nep-pol New Economics Papers
on Positive Political Economics
Issue of 2020‒10‒12
eight papers chosen by
Eugene Beaulieu
University of Calgary

  1. Party Preference Representation By André Blais; Eric Guntermann; Vincent Arel-Bundock; Ruth Dassonneville; Jean-François Laslier; Gabrielle Péloquin-Skulski
  2. Corona politics: The cost of mismanaging pandemics By Herrera, Helios; Konradt, Maximilian; Ordoñez, Guillermo; Trebesch, Christoph
  3. The Political Economy of Inequality, Mobility and Redistribution By Ignacio P. Campomanes
  4. Workplace Contact and Support for Anti-Immigration Parties By Henrik Andersson; Sirus H. Dehdari
  5. Elections, Economic Outcomes and Policy Choices in Canada: 1870 - 2015 By Stephen FERRIS; Marcel-Christian VOIA
  6. The Effect of Community Size on Electoral Preferences: Evidence From Post-WWII Southern Germany By Fiorini, Luciana C.; Jetter, Michael; Parmeter, Christopher F.; Parsons, Christopher
  7. Roots of dissent: Trade liberalization and the rise of populism in Brazil By Francesco Iacoella; Patricia Justino; Bruno Martorano
  8. Hate Trumps Love: The Impact of Political Polarization on Social Preferences By Eugen Dimant

  1. By: André Blais (UdeM - Université de Montréal); Eric Guntermann (UC BERKELEY - Berkeley University of California); Vincent Arel-Bundock (UdeM - Université de Montréal); Ruth Dassonneville (UdeM - Université de Montréal); Jean-François Laslier (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics); Gabrielle Péloquin-Skulski (UdeM - Université de Montréal)
    Abstract: Political parties are key actors in electoral democracies: they organize the legislature, form governments, and citizens choose their representatives by voting for them. How citizens evaluate political parties and how well the parties that citizens evaluate positively perform thus provide useful tools to estimate the quality of representation from the individual's perspective. We propose a measure that can be used to assess party preference representation at both the individual and aggregate levels, both in government and in parliament. We calculate the measure for over 160,000 survey respondents following 111 legislative elections held in 38 countries. We find little evidence that the party preferences of different socio-economic groups are systematically over or underrepresented. However, we show that citizens on the right tend to have higher representation scores than their left-wing counterparts. We also find that whereas proportional systems do not produce higher levels of representation on average, they reduce variance in representation across citizens.
    Keywords: party preference representation,party like/dislike,elections,cabinet,legislature
    Date: 2020–09
  2. By: Herrera, Helios; Konradt, Maximilian; Ordoñez, Guillermo; Trebesch, Christoph
    Abstract: The Covid-19 pandemic is a major test for governments around the world. We study the political consequences of (mis-)managing the Covid crisis by constructing a highfrequency dataset of government approval for 35 countries. In the first weeks after the outbreak, approval rates for incumbents increase strongly, consistent with a global 'rally around the flag' effect. Approval, however, drops again in countries where Covid cases continue to grow. This is especially true for governments that do not implement stringent policies to control the number of infections. Overall, the evidence suggests that loose pandemic policies are politically costly. Governments that placed more weight on health rather than short-term economic outcomes obtained higher approval.
    Keywords: Political Popularity,Political Economy,Crisis Management,Covid-19
    JEL: D72 H12 F50
    Date: 2020
  3. By: Ignacio P. Campomanes
    Abstract: How does the interaction between inequality and social mobility affect the choice of fiscal policy? I analyze this question in a model of democratic politics with imperfect tax enforcement, where the ability of individuals to evade taxes limits the amount of redistribution in the economy. Social mobility creates an insurance motive that increases voluntary compliance, favoring the tax enforcement process. In such an environment, redistributive pressures brought about by an increase in inequality are only implementable in highly mobile societies. On the contrary, when mobility is low, higher inequality reduces tax rates and does not translate into higher redistribution. I empirically analyze the predictions of the model for a sample of 72 countries during the period 1960-2015. Using cross-sectional as well as panel estimation techniques, the results point to a positive relation between market inequality and the level of redistribution only when social mobility is relatively high.
    Keywords: Inequality, Social Mobility, Fiscal Policy, Tax Evasion.
    JEL: E62 D31 J62 H26 P16
    Date: 2020–09
  4. By: Henrik Andersson (Uppsala University); Sirus H. Dehdari (Uppsala University)
    Abstract: This paper studies the consequences of an increased presence of immigrants in the workplace on anti-immigration voting behavior by combining detailed Swedish workplace data with election outcomes for a large anti-immigration party (the Sweden Democrats). At each election precinct, we match the election outcomes with the share of non-European co-workers among the average native-born worker for three consecutive elections between 2006 and 2014. Using a fixed effects approach, we estimate a negative effect of an increased share of non-Europeans in the workplace on support for the Sweden Democrats: a one standard deviation increase in the average share of non-European co-workers decreases the precinct vote share for the Sweden Democrats by roughly 0.4 percentage points. We show that these results are solely driven by within-skill contact, and by contact within occupations that are less exposed to job loss. We interpret the results as supporting the contact hypothesis: that increased interactions with minorities r duce prejudice among native-born voters, which leads to lower support for anti-immigration parties.
    Date: 2020–02
  5. By: Stephen FERRIS; Marcel-Christian VOIA
    Keywords: , economic and electoral outcomes, political business cycle, political influences on policy, policy endogeneity, seemingly unrelated regressions
    Date: 2020
  6. By: Fiorini, Luciana C. (University of Western Australia); Jetter, Michael (University of Western Australia); Parmeter, Christopher F. (University of Miami); Parsons, Christopher (University of Western Australia)
    Abstract: Populous communities often prefer more government involvement than less populous communities, but does community size per se affect citizens' preferences for government? Endogeneity commonly prevents testing for causal effects because (i) people can select into communities while (ii) government structures can affect community size (e.g., by en- or discouraging migration and fertility decisions). This paper studies a plausibly exogenous setting from post-WWII Baden-Württemberg (located in Southern Germany), in which the French occupation zone prevented the entry of German expellees after 1945, whereas the U.S. occupied zone did not. Consequently, municipalities on the U.S. side, just across the border from the French zone, experienced large and relatively homogenous population shocks. Studying voting patterns in the 1949 national- and 1952 state-level elections for 828 municipalities, we find more populous municipalities systematically preferred the SPD (Sozialdemokratische Partei Deutschlands), the party advocating for greater government involvement in virtually all areas of policymaking, over the CDU (Christlich Demokratische Union), the major conservative party that emphasized free markets. Our results hold when accounting for a host of potential confounding factors, county-fixed effects, pre-WWII vote shares, employing fractional response models and alternative instrumental variable specifications. Our benchmark estimates imply that a one standard deviation increase in population size (equivalent to ≈4,000 citizens) raised the SPD vote share by more than 11 percentage points.
    Keywords: community size, government size, voting preferences, public good provision
    JEL: D61 D72 H11 N44
    Date: 2020–09
  7. By: Francesco Iacoella; Patricia Justino; Bruno Martorano
    Abstract: This paper investigates the long-term impact of economic shocks on populism, by exploiting a natural experiment created by the trade liberalization process implemented in Brazil between 1990 and 1995. This high impact and low duration event generated a profound shock to the economy with, we argue, long term implications for political outcomes. We focus on the 2002 and 2018 presidential elections in Brazil, which resulted in the election of a left-wing and a right-wing populist president, respectively.
    Keywords: Trade liberalization, Populism, austerity, Inequality, Brazil, insecurity
    Date: 2020
  8. By: Eugen Dimant (University of Pennsylvania; CESifo, Munich; Identity and Conflict Lab)
    Abstract: Political polarization has ruptured the fabric of U.S. society. The focus of this paper is to examine various layers of (non-)strategic decision-making that are plausibly affected by political polarization through the lens of one's feelings of hate and love for Donald J. Trump. In several pre-registered experiments, I document the behavioral-, belief-, and norm-based mechanisms through which perceptions of interpersonal closeness, altruism, and cooperativeness are affected by polarization, both within and between political factions. To separate ingroup-love from outgroup-hate, the political setting is contrasted with a minimal group setting. I find strong heterogeneous effects: ingroup-love occurs in the perceptional domain (how close one feels towards others), whereas outgroup-hate occurs in the behavioral domain (how one helps/harms/cooperates with others). In addition, the pernicious outcomes of partisan identity also comport with the elicited social norms. Noteworthy, the rich experimental setting also allows me to examine the drivers of these behaviors, suggesting that the observed partisan rift might be not as forlorn as previously suggested: in the contexts studied here, the adverse behavioral impact of the resulting intergroup conflict can be attributed to one's grim expectations about the cooperativeness of the opposing faction, as opposed to one's actual unwillingness to cooperate with them.
    Keywords: Identity, Norms, Political Polarization, Social Preferences, Trump
    JEL: B41 D01 D9
    Date: 2020–09

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