nep-pol New Economics Papers
on Positive Political Economics
Issue of 2020‒01‒27
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Perceived Immigration and Voting Behavior By Davide Bellucci; Pierluigi Conzo; Roberto Zotti
  2. Voting Corrupt Politicians Out of Office? Evidence from a Survey Experiment in Paraguay By Cañete, Rumilda; Miquel-Florensa, Josepa; Straub, Stéphane; Van Der Straeten, Karine
  3. Fear and Loathing on the Campaign Trail: Did Immigration Cause Brexit? By Max Viskanic
  4. Enfranchising Foreigners: What Drives Natives’ Willingness to Share Power? By Anna Maria Koukal; Reiner Eichenberger; Patricia Schafera
  5. Jam-barrel Politics By Leonardo Bonilla-Mejía; Juan S. Morales
  6. My (Running) Mate, the Mayor: Political Ties and Access to Public Jobs in Ecuador By Brassiolo, Pablo; Estrada, Ricardo; Fajardo, Gustavo
  7. Dynamic Campaign Spending By Avidit Acharya; Edoardo Grillo; Takuo Sugaya; Eray Turkel
  8. On the Political Economy of the European Union By Julia M. Puaschunder; Martin Gelter
  9. Political Uncertainty and the Choice of Debt Sources By Hamdi Ben-Nasr; Lobna Bouslimi; M. Shahid Ebrahim; Rui Zhong
  10. Exposure to Opposing Views can Increase Political Polarization: Evidence from a Large-Scale Field Experiment on Social Media By Bail, Christopher A.; Argyle, Lisa; Brown, Taylor; Bumpuss, John; Chen, Haohan; Hunzaker, M.B. Fallin; Lee, Jaemin; Mann, Marcus; Merhout, Friedolin; Volfovsky, Alexander
  11. Politically-Connected Firms and the Military-Clientelist Complex in North Africa By Kubinec, Robert
  12. A characterization of Approval Voting without the approval balloting assumption By Federica Ceron; Stéphane Gonzalez
  13. Unequal Political Business Cycles: Inequality, Policy Uncertainty and the Macroeconomy By Alvaro Aguirre

  1. By: Davide Bellucci; Pierluigi Conzo; Roberto Zotti
    Abstract: A growing number of studies have found significant effects of inflows of migrants on electoral outcomes. However, the role of perceived immigration, which in many European countries is above official migration statistics, is overlooked. This paper investigates the effects of perceived threat of immigration on voting behavior, by looking at whether local elections in Italy were affected by sea arrivals of refugees before the election day. While, upon arrival, refugees cannot freely go to the destination municipality, landing episodes were discussed in the media especially before the elections, thereby influencing voters’ perceptions about the arrivals. We develop an index of exposure to arrivals that varies over time and across municipalities depending on the nationality of the incoming refugees. This index captures the impact of perceived immigration on voting behavior, on top of the effects of real immigration as proxied for by the stock of immigrants and the presence of refugee centers. Results show that, in municipalities where refugees are more expected to arrive, participation decreases, whereas protest votes and support for extreme-right, populist and anti-immigration parties increase. Since these effects are driven by areas with fast broadband availability, we argue that anti-immigration campaigns played a key role.
    Keywords: Immigration; Voting; Political Economy; Populism; Electoral campaigns; Media exposure.
    JEL: D62 P16 J61
    Date: 2019
  2. By: Cañete, Rumilda; Miquel-Florensa, Josepa; Straub, Stéphane; Van Der Straeten, Karine
    Abstract: This paper challenges the conventional wisdom that giving voters more power{both formally through the use of more "open" electoral systems and informally through easier access to information on politicians' wrongdoings will necessarily result in them voting corrupt politicians out of office. Focusing on a comparison between closed-list and open-list proportional representation systems, we theoretically show that opening the lists is likely to generate a large shift of vote shares in favor of the traditional, most corrupt parties. We design a survey experiment to test these predictions in Paraguay and nd strong supporting evidence. We do not nd in our context that the lack of information is a major obstacle preventing voters from voting out corrupt politicians; if anything, under the more open system, supporters of the incumbent party tend to cast more votes for politicians with a recent history of corruption.
    Keywords: Corruption; Electoral systems; Information
    Date: 2020–01
  3. By: Max Viskanic (Sciences Po)
    Abstract: Can large immigration inflows impact electoral outcomes and specifically, what impact did immigration have on the vote in favour of leaving the European Union (Brexit) in the United Kingdom? In particular, I focus on how the increase in Polish immigration, the major group of immigrants post 2004, affected votes in favour of leaving the EU. I find a percentage point increase in Polish immigration to the UK to have caused an increase in votes in favour of Brexit of about 2.72-3.12 percentage points, depending on the specification. To obtain exogenous variation in Polish immigration, I collect data from the archives that reveals the location of Polish War Resettlement Camps after Word War II, which location is plausibly exogenous to current political outcomes. Discussing potential mechanisms, I examine public opinion data in the British Election Study 2015 and find evidence of adversity towards immigration to be a root cause. Other considerations such as the National Health Service (NHS), incumbency and the general trust in politicians as well as the political institutions seem not to play a role.
    Keywords: Political Economy; Voting; Migration; Brexit; EU; UK
    Date: 2020–01
  4. By: Anna Maria Koukal; Reiner Eichenberger; Patricia Schafera
    Abstract: Universal suffrage is a core element for the functioning of democracy. However, with growing international mobility, an increasing share of the resident population has no suffrage. This paper analyzes the conditions under which domestic citizens are willing to extend suffrage to foreign residents. We explore a new municipality level dataset of 35 Swiss referenda on the enfranchisement of foreigners at the cantonal level. The Swiss setting provides a unique laboratory for capturing the drivers of the enfranchisement of foreigners, as it allows for measuring the actual native electorate’s revealed preferences. We find evidence that perceived cultural and economic threats hinder the enfranchisement of foreigners.
    Keywords: foreigners’ voting rights; political integration; threat hypothesis; democratization
    JEL: D72 J15 P16
    Date: 2019–12
  5. By: Leonardo Bonilla-Mejía; Juan S. Morales
    Abstract: We study the executive-legislative exchange of centrally-allocated and individually targeted benefits (jam) for legislative support in Colombia. We use data from road building contracts, roll-call votes, and a leaked document which allegedly revealed the secret assignment of road projects to specific legislators. We find that assigned projects were more expensive relative to similar non-assigned projects, legislators who appeared in the leak were more likely to be "swing" voters in the congress, and legislators increased their support for the president’s party after their assigned contracts were signed. The results are stronger for legislators representing remote regions, where political institutions are weaker.
    Keywords: legislatures; distributive politics; pork-barrel; legislative vote-buying; spatial isolation
    JEL: D72 D73 H54 H57 R11
    Date: 2019
  6. By: Brassiolo, Pablo; Estrada, Ricardo; Fajardo, Gustavo
    Abstract: We show that local politicians’ probability of being employed by a municipality increases when they have a strong party connection to its mayor. Using a regression discontinuity design, we compare the employment outcomes of individuals connected to the winner vis-à-vis those connected to the runner-up in close mayoral races in Ecuador. Among candidates to local councils who lose their bid, the probability of getting a job in the municipality increases tenfold when their own party’s mayoral nominee is elected. Importantly, the effect is concentrated among low-ranking positions, which reveals that this is the result of political patronage.
    Keywords: Democracia, Gobernabilidad, Políticas públicas,
    Date: 2020
  7. By: Avidit Acharya; Edoardo Grillo; Takuo Sugaya; Eray Turkel
    Abstract: We build a model of electoral campaigning in which two oce-motivated candidates each allocate their budgets over time to a ect their relative popularity, which evolves as a mean-reverting stochastic process. We show that in each period, the equilibrium ratio of spending by each candidate equals the ratio of their available budgets. This result holds across di erent specifications and extensions of the model, including extensions that allow for early voting, and an endogenous budget process. We also characterize how the path of spending over time depends not just on the rate of decay of popularity leads, but also the rate at which returns to spending are diminishing, rates of participation in early voting, and any feedback that short run leads in popularity have on the budget process.
    Keywords: campaigns, dynamic allocation problems, contests
    JEL: C72
    Date: 2019
  8. By: Julia M. Puaschunder (The New School, Department of Economic, USA); Martin Gelter (Fordham University School of Law and Center on European Union Law)
    Abstract: Political economy concerns historical, legal and heterodox economics analysis of complex systems. This article attempts to analyze the current state of the European Union from historical, legal and interdisciplinary economics perspectives. Historically, the ancient Athenian democracy, the Holy Roman Empire and the early formation of the United States serve as examples of early innovative legal constructs of their times that were sui generis and share key features with the current European Union. Regarding legal developments, this paper discusses the bicameral parliamentary structure, electoral processes and populist pressures. The future of the European Union economy is likely to see an AI (r)evolution shaping markets and rising big data revenues. This develop necessitates the creation of a fifth fundamental freedom of data transfer within the European Union, as well as taxation of growth generated by big data. Heterodox economic growth theories will increasingly have to account for this growth.
    Keywords: Ancient Athenian democracy, Artificial Intelligence, Bicameral parliament, Big data, Electoral system, European Union, Holy Roman empire, market disruption, political economy, Populist pressures, Taxation, United States
    Date: 2019–11
  9. By: Hamdi Ben-Nasr (Qatar University); Lobna Bouslimi (Concordia University); M. Shahid Ebrahim (Durham University Business School); Rui Zhong (University of Western Australia)
    Abstract: This paper studies the effect of political uncertainty on the choice of debt sources. We find a positive relationship between political uncertainty stemming from elections and the proportion of bank loans over total debts, especially when elections are closely contested. Furthermore, this relationship is stronger in opaque firms and more financially constrained firms as well as firms from countries with weaker shareholder rights, labor protection, creditor rights and national governance.
    Keywords: Bank Debt; Public Debt; National Election; Political Uncertainty
    JEL: D72 D81 G24 G32
    Date: 2019–08
  10. By: Bail, Christopher A.; Argyle, Lisa; Brown, Taylor; Bumpuss, John; Chen, Haohan; Hunzaker, M.B. Fallin (New York University); Lee, Jaemin; Mann, Marcus; Merhout, Friedolin; Volfovsky, Alexander
    Abstract: There is mounting concern that social media sites contribute to political polarization by creating "echo chambers" that insulate people from opposing views about current events. We surveyed a large sample of Democrats and Republicans who visit Twitter at least three times each week about a range of social policy issues. One week later, we randomly assigned respondents to a treatment condition in which they were offered financial incentives to follow a Twitter bot for one month that exposed them to messages produced by elected officials, organizations, and other opinion leaders with opposing political ideologies. Respondents were re-surveyed at the end of the month to measure the effect of this treatment, and at regular intervals throughout the study period to monitor treatment compliance. We find that Republicans who followed a liberal Twitter bot became substantially more conservative post-treatment, and Democrats who followed a conservative Twitter bot became slightly more liberal post-treatment. These findings have important implications for the interdisciplinary literature on political polarization as well as the emerging field of computational social science.
    Date: 2018–03–19
  11. By: Kubinec, Robert (Princeton University)
    Abstract: Although much of the theory of authoritarian regimes assumes that the distribution of patronage is a core plank of rulers' coalitions, it is also true that rulers can survive despite impoverishing influential elites. I argue that what can explain authoritarian stability without patronage are patterns of political action evolving from coordination games. I make this claim based on an original online survey of 2,496 firm managers and employees in Algeria, Egypt and Tunisia in which I randomized the type of offers made by political parties to companies for support in a hypothetical election. I show that Egyptian business, which has suffered the most under the authoritarian regime, counter-intuitively appears to be the most supportive of the country's rulers. The underlying mechanism that explains these findings appears to be the convergence of business owners' beliefs on the military as a coordination point rather than a distributor of goodies.
    Date: 2018–09–07
  12. By: Federica Ceron (Paris School of Economics, Université Paris 1 Panthéon-Sorbonne, Université Paris-Est Créteil); Stéphane Gonzalez (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne)
    Abstract: We provide an axiomatic characterization of Approval Voting without the approval balloting assumption. The dichotomous structure of the informational basis of Approval voting as well as its aggregative rationale are jointly derived from a set of normative conditions on the voting procedure. The first one is the well-known social-theoretic principle of consistency; the second one, ballot richness, requires voters to be able to express a sufficiently rich set of opinions; the last one, dubbed no single-voter overrides, demands that the addition of a voter to an electorate cannot radically change the outcome of the election. Such result is promising insofar it suggests that the informational basis of voting may have a normative relevance that deserves formal treatment.
    Keywords: Informational basis, balloting procedure, Approval voting, Evaluative voting
    JEL: C71
    Date: 2019
  13. By: Alvaro Aguirre
    Abstract: This paper explores the presence of political cycles that are contingent on inequality. I claim that high inequality leads to high policy uncertainty as pressures for redistribution increase at the same time that the richest become politically more powerful. This higher policy uncertainty harms the economy through channels already studied by the literature. Using data for the US from 1947 to 2014 I find supporting evidence for this mechanism. Only when inequality is sufficiently high, policy uncertainty spikes during an election and GDP falls below its trend thereafter.
    Date: 2020–01

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