nep-pol New Economics Papers
on Positive Political Economics
Issue of 2020‒08‒31
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. The Trade-off between Deepening and Broadening of Democracy Lessons from Youth Enfranchisement By Anna Maria Koukal; Patricia Schafer; Reiner Eichenberger
  2. Apostolic Voting By Ruzica Savivc; Dimitrios Xefteris
  3. Distributive politics inside the city? The political economy of Spain’s Plan E By Carozzi, Felipe; Repetto, Luca
  4. Moral Hazard in Electoral Teams By Gary W. Cox; Jon H. Fiva; Daniel M. Smith; Rune J. Sørensen
  5. Politics as a determinant of primary school provision The case of Uruguay, 1914-1954 By Paola Azar
  6. Watchdog or Loyal Servant? Political Media Bias in US Newscasts By Bernhardt, Lea; Dewenter, Ralf; Thomas, Tobias
  7. Does Voting Solve Intergenerational Sustainability Dilemma? By Shun Katsuki; Yoichi Hizen
  8. The Political Economy of Palm Oil Expansion and Deforestation in Indonesia By Elías Cisnerosy; Krisztina Kis-Katosz; Nunung Nuryartono
  9. Measuring Media Partisanship during Election: The Case of 2019 Indonesia Election By Maulana, Ardian; Situngkir, Hokky
  10. Growing Cleavages in India? Evidence from the Changing Structure of Party Electorates, 1962-2014 By Abhijit Banerjee; Amory Gethin; Thomas Piketty
  11. Divided Information Space: Media Polarization on Twitter during 2019 Indonesian Election By Maulana, Ardian; Situngkir, Hokky
  12. Income Growth and Preferences for Redistribution: The Role of Absolute and Relative Economic Experiences By David Weisstanner
  13. Bringing Connections Onboard: The Value of Political Influence By Green, Colin P.; HomRoy, Swarnodeep
  14. More elections, more burden? On the relationship between elections and public debt in Africa By Bayale, Nimonka; Tchagnao, Abdou-Fataou; Chavula, Hopestone Kayiska

  1. By: Anna Maria Koukal; Patricia Schafer; Reiner Eichenberger
    Abstract: Broadening democracy by lowering the voting age is on the political agenda in many democratic societies. Previous suffrage extensions suggest that there are systematic differences between what parliaments decide and what voters want with respect to enfranchisement of new groups. This paper analyzes a new municipality level dataset of two Swiss federal referendums on lowering the voting age from 20 to 18. We focus on the role of institutional price variations by (i) the depth of democracy proxied by the strength of direct democratic institutions and (ii) the size of the new electorate. Our results provide evidence that the price the current electorate faces – thus their potential influence loss – varies with the strength of direct democracy and affects citizens’ willingness to lower the voting age. Moreover, we find systematic price reactions of present voters to the number of new voters.
    Keywords: voting age; youth enfranchisement; direct democracy; power loss
    JEL: D72 D02 J15 P16
    Date: 2020–08
  2. By: Ruzica Savivc; Dimitrios Xefteris
    Abstract: We study electoral competition under the, so-called, Apostolic voting rule (AVR) in the framework of the Hotelling-Downs model (Osborne, 1993). The AVR is a two-stage election procedure composed of a voting stage and a lottery stage: the voters vote for the candidate they like best, and each of the two most-voted candidates is elected with even probability. Under standard assumptions regarding the voters' preferences, we show that the AVR leads to a unique -up to permutations of the players' identities- equilibrium: only two candidates enter in the electoral race and they choose distinct policy platforms. This is the first rule which is proved to support an essentially unique equilibrium in this popular model. Our analysis highlights that as long as candidates do not compete for a single first place (as in standard plurality or runoff elections), but for a number of them (as under the AVR), strategic incentives alter dramatically and lead to stable and predictable configurations.
    Keywords: Apostolic Voting, Hotelling-Downs model, manipulation, lotteries, unique equilibrium
    JEL: D72
    Date: 2020–08
  3. By: Carozzi, Felipe; Repetto, Luca
    Abstract: We study distributive politics inside cities by analysing how local governments allocate investment projects to voters across neighbourhoods. In particular, we ask whether politicians use investment to target their own supporters. To this aim, we use detailed geo-located investment data from Plan E, a large fiscal stimulus program carried out in Spain in 2009–2011. Our main empirical strategy is based on a close-elections regression-discontinuity design. In contrast to previous studies – which use aggregate data at the district or municipal level – we exploit spatial variation in both investment and voter support within municipalities and find no evidence of supporter targeting. Complementary results indicate that voters may be responding to investment by increasing turnout.
    Keywords: political economy; distributive Politics; partisan alignment; local governments
    JEL: H70 R53 D72
    Date: 2019–03–01
  4. By: Gary W. Cox; Jon H. Fiva; Daniel M. Smith; Rune J. Sørensen
    Abstract: How do parties motivate candidates to exert effort in closed-list elections? If each candidate’s primary goal is winning a seat, then those in safe and hopeless list positions have weak incentives to campaign. We present a model in which (i) candidates care about both legislative seats and the higher offices available when their party enters government; and (ii) parties commit to allocating higher offices monotonically with list rank. This model predicts that the volume and geo-diversity of candidates’ campaign efforts will increase as their list rank improves. Using new data cover-ing Norwegian parliamentary candidates’ use of mass and social media during the 2017 election, we find clear support for this prediction. As their list rank increases, candidates shift from intra-district to extra-district media exposure—which cannot help them win their own seats; but can improve their party’s chance of entering government, and thus their own potential share of the spoils.
    Keywords: party lists, cabinet promotion, Gamson’s law, proportional representation, voter mobilization
    JEL: D72
    Date: 2020
  5. By: Paola Azar (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: This paper analyses the relationship between school provision and the political power of the president in Uruguay between 1914 and 1954. The empirical test relies on panel fixed effects models based on newly compiled information about the partisan orientation of legislative members, the electoral competition and the schooling diffusion at the department-level. The estimates suggest the use of school provision as a pork barrel good. Ceteris paribus, school provision was lower in districts where government did not need to capture votes or to obtain legislative support. The direction of the influence shifted over time as an answer to increasing political fragmentation. Against the traditional historical narrative, these findings suggest that political interests did influence the provision of basic schooling over the territory.
    Keywords: public schooling, distributive politics, pork barrel, Uruguay
    JEL: D72 H75 I28 N36
    Date: 2020–05
  6. By: Bernhardt, Lea (Helmut Schmidt University, Hamburg); Dewenter, Ralf (Helmut Schmidt University, Hamburg); Thomas, Tobias (Heinrich-Heine-University Düsseldorf, Central European University (CEU), Hungary)
    Abstract: We investigate if four leading, electronic news gathering organizations in the US – ABC News, CBS News, FOX News, and NBC News – fulfill their role as the fourth estate in the US democracy. Our analysis, using the Political Coverage Index (PCI) introduced by Dewenter et al (2020), is based on the tonality of their political coverage using 815,000 human-coded news items from 2001 through 2012. For our econometric analysis, we use panel regressions with media and time fixed effects. To account for endogeneity, we cut time spans around national elections out of our data. In the remaining data, elections can be seen as a purely exogenous event. Focusing on the entire media set, we find robust empirical results for an anti-government bias in media reporting: Under Republican presidents, political coverage tends to be more liberal, whereas it tends to be more conservative if the president is a Democrat. However, when focusing on each single news organization, interesting differences emerge: For CBS News and NBC News, we find robust empirical evidence of anti-government-bias. In contrast, FOX News is always much more critical of Democrats than of Republicans. Hence, FOX News can be seen as a more loyal servant to one party rather than acting as the fourth estate. In addition, we find no evidence that ABC News significantly changes its position depending on the presidency. Although descriptive statistics show a certain tendency toward government-critical reporting by ABC News, the variation is not statistically significant.
    Keywords: Political Coverage Index; government bias; tonality; media capture; US newscasts
    JEL: C43 D72 L82
    Date: 2020–08–17
  7. By: Shun Katsuki (School of Economics and Management, Kochi University of Technology); Yoichi Hizen (School of Economics and Management, Kochi University of Technology)
    Abstract: Does voting solve intergenerational sustainability dilemma? Do voting rules matter for inducing people to collectively select a sustainable alternative that leaves more resources for future generations? To answer these questions, we conduct a laboratory experiment with human subjects in the framework of intergenerational sustainability dilemma game, in which the own-payoff maximizing choice by the current generation decreases the size of resource left for the subsequent generations. The choice is made by voting among the members of each generation, and we compare three voting rules, ordinary voting, whereby each person has one vote, proxy voting, whereby a part of people are given an extra vote on behalf of the subsequent generations, and two-ballot voting, whereby all people are given an extra vote. We observe that proxy voting and two-ballot voting improve the frequency of sustainable choice in comparison with ordinary voting, but the frequency is still low. This result implies that having people vote individually hardly achieves sustainable choices by successive generations even if the rules of voting are elaborated to some extent.
    Keywords: proxy vote, intergenerational sustainability dilemma, future generation, laboratory experiment
    Date: 2020–07
  8. By: Elías Cisnerosy; Krisztina Kis-Katosz; Nunung Nuryartono
    Abstract: This paper studies the interactions between political and economic incentives to foster forest conversion in Indonesian districts. Using a district–level panel data set from 2001 to 2016, we analyze variation in remotely sensed forest loss and forest fires as well as measures of land use licensing. We link these outcomes to economic incentives to expand oil palm cultivation areas as well as political incentives arising before idiosyncratically–timed local mayoral elections. Empirical results documentsubstantial increases in deforestation and forest fires in the year prior to local elections.Additionally, oil palm plays a crucial role in driving deforestation dynamics. Variations in global market prices of palm oil are closely linked to deforestation inareas which are geo-climatically best suited for growing oil palm and they amplify the importance of the political cycle. We thus find clear evidence for economic and political incentives reinforcing each other as drivers of forest loss and land conversion for oil palm cultivation.
    JEL: O13 Q15 Q56 P16
    Date: 2020–07
  9. By: Maulana, Ardian; Situngkir, Hokky
    Abstract: Analysis of media partisanship during election requires an objective measurement of political bias that frames the content of information conveyed to the audience. In this study we propose a method for political stance detection of online news outlets based on the behavior of their audience in social media. The method consists of 3 processing stages, namely hashtag-based user labeling, network-based user labeling and media classification. We applied this methodology to the tweet dataset related to the 2019 Indonesian general election, to observed media alignments during the election. Evaluation results show that the proposed method is very effective in detecting the political affiliation of twitter users as well as predicting the political stance of news media. Over all, the stance of media in the spectrum of political valence confirms the general allegations of media partisanship during 2019 Indonesian election. Further elaboration regarding news consumption behavior shows that low-credibility news outlets tend to have extreme political positions, while partisan readers tend not to question the credibility of the news sources they share.
    Keywords: news media network, label propagation algorithm, twitter, election, media partisanship, news consumption
    JEL: C60 C63 C79 C80 C90 D83 D85
    Date: 2020–05–01
  10. By: Abhijit Banerjee (MIT - Massachusetts Institute of Technology); Amory Gethin (PSE - Paris School of Economics, WIL - World Inequality Lab); Thomas Piketty (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, WIL - World Inequality Lab)
    Abstract: This paper combines surveys, election results and social spending data to document the long-run evolution of political cleavages in India. From a dominantparty system featuring the Indian National Congress as the main actor of the mediation of political conflicts, Indian politics have gradually come to include a number of smaller regionalist parties and, more recently, the Bharatiya Janata Party (BJP). These changes coincide with the rise of religious divisions and the persistence of strong caste-based cleavages, while education, income and occupation play little role (controlling for caste) in determining voters' choices. We find no evidence that India's new party system has been associated with changes in social policy. While BJP-led states are generally characterized by a smaller social sector, switching to a party representing upper castes or upper classes has no significant effect on social spending. We interpret this as evidence that voters seem to be less driven by straightforward economic interests than by sectarian interests and cultural priorities. In India, as in many Western democracies, political conflicts have become increasingly focused on identity and religious-ethnic conflicts rather than on tangible material benefits and class-based redistribution.
    Keywords: India,political cleavages,economic cleavage,social spending
    Date: 2019
  11. By: Maulana, Ardian; Situngkir, Hokky
    Abstract: Nowadays, the understanding of the impact of social media and online news media on the emergence of extreme polarization in political discourse is one of the most pressing challenges for both science and society. In this study, we investigate the phenomenon of political polarization in the indonesian news media network based on the pattern of news consumption patterns of Twitter users during 2019 Indonesian elections. By modeling news consumption patterns as a bipartite network of news outletsTwitter user, and then projecting to a network of news outlets, we observed the emergence of a number of media communites based on audience similarity. By measuring the political alignments of each news outlet, we shows the politically fragmented Indonesian news media landscape, where each media community becomes an political echo chamber for its audience. Our finding highlight the important role of mainstream media as a bridge of information between political echo chamber in social media environment
    Keywords: network, news media network, echo-chamber, twitter, community detection, news consumption
    JEL: C00 C10 C12 C13 C15 C60 C63 C90 D80 D85
    Date: 2020–06
  12. By: David Weisstanner
    Abstract: The unequal distribution of economic gains is a prominent factor behind policy preferences and recent electoral outcomes, but often fails to explain trends in preferences over time. This study introduces the distinction between “absolute” and “relative” economic experiences and explore how they shape preferences for redistribution. I argue that absolute and relative experiences have offsetting effects on redistribution preferences. Contrary to political economy theories, I expect that lower absolute income growth reduces demand for redistribution, because only favourable absolute economic contexts that are widely shared create the willingness to finance costly redistributive policies. Support for this expectation is provided in an empirical analysis that combines novel estimates for absolute and relative income growth with longitudinal survey data on redistribution preferences in 20 advanced democracies between 1985 and 2019. The distinction between absolute and relative economic experiences carries broader implications for research in political economy and comparative politics.
    Date: 2020–02
  13. By: Green, Colin P. (Norwegian University of Science and Technology (NTNU)); HomRoy, Swarnodeep (University of Groningen)
    Abstract: In 2002, an amendment to UK parliamentary regulations removed restrictions on the participation of members of parliament (MPs) in parliamentary proceedings related to their corporate interests. Using this amendment as a quasi-natural experiment, we demonstrate gains in firm value and profitability for firms with prior connections to MPs. These benefits are higher for firms with family ownership and lower accounting transparency. Both firms and politicians to change their behaviour. Post-amendment, firms are more likely to appoint MPs and also reduce political donations. Politicians with corporate connections were more likely to both become members of, and conditional on this, attend meetings of parliamentary select and joint committee. Our results highlight mechanisms of returns from political influence in well-developed institutional contexts.
    Keywords: political connections, board of directors, firm value
    JEL: G14 D72 G18 G30
    Date: 2020–06
  14. By: Bayale, Nimonka; Tchagnao, Abdou-Fataou; Chavula, Hopestone Kayiska
    Abstract: The political determinants of public indebtedness in developing countries is still generating a lot of interest among academics and policy makers. This paper investigates whether elections influence the public debt dynamics relying on data from 51 African countries spanning 1990 to 2015. The analyses are conducted using the fixed effects and the system Generalized Method of Moments (GMM). The results reveal that although all types of elections increase public debt, only the impact of the presidential elections are significant. The findings are robust irrespective of the estimation technique. The paper recommends African countries to rationalize public resources, particularly in the election years.
    Keywords: Public debt; Elections; Africa; Fixed effects; System GMM.
    JEL: C23 D72 F34 H60 N17
    Date: 2020–07–10

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