nep-pol New Economics Papers
on Positive Political Economics
Issue of 2019‒01‒14
fifteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Practice Makes Voters? Effects of Student Mock Elections on Turnout By Öhrvall, Richard; Oskarsson, Sven
  2. The Institutional Foundations of Religious Politics: Evidence from Indonesia By Samuel Bazzi; Gabriel Koehler-Derrick; Benjamin Marx
  3. On the political economy of income taxation By Berliant, Marcus; Gouveia, Miguel
  4. The European Trust Crisis and the Rise of Populism By Yann Algan; Sergei Guriev; Elias Papaioannou; Evgenia Passari
  5. Individual Life Horizon Influences Attitudes Toward Democracy By Lechler, Marie; Sunde, Uwe
  6. Patrons or Clients? Measuring and Experimentally Evaluating Political Connections of Firms in Morocco and Jordan By Robert Kubinec
  7. Who is NOT voting for Brexit anymore? By Alabrese, Eleonora; Fetzer, Thiemo
  8. Does the Left Spend More? By Georgios Magkonis; Vasileios Logothetis; Kalliopi-Maria Zekente
  9. The politics of violence and populism in post-colonial democracy: The role of political society in South Africa By Koelble, Thomas A.
  10. The Political Economy of Business Elites in Tunisia: Actors, Strategies and Identities By Mohamed Oubenal
  11. Picking Winners at the Ballot Box: Votes and Local Economic Growth in Turkey By Davide Luca
  12. Political Determinants of Government Structure and Economic Performance in Turkey since 1950 By Ali Akarca
  13. Optimal Dynamic Allocation of Attention By Yeon-Koo Che; Konrad Mierendorff
  14. Success Factors for Peace Treaties: A Review of Theory and Evidence By Dominic Rohner
  15. The welfare state and liberal democracy: A political economy approach By Heise, Arne; Serfraz Khan, Ayesha

  1. By: Öhrvall, Richard (Research Institute of Industrial Economics (IFN)); Oskarsson, Sven (Uppsala University)
    Abstract: Student mock elections are carried out in schools around the world in an effort to increase political interest and efficacy among students. There is, however, a lack of research on whether mock elections in schools enhance voter turnout in real elections. In this paper, we examine whether the propensity to vote in Swedish elections is higher among young people who have previously experienced a student mock election. The analysis is based on unique administrative population-wide data on turnout in the Swedish 2010 parliamentary election and the 2009 European Parliament election. Our results show that having experienced a mock election as a student does not increase the likelihood of voting in subsequent real elections. This result holds when we study both short- and long-term effects, and when we divide our sample into different parts depending on their socio-economic status and study each part separately.
    Keywords: Political inequality; Student mock elections; Voter turnout; Education
    JEL: D10 D72 I24 I28
    Date: 2018–12–18
  2. By: Samuel Bazzi (Boston University (Boston, Massachusetts) (BU)); Gabriel Koehler-Derrick (Harvard University); Benjamin Marx
    Abstract: Why do religious politics thrive in some societies but not others? This paper explores the institutional foundations of this process in Indonesia, the world’s largest Muslim democracy. We show that a major Islamic institution, the waqf, fostered the entrenchment of political Islam at a critical historical juncture. In the early 1960s, rural elites transferred large amounts of land into waqf—a type of inalienable charitable trust—to avoid expropriation by the government as part of a major land reform effort. Although the land reform was later undone, the waqf properties remained. We show that greater intensity of the planned reform led to more prevalent waqf land and Islamic institutions endowed as such, including religious schools, which are strongholds of the Islamist movement. We identify lasting effects of the reform on electoral support for Islamist parties, preferences for religious candidates, and the adoption of Islamic legal regulations (sharia). Overall, the land reform contributed to the resilience and eventual rise of political Islam by helping to spread religious institutions, thereby solidifying the alliance between local elites and Islamist groups. These findings shed new light on how religious institutions may shape politics in modern democracies.
    JEL: D72 D74 P16 P26 Z12
    Date: 2018–10
  3. By: Berliant, Marcus; Gouveia, Miguel
    Abstract: The literatures dealing with voting, optimal income taxation, implementation, and pure public goods are integrated here to address the problem of voting over income taxes and public goods. In contrast with previous articles, general nonlinear income taxes that affect the labor-leisure decisions of consumers who work and vote are allowed. Uncertainty plays an important role in that the government does not know the true realizations of the abilities of consumers drawn from a known distribution, but must meet the realization-dependent budget. Even though the space of alternatives is infinite dimensional, conditions on primitives are found to assure existence of a majority rule equilibrium when agents vote over both a public good and income taxes to finance it.
    Keywords: Voting; Income taxation; Public good
    JEL: D72 D82 H21 H41
    Date: 2018–12–12
  4. By: Yann Algan (Département d'économie); Sergei Guriev (Département d'économie); Elias Papaioannou (London Business School (LBS)); Evgenia Passari (Université Paris-Dauphine)
    Abstract: We study the implications of the Great Recession for voting for antiestablishment parties, as well as for general trust and political attitudes, using regional data across Europe. We find a strong relationship between increases in unemployment and voting for nonmainstream parties, especially populist ones. Moreover, unemployment increases in tandem with declining trust toward national and European political institutions, though we find only weak or no effects of unemployment on interpersonal trust. The correlation between unemployment and attitudes toward immigrants is muted, especially for their cultural impact. To explore causality, we extract the component of increases in unemployment explained by the precrisis structure of the economy, in particular the share of construction in regional value added, which is strongly related both to the buildup preceding and the bursting of the crisis. Our results imply that crisis-driven economic insecurity is a substantial determinant of populism and political distrust.
    Date: 2017
  5. By: Lechler, Marie (LMU Munich); Sunde, Uwe (LMU Munich)
    Abstract: Support for democracy in the population is considered critical for the emergence and stability of democracy. Macro-determinants and retrospective experiences have been shown to affect the support for democracy at the individual level. We investigate whether and how the individual life horizon, in terms of the prospective length of life and age, affect individual attitudes toward democracy. Combining information from period life tables with individual survey response data spanning more than 260,000 observations from 93 countries over the period 1994-2014, we find evidence that the expected remaining years of life influence the attitudes toward a democratic political regime. The statistical identification decomposes the influence of age from the influence of the expected proximity to death. The evidence shows that support for democracy increases with age, but declines with expected proximity to death, implying that increasing longevity might help fostering the support for democracy. Increasing age while keeping the remaining years of life fixed as well as increasing remaining years of life for a given age group both contribute to the support for democracy.
    Keywords: attitudes toward democracy; life expectancy; aging;
    Date: 2019–01–08
  6. By: Robert Kubinec (Princeton University)
    Abstract: I use an original survey of firm employees in Morocco and Jordan to construct an index of political-connectedness that collapses several possible indicators of connectedness down to a single latent dimension. To do so, I employ item-response theory on a subset of questions from the survey for which I have a prior theoretical reason to believe that these factors should either be caused by or cause political-connectedness. With this index, I can better understand political-connectedness as a continuous measure that reflects the broad range of political interactions firms may have rather than as a dichotomous measure of connected versus nonconnected firms. I also employ an experimental design embedded in the survey that simulated a hypothetical interaction between the firm and a party offering political benefits in exchange for resources in order to understand if this measure of political connectedness can predict political activity across domains. I show that politically-connected firms are able to exchange political loyalty to regimes for lighter regulatory burdens and access to protected markets that insulate them from competition.
    Date: 2018–12–26
  7. By: Alabrese, Eleonora (University of Warwick); Fetzer, Thiemo (University of Warwick and CAGE)
    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 Classification: D72, F5, F6, H3, H5
    Date: 2018
  8. By: Georgios Magkonis (University of Portsmouth); Vasileios Logothetis (Cardiff University); Kalliopi-Maria Zekente (Alpha Bank)
    Abstract: This study provides a quantitative review of the empirical literature on partisan politics. Given the voluminous work on this subject, we focus on the relationship between government ideology and public spending. By exploiting a dataset of 800 estimates from papers published between 1992 and 2018, we conduct a meta-analysis. Taking into account the differences in the various categories of spending, proxies of ideologies, estimations methods, as well as, data and publication characteristics, we conclude that more left-wing governments do spend more, although the effect tends to weaken over time.
    Keywords: Partisan politics, government ideology, meta-analysis
    JEL: D72 H00 P16
    Date: 2019–01–09
  9. By: Koelble, Thomas A.
    Abstract: This paper argues that current levels of violence and populism in post-colonial spaces such as South Africa are a consequence of a socio-history of violent dispossession, exploitation and impoverishment and is perpetuated by the continuation of the socio-economic and political conditions rooted in that history of exceptional violence, inequality and injustice. A switch in the political system does not reduce violence by itself. The disposition towards violence can only be shifted by a fundamental shift away from the economics and politics of the apartheid era. Since such a shift is unlikely to occur under current conditions, the perpetuation of violence and populist politics are likely to remain key features and consti-tutive elements of post-apartheid democracy.
    Date: 2018
  10. By: Mohamed Oubenal (Institut Royal de la Culture AmazigheAuthor-Name: Houda Ben Hamouda)
    Abstract: When the Tunisian government seized the assets of the Ben Ali clan in 2011, prosperous companies were sold to some fractions of the business elite which started adopting a strategy of direct intervention in the political sphere to consolidate their resources and find new opportunities. In order to study the position of business elites in Tunisia we use a methodology combining a social network analysis (SNA) of the board of directors of Tunisian listed companies and a qualitative history of its political economy. We shed light on the regional identities of some family groups and the centrality of financial institutions such as insurance companies. The financial sector is dominated by the State, but some Djerbian families occupy important positions. Sfaxian entrepreneurs are organized in clusters that control certain large industrial enterprises.
    Date: 2018–12–19
  11. By: Davide Luca (London School of Economics)
    Abstract: While there is systematic evidence of how governments affect policy outputs for strategic reasons, a limited amount of studies has assessed whether these distortions are consequential for economic growth. Using data from Turkey over the period 2004-2013, the current paper measures the effect of voting for the national incumbent party on local economic performance. New instrumental variable estimates suggest that provinces where the electoral race for the Justice and Development Party (AKP) was closer have experienced faster per-capita GVA and employment growth rates. The effect is economically substantive and increases in election years. Results also provide evidence that the government has affected growth through the selective provision of state goods.
    Date: 2018–10–10
  12. By: Ali Akarca (University of Illinois)
    Abstract: During the last two-thirds of a century, Turkey was ruled by a wide variety of governments: single-party governments, coalitions partnered by two or more parties and by ideologically compatible and incompatible parties, minority and military governments. While single party governments all lasted at least two terms, the rest rarely lasted even one term. The timing of these governments and the order in which they followed each other were not by chance but according to a pattern induced by coups. Typically single party governments were ended by coups. Ideologically incompatible and then compatible coalition governments followed, usually after a brief military administration. Then once again single party governments returned. As economic growth typically exhibits an inverted-U type of pattern over the life of a government, and declines as the number of ruling parties and the ideological distance between them increase, the coups lowered the growth rate of the country and generated political business cycles that are distinct from those induced by elections. In the paper, these assertions are explained in detail, and supported using theory, history, descriptive statistics, and regression analysis. It is also shown that improving democratic institutions of the country would enhance the stability and growth of the economy greatly.
    Date: 2018–10–23
  13. By: Yeon-Koo Che; Konrad Mierendorff
    Abstract: We consider a decision maker (DM) who, before taking an action, seeks information by allocating her limited attention dynamically over different news sources that are biased toward alternative actions. Endogenous choice of information generates rich dynamics: The chosen news source either reinforces or weakens the prior, shaping subsequent attention choices, belief updating, and the final action. The DM adopts a learning strategy biased toward the current belief when the belief is extreme and against that belief when it is moderate. Applied to consumption of news media, observed behavior exhibits an `echo-chamber' effect for partisan voters and a novel `anti echo-chamber' effect for moderates.
    Date: 2018–12
  14. By: Dominic Rohner
    Abstract: Wars impose tremendous costs on societies and the question of how to end them is of foremost importance. Several hundred books and scientific articles have been written on mediation and peace agreements. In this policy paper I shall provide a critical literature survey on the effects of peace agreements, with a special emphasis on mediation. One of the major conclusions of this review of existing work is that many findings in the literature need to be interpreted with much care, as they are merely correlations that could well be driven by selection bias or confounding factors, and that interpreting them as causal evidence would be dangerous. This survey does however not limit itself to discussing the potential fragility of various findings, but also highlights some results that are supported by a substantial body of suggestive evidence, focusing in particular on the sharing of political and military power, on security guarantees, on trust-building measures and on the role of economic opportunities.
    Keywords: Conflict, civil war, mediation, peace agreement, negotiation, peace treaty, third party intervention
    Date: 2018–12
  15. By: Heise, Arne; Serfraz Khan, Ayesha
    Abstract: This paper attempts to shed some light on the developments of welfare states in highly developed nations since WW2 within the context of a narrative which seeks to combine institutional distinctions, termed 'varieties of capitalism', with the historical regimes of regulation theory in a political economy perspective which puts interested political actors at centre stage. It will be argued that in a liberal democracy, the elite has the framing and agenda-setting power to 'manufacture a political will' according to its interests. The welfare state is not the result of a long social struggle on the part of the needy; rather, it results in its general features from the minimal state of meritocratic exigencies. Under the very peculiar circumstances of the post-WW2 era, this even translated into a rise in social welfare spending to more than a third of national income. The particular design of welfare state organisation was the subject-matter of political conflict, and a clear distinction between liberal and coordinated market economies can be attributed to cultural differences and institutional settings. Yet the core of the welfare state conception serves the interest of the meritocracy as much as those who benefit from social programmes and re-distribution. And the neoliberal attack on the welfare state since the 1980s is not a necessary re-calibration due to changing economic conditions or a growing lack of solidarity among the people but an expression of a modified cost-benefit analysis from the elite's perspective.
    Keywords: Welfare State,Keynesian National Welfare State,Schumpeterian Competition State,Elite,Agenda Theory
    JEL: B59 I31 P16 P31
    Date: 2018

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