nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒01‒04
seventeen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Developing Market-Oriented Politics in Nigeria: A Review of the 2019 Presidential Election By Olanrewaju O. Akinola; Ibrahim A. Adekunle
  2. Designing Preference Voting By Philipp Harfst; Damien Bol; Jean-François Laslier
  3. Information, get-out-the-vote messages, and peer influence: causal effects on political behavior in Mozambique By Matilde Grácio; Pedro C. Vicente
  4. How does legislative behavior change when the country becomes democratic? The case of South Korea By Francesco Lagona; Fabio Padovano
  5. Ethnic Identities, Public Spending and Political Regimes By Sugata Ghosh; Anirban Mitra
  6. The electoral consequences of corruption and integrity scandals: The case of Dutch local elections By Harm Rienks
  7. "The mother of all political problems"? On asylum seekers and elections By Tomberg, Lukas; Smith Stegen, Karen; Vance, Colin
  8. Reverse Party Favoritism in Times of Pandemics: Evidence from Poland By Kantorowicz, Jaroslaw
  9. Shaping a Network Constituency: A PGI Analysis inspired by the City of Munich By Manfred J. Holler; Florian Rupp
  10. Voting behavior in one-shot and iterative multiple referenda By Grandi, Umberto; Lang, Jérôme; Ozkes, Ali; Airiau, Stéphane
  11. Political Budget Forecast cycles By Frank Bohn; Francisco José Veiga
  12. A political economy of loose means-testing in targeted social programs By Cremer, Helmuth; Klimaviciute, Justina; Pestiau, Pierre
  13. Immigration, Political Ideologies and the Polarization of American Politics By Axel Dreher; Sarah Langlotz; Johannes Matzat; Anna Maria Mayda; Christopher Parsons
  14. Does Access to Credit Come with Access to Voting? Democracy and Firm Financing Constraints By Francis OSEI-TUTU; Laurent WEILL
  15. Do Left-Wing Governments Decrease Wage Inequality among Civil Servants? Empirical Evidence from the German States By Björn Kauder; Manuela Krause; Niklas Potrafke
  16. On the Political Economy Determinants of Tax Reforms: Evidence from Developing Countries By Sanjeev Gupta; João Tovar Jalles
  17. Supporting carbon taxes: The role of fairness By Sommer, Stephan; Mattauch, Linus; Pahle, Michael

  1. By: Olanrewaju O. Akinola (Olabisi Onabanjo University, Ogun State, Nigeria); Ibrahim A. Adekunle (Olabisi Onabanjo University, Ogun State, Nigeria)
    Abstract: The 2015 presidential elections in Nigeria were unique in many facets. Apart from being the first time an incumbent candidate of a ruling party lost to the candidate of the opposition party, it was also the first presidential election that did not go through expensive and rigorous post-election litigations processes. From the political marketing point of view, we argued that the market-oriented approach, the purposeful, coordinated, and strategic use of marketing communication media and tools contributed to the success of APC at the 2015 presidential polls. The success story of the 2015 election gave rise to the evolution of voter-centric election campaigns, indicating that marketing and communication professionals and strategies, rather than violence and electoral fraud, have dominated and could dictate the outcomes of future elections in Nigeria. Based on the foregoing, this study reviewed the 2019 presidential election (the next election after the 2015 general election in Nigeria) to ascertain if that anticipated better tomorrow is here. We rely on experts’ interviews, direct observations, and secondary materials to confirm if the political landscape in Nigeria is market-driven. Findings revealed that the 2019 presidential election was extremely monetised, violent, and fraught with all manners of electoral misconducts such that are antithetical to the principles and practice of political marketing. We aver that electioneering in Nigeria is not market-driven and voter-centric.
    Keywords: Political Marketing; Democracy; 2019 Election; Market-Orientation; Nigeria
    Date: 2020–01
  2. By: Philipp Harfst (TUD - Technische Universität Dresden); Damien Bol (King‘s College London); Jean-François Laslier (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, 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: Electoral systems in which voters can cast preference votes for individual candidates within a party list are increasingly popular. To the best of our knowledge, there is no research on whether and how the scale used to evaluate candidates can affect electoral behavior and results. In this paper, we analyze data from an original voting experiment leveraging real-life political preferences and embedded in a nationally representative online survey in Austria. We show that the scale used by voters to evaluate candidates makes differences. For example, the possibility to give up to two points advantages male candidates because male voters are more likely to give 'zero points' to female candidates. Yet this pattern does not exist in the system in which voters can give positive and negative points because male voters seem reluctant to actively withdraw points from female candidates. We thus encourage constitution makers to think carefully about the design of preference voting.
    Keywords: Electoral system,Proportional representation,Preference voting,Approval voting,experiment,Austria
    Date: 2020
  3. By: Matilde Grácio; Pedro C. Vicente
    Abstract: Political accountability requires informed voters and electoral participation. Both have been lagging in many developing countries like Mozambique. We designed and implemented a field experiment during the 2013 municipal elections in that country. We study the impact on political behavior of location-level distribution of a free newspaper and get-out-the-vote text messages aimed at mobilizing voters. As part of our design, we randomly assigned peers to experimental subjects in order to test for peer influence via text messages. Measurement of political outcomes comes from official electoral results at the level of the polling station, and from a range of behavioral and survey-based measures. We find that the distribution of the newspaper increased turnout and voting for the ruling party. The text messages led to higher political participation. When turning to influencing peers, we observe a clear role of male and older individuals, as well as complementarity with the distribution of newspapers.
    Keywords: Political behavior, information, peer influence, political economy, field experiment, Africa
    JEL: D72 O55
    Date: 2020
  4. By: Francesco Lagona (DSP, University of Roma Tre, Italy); Fabio Padovano (CREM-CNRS, Condorcet Center for Political Economy, University of Rennes 1 and DSP, Università Roma Tre, Italy)
    Abstract: The Political Legislation Cycle theory predicts a peak of legislative production in the preelectoral period, when legislators focus on voters’ welfare to be reelected. This paper verifies the theory on South Korean legislative production (1948-2016) and is the first test of the theory in a country undergoing a process of democratization. Two insofar untested hypotheses are being verified: 1) peaks of legislative production should increase with the degree of democracy; 2) as the party system and the mechanisms of legislative checks and balances develop, the PLC should become more evident in bills of legislative rather than executive’s initiative. A hurdle model estimated on both laws of parliamentary proposal and of government assignment lends empirical support to both hypotheses, with the noticeable feature that PLC in Korea appear more in the form of an upward trend than of pre-electoral peaks.
    Keywords: Political legislation cycles, conditional political cycles, democratic transition, autocracy, executive vs. parliamentary legislative initiative, hurdle model
    JEL: D72 C49 H61 H62
    Date: 2020–09
  5. By: Sugata Ghosh (Brunel University); Anirban Mitra (University of Kent)
    Abstract: Do democracies discriminate less against minorities as compared to non-democracies? How does the dominance of an ethnic group a ect discrimination under various political regimes? We build a theory which tries to answer such questions. In our model, political leaders (democratically elected or not) decide on the allocation of spending on di erent types of public goods: a general public good and an ethnically-targetable public good which benefits the majority ethnic group while imposing a cost on the other minorities. We show that, under democracy, lower ethnic dominance leads to greater provision of the general public good while higher dominance implies higher provision of the ethnically-targetable good. Interestingly, the opposite relation obtains under dictatorship. This implies that political regime changes can favour or disfavour minorities based on the ambient level of ethnic dominance. Several historical events involving regime changes can be analysed within our framework and are consistent with our results.
    Keywords: Ethnic identities, Discrimination, Public spending, Political regimes.
    JEL: D72 D74 H40
    Date: 2019–05
  6. By: Harm Rienks (University of Groningen and COELO)
    Abstract: Corruption scandals reveal to voters that a politician is not who he publicly is presenting to be and also reveals information about mal-performance. This paper investigates whether voters mainly respond to the first cue, as predicted by theories modeling elections as a type-selection device, or rather to the second cue, as predicted by theories modeling elections as an accountability device. For this a unique panel dataset is used on corruption and integrity scandals in Dutch local elections in the period 2006-2018. It finds that Dutch voters severely punish parties whose candidates have been involved in corruption scandals. An average sized party loses on average 11 percentage points of their voters compared to similar parties whose candidates were not involved in a corruption scandal. This paper also shows that voters punish integrity violation less directly related to in-office performance, such as misconduct in private time, much more mildly. These results support the accountability theory of voting rather than the type-selection theory. This also indicates that the corruption literature does not suffer from sub-set-bias and has been correct in treating corruption as being distinct from other integrity violations.
    Date: 2019–04
  7. By: Tomberg, Lukas; Smith Stegen, Karen; Vance, Colin
    Abstract: As immigration to Europe has increased, so has support for extremist parties. While many studies have examined the effect of immigration on election outcomes, few have probed the effect of asylum seekers - those fleeing strife and persecution - on voting, nor has there been much research on the mediating role of local economic conditions. Drawing on county level panel data from Germany, our study fills both gaps. We find that economic circumstances, as measured by the unemployment rate and the level of disposable income, condition voters' responses to the presence of asylum seekers, but the effects for parties on the far right and left diverge markedly. Under economic prosperity, immigration increases support on both sides of the political spectrum. As economic conditions worsen, however, the effect of asylum seekers on the vote share for the far right remains stable, but weakens for the left, eventually becoming negative. This divergence - which has not yet been reported in the literature - suggests that an influx of asylum seekers, particularly when coupled with an economic downturn, could tilt a political system rightwards. From a policy perspective, these results suggest that heterogeneity arising from local economic conditions has important implications for the regional allocation of asylum seekers.
    Keywords: asylum seekers,immigration,voting outcomes,fractional response
    JEL: D72 J15 K37 P16
    Date: 2020
  8. By: Kantorowicz, Jaroslaw
    Abstract: There is an abundant empirical literature demonstrating party favoritism whereby the central government is prone to disburse financial transfers to favor aligned local governments. This contrasts with much scarcer evidence on reverse party favoritism, i.e. aligned local governments offering non-pecuniary support to the central government in times of elections. In this paper I show that such reverse party favoritism exists. To demonstrate it, I exploit the fact that during the SARS-CoV-2 pandemic crisis, the Polish government was keen to launch postal voting in the presidential elections scheduled for May 2020. The organization of these elections hinged on the Polish Post getting access to the lists of voters, which were in the possession of heads of the municipal executive (mayors). Since the relevant legislation on postal voting had not been enacted on time, the vast majority of local executives refused to share their lists of voters. Nonetheless, numerous mayors did transfer the lists to the Post. By employing a set of standard (linear probability and logistic) regression models and regression discontinuity design, I show that the political alignment of mayors with the central government leads to approximately 20-25 percentage points greater likelihood of transferring the lists of voters to the Polish Post. This difference in probabilities tends to be smaller in cases of divided governments but not in cases of higher political contestability.
    Date: 2020–12–15
  9. By: Manfred J. Holler (University of Hamburg and CCR-Munich); Florian Rupp (Technical University Munich and CCR-Munich)
    Abstract: This paper analyzes a network constituency which is characterized by voting in a political network. It applies power index analysis to the notorious Krackhardt’s kite social network by imposing a weighted voting game on the given network structure. It compares the results of this analysis, derived by applying the Public Good Index and the Public Value, with the outcome of employing the centrality concepts - degree centrality, closeness centrality, and betweenness centrality - that we find in Krackstadt (1990), and eigenvector centrality. Alternative collective decision rules and alternative network structure are considered. The study is concurs with a real-world collective decision problem which one of the authors experiences concerning a massive expansion of housebuilding with the City of Munich, the State of Bavaria and some German Federal Government institutions as possible players in a decision network. Other players are the Nature and Biodiversity Conservation Union, the farmers who are threatened by the expropriation of land and the incumbent inhabitants of the area who like their last resort of green fields and relatively fresh air, and already suffer from the heavy traffic in this area. The city’s housebuilding project is strongly contested.
    Keywords: network, centrality, Public Good Index, Public Value, power indices, weighted voting game, collective decision rules
    JEL: C70 C72 D72 D85 L14 Z13
    Date: 2019–04
  10. By: Grandi, Umberto; Lang, Jérôme; Ozkes, Ali (WU Vienna); Airiau, Stéphane
    Abstract: We consider a set of voters making a collective decision via simultaneous vote on two binary issues. Voters' preferences are captured by payoffs assigned to combinations of outcomes for each issue and they can be nonseparable: a voter's preference over an issue might be dependent on the other issue. When the collective decision in this context is reached by voting on both issues at the same time, multiple election paradoxes may arise, as studied extensively in the theoretical literature. In this paper we pursue an experimental approach and investigate the impact of iterative voting, in which groups deliberate by repeating the voting process until a final outcome is reached. Our results from experiments run in the lab show that voters tend to have an optimistic rather than a pessimistic behaviour when casting a vote on a non-separable issue and that iterated voting may in fact improve the social outcome. We provide the first comprehensive empirical analysis of individual and collective behavior in the multiple referendum setting.
    Date: 2020–12–15
  11. By: Frank Bohn (Radboud University); Francisco José Veiga (Universidade do Minho and NIPE)
    Abstract: By forecasting overly optimistic revenues opportunistic governments can increase spending in order to appear more competent prior to elections. Ex post deficits emerge in election years, thereby producing political forecast cycles - as also found for US states in the empirical literature. In our theoretical moral hazard model we obtain three additional results which are tested with panel data for Portuguese municipalities. The extent of manipulations is reduced when (i) the winning margin is expected to widen; (ii) the incumbent is not re-running; and/or (iii) the share of informed voters (proxied by education) goes up.
    Keywords: opportunistic political cycles; political budget cycles; revenue forecasts; deficit; transfers; asymmetric information; political economy.
    JEL: D72 H68 E32
    Date: 2019–06
  12. By: Cremer, Helmuth; Klimaviciute, Justina; Pestiau, Pierre (Université catholique de Louvain, LIDAM/CORE, Belgium)
    Abstract: This paper studies the political sustainability of programs that are targeted towards the poor. Given that the poor to whom these programs cater do not constitute a majority, we show that for their own good it pays to let the middle class benefit from them in a random way. This approach mimics the actual institutional arrangements whereby middle-class individuals feel that they can successfully apply to the programs. We consider a two stage decision process: first a Rawlsian government chooses the probability at which the middle class is allowed to benefit from a given program; then, majority voting determines the level of benefit and the rate of contribution. At the first, constitutional stage, the government cannot commit to a specific level of taxes and benefit but anticipates that these are set by majority voting in the second stage.
    Keywords: Targeted transfers; Political support; Redistribution paradox
    JEL: H23 D72 H50
    Date: 2020–12–01
  13. By: Axel Dreher; Sarah Langlotz; Johannes Matzat; Anna Maria Mayda; Christopher Parsons
    Abstract: We study the extent to which migrant inflows to the United States affect the political polarization of campaign donors and the ideology of politicians campaigning for the House of Representatives in the 1992-2016 period. Implementing various polarization measures based on ideology data derived from 16 million campaign finance contributors, our results show that migrant inflows causally increase the polarization of both campaign donations and leading political candidates. Our estimates hold over the medium-run, although the effects decline over time. The effects of migration are stronger if counties host migrants from more distant cultures, or if incoming migrants are similarly educated. Our main results hold when we focus on refugees as opposed to all immigrants on aggregate.
    Keywords: migration, refugees, polarization, political ideology, United States
    JEL: J15 F52 F63
    Date: 2020
  14. By: Francis OSEI-TUTU (LaRGE Research Center, Université de Strasbourg); Laurent WEILL (LaRGE Research Center, Université de Strasbourg)
    Abstract: Access to credit is one of the main obstacles for the growth of firms. We test the hypothesis that democracy exerts an impact on access to credit. Democratic development is expected to alleviate credit constraints for firms by favoring inclusive institutions and by strengthening the institutional framework. We perform regressions at the firm-level on a large dataset of 46,000 firms in 108 countries. We find evidence of a negative effect of democratic development on credit constraints for firms. We further establish that democratic development contributes to reduce borrower discouragement and leads to more bank loan approval decisions. Our key finding is therefore that democracy favors access to credit. Our work contributes to the debate on the impact of democracy on economic development by considering one firm-level channel of transmission.
    Keywords: democracy, access to credit, financing constraints.
    JEL: G21 P16
    Date: 2020
  15. By: Björn Kauder; Manuela Krause; Niklas Potrafke
    Abstract: We investigate whether left-wing governments decrease wage inequality among civil servants. The data is based on salaries of civil servants in the German states. Since a reform in 2006, German state governments are allowed to design salaries of civil servants. We employ encompassing data for pay levels and professions including judges, professors, policemen, and administrators and distinguish between levels of operating experiences. We use six wage inequality measures comparing salaries across pay levels and operating experiences. The results do not suggest that left-wing governments were more active in decreasing wage inequality among civil servants than center or right-wing governments. Cabinet members are civil servants themselves and decide on their own salaries: government ideology is also not shown to predict salaries of cabinet members. Because left-wing governments are perceived as taking action against income and wage inequality, future research should employ data from other federal states such as the United States to examine how government ideology influences salaries of civil servants.
    Keywords: wage inequality, civil servants, government ideology, partisan politics, German states
    JEL: D72 H70 A13 P16
    Date: 2020
  16. By: Sanjeev Gupta; João Tovar Jalles
    Abstract: This paper analyzes the role of political variables in the implementation of structural tax reforms in 45 emerging market and low-income economies during 2000-2015. The existing literature identifies several hypotheses that drive reforms, but empirical studies that support these hypotheses are lacking. Relying on a new database of structural tax reforms and on binary-type models, our results suggest that a left-wing government is less inclined to implement tax reforms while both proximity to elections and political strength orcohesion are positively associated with tax reforms. The influence of the left government is stronger in low-income than in emerging market economies and revenue administration reforms are resisted the most by such governments. Proximity to elections seems to trigger reforms of personal income tax (PIT) but opposite holds for trade tax reforms. Political cohesion is a necessary ingredient to reform most tax categories and revenue administration.
    Keywords: fiscal policy; binary choice models; tax reforms; elections; political fragmentation; ideology
    JEL: C33 C36 D63 E32 E62 H20
    Date: 2020–12
  17. By: Sommer, Stephan; Mattauch, Linus; Pahle, Michael
    Abstract: We conduct a discrete choice experiment with a sample of 6,000 German household heads to examine how fairness preferences influence the support for carbon taxes and revenue-recycling options. While it is well-known that carbon taxes are effective in reducing emissions and can be made progressive, they remain fairly unpopular with German citizens. Consequently, best practice to build public support for them remains a relevant question for which there is no consensus. We obtain two major results: First, while green spending is more popular in general, it is significantly more popular among those who are pro-environment and trust the government. Second, when restricted to options for direct revenue redistribution, Germans prefer lump-sum payments over directing payments to the poorest or the most affected. Importantly, choices over these options depend both on genuinely different conceptions of fairness and respondents' economic circumstances. Our findings have implications for building support for effective climate change mitigation policies with those who are not yet convinced.
    Keywords: carbon pricing,climate change mitigation,fairness,redistribution,environmental tax reform
    JEL: A13 H23 Q54
    Date: 2020

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