nep-pol New Economics Papers
on Positive Political Economics
Issue of 2019‒07‒15
fifteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. The Heterogeneous Price of a Vote: Evidence from France, 1993-2014 By Yasmine Bekkouche; Julia Cage
  2. Your vote is (no) secret! How low voter density harms voter anonymity and biases elections in Italy By Mauro Caselli; Paolo Falco
  3. Remittances and vote buying By González-Ocantos, Ezequiel; de Jonge, Chad Kiewiet; Meseguer, Covadonga
  4. Age of Marriage and Women's Political Engagement: Evidence from India By Fenella Carpena; Francesca R. Jensenius
  5. Hate at first sight? Dynamic aspects of the electoral impact of migration: The case of Ukip By Levi, Eugenio; Mariani, Rama Dasi; Patriarca, Fabrizio
  6. Financial Inequality, group entitlements and populism By Federico Faveretto; Donato Masciandaro
  7. Disincentives from Redistribution: Evidence on a Dividend of Democracy By Sausgruber, Rupert; Sonntag, Axel; Tyran, Jean-Robert
  8. The Political Economy Consequences of China's Export Slowdown By Filipe R. Campante; Davin Chor; Bingjing Li
  9. Opposition Media, State Censorship, and Political Accountability: Evidence from Chavez's Venezuela By Brian Knight; Ana Tribin
  10. Friendship Networks and Political Opinions: A Natural Experiment among Future French Politicians By Algan, Yann; Dalvit, Nicolo; Do, Quoc-Anh; Le Chapelain, Alexis; Zenou, Yves
  11. Positive and Negative Campaigning in Primary and General Elections By Bernhardt, Dan; Ghosh, Meenakshi
  12. Government Privatization and Political Participation: The Case of Charter Schools By Jason B. Cook
  13. Internationalized at work and localistic at home: the ‘split’ Europeanization behind Brexit By Crescenzi, Riccardo; Di Cataldo, Marco; Faggian, Alessandra
  14. Political Economy of Transparency By Raphael Galvão
  15. Inequality and Democracy By A. Soci

  1. By: Yasmine Bekkouche (Ecole d'Économie de Paris - Paris School of Economics (PSE)); Julia Cage (Département d'économie)
    Abstract: What is the impact of campaign spending on votes? Does it vary across election types and across political parties? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that successfully deal with the endogeneity of campaign spending. We provide novel contributions in both of these areas. We build a new comprehensive dataset of all French municipal and legislative elections over the 1993-2014 period. We propose two new instruments to overcome the endogenous nature of campaign spending; they rely on the fact that candidates are differentially affected by regulation on campaign funding depending on the source of funding they depend on the most. 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 party. In particular, we show that spending by extreme-right candidates has much lower returns than spending by other parties. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of the mechanisms at play.
    Keywords: Elections; Campaign financing; Campaign expenditures; Campaign spending limits; Campaign finance reform; Multiparty electoral data; Heterogeneous effects of campaign spending
    JEL: D72 P48 H7
    Date: 2019–06
  2. By: Mauro Caselli; Paolo Falco
    Abstract: Italian voters are assigned to a specific polling station according to their address. After an election, candidates know how many votes they received in each polling station. When the number of voters per polling stations is low and candidates are many, this jeopardises the secrecy of voting and candi- dates can more easily detect deviations from pre-electoral pledges. Exploit- ing variation in the number of voters per polling station across cities and over time, combined with rich data on politicians in office in all Italian mu- nicipalities between 1989 and 2015, we estimate the effect of voter density on the probability of re-election for local politicians. We find that when the number of voters per polling station is lower (and secrecy is at greater risk), incumbents have a higher probability of re-election. The analysis addresses the potential endogeneity of voter density. The results are stronger in regions with lower social capital and worse institutions.
    Keywords: elections, secret ballot, incumbency advantage, polling stations, voter density, institutions, social capital, Italy
    JEL: D02 D72 H70
    Date: 2019
  3. By: González-Ocantos, Ezequiel; de Jonge, Chad Kiewiet; Meseguer, Covadonga
    Abstract: How does the presence of a large group of remittance recipients in the electorate affect the way political parties in Latin America plan their vote-buying operations during electoral campaigns? Existing research claims that remittances bolster the political autonomy of recipients, allowing them to escape clientelistic networks and making them less attractive targets from the point of view of party machines. Although in the long run remittances may undermine the effectiveness of clientelistic inducements, parties still have strong incentives to distribute gifts and favors among these voters. Cross-national survey evidence and an original list experiment fielded in the aftermath of El Salvador’s 2014 presidential race support the view that remittances alter key attitudes and patterns of political behavior among recipients in ways that are relevant for the electoral strategies of party machines. In particular, remittance recipients are appealing targets for clientelistic exchanges due to the uncertainty of their turnout propensity and their distributive preferences.
    JEL: F3 G3
    Date: 2018–12–20
  4. By: Fenella Carpena (Oslo Business School, Oslo Metropolitan University); Francesca R. Jensenius (NUPI - Norwegian Institute for InternationalAffairs; University of Oslo)
    Abstract: Although decades have passed since most women in the democratic world gained the right to vote and run for elections, a large gender gap in political participation persists today, particularly in developing democracies. This short paper considers an important --- and heretofore overlooked --- factor limiting the political engagement of many women in the developing world: her age of marriage. Drawing on nationally representative data from India and instrumenting marriage age with menarche age, we find substantial positive effects of delaying marriage on women's participation in everyday politics. A standard deviation increase in marriage age makes a woman 36.2 percent more likely to attend a village meeting, and 6.2 percent more likely discusses politics with her husband. Exploring mechanisms, we show that education and time --- rather than employment and mobility --- are the main channels of impact. These findings underscore the importance of early marriage as a critical barrier to women's participation in the political sphere.
    Keywords: Gender, Politics, India
    JEL: D72
    Date: 2019–05–05
  5. By: Levi, Eugenio; Mariani, Rama Dasi; Patriarca, Fabrizio
    Abstract: In this paper, we test the hypothesis that the causal effect of immigrant presence on anti-immigrant votes is a short-run effect. For this purpose, we consider a distributed lag model and adapt the standard instrumental variable approach proposed by Altonji and Card (1991) to a dynamic framework. The evidence from our case study, votes for the UK Independent Party (Ukip) in recent European elections, supports our hypothesis. Furthermore, we find that this effect is robust to differences across areas in terms of population density and socioeconomic characteristics, and it is only partly explained by integration issues.
    Keywords: Immigration,Voting,Political Economy
    JEL: P16 J61 D72
    Date: 2019
  6. By: Federico Faveretto; Donato Masciandaro
    Abstract: This paper offers a theoretical framework that explains how financial inequality and misbeliefs about group entitlements among voters foster voting in favour of populist parties. When a banking shock occurs in an economy with heterogeneous agents, the central bank independently chooses the optimal degree of monetization to balance financial and monetary instability, while agents choose between a populist party and a classical party to select the degree of bank bailout, which is paid through a proportional tax. Agents vote according to a behavioural mechanism that we call “democratic rioting”: “aggrieved” agents benefit psychologically from voting for the populist party. The banking shock triggers a higher probability of voting for a populist party in the presence of financial inequality and misbeliefs about group entitlements.
    Keywords: Financial inequality, monetary policy, populism, banking policy, fiscal policy, central bank independence, political economics
    JEL: D72 D78 E31 E52 E58 E62
    Date: 2018
  7. By: Sausgruber, Rupert; Sonntag, Axel; Tyran, Jean-Robert
    Abstract: We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a "dividend of democracy" in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a vote than when it is imposed. Redistribution seems to be more legitimate, and hence less demotivating, when accepted in a vote.
    Keywords: disincentive effect; Lab Experiment; Legitimacy; Real effort task; redistribution; voting
    JEL: C92 D31 D72 H23
    Date: 2019–06
  8. By: Filipe R. Campante; Davin Chor; Bingjing Li
    Abstract: We study how adverse economic shocks influence political outcomes in authoritarian regimes in strong states, by examining the 2013-2015 export slowdown in China. We exploit detailed customs data and the variation they reveal about Chinese prefectures’ underlying exposure to the global trade slowdown, in order to implement a shift-share instrumental variables strategy. Prefectures that experienced a more severe export slowdown witnessed a significant increase in incidents of labor strikes. This was accompanied by a heightened emphasis in such prefectures on upholding domestic stability, as evidenced from: (i) textual analysis measures we constructed from official annual work reports using machine-learning algorithms; and (ii) data we gathered on local fiscal expenditures channelled towards public security uses and social spending. The central government was subsequently more likely to replace the party secretary in prefectures that saw a high level of “excess strikes”, above what could be predicted from the observed export slowdown, suggesting that local leaders were held to account on yardsticks related to political stability.
    JEL: D73 D74 F10 F14 F16 H10 J52 P26
    Date: 2019–06
  9. By: Brian Knight; Ana Tribin
    Abstract: This paper investigates the role of opposition media and state censorship in political accountability using evidence from the closing of RCTV, a popular opposition television channel in Venezuela. The government did not renew RCTV's license, and the channel was replaced overnight, during May 2007, by a pro-government channel. Based upon this censorship of opposition television, we have three key findings. First, using Nielsen ratings data, viewership fell, following the closing of RCTV, on the pro-government replacement, but rose on Globovision, the only remaining television channel for opposition viewers. This finding is consistent with a model in which viewers have a preference for opposition television and substitute accordingly. Second, exploiting the geographic location of the Globovision broadcast towers, Chavez approval ratings fell following the closing of RCTV in places with access to the Globovision signal, relative to places without access. Third, in places with access to the Globovision signal, relative to places without, support for Chavez in electoral data also fell following the closing of RCTV. Taken together, these findings suggest that opposition media and viewer responses to censorship can help to hold governments and incumbent politicians accountable.
    JEL: D7 D8
    Date: 2019–06
  10. By: Algan, Yann; Dalvit, Nicolo; Do, Quoc-Anh; Le Chapelain, Alexis; Zenou, Yves
    Abstract: We study how friendship shapes students' political opinions in a natural experiment. We use the indicator whether two students were exogenously assigned to a short-term "integration group", unrelated to scholar activities and dissolved before the school year, as instrumental variable for their friendship, to estimate the effect of friendship on pairwise political opinion outcomes in dyadic regressions. After six months, friendship causes a reduction of differences in opinions by one quarter of the mean difference. It likely works through a homophily-enforced mechanism, by which friendship causes politically-similar students to join political associations together, which reinforces their political similarity. The effect is strong among initially similar pairs, but absent in dissimilar pairs. Friendship affects opinion gaps by reducing divergence, therefore polarization and extremism, without forcing individuals' views to converge. Network characteristics also matter to the friendship effect.
    Keywords: extremism; friendship effect; homophily; learning; Natural Experiment; Polarization; Political opinion; Social Networks
    JEL: C93 D72 Z13
    Date: 2019–06
  11. By: Bernhardt, Dan (University of Illinois & University of Warwick); Ghosh, Meenakshi (University of Illinois)
    Abstract: We analyze primary and general election campaigning. Positive campaigning builds a candidate’s reputation; negative campaigning damages a rival’s. Each primary candidate hopes to win the general election; but failing that, he wants his primary rival to win. We establish that general elections always feature more negative campaigning than positive, as long as reputations are easier to tear down than build up. In contrast, if the effects of primary campaigns strongly persist, primary elections always feature more positive campaigning than negative. This reflects that a primary winner benefits only from his positive primary campaigning in general elections, and negative campaigning by a rival hurts.
    Keywords: Primary ; general election ; negative and positive campaigning ; contest ; incumbent ; challenger
    JEL: D72
    Date: 2019
  12. By: Jason B. Cook
    Abstract: Governments around the world have privatized public services in the name of efficiency andcitizen empowerment, but some argue that privatization could also affect citizen participation indemocratic governance. We explore this possibility by estimating the impact of charter schools(which are publicly funded but privately operated) on school district elections. The analysisindicates that the enrollment of district students in charter schools reduced the number of votescast in district school board contests and, correspondingly, reduced turnout in the odd-yearelections in which those contests are held. This impact is concentrated in districts that servelow-achieving, impoverished, and minority students, leading to a modest decline in the share ofvoters in those districts who are black and who have children. There is little evidence that charterschool expansion affected the outcomes of school board elections or turnout in other elections
    Date: 2019–01
  13. By: Crescenzi, Riccardo; Di Cataldo, Marco; Faggian, Alessandra
    Abstract: This paper looks at the results of the Referendum on the United Kingdom membership to the European Union in order to test the link between the internationalisation of the local economy and the openness of the local society as factors associated with the ‘Leave’ vote (Brexit). The paper compares a number of alternative explanations put forward in the public debate after the Referendum. The empirical analysis suggests that the outcome of the referendum can be linked to an increasing tension between the ever increasing internationalisation of local firms and the ‘localistic’ attitude of their employees. Brexit can be seen as the result of a process of ‘split Europeanisation’ whereby Euroscepticism is triggered by the increasing mismatch between internationalised economies (and corporate economic interests) and localistic societies (and workers’ attitudes and cultural preferences).
    Keywords: Brexit; voting; FDI; trade; UK; European Union
    JEL: D72 N44 R23 Z13
    Date: 2017–12–27
  14. By: Raphael Galvão (Universidad Alberto Hurtado)
    Abstract: This paper studies the effects of short-term reputation concerns on the public disclosure of information about the state of the economy. There are efficient and inefficient governments, and high productivity states are more likely under the ecient type. Governments know the state and make public reports with the objective to be perceived as ecient. Entrepreneurs use public information to make investment decisions and their actions are strategic complements. In equilibrium, the inecient type is optimistic: it sends false reports high productivity states with positive probability. This creates uncertainty for entrepreneurs: if the true state is high, productivity is underestimated; if the true state is low, productivity is overestimated. This bias reduces welfare in the high state, but there is a tradeo↵ in the low state: marginal entrepreneurs lose from overestimating productivity; all entrepreneurs receive complementarity gains from a higher aggregate investment. I show that when the trust in the government’s report is low, the inecient government can improve welfare in the low state by sending false reports that increase investment (a small economic boom). However, as the trust in the false reports rises, the bias in entrepreneurs’ beliefs becomes large and welfare decreases (there is too much investment).
    Date: 2018–08
  15. By: A. Soci
    Abstract: The paper is about the political consequences of increasing economic inequality in Western economies. Political theorists have often stressed that democracy is in troubles when its population is not broadly uniform in income and wealth because unequal economic resources can easily translate into a surplus of political resources in the hands of the few. The connections between economic inequality and democracy, however, are not easy to detect and the body of literature is not so large to provide robust assessments of their complex relationship. The aim of this paper is to review the links between the two and to offer some hints on the political relevance of the inequality consequences, if any, on democracy.
    JEL: A13 D6
    Date: 2019–07

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