nep-pol New Economics Papers
on Positive Political Economics
Issue of 2020‒11‒30
nineteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Beyond political divides: analyzing public opinion on carbon taxation in Switzerland By Laurent Ott; Mehdi Farsi; Sylvain weber
  2. Competitive Gerrymandering and the Popular Vote By Felix J. Bierbrauer; Mattias Polborn; Felix Bierbrauer
  3. Manipulable outcomes within the class of scoring voting rules By Mostapha Diss; Boris Tsvelikhovskiy
  4. Making Rallies Great Again: The Effects of Presidential Campaign Rallies on Voter Behavior, 2008-2016 By James M. Snyder Jr.; Hasin Yousaf
  5. Fiscal Transfers, Natural Calamities and Partisan Politics - Evidence from India By Anubhab Pattanayak; K.S.Kavikumar
  6. Voting Rights, Deindustrialization, and Republican Ascendancy in the South By Gavin Wright
  7. The COVID-19 Pandemic and US Presidential Elections By Brodeur, Abel; Baccini, Leonardo; Weymouth, Stephen
  8. Voting Plans and Mask-Wearing Practices During the 2020 U.S. National Election By Shacham, Enbal; Scroggins, Steve; Ellis, Matthew; Little, Germysha; Garza, Alexander
  9. Political Constraints and Sovereign Default Premia By Mitra, Nirvana
  10. Disinformation and digital dominance: Regulation through the lens of the election lifecycle By Marsden, Christopher T; Brown, Ian; Veale, Michael
  11. The Base of Party Political Support in Ireland: An Update By David (David Patrick) Madden
  12. U.S. Presidential Election Polls and the Economic Prospects of China and Mexico By Hyeongwoo Kim; Madeline H. Kim
  13. Predicting United States Policy Outcomes with Random Forests By Shawn K. McGuire; Charles B. Delahunt
  14. Foreign influence and domestic policy By Toke S Aidt; Facundo Albornoz; Esther Hauk
  15. A New Global Political Force to Address Environmental Change? The Circular Economy Discourse between the EU and China By Luo, Anran; Zuberi, Mehwish; Liu, Jiayu; Perrone, Miranda; Schnepf, Simone; Leipold, Sina
  16. Political Stability and Economic Prosperity: Are Coups Bad for Growth? By Gründler, Klaus
  17. Political Cycles in MGNREGs Implementation By K. Vinay; Brinda Viswanathan
  18. Turning Opposition into Support to Immigration: The Role of Narratives By Cristina Cattaneo; Daniela Grieco
  19. Shadow Lobbyists By Rocco d`Este; Mirko Draca; Christian Fons-Rosen

  1. By: Laurent Ott; Mehdi Farsi; Sylvain weber
    Abstract: This paper investigates public opinion on the Swiss CO2 levy and its 2020 revision by using a discrete choice experiment answered by a sample of 586 respondents living in Switzerland. The experiment is designed to elicit citizen preferences among various taxation attributes and is followed by a referendum voting experiment on various CO2 levy proposals. Based on latent class modeling approaches, we find that the population is composed by two distinct but relatively preference profiles: Environmentalists and Neutrals. Respondents belonging to the first group tend to favor higher carbon tax rates and a redistribution of proceeds benefiting low-income individuals, whereas those in the second group prefer lower rates and a uniform redistribution of proceeds across all taxpayers. Findings from the voting experiment point to a general support among the Environmentalists, but an uncertain approval from the Neutral group.
    Keywords: Carbon tax, preference heterogeneity, public opinion, latent class, discrete choice experiment.
    JEL: C25 D72 D78 H23 Q48 Q54
    Date: 2020–11
  2. By: Felix J. Bierbrauer; Mattias Polborn; Felix Bierbrauer
    Abstract: Gerrymandering undermines representative democracy by creating many uncompetitive legislative districts, and generating the very real possibility that a party that wins a clear majority of the popular vote does not win a majority of districts. We present a new approach to the determination of electoral districts, taking a design perspective. Specifically, we develop a redistricting game between two parties who both seek an advantage in upcoming elections, and show that we can achieve two desirable properties: First, the overall election outcome corresponds to the popular vote. Second, most districts are competitive.
    Keywords: Gerrymandering, legislative elections, redistricting
    JEL: D72 C72
    Date: 2020
  3. By: Mostapha Diss (CRESE EA3190, Univ. Bourgogne Franche-Comté, F-25000 Besançon, France); Boris Tsvelikhovskiy (Department of Mathematics, Northeastern University, Boston, MA, 02115, USA)
    Abstract: Coalitional manipulation in voting is considered to be any scenario in which a group of voters decide to misrepresent their vote in order to secure an outcome they all prefer to the first outcome of the election when they vote honestly. The present paper is devoted to study coalitional manipulability within the class of scoring voting rules. For any such rule and any number of alternatives, we introduce a new approach allowing to characterize all the outcomes that can be manipulable by a coalition of voters. This gives us the possibility to find the probability of manipulable outcomes for some well-studied scoring voting rules in the case of small number of alternatives and large electorates under a well-known assumption on individual preference profiles.
    JEL: D71 D72
    Date: 2020–11
  4. By: James M. Snyder Jr.; Hasin Yousaf
    Abstract: Populism has surged around the world in recent decades. One campaign activity that may be especially important for populist leaders is holding large rallies to gain unmediated support from "the people." In this paper, we explore whether populist leaders are particularly effective in gaining support via their rallies. We do this by studying the effect of campaign rallies held by Donald Trump and other U.S. Presidential candidates since 2008. To measure the short-run causal impact of rallies, we exploit the fact that some respondents in the CCES were surveyed a few days before a rally, while others were surveyed a few days afterwards. We find that Trump's rallies produced a short-lived increase in his support over Clinton (especially among leaning Republicans), intention to vote (especially among strong Republicans), and individual campaign contributions for him. We do not find consistent, robust effects for other candidates. In terms of channels, we find that local media coverage of all candidates increased around their rallies, suggesting that the quantity of media coverage alone does not explain the findings.
    JEL: D72
    Date: 2020–10
  5. By: Anubhab Pattanayak (Assistant Professor, Madras School of Economics); K.S.Kavikumar (Professor, Madras School of Economics)
    Abstract: Do some sub-national governments receive higher transfers from the Central Government than others? Which channels exist for the Central Government to practice partisan politics? Taking note of the significant gap between the relief sought by the states in the context of natural calamities such as drought and the assistance given by the Centre, the present study attempts to contribute to the vast literature on fiscal transfers from the Centre to different states in India with particular focus on partisan politics. The empirical analysis based on total and non-plan fiscal grants from the Centre to different states and an index of drought over the past three decades suggests that the grant allocation in response to drought is higher when political alignment exists between the Centre and the states. The study further shows that the allocation of grants in response to drought is affected by the nature of political alignment and has changed over time.
    Keywords: Fiscal Federalism; Political Alignment; Natural Calamities
    JEL: H77 O23 D72 Q54
  6. By: Gavin Wright (Stanford University)
    Abstract: The Voting Rights Act of 1965 revolutionized politics in the American South. These changes also had economic consequences, generating gains for white as well as Black southerners. Contrary to the widespread belief that the region turned Republican in direct response to the Civil Rights Revolution, expanded voting rights led to twenty-five years of competitive two-party politics, featuring strong biracial coalitions in the Democratic Party. These coalitions remained competitive in most states until the Republican Revolution of the 1990s. This abrupt rightward shift had many causes, but critical for southern voters were the trade liberalization measures of 1994, specifically NAFTA and the phase-out of the Multi-Fiber Arrangement which had protected the textiles and apparel industries for decades. The consequences of Republican state regimes have been severe, including intensified racial polarization, loss of support for public schools and higher education, and harsh policies toward low-income populations.
    Keywords: African Americans, American South, deindustrialization, voting
    JEL: D72 J15 N32 N92
    Date: 2020–09–15
  7. By: Brodeur, Abel; Baccini, Leonardo; Weymouth, Stephen
    Abstract: What is the effect of the COVID-19 pandemic on the 2020 U.S. presidential election? Guided by a pre-analysis plan, we estimate the effect of COVID-19 cases and deaths on the change in county-level voting for Donald Trump between 2016 and 2020. To account for potential confounders, we include a large number of COVID-19-related controls as well as demographic and socioeconomic variables. Moreover, we instrument the numbers of cases and deaths with the share of workers employed in meat-processing factories to sharpen our identification strategy. We find that COVID-19 cases negatively affected Trump's vote share. The estimated effect appears strongest in urban counties, in swing states, and in states that Trump won in 2016. A simple counterfactual analysis suggests that Trump would likely have won re-election if COVID-19 cases had been 5 percent lower. Our paper contributes to the literature of retrospective voting and demonstrates that voters hold leaders accountable for their (mis-)handling of negative shocks.
    Date: 2020–11–10
  8. By: Shacham, Enbal; Scroggins, Steve; Ellis, Matthew; Little, Germysha; Garza, Alexander
    Abstract: Background: While U.S. continues to face increasing rates of COVID-19, there is concern that voting behavior during the 2020 U.S. Presidential election may contribute to additional outbreaks and infections among communities. The purpose of the current study was to assess the impact of the spread of the COVID-19 infection and mask-wearing behavior on voting behaviors and political affiliation during the 2020 national election. Methods: During a two-week period from September into October 2020, YouGov, in association with Saint Louis University, conducted an online cross-sectional survey consisting of participants that were likely to vote in Missouri in the upcoming national election (n=931). The sample was stratified into two groups: those that reported always wearing a mask or face-covering in public spaces and those that did not. Individual socio-demographics and environmental factors were compared between these groups to identify significant differences according to mask-wearing patterns. Additionally, two adjusted multivariate models were constructed to determine probability of (1) reporting always wearing a mask and (2) planning on voting in-person on election day. Indicators in each model included reported political party affiliation, and urbanicity, presence of mask mandate, and recent COVID-19 rate, respective of reported Missouri county of residence. Results: The sample consisted of 931 participants across Missouri that were likely to vote during the 2020 Presidential election. Among this sample, 38.5% resided in counties with a mask mandate at the time of the survey. Individuals who resided in either suburban or urban counties were twice as likely to report always wearing a mask compared to rural residents. In addition, while individuals from counties with a mask mandate were over twice as likely to report always wearing a mask, county COVID-19 infection rates were not found to be a significant predictor of mask-wearing. Republicans and Independents were significantly less likely to report always wearing a mask. Compared to Democrats, Republicans were 4 times, and Independents were 2 times, more likely to vote in person on election day compared to Democratic party members. These results were significant even when adjusting urbanicity, residing in a county with a mask mandate, and county COVID-19 case-rate. While urbanicity and COVID-19 infection rate were determined to not add significantly to model performance, those that lived within a county with a mask mandate were nearly 50% less likely to vote in person on election date. Discussion: Overall, this study identified significant relationships that are likely to contribute to the spread of COVID-19. Individuals who identified as Republican and Independent party members were more likely to vote in-person on election day and less likely to always wear a mask in public spaces. The interaction between political party affiliation and mask wearing highlights the concerning dichotomy within political discourse and highlights an opportunity to develop novel interventions that reduce the current political division that exists within the U.S.
    Date: 2020–11–10
  9. By: Mitra, Nirvana
    Abstract: I study the relationship between political constraints and the probability of sovereign default on external debt using a dynamic stochastic model of fiscal policy augmented with legislative bargaining and default. I find that political constraints and default probability are inversely related if the output cost of default is not too high. The model government comprises legislators who bargain over policy instruments, including over a local public good that benefits only the regions they represent. Higher political constraints are equivalent to more legislators with veto power over fiscal policies. This implies that during a default, the released resources need to be distributed among more regions as local public goods, with a smaller benefit accruing to each region, discouraging default. However, if default is too costly, even governments with lower political constraints default less frequently. Empirical evidence from South American countries is consistent with this result. I calibrate the infinite horizon model to Argentina. It confirms the negative relationship. A counterfactual exercise with even higher political constraints shows that the default by Argentina in 2001 could not be avoided.
    Keywords: Sovereign debt, Default risk, Interest rates, Political economy, Minimum winning coalition, Endogenous borrowing constraints.
    JEL: D72 E43 E62 F34 F41
    Date: 2020–11–15
  10. By: Marsden, Christopher T; Brown, Ian; Veale, Michael
    Abstract: Forthcoming in Martin Moore & Damian Tambini (eds.) Dealing with Digital Dominance (OUP 2021) This chapter elaborates on challenges and emerging best practices for state regulation of electoral disinformation throughout the electoral cycle. It is based on research for three studies during 2018-20: into election cybersecurity for the Commonwealth (Brown et al. 2020); on the use of Artificial Intelligence (AI) to regulate disinformation for the European Parliament (Marsden & Meyer 2019a; Meyer et al. 2020); and for UNESCO, the United Nations body responsible for education (Kalina et al. 2020). The research covers more than half the world’s nations, and substantially more than half that population, and in 2019 the two largest democratic elections in history: India’s general election and the European Parliamentary elections.
    Date: 2020–11–13
  11. By: David (David Patrick) Madden
    Abstract: A recent paper by Madden used concentration indices to examine the bases of party support in Ireland in the 2011 election. This note updates this work to incorporate the 2016 election using the latest wave of ESS data. The results show that in terms of the bases of party supports many of the features of the “earthquake election” of 2011 remain, in particular the widely differing support bases for Fine Gael and Sinn Fein. Concentration indices with respect to income show little change from the 2011 election. However, there is some evidence that the support base for Fianna Fail in 2016 was older and less well-educated than in 2011, with the change in support base for Fine Gael over the same period a mirror image.
    Keywords: Party support; Social base; Concentration index
    Date: 2020–03
  12. By: Hyeongwoo Kim; Madeline H. Kim
    Abstract: Motivated by Mr. Trump’s political agendas against China and Mexico, we investigate how a candidate’s probability of winning the U.S. presidential election affects the financial markets that are directly related to these countries. Unexpected increases in Trump’s winning probability in the 2020 election tend to generate significantly negative long-term effects on the home currency and the stock prices, while the default probability responds significantly positively in the long run. Similar responses, though in the short run, were observed when Mr. Biden’s probability of winning increases, which dissipates quickly over time. We note that the responses to the Biden shock resemble those to the Trump shock during the 2016 election, which may imply that the probability shock of the new entrant candidate tends to create short-run disturbances in the financial market, whereas the probability shock of the incumbent candidate such as Trump in 2020 or Clinton in 2016 tends to stabilize financial markets in the short run.
    Keywords: Donald Trump; Joe Biden; Hillary Clinton; Incumbent Candidate; PredictIt; Financial market
    JEL: F31 G15
    Date: 2020–11
  13. By: Shawn K. McGuire; Charles B. Delahunt (University of Washington, Seattle, WA)
    Abstract: Two decades of U.S. government legislative outcomes, as well as the policy preferences of rich people, the general population, and diverse interest groups, were captured in a detailed dataset curated and analyzed by Gilens, Page et al. (2014). They found that the preferences of the rich correlated strongly with policy outcomes, while the preferences of the general population did not, except via a linkage with rich people`s preferences. Their analysis applied the tools of classical statistical inference, in particular logistic regression. In this paper we analyze the Gilens dataset using the complementary tools of Random Forest classifiers (RFs), from Machine Learning. We present two primary findings, concerning respectively prediction and inference: (i) Holdout test sets can be predicted with approximately 70% balanced accuracy by models that consult only the preferences of rich people and a small number of powerful interest groups, as well as policy area labels. These results include retrodiction, where models trained on pre-1997 cases predicted ``future`` (post-1997) cases. The 20% gain in accuracy over baseline (chance), in this detailed but noisy dataset, indicates the high importance of a few wealthy players in U.S. policy outcomes, and aligns with a body of research indicating that the U.S. government has significant plutocratic tendencies. (ii) The feature selection methods of RF models identify especially salient subsets of interest groups (economic players). These can be used to further investigate the dynamics of governmental policy making, and also offer an example of the potential value of RF feature selection methods for inference on datasets such as this one.
    Keywords: political economy, financial crisis, political parties, political money.
    JEL: G20 L5 N22 D72 G38 P16 K22
    Date: 2020–10–02
  14. By: Toke S Aidt; Facundo Albornoz; Esther Hauk
    Abstract: In an interconnected world, economic and political interests inevitably reach beyond national borders. Since policy choices generate external economic and political costs, foreign state and non-state actors have an interest in infl uencing policy actions in other sovereign countries to their advantage. Foreign influence is a strategic choice aimed at internalizing these externalities and takes three principal forms: (i) voluntary agreements, (ii) policy interventions based on rewarding or sanctioning the target country to obtain a specific change in policy and (iii) institution interventions aimed at influencing the political institutions in the target country. We propose a unifying theoretical framework to study when foreign influence is chosen and in which form, and use it to organize and evaluate the new political economics literature on foreign influence along with work in cognate disciplines.
    Keywords: Foreign influence, international agreements, institutions, foreign lobbying, aid, sanctions, conflict
    Date: 2020
  15. By: Luo, Anran; Zuberi, Mehwish; Liu, Jiayu; Perrone, Miranda; Schnepf, Simone; Leipold, Sina
    Abstract: Many consider the recent development of a ‘circular economy’ (CE) between the EU and China a milestone towards global efforts to address pressing environmental problems of extraction, resource use and waste management. The implications of EU-China’s efforts to coordinate on CE for the development of international environmental politics, however, has received little attention so far. This article studies the discourse of a ‘circular economy’ between the EU and China based on 72 interviews with key stakeholders, 40 documents related to EU-China CE, and participant observation at key international events. Our results reveal three dominant market optimist narratives of ‘Common CE Market’, ‘CE Technology Exchange’, and ‘Regulatory Harmonization’ in the EU-China CE discourse and three marginal market skeptical narratives of ‘System and Development Disparity’, ‘Competition’, and ‘Distrust’. The dominant narratives 1) align with eco-modernist and global trade discourses, 2) are facilitated by a fragile discourse coalition, and 3) postpone causal conflicts shown by the marginal narratives that threaten EU-China CE cooperation. Our analysis suggests that the dominant politically agnostic CE narratives facilitate short term EU-China political cooperation. They will, however, unlikely lead to a ‘paradigm shift’ some CE advocates envision because they are contingent upon the subordination of environmental to economic priorities in incumbent trade discourses. This study expands scholarship on CE development beyond national and regional comparisons to international relations. More importantly, it evaluates the prospects and possible implications of EU-China CE cooperation for international environmental politics.
    Date: 2020–11–09
  16. By: Gründler, Klaus
    Abstract: We provide evidence that political instability deteriorates economic growth. We establish this result based on panel difference-in-differences strategies and dynamic panel data models using a large sample of 180 countries, a novel geocoded dataset for 2,660 regions, and micro data for about 250,000 households. We exploit coups d'état as a source of exogenous variation in political instability, as they are difficult to anticipate, mirror the political zeitgeist, and reduce measurement error. We use spatial variations and synthetic control methods for identification and find that periods of instability reduce growth by 2-3 percentage points, increase unemployment, and impair health and life satisfaction.
    Keywords: Coups d'État,Economic Growth,Political Stability
    JEL: O10
    Date: 2020
  17. By: K. Vinay (Officer, Citigroup, Chennai, India); Brinda Viswanathan (Professor, Madras School of Economics)
    Abstract: Nordhaus (1975) is one of the earliest studies to provide a theoretical assessment of political business cycles, explaining opportunistic behaviour of political parties before the elections. This study is an attempt to find the nature of association between electoral incentives and the use of welfare policies in a federal democratic system through the lens of India‟s largest nationwide social security scheme, MGNREGS. Among the panel data random effects models, the Hausman-Taylor instrumental variable estimator is used for econometric modelling by leveraging data at a month on month level from April 2012 to June 2019 for twenty-two Indian states. The demand for work and person-days of work are considered for the analysis capturing respectively the demand and supply side variables of the program. After controlling for rainfall, rural population and landless agricultural labour, an asymmetric behaviour is observed for the states governed by regional parties such that they tend to generate significantly lower person-days of work near the central elections but show a significantly higher demand for work near the state elections. Moreover, states ruled by aligned central and state parties generate higher than average demand for work under the scheme. The over-arching framework of multi-party democracy and the dynamics of center-state relations present in centrally sponsored schemes create scope for such behaviour.
    Keywords: : elections, incumbent, MGNREGS, Hausman-Taylor IV regression
    JEL: C36 D72 D91 J08
  18. By: Cristina Cattaneo (RFF-CMCC); Daniela Grieco (University of Milan)
    Abstract: The way we collectively discuss migration shapes citizens’ perceptions of migrants and their influence on our society. This paper investigates whether a narrative about the positive impact of immigrants on the hosting economy affects natives’ behaviour towards migrants. To shed light on the underlying mechanism, we present a simple theoretical framework that models the relationship between beliefs, attitude and behaviour and identifies the sequential channels through which a narrative might be useful in changing attitude and behaviour. We test its predictions through an online survey experiment, where we deliver UK natives a favourable narrative about migrants. Treated subjects revise their beliefs about migrants and exhibit significantly more positive self-reported attitudes and more pro-migrant behaviour. Moreover, they update beliefs in a way that gives support to the existence of confirmation bias.
    Keywords: Immigration, Survey experiment, Narrative, Attitudes, Beliefs
    JEL: C90 D83 F22 J15
    Date: 2020–11
  19. By: Rocco d`Este (University of Sussex); Mirko Draca (University of Warwick); Christian Fons-Rosen (University of California, Merced.)
    Abstract: Special interest influence via lobbying is increasingly controversial and legislative efforts to deal with this issue have centered on the principle of transparency. In this paper we evaluate the effectiveness of the current regulatory framework provided by the US Lobbying Disclosure Act (LDA). Specifically, we study the role of ex-Congressional officials who join US lobbying firms in positions that could be related to lobbying activity but without officially registering as lobbyists themselves. We find that firm lobbying revenues increase significantly when these potential `shadow lobbyists` join, with effects in the range of 10-20%. This shadow lobbyist revenue effect is comparable to the effect of a registered lobbyist at the median of the industry skill distribution. As such, it is challenging to reconcile the measured shadow lobbyist effect with the 20% working time threshold for registering as a lobbyist. Based on our estimates, the contribution of unregistered ex-Congressional officials could explain 4.9% of the increase in sectoral revenues, compared to 24.0% for the group of registered officials.
    Keywords: Lobbying, Revolving Door, Political Money
    JEL: D72
    Date: 2020–10–23

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