nep-pol New Economics Papers
on Positive Political Economics
Issue of 2019‒11‒18
four papers chosen by
Eugene Beaulieu
University of Calgary

  1. Oil, Politics, and Corrupt Bastards By Alexander James; Nathaly M. Rivera
  2. Accumulation by Dispossession and Electoral Democracies : An Analysis of Land Acquisition for Special Economic Zones in India By Kartik Misra
  3. Media attention and strategic timing in politics: Evidence from U.S. presidential executive orders By Milena Djourelova; Ruben Durante
  4. Comparative European Institutions and the Little Divergence, 1385-1800 By António Henriques; Nuno Palma

  1. By: Alexander James (University of Alaska Anchorage); Nathaly M. Rivera (University of Alaska Anchorage)
    Abstract: We develop an analytical framework in which a natural-resource-extracting firm pays an incumbent politician both legal and illegal bribes in exchange for reductions in the severance tax rate. A positive resource shock increases the marginal benefit of a tax cut and more bribes are given. We test this theory using forty years of U.S. state-level data, measuring legal corruption as contributions to political campaigns from the oil and gas sector, and illegal corruption as both convictions of public corruption and "reflections'' of it, measured as the frequency that words like "corrupt'', "fraud'', and "bribery’’—and their iterations—appear in local newspapers. We find that oil-rich U.S. states are significantly more corrupt than their oil-poor counterparts and that this is especially true during periods of high oil prices, suggesting an underlying causal relationship. Our findings are robust to a variety of modeling assumptions and specifications suggesting that oil—through its effect on political corruption—plays an indirect, critically important, and yet previously overlooked role in shaping public and economic outcomes in the United States.
    Keywords: Oil, Rents, Political Corruption, Campaign Finance, Bribery
    JEL: Q33 Q32 D72 D73
    Date: 2019–11
  2. By: Kartik Misra (Department of Economics, University of Massachusetts Amherst)
    Abstract: Forcible acquisition of agricultural land to facilitate accumulation by dispossession attempts like setting up of Special Economic Zones (SEZ) is fiercely resisted by farmers in India. These agitations may determine the political viability of governments. The ability if the state to enact and implement policies favoring accumulation by dispossession is determined by the political conflict between, on the one side, the elite and the state, and, on the other side, dispossessed farmers and landless agricultural workers. The outcome of this conflict is determined by the distribution of power in society and the success of different groups in mobilizing and enforcing their class interests. Using a simple model of the political conflict over land acquisition and new data-set on SEZs that failed to acquire land from farmers, this paper shows that factors like inequality in land ownership (class) and hierarchies of caste and gender hinder the ability of small and marginal farmers from protecting their class interests even though they have de jure political rights and majority in the voting process. Further, excessive political competition along caste and ethnic lines weakens the political power of farmers and reduces the probability of success of farmer movements. Finally, the promise of formal employment and higher wages does not convince marginalized communities or educated farmers to support SEZs.
    Date: 2019
  3. By: Milena Djourelova; Ruben Durante
    Abstract: Do politicians tend to adopt unpopular policies when the media and the public are distracted by other events? We examine this question by analyzing the timing of the signing of executive orders (EOs) by U.S. presidents over the past four decades. We find robust evidence that EOs are more likely to be signed on the eve of days when the news are dominated by other important stories that can crowd out coverage of EOs. Crucially, this relationship only holds in periods of divided government when unilateral presidential actions are more likely to be criticized by a hostile Congress. The effect is driven by EOs that are more likely to make the news and to attract negative publicity, particularly those on topics on which president and Congress disagree. Finally, the timing of EOs appears to be related to predictable news but not to unpredictable ones, which suggests it results from a deliberate and forward-looking PR strategy.
    Keywords: Mass media, political accountability, presidential powers, strategic timing
    JEL: D02 D72 H11 L82
    Date: 2019–10
  4. By: António Henriques (Universidade do Porto and CEPESE); Nuno Palma (Department of Economics, University of Manchester; Instituto de Ciências Sociais, Universidade de Lisboa; CEPR)
    Abstract: Why did the countries which first benefitted from access to the New World - Castile and Portugal - decline relative to their followers, especially England and the Netherlands? The dominant narrative is that worse initial institutions at the time of the opening of Atlantic trade explain Iberian divergence. In this paper, we build a new dataset which allows for a comparison of institutional quality over time. We consider the frequency and nature of parliamentary meetings, the frequency and intensity of extraordinary taxation and coin debasement, and real interest spreads for public debt. We and no evidence that the political institutions of Iberia were worse until at least the English Civil War.
    Keywords: Atlantic Traders, New Institutional Economics, The Little Divergence
    JEL: N13 N23 O10 P14 P16
    Date: 2019–11

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