an explicit distinction between ideas and vested interests and show how they feed into each other. In doing so the paper integrates the Keynes-Hayek perspective on the importance of ideas with the currently more fashionable Stigler-Becker (interests only) approach to political economy. We distinguish between two kinds of ideational politics { the battle among different worldviews on the efficacy of policy (worldview politics) versus the politics of victimhood, pride and identity (identity politics). Political entrepreneurs discover identity and policy `memes' (narratives, cues, framing) that shift beliefs about how the world works or a person's belief of who he is (i.e. identity). Our framework identifies a complementarity between worldview politics and identity politics and illustrates how they may reinforce each other. In particular, an increase in identity polarization may be associated with a shift in views about how the world works. Furthermore, an increase in income inequality is likely to result in a greater incidence of ideational politics. Finally, we show how ideas may not just constrain, but also `bite' the interests that helped propagate them in the rst instance.
    Date: 2018
  10. By: Adefeso, Hammed
    Abstract: The study examined the extent of the effect of control of corruption and political (in)stability on economic development in African countries. The study employed System General Method of Moment (GMM) framework on recent pooled of data from thirty-seven African countries over a period of 1996 and 2016.The study found evidence of political instability though not statistically significant and ineffective control of corruption in African countries. The study also found that simultaneous implementation of policies towards ensuring political stability and effective control of corruption are not complementary and has more negative impact on development in the region. Both policies are substitute in the context of African economy, and hence should be pursued through sequential reforms. This study also found that continuous implementation of the current policies towards having both political stability and effective corruption control may not have positive impact on development in Africa. The study strongly supports sequential policy reform in the region and also recommends review of the ongoing policies towards ensuring effective control of corruption in the region.
    Keywords: Political instability; corruption; development; GMM; Africa
    JEL: O1 O17
    Date: 2018–02–28
  11. By: Violeta Iftinchi (Department of International Economics and Business, Bucharest University of Economic Studies)
    Abstract: În cautarea de noi oportunitați de afaceri, societațile transnaționale (STN) se confrunta cu o varietate de riscuri care le afecteaza activitatea pe piața internaționala. Unul dintre aceste riscuri este riscul politic. Spre deosebire de alte tipuri de riscuri cum ar fi riscul valutar, riscul de credit sau riscul operațional, riscul politic nu a beneficiat de aceeași atenție nici din partea cercetatorilor și nici din partea STN-urilor. Lucrarea îsi propune sa ofere o delimitare mai clara a conceptului de risc politic. O definitie a riscului politic trebuie sa tina seama de multiplele interdependente si variabile care trebuie analizate, cum ar fi delimitarea conceptului de risc de tara si cel de risc politic, analiza relatiei dintre riscul politic si incertitudine, dintre riscul politic si instabilitatea politica, dintre riscul real si riscul perceput, finalitatea riscului politic, dimensiunea macro sau micro și definirea riscului politic prin prisma asigurarilor.
    Keywords: societati transnationale, risc politic, comert international
    JEL: M10
    Date: 2018–03
  12. By: Tadas Limba (Mykolas Romeris University); Konstantin Agafonov (Mykolas Romeris University); Linas Paukštė (Cognit consult JSC); Martynas Damkus (Mykolas Romeris University); Tomas Plėta (NATO Energy Security Center of Excellence)
    Abstract: The modern world could not be imagined without the information and communications technology. Today's society, its life and social relations are deeply influenced by the virtual space, and that stands as a reason why the world's Information Technology specialists and representatives of various branches of science have been focusing on solving the problems in the sphere of cyber security. Software and technological solutions used in reorganization of the activity of private sector nowadays are widely used in the public sector as well. By using technologies, countries put their effort into involving their citizens into the process of governance and direct participation in various political processes inside the state itself, and one of the most widespread tools to motivate the citizen-to-state political participation and resident's direct interaction in political processes is internet voting. Authors of scientific literature investigate how cybersecurity management is being comprehended and analyzed in technological, legal, management, economical, human resource management and other aspects; how cyber security is analyzed in the context of services provided by institutions of public administration; which means of cyber security management are essential, in order to speed up the processes of establishing e-voting systems. In this article the authors investigate the theoretical aspects of cyber security management in internet voting, analyze the global experience in the sphere of cyber security management implementation with the help of already established e-voting systems, evaluate the properties of cyber security management in the process of implementation of internet voting in Lithuania, as well as present audience with an in-depth analysis of the opinion of the local population, cyber security and voting system specialists, concerning the matters and possibilities of establishing internet voting in Lithuania. The authors also propose a cyber security management model, which could be used in the process of implementation (both preparation and establishment) of the internet voting system in Lithuania.
    Keywords: cyber security model,cyber security management,cyber security,e-voting,internet voting
    Date: 2017–12–29
  13. By: Korotaev, Andrey (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Shulgin, Sergey (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Zinkina, Yulia (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Novikov, Kirill (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: In this paper, we study the global value system and the process of its change as a result of population aging, as well as the influence of the value system on political and social dynamics. The analysis is also carried out using the microeconomic database of the World Values ??Survey (VOTS / WVS) using APC models for separating the cohort and age effect. The paper estimates two model specifications in which cohort and age effects are singled out for individual measurements of individual values. With the use of the UN Model and UN Demographic Projections estimates of 2017, we make estimates of the dynamics of the trajectories of individual value measurements and analyze of the possible consequences of the projected changes.
    Date: 2018–03

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