nep-pol New Economics Papers
on Positive Political Economics
Issue of 2020‒11‒16
eighteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Autocrats in the United Nations General Assembly: A Test of the Decoy Voting Hypothesis By Martin Mosler
  2. Introducing media in a model of electoral competition with candidate quality By Gerard Domènech i Gironell
  3. Fundamentals-Based State-Level Forecasts of the 2020 US Presidential Election By Nollenberger, Clemens; Unger, Gina-Maria
  4. Neither Left-Behind nor Superstar: Ordinary Winners of Digitalization at the Ballot By Gallego, Aina; Kurer, Thomas; Schöll, Nikolas
  5. Does Context Outweigh Individual Characteristics in Driving Voting Behavior? Evidence from Relocations within the U.S. By Enrico Cantoni; Vincent Pons
  6. Hosting Refugees and Voting for the Far-Right: Evidence from France By Sarah Schneider-Strawczynski
  7. Social Media and Political Contributions: The Impact of New Technology on Political Competition By Maria Petrova; Ananya Sen; Pinar Yildirim
  8. Discrimination by Politicians against Religious Minorities: Experimental Evidence from the UK By Crawfurd, Lee; Ramli, Ukasha
  9. One strike and you’re out! Dictators’ fate in the aftermath of terrorism By Adam, Antonis; Tsavou, Evi
  10. Social Networks, Confirmation Bias and Shock Elections By Gallo, E.; Langtry, A.
  11. Protectionism or Free Trade? Or Both? Analysis of Protectionism Attitudes in the EU By Galina Kolev
  12. How Trump triumphed: Multi-candidate primaries with buffoons By Castanheira, Micael; Huck, Steffen; Leutgeb, Johannes Josef; Schotter, Andrew
  13. The Effect of the 2016 United States Presidential Election on Employment Discrimination By Gorzig, Marina Mileo; Rho, Deborah
  14. Open Rule Legislative Bargaining By Volker Britz; Hans Gersbach
  15. Agenda-Setter Power Dynamics: Learning in Multi-Issue Bargaining By Renee Bowen; Ilwoo Hwang; Stefan Krasa
  16. The political economic of fi nancing climate policy : evidence from the solar PV subsidy programs By Olivier De Groote; Axel Gautier; Frank Verboven
  17. Checks and balance, Political Leadership, and Bureaucratic Autonomy: Evidence from National Development Banks By Beichen HUANG; Tianyang XI; Jiajun XU
  18. Political Instability, FDIand Economic Growth in Sub-Saharan African Countries: Evidence from Modelling Dynamic Simultaneous Equations By Gakpa Lewis Landry

  1. By: Martin Mosler
    Abstract: I empirically examine whether autocratic governments use decoy voting in the United Nations General Assembly to hide repressive behavior of their regimes. Previous research has identified the State of Israel as a unique decoy. My sample includes votes on all 4,878 contested resolutions involving Israel between 1950 and 2018. The vote agreement rate of fully autocratic regimes with Israel is on average 3.2 percentage points or 18 percent of a standard deviation lower than among fully democratic governments for Israel- and Palestinian issues-related resolutions. The effect is more pronounced for resolutions that primarily deal with the State of Israel, with an estimated decline in voting alignment of 3.6 percentage points or 20 percent of a standard deviation. The results are consistent with the hypothesis that autocratic governments use resolutions against the only Jewish-majority state to fill the voting agenda and deflect attention from their regimes.
    Keywords: United Nations, autocracy, ethics of governance, decoy, political alignment, Israel
    JEL: F53 D72 D74
    Date: 2020
  2. By: Gerard Domènech i Gironell (Universitat de Barcelona)
    Abstract: This work proposes and studies a two candidate model of electoral competition with candidate quality and media. The role of media is to inform voters about the quality of each candidate. We assume that there are two non-strategic media outlets, each one with a different ideal policy (there is a leftist media outlet and a rightist one), and that both of them transmit lower quality for a candidate the further from their ideal policy the policy the candidate proposes is. We also assume that the rightist media outlet has greater coverage, in the sense that it informs neutral voters and voters slightly on the left side of the political spectrum. We study the model under the classical assumption of risk-averse voters. Classical results concerning PSNE generally hold with a "media bias". We extend and characterize in our setting the MSNE found in Aragonés and Xefteris (2012), which sometimes fails to exist in our model.
    Keywords: Electoral competition, Median voter, Media manipulation, Candidate quality.
    JEL: C72 C82 D72
    Date: 2020
  3. By: Nollenberger, Clemens; Unger, Gina-Maria
    Abstract: Forecasts of US presidential elections have gained considerable attention in recent years. However, as became evident in 2016 with the victory of Donald Trump, most of them consider presidential elections only at the national level, neglecting that these are ultimately decided by the Electoral College. In order to improve accuracy, we believe that forecasts should instead address outcomes at the state-level to determine the eventual Electoral College winner. We develop a political economy model of the incumbent vote share across states based on different short- and long-term predictors, referring up to the end of the second quarter of election years. Testing it against election outcomes since 1980, our model correctly predicts the eventual election winner in 9 out of 10 cases – including 2016 –, with the 2000 election being the exception. For the 2020 election, it expects Trump to lose the Electoral College, as only 6.2 percent of simulated outcomes cross the required threshold of 270 Electoral Votes, with a mean prediction of 106 Electoral Votes.
    Date: 2020–10–22
  4. By: Gallego, Aina; Kurer, Thomas; Schöll, Nikolas
    Abstract: The nascent literature on the political consequences of technological change studies either left-behind voters or successful technology entrepreneurs ("superstars"). However, it neglects the large share of skilled workers who benefit from limited but steady economic improvements in the knowledge economy. This paper studies how workplace digitalization affects political preferences among the entire active labor force by combining individual-level panel data from the United Kingdom with industry-level data on ICT capital stocks between 1997-2017. We first demonstrate that digitalization was economically beneficial for workers with middle and high levels of education. We then show that growth in digitalization increased support for the Conservative Party, the incumbent party, and voter turnout among beneficiaries of economic change. Our results hold in an instrumental variable analysis and multiple robustness checks. While digitalization undoubtedly produces losers (along with some superstars), ordinary winners of digitalization are an important stabilizing force content with the political status quo.
    Date: 2020–10–27
  5. By: Enrico Cantoni; Vincent Pons
    Abstract: We measure the overall influence of contextual versus individual factors (e.g., voting rules and media as opposed to race and education) on voter behavior, and explore underlying mechanisms. Using a U.S.-wide voter-level panel, 2008–18, we examine voters who relocate across state and county lines, tracking changes in registration, turnout, and party affiliation to estimate location and individual fixed effects in a value-added model. Location explains 37 percent of the cross-state variation in turnout (to 63 percent for individual characteristics) and an only slightly smaller share of variation in party affiliation. Place effects are larger for young and White voters.
    JEL: D72
    Date: 2020–10
  6. By: Sarah Schneider-Strawczynski (PSE - Paris School of Economics, 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)
    Abstract: Does exposure to refugees change the political preferences of natives towards far-right parties, and how does this change in preferences occur? This paper examines the political economy of refugee-hosting. Using the opening of refugee centers in France between 1995 and 2017, I show that voting for far-right parties in cities with such opening between two presidential elections has fallen by about 2 percent. The drop in far-right voting is higher in municipalities with a small population, working in the primary and secondary sectors, with low educational levels and few migrants. I show that this negative effect can not be explained by an economic channel , but rather by a composition channel, through natives' avoidance, and a contact channel, through natives' exposure to refugees. I provide suggestive evidence that too-disruptive exposure to refugees, as measured by the magnitude of the inflows, the cultural distance and the media salience of refugees, can mitigate the beneficial effects of contact on reducing far-right support.
    Keywords: Migration,Refugees,Political Economy,Preferences Keywords: Migration,Preferences
    Date: 2020–10
  7. By: Maria Petrova; Ananya Sen; Pinar Yildirim
    Abstract: Political campaigns are among the most sophisticated marketing exercises in the United States. As part of their marketing communication strategy, an increasing number of politicians adopt social media to inform their constituencies. This study documents the returns from adopting a new technology, namely Twitter, for politicians running for Congress by focusing on the change in campaign contributions received. We compare weekly donations received just before and just after a politician opens a Twitter account in regions with high and low levels of Twitter penetration, controlling for politician-month fixed effects. Specifically, over the course of a political campaign, we estimate that the differential effect of opening a Twitter account in regions with high vs low levels of Twitter penetration amounts to an increase of 0.7-2% in donations for all politicians and 1-3.1% for new politicians, who were never elected to the Congress before. In contrast, the effect of joining Twitter for experienced politicians remains negligibly small. We find some evidence consistent with the explanation that the effect is driven by new information about the candidates, e.g., the effect is primarily driven by new donors rather than past donors, by candidates without Facebook accounts and tweeting more informatively. Overall, our findings imply that social media can intensify political competition by lowering costs of disseminating information for new entrants to their constituents and thus may reduce the barriers to enter politics.
    Date: 2020–11
  8. By: Crawfurd, Lee; Ramli, Ukasha
    Abstract: Are Labour party politicians anti-Semitic, and are Conservative party politicians Islamophobic? In this correspondence study we measure the responsiveness of elected local representatives in the United Kingdom to requests from putative constituents from minority religious groups. We send short email requests to 10,268 local government representatives from each of the main political parties, from stereotypically Islamic, Jewish, and Christian names. Response rates are six to seven percentage points lower to stereotypically Muslim or Jewish names. The two major political parties both show equal bias towards the two minority group names. Results suggest that the bias in response may be implicit. Bias is lower in more dense and diverse locations.
    Date: 2020–10–30
  9. By: Adam, Antonis; Tsavou, Evi
    Abstract: We use a cross-country dataset on terrorism and leadership survival from 1970 through 2015 to shed light on a leader’s fate after terrorists’ strike. We provide robust evidence that incumbents in electoral authoritarian regimes face an increased hazard of exit from political power. This is contrasted with the closed authoritarian dictators that remain intact. Moreover, we fail to find a robust effect of terrorism on a leader’s survival probability in democracies. We conceive this effect to be due to the collapse of the elite coalition in autocracies after an attack, suggesting that the Dictator’s “loyal friends” betray him in the aftermath of terrorism.
    Keywords: Terrorism · Political Survival · Incumbent Leaders · Electoral Autocracies · Closed Autocracies
    JEL: P16
    Date: 2020
  10. By: Gallo, E.; Langtry, A.
    Abstract: In recent years online social networks have become increasingly prominent in political campaigns and, concurrently, several countries have experienced shock election outcomes. This paper proposes a model that links these two phenomena. In our set-up, the process of learning from others on a network is influenced by confirmation bias, i.e. the tendency to ignore contrary evidence and interpret it as consistent with one's own belief. When agents pay enough attention to themselves, confirmation bias leads to slower learning in any symmetric network, and it increases polarization in society. We identify a subset of agents that become more/less influential with confirmation bias. The socially optimal network structure depends critically on the information available to the social planner. When she cannot observe agents' beliefs, the optimal network is symmetric, vertex-transitive and has no self-loops. We explore the implications of these results for electoral outcomes and media markets. Confirmation bias increases the likelihood of shock elections, and it pushes fringe media to take a more extreme ideology.
    Keywords: social learning, confirmation bias, network, elections, media
    JEL: C63 D72 D83 D85 D91 L15
    Date: 2020–11–02
  11. By: Galina Kolev (RheinMain University and German Economic Institute)
    Abstract: The changing landscape in trade policy in recent years is undoubtedly related to a shift in voter preferences. Based on Eurobarometer survey data, the present paper investigates both the factors determining the level of support for protectionism and the striking positive correlation of responses to questions related to free trade and protectionism. EU citizens are more likely to support protectionism when the economy runs smoothly and reject protectionism if the national economy is not in the best shape. Unemployment, bad economic situations as well as negative feelings regarding immigration are identified as possible reasons to call for protectionism while respondents are favouring free trade at the same time. The positively correlated attitudes toward free trade and protectionism are furthermore a matter of lacking knowledge of political issues. Better educated EU citizens are less likely to support free trade and protectionism at the same time. This applies also to respondents who show a higher level of knowledge regarding basic EU-related facts as well as to those who discuss political matters with friends more often. A possible way to tackle this problem is a broad information strategy covering topics of international economics across several media channels. Especially radio, press and internet are identified as media which seem to contribute to a better understanding of these complex issues.
    Keywords: Trade Policy, Protectionism, International Political Economy
    JEL: F
    Date: 2019
  12. By: Castanheira, Micael; Huck, Steffen; Leutgeb, Johannes Josef; Schotter, Andrew
    Abstract: While people on all sides of the political spectrum were amazed that Donald Trump won the Republican nomination this paper demonstrates that Trump's victory was not a crazy event but rather the equilibrium outcome of a multi-candidate race where one candidate, the buffoon, is viewed as likely to self-destruct and hence unworthy of attack. We model such primaries as a truel (a three-way duel), solve for its equilibrium, and test its implications in the lab. We find that people recognize a buffoon when they see one and aim their attacks elsewhere with the unfortunate consequence that the buffoon has an enhanced probability of winning. This result is strongest amongst those subjects who demonstrate an ability to best respond suggesting that our results would only be stronger when this game is played by experts and for higher stakes.
    Keywords: truel,political primaries,Trump
    JEL: C72 C92 D72 D74
    Date: 2020
  13. By: Gorzig, Marina Mileo; Rho, Deborah
    Abstract: We examine whether employment discrimination increased after the 2016 presidential election in the United States. We submitted fictitious applications to publicly advertised positions using resumes that are manipulated on perceived race and ethnicity (Somali American, African American, and white American). Prior to the 2016 election, employers contacted Somali American applicants slightly less than white applicants but more than African American applicants. After the election, the difference between white and Somali American applicants increased by 8 percentage points. The increased discrimination predominantly occurred in occupations involving interaction with customers. We continued data collection from July 2017 to March 2018 to test for seasonality in discrimination; there was no substantial increase in discrimination after the 2017 election.
    Keywords: discrimination,race/ethnicity,immigration,resume audit,election
    JEL: J61 J68 J71
    Date: 2020
  14. By: Volker Britz (CER–ETH – Center of Economic Research at ETH Zurich, Zurichbergstrasse 18, 8092 Zurich, Switzerland); Hans Gersbach (CER–ETH – Center of Economic Research at ETH Zurich, Zurichbergstrasse 18, 8092 Zurich, Switzerland)
    Abstract: We consider non–cooperative bargaining on the division of a surplus under simple majority rule. We use the “open rule” bargaining protocol as originally suggested by Baron and Ferejohn (1989): Proposals can be amended before they are voted on. It is widely known that there are significant gaps in our understanding of open rule bargaining. In order to address these gaps, we provide a fresh analysis of a particularly simple class of equilibria. Our results shed new light on the efficiency and fairness implications of using an open vs. closed rule in bargaining. In particular, our results on the open rule model suggest that equilibrium delays tend to be longer, and surplus allocations tend to be less egalitarian than originally predicted by Baron and Ferejohn. Understanding the efficiency and fairness properties of different bargaining protocols is crucial for institutional design.
    Keywords: Bargaining, Legislatures, Open Rules, Baron and Ferejohn, Stationary Equilibrium
    JEL: C72 C78 D72
    Date: 2020–11
  15. By: Renee Bowen; Ilwoo Hwang; Stefan Krasa
    Abstract: We study a dynamic bargaining model between a fixed agenda-setter and responder over successive issues. If the responder rejects the setter’s proposal, the setter can attempt to assert her will to implement her ideal and will succeed with a probability that depends on her “personal power”. The players learn about the setter’s power as gridlock persists. Gridlock occurs when the setter’s perceived power is either too high or too low, and the players reach compromise in an intermediate interval of beliefs. The presence of “difficult” issues can induce more compromise as the players have incentives to avoid learning.
    JEL: C78 D72 D74 D83
    Date: 2020–10
  16. By: Olivier De Groote (Toulouse School of Economics, University of Toulouse Capitole); Axel Gautier (IHEC Liège, University of Liège); Frank Verboven (Department of Economics, KU Leuven)
    Abstract: To combat climate change, governments are taking an increasing number of technologyspecific measures to support green technologies. In this paper, we look at the very generous subsidy policies to solar PVs in the three regions of Belgium to ask the question of how voters responded to these programs. We provide evidence that voters did not reward the incumbent government that was responsible for the program, as predicted by the ‘buying-votes’ hypothesis. Instead, we find that voters punish the incumbent government because of the increasing awareness of the high financing costs. These did not only affect the non-adopting electricity consumers who did not benefit from the programs, but also the adopting prosumers, who saw unannounced new costs such as the introduction of prosumer fees to get access to the grid.
    Date: 2020–10
  17. By: Beichen HUANG; Tianyang XI; Jiajun XU
    Abstract: A long standing view in the political economy of bureaucracy holds that the quality of political governance is the foundation of high quality development agencies. However, the existing literature does not provide an adequate account of how political leadership shape the capacity of development agencies. Motivated by the discrepancy between formal political institutions and large within country variation of bureaucratic governance in reality, this paper argues that the governing structure and capacity of development agencies crucially depend on the interaction between formal institutional constraints entrenched in the political system and the strength of political leadership. Specifically, neither institutional constraints nor strong leadership alone guarantees a sufficient degree of bureaucratic autonomy for development agencies. Without strong leadership, institutional checks and balance may give rise to excessive veto points in policy making and underminebureaucratic autonomy. Without proper institutional checks and balance, development agencies’ autonomy and capacity tend to compromised by the moral hazard of strong leadership. In turn, our theoretical argument predicts that development agencies exhibit strong autonomy and capacity with the presence of both strong leadership and institutional constraints. We use a crosscountry dataset of national development banks to test the theory. The regression results and case studies of national development banks are consistent with the theory.This Research Paper is published in the framework of the International Research Initiative on Public Development Banks working groups and released for the occasion of the 14th AFD International Research Conference on Development. It is part of the pilot research program “Realizing the Potential of Public Development Banks for Achieving Sustainable Development Goals”. This program was launched, along with the International Research Initiative on Public Development Banks (PDBs), by the Institute of New Structural Economics (INSE) at Peking University, and sponsored by the Agence française de développement (AFD), Ford Foundation and International Development Finance Club (IDFC). Have a look on the key findings for a quick overview of the research resultsSee the video pitch
    JEL: Q
    Date: 2020–11–02
  18. By: Gakpa Lewis Landry (École Nationale Supérieure de Statistique et d’Économie Appliquée (ENSEA)-Abidjan-Côte d’Ivoire)
    Date: 2020

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