nep-pol New Economics Papers
on Positive Political Economics
Issue of 2018‒12‒10
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. A banana republic? The effects of inconsistencies in the counting of votes on voting behavior By Niklas Potrafke; Felix Roesel
  2. Not so Disruptive after All: How Workplace Digitalization Affects Political Preferences By Aina Gallego; Thomas Kurer; Nikolas Schöll
  3. The Impact of Medicaid Expansion on Voter Participation: Evidence from the Oregon Health Insurance Experiment By Katherine Baicker; Amy Finkelstein
  4. On the political economy of compulsory education By Alessandro Balestrino; Lisa Grazzini; Annalisa Luporini
  5. Stable Constitutions By Daeyoung Jeong; Semin Kim
  6. Cohesive Institutions and Political Violence By Thiemo Fetzer; Stephan Kyburz
  7. Partisan Professionals: Evidence from Credit Rating Analysts By Elisabeth Kempf; Margarita Tsoutsoura
  9. Who Benefited from Women's Suffrage? By Esra Kose; Elira Kuka; Na'ama Shenhav
  10. Increasing resistance to globalization: The role of trade in tasks By Egger, Hartmut; Fischer, Christian

  1. By: Niklas Potrafke; Felix Roesel
    Abstract: We examine whether local inconsistencies in the counting of votes influence voting behavior. We exploit the case of the second ballot of the 2016 presidential election in Austria. The ballot needed to be repeated because postal votes were counted carelessly in individual electoral districts (“scandal districts”). We use a difference-indifferences approach comparing election outcomes from the regular and the repeated round. The results do not show that voter turnout and postal voting declined significantly in scandal districts. Quite the contrary, voter turnout and postal voting increased slightly by about 1 percentage point in scandal districts compared to nonscandal districts. Postal votes in scandal districts also were counted with some greater care in the repeated ballot. We employ micro-level survey data indicating that voters in scandal districts blamed the federal constitutional court for ordering a second election, but did not seem to blame local authorities.
    Keywords: Elections, trust, political scandals, administrative malpractice, counting of votes, voter turnout, populism, natural experiment
    JEL: D72 D02 Z18 P16
    Date: 2018
  2. By: Aina Gallego; Thomas Kurer; Nikolas Schöll
    Abstract: New digital technologies are transforming workplaces, with unequal economic consequences depending on workers’ skill set. Does digitalization also cause divergence in political preferences? Using an innovative empirical approach combining individuallevel panel data from the United Kingdom with a time-varying industry-level measure of digitalization, we first show that digitalization was economically beneficial for a majority of the labor force between 1997-2015. High-skilled workers did particularly well, they are the winners of digitalization. We then demonstrate that positive economic trajectories are mirrored in political preferences: Among high-skilled workers, exposure to digitalization increased voter turnout, support for the Conservatives, and support for the incumbent. An instrumental variable analysis, placebo tests and multiple robustness checks support our causal interpretation. The findings complement the dominant narrative of the "revenge of the left-behind": While digitalization undoubtedly eliminates some jobs and does produce losers, there is a large and often neglected group of winners of digitalization who positively react to economic modernization by supporting the status quo.
    Keywords: political economy, digitalization, labor markets, Voters
    JEL: P16 D72 O33 J31
    Date: 2018–11
  3. By: Katherine Baicker; Amy Finkelstein
    Abstract: In 2008, a group of uninsured low-income adults in Oregon was selected by lottery for the chance to apply for Medicaid. Using this randomized design and state administrative data on voter behavior, we analyze how a Medicaid expansion affected voter turnout and registration. We find that Medicaid increased voter turnout in the November 2008 Presidential election by about 7 percent overall, with the effects concentrated in men (18 percent increase) and in residents of democratic counties (10 percent increase); there is suggestive evidence that the increase in voting reflected new voter registrations, rather than increased turnout among pre-existing registrants. There is no evidence of an increase in voter turnout in subsequent elections, up to and including the November 2010 midterm election.
    JEL: I13 I28
    Date: 2018–11
  4. By: Alessandro Balestrino; Lisa Grazzini; Annalisa Luporini
    Abstract: We consider an economy with two categories of agents: entrepreneurs and workers. In laissez-faire, the former gain from having their children educated, while the latter, although they may profit from their own education, have no interest in sending their children to school. We first characterise the preferred education policy-cum-redistributive taxation for the two groups, and find that entrepreneurs favour a compulsory education policy while workers prefer a purely redistributive taxation. Each group would like the policy to be entirely financed by the other group. Then, we introduce a political process with probabilistic voting and verify that an equilibrium with both a compulsory education policy and some redistribution may exist in which the workers are constrained but the entrepeneurs, who benefit from hiring educated workers, are not.
    Keywords: Education Policy, Redistributive taxation, Probabilistic voting.
    JEL: H42 H52
    Date: 2018
  5. By: Daeyoung Jeong (New York University Abu Dhabi); Semin Kim (Yonsei University)
    Abstract: This study identifies a set of stable constitutions. A constitution is a pair of voting rules (f, F) where f is for the choice of final outcome, and F is for the decision on the change of a voting rule from the given rule f. A constitution is stable if any possible alternative rule does not get enough votes to replace the given rule f under the rule F. We fully characterize the set of interim stable constitutions among anonymous voting rules. We also characterize the properties of the interim stable constitutions among general weighted majority rules.
    Keywords: Weighted majority rules, decision rules, self-stability
    JEL: C72 D02 D72 D82
    Date: 2018–11
  6. By: Thiemo Fetzer (University of Warwick); Stephan Kyburz (Center for Global Development)
    Abstract: Can institutionalized transfers of resource rents be a source of civil conflict? Are cohesive institutions better at managing conflicts over distribution? We exploit exogenous variation in revenue disbursements to local governments and use new data on local democratic institutions in Nigeria to answer these questions. There is a strong link between rents and conflict far away from the location of the resource. Conflict over distribution is highly organized, involving political militias, and concentrated in the extent to which local governments are non-cohesive. Democratically elected local governments significantly weaken the causal link between rents and political violence. Elections produce more cohesive institutions, and vastly limit the extent to which distributional conflict between groups breaks out following shocks to the rents. Throughout, we confirm these findings using individual level survey data.
    Keywords: Nigeria, conflict, ethnicity, natural resources, political economy, commodity, prices
    JEL: Q33 O13 N52 R11 L71
    Date: 2018–11
  7. By: Elisabeth Kempf; Margarita Tsoutsoura
    Abstract: Partisan bias affects the decisions of financial analysts. Using a novel hand-collected dataset that links credit rating analysts to party affiliations from voter registration records, we show that analysts who are not affiliated with the U.S. President's party are more likely to downward-adjust corporate credit ratings. Our identification approach compares analysts with different party affiliations covering the same firm at the same point in time, ensuring that differences in the fundamentals of rated firms cannot explain the results. The effect is more pronounced in periods of high partisan conflict and for analysts who vote frequently. Our results suggest that partisan bias and political polarization create distortions in the cost of capital of U.S. firms.
    JEL: G14 G24
    Date: 2018–11
  8. By: Kirill Chmel (National Research University Higher School of Economics); Nikita Savin (National Research University Higher School of Economics); Michael X. Delli Carpini (Annenberg School for Communication)
    Abstract: There is an extensive body of research devoted to how political satire affects political knowledge and political behavior. Extant studies are focused on political satire in democratic countries and do not pay enough attention to authoritarian regimes. This study extends this research to non-democratic regimes, while also adding to it by exploring the extent to which the use of political satire encourages exposure to political information. We conduct an online experiment on the sample of Russian students. We borrow satirical pictures from Lentach – popular Russian social media public page, whose motto is “a propaganda of common sense” as opposed to biased political messages proliferated by government-controlled media outlets. Using both frequentist and Bayesian approaches, we found that access to political information containing satirical illustrating content increases attention to the information, relative to political news reports accompanied by standard news illustrations. The findings contribute to the literature on the political entertainment and exposure to political information, as well as to research on media under authoritarianism
    Keywords: political satire, selective exposure, new media environment, authoritarianism, Russia
    JEL: Z19
    Date: 2018
  9. By: Esra Kose (Bucknell University); Elira Kuka (Southern Methodist University); Na'ama Shenhav (Dartmouth College)
    Abstract: While a growing literature has shown that women prefer investments in child welfare and increased redistribution, little is known about the long-term effect of empowering women. Exploiting plausibly exogenous variation in U.S. suffrage laws, we show that children from economically disadvantaged backgrounds who were exposed to women�s political empowerment during childhood experienced large increases in educational attainment, especially blacks and Southern whites. We also find improvements in earnings among whites and blacks that experienced educational gains. We employ newly digitized data to map these long-term effects to contemporaneous increases in local education spending and childhood health, showing that educational gains were linked to improvements in the policy environment.
    Keywords: women's suffrage, educational attainment
    JEL: I21 N32
    Date: 2018–07
  10. By: Egger, Hartmut; Fischer, Christian
    Abstract: We show in this paper that trade in tasks can explain increasing resistance to globalization in industrialized countries. In a traditional trade model of a small open economy, we demonstrate that schooling provides protection against losses from trade if trade increases the relative price of the skill-intensive good. Furthermore, increasing public schooling expenditure may help securing support for trade reform by a majority of voters. However, this conclusion is no longer true, if education provides task-specific skills and trade in tasks makes some of these skills obsolete in the open economy. In this case, increasing public schooling expenditure may be of limited help to secure support for trade reform by a majority of voters, even if the reform is welfare-improving. Our analysis suggests to change the education system to one that provides broader, less-specialized skills in order to facilitate trade reforms. Although such skills may be less productive, they do not become obsolete in the open economy and therefore increase the likelihood that a proposal for a welfare-improving trade reform is successful in a referendum.
    Keywords: Resistance to globalization,Trade in tasks,Public education,Majority voting
    JEL: F11 F50 D72 I28
    Date: 2018

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