nep-pol New Economics Papers
on Positive Political Economics
Issue of 2019‒02‒11
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Comparing Voting Methods: 2016 US Presidential Election By Herrade Igersheim; François Durand; Aaron Hamlin; Jean-François Laslier
  2. Cushion or catalyst? How welfare state generosity moderates the impact of economic vulnerability on populist radical right support By Ennser-Jedenastik, Laurenz; Köppl-Turyna, Monika
  3. Occupy Government: Democracy and the Dynamics of Personnel Decisions and Public Finances By Klenio Barbosa; Fernando V. Ferreira
  4. School spending and extension of the youth voting franchise: Evidence from an experiment in Norway By Ole Henning Nyhus; Bjarne Strøm
  5. New electoral systems and old referendums By Gabrielle Demange
  6. Losing Your Dictator: Firms During Political Transition By Felipe González; Mounu Prem
  7. International Migration as Driver of Political and Social Change: Evidence from Morocco By Tuccio, Michele; Wahba, Jackline; Hamdouch, Bachir
  8. Dominance in Spatial Voting with Imprecise Ideals: A New Characterization of the Yolk. By Mathieu Martin; Zéphirin Nganmeni; Craig A. Tovey
  9. Sincere voting, strategic voting A laboratory experiment using alternative proportional systems By Isabelle Lebon; Antoinette Baujard; Frédéric Gavrel; Herrade Igersheim; Jean-François Laslier
  10. The fi nagle point might not be within the Ɛ-core: a contradiction with Bräuninger's result By Mathieu Martin; Zéphirin Nganmeni
  11. Electoral Reform and Trade-Offs in Representation By Becher, Michael; Menendez, Irene
  13. Market And Network Corruption By Maria Kravtsova; Aleksey Oshchepkov

  1. By: Herrade Igersheim (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); François Durand (Nokia Bell Labs [Paris-Saclay]); Aaron Hamlin (Center for election science); Jean-François Laslier (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Before the 2016 US presidential elections, more than 2,000 participants participated to a survey in which they were asked their opinions about the candidates, and were also asked to vote according to different alternative voting rules, in addition to plurality: approval voting, range voting, and instant runoff voting. The participants were split into two groups, a first one facing a short set of four candidates (Clinton, Trump, Johnson and Stein), and a second one facing a long set of nine candidates (the previous four plus Sanders, Cruz, McMullin, Bloomberg, and Castle). The paper studies three issues: (1) How do U.S. voters effectively use these alternative rules? (2) What kind of candidates, in terms of individual preferences, is favored by which rule? (3) Which rules empirically satisfy the independence of irrelevant alternatives? Our results evidence that Bernie Sanders stands out as the "best" candidate in terms of individual preferences (using any standard criterion), and that evaluative voting rules such as approval voting and range voting might lead to this outcome, contrary to direct plurality and instant runoff voting (that elects Clinton) and to the official voting rule (that elected Trump).
    Keywords: Approval voting,range voting,instant runoff,strategic voting,US Presidential election
    Date: 2018–12
  2. By: Ennser-Jedenastik, Laurenz; Köppl-Turyna, Monika
    Abstract: The rise of populist radical right parties represents one of the most dramatic shifts in European party systems of the past decades. Although it has been established that the populist radical right's core appeal centers around issues of immigration and multiculturalism rather than economic matters, there has been a debate in the literature about the role of socioeconomic factors as a driver of PRRP success. We focus on two strands of argument relating to the welfare state and its impact on PRRP support. On the one hand, generous social policy regimes may mitigate the adverse economic effects of globalization and thus make workers less vulnerable to the appeal of populist radical right parties (the inoculation hypothesis). On the other hand, generous welfare regimes may make voters more concerned about increased numbers of low-skilled immigrants entering a country and potentially claiming benefits paid for largely by the taxes and contributions of the native population (the welfare chauvinism hypothesis). Our results suggest several channels through which the welfare state affects votes for the PRRP. Firstly, social protection seems to moderate economic vulnerability: in countries with higher relative redistribution and/or poverty prevention, the economically vulnerable are less likely to vote for the PRRP. Secondly, the direct effect of social welfare measures on the populist vote is positive when considering individual voters' positions. Thirdly, a stronger welfare state contributes to increasing the salience of the immigration platform for voting decisions. As a result, voters in high-redistribution countries are more likely to vote for the PRRP if they have a more moderate view on migration.
    Keywords: Populism,Right-Wing Populism,Welfare State,Party Systems,Europe,Social Protection
    Date: 2019
  3. By: Klenio Barbosa; Fernando V. Ferreira
    Abstract: We study the causes and consequences of patronage in Brazilian cities since the country’s re-democratization. We test key mechanisms – fiscal rules, accountability, political ideology, and rent-seeking – and estimate the consequences of patronage for public finances. Our data consist of the universe of public sector employees merged with their party affiliations, and a dynamic regression discontinuity design is applied to disentangle patronage from the growing political participation. The short-term patronage effect is large, with winning political coalitions increasing their shares of public sector workers and wages by 4 and 6 percentage points, respectively, during a mayoral term. Part of this effect lasts longer than a decade, with winning coalitions also occupying civil servant jobs that perform service-oriented tasks. This political occupation of government jobs is not associated with ideology, though. Instead, lack of accountability and rent-seeking are the primary driving forces, while reliance on intergovernmental transfers only increases patronage for smaller cities. Higher patronage does not affect the size of local governments, but it changes the composition of expenditures: hiring politically connected workers crowds out, almost one-to-one, non-affiliated employees. Overall, patronage accounted for more than half of the dramatic increase in public sector political employment since the Brazilian re-democratization.
    JEL: D72 D73 H70 J45 M5
    Date: 2019–01
  4. By: Ole Henning Nyhus (Department of Economics, Norwegian University of Science and Technology); Bjarne Strøm (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Changes in population age composition is challenging in modern welfare states. Intergenerational conflicts may have important consequences for provision of services directed towards specific age groups as schooling and care for elderly. A relevant question is to what extent the supply side responds to changes in the age composition of the electorate in terms of actual spending policies. This paper exploits a novel experiment that took place in Norway in the 2011 local elections to estimate the causal relationship between local government school spending and the age composition of the electorate. We exploit that the voting age was reduced from 18 to 16 years in local elections in selected local governments (experimental governments), while voting age was kept at 18 in the rest (control governments). Using a difference in differences strategy, we find that compulsory school spending decreased by approximately 2% in the experimental governments. The results are robust across a number of econometric specifications and robustness checks. Since all the newly enfranchised voters had just finished compulsory school and receive no direct benefits from local government school spending, the result is consistent with selfish voter behavior.
    Keywords: Youth voting franchise; Compulsory school spending; Local governments
    JEL: D72 H10 H70
    Date: 2019–01–12
  5. By: Gabrielle Demange (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris)
    Abstract: I discuss the future of electoral systems' design. Two routes are worth investigating. First, new voting procedures can be designed and implemented due to new computing and communication facilities. I illustrate with two positive recent experiments in France and Switzerland. Second, the well-known old referendum needs to be investigated more thoroughly, especially because it is being increasingly popular in a variety of situations. I discuss some issues and directions for its improvement.
    Keywords: Approval voting,New Apportionment Procedure,bi-apportionment,referendum
    Date: 2018–08–01
  6. By: Felipe González; Mounu Prem
    Abstract: We use new firm-level data from Chile to document resource misallocation in favor of politically connected firms during the transition from dictatorship to democracy. We find that firms with links to the Pinochet regime (1973–1990) were relatively unproductive and benefited from resource misallocation during the dictatorship, and those distortions persisted into democracy. We show that, after learning that the dictatorship was going to end, firms in the dictator’s network increased their productive capacity, experienced higher profits, and obtained more loans from the state-owned bank. We test for different explanations and provide suggestive evidence consistent with connected firms aiming to shield their market position for the transition to democracy.
    Keywords: Transition; Distortions; Firms; Networks
    JEL: D2 G2 G3 M2 N86
    Date: 2019–02
  7. By: Tuccio, Michele; Wahba, Jackline; Hamdouch, Bachir
    Abstract: This paper focuses on the impact of international migration on the transfer of political and social norms. Exploiting recent and unique data on Morocco, it explores whether households with return and current migrants bear different political preferences and behaviours than non-migrant families. Once controlling for the double selection into emigration and return migration, findings suggest that having a returnee in the household increases the demand for political and social change, driven by returnees mostly from Western European countries, who have been exposed to more democratic norms at destination. However, we find a negative impact of having a current migrant on the willingness to change of the left-behind household, driven by migrants to non-West countries, where the quality of political and social institutions is lower. Our results are robust to also controlling for destination selectivity.
    Keywords: International migration,Political change,Transfer of norms,Morocco
    JEL: D72 F22 O15 O55
    Date: 2019
  8. By: Mathieu Martin; Zéphirin Nganmeni; Craig A. Tovey (Université de Cergy-Pontoise, THEMA)
    Abstract: We introduce a dominance relationship in spatial voting with Euclidean preferences, by treating voter ideal points as balls of radius δ. Values δ > 0 model imprecision or ambiguity as to voter preferences, or caution on the part of a social planner. The winning coalitions may be any consistent monotonic collection of voter subsets. We characterize the minimum value of δ for which the δ-core, the set of undominated points, is nonempty. In the case of simple majority voting, the core is the yolk center and δ is the yolk radius. Thus the δ-core both generalizes and provides a new characterization of the yolk. We then study relationships between the δ-core and two other concepts: the Ɛ-core and the finagle point. We prove that every fi nagle point must be within 2.32472 yolk radii of every yolk center, in all dimensions m ≥ 2.
    Keywords: Spatial voting, dominance, core, yolk, fi nagle.
    JEL: C62 C70 D71 D72
    Date: 2019
  9. By: Isabelle Lebon (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Antoinette Baujard (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Frédéric Gavrel (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Herrade Igersheim (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); Jean-François Laslier (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In two laboratory surveys run in France during the 2014 European Elections, we asked the participants to provide their personal evaluations of the parties in terms of ideological proximity, and asked how they would vote under three proportional, closed-list voting rules : the (official) single-vote rule, a split-my-vote rule, and a list-approval rule. The paper analyzes the relation between opinions and vote, under the three systems. Compared to multi-vote rules, the single-vote system leads to voters' decisions that are more often strategic but also more often sincere. Sincere voting and strategic voting therefore appear to be more consistent than contradictory. Multi-vote rules allow the voter to express complex behavior, and the concepts of "sincere" and "strategic" voting are not always sufficient to render this complexity.
    Keywords: Laboratory experiment,Proportional systems,Contextualized experiment,Approval voting,Cumulative voting,Strategic voting
    Date: 2018
  10. By: Mathieu Martin; Zéphirin Nganmeni (Université de Cergy-Pontoise, THEMA)
    Abstract: In this paper, we focus on a result stated by Bräuninger that the fi nagle point is within the Ɛ-core in a spatial voting game with Euclidean individual preferences. Through a counterex- ample with 7 players, we show that Bräuninger's result is not valid.
    Keywords: Spatial voting, majority game, dominance, core, fi nagle.
    JEL: C62 C70 D71 D72
    Date: 2019
  11. By: Becher, Michael; Menendez, Irene
    Abstract: We examine the effect of electoral institutions on two important features of representation that are often studied separately: policy responsiveness and the quality of legislators. Theoretically, we show that while a proportional electoral system is better than a majoritarian one at representing popular preferences in some contexts, this advantage can come at the price of undermining the selection of good politicians. To empirically assess the relevance of this trade-off, we analyze an unusually controlled electoral reform in Switzerland early in the twentieth century. To account for endogeneity, we exploit variation in the intensive margin of the reform, which introduced proportional representation, based on administrative constraints and data on voter preferences. A difference-in-difference analysis finds that higher reform intensity increases the policy congruence between legislators and the electorate and reduces legislative effort. Contemporary evidence from the European Parliament supports this conclusion.
    Date: 2019–01
  12. By: Gaygysyz Ashyrov; Jaan Masso
    Abstract: Until recently, studies have not reached any general agreement on how a corrupt environment influences foreign investments. Furthermore, far too little attention has so far been paid to how corruption relates to the performance of foreign and domestically owned firms. This paper exploits cross-sectional firm-level data from the fifth round of the Business Environment and Enterprise Performance Survey (BEEPS V) for the purpose of investigating how bribery is associated with FDI and firm performance. By using various econometric estimation strategies, we find that foreign owned firms tend to pay larger bribes compared to domestically owned firms, while the negative size of these expenses on firm productivity is larger for foreign owned firms than domestically owned firms in highly corrupt countries. This study suggests that developing countries should fight against informal payments in bureaucracy to create corruption free environments, so that multinationals are incentivized to invest in their countries.
    Keywords: corruption, FDI, firm performance
    Date: 2019
  13. By: Maria Kravtsova (National Research University Higher School of Economics); Aleksey Oshchepkov (National Research University Higher School of Economics)
    Abstract: Economists tend to reduce all corruption to impersonal market-like transactions, ignoring the role of social ties in shaping corruption. In this paper, we show that this simplification substantially limits the understanding of corruption. We distinguish between market corruption (impersonal bribery), and network (or parochial) corruption which is conditional on the social connections between bureaucrats and private agents. We argue, both theoretically and empirically, that these types of corruption have different qualities. Using data from the Life in Transition Survey (LiTS) which covers all post-socialist countries we show, first, that the correlation between market and network corruption is weak, which implies that ignoring network corruption leads not only to an underestimation of the overall scale of corruption but also biases national corruption rankings. Secondly, in line with theoretical expectations, we find that network corruption is more persistent over time, less related to contemporary national socio-economic and institutional characteristics and has stronger historical roots than market corruption. Yet, network corruption, unlike bribery, is not able to ‘grease the wheels’ and is not associated with political instability. Lastly, we show that the decline in bribery which was observed in almost all post-socialist countries in the period from 2010 to 2016 was accompanied by rising network corruption in many of them, which has important policy implications
    Keywords: market corruption, parochial corruption, network corruption, blat, bribery, post-socialist countries
    JEL: D73 Z13 L26
    Date: 2019

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