nep-pol New Economics Papers
on Positive Political Economics
Issue of 2020‒04‒20
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Expressive voting and its costs By Vincent Pons; Clémence Tricaud; Vestal Mcintyre
  2. Political Budget Cycles Revisited: Testing the Signalling Process By Israel Garcia; Bernd Hayo
  3. The Virus of Fear: The Political Impact of Ebola in the U.S. By Filipe R. Campante; Emilio Depetris-Chauvin; Ruben Durante
  4. Ground work vs. social media: how to best reach voters in French municipal elections? By Vincent Pons; Vestal Mcintyre
  5. Political polarization, social fragmentation, and cooperation during a pandemic By Kirsten Cornelson; Boriana Miloucheva
  6. The Politics of Fiscal Federalism: Building a Stronger Decentralization Theorem By Raúl A. Ponce-Rodríguez; Charles R. Hankla; Jorge Martinez-Vazquez; Eunice Heredia-Ortiz
  7. Public Information is an Incentive for Politicians: Experimental Evidence from Delhi Elections By Abhijit Banerjee; Nils T. Enevoldsen; Rohini Pande; Michael Walton
  8. The Political (In)Stability of Funded Pension Systems By Roel Beetsma; Oliwia Komada; Krzysztof Makarski; Joanna Tyrowicz
  9. On the Representativeness of Voter Turnout By Louis Kaplow; Scott Duke Kominers
  10. A Note on Detecting Dividing Lines in Turnout: Spatial Dependence and Heterogeneity in the 2012 US Presidential Election By Nadia Fiorino; Nicola Pontarollo; Roberto Ricciuti
  11. How Political Insiders Lose Out When International Aid Underperforms: Evidence from a Participatory Development Experiment in Ghana By Kate Baldwin; Dean Karlan; Christopher R. Udry; Ernest Appiah
  12. From the global to the everyday: Anti-globalization metaphors in Trump's and Salvini's political language By Freistein, Katja; Gadinger, Frank; Unrau, Christine
  13. The Political-Economy Trilemma By Joshua Aizenman; Hiro Ito
  14. Confidence in public institutions and the run up to the October 2019 uprising in Lebanon By Fakih, Ali; Makdissi, Paul; Marrouch, Walid; Tabri, Rami V.; Yazbeck, Myra

  1. By: Vincent Pons (Harvard Business School - Harvard University [Cambridge], National Bureau of Economic Research - National Bureau of Economic Research); Clémence Tricaud (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, X - École polytechnique); Vestal Mcintyre (Harvard Kennedy School - Harvard Kennedy School)
    Abstract: Voters who support a candidate with little or no chance of winning face a choice: whether to express their true preference, vote for their preferred candidate, and risk wasting their vote; or vote strategically for a second-best candidate who is more likely to be in a position to win. To explore this tradeoff, this study focuses on French parliamentary and local elections, in which the top two candidates always qualify for the second round, and others also qualify if they get a number of voters higher than 12.5 percent of registered citizens. Results show that third candidates who qualify for the second round tend to prefer staying in the race rather than dropping out. Many of the third candidates' supporters then act expressively and vote for them instead of their second-best candidate among the top two. The study finds this disproportionally harms the candidate ideologically closest to the third and often causes their defeat. This behavior by voters and candidates likely affects the results of many elections beyond those in the study, including European elections and other proportional elections, where voters face similar trade-offs. The results call for ideologically similar parties to reach agreements limiting the number of candidates or lists that are competing, and for the adoption of voting systems in which electoral outcomes are less distorted by voters' and candidates' failure to act strategically.
    Date: 2019–05
  2. By: Israel Garcia (University of Marburg); Bernd Hayo (University of Marburg)
    Abstract: A widespread view in the 'political budget cycles' literature is that incumbent politicians seek to influence voters' perceptions of their competence and/or preferences by using the composition of the fiscal budget as a signalling tool. However, little is known about whether voters actually receive and perceive the signal in that way. To empirically assess the relevance of the signalling channel at the municipal level, we conducted a survey among 2,000 representative German citizens in 2018. Only a small fraction of voters feel well-informed about the fiscal budget signal and use the information it contains to decide whether to vote for the incumbent politician. Persons paying more attention to the signal sent by local politicians live in smaller municipalities, are more satisfied with their economic situation, are more educated, and do not feel that they are being electorally targeted. Our analysis suggests that the municipal voting decision, at least in Germany, is a more complex process than is commonly assumed in political budget cycle models.
    Keywords: Political budget cycles, Signalling mechanism, Local government, Fiscal policy, Representative population survey, Germany
    JEL: E62 D83 H70 H72
    Date: 2020
  3. By: Filipe R. Campante; Emilio Depetris-Chauvin; Ruben Durante
    Abstract: We study how fear can affect the behavior of voters and politicians by looking at the Ebola scare that hit the U.S. a month before the 2014 midterm elections. Exploiting the timing and location of the four cases diagnosed in the U.S., we show that heightened concern about Ebola, as measured by online activity, led to a lower vote share for the Democrats in congressional and gubernatorial elections, as well as lower turnout, despite no evidence of a general anti-incumbent effect (including on President Obama's approval ratings). We then show that politicians responded to the Ebola scare by mentioning the disease in connection with immigration and terrorism in newsletters and campaign ads. This response came only from Republicans, especially those facing competitive races, suggesting a strategic use of the issue in conjunction with topics perceived as favorable to them. Survey evidence suggests that voters responded with increasingly conservative attitudes on immigration but not on other ideologically-charged issues. Taken together, our findings indicate that emotional reactions associated with fear can have a strong electoral impact, that politicians perceive and act strategically in response to this, and that the process is mediated by issues that can be plausibly associated with the specific fear-triggering factor.
    JEL: D72 D91
    Date: 2020–03
  4. By: Vincent Pons (Harvard Business School - Harvard University [Cambridge], National Bureau of Economic Research - National Bureau of Economic Research); Vestal Mcintyre (Harvard Kennedy School - Harvard Kennedy School)
    Abstract: Platforms such as Twitter and Facebook are widely considered important, if controversial, channels for candidates and parties around the world to communicate with citizens and win votes. While political parties in France make less use of social media than in the U.S. and other Western democracies, there is disagreement of how it will affect French democracy. But discussions of the promise and peril of social media's role in elections may miss a higher-order issue: what limited evidence exists suggests that outreach via social media has little effect on voting behavior. By contrast, a series of studies show that face-to-face canvassing has a strong potential to mobilize and persuade voters. These findings give grounds for parties to increase their canvassing efforts, and for the government to enact policies that ease the way for citizens to participate in elections.
    Date: 2020–02
  5. By: Kirsten Cornelson; Boriana Miloucheva
    Abstract: We study the impact of political polarization on the willingness of people to comply with social distancing directives during the COVID-19 pandemic. We find a reduced compliance with these measures when the state governor differs from the preferred party of survey respondents. Exploring a number of possible mechanisms, we show that these results are strongest in states where the opposing party's advocates are more hostile and provide evidence that compliance is low when recommendations come from an out-group member. This paper, more broadly, demonstrates the consequences of political polarization on the willingness to contribute to public goods.
    Keywords: Polarization, health
    JEL: I1 P16 Z1
    Date: 2020–04–07
  6. By: Raúl A. Ponce-Rodríguez (Department of Economics, Universidad Autónoma de Ciudad Juárez); Charles R. Hankla (Department of Political Science, Georgia State University); Jorge Martinez-Vazquez (International Center for Public Policy, Department of Economics, Andrew Young School of Policy Studies, Georgia State University); Eunice Heredia-Ortiz (Development Alternatives Inc., DAI)
    Abstract: We explore how party structures can condition the benefits of decentralization in modern democracies. In particular, we study the interaction of two political institutions: democratic (de)centralization (whether a country has fiscally autonomous and elected local governments) and party (non)integration (whether power over local party leaders flows upwards through party institutions, which we model using control over candidate selection). We incorporate these institutions into our strong decentralization theorem, which expands on Oates (1972) to examine when the decentralized provision of public services will dominate centralized provision even in the presence of inter-jurisdictional spillovers. Our findings suggest that, when externalities are present, democratic decentralization will be beneficial only when parties are integrated. In countries with non-integrated parties, we find that the participation rules of primaries have implications for the expected gains from democratic decentralization. Under blanket primaries, Oates’ conventional decentralization theorem holds but our strong decentralization theorem does not. By contrast, when primaries are closed, not even Oates’ conventional decentralization theorem holds.
    Date: 2020–04
  7. By: Abhijit Banerjee; Nils T. Enevoldsen; Rohini Pande; Michael Walton
    Abstract: In 2010, we informed a random set of Delhi councilors, some ineligible for re-election in their current ward, that a newspaper would report on their performance shortly prior to the 2012 city elections. Using slum dwellers' spending preferences, we created a councilor-specific index of pro-poor spending. Treated councilors increased pro-poor spending in high-slum wards. Cross-cutting experiments suggest that the public nature of report cards, not access to information on public services per se, incentivized councilors. Data on party ticket allocation and electoral outcomes shows that, in low-information situations, credible public disclosures of politician achievements matters to both parties and voters.
    JEL: H4 O1 O12
    Date: 2020–04
  8. By: Roel Beetsma; Oliwia Komada; Krzysztof Makarski; Joanna Tyrowicz
    Abstract: We analyze the political stability of capital funded social security. In particular, using a stylized theoretical framework we study the mechanisms behind governments capturing pension assets in order to lower current taxes. This is followed by an analysis of the analogous mechanisms in a fully-edged overlapping generations model with intra-cohort heterogeneity. Funding is efficient in a Kaldor-Hicks sense. Individuals vote on capturing the accumulated pension assets and replacing the funded pension pillar with a pay-as-you-go scheme. We show that even if capturing assets reduces welfare in the long run, it always has sufficient political support from those alive at the moment of the vote.
    Keywords: funded pensions, asset capture, majority voting, welfare
    JEL: H55 D72 E17 E27
    Date: 2020
  9. By: Louis Kaplow; Scott Duke Kominers
    Abstract: Prominent theory research on voting uses models in which expected pivotality drives voters’ turnout decisions and hence determines voting outcomes. It is recognized, however, that such work is at odds with Downs’s paradox: in practice, many individuals turn out for reasons unrelated to pivotality, and their votes overwhelm the forces analyzed in pivotality-based models. Accordingly, we examine a complementary model of large- N elections at the opposite end of the spectrum, where pivotality effects vanish and turnout is driven entirely by individuals’ direct costs and benefits from the act of voting itself. Under certain conditions, the level of turnout is irrelevant to representativeness and thus to voting outcomes. Under others, however, “anything is possible”: starting with any given distribution of preferences in the underlying population, there can arise any other distribution of preferences in the turnout set and thus any outcome within the range of the voting mechanism. Particular skews in terms of representativeness are characterized. The introduction of noise in the relationship between underlying preferences and individuals’ direct costs and benefits from voting produces, in the limit, fully representative turnout. To illustrate the potential disconnect between the level of turnout (a focus of much empirical literature) and representativeness, we present a simple example in which, as noise increases, the turnout level monotonically falls yet representativeness monotonically rises.
    JEL: D71 D72
    Date: 2020–03
  10. By: Nadia Fiorino; Nicola Pontarollo; Roberto Ricciuti
    Abstract: US voters have been moving apart in the last twenty years. This paper analyzes how their voting participation has partitioned by looking at US counties in the 2012 Presidential elections. To tackle this question, we propose a methodology that jointly addresses spatial autocorrelation of the dependent variable and splits the sample according to the non-linearity in the covariates. We find that in different groups of US counties, obtained through a spatial lag regression tree procedure, some variables have different statistical significance (or lack of it), and sometimes different signs. This heterogeneity – which is a manifestation of the complexity of the political behavior - is obfuscated by traditional methods that extrapolate a single average relationship between the variables.
    Keywords: turnout, spatial dependence, heterogeneity
    JEL: D72 C14 C21
    Date: 2020
  11. By: Kate Baldwin; Dean Karlan; Christopher R. Udry; Ernest Appiah
    Abstract: Participatory development is designed to mitigate problems of political bias in pre-existing local government but also interacts with it in complex ways. Using a five-year randomized controlled study in 97 clusters of villages (194 villages) in Ghana, we analyze the effects of a major participatory development program on participation in, leadership of and investment by preexisting political institutions, and on households’ overall socioeconomic well-being. Applying theoretical insights on political participation and redistributive politics, we consider the possibility of both cross-institutional mobilization and displacement, and heterogeneous effects by partisanship. We find the government and its political supporters acted with high expectations for the participatory approach: treatment led to increased participation in local governance and reallocation of resources. But the results did not meet expectations, resulting in a worsening of socioeconomic wellbeing in treatment versus control villages for government supporters. This demonstrates international aid’s complex distributional consequences.
    JEL: H4 H7 O12 O17 O19
    Date: 2020–04
  12. By: Freistein, Katja; Gadinger, Frank; Unrau, Christine
    Abstract: In this paper, we ask how exactly right-wing populists make anti-globalization appealing. We follow the growing interest in the ambivalent features of populist language and performances by suggesting a methodological framework around narratives, metaphors, and emotions. We argue that right-wing populists skillfully present abstract phenomena of globalization and translate them to individual experiences of 'ordinary people'. Metaphors play a crucial role in populist storytelling as they make sense of a complex reality through imagery. They mobilize collective emotions and reach a wider audience through a high degree of linguistic adaptability and normative ambiguity. We demonstrate these narrative operations using two recent cases of 'successful' right-wing populist, anti-globalization storytelling, which build on strong metaphors. One is the metaphor of the 'House', used by former Italian Deputy Prime Minister and Interior Minister Matteo Salvini, and the other is U.S. President Donald Trump's metaphor of 'The Wall'. We argue that these metaphors are used to create an inside/outside distinction that externalizes threats which are possibly internal (e.g. drug consumption) to a polity (e.g. external drug abuse or organized crime) but can be blamed on globalization through the use of metaphors. What is more, metaphors can be utilized to construct a crisis, which in turn makes it possible for populists to adopt the savior-role of an energetic hero, who alone is able to resolve the supposed crisis.
    Keywords: Metaphors,Populist Storytelling,Narrative Analysis,(Anti-)Globalization,Migration
    Date: 2020
  13. By: Joshua Aizenman; Hiro Ito
    Abstract: This paper investigates Rodrik’s political-economy trilemma: policy makers face a trade-off of choosing two out of three policy goals or governance styles, namely, (hyper-) globalization, national sovereignty, and democracy. We develop a set of indexes that measure the extent of attainment of the three factors for 139 countries in the period of 1975-2016. Using these indexes, we examine the validity of the hypothesis of the political-economy trilemma by testing whether the three trilemma variables are linearly related. We find that, for industrialized countries, there is a linear relationship between globalization and national sovereignty (i.e., a dilemma), and that for developing countries, all three indexes are linearly correlated (i.e., a trilemma). We also investigate whether and how three political-economic factors affect the degree of political and financial stability. The results indicate that more democratic industrialized countries tend to experience more political instability while developing countries tend to be able to stabilize their politics if they are more democratic. The lower level of national sovereignty an industrialized country attains, the more stable its political situation tends to be, while a higher level of sovereignty helps a developing country to stabilize its politics. Globalization brings about political stability for both groups of countries. Furthermore, more globalized countries, whether industrial or developing, tend to experience more financial stability. Future data will allow us to test the possibility of regime changes associated with the post-2016 dynamics.
    JEL: F36 F41
    Date: 2020–03
  14. By: Fakih, Ali; Makdissi, Paul; Marrouch, Walid; Tabri, Rami V.; Yazbeck, Myra
    Abstract: This paper uses the 2013 World Value Survey, as well as the 2016 and 2018 waves of the Arab Barometer, to analyze the dynamics of trust in public institutions in Lebanon. It finds strong evidence that confidence in most public institutions has decreased between 2013 and 2016. The evidence of this decrease is robust to the numerical scale assigned to the different ordinal categories of trust and to assumptions on the missing values generating process. This finding highlights the importance for policymakers in developing countries to survey the perceptions and political attitude of their constituents in order to improve the performance of public institutions.
    Keywords: Confidence, institutions, uprising, ordinal variable.
    Date: 2020–03

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