nep-pol New Economics Papers
on Positive Political Economics
Issue of 2019‒07‒08
twenty-one papers chosen by
Eugene Beaulieu
University of Calgary

  1. Overstrained Citizens? The Number of Ballot Propositions and the Quality of the Decision Process in Direct Democracy By Stutzer, Alois; Baltensperger, Michael; Meier, Armando N.
  2. Measuring electoral competitiveness: A Probability ratio index By Satya R. Chakravarty; Manipushpak Mitra; Suresh Mutuswami; Rupayan Pal
  3. What are the best quorum rules? A Laboratory Investigation By Luís Aguiar-Conraria; Pedro C. Magalhães; Christoph A. Vanberg
  5. Term Length and Public Finances: The Case of U.S. Governors By Klarin, Jonas
  6. Protectionism under Trump: The China Shock, Intolerance, and the “First White President” By Marcus Noland
  7. Can common ownership prevent the tragedy of the commons? An experimental investigation By Puzon, Klarizze; Willinger, Marc
  8. News We Like to Share : How News Sharing on Social Networks Influences Voting Outcomes By Pogorelskiy. Kirill; Shum, Matthew
  9. Slacktivism By Ginzburg, Boris
  10. Runoff Elections in the Laboratory By Laurent Bouton; Jorge Gallego; Aniol Llorente-Saguer; Rebecca Morton
  11. Political entrenchment and GDP misreporting By Ho Fai Chan; Bruno S. Frey; Ahmed Skali; Benno Torgler
  12. Democratisation in Tanzania: No Elections Without Exemptions By Therkildsen, Ole; Bak, Ane Karoline
  13. Robust Information Aggregation Through Voting By Midjord, Rune; Rodríguez Barraquer, Tomás; Valasek, Justin
  14. Partial decentralisation and inter-governmental electoral competition in local public good provision By Marco Catola
  15. The urban-rural gap in health care infrastructure - does government ideology matter? By Niklas Potrafke; Felix Roesel
  16. Transitional justice in Colombia: competing discourses in a peace agreement context By Navarrete Guzmán, T.
  17. The Winner-Take-All Dilemma By Kazuya Kikuchi; Yukio Koriyama
  18. On some k-scoring rules for committee elections: agreement and Condorcet Principle By Mostapha Diss; Eric Kamwa; Abdelmonaim Tlidi
  19. Patronage Appointments between Politics and Public Governance: a Review. By Quaresima, Federico
  20. Expertise and Independence on Governing Boards: Evidence from School Districts By Shi, Ying; Singleton, John D.
  21. A Political Economy of Social Discrimination By Dewan, Torun; Wolton, Stephane

  1. By: Stutzer, Alois (University of Basel); Baltensperger, Michael (BRUEGEL); Meier, Armando N. (University of Basel)
    Abstract: We study how the number of ballot propositions affects the quality of decision making in direct democracy, as reflected in citizens' knowledge, voting behavior, and attitudes toward democracy. Using three comprehensive data sets from Switzerland with over 3,500 propositions, we exploit variation in the number of federal and cantonal propositions. Voters know the most about the content of federal propositions when they are exclusively presented and less with a high number of concurrent cantonal propositions on the ballot. Across other outcomes we find no consistent indications that – for the observed variation in the exposure to popular votes – a high number of propositions impedes the quality of decision making in Swiss federal direct democracy. In the medium to longer term, more federal propositions on the ballot rather relate to higher perceived political influence and satisfaction with democracy.
    Keywords: satisfaction with democracy, political knowledge, pole-party endorsements, political efficacy, direct democracy, ballot length, turnout, voter behavior
    JEL: D03 D72 D78 H00
    Date: 2019–06
  2. By: Satya R. Chakravarty (Indian Statistical Institute, Kolkata); Manipushpak Mitra (Indian Statistical Institute, Kolkata); Suresh Mutuswami (University of Leicester); Rupayan Pal (Indira Gandhi Institute of Development Research)
    Abstract: We propose an index of electoral competition based on the vote shares of parties competing in the election. This index is the ratio between the probabilities that the two voters drawn at random with (without) replacement have voted for different parties under actual vote shares across the competing parties and under equal vote shares across them. The measure is characterized using two simple axioms, consistency in aggregation and competitive indifference. The former expresses the index as a weighted sum of competitiveness in two party elections. The latter is concerned with redistribution of vote shares across parties.
    Keywords: electoral competition, probability ratio index, electoral concentration, political heterogeneity
    JEL: D72 P16
    Date: 2019–05
  3. By: Luís Aguiar-Conraria (Department of Economics / NIPE, University of Minho); Pedro C. Magalhães (Institute of Social Sciences, University of Lisbon); Christoph A. Vanberg (Alfred-Weber-Institut, University of Heidelberg)
    Abstract: Many political systems with direct democracy mechanisms have adopted rules preventing decisions from being made by simple majority rule. The device most commonly added to majority rule in national is a quorum requirement. The two most common are the participation and the approval quora. Such rules are a response to three major concerns: the legitimacy of the referendum outcome, its representativeness (the concern with the outcome representing the will of the whole electorate), and protection of minorities regarding issues that should demand a broad consensus. Guided by a pivotal voter model, we conduct a laboratory experiment to investigate the performance of different quora in reaching such goals. We introduce two main innovations in relation to previous work on the topic. First, part of the electorate goes to the polls out of a sense of civic duty. Second, we test the performance of a different quorum, the rejection quorum, recently proposed in the literature. We conclude that, depending on the preferred criterion, either the approval or the rejection quorum is to be preferred.
    Keywords: Election Design; Participation Quorum; Approval Quorum; Laboratory Experiment
    JEL: C91 D72 D02
    Date: 2019
  4. By: Dmitriy Veselov (National Research University Higher School of Economics)
    Abstract: When property rights are poorly secured, crony relations i.e. the tight connection between the owners of major firms and the government are the primary informal mechanism securing the property. However, this institutional framework creates high entry barriers on markets. We propose a theory that explains why in a democracy the majority of voters may prefer this type of institutions. This paper develops a simple voting model with heterogeneous agents, which differ in their skills and wealth endowment. We show that if the policy space is two-dimensional, the wealthy elite and low-skilled workers may form a majority coalition, supporting the regime with high-entry barriers. In this case, the wealthy elite agrees on a higher level of redistribution, preferred by the least skilled agents. We compare the possibility of this outcome for different voting rules, and prove that the electoral support of crony capitalism is more likely for countries with a low level of human capital and high income and skill inequality. The model is also able to explain different effects of democratization process on the institutional structure of the society.
    Keywords: barriers to entry, electoral rules, income inequality, skills inequality, crony capitalism
    JEL: D30 D71 D72 O10 P16
    Date: 2019
  5. By: Klarin, Jonas (Department of Economics)
    Abstract: This paper studies how a politician’s term length affects public finances. I test whether the gradual increase fromtwo- to four-year terms for American governors affects state finances using a rich state-year panel stretching back almost a century. The results show that adopting four-year terms decreases annual expendituresand revenues by 6 %. The effect of the reform is present immediately after voters approve the ballot measure, when the last two-year-term governor is still in office, which suggests that the mechanism at work is stronger re-election incentives for the incumbent. The effect is larger among electorally ’at risk’ governors. Democratic governors respond to longer terms by increasing public employment instead of decreasing expenditures.
    Keywords: Term Length; U.S. Governors; Political Agency; Elections
    JEL: D72 H11 H70 P16
    Date: 2019–05–08
  6. By: Marcus Noland (Peterson Institute for International Economics)
    Abstract: In 2016, the United States elected an avowedly protectionist president. This paper uses US county-level electoral data to examine this outcome. The hypothesis that support for protectionism was purely a response to globalization is rejected. Exposure to trade competition encouraged a shift to the Republican candidate, but this effect is mediated by race, diversity, education, and age. If the turn toward protectionism is due to economic dislocation, then public policy interventions could mitigate the impact and support the reestablishment of a political consensus for open trade. If, however, the drivers are identity or cultural values, then the scope for constructive policy intervention is unclear.
    Keywords: China shock, Donald Trump, globalization, protectionism, sociotropic voting
    JEL: D72 F13 Z13
    Date: 2019–06
  7. By: Puzon, Klarizze (Institute of Social and Economic Research, Osaka University); Willinger, Marc (University of Montpellier)
    Abstract: We study experimentally a two-stage common pool resource game. In the first stage, selected members of the group determine the level of protection for the resource. The protected fraction of the resource is equally shared among group members. In the second stage, the unprotected fraction of the resource is competed for. We consider three institutions varying in the extent by which subjects participate in the first stage: vote (all group members participate), dictator (only one member decides), and outsider (no one participates). We also vary the initial level of the resource: scarce or abundant. We establish the following results. First, we find that voting provides more frequent protection and leads to higher protection levels than other institutions. Second, collective rent-seeking is larger when the level of the resource is high, but this tendency is sharply reduced in the presence of democratic institutions. Third, collective rent-seeking is negatively affected by the level of protection, but significantly so only when the highest protection level is implemented. These experimental results are stronger in the case of a resource boom than in the case of a resource bust.
    Keywords: voting; commons; natural resources; property rights; experiments
    JEL: C90 D02 D72 P48
    Date: 2019–06–26
  8. By: Pogorelskiy. Kirill (University of Warwick); Shum, Matthew (Caltech)
    Abstract: More voters than ever get political news from their friends on social media platforms. Is this bad for democracy? Using context-neutral laboratory experiments, we find that biased (mis)information shared on social networks affects the quality of collective decisions relatively more than does segregation by political preferences on social media. Two features of subject behavior underlie this finding: 1) they share news signals selectively, revealing signals favorable to their candidates more often than unfavorable signals; 2) they naıvely take signals at face value and account for neither the selection in the shared signals nor the differential informativeness of news signals across different sources.
    Keywords: news sharing ; social networks ; voting ; media bias ; fake news ; polarization ; filter bubble ; lab experiments
    JEL: C72 C91 C92 D72 D83 D85
    Date: 2019
  9. By: Ginzburg, Boris
    Abstract: Many countries have introduced e-government petitioning systems, in which a petition that gathers enough signatures triggers some political outcome. This paper models citizens who choose whether to sign a petition. Citizens are imperfectly informed about the petition's chance of bringing change. The number of citizens approaches infinity, while the cost of signing is positive but low, falling within certain bounds. In the limit, participation is increasing in the required quota of signatures. Social welfare is decreasing in the quota. Information aggregation may fail if individual signals are sufficiently uninformative.
    Keywords: online petitions, collective action, voting, political participation
    JEL: D72 H41
    Date: 2019–05–09
  10. By: Laurent Bouton; Jorge Gallego; Aniol Llorente-Saguer; Rebecca Morton
    Abstract: We study experimentally the properties of the majority runoff system and compare them to the ones of plurality rule, in the setup of a divided majority. Our focus is on Duverger's famous predictions that the plurality rule leads to a higher coordination of votes on a limited number of candidates than the majority runoff rule. Our experiments show that, in contradiction with Duverger's predictions, coordination forces are strong in majority runoff elections. We indeed observe similar levels of coordination under both rules, even when sincere voting is an equilibrium only under majority runoff. Our results suggest that the apparent desire to coordinate, and not vote sincerely, under the majority runoff rule is to some extent not rational. Finally, we find insignificant differences between runoff and plurality systems in terms of both electoral outcomes and welfare. This is so exactly because coordination forces are strong under both rules. But, this does not mean that the two rules are equally socially desirable. Majority runoff rule entails an additional cost: second rounds that take place frequently.
    JEL: C92 D7
    Date: 2019–06
  11. By: Ho Fai Chan; Bruno S. Frey; Ahmed Skali; Benno Torgler
    Abstract: By examining discrepancies between officially reported GDP growth figures and the actual economic growth implied by satellite-based night time light (NTL) density, we investigate whether democracies manipulate officially reported GDP figures, and if so, whether such manipulation pays political dividends. We find that the over-reporting of growth rates does indeed precede increases in popular support, with around a 1% over-statement associated with a 0.5% increase in voter intentions for the incumbent. These results are robust to allowing the elasticity of official GDP statistics to NTL to be country specific, as well as accounting for the quality of governance, and checks and balances on executive power.
    Keywords: manipulation, political entrenchment, electoral cycles, trust, popular support, GDP, night lights
    JEL: D72 D73 O43
    Date: 2019
  12. By: Therkildsen, Ole; Bak, Ane Karoline
    Abstract: A demand-supply framework has been developed and applied to Tanzania to explore the link between democratisation, economic liberalisation and the use of tax exemptions to fund political parties’ electoral campaigns. In Tanzania, the demand for this type of money has increased since one-party rule was abolished in 1992. This led to reduced state subsidies to parties, while growing inter- and intra-party competition for political power through the ballot box increased the campaign costs of the last three elections. Political liberalisation also raised the cost of keeping together increasingly fragmented political elites. The increased supply of political funding for the ruling party is driven by mutual interest between the funding demands of political elites, the interests of companies and emerging capitalists for tax exemptions and other rents to succeed in business. This demand-supply framework helps to explain an increased use of tax exemptions for private companies and individuals around election years in Tanzania. The framework is also relevant to the analysis of political financing through tax exemptions elsewhere on the African continent.
    Keywords: Economic Development, Finance, Governance,
    Date: 2019
  13. By: Midjord, Rune; Rodríguez Barraquer, Tomás; Valasek, Justin (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Numerous theoretical studies have shown that information aggregation through voting is fragile. We consider a model of information aggregation with vote-contingent payoffs and generically characterize voting behavior in large committees. We use this characterization to identify the set of vote-contingent payoffs that lead to a unique outcome that robustly aggregates information. Generally, it is not sufficient to simply reward agents for matching their vote to the true state of the world. Instead, robust and unique information aggregation can be achieved with vote-contingent payoffs whose size varies depending on which option the committee chooses, and whether the committee decision is correct
    Keywords: Information aggregation; Voting; Vote-contingent payoffs.
    JEL: D71 D72
    Date: 2019–06–10
  14. By: Marco Catola
    Abstract: Over the last few years, the literature on partial decentralisation has largely grown, pointing out that one of its effects is a reduction in accountability because voters are imperfectly informed about each government contribution. However, the possibility for politicians to directly manipulate this asymmetry in information has not been addressed yet. This paper provides a simple model in which two levels of government are involved in the provision of a local public good with the local government that can decide to spend its budget either on the provision of the public good or in spending that influences the information of the voters in its favour. A central result is that the conflict of interest that arises among the levels of government reduces the spending in the public good at both levels, while it generates a wasteful spending to pander to voters.
    Keywords: partial decenstralisation; party alignment; accountability; intergovernmental transfers
    JEL: D72 H72 H77
    Date: 2019–06–01
  15. By: Niklas Potrafke; Felix Roesel
    Abstract: Spatial inequalities in publicly provided goods such as health care facilities have substantial socio-economic effects. Little is known, however, as to why publicly provided goods diverge among urban and rural regions. We exploit narrow parliamentary majorities in German states between 1950 and 2014 in an RD framework to show that government ideology influences the urban-rural gap in public infrastructure. Leftwing governments relocate hospital beds from rural regions. We propose that leftwing governments do so to gratify their more urban constituencies. In turn, spatial inequalities in hospital infrastructure increase, which seems to influence general and infant mortality.
    Keywords: publicly provided goods, spatial inequalities, political business cycles, partisan politics, government ideology, health care, hospitals
    JEL: D72 H42 I18
    Date: 2019
  16. By: Navarrete Guzmán, T.
    Abstract: This research paper analysed the transitional justice discourses of the government, its political opposition, the FARC, and the civil society participants in the peace negotiation, and its particular understandings of peace and conflict in the context of the peace negotiation with FARC in Colombia. Based on the study of the competing discourses and how are they reflected in the mechanism to admin transitional justice – Special Jurisdiction of Peace – I argue that the mechanism definition has been part of a bargain between elites looking for the status quo preservation. Thus, the Special Jurisdiction of Peace privileges the governments' discourses, especially of the government in power, while excluding some of the demands from civil society representatives and FARC.
    Keywords: Transitional justice, Colombian peace agreement, Special Jurisdiction of Peace, discourse analysis
    Date: 2019–06–28
  17. By: Kazuya Kikuchi; Yukio Koriyama
    Abstract: This paper considers collective decision-making when individuals are partitioned into groups (e.g., states or parties) endowed with voting weights. We study a game in which each group chooses an internal rule that specifies the allocation of its weight to the alternatives as a function of its members’ preferences. We show that under quite general conditions, the game is a Prisoner’s Dilemma: while the winner-take-all rule is a dominant strategy, the equilibrium is Pareto dominated. We also show asymptotic Pareto dominance of the proportional rule. Our numerical computation for the US Electoral College verifies the sensibility of the asymptotic results.
    Date: 2019–06
  18. By: Mostapha Diss (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); Eric Kamwa (LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles); Abdelmonaim Tlidi (ENSA Marrakech - École nationale des sciences appliquées de Marrakech)
    Abstract: Given a collection of individual preferences on a set of candidates and a desired number of winners, a multi-winner voting rule outputs groups of winners, which we call committees. In this paper, we consider five multi-winner voting rules widely studied in the literature of social choice theory: the k-Plurality rule, the k-Borda rule, the k-Negative Plurality rule, the Bloc rule, and the Chamberlin-Courant rule. The objective of this paper is to provide a comparison of these multi-winner voting rules according to many principles by taking into account a probabilistic approach using the well-known Impartial Anonymous Culture (IAC) assumption. We first evaluate the probability that each pair of the considered voting rules selects the same unique committee in order to identify which multi-winner rules are the most likely to agree for a given number of candidates and a fixed target size of the committee. In this matter, our results show that the Chamberlin-Courant rule and the k-Plurality rule on one side, and the k-Borda rule and the Bloc rule on the other side, are the pairs of rules that most agree in comparison to other pairs. Furthermore, we evaluate the probability of every multi-winner voting rule selecting the Condorcet committee à la Gehrlein when it exists. The Condorcet committee à la Gehrlein is a fixed-size committee such that every member defeats every non-member in pairwise comparisons. In addition, we compare the considered multi-winner voting rules according to their ability (susceptibility) to select a committee containing the Condorcet winner (loser) when one exists. Here, our results tell us that in general, the k-Borda rule has the highest performance amongst all the considered voting rules. Finally, we highlight that this paper is one of the very rare contributions in the literature giving exact results under the Impartial Anonymous Culture (IAC) condition for the case of four candidates.
    Keywords: Scoring rules,Chamberlin-Courant,Borda,Condorcet,Voting,Committee
    Date: 2019–06–04
  19. By: Quaresima, Federico
    Abstract: The present work reviews how scholars of different disciplines have examined political appointments in recent years, in particular, those regarding public and semi-public organizations. First of all, I show how political economy research has shed light on several reform processes, arguing how economic and managerial policies have been implemented also considering political rationales, such as, for instance,the preservation of parties' control of privatized firms. This enduring power of political parties primarily results from their preserved appointment authority over semi-public firms (beyond public agencies), one of the tools by which the political class continues to govern the enterprises in question. In particular, this appointment authority has been exploited by parties in order to reward their members and control bureaucracies, among other purposes. The phenomenon naturally resulted in a widespread surviving politicization of the state, which presents several consequences, especially in terms of public- private politically connected firms' performance. In the conclusions, I suggest some further research trajectories which could enhance the literature.
    Keywords: patronage, literature, appointment, politicization, public sector
    JEL: D72 D73 H77
    Date: 2019–04
  20. By: Shi, Ying (Stanford University); Singleton, John D. (University of Rochester)
    Abstract: In this paper, we study the roles of expertise and independence on governing boards in the context of education. In particular, we examine the causal influence of professional educators elected to local school boards on education production. Educators may bring valuable human capital to school district leadership, thereby improving student learning. Alternatively, the independence of educators may be distorted by interest groups. The key empirical challenge is that school board composition is endogenously determined through the electoral process. To overcome this, we develop and implement a novel research design that exploits California's randomized assignment of the order that candidates appear on election ballots. The insight of our empirical strategy is that ballot order effects generate quasi-random variation in the elected school board's composition. This approach is made possible by a unique dataset that combines election information about California school board candidates with district-level data on education inputs and outcomes. The results reveal that educators on the school board causally increase teacher salaries and reduce district enrollment in charter schools relative to other board members. We do not find accompanying effects on student test scores. We interpret these findings as consistent with educators on school boards shifting bargaining in favor of teachers' unions.
    Keywords: school boards, education, ballot order effects, education production, expertise, independence
    JEL: I20 H75 J24
    Date: 2019–06
  21. By: Dewan, Torun; Wolton, Stephane
    Abstract: From burqa ban to minaret ban, from right to detain suspected illegal immigrants to restricting the help to migrants, the number of social laws specifically targeting a tiny proportion of citizens has raised in recent years across Western democracies. These symbolic policies, we show, are far from being innocuous: they can have far reaching consequences for large parts of the population. By raising the salience of certain social traits (e.g., Muslim identity) these laws can create a labour market loaded in favor of the majority (e.g., the non-Muslims), yielding higher unemployment rates and spells for minority citizens. These deleterious effects arise even absent any form of bias against, or uncertainty about, minority workers. Instead they are fully driven by social expectations about behavior and are best understood as a form of social discrimination. Importantly, we establish conditions under which a plurality of the citizenry demands the implementation of symbolic policies anticipating their labor market consequences. We further highlight that the implementation of symbolic policies is always associated with less redistribution and can be coupled with lower tax rates. We discuss several policy recommendations to limit the possibility of social discrimination arising.
    Keywords: burqa, minority, redistribution, identity politics
    JEL: D70 J60 J64 J70 J71 J78
    Date: 2019–06–08

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