nep-pol New Economics Papers
on Positive Political Economics
Issue of 2019‒01‒07
eleven papers chosen by
Eugene Beaulieu
University of Calgary

  1. Immigration and anti-immigrant sentiments: Evidence from the 2017 German parliamentary election By Kellermann, Kim Leonie; Winter, Simon
  2. Electoral Cycles in Perceived Corruption: International Empirical Evidence By Niklas Potrafke
  3. Identity, Beliefs, and Political Confl ict By Nicola Gennaioli; Guido Tabellini
  4. Election Outcomes and Individual Well-being: Evidence from British Panel Data By Daniel Gray; Harry Pickard; Luke Munford
  5. Crime and punishment the British way: accountability channels following the MPs’ expenses scandal By Larcinese, Valentino; Sircar, Indraneel
  6. Incentivising Participation in Liquid Democracy with Breadth First Delegation By Grammateia Kotsialou; Luke Riley
  7. Ricœur, Rawls and the Aporia of the Just By Feriel Kandil
  8. Manipulated Electorates and Information Aggregation By Mehmet Ekmekci; Stephan Lauermann
  9. Firm Ownership, Political Participation, and Access to Finance through Public Bond Offerings in China By Feng, Xunan; Johansson, Anders C.
  10. Government Ideology and Arms Exports By Brender, Agnes
  11. Does inward FDI influence the quality of domestic institutions? A cross-country panel analysis By Roberto Antonietti; Jasmine Mondolo

  1. By: Kellermann, Kim Leonie; Winter, Simon
    Abstract: We empirically examine the relationship between shares of foreigners in a district and the share of votes cast in that district for the Alternative für Deutschland (AfD), the major anti-immigrant party in the 2017 German parliamentary election. The classic theory on the political economy of migration supposes that immigration fosters opposing sentiments among the natives due to fiercer competition for jobs, housing and public goods. Notably, the vote distribution in the 2017 election suggests that AfD vote shares are higher in districts with fewer foreign inhabitants. We exploit administrative data on election results and district-specific features to study a potentially causal effect. As the share of foreigners in a district may be endogenous, we apply an IV approach, using the number of working permits as an instrument for the share of foreign residents. Our results corroborate the Contact Theory, which states that more intensive exposure to and contact with immigrants reduce the propensity for anti-immigrant voting. We find that a 10 % increase in the population share of foreigners is associated with a 2.6 % lower vote share for the AfD. By contrast, a strong increase in the number of asylum seekers positively adds to AfD support.
    Keywords: migration,anti-immigrant parties,contact theory,ethnic competition,economic competition
    JEL: D72 D91 J15
    Date: 2018
  2. By: Niklas Potrafke
    Abstract: I examine whether elections influence perceived corruption in the public sector. Perceived corruption in the public sector is measured by the reversed Transparency International’s Perception of Corruption Index (CPI). The dataset includes around 100 democracies over the period 2012-2016, a sample for which the CPI is comparable across countries and over time. The results show that the reversed CPI was about 0.4 points higher in election years than in other years, indicating that perceived corruption in the public sector increased before elections. The effect is especially pronounced before early elections (1.0 points) compared to regular elections (0.4 points). Future research needs to investigate why perceived corruption in the public sector increased before elections.
    Keywords: perceived corruption, elections, political manipulation, panel data, democracies
    JEL: C23 D72 H11 K40
    Date: 2018
  3. By: Nicola Gennaioli; Guido Tabellini
    Abstract: We present a theory of identity politics that builds on two ideas. First, voters identify with the social group whose interests are closest to theirs and that features the strongest policy con ict with outgroups. Second, identification causes voters to slant their beliefs toward the group's distinctive opinion. The theory yields two main implications: i) voters' beliefs are polarized and distorted along group boundaries; ii) economic shocks that induce new cleavages to emerge also bring about large changes in beliefs and preferences across many policy issues. In particular, exposure to globalization or cultural changes may induce voters to switch identities, dampening their demand for redistribution and exacerbating con icts in other social dimensions. We show that survey evidence is consistent with these implications.
    Date: 2018
  4. By: Daniel Gray (Department of Economics, University of Sheffield, UK); Harry Pickard (Department of Economics, University of Sheffield, UK); Luke Munford (School of Health Sciences, University of Manchester, UK)
    Abstract: Given the recent seismic changes in the political landscape across Europe and in the US, it is important to understand how voting behaviour and election results in influence an individual's subjective well-being. Exploiting novel longitudinal data on individuals in the UK matched to their parliamentary constituency, we find that supporting the incumbent political party exerts a positive influence on individual well-being. This relationship is different across overall life satisfaction and psychological well-being, gender and personal characteristics. Potential endogeneity concerns are addressed in two ways; we employ an instrumental variable approach and a regression discontinuity in time design to estimate the impact of a quasi-natural experiment. The results relating to the instrumental variable approach support the positive relationship between national and constituency incumbency support and well-being. In the regression discontinuity in time design, we identify a causal relationship by exploiting the timing of survey questions around the 2010 election date. We find that Liberal Democrat supporters have approximately one-unit higher level of overall life satisfaction after their party's surprise electoral success.
    Keywords: Election Results; Subjective Well-being; United Kingdom; Voting Behaviour
    JEL: D0 D1 D6 H1
    Date: 2018–12
  5. By: Larcinese, Valentino; Sircar, Indraneel
    Abstract: Does democracy make politicians accountable? And which role does information play in the accountability process? There are several reasons making the 2009 {UK} expenses scandal an ideal setting to answer these questions. Our study of the scandal reaches two main conclusions: 1) the removal of corrupt politicians happens mostly at the pre-election stage; 2) information availability is a crucial ingredient in the accountability process. We also show that punishment was directed to individual {MPs} rather than their parties and that voters displayed a substantial partisan bias, not only at the voting stage but also by perceiving co-partisan {MPs} to be less involved in the scandal. Ceteris paribus, female {MPs} attracted more press coverage and, for the same amount of coverage, were more likely to stand down. Finally, we show that press coverage was ideologically balanced, i.e., newspapers with different ideological leaning devoted similar amount of news to each MP.
    Keywords: mass media; accountability; corruption; voting; partisan bias; female politicians
    JEL: F3 G3
    Date: 2017–03–01
  6. By: Grammateia Kotsialou; Luke Riley
    Abstract: Liquid democracy allows an agent to either vote directly over the available alternatives (candidates) of an election, or to delegate her voting rights to another agent (her guru) who can then vote on her behalf. In the academic literature and industrial applications of liquid democracy, each agent is usually allowed to nominate only one guru per election. However, if the nominated guru does not participate in the election, then the votes delegated to this guru will be wasted. To minimise the possibility of wasted votes, each agent can declare a personal ranking over her most desirable gurus, e.g, as in GoogleVotes. In this paper, we show that even if personal rankings over gurus are declared, the common delegation method of liquid democracy (which we call Depth First Delegation) remains problematic. More specifically, we show that if personal rankings over gurus are declared under the Depth First Delegation rule, there can be gurus who become worst off by receiving a delegated vote. To solve this issue, firstly we introduce a general framework for voting systems that allow delegation of voting rights. The key feature of this framework is the delegation rule function, which when instantiated details who receives each delegated vote. Secondly, we propose a delegation rule function instantiation that we call Breadth First Delegation. Given that personal rankings over gurus are declared, this is the first rule where every agent weakly prefers receiving a delegated vote.
    Date: 2018–11
  7. By: Feriel Kandil (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE)
    Abstract: The article conducts a comparative study between Ricœur’s and Rawls’ thought on justice. Whereas Ricoeur focuses on the dialectic between the just and the good, Rawls is concerned with the ideal conditions under which a universal consensus on the principles of justice may be reached. Ricœur gives much importance to reading Rawls. He offers many commentaries, especially on Rawls’s major contribution, A Theory of Justice. This chapter focuses on such comments and on the relating paradoxical interpretation of Rawls’s approach to justice Ricœur provides. First, this chapter suggests that, with his interpretation of Rawls’s major contribution, Ricœur contributes to put the light on the conflicts between the just and the good. These conflicts are the key elements of what may be referred to as the aporia of the just, which consists in the contradictory requirements coming from the just considered as a virtue of either institutions or individuals. Second, this chapter shows that whereas the aporia is a major problem in Rawls’ approach to justice, it is at the core of the dialectic dynamic Ricœur sees within moral life. In his work, the aporia leads to what we call the three paradoxes of justice, which are the paradoxes with legal, distributive and political justice. Considering such paradoxes, Ricœur takes the ethics of practical wisdom as a necessary recourse. The latter provides fair decision makers with the resources needed for the aporia to be, if not resolved, at least eased.
    Keywords: social justice, distributive justice, legal justice, political justice, the just, the good, principles of justice, Kant, Aristotle, Ricœur, Rawls, political paradox, sense of justice
    Date: 2018–11
  8. By: Mehmet Ekmekci; Stephan Lauermann
    Abstract: We study the aggregation of dispersed information in elections in which turnout may depend on the state. State-dependent turnout may arise from the actions of a biased and informed "election organizer." Voters are symmetric ex ante and prefer policy a in state α and policy b in state β, but the organizer prefers policy a regardless of the state. Each recruited voter observes a private signal about the unknown state but does not learn the turnout. First, we characterize how the outcomes of large elections depend on the turnout pattern across states. In contrast to existing results for large elections, there are equilibria in which information aggregation fails whenever there is an asymmetry in turnout; information aggregation is only guaranteed in all equilibria if turnout is state independent. Second, when the turnout is the result of costly voter recruitment by a biased organizer, the organizer can ensure that its favorite policy a is implemented with high probability independent of the state as the voter recruitment cost vanishes. Moreover, information aggregation will fail in all equilibria. The critical observation is that a vote is more likely to be pivotal for the decision if turnout is smaller, leading to a systematic bias of the decision toward the low-turnout state.
    Keywords: Voting, Information Aggregation
    JEL: C70 D80
    Date: 2019–01
  9. By: Feng, Xunan (Shanghai University of Finance and Economics); Johansson, Anders C. (Stockholm China Economic Research Institute)
    Abstract: This study examines how state versus private ownership and political participation by private entrepreneurs affect access to financing through the corporate bond market in China. We find that state ownership is positively related to the likelihood that a firm issues bonds and that firms controlled by ultimate owners who participate in politics are significantly more likely to issue bonds. We also show that state ownership as well as political participation by the ultimate owner is positively associated with the amount firms raise in bond offerings. Moreover, state firms characterized by over-investment tend to increase their excess investments after a bond offering. For under-investing private firms, existing suboptimal investment levels are alleviated by bond offerings. In addition, we find that private firms significantly increase their R&D investments after a public bond offering, especially those controlled by owners who participate in politics. Finally, bond offerings are associated with a significant decline in market value for SOEs. For firms controlled by an owner who participates in politics, the opposite holds true. These findings highlight the need to improve the existing credit allocation via the bond market and the important role political capital plays for private firms in China.
    Keywords: corporate bonds; bond issuance; SOEs; private firms; political participation; political connections; access to finance; China
    JEL: G10 G30 G32 L33 P20
    Date: 2018–12–19
  10. By: Brender, Agnes
    Abstract: The relationship between ideology and government decisions is a major field of research in economics and political sciences. Particularly the influence of government ideology on security issues of special interest. This paper analyses the relationship between government orientation and arms exports. Therefore, bilateral trade data for conventional weapons is regressed on data of government orientation. The results indicate that left-wing governments are more likely to grant arms export licences than governments of other partisan orientation. The finding is robust to the inclusion of control variables checking for further characteristics of the exporter government. Including interaction terms shows, that left-wing governments care about the human rights protection in importing countries and prefer to export to countries which are not involved in a conflict.
    Keywords: Arms trade,government orientation,partisan ideology
    JEL: F19 F59 H11
    Date: 2018
  11. By: Roberto Antonietti; Jasmine Mondolo
    Abstract: Domestic institutions are recognized as important in attracting foreign direct investment (FDI) and spurring economic development in host countries, but FDI can also affect and shape domestic institutions. In this paper we use extensive data on the quality of institutions and on inward FDI in 127 countries over a period of 22 years to see whether attracting FDI improves the quality of institutions in the host economies. We distinguish between different types of institution, FDI and country, and we estimate a series of pooled ordinary least squares, fixed effects, and dynamic panel data models to address endogeneity. Our findings suggest that higher amounts of inward FDI improve the average quality of institutions in recipient countries. This holds particularly when the quality of institutions is measured in terms of political stability, regulatory quality and rule of law, and when host countries are developing or transition economies.
    Keywords: quality of institutions, foreign direct investment, panel data
    JEL: F23 O43 O57
    Date: 2018–12

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