nep-pol New Economics Papers
on Positive Political Economics
Issue of 2020‒07‒13
fifteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. The Virus of Fear: The Political Impact of Ebola in the U.S. By Campante, Filipe; Depetris-Chauvín, Emilio; Durante, Ruben
  2. Internet and politics: evidence from U.K. local elections and local government policies By Gavazza, Alessandro; Nardotto, Mattia; Valletti, Tommaso
  3. Designing Stable Elections: A Survey By Steven Heilman
  4. A Glimpse of Freedom: Allied Occupation and Political Resistance in East Germany By Luis Martinez; Jonas Jessen; Guo Xu
  5. Election Systems, the "Beauty Premium" in Politics, and the Beauty of Dissent By Niklas Potrafke; Marcus Rösch; Heinrich Ursprung
  6. The Cost of Gendered Attitudes on a Female Candidate: Evidence from Google Trends By Raphael Corbi; Pedro Picchetti
  7. The Political Scar of Epidemics By Aksoy, Cevat Giray; Eichengreen, Barry; Saka, Orkun
  8. Reciprocity versus Reelection By Prateik Dalmia; Allan Drazen; Erkut Y. Ozbay
  9. The Conservation Multiplier By Bård Harstad
  10. Liberalism, conservatism and contested boundaries By Tate, John William
  11. Populism, Group Thinking and Banking Policy By Donato Masciandaro; Federico Faveretto
  12. Can inequalities in political participation explain health inequalities? By Reeves, Aaron; Mackenbach, Johan P.
  13. Globalization for Sale By Blanga-Gubbay, Michael; Conconi, Paola; Parenti, Mathieu
  14. Economic geography, politics, and policy By Rickard, Stephanie J.
  15. The Political Economy of Inequality in Chile and Mexico: Two Tales of Neoliberalism By Gouzoulis, Giorgos; Constantine, Collin

  1. By: Campante, Filipe; Depetris-Chauvín, Emilio; Durante, Ruben
    Abstract: We study how fear can aï¬?ect 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 eï¬?ect (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, terrorism, and President Obama in newsletters, tweets 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 ï¬ ndings 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 speciï¬ c fear-triggering factor.
    Keywords: Ebola; elections; Emotions; Fear; Immigration
    JEL: D72 D91
    Date: 2020–03
  2. By: Gavazza, Alessandro; Nardotto, Mattia; Valletti, Tommaso
    Abstract: We empirically study the effects of broadband internet diffusion on local election outcomes and on local government policies using rich data from the U.K. Our analysis shows that the internet has displaced other media with greater news content (i.e. radio and newspapers), thereby decreasing voter turnout, most notably among less-educated and younger individuals. In turn, we find suggestive evidence that local government expenditures and taxes are lower in areas with greater broadband diffusion, particularly expenditures targeted at less-educated voters. Our findings are consistent with the idea that voters’ information plays a key role in determining electoral participation, government policies, and government size.
    Keywords: local elections; voter turnout; local government expenditure; media; internet
    JEL: D72 H72 H75 L82 L86 N44
    Date: 2019–10–01
  3. By: Steven Heilman
    Abstract: We survey the design of elections that are resilient to attempted interference by third parties. For example, suppose votes have been cast in an election between two candidates, and then each vote is randomly changed with a small probability, independently of the other votes. It is desirable to keep the outcome of the election the same, regardless of the changes to the votes. It is well known that the US electoral college system is about 5 times more likely to have a changed outcome due to vote corruption, when compared to a majority vote. In fact, Mossel, O'Donnell and Oleszkiewicz proved in 2005 that the majority voting method is most stable to this random vote corruption, among voting methods where each person has a small influence on the election. We discuss some recent progress on the analogous result for elections between more than two candidates. In this case, plurality should be most stable to corruption in votes. We also survey results on adversarial election manipulation (where an adversary can select particular votes to change, perhaps in a non-random way), and we briefly discuss ranked choice voting methods (where a vote is a ranked list of candidates).
    Date: 2020–06
  4. By: Luis Martinez (University of Chicago); Jonas Jessen (the German Institute for Economic Research (DIW Berlin)); Guo Xu (University of California, Berkeley)
    Abstract: This paper studies costly political resistance in a non-democracy. When Nazi Germany surrendered in May 1945, 40% of the designated Soviet occupation zone was initially captured by the western Allied Expeditionary Force. This occupation was short-lived: Soviet forces took over after less than two months and installed an authoritarian regime in what became the German Democratic Republic (GDR). We exploit the idiosyncratic line of contact separating Allied and Soviet troops within the GDR to show that areas briefly under Allied occupation had higher incidence of protests during the only major episode of political unrest in the GDR before its demise in 1989 - the East German Uprising of 1953. These areas also exhibited lower regime support during the last free elections in 1946. We argue that even a “glimpse of freedom" can foster civilian opposition to dictatorship.
    Keywords: German Democratic Republic; East Germany,World War II, Dictatorship, Protests, Soviet Union, Line of Contact, Regression Discontinuity Design
    JEL: D72 D74 P26
    Date: 2020–04
  5. By: Niklas Potrafke; Marcus Rösch; Heinrich Ursprung
    Abstract: We ask three questions. First, do election systems differ in how they translate physical attractiveness of candidates into electoral success? Second, do political parties strategically exploit the “beauty premium” when deciding on which candidates to nominate, and, third, do elected MPs use their beauty premium to reap some independence from their party? Using the German election system that combines first-past-the-post election with party-list proportional representation, our results show that plurality elections provide more scope for translating physical attractiveness into electoral success than proportional representation. Whether political parties strategically use the beauty premium to optimize their electoral objectives is less clear. Physically attractive MPs, however, allow themselves to dissent more often, i.e. they vote more often against the party line than their less attractive peers.
    Keywords: attractiveness of politicians, safe district, party strategies, electoral success, electoral system
    JEL: D72 J45 J70
    Date: 2020
  6. By: Raphael Corbi; Pedro Picchetti
    Abstract: How much can negative attitudes towards women affect voting for a female candidate on a major election? We measure gender animus by calculating a proxy based on Google search queries that include gender-charged language. Such approach likely elicits socially sensitive attitudes by limiting the concern of social censoring, circumventing usual difficulties associated with survey-based measurements. We compare the proxy to Hillary Clinton’s vote share in the presidential election of 2016, controlling for the vote share of the previous Democratic presidential candidate, Barack Obama. Our results indicate that a one standard deviation increase in our proxy is associated with a 2 percentage points relative loss for Hillary and suggest that online-based observable behavior can be useful for measuring different kinds of hard-to-measure social attitudes.
    Keywords: Gender; Discrimination; Election; Google
    JEL: D72 J16 J7
    Date: 2020–06–19
  7. By: Aksoy, Cevat Giray (European Bank for Reconstruction and Development); Eichengreen, Barry; Saka, Orkun (University of Essex)
    Abstract: What will be political legacy of the Coronavirus pandemic? We find that epidemic exposure in an individual's "impressionable years" (ages 18 to 25) has a persistent negative effect on confidence in political institutions and leaders. We find similar negative effects on confidence in public health systems, suggesting that the loss of confidence in political leadership and institutions is associated with healthcare-related policies at the time of the epidemic. In line with this argument, our results are mostly driven by individuals who experienced epidemics under weak governments with less capacity to act against the epidemic, disappointing their citizens. We provide evidence of this mechanism by showing that weak governments took longer to introduce policy interventions in response to the COVID-19 outbreak. These results imply that the Coronavirus may leave behind a long-lasting political scar on the current young generation ("Generation Z").
    Keywords: epidemics, trust, democracy, political approval, COVID-19
    JEL: D72 F50 I19
    Date: 2020–06
  8. By: Prateik Dalmia; Allan Drazen; Erkut Y. Ozbay
    Abstract: We study how reelection concerns affect reciprocity by elected leaders to the voters who elected them. If showing kindness to past voters reduces the chances of reelection, will an elected leader reduce or eliminate such intrinsic reciprocity? We present a signalling model of candidate behavior, where we show that candidates may limit intrinsic reciprocity to past voters to signal congruence with voters important for reelection, and selfish candidates may mimic reciprocal behavior for instrumental purposes. We then present an experiment that tests these ideas in the laboratory and finds support for the model. Both candidates and voters behave as the signalling model predicts. Our key finding is that the desire to be reelected may limit intrinsic reciprocity of an elected leader to the voters who put her in office, but does not eliminate it entirely.
    JEL: C91 D72 D78
    Date: 2020–06
  9. By: Bård Harstad
    Abstract: Every government that controls an exhaustible resource must decide whether to exploit it or to conserve and thereby let the subsequent government decide whether to exploit or conserve. This paper develops a theory of this situation and shows when a small probability that some future government will exploit a resource leads to a domino effect with rapid exploitation. This effect leads to a multiplier that measures how a small change in parameters can have large effects. The multiplier is especially large if the government is powerful now but unlikely to be in power later. The multiplier also permits dramatic returns on lobby contributions contingent on exploitation -- or on compensations contingent on conservation -- when these offers are expected to continue. To best take advantage of the multiplier, I show how and when compensations should be offered to the president, the party in power, the general public, or to the lobby group.
    Keywords: dynamic games, exhaustible resources, deforestation, political economy, lobbying, conservation, PES, REDD+.
    JEL: D72 C73 Q57 O13
    Date: 2020
  10. By: Tate, John William (The University of Newcastle, Newcastle Business School)
    Abstract: Within contemporary liberal democracies, the relationship between liberalism and conservatism is a contested one. Some political parties, seeking to challenge a more egalitarian left-wing tradition, have sought to combine both within their political agenda. This article uses a debate between two professional politicians, George Brandis and John Howard, concerning the relationship between liberalism and conservatism, and the respective place of these political traditions within the Liberal Party of Australia, as the impetus for an investigation of both political traditions and the extent to which each are compatible as political philosophies. The discussion extends to an investigation of key liberal political philosophers - John Rawls, Ronald Dworkin, Friedrich von Hayek and James Buchanan. We shall see that these thinkers split on the extent to which liberalism is capable of incorporating conservative principles, thereby revealing the contested boundaries of the liberal tradition. As a result of this investigation, we shall see that the liberal tradition is in fact far more plural, and at times less individualist, than some of its most rigorous proponents proclaim.
    Keywords: political theory; political philosophy; liberalism; conservatism
    JEL: Z10
    Date: 2019
  11. By: Donato Masciandaro; Federico Faveretto
    Abstract: This paper builds a model of populism called Democratic Rioting in which citizens - i.e., the poor and teh rich - are assumed to be heavily influenced by psychological group dynamics that result from banking shocks. We highlight a display of anger that is channelled through an election instead of in the streets. In turn the anger - a self-serving bias - can be influenced by non-financial news about immigration, welfare plans and housing plans. Therefore after a banking shock the consensus on a myopic populisr policy can depend on many issues that have nothing to do with the bailout decision itself. We describe a mechanism that can be applied to the aftermath of both the Great Recession and the Great Depression.
    Keywords: Populism, Political Economics, Behavioural economics, Financial inequality, Banking policy
    JEL: D72 D78 E31 E52 E58 E62
    Date: 2020
  12. By: Reeves, Aaron; Mackenbach, Johan P.
    Abstract: Inequalities in health are pervasive and durable, but they are not uniform. To date, however, the drivers of these between-country patters in health inequalities remain largely unknown. In this analysis, we draw on data from 17 European countries to explore whether inequalities in political participation, that is, inequalities in voting by educational attainment, are correlated with health inequalities. Over and above a range of relevant confounders, such as GDP, income inequality, health spending, social protection spending, poverty rates, and smoking, greater inequalities in political participation remain correlated with higher health inequalities. If ‘politicians and officials are under no compulsion to pay much heed to classes and groups of citizens that do not vote’ then political inequalities could indirectly affect health through its impact on policy choices that determine who has access to the resources necessary for a healthy life. Inequalities in political participation, then, may well be one of the ‘causes of the causes’ of ill-health.
    Keywords: Health inequality; Mortality; Political economy; Political participation; Voting
    JEL: N0
    Date: 2019–08–01
  13. By: Blanga-Gubbay, Michael; Conconi, Paola; Parenti, Mathieu
    Abstract: We study the role of firms in the political economy of trade agreements. Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, we find that virtually all firms that lobby on free trade agreements (FTAs) support their ratification. Moreover, relative to non-lobbying firms, lobbying firms are larger, and more likely to be engaged in international trade and to operate in comparative advantage sectors. To rationalize these findings, we develop a model in which heterogeneous firms decide whether to lobby and how much to spend in favor or against a proposed FTA. We show that the distributional effects are asymmetric: the winners from the FTA have higher stakes in the agreement than the losers, which explains why only pro-FTA firms select into lobbying. The model also delivers predictions on the intensive margin of lobbying. In line with these predictions, we find that firms spend more supporting agreements that generate larger potential gains -- in terms of the extent of the reduction of tariffs on their final goods and intermediate inputs, the depth of the agreement, and the export and sourcing potential of the FTA partners -- and when politicians are less likely to be in favor of ratification.
    Date: 2020–04
  14. By: Rickard, Stephanie J.
    Abstract: Globalization has reduced the importance of distance between countries. Yet, within countries, geography matters now more than ever. Economic activities, including production and employment, occur unevenly across space within countries, and globalization consequently impacts various regions differently. Some areas benefit from international economic integration while others lose, and as a result, economic geography shapes citizens¤rsquo¤ experience of globalization. Economic geography also influences governments¤rsquo¤ responses to globalization and economic shocks. Economic geography consequently merits the attention of political scientists. By examining economic geography, researchers will find new traction on long-standing theoretical debates and valuable insights on recent developments, including the growing backlash against globalization. The challenges of studying economic geography include causal complexity and measurement issues.
    Keywords: economic geography; electoral institutions; geography of discontent; globalization; left-behind places; populism
    JEL: L81
    Date: 2020–05–11
  15. By: Gouzoulis, Giorgos (University College London); Constantine, Collin
    Abstract: This paper undertakes a comparative study on the topographies of neoliberalism in Latin America (Chile and Mexico) and provides empirical estimates of how the varied geographies of neoliberalism affect functional income inequality between 1980-2011. Our empirical strategy employs a single-equation Unrestricted Error-Correction Model that tests an exploratory baseline specification. We find robust evidence that government consumption is a positive driver of the respective wage shares. Since Chile has entrenched austerity as opposed to Mexico, it is a fundamental explanation for its falling wage share. Private debt is the second most important explanation for why wage shares have fallen in Chile. We find no evidence of this channel in the Mexican case. The article also finds similarly varied effects of globalisation on the respective wage shares. These results demonstrate the importance of country-level studies and how new spatialities of neoliberalism through different state reconfigurations can tell unique distributional stories.
    Date: 2020–05–19

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