nep-pol New Economics Papers
on Positive Political Economics
Issue of 2019‒02‒25
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. The Price of a Vote: Evidence from France, 1993-2014 By Julia Cage; Yasmine Bekkouche
  2. The Logic of Fear - Populism and Media Coverage of Immigrant Crimes By Couttenier, Mathieu; Hatte, Sophie; Thoenig, Mathias; Vlachos, Stephanos
  3. Storable Votes and Quadratic Voting. An Experiment on Four California Propositions By Casella, Alessandra; sanchez, luis
  4. The generation gap in direct democracy By Ahlfeldt, Gabriel; Maennig, Wolfgang; Mueller, Steffen
  5. State-Dependent Effect on Voter Turnout: The Case of US House Elections By Panagiotis Konstantinou; Theodore Panagiotidis; Costas Roumanias
  6. Well-being, political decentralisation and governance quality in Europe By Rodríguez-Pose, Andrés; Tselios, Vassilis
  7. A Signaling Theory of Distributive Policy Choice: Evidence from Senegal By Jessica Gottlieb; Guy Grossman; Horacio Larreguy; Benjamin Marx
  8. Education and Conflict: Evidence from a Policy Experiment in Indonesia By Rohner, Dominic; Saia, Alessandro
  9. Immigration and Preferences for Redistribution in Europe By Alberto Alesina; Elie Murard; Hillel Rapoport
  10. From Microeconomic Favoritism to Macroeconomic Populism By Saint-Paul, Gilles

  1. By: Julia Cage (Département d'économie); Yasmine Bekkouche (Ecole d'Économie de Paris - Paris School of Economics (PSE))
    Abstract: What is the price of a vote? This paper investigates this consequential controversy by analyzing a new comprehensive dataset of all French municipal and legislative elections over the 1993-2014 period. We begin by documenting the evolution of campaign finance in France, and show that both the amount and sources of campaign contributions vary widely from one candidate to another, in particular depending on their political party. We then turn to the empirical analysis and tackle a number of empirical challenges. First, we rely on recent methodological innovations to handle the special characteristics of multiparty data. Second, to overcome the endogenous nature of campaign spending, we propose a new instrument based on a change in legislation. We find that an increase in spending per voter consistently increases a candidate's vote share both for municipal and legislative elections, and that the effect is heterogeneous depending on the parties and on the sources of campaign funding. According to our estimations, the price of a vote is about 6 euros for the legislative elections, and 32 euros for the municipal ones. Simulations show that small changes in spending patterns and caps can have a large impact on electoral outcomes and seats. Our results suggest that political finance needs to be tightly regulated.
    Keywords: Campaign expenditures; Campaign finance reform; Campaign financing; Elections; Multiparty electoral data
    JEL: D72 H72 P48
    Date: 2018–01
  2. By: Couttenier, Mathieu; Hatte, Sophie; Thoenig, Mathias; Vlachos, Stephanos
    Abstract: We study how news coverage of immigrant criminality impacted municipality-level votes in the November 2009 "minaret ban" referendum in Switzerland. The campaign, successfully led by the populist Swiss People's Party, played aggressively on fears of Muslim immigration and linked Islam with terrorism and violence. We combine an exhaustive violent crime detection dataset with detailed information on crime coverage from 12 newspapers. The data allow us to quantify the extent of pre-vote media bias in the coverage of migrant criminality. We then estimate a theory-based voting equation in the cross-section of municipalities. Exploiting random variations in crime occurrences, we find a first-order, positive effect of news coverage on political support for the minaret ban. Counterfactual simulations show that, under a law forbidding newspapers to disclose a perpetrator's nationality, the vote in favor of the ban would have decreased by 5 percentage points (from 57.6% to 52.6%).
    Keywords: Immigration; populism; Violent Crimes; Vote
    JEL: D72 K42 L82 Z12
    Date: 2019–01
  3. By: Casella, Alessandra; sanchez, luis
    Abstract: Storable Votes and Quadratic Voting are voting systems designed to account for voters' intensity of preferences. We test their performance in two samples of California residents using data on four initiatives prepared for the 2016 California ballot. We bootstrap the original samples and generate two sets of 10,000 multi-elections simulations. As per design, both systems induce minority victories and result in higher expected welfare relative to majority voting. In our parametrization, quadratic voting induces more minority victories and achieves higher average welfare, but causes more frequent inefficient minority victories. The results are robust to different plausible rules-of-thumb in casting votes.
    Keywords: democracy; majority; voting
    JEL: D70
    Date: 2019–01
  4. By: Ahlfeldt, Gabriel; Maennig, Wolfgang; Mueller, Steffen
    Abstract: We provide the first systematic documentation and analysis of a generation gap in direct democracy outcomes across a wide range of topics using postelection survey data covering more than 300 Swiss referenda and four decades. We find that young voters are more likely to support reform projects that are politically liberal, support the young, or protect the environment. We separate age and cohort effects without imposing functional form constraints using a panel rank regression approach. The aging effect on political orientation is robust for con-trolling for arbitrary cohort effects and appears to be driven by expected utility maximization and not by habitu-ation-induced status-quo bias. In Switzerland, population ageing is already affecting direct democracy outcomes. Five referenda since 2004 would have had a different outcome, had the population distribution remained at 1981 levels.
    Keywords: age; cohort; direct democracy; generation gap; Referendum; reform; status quo; utility
    JEL: D7 H3
    Date: 2019–01
  5. By: Panagiotis Konstantinou (AUEB); Theodore Panagiotidis (Department of Economics, University of Macedonia); Costas Roumanias (Department of International and European Economic Studies, Athens University of Economics and Business)
    Abstract: In models of voter participation, the effects of election margin and campaign expenditure can be shown to be state-dependent - varying with low/high turnout. We empirically assess these implications for observed turnout, employing data from US House elections from 2000 to 2008 by means of quantile regression analysis. We document that the effects of expected election margin and campaign spending on turnout are state-dependent: the later is positive and decreasing, whereas the former is negative and U-shaped. Other determinants' influence on turnout (e.g. education, population density) is also shown to vary across the conditional distribution of turnout rate. Our findings are robust to a number of extensions.
    Keywords: Voter Turnout, Election Margin, Campaign Expenditure, Quantile Regression
    JEL: C21 D72
    Date: 2019–01–25
  6. By: Rodríguez-Pose, Andrés; Tselios, Vassilis
    Abstract: European nations allocate public sector resources with the general aim of increasing the well-being and welfare of their citizens through a fair and efficient distribution of these public goods and services. However, 'who' delivers these goods and services and 'how well' they are delivered are essential in determining outcomes in terms of well-being. Drawing on data from the European Social Survey database, this paper uses Amartya Sen's social welfare index framework - accounting for the trade-off between the maximization of public sector resources and an equitable distribution of these resources - to examine the influence of political decentralisation ('who' delivers the resources) and whether this influence is moderated by governance quality ('how well' they are delivered) on individual subjective well-being. The findings of the econometric analysis reveal that decentralisation does not always lead to higher well-being, as the benefits of political decentralisation are highly mediated by the quality of national governance. In countries with high governance quality, political decentralisation results in a greater satisfaction with health provision, while in lower quality governance countries, a more decentralized government can increase the overall satisfaction with life, the economy, government, democracy and the provision of education, but not necessarily with health-related services.
    Keywords: Europe; European Social Survey; political decentralisation; quality of governance; Well-being
    JEL: H11 H70 I31
    Date: 2019–01
  7. By: Jessica Gottlieb (Texas A&M University); Guy Grossman (University of Pennsylvania (Penn)); Horacio Larreguy (Harvard University); Benjamin Marx (Département d'économie)
    Abstract: A recent literature emphasizes political economy factors behind the wave of administrative splits across the developing world. While previous studies have focused on why some groups are more likely to obtain new administrative units, they do not explain why vote-maximizing incumbents use this arguably less efficient policy in the first place. We contribute to this literature by embedding administrative splits within incumbents’ broader electoral strategy of distributive policies. We develop a model in which incumbents target local public goods to groups for whom this is a credible signal of commitment, namely, those with a history of reciprocal relationship. When incumbents face increased electoral competition, however, other groups require a stronger signal, which is emitted by the costly creation of new units that reduces the cost of future transfers to those groups. We test our theory using electoral and public goods data from Senegal and find robust support for its predictions.
    Keywords: Policy choice; Administrative unit creation; Electoral competition; Distributive politics
    Date: 2019–02
  8. By: Rohner, Dominic; Saia, Alessandro
    Abstract: This paper studies the impact of school construction on the likelihood of conflict, drawing on a policy experiment in Indonesia, and collecting our own novel dataset on political violence for 289 districts in Indonesia over the period 1955-1994. We find that education has a strong, robust and quantitatively sizeable conflict-reducing impact. It is shown that the channels of transmission are both related to economic factors as well as to an increase in inter-religious trust and tolerance. Interestingly, while societal mechanisms are found to have an immediate impact, economic channels only gain importance after some years. We also show that school construction results in a shift away from violent means of expression (armed conflict) towards non-violent ones (peaceful protests).
    Keywords: Civil War; conflict; education; Fighting; Polarization; protest; Returns to education; Schools
    JEL: C23 D74 H52 I20 N45
    Date: 2019–02
  9. By: Alberto Alesina; Elie Murard; Hillel Rapoport
    Abstract: We examine the relationship between immigration and attitudes toward redistribution using a newly assembled data set of immigrant stocks for 140 regions of 16 Western European countries. Exploiting within-country variations in the share of immigrants at the regional level, we find that native respondents display lower support for redistribution when the share of immigrants in their residence region is higher. This negative association is driven by regions of countries with relatively large Welfare States and by respondents at the center or at the right of the political spectrum. The effects are also stronger when immigrants originate from Middle-Eastern countries, are less skilled than natives, and experience more residential segregation. These results are unlikely to be driven by immigrants' endogenous location choices.
    JEL: D6 O15 P16
    Date: 2019–02
  10. By: Saint-Paul, Gilles
    Abstract: Why would people support policies that are macroeconomically unsound, in that they are more likely to lead to such events as sovereign crises, balance of payments crises, and the like? This may arise if decisive voters are likely to bear a lower fraction of the costs of the crisis, while benefitting from the short-run gains associated with those policies, such as greater public expenditure or lower taxes. I first discuss an illustrative model based on Saint-Paul et al. (2017), based on the assumption that in a crisis, not everybody can access his or her entitlement to publicly provided goods, a feature labelled "favoritism". If the decisive voter is relatively favored in this rationing process, then people are more likely to finance public expenditure by debt, the greater the degree of favoritism. Furthermore, favoritism and the likelihood of a crisis raises the level of public spending. Next, I consider the choice between electing a "populist" who reneges on anonymity when allocating the public good, even in normal times, and a "technocrat" who sticks to anonymity, and does all it takes to balance the budget. I show that the support for the populist is greater, (i) the greater the likelihood of default, (ii) the more depressed the macroeconomic environment, (iii) the greater the inherited level of public debt and (iv) the lower the state's fiscal capacity. I then argue that the model helps understanding some episodes in French pension reform. Some occupational groups supported unsustainable reductions in the retirement age because they expected that other workers would bear a higher proportion of the burden of future adjustment. Finally, using a panel of countries, I provide evidence in favor of some of the predictions of the model. As predicted, favoritism raises public debt, budget deficits, and public spending. It also raises the likelihood of a fiscal crisis through its effect on public debt. Furthermore, "populists" are more likely to conquer power, the higher the degree of debt and budget deficits, and the higher the level of government spending--the latter finding being consistent with the model's prediction on the effect of fiscal capacity.
    Keywords: Entitlements; favoritism; Fiscal Crises; inequality; political economy; populism; public debt; state capacity
    Date: 2019–01

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