nep-pol New Economics Papers
on Positive Political Economics
Issue of 2018‒08‒20
twenty-one papers chosen by
Eugene Beaulieu
University of Calgary

  1. Making Policies Matter: Voter Responses to Campaign Promises By Cesi Cruz; Philip Keefer; Julien Labonne; Francesco Trebbi
  2. Compulsory voting, habit formation, and political participation By Bechtel, Michael M.; Hangartner, Dominik; Schmid, Lukas
  3. Voting turnout in Greece: expressive or instrumental? By DASKALOPOULOU, EIRINI
  4. Candidate Competition and Voter Learning in the 2000-2012 US Presidential Primaries By George Deltas; Mattias K. Polborn
  5. Did Austerity Cause Brexit? By Thiemo Fetzer
  6. Relative age effects in political selection By Tukiainen, Janne; Takalo, Tuomas; Hulkkonen, Topi
  7. Towards Transnational European Democracy? The New Battles Lines of the 2019 European Parliament Election By Alemanno, Alberto
  8. Immigration and Redistribution By Alberto Alesina; Armando Miano; Stefanie Stantcheva
  9. Progress and Perspectives in the Study of Political Selection By Ernesto Dal Bó; Frederico Finan
  10. Media and Political Participation in North Africa By Mathilde Maurel; Charlemagne Nikiema
  11. Who Voted for Brexit? Individual and Regional Data Combined By Alabrese, Eleonora; Becker, Sascha O.; Fetzer, Thiemo; Novy, Dennis
  12. Collective Mistakes: Intuition Aggregation for a Trick Question under Strategic Voting By Tajika, Tomoya
  13. The Political Economy of Trade and Migration: Evidence from the U.S. Congress By Paola Conconi; Giovanni Facchini; Max F. Steinhardt; Maurizio Zanardi
  14. Authoritarian populism at work: A political transaction cost approach with reference to Viktor Orbán’s Hungary By Zoltán à dám
  15. Explaining Parochialism: A Causal Account for Political Polarization in Changing Economic Environments By Alexander J. Stewart; Nolan McCarty; Joanna J. Bryson
  16. Politically feasible reforms of non-linear tax systems By Bierbrauer, Felix; Boyer, Pierre
  17. Economic Integration and Democracy: An Empirical Investigation By Giacomo Magistretti; Marco Tabellini
  18. Family Income and the Intergenerational Transmission of Voting Behavior: Evidence from an Income Intervention By Randall Akee; William Copeland; E. Jane Costello; John B. Holbein; Emilia Simeonova
  19. How much does environment pay for politicians? By Mohamed Boly; Jean-Louis Combes; Pascale Combes Motel
  20. Do Elected Councils Improve Governance? Experimental Evidence on Local Institutions in Afghanistan By Enikolopov, Ruben
  21. Romanian Attitudes and Perceptions towards the 16+1 Cooperation Platform By Iulia Monica, Oehler-Șincai; Costin, Lianu; Cristina, Ilie; Rădulescu, Irina

  1. By: Cesi Cruz; Philip Keefer; Julien Labonne; Francesco Trebbi
    Abstract: Can campaign promises change voter behavior, even where clientelism and vote buying are pervasive? We elicit multidimensional campaign promises from political candidates in consecutive mayoral elections in the Philippines. Voters who are randomly informed about these promises rationally update their beliefs about candidates, along both policy and valence dimensions. Those who receive information about current promises are more likely to vote for candidates with policy promises closest to their own preferences. Those informed about current and past campaign promises reward incumbents who fulfilled their past promises; they perceive them to be more honest and competent. However, voters with clientelist ties to candidates respond weakly to campaign promises. A structural model allows us to disentangle information effects on beliefs and preferences by comparing actual incumbent vote shares with shares in counterfactual elections: both effects are substantial. Even in a clientelist democracy, counterfactual incumbent vote shares deviate more from actual shares when policy and valence play no role in campaigning than when vote-buying plays no role. Finally, a cost benefit analysis reveals that vote-buying is nevertheless more effective than information campaigns, explaining why candidates do not use them.
    JEL: D72 P16
    Date: 2018–06
  2. By: Bechtel, Michael M.; Hangartner, Dominik; Schmid, Lukas
    Abstract: Can electoral institutions induce lasting changes in citizens’ voting habits? We study the long-term and spillover effects of compulsory voting in the Swiss canton of Vaud (1900–1970) and find that this intervention increases turnout in federal referendums by 30 percentage points. However, despite its magnitude, the effect disappears quickly after voting is no longer compulsory. We find minor spillover effects on related forms of political participation that also vanish immediately after compulsory voting has been abolished. Overall, these results question habit formation arguments in the context of compulsory voting.
    Keywords: Habit Formation; Compulsory Voting; Turnout; Political Participation; Social Norms
    JEL: D72 H41 P16
    Date: 2018–07
    Abstract: Voting turnout is a core element of political democracy as it constitutes the so-called hard evidence of citizens’ engagement in the wider political processes. Thus, increasing voting abstention rates in the developed countries and the emergence of abstract types of political and civic engagement raise concerns over the ways in which participation evolves in modern democracies and the underlying socio-political mechanisms and dynamics that govern its development. Within this context, we analyse the micro-level determinants of voting turnout rates in Greece using ESV data for the 2002-2011 period. In particular, we test for the effects of formal and latent political participation, activism and trust as pointing to either an expressive or instrumental voting decision process. After controlling for the individuals’ socio-demographic and economic profile evidence is found of instrumental voting in Greece. Important policy level implications arise as a result of these findings.
    Keywords: voting turnout; political participation; activism; trust; economic crisis; Greece
    JEL: D72 H11
    Date: 2018–07–27
  4. By: George Deltas; Mattias K. Polborn
    Abstract: When candidates in primary elections are ideologically differentiated (e.g., conservatives and moderates in the Republican party), then candidates with similar positions affect each others’ vote shares more strongly than candidates with different ideological positions. We measure this effect in U.S. Presidential primaries and show that it is of first order importance. We also show that voter beliefs about the candidates harden over the course of the primary, as manifested in the variability of candidate vote shares. We discuss models of sequential voting that cannot yield this pattern of results, and propose an explanation based on a model with horizontally and vertically differentiated candidates and incompletely informed voters. Consistent with the predictions of this model, we also show that, in more conservative states, low quality conservative candidates do better relative to high quality conservatives, and vice versa.
    Keywords: Voting, primary elections, simultaneous versus sequential elections
    JEL: D72 D60
    Date: 2018
  5. By: Thiemo Fetzer
    Abstract: Did austerity cause Brexit? This paper shows that the rise of popular support for the UK Independence Party (UKIP), as the single most important correlate of the subsequent Leave vote in the 2016 European Union (EU) referendum, along with broader measures of political dissatisfaction, are strongly and causally associated with an individual’s or an area’s exposure to austerity since 2010. In addition to exploiting data from the population of all electoral contests in the UK since 2000, I leverage detailed individual level panel data allowing me to exploit within-individual variation in exposure to specific welfare reforms as well as broader measures of political preferences. The results suggest that the EU referendum could have resulted in a Remain victory had it not been for a range of austerity-induced welfare reforms. Further, auxiliary results suggest that the welfare reforms activated existing underlying economic grievances that have broader origins than what the current literature on Brexit suggests. Up until 2010, the UK’s welfare state evened out growing income differences across the skill divide through transfer payments. This pattern markedly stops from 2010 onwards as austerity started to bite.
    Keywords: political economy, austerity, globalization, voting, EU
    JEL: H20 H30 H50 P16 D72
    Date: 2018
  6. By: Tukiainen, Janne; Takalo, Tuomas; Hulkkonen, Topi
    Abstract: We exploit a regression discontinuity design to provide causal evidence of the relative age effect (RAE) on a long-run adult age outcome: Political selection. We find strong evidence of the RAE in politics in Finland. However, the effect is heterogeneous: We find that male candidates born early in the calendar year have a significantly higher probability of getting elected to the parliament but no similar RAE applies to female candidates nor to municipal elections. Moreover, this effect only takes place in the most competitive parliamentary districts and is present only for some parties. We also find that in all the groups where the RAE does not exist, early-born candidates are under-represented suggesting attrition of talent in the candidate placement. Overall, our results show that seemingly artificial cutoffs imposed by the government have persistent consequences even on the selection to the highest positions of power within a society.
    JEL: C21 D72 J13 J16 J24
    Date: 2018–08–08
  7. By: Alemanno, Alberto (HEC Paris)
    Abstract: The EU’s political system has never caught up with the impact European integration has had on citizens’ daily lives. EU citizens still vote in the European Parliament elections on different dates, according to different electoral laws, and in support of candidates selected by national parties and on the basis of domestic agendas. Yet this is set to change. With less than a year to go before the European Parliament elections, the EU political landscape is about to undergo a deep and historical shake-up. While populists are poised to disrupt the Parliament, a new wave of little-noticed transnational parties is emerging from the bottom-up. They both threaten established, mainstream political parties that have historically hold a monopoly of the European ‘project’. This paper traces their genesis, evolution and raison d'être before identifying their major features and political prospect.
    Keywords: Elections; Parties; Europe; trasnational parties; European Parliament; Spitzenkandidated; Trasnational list
    JEL: F00 H00 K00
    Date: 2018–06–28
  8. By: Alberto Alesina; Armando Miano; Stefanie Stantcheva
    Abstract: We design and conduct large-scale surveys and experiments in six countries to investigate how natives' perceptions of immigrants influence their preferences for redistribution. We find strikingly large biases in natives' perceptions of the number and characteristics of immigrants: in all countries, respondents greatly overestimate the total number of immigrants, think immigrants are culturally and religiously more distant from them, and are economically weaker – less educated, more unemployed, poorer, and more reliant on government transfers – than is the case. While all respondents have misperceptions, those with the largest ones are systematically the right-wing, the non-college educated, and the low-skilled working in immigration-intensive sectors. Support for redistribution is strongly correlated with the perceived composition of immigrants – their origin and economic contribution – rather than with the perceived share of immigrants per se. Given the very negative baseline views that respondents have of immigrants, simply making them think about immigration in a randomized manner makes them support less redistribution, including actual donations to charities. We also experimentally show respondents information about the true i) number, ii) origin, and iii) “hard work” of immigrants in their country. On its own, information on the “hard work” of immigrants generates more support for redistribution. However, if people are also prompted to think in detail about immigrants' characteristics, then none of these favorable information treatments manages to counteract their negative priors that generate lower support for redistribution.
    JEL: D71 D72 H2
    Date: 2018–06
  9. By: Ernesto Dal Bó; Frederico Finan
    Abstract: We provide a model of self-selection by candidates in a probabilistic voting environment to shed light on the forces shaping the quality of politicians from both the supply and demand sides of politics. The model highlights that the patterns of selection and the comparative statics of politician quality depend critically on how the costs of running for office vary for candidates with different qualities. The model offers predictions on how the quality of the political class will vary with key parameters pertaining to both the supply and demand for candidates. We use the model to frame a review of the empirical literature on political selection that has emerged in the last two decades. We contrast areas where significant progress has been made with others where important theoretical predictions remain untested or existing evidence does not allow a consensus, highlighting areas for future research.
    JEL: D72
    Date: 2018–06
  10. By: Mathilde Maurel (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Charlemagne Nikiema (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We examine the role of new decentralized media (the internet) vs old media (television) on individuals' political engagement in North Africa. Drawing our data from the Afrobarometer round 5 survey, we tackle issues of endogeneity by resorting first to a propensity score matching method to identify the effect of media on political participation. We then address endogeneity by relying to a bivariate probit model while using lightening activity as an instrument for media. The analysis evidences the political power of the internet and TV. Getting news from internet reduces voting but increases protests, while TV watching induces more vote and less protest. This effect is channeled through the impact of media on the perception about political institutions, which differs across the different media.
    Keywords: Media, Political Participation, North Africa
    Date: 2016–11–13
  11. By: Alabrese, Eleonora (Department of Economics, University of Warwick); Becker, Sascha O. (Department of Economics,and CAGE (Competitive Advantage in the Global Economy), University of Warwick, CEPR,CESifo, ifo,IZA and ROA); Fetzer, Thiemo (Department of Economics, University of Warwick & SERC); Novy, Dennis (Department of Economics, University of Warwick, CEPR, CESifo and CEP/LSE)
    Abstract: Previous analyses of the 2016 Brexit referendum used region-level data or small samples based on polling data.The former might be subject to ecological fallacy and the latter might suffer from small-sample bias. We use individual-level data on thousands of respondents in Understanding Society, the UK’s largest household survey, which includes the EU referendum question. We find that voting Leave is associated with older age, white ethnicity,low educational attainment, infrequent use of smart phones and the internet,receiving benefits, adverse health and low lifesatisfaction. These results coincide with corresponding patterns at the aggregate level of voting areas.We therefore do not find evidence of ecological fallacy. In addition, we show that prediction accuracy is geographically heterogeneous across UK regions,with strongly pro-Leave and strongly pro-Remain areas easier to predict. We also show that among individuals with similar socioeconomic characteristics, Labour supporters are more likely to support remain while Conservative supporters are more likely to support Leave
    Keywords: Aggregation ; Ecological Fallacy ; European Union ; Populism ; Referendum ; UK
    JEL: D72 I10 N44 R20 Z13
    Date: 2018
  12. By: Tajika, Tomoya
    Abstract: We consider a situation in which voters collectively answer a binary question. Each voter obtains an intuition about the answer to the question, but whether the question is intuitive or counterintuitive is not known to any voter. If each voter receives an independent signal on whether the question is intuitive or not, the majority rule under sincere voting correctly aggregates the intuitions with a large electorate; however, it is not an equilibrium. We show that in a unique pure-strategy equilibrium with a large electorate, majority voting makes an incorrect decision with a probability that can be sufficiently close to 1.
    Keywords: Information aggregation, inefficiency, counterintuitive question, strategic voting
    JEL: C72 D72
    Date: 2018–07
  13. By: Paola Conconi; Giovanni Facchini; Max F. Steinhardt; Maurizio Zanardi
    Abstract: We systematically examine the drivers of U.S. congressmen's votes on trade and migration reforms since the 1970's. Standard trade theory suggests that reforms that lower barriers to goods and migrants should have similar distributional effects, hurting low-skilled U.S. workers while benefiting high-skilled workers. In line with this prediction, we find that House members representing more skilled-labor abundant districts are more likely to support both trade and migration liberalization. Still, important differences exist: Democrats favor trade reforms less than Republicans, while the opposite is true for immigration reforms; welfare state considerations and network effects shape support for immigration, but not for trade.
    Keywords: trade reforms, immigration reforms, roll-call votes
    JEL: F1 F22
    Date: 2018–08
  14. By: Zoltán à dám
    Abstract: This paper conceptualizes authoritarian populism in an institutional economics context. Examining the literature on populism in political science, it considers authoritarian populism a degraded form of democracy that holds elections in regular intervals as means of popular legitimation, but undermines pluralism and constrains political choice. Based on the theory of transaction cost economics, the paper argues that authoritarian populism reduces political transaction costs by vertically organizing political exchange instead of the horizontal organization characteristic of liberal democracy. Electoral demand for such a shift rises at times of crises and a mismatch between formal and informal political institutions. This is what happened in Hungary towards the end of the 2000s, in a period of socially costly fiscal stabilization and the troubles of the global financial crisis. Correspondingly, voters have given Prime Minister Orbán strong mandates to govern at three consecutive elections since 2010, who transformed Hungary into a textbook case of authoritarian populism.
    Keywords: authoritarian populism, democratic populism, political transaction costs, political exchange, Hungary
    Date: 2018–05
  15. By: Alexander J. Stewart; Nolan McCarty; Joanna J. Bryson
    Abstract: Political and social polarization are a significant cause of conflict and poor governance in many societies, thus understanding their causes is of considerable importance. Here we demonstrate that shifts in socialization strategy similar to political polarization and/or identity politics could be a constructive response to periods of apparent economic decline. We start from the observation that economies, like ecologies are seldom at equilibrium. Rather, they often suffer both negative and positive shocks. We show that even where in an expanding economy, interacting with diverse out-groups can afford benefits through innovation and exploration, if that economy contracts, a strategy of seeking homogeneous groups can be important to maintaining individual solvency. This is true even where the expected value of out group interaction exceeds that of in group interactions. Our account unifies what were previously seen as conflicting explanations: identity threat versus economic anxiety. Our model indicates that in periods of extreme deprivation, cooperation with diversity again becomes the best (in fact, only viable) strategy. However, our model also shows that while polarization may increase gradually in response to shifts in the economy, gradual decrease of polarization may not be an available strategy; thus returning to previous levels of cooperation may require structural change.
    Date: 2018–07
  16. By: Bierbrauer, Felix; Boyer, Pierre
    Abstract: We present a conceptual framework for the analysis of politically feasible tax reforms. First, we prove a median voter theorem for monotonic reforms of non-linear tax systems. This yields a characterization of reforms that are preferred by a majority of individuals over the status quo and hence politically feasible. Second, we show that every Pareto-efficient tax system is such that moving towards lower tax rates for below-median incomes and towards higher rates for above median incomes is politically feasible. Third, we develop a method for diagnosing whether a given tax system admits reforms that are politically feasible and/or welfare-improving.
    Keywords: Non-linear income taxation; optimal taxation; political economy; Tax Reforms
    JEL: C72 D72 D82 H21
    Date: 2018–07
  17. By: Giacomo Magistretti (Northwestern University); Marco Tabellini (Harvard Business School, Business, Government and the International Economy Unit)
    Abstract: We study whether economic integration fosters the process of democratization and the channels through which this might happen. Our analysis is based on a large panel dataset of countries between 1950 and 2014. We instrument actual trade with predicted trade constructed by estimating a time-varying gravity equation similar to Feyrer (2009). We find that economic integration has a positive effect on democracy, driven by trade with democratic partners and stronger for countries with lower initial levels of economic and institutional development. These results are consistent with a learning/cultural exchange process whereby economic integration promotes the spread of democracy from more to less democratic countries. We corroborate this interpretation by providing evidence against alternative mechanisms, such as income effects, human capital accumulation, and trade-induced changes in inequality.
    Keywords: democracy, institutional development, economic integration, international trade.
    JEL: F14 F15 P16
    Date: 2018–07
  18. By: Randall Akee; William Copeland; E. Jane Costello; John B. Holbein; Emilia Simeonova
    Abstract: Despite clear evidence of an income gradient in political participation, research has not been able to isolate the effects of income on voting from other household characteristics. We investigate how exogenous unconditional cash transfers affected voting in US elections across two generations from the same household. The results confirm that there is strong inter-generational correlation in voting across parents and their children. We also show—consistent with theory—that household receipt of unconditional cash transfers has heterogeneous effects on the civic participation of children coming from different socio-economic backgrounds. It increases children’s voting propensity in adulthood among those raised in initially poorer families. However, income transfers have no effect on parents, regardless of initial income levels. These results suggest that family circumstance during childhood—income in particular—plays a role in influencing levels of political participation in the United States. Further, in the absence of outside shocks, income differences are transmitted across generations and likely contribute to the intergenerational transmission of social and political inequality.
    JEL: D31 D72 H53 H75 I38 J15
    Date: 2018–06
  19. By: Mohamed Boly (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Jean-Louis Combes (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Pascale Combes Motel (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)
    Abstract: ln this paper we empirically explore how elections impact environmental degradation using a sample of 77 democratic countries over the period 1990-2014. Three key results emerge. First, election years are characterized by an increase in CO2 emissions, even though the effect seems to diminish over the recent years. Second, this effect is present only in established democracies, where fiscal manipulation by incumbents is done through the composition of spending rather than the level. Third, better access to information and the adoption of strict environmental policies reduce the size of this trade-off between pork-barrel spending and the public good, namely environment quality.
    Keywords: CO2 emissions, Elections, Environmental policy
    Date: 2018–07–27
  20. By: Enikolopov, Ruben
    Abstract: Using data from a field experiment across 500 villages in Afghanistan, we study how electoral accountability of local institutions affects the quality of governance. In villages with newly created elected councils, food aid distributed by local leaders is more likely to reach needy villagers. However, this effect is observed only if the council is mandated to be the entity responsible for managing the distribution. In the absence of such a mandate the presence of elected councils increases embezzlement without improving aid targeting. Thus, while elected councils can improve governance, unclear and overlapping mandates may increase rent-seeking and worsen governance outcomes.
    Keywords: democratization; field experiment; governance quality; Political Institutions
    JEL: D7 O1
    Date: 2018–07
  21. By: Iulia Monica, Oehler-Șincai; Costin, Lianu; Cristina, Ilie; Rădulescu, Irina
    Abstract: The aim of this paper is to analyze Romanian citizens’ attitudes and perceptions towards the 16+1 framework, their determinants and effects. The influencing factors are correlated with the general perception of China and its image, while the effects are seen from the perspectives of the engagement and level of participation in joint initiatives. Recent literature underscores that although this platform offers a range of opportunities in each of the nine pillars of sectoral cooperation, Romania has adopted a passive attitude as regards large-scale projects developed with Chinese partners. Beyond EU specific technical barriers to such projects, the Romanian attitudes towards the 16+1 strongly affected cooperation intensity with China. Positions towards this initiative (opinions from general public, elites, politicians and experts) are identified through three main channels: mass media research, individual interviews and focus groups. The quantitative analysis, combined with qualitative research, emphasizes that in spite of the recognition by some groups of the potential benefits offered by the cooperation in the 16+1 format, reluctance remains. This is not due to China’s assets-liabilities balance or the lack of capacity to understand China, but on both insufficient information on 16+1 and political inertia.
    Keywords: China, Central and Eastern Europe CEE, 16+1, attitude, perception, country image, cooperation
    JEL: F0 F00 F01 F02 F5 F50 F55 F59
    Date: 2017

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