nep-pol New Economics Papers
on Positive Political Economics
Issue of 2018‒05‒21
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Political disagreement and information in elections By Alonso, Ricardo; Câmara, Odilon
  2. A Two-Party System under the Proportional Rule is Possible: Strategic Voting in the Lab By Francesco, De Sinopoli; Giovanna, Iannantuoni; Valeria, Maggian; Stefania, Ottone;
  3. Childhood harshness induces long-lasting preference for authoritarian leaders By Lou Safra; Yann Algan; Teodora Tecu; Julie Grèzes; Nicolas Baumard; Coralie Chevallier
  4. One Mandarin Benefits the Whole Clan: Hometown Favoritism in an Authoritarian Regime By Quoc-Anh Do; Kieu-Trang Nguyen; Anh N. Tran
  5. Women Leaving the Playpen: The Emancipating Role of Female Suffrage By Michaela Slotwinski; Alois Stutzer
  6. The flip side of power By Friedel Bolle; Philipp E. Otto
  7. Intergenerational policies, public debt, and economic growth: a politico{economic analysis By Real Arai; Katsuyuki Naito; Tetsuo Ono
  8. Simultaneous and Sequential Voting under General Decision Rules By Friedel Bolle
  9. Do CEOs affect employees' political choices? By Ilona Babenko; Viktar Fedaseyeu; Song Zhang
  10. The Politics of Selecting the Bench from the Bar: The Legal Profession and Partisan Incentives to Introduce Ideology into Judicial Selection By Bonica, Adam; Sen, Maya
  11. The Political Economy of Automation: Occupational Automatability and Preferences for Redistribution By van Hoorn, Andre
  12. Global Crises and Populism: the Role of Eurozone Institutions By Luigi Guiso; Helios Herrera; Massimo Morelli; Tommaso Sonno
  13. Recursive Representation in the Representative System By Mansbridge, Jane
  14. Group Size, Collective Action and Complementarities in Efforts By Cheikbossian, Guillaume; Fayat, Romain

  1. By: Alonso, Ricardo; Câmara, Odilon
    Abstract: We study the role of re-election concerns in incumbent parties' incentives to shape the information that reaches voters. In a probabilistic voting model, candidates representing two groups of voters compete for office. In equilibrium, the candidate representing the majority wins with a probability that increases in the degree of political disagreement — the difference in expected payoffs from the candidates' policies. Prior to the election, the office-motivated incumbent party (IP) can influence the degree of disagreement through policy experimentation — a public signal about a payoff-relevant state. We show that if the IP supports the majority candidate, then it strategically designs this experiment to increase disagreement and, hence, the candidate's victory probability. We define conditions such that the IP chooses an upper-censoring experiment and the experiment's informativeness decreases with the majority candidate's competence. The IP uses the experiment to increase disagreement even when political disagreement is due solely to belief disagreement.
    Keywords: Disagreement; Bayesian persuasion; Strategic experimentation; Voting
    JEL: D72 D83
    Date: 2016–11–02
  2. By: Francesco, De Sinopoli; Giovanna, Iannantuoni; Valeria, Maggian; Stefania, Ottone;
    Abstract: In this study, we implement a series of voting games in the laboratory to test whether a strategic voting behavior in a proportional system would arise and induce a two-party system. In each voting game, a finite number of subjects with single-peaked preferences, uniformly distributed on a 0–20 line, are asked to vote for a number within the interval 0–20. The policy outcome is the average of the chosen numbers—a realistic representation of a compromise between parties in a parliament elected through the proportional rule. Our main result shows that polarization and strategic voting occur in the proposed proportional rule scenario. Moreover, experience and information concerning the electoral outcome of the previous period drive individuals to opt for strategic voting.
    Keywords: Proportional representation, strategic voting, polarization, political compromise, laboratory experiment, information
    JEL: C91 C92 D72
    Date: 2018–05–16
  3. By: Lou Safra (École normale supérieure - Paris (ENS Paris)); Yann Algan (Département d'économie); Teodora Tecu (University of Bucharest); Julie Grèzes (École normale supérieure - Paris (ENS Paris)); Nicolas Baumard (École normale supérieure - Paris (ENS Paris)); Coralie Chevallier (École normale supérieure - Paris (ENS Paris))
    Abstract: Understanding the origins of political authoritarianism is of key importance for modern democracies. Recent works in evolutionary psychology suggest that human cognitive preferences may be the output of a biological response to early stressful environments. In this paper, we hypothesized that people's leader preferences are partly driven by early signals of harshness. We experimentally elicited children's (Study 1) and adults' (Study 2) political preferences using faces controlled for dominance and trustworthiness and showed that early childhood harshness has an enduring effect on adult political attitudes. Importantly, this effect was further confirmed using self-reported extreme authoritarianism (Study 2) and by the analysis of the large database of the European Value Survey (Study 3). We discuss the potential political implications of this early calibration of leader preferences.
    Keywords: Authoritarianism; Poverty; Childhood; Social perception; Dominance; Politics
    Date: 2017–09
  4. By: Quoc-Anh Do (Département d'économie); Kieu-Trang Nguyen (London School of Economics and Political Science); Anh N. Tran (Indiana University)
    Abstract: We study patronage politics in authoritarian Vietnam, using an exhaustive panel of ranking officials from 2000 to 2010 to estimate their promotions' impact on infrastructure in their hometowns of patrilineal ancestry. Native officials' promotions lead to a broad range of hometown infrastructure improvement. Hometown favoritism is pervasive across all ranks, even among officials without budget authority, except among elected legislators. Favors are narrowly targeted toward small communes that have no political power, and are strengthened with bad local governance and strong local family values. The evidence suggests a likely motive of social preferences for hometown.
    Keywords: patronage politics; Vietnam; hometown
    JEL: D72 H76 O15 O17 O18 P25 Z13
    Date: 2017–10
  5. By: Michaela Slotwinski; Alois Stutzer
    Abstract: The role of women in Western societies changed dramatically in the 20th century. We study how political empowerment affected women’s emancipation as reflected in their life choices like marital decisions and labor market participation. The staggered introduction of female suffrage in Swiss states allows us to exploit the variation in the age women experienced enfranchisement to estimate the differences in life choices between women who were socialized in a world where women had a formal say in politics and those who were mainly socialized before. Our empirical findings document that political empowerment strongly increased female labor force participation, weakened marital bonds and motivated human capital investment. Moreover, being socialized with female suffrage increased long-term voting participation and perceptions of control. Our evidence suggests that changes in formal political institutions hold the power to change norms.
    Keywords: female suffrage, voting rights, institutions, norms, female labor force participation, marital choices, voting participation, efficacy
    JEL: D02 D72 J12 J16 J22 J24 Z13
    Date: 2018
  6. By: Friedel Bolle (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder)); Philipp E. Otto (European University Viadrina, Frankfurt (Oder))
    Abstract: Based on power indices as well as intuition, the chairman of a committee whose vote decides in the case of a draw has more power than ordinary voters. Even more powerful are members with veto right, who can block a majority vote. We pose the question whether giving one of the players in a majority voting game more power is beneficial for the powerful individual and/or the community. We find that, in our environment, the introduction of a powerful player is efficiency-improving, but that powerful players earn less than their ordinary co-players. Our environment is a Binary Threshold Public Good game which can also be interpreted as a general non- cooperative voting game. We supplement our investigation by successfully explaining behavior as a finite mixture of mostly equilibrium strategies.
    Keywords: veto power; tie-breaking power; binary threshold public goods; experiment
    JEL: D71 D72 H41
    Date: 2017–03
  7. By: Real Arai (Department of Management, Kochi University of Technology); Katsuyuki Naito (Faculty of Economics, Asia University); Tetsuo Ono (Graduate School of Economics, Osaka University)
    Abstract: This study presents a two-period overlapping-generations model with endoge- nous growth. In each period, the government representing young and old gener- ations provides a public good financed by labor income taxation and public debt issuance, and the government's policies are determined by probabilistic voting. Increased political power of the old lowers economic growth. A debt-ceiling rule is considered to resolve the negative growth effect, but it creates a trade-off between generations in terms of welfare.
    Keywords: public debt; probabilistic voting; Markov perfect equilibrium; eco- nomic growth
    JEL: D72 H41 H63 O43
    Date: 2018–04
  8. By: Friedel Bolle (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder))
    Abstract: In an economic theory of voting, voters have positive or negative costs of voting in favor of a proposal and positive or negative benefits from an accepted proposal. When votes have equal weight then simultaneous voting mostly has a unique pure strategy Nash equilibrium which is independent of benefits. Voting with respect to (arbitrarily small) costs alone, however, often results in voting against the “true majority” (Groseclose and Milyo, 2010). If voting is sequential as in the roll call votes of the US Senate then, in the unique subgame perfect equilibrium, the ”true majority” prevails (Groseclose and Milyo, 2013). It is shown that the result for sequential voting holds also with different weights of voters (shareholders), with multiple necessary majorities (EU decision making), or even more general rules. Simultaneous voting in the general model has more differentiated results.
    Keywords: Voting, free riding, binary decisions, unique pure strategy equilibria
    JEL: H41 D71
    Date: 2018–05
  9. By: Ilona Babenko; Viktar Fedaseyeu; Song Zhang
    Abstract: We analyze whether CEOs influence their employees’ political choices whether this influence has implications for firm value. We find that employees donate three times more money to CEO-supported political candidates than to other candidates. This relation also holds around CEO departures, including plausibly exogenous departures due to retirement or death. Equity returns are significantly higher when CEO-supported candidates win elections than when employee-supported candidates win. Further, CEO influence is strongest in firms with the largest potential benefits from political participation and firms that explicitly advocate for political candidates. Our results suggest that CEOs are a political force that benefits shareholders
    Keywords: campaign contributions, elections, voting, CEOs, political activism, PACs, political candidates, voter turnout
    JEL: D72 P48 G30
    Date: 2017
  10. By: Bonica, Adam (Stanford University); Sen, Maya (Harvard University)
    Abstract: Using a new dataset capturing the ideological positioning of nearly half a million U.S. judges and lawyers, we present evidence showing how ideology affects the selection of judges across federal and state judiciaries. We document that the higher the court, the more it deviates ideologically from the ideology of attorneys, suggesting ideology plays a strong role in judicial selection. We also show ideology plays stronger roles in jurisdictions where judges are selected via political appointments or partisan elections. Our findings suggest that ideology is an important component of judicial selection primarily where (1)using ideology leads to expected benefits to politicians, (2) when the jurisdiction’s selection process allows ideology to be used, and (3) where it concerns the most important courts. The study is the first to provide a direct ideological comparison across judicial tiers and between judges and lawyers and to explain how and why American courts become politicized.
    Date: 2017–12
  11. By: van Hoorn, Andre
    Abstract: Although the importance of technological change for increasing prosperity is undisputed and economists typically deem it unlikely that labor-saving technology causes long-term employment losses, people’s anxiety about automation and its distributive consequences can be an important shaper of economic and social policies. This paper considers the political economy of automation, proposing that individuals in occupations that are more at risk of losing their job to automation have stronger preferences for government redistribution. Analysis of cross-national individual-level survey data from three different sources confirms the effect of occupational automation risk on redistribution preferences. The same effect is found when considering indirect exposure to automation risk through the occupation of one’s spouse or partner and using the automatability of individuals’ own occupation as a generic control variable. In addition, the effect is not limited to the preference for redistribution in general but extends to a preference for a specific policy with redistributive consequences, namely the preference for government support of declining industries.
    Keywords: Preferences for redistribution; automation; social insurance; robotization; task content; welfare state; routineness
    JEL: J23 J24 J31 O14
    Date: 2018–05–02
  12. By: Luigi Guiso (EIEF and CEPR); Helios Herrera (Warwick University); Massimo Morelli (Bocconi University and CEPR); Tommaso Sonno (London School of Economics, Université Catholique de Louvain and F.R.S-FNRS)
    Abstract: Populist parties are likely to gain consensus when mainstream parties and status quo institutions fail to manage the shocks faced by their economies. Institutional constraints, which limit the possible actions in the face of shocks, result in poorer performance and frustration among voters who turn to populist movements. We rely on this logic to explain the different support of populist parties among European countries in response to the globalization shock and to the 2008-2011 financial and sovereign debt crisis. We predict a greater success of populist parties in response to these shocks in Euro zone countries, and our empirical analysis confirms this prediction. This is consistent with voters’ frustration for the greater inability of the Euro zone governments to react to difficult-to-manage globalization shocks and financial crises. Our evidence has implications for the speed of construction of political unions. A slow, staged process of political unification can expose the EU to a risk of political backlash if hard to manage shocks hit the economies during the integration process.
    Date: 2018
  13. By: Mansbridge, Jane (Harvard University)
    Abstract: In recursive representation both representatives and constituents take in what the other is saying, update, revise, and respond on the basis of their own experience, then listen to the others’ response to their responses and respond to that accordingly. Recursive representation should replace or at least supplement the traditional norm of “two-way communication†as a component of the larger ideal of good political representation across the representative system. The ideal is aspirational (“regulative†) and may in many actual instances have prohibitive costs, but it can serve as a standard toward which to aspire. Currently the most active and affluent donors in democracies have access to recursive representation even at the national scale, as do some constituents at local levels. Even on the scale of a large nation-state, some currently available mechanisms make it feasible to approach this ideal more fully with average and even relatively marginal constituents. Recursive representation serves as an aspirational ideal in the arenas of administrative and societal representation as well as the arena of legislative/electoral representation.
    Date: 2017–09
  14. By: Cheikbossian, Guillaume; Fayat, Romain
    Abstract: We revisit the group size paradox in a model where two groups of different sizes compete for a prize exhibiting a varying degree of rivalry and where group effort is given by a CES function of individual e¤orts. We show that the larger group can be more successful than the smaller group if the degree of complementarity is sufficiently high relative to the degree of rivalry of the prize.
    Keywords: group size paradox; group contest; complementarity; (impure) public good
    JEL: D72 D74
    Date: 2018–05

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