|
on Positive Political Economics |
| By: | Balles, Patrick (University of Basel); Matter, Ulrich (University of Basel); Stutzer, Alois (University of Basel) |
| Abstract: | Asymmetric information between voters and legislative representatives poses a major challenge to the functioning of representative democracy. We examine whether representatives are more likely to serve long-term campaign donors instead of constituents during times of low media attention to politics. Combining data on campaign finance donations made by individuals and special interest groups with information on their preferences for particular bills, we construct novel measures of electoral and organized interests pressure that representatives face with regard to specific legislative votes. In our analysis based on 490 roll calls between 2005 and 2014 in the US House of Representatives, we find strong evidence that representatives are more likely to vote with special interests and against constituency interests when the two are in conflict. Importantly, the latter effect is significantly larger when there is less attention on politics. Thereby, we draw on exogenous newsworthy shock events that crowd out news on the legislative process, but are themselves not related to it. The opportunistic behavior seems not to be mediated by short-term scheduling of sensitive votes right after distracting events. |
| Keywords: | attention, campaign finance, interest groups, legislative voting, mass media, media attention, roll call voting, US House of Representatives |
| JEL: | D72 L82 L86 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11945&r=pol |
| By: | Burkhard Schipper; Hee Yeul Woo (Department of Economics, University of California Davis) |
| Abstract: | We study the informational effectiveness of electoral campaigns. Voters may not think about all political issues and have incomplete information with regard to political positions of candidates. Nevertheless, we show that if candidates are allowed to microtarget voters with messages then election outcomes are as if voters have full awareness of political issues and complete information about candidate's political positions. Political competition is paramount for overcoming the voter's limited awareness of political issues but unnecessary for overcoming just uncertainty about candidates' political positions. Our positive results break down if microtargeting is not allowed or voters lack political reasoning abilities. Yet, in such cases, negative campaigning comes to rescue. |
| Keywords: | Electoral competition, campaign advertising, multidimensional policy space, microtargeting, dog-whistle politics, negative campaigning, persuasion games, unawareness |
| JEL: | C72 D72 D82 P16 |
| Date: | 2017–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cda:wpaper:228&r=pol |
| By: | María Angelica Bautista; Felipe González; Luis R. Martínez; Pablo Muñoz; Mounu Prem |
| Abstract: | We show that exposure to repression under dictatorship increases support for democracy and contributes to regime change when a democratic window of opportunity arises. Studying the military dictatorship of Augusto Pinochet in Chile, we exploit the fact that the predetermined location of military bases predicts local levels of civilian victimization, but is unrelated to historical political preferences. Using two-stage least squares, we show that increased exposure to repression during the dictatorship led to higher voter registration and higher opposition to Pinochet’s continuation in power in the 1988 plebiscite that triggered the democratic transition. Complementary survey data confirms that individuals with greater exposure to repression during the military regime continue to have stronger preferences for democracy. However, exposure to repression does not affect election outcomes after democratization. |
| Keywords: | Chile; Human rights; Repression; Dictatorship; Democratization; Elections; Derechos humanos; Represión; Dictadura; Democratización; Elecciones |
| JEL: | D72 N46 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:rie:riecdt:5&r=pol |
| By: | Aina Gallego; Thomas Kurer; Nikolas Schöll |
| Abstract: | New digital technologies are transforming workplaces, with unequal economic consequences depending on workers’ skills. 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 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 produces losers, there is a large and often neglected group of winners who react to technological change by supporting the status quo. |
| Keywords: | Political economy, digitalization, labor markets, voters |
| JEL: | P16 D72 O33 J31 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1623&r=pol |
| By: | Christopher J. Ellis; Thomas Groll |
| Abstract: | We model which special interest groups lobby which policymakers directly, and which employ for-profit intermediaries. We show that special interests affected by policy issues that frequently receive high political salience lobby policymakers directly, while those that rarely receive high political salience must employ “hired guns.” This follows from the availability of repeated agency contracts between policymakers and special interests. Special interests that lobby on issues that frequently experience high political salience may be incentivized to truthfully reveal private, policy relevant, information to policymakers via the promise of a high probability future political access. For-profit intermediaries are always in the “informational lobbying market” and can be easily incentivized by policymakers to truthfully reveal private information. We also show that “insecure” policymakers, those in vulnerable seats, tend to be lobbied by professional intermediaries. Also, policymakers that are more time constrained tend to rely more on professional intermediaries for policy relevant information. |
| Keywords: | informational lobbying, constrained access, intermediaries, financial contributions |
| JEL: | D72 D78 D83 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7367&r=pol |
| By: | Eleonora Alabrese; Thiemo Fetzer |
| Abstract: | Using estimates of support for Leave across UK local authority areas constructed from a comprehensive 20,000 strong survey, we show that both the level and the geographic variation capturing differential degrees of support for Leave have changed significantly since the 2016 EU referendum. A lot of area characteristics, many of which were previously associated with higher levels of support for Leave, are now significant correlates capturing a swing towards Remain. They include, for example, the degree to which local authorities receive transfers from the EU or the extent to which their economies rely on trade with the EU, along with past electoral support for UKIP (and the BNP) and exposure to immigration from Eastern Europe. Lastly, exposure to austerity since 2010 is among the strongest individual correlates weakening the support for Leave. The evidence is consistent with the argument that the small margin of victory of Leave in 2016 was, to a significant extent, carried by protest voters, who used the EU referendum to voice their discontent with domestic social and economic developments, particularly, austerity. Lastly, we present some evidence suggesting that the UK public, even in Leave supporting areas, would be much more willing to make compromises on free movement and aspects of single market membership compared to what appears to be the UK governments negotiation objective. |
| Keywords: | Brexit, protest voting, globalization, European Union |
| JEL: | D72 F50 H30 H50 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7389&r=pol |
| By: | José García-Montalvo; Omiros Papaspiliopoulos; Timothée Stumpf-Fétizon |
| Abstract: | We propose a new methodology for predicting electoral results that combines a fundamental model and national polls within an evidence synthesis framework. Although novel, the methodology builds upon basic statistical structures, largely modern analysis of variance type models, and it is carried out in open-source software. The methodology is largely motivated by the specific challenges of forecasting elections with the participation of new political parties, which is becoming increasingly common in the post-2008 European panorama. Our methodology is also particularly useful for the allocation of parliamentary seats, since the vast majority of available opinion polls predict at the national level whereas seats are allocated at local level. We illustrate the advantages of our approach relative to recent competing approaches using the 2015 Spanish Congressional Election. In general, the predictions of our model outperform the alternative specifications, including hybrid models that combine fundamental and polls' models. Our forecasts are, in relative terms, particularly accurate to predict the seats obtained by each political party. |
| Keywords: | multilevel model, Bayesian machine learning, inverse regression, evidence synthesis, elections |
| JEL: | C11 C53 C63 D72 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1065&r=pol |
| By: | Clément Mathonnat (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); Alexandru Minea (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: | Although the empirical literature on the determinants of economic growth volatility highlights a robust stabilizing effect of democratic regimes compared to dictatorships, no study focused so far on identifying the precise political institutions explaining this stabilizing effect. We open the political institutions black-box associated to democratic regimes, and study the effects of disaggregated political institutions on macroeconomic volatility along five institutional dimensions, namely forms of government, electoral rules, state forms, the number of veto players, and the age of democracies. Using a large panel of 140 countries over 1975-2007, we show that institutional details are of crucial importance, since the stabilizing effect of democracies depends on the precise institutional dimensions at work. Thus, our study contributes to the institutional design debate, by showing that the simple promotion of democratic regimes might not be sufficient to foster a more stable development path. |
| Keywords: | Political Institutions,Macroeconomic Volatility,Positive Constitutional Economics,Comparative Politics,Economic Development |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01903680&r=pol |
| By: | Bartholdi, Laurent; Hann-Caruthers, Wade; Josyula, Maya; Tamuz, Omer; Yariv, Leeat |
| Abstract: | A celebrated result in social choice is May's Theorem (May, 1952), providing the foundation for majority rule. May's crucial assumption of symmetry, often thought of as a procedural equity requirement, is violated by many choice procedures that grant voters identical roles. We show that a modification of May's symmetry assumption allows for a far richer set of rules that still treat voters equally, but have minimal winning coalitions comprising a vanishing fraction of the population. We conclude that procedural fairness can coexist with the empowerment of a small minority of individuals. Methodologically, we introduce techniques from discrete mathematics and illustrate their usefulness for the analysis of social choice questions. |
| Keywords: | equity; Finite Groups; May's Theorem; Social Choice; Voting rules |
| JEL: | C60 D71 D72 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13316&r=pol |
| By: | Mauro Caselli; Andrea Fracasso; Silvio Traverso |
| Abstract: | We study whether and to what extent the electoral dynamics in Italy over the 1994-2008 period can be explained by the development of economic factors associ- ated with globalization. To measure the level of exposure to globalization for local labor markets, our main unit of analysis, we use the intensity of import compe- tition from China and the presence of immigrants. Looking at parties’ political positions and employing an estimation strategy that accounts for endogeneity and time-invariant unobserved e↵ects across local labor markets, we find that both immigration intensity and exposure to import competition from China have con- tributed positively to the electoral outcomes of far-right parties, whereas only the former has produced a positive e↵ect on the votes of right-wing and traditional- ist/authoritarian/nationalist parties. On the other hand, neither of them has had an e↵ect on far-left parties. Moreover, electoral turnout has responded negatively to an increased presence of migrants. While the above e↵ects seem to work through the mediation of labor markets, the results suggest that other mechanisms at the level of local communities are also at play. |
| Keywords: | voting, electoral outcomes, trade, import competition, immigration, local labor markets |
| JEL: | D72 F14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwprg:2018/07&r=pol |
| By: | Hanming Fang; Zhe Li; Nianhang Xu; Hongjun Yan |
| Abstract: | We document that following a turnover of the Party Secretary or mayor of a city in China, firms (especially private firms) headquartered in that city significantly increase their “perk spending.” Both the instrumental-variable-based results and heterogeneity analysis are consistent with the interpretation that the perk spending is used to build relations with local governments. Moreover, local political turnover in a city tends to be followed by changes of Chairmen or CEOs of state-owned firms that are controlled by the local government. However, the Chairmen or CEOs who have connections with local government officials are less likely to be replaced. |
| JEL: | G30 G38 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25300&r=pol |
| By: | Tito Boeri; Prachi Mishra; Chris Papageorgiou; Antonio Spilimbergo |
| Abstract: | Populists claim to be the only legitimate representative of the people. Does it mean that there is no space for civil society? The issue is important because since Tocqueville (1835), associations and civil society have been recognized as a key factor in a healthy liberal democracy. We ask two questions: 1) do individuals who are members of civil associations vote less for populist parties? 2)does membership in associations decrease when populist parties are in power? We answer thesequestions looking at the experiences of Europe, which has a rich civil society tradition, as well as of Latin America, which already has a long history of populists in power. The main findings are that individuals belonging to associations are less likely by 2.4 to 4.2 percent to vote for populist parties, which is large considering that the average vote share for populist parties is from 10 to 15 percent. The effect is strong particularly after the global financial crisis, with the important caveat that membership in trade unions has unclear effects. |
| Keywords: | Political economy;Voting;Europe;Democracy, populist parties, associations, Latin America |
| Date: | 2018–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:18/245&r=pol |
| By: | José Garcia Montalvo; Omiros Papaspiliopoulos; Timothée Stumpf-Fétizon |
| Abstract: | We propose a new methodology for predicting electoral results that com- bines a fundamental model and national polls within an evidence synthesis framework. Although novel, the methodology builds upon basic statistical structures, largely modern analysis of variance type models, and it is car- ried out in open-source software. The methodology is largely motivated by the speci c challenges of forecasting elections with the participation of new political parties, which is becoming increasingly common in the post-2008 European panorama. Our methodology is also particularly useful for the al- location of parliamentary seats, since the vast majority of available opinion polls predict at the national level whereas seats are allocated at local level. We illustrate the advantages of our approach relative to recent competing approaches using the 2015 Spanish Congressional Election. In general the predictions of our model outperform the alternative speci cations, including hybrid models that combine fundamental and polls' models. Our forecasts are, in relative terms, particularly accurate to predict the seats obtained by each political party. |
| Keywords: | Multilevel models, Bayesian machine learning, inverse regression, evidence synthesis, elections |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1624&r=pol |
| By: | Raphael A. Auer (Bank for International Settlements and CEPR); Barthélémy Bonadio (Bank for International Settlements and CEPR); Andrei A. Levchenko (University of Michigan, NBER, and CEPR) |
| Abstract: | We provide a quantitative assessment of both the aggregate and the distributional effects of revoking NAFTA using a multi-country, multi-sector, multi-factor model of world production and trade with global input-output linkages. Revoking NAFTA would reduce US welfare by about 0.2%, and Canadian and Mexican welfare by about 2%. The distributional impacts of revoking NAFTA across workers in different sectors are an order of magnitude larger in all three countries, ranging from -2.7 to 2.26% in the United States. We combine the quantitative results with information on the geographic distribution of sectoral employment, and compute average real wage changes in each US congressional district, Mexican state, and Canadian province. We then examine the political correlates of the economic effects. Congressional district-level real wage changes are negatively correlated with the Trump vote share in 2016: districts that voted more for Trump would on average experience greater real wage reductions if NAFTA is revoked. |
| Keywords: | NAFTA, quantitative trade models, distributional effects, protectionism, trade policy |
| JEL: | F11 F13 F16 J62 R13 |
| Date: | 2018–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:mie:wpaper:666&r=pol |
| By: | Grossman, Gene; Helpman, Elhanan |
| Abstract: | We characterize trade policies that result from political competition when assessments of well-being include both material and psychosocial components. The material component reflects, as usual, satisfaction from consumption. Borrowing from social identity theory, we take the psychosocial component as combining the pride and self-esteem an individual draws from the status of groups with which she identifies and a dissonance cost she bears from identifying with those that are different from herself. In this framework, changes in social identification patterns that may result, for example, from increased income inequality or heightened racial and ethnic tensions, lead to pronounced changes in trade policy. We analyze the nature of these policy changes. |
| Keywords: | political economy; populism; protectionism; social identity; tariff formation |
| JEL: | D78 F13 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13367&r=pol |