nep-pol New Economics Papers
on Positive Political Economics
Issue of 2020‒02‒24
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. “One Man, One Vote” Part 1: Electoral Justice in the U.S. Electoral College: Banzhaf and Shapley/Shubik versus May By de Mouzon, Olivier; Laurent, Thibault; Le Breton, Michel; Moyouwou, Issofa
  2. Historical institutions and electoral outcomes the case of India after decolonization By Shree Saha
  3. Bargaining over Mandatory Spending and Entitlements By Marina Azzimonti; Laura Karpuska; Gabriel Mihalache
  4. Trust in Government Institutions and Tax Morale By Antonios M. Koumpias; Gabriel Leonardo; Jorge Martinez-Vazquez
  5. Civic legacies of wartime governance By Justino Patricia; Stojetz Wolfgang
  6. Winning or buying hearts and minds?: Cash transfers and political attitudes in Pakistan By Justino Patricia; Ghorpade Yashodhan
  7. Political Polarization in Consumer Expectations By John Conlon; Olivier Armantier; Wilbert Van der Klaauw
  8. Social embeddedness in stakeholder networks and legislators' policy preferences: The case of German livestock policy By Grunenberg, Michael; Henning, Christian H. C. A.
  9. Policy Uncertainty, Trade, and Global Value Chains : Some Facts, Many Questions By Constantinescu,Ileana Cristina; Mattoo,Aaditya; Ruta,Michele
  10. What are Europeans’ views on migrant integration?: An in-depth analysis of 2017 Special Eurobarometer “Integration of immigrants in the European Union” By Lenka Drazanova; Thomas Liebig; Silvia Migali; Marco Scipioni; Gilles Spielvogel

  1. By: de Mouzon, Olivier; Laurent, Thibault; Le Breton, Michel; Moyouwou, Issofa
    Abstract: This paper is dedicated to the measurement of (or lack of) electoral justice in the 2010 Electoral College using a methodology based on the expected influence of the vote of each citizen for three probability models. Our first contribution is to revisit and reproduce the results obtained by Owen (1975) for the 1960 and 1970 Electoral College. His work displays an intriguing coincidence between the conclusions drawn respectively from the Banzhaf and Shapley-Shubik’s probability models. Both probability models conclude to a violation of electoral justice at the expense of small states. Our second contribution is to demonstrate that this conclusion is completely flipped upside-down when we use May’s probability model: this model leads instead to a violation of electoral justice at the expense of large states. Besides unifying disparate approaches through a common measurement methodology, one main lesson of the paper is that the conclusions are sensitive to the probability models which are used and in particular to the type and magnitude of correlation between voters that they carry.
    JEL: D71 D72
    Date: 2020–02
  2. By: Shree Saha (Indira Gandhi Institute of Development Research; Institute of Economic Growth)
    Abstract: There is now ample evidence that historical colonial institutions impact contemporary economic outcomes and some suggest that these links might be mediated by the influence of colonial institutions on electoral processes and outcomes. This paper examines this under-researched link in the context of India, focusing on two colonial institutions that potentially influence electoral outcomes - the type of rule, i.e. whether a territory was under direct British rule or whether it was under native rule - and the type of land tenure installed by the British. I measure electoral outcomes by three variables: voter turnout (VT), margin of victory (MV) and electoral competition (EC) and ask: Do historical colonial institutions impact contemporary electoral outcomes and if yes, in what ways? Do such impacts persist in the longer term? I focus specifically on the elections at the cusp of decolonization (1951) and those in 1970s, to assess short and longer-terms impacts. Results indicate a 4 higher VT in native ruled areas in the long run and 5 higher VT in the non-landlord areas in the short run. The latter dissipates in the longer term because of tenancy reforms. I find EC consistently higher in British and landlord areas but no robust impact on MV is noted. These results are consistent with the role played by landlords and erstwhile princes of native states after decolonization. The paper provides evidence on the potentially important mediating role of electoral outcomes in link between historical institutions and economic outcomes and suggests that research on elections should not overlook the role of historical institutions and those exploring the historical origins of economic outcomes should not overlook the role of elections.
    Keywords: Colonial institution, political institution, democracy, decolonization, path- dependence, elections
    JEL: B15 B16 B25 B52 D72 P48
    Date: 2019–11
  3. By: Marina Azzimonti; Laura Karpuska; Gabriel Mihalache
    Abstract: Do mandatory spending rules improve society's welfare? To answer this, we analyze an infinite horizon dynamic political-economy model with two parties which disagree on how to split a fixed budget between public and private goods. We study the welfare implications of introducing two types of budget rules, mandatory spending on public goods and entitlement programs, the latter imposing constraints on the private goods' allocations that can be implemented. We model budget rules following the literature on legislative bargaining with an endogenous status quo. Under a mandatory spending rule on public goods, expenditures are governed by criteria determined by enacted law. In particular, previous year's spending bill is applied in the current year unless explicitly changed by a majority of policymakers. Entitlement programs, on the other hand, impose restrictions on the provision of private transfers through eligibility rules and generosity formulas that can only be modified with bi-partisan support. We find that entitlement programs induce over-provision of private goods and under-provision of public goods, whereas the opposite is true under a mandatory spending rule on public goods. We show that mandatory spending rules are typically associated with larger welfare gains than entitlement programs. The desirability of the rule, however, depends on the degree of political turnover: (i) with high enough political turnover, both budget rules are better than discretion, but (ii) entitlement programs can generate welfare losses when political persistence is large. This happens because entitlement rules actually increase the volatility of private and public consumption, and reduce public goods' provision significantly. Finally, we describe conditions under which budget rules would arise in a bargaining equilibrium.
    Date: 2020
  4. By: Antonios M. Koumpias (Department of Social Sciences, University of Michigan-Dearborn, USA); Gabriel Leonardo (International Center for Public Policy, Georgia State University, USA); Jorge Martinez-Vazquez (International Center for Public Policy, Georgia State University, USA)
    Abstract: What actions do governments around the world take that may affect individuals’ trust in the government that positively influence tax morale (or a positive attitude toward tax compliance)? This paper researches which are the most salient government institutions that breed individual trust and the extent to which this trust ends up increasing citizens’ tax morale. We use cross-country survey information from the World Values Survey and the Freedom House spanning 92 countries and six survey waves during the period 1981-2014. Conditional on the level of political rights and civil liberties, we confirm prior evidence that trust in government organizations positively influences tax morale. More importantly, our findings show that it is trust in output government organizations that implement and deliver public goods and services to the citizenry that has a significantly larger impact on tax morale as compared to citizens’ trust in input-side organizations, such as the legislative and the executive branches of the government that design policy. We also exploit periods of democratic transitions, when large variations in trust may be present, to assess the role of trust in government organizations for tax morale using a treatment effects model. Our results reveal a robust, positive impact of negative democratic transitions on tax morale.
    Date: 2020–02
  5. By: Justino Patricia; Stojetz Wolfgang
    Abstract: In conflict zones around the world, both state and non-state actors deliver governance at local levels. This paper explores the long-term impact of individual exposure to ‘wartime governance’ on social and political behaviour.We operationalize wartime governance as the local policy choices and practices of a ruling actor. Building on detailed ethnographic and historical insights, we use survey data and a natural experiment to show that involvement in wartime governance by armed groups makes Angolan war veterans more likely to participate in local collective action twelve years after the end of the war.This effect is underpinned by a social learning mechanism and a shift in political preferences, but has no bearing on political mobilization at the national level or social relations within the family. Our study documents an important institutional legacy of civil wars and exposes challenges and opportunities for bottom-up approaches to post-conflict state-building and local development.
    Keywords: local development,state-building,Civil conflict,Conflict,wartime governance
    Date: 2019
  6. By: Justino Patricia; Ghorpade Yashodhan
    Abstract: This paper studies how household-level receipts of cash transfers affect political attitudes in Pakistan. The paper exploits the locally exogenous eligibility cut-off of the flagship Benazir Income Support Programme to estimate causal effects.The main results show evidence of improved satisfaction with the government among beneficiaries of the programme. The paper discusses what potential mechanisms may explain this result and finds no evidence of changes in attitudes being associated with improvements in state capacity or better economic and security prospects. Instead, we find that the effect is present only when the programme has been in place in communities for over two years, which coincides with the switch to proxy-means test-based targeting from the earlier modality of nominations by parliamentarians.The main result is therefore driven by better connected and politically important communities that were favoured by incumbent parliamentarians for programme rollout before the introduction of objective targeting criteria.
    Keywords: Social protection,Cash transfers,Pakistan,Political attitudes
    Date: 2019
  7. By: John Conlon (Research and Statistics Group); Olivier Armantier (Board of Governors of the Federal Reserve System (U.S.); Federal Reserve Bank of Philadelphia; Federal Reserve Bank of New York); Wilbert Van der Klaauw
    Abstract: Following the 2016 presidential election, as noted on this blog and many other outlets, Americans? political and economic outlook changed dramatically depending on partisan affiliation. Immediately after the election, Republicans became substantially more optimistic relative to Democrats. In this blog post, we revisit the issue of polarization over the past twelve months using data from the New York Fed?s Survey of Consumer Expectations (SCE)?also the focus of a detailed technical overview in the latest edition of the Bank?s journal, the Economic Policy Review. The overview walks readers through the design and implementation of the survey, as well as the computation of the various statistics released by the SCE team every month.
    Keywords: Expectations; Polarization
    JEL: D7 D8
  8. By: Grunenberg, Michael; Henning, Christian H. C. A.
    Abstract: In a world of increasing complexity, politicians have only limited information about the relationship of policies and the outcomes. They often make use of simplified heuristics, i.e. policy beliefs. Hence, an influence opportunity for interest groups occurs: informational lobbying. It complements classic lobbying strategies, e.g. vote buying or campaign spending. Providing expert knowledge allows interest groups to influence legislators towards the preferred policy position. Aside from so-called "approved votes", German parliamentarians generally follow parliamentary group's discipline. Thus, experts' role within parliamentary groups is crucial. They deal with key issues and represent the parliamentary group in the committees. Furthermore, they work out the group's positions on these specific issues. They are the starting point for interest groups to disseminate their information and hence influence the legislators' positions. An exemplary field of complexity is the agricultural sector. In particular, livestock production is challenged by questions of sustainability, i.e. public expectations towards animal welfare, producers and consumers' welfare as well as ecological consequences. Importance of animal welfare is demonstrated by the ongoing debate about piglet castration or husbandry system standards. This raises two questions: First, to what extend are stakeholders able to gain direct access to politicians? Second, how can they use this structure to influence policy decisions? Using a social network approach, we first investigate the structure of three networks: exchange of expert knowledge, political support and informal social ties. In particular, we put emphasis on the connection between parliamentary actors and other stakeholders from society, i.e. interest groups. This refers to the first question. Second, we apply a model of political exchange using information and lobbying networks. Following Henning et al. (2019), this model not only includes political exchange, but also belief updating. Moreover, it considers direct as well as indirect ties. This analysis step serves to answer the second question.
    Date: 2019
  9. By: Constantinescu,Ileana Cristina; Mattoo,Aaditya; Ruta,Michele
    Abstract: This paper attempts to quantify the impact of economic policy uncertainty on overall trade and trade linked to global value chains. Using new data on policy uncertainty for 18 countries and 24 years, it finds a statistically significant negative impact of policy uncertainty on overall trade growth. A 1 percent increase in uncertainty is associated with a 0.02 percentage point reduction in the growth of goods and services trade, implying that the increase in policy uncertainty since mid-2018 may have caused a 1 percentage point decline in world trade growth. The paper also finds that the impact of policy uncertainty on trade linked to global value chains is similar to overall trade. This is likely to be the result of two opposing forces: global value chains are more dependent on relation-specific investments that are sensitive to policy uncertainty, but these investments also make trade patterns sticky. More research and better data are needed to disentangle these different effects empirically.
    Date: 2019–10–25
  10. By: Lenka Drazanova (European University Institute); Thomas Liebig (OECD); Silvia Migali (Joint Research Centre - European Commission); Marco Scipioni (Joint Research Centre - European Commission); Gilles Spielvogel (OECD)
    Abstract: This paper provides an in-depth description of public opinion about immigrants’ integration in European countries, as captured in the 2017 Special Eurobarometer on this topic. It highlights a near consensus among European respondents on the meaning of integration, but more variation across countries regarding policy options to support integration. It also shows that positive opinions about immigration are often associated with a favourable public perception of integration. Looking at the individual correlates of opinions about immigration and integration, this paper finds that actual knowledge about the magnitude of immigration is positively correlated with attitudes to immigration but not integration. In contrast, more interactions with immigrants are associated with more positive views on integration but not necessarily on immigration.
    Keywords: Eurobarometer, Immigration, Integration, Public opinion
    JEL: F22 J61 J68
    Date: 2020–02–19

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