nep-pol New Economics Papers
on Positive Political Economics
Issue of 2020‒03‒09
seven papers chosen by
Eugene Beaulieu
University of Calgary

  1. Does a District-Vote Matter for the Behavior of Politicians? A Textual Analysis of Parliamentary Speeches By Born, Andreas; Janssen, Aljoscha
  2. Erosion of state power, corruption control, and political stability By Li, Weijia; Roland, Gérard; Xie, Yang
  3. Gender gap in voting: Evidence from actual ballots By Köppl-Turyna, Monika
  4. Organized crime and women in politics: Evidence from a quasi-experiment in southern Italy By Baraldi, Anna Laura; Ronza, Carla
  5. Governance,capital flight and industrialisation in Africa By Asongu, Simplice A; Odhiambo, Nicholas M
  6. Partisan Conflict, News, and Investors' Expectations By Marina Azzimonti
  7. To fight or to vote: Sovereignty referendums as strategies in conflicts over self-determination By Kelle, Friederike Luise; Sienknecht, Mitja

  1. By: Born, Andreas (Department of Economics); Janssen, Aljoscha (Singapore Management University)
    Abstract: In most democracies, members of parliament are either elected over a party list or by a district. We use a discontinuity in the German parliamentary system to investigate the causal effect of a district-election on an MP’s conformity with her party-line. A district-election does not affect roll call voting behavior causally, possibly due to overall high adherence to party voting. Analyzing the parliamentary speeches of each MP allows us to overcome the high party discipline with regard to parliamentary voting. Using textual analysis and machine learning techniques, we create two measures of closeness of an MP’s speeches to her party. We find that district-elected members of parliament do not differ, in terms of speeches, from those of their party-peers who have been elected through closed party lists. However, both speeches and voting correlate with district characteristics suggesting that district-elections allow districts to select more similar politicians.
    Keywords: Party-line; Textual Analysis; Regression Discontinuity; Parliamentary Speeches; Voting
    JEL: D72
    Date: 2020–02–24
  2. By: Li, Weijia; Roland, Gérard; Xie, Yang
    Abstract: How do corruption and the state apparatus interact, and how are they connected to the political and economic dimensions of state capacity? Motivated by historians' analysis of powerful empires, we build a model that emphasizes the corrosive effect of corruption on state power. Under general assumptions about fat-tailed risk, we show that, if fiscal capacity is strong, then the optimal response for the head of the state apparatus will be an endogenous lexicographic rule whereby local corruption is maintained at such a level that no erosion of state power is tolerated. Comparative statics shows the impacts of additional risk of crisis on corruption tolerance as well as the complementarity between personalistic rule and corruption. Implications of corruption at the head of the state apparatus are also analyzed. If fiscal capacity is not sufficiently strong, however, the state will have to over-tolerate corruption to retain its affiliates, risking its control in crises. Our model predicts that the correlation between state's political stability and corruption is non-monotonic across different levels of fiscal capacity, and this prediction is robustly consistent with recent cross-country panel-data.
    JEL: D73 H12 D02
    Date: 2020–02–25
  3. By: Köppl-Turyna, Monika
    Abstract: This short article looks at the development of an electoral gender gap over time, using, for the first time, actual ballot data collected in the Austrian state of Vienna. Vienna recorded female and male ballots separately in the years from 1954 to 1991. Firstly, using this unique design, we conclude that the traditional gender gap (males more left-leaning) existed up to 1969 and then changed into the modern gender gap (females more left-leaning), from that date. These results confirm the considerable literature based on survey data. Secondly, we can confirm surveybased findings that male voters support more extreme positions than female voters. Thirdly, and contrary to expectations, we do not observe large systematic differences in turnout.
    Keywords: electoral gender gap,ballots,Vienna,turnover
    JEL: D72
    Date: 2020
  4. By: Baraldi, Anna Laura; Ronza, Carla
    Abstract: This paper provides new and unexplored evidence of a negative link between an increasing female participation in politics and the infiltration of organized crime in government. We perform an empirical analysis of about 1,700 Southern Italian municipalities between 1985 and 2013 exploiting two Italian laws: law no. 164/1991, which allows measure of mafia infiltration in the Italian municipalities, and law no. 81/1993, which creates an exogenous source of variation in the share of women on the council that allows for correction of endogeneity bias. Increasing the female proportion on the city council of 10 percentage points reduces the probability of dissolution for mafia infiltration of about 1.8 p.p.; the result is confirmed when considering a female mayor. This negative effect remains across several robustness checks. This research adds a further reason in favour of the reduction of the gender gap in politics. In fact, policies aimed at legitimizing democracy, such as gender quotas in electoral law, also have the effect of strengthening institutions in the fight against organized crime, which is always a key government agenda.
    Keywords: organized crime, gender gap, quasi-experiments, panel probit model
    JEL: D72 D78 J16 K42
    Date: 2019–12–01
  5. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: The study examines the role of governance in modulating the effect of capital flight on industrialisation in Africa. The empirical evidence is based on Generalised Method of Moments and governance is bundled by principal component analysis, namely: (i) political governance from political stability and ?voice and accountability?; (ii) economic governance from government effectiveness and regulation quality; and (iii) institutional governance from corruption-control and the rule of law. First, governance increases industrialisation whereas capital flight has the opposite effect; and second, governance does not significantly mitigate the negative effect of capital flight on industrialisation. Policy implications are discussed.
    Keywords: Econometric modelling; Capital flight; Governance; Industrialisation; Africa
    Date: 2019–10
  6. By: Marina Azzimonti
    Abstract: In this paper, I consider the role of news provided by the media as signals used by investors to learn the underlying degree of partisan conflict. Partisan conflict is relevant for investment decisions because it affects the intensity of legislative effort aimed at (i) improving the institutional environment in which firms operate and (ii) instituting tax reforms. Higher partisan conflict makes tax reforms less likely but increases the probability of crises. These, in turn, affect the after-tax returns to investment. Whether the uncertainty and gridlock induced by partisan conflict is beneficial or detrimental for the economy depends on the status-quo level of taxes, on the identity of the party proposing policy reforms, and on the expected severity of crises. This is the case because even though a higher likelihood of bad economic outcomes is always negative for investment, stalemate makes tax-hikes less likely under some scenarios, and this may increase expected returns to investment. Agents do not observe the true degree of political disagreement (and hence the quality of policies), but can create expectations based on the observation of informative signals. Using a Bayesian learning model, I illustrate how these signals affect investment decisions by changing agents’ expectations. I show that, to the extent crises are severe enough, an increase in the partisan conflict index (a summary of the signals observed) reduces expected returns and induces lower investment. Interestingly, investors react to news through changes in expectations even when there is no change in fundamentals.
    Date: 2019
  7. By: Kelle, Friederike Luise; Sienknecht, Mitja
    Abstract: Subnational groups employ a variety of strategies to contest governments. While democratic states offer a broader array of accessible options, autocratic regimes are more difficult to contest via conventional means. Why do subnational groups stage sovereignty referendums across regime types? Our argument is that public votes over greater autonomy or independence signal adherence to international democratic norms and the legitimacy of the demand towards three audiences: the state, the domestic population, and the international community. Self-determination groups seek to gain support from their domestic constituency as well as the international community in order to pressure the state government into granting concessions. We introduce a new dataset of referendums and international diplomacy by subnational self-determination groups on a global scale between 1990 and 2015. We supplement the descriptive evidence and assess the plausibility of the proposed mechanism with an out-of-sample case of an in-sample observation, the 2017 independence referendum in Iraqi Kurdistan. We show that referendums are indeed associated with international diplomacy and domestic state building by self-determination groups, suggesting that both tools are critical for the choice of conventional strategies across regime types.
    Keywords: self-determination,conflict,referendum,rebel diplomacy,domestic institutionbuilding,Selbstbestimmung,Konflikt,Referendum,Rebellendiplomatie,Aufbau substaatlicher Institutionen
    Date: 2020

This nep-pol issue is ©2020 by Eugene Beaulieu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.