nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒02‒08
twenty-one papers chosen by
Eugene Beaulieu
University of Calgary

  1. Designing Preference Voting By Philipp Harfst; Damien Bol; Jean-François Laslier
  2. Changes in Well-Being Around Elections By Schreiner, Nicolas
  3. Buying Votes across Borders? A List Experiment on Mexican Immigrants in the US By Jaehyun Song; Takeshi Iida; Yuriko Takahashi; Jesús Tovar
  4. Trapped by the Prisoner’s Dilemma, the United States Presidential Election Needs a Coordination Device By Héloïse Cloléry; Yukio Koriyama
  5. Voting Advice Applications and Elections By Christine Benesch; Rino L. Heim; Mark Schelker; Lukas D. Schmidt
  6. Monetary Costs Versus Opportunity Costs in a Voting Experiment By Yoichi Hizen; Kengo Kurosaka
  7. Empirical evidence on the impact of clientelism on income redistribution By Kyriacou, Andreas
  8. Love Thy (Elected) Neighbor? Residential Segregation, Political Representation and Local Public Goods By Oskari Harjunen; Tuukka Saarimaa; Janne Tukiaianen
  9. The Global Economic Impact of Politicians: Evidence from an International Survey RCT By Dorine Boumans; Klaus Gründler; Niklas Potrafke; Fabian Ruthardt; Fabian Ruthardt
  10. The Advantage of Incumbents in Coalitional Bargaining By Jaakko Meriläinen; Janne Tukiaianen
  11. The Inefficient Combination: Competitive Markets, Free Entry, and Democracy By Halvor Mehlum; Gisle Natvik; Ragnar Torvik
  12. Friendship Networks and Political Opinions: A Natural Experiment among Future French Politicians By Algan, Yann; Dalvit, Nicolò; Do, Quoc-Anh; Le Chapelain, Alexis; Zenou, Yves
  13. Did Covid-19 Cost Trump the Election? By James Lake; Jun Nie
  14. Self-Signaling in Moral Voting By Lydia Mechtenberg; Grischa Perino; Nicolas Treich; Jean-Robert Tyran; Stephanie Wang
  15. The Political Economy of Bureaucratic Overload: Evidence from Rural Development Officials in India By Dasgupta, Aditya; Kapur, Devesh
  16. Class, Social Mobility, and Voting: Evidence from Historical Voting Records By Torun Dewan; Christopher Kam; Jaakko Meriläinen; Janne Tukiaianen
  17. Voting on Education and Redistribution Policies in the U.S: Does Endogenous Fertility Matter? By Vera Tolstova
  18. Stable Coalition Structures and Power Indices for Majority Voting By Takaaki Abe
  19. The Political Economy of Trade and Migration: Evidence from the U.S. Congress By Paola Conconi; Giovanni Facchini; Maurizio Zanardi
  20. Technological Change and Political Turnover: The Democratizing Effects of the Green Revolution in India By Dasgupta, Aditya
  21. The Effect of Democracy on Migration: A Panel Data Approach By Azad, Kalam

  1. 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
  2. By: Schreiner, Nicolas (University of Basel)
    Abstract: Elections constitute the essential element of democracy, yet surprisingly little is known about their immediate consequences for individual well-being. Cross-country empirical evidence is particularly absent for the campaign period leading up to elections. While elections as a process allow citizens to contribute to democratic quality, they are also intrinsically conflictual and require voters to exert effort to make informed decisions. To measure the aggregate changes in well-being along the entirety of the electoral process, I use survey data from before and after 148 national elections in 24 European countries between 1989 and 2019. Respondents interviewed in the months preceding election day report significantly lower levels of life satisfaction than their compatriots asked the same calendar week but in years without elections. Once voting has taken place, aggregate well-being immediately returns to its regular average. Exploratory analyses suggest that partisan conflict and social pressures regarding democratic participation may play a role in explaining the reduction in life satisfaction before elections.
    Keywords: elections, well-being, life satisfaction, election campaigns, electoral systems, political polarization, eurobarometer
    JEL: D72 D91 I31
    Date: 2021–01–21
  3. By: Jaehyun Song (Waseda Institute of Advanced Studies, Waseda University); Takeshi Iida (Department of Political Science, Doshisha Universit); Yuriko Takahashi (School of Political Science and Economics, Waseda University); Jesús Tovar (Centro de Investigación en Ciencias Sociales y Humanidades, Universidad Autónoma del Estado de México)
    Abstract: Although immigrant populations have grown worldwide, their electoral connections with their home countries have been understudied. This study investigated vote-buying in the overseas ballot. Focusing on the 2018 federal elections in Mexico, we assumed that the recent reform of extending voting rights abroad, the lower socioeconomic status of the immigrants, the dubious secret ballot, and the weak oversight mechanisms in overseas ballots provided favorable conditions for buying expatriates' votes through the cross-border networks. Our list experiment found that approximately 32 percent of Mexican immigrants in the US experienced vote-buying during the electoral campaign. Furthermore, multivariate analysis showed that the most susceptible to vote-buying were those who were female, young, full-time workers, contacted by party activists, supporters of PAN (Partido Acción Nacional) and MORENA (Movimiento Regeneración Nacional), and living where there was a high concentration of Hometown Associations (HTAs).
    Keywords: vote-buying; overseas ballot; list experiment; immigration; Mexico; US
    Date: 2020–01
  4. By: Héloïse Cloléry; Yukio Koriyama (X - École polytechnique)
    Abstract: Summary: The system according to which the President of the United States of America is elected, the Electoral College, has often raised concerns. Among those, the winner-take-all rule is often criticized for potentially – and in recent years effectively – bringing to power a president who has not obtained the majority of the popular vote. This note shows that most of the reform proposals have failed due to the structure of the problem: the US Presidential Election is trapped by the Prisoner's Dilemma. Each state would rationally choose the winner-take-all rule in order to best reflect its citizens' preferences on the federal decision. However, the outcome of such a choice, if adopted by all states, would not be desirable for the nation as a whole, because it prevents the optimal aggregation of all citizens' preferences. A weighted proportional rule, if used by all states, would make all citizens better off by reflecting their preferences on the final decision more accurately. However, since each state has an incentive to adopt the winner-take-all rule regardless of the choice of the other states, it is impossible for all the states to adopt such a rule without a coordination device. We therefore analyze interesting attempts to escape from this dilemma, such as the National Popular Vote Interstate Compact, and how our framework applies to representative democracy. Key points: The winner-take-all rule has been used almost exclusively in the US presidential elections since the 1830s, but has been criticized for various reasons. One of these is the occasional discrepancy between the election winner and the national popular vote results (e.g. George W. Bush vs. Al Gore in 2000, and Donald Trump vs. Hilary Clinton in 2016). The structure of the problem can be described with a game-theoretic analysis, at least partially: the Electoral College system is trapped by the Prisoner's Dilemma. States could benefit from cooperating, but they do not achieve this because each state does not have any guarantee that the other states would join a cooperative action. A coordination device is necessary in order to escape from the dilemma. Some interesting attempts, such as the National Popular Vote Interstate Compact, are underway. The same structure of the dilemma appears in representative democracy. Party discipline may induce distortion of the preference aggregation and thus may be welfare-detrimental for the society.
    Date: 2020–10
  5. By: Christine Benesch; Rino L. Heim; Mark Schelker; Lukas D. Schmidt
    Abstract: We analyze how the introduction of the voting advice application (VAA) smartvote affects voter turnout, voting behavior and electoral outcomes. The Swiss context offers an ideal setting to identify the causal effects of online information with aggregate real world data because smartvote was introduced in different cantons at different points in time. In contrast to previous experimental studies, we find that smartvote did not affect turnout but that voters more actively select candidates instead of parties by splitting their ballot. Our findings suggest that no specific parties seem to benefit from the change in voting behavior and we find no effects on aggregate electoral outcomes.
    Keywords: elections, information, internet
    JEL: D70 D72
    Date: 2021
  6. By: Yoichi Hizen (School of Economics and Management, Kochi University of Technology); Kengo Kurosaka (Hiroshima Shudo University)
    Abstract: Monetary incentives are widely used to reproduce various voting environments in the laboratory. In actual elections, however, non-monetary opportunity costs play a role in voter turnout. Our research question was two-fold; whether the effect of opportunity costs on voter turnout differs from the effect of monetary costs, and if so, to what extent they differ. To generate opportunity costs, we asked participants to work on tasks for two minutes; they were rewarded for successful task completions but lost thirty seconds if they chose to vote. Our regression analysis suggested that nearly half of the participants’ decisions took account of opportunity costs as well as monetary costs, and that for such decisions, the effect of opportunity costs on voter turnout was about one-third of the effect of monetary costs. These observations attribute the “paradox of voter turnout†to the misperception and/or depreciation of voting costs.
    Keywords: Laboratory experiment, Monetary incentives, Opportunity cost, Paradox of voter turnout, Finite mixture model
    JEL: C92 D72 D90
    Date: 2021–02
  7. By: Kyriacou, Andreas
    Abstract: This article marshals empirical evidence from a cross-section of up to 86 countries to consider the assertion that clientelism will reduce income redistribution because it implies the weakness of programmatic politics, thus undermining the emergence of broad-based redistributive programs. To measure clientelism I turn to expert surveys capturing the extent to which political candidates and parties promise selective material and non-material benefits to voters. The analysis controls for a range of potentially confounding covariates including the level of economic development and democracy, market income inequality and ethnic heterogeneity. It moreover accounts for the real possibility that more extensive redistributive programs may undermine the strength of clientelism. The results strongly support the expectation that clientelism is inimical to income redistribution.
    Keywords: clientelism, income redistribution, programmatic politics
    JEL: D31 D72 H11
    Date: 2020–12–26
  8. By: Oskari Harjunen (VATT Institute for Economic Research, Arkadiankatu 7, Helsinki, FI-00101); Tuukka Saarimaa (Aalto University School of Business and School of Engineering and Helsinki Graduate School of Economics, Ekonominaukio 1, Espoo, FI-02150); Janne Tukiaianen (Department of Economics, Turku School of Economics, Rehtorinpellonkatu 3, FI-20014 University of Turku, Finland; VATT Institute for Economic Research, Arkadiankatu 7, FI-00101, Helsinki, Finland)
    Abstract: We study the link between geographic political representation and geographic distribution of public goods within local jurisdictions using geo-coded data on politicians, the electorate and elementary school closures. We find that poorer neighborhoods are under-represented. Inequality in geographic representation matters as the probability of school closure halves from about 20% to 10% when a candidate close to the school is randomly elected due to ties in personal vote counts. Highincome residents react to school closures by moving away from their neighborhood. Taken together, residential sorting leads to inequality in representation and public goods across neighborhoods, which further reinforces residential segregation.
    Keywords: Geographic representation, random elections, residential segregation, school closure
    JEL: C21 D72 H75 R23
    Date: 2021–01
  9. By: Dorine Boumans; Klaus Gründler; Niklas Potrafke; Fabian Ruthardt; Fabian Ruthardt
    Abstract: We use the US presidential election on 3 November 2020 to examine how the US president influences economic expectations of international experts. We design a large-scale RCT among 843 experts working in 107 countries, asking about their expectations regarding GDP growth, unemployment, inflation, and trade in their country. The sample is split randomly in two subsamples. Half of the participants were surveyed closely before the election, the other half directly after Joe Biden had been called US president. Our results show that the election of Joe Biden increased growth expectations of international experts by 0.98 percentage points for the year 2021. We also find that (i) treatment effects materialize only in the short-run and (ii) experts’ uncertainty increased after the election. Our results suggest that exceptional politicians influence global economic outcomes.
    Keywords: US presidential elections, politicians, economic expectations, economic experts, Randomized Controlled Trial, causal inference
    JEL: A11 D72 O11
    Date: 2021
  10. By: Jaakko Meriläinen (Centro de Investigación Económica and Department of Economics, ITAM, Av. Camino Santa Teresa 930, Col. Héroes de Padierna, Del. Magdalena Contreras, 10700 Ciudad de México, Mexico); Janne Tukiaianen (Department of Economics, Turku School of Economics, Rehtorinpellonkatu 3, FI-20014 University of Turku, Finland; VATT Institute for Economic Research, Arkadiankatu 7, FI-00101, Helsinki, Finland)
    Abstract: The composition of governing coalitions does not always reflect the relative sizes of the coalition members, but research has not been able to fully reconcile why. We propose that political parties with more (reelected) incumbent representatives fare better in coalitional bargaining. To evaluate this argument empirically, we construct a data set of parties and governing coalitions in Finnish local governments. Using an instrumental variable strategy that hinges on within-party close elections between incumbents and non-incumbents, we find that, ceteris paribus, having more re-elected incumbents improves a partyâs coalitional bargaining outcomes. Descriptive evidence suggests that incumbent representation is particularly useful when a party is in a disadvantaged position (e.g., it is ideologically distant from other parties) and when the bargaining environment is more complex (e.g., there are more parties). Lastly, incumbent representation also matters for selection: parties that have more incumbent representatives nominate more incumbents in the municipal executive.
    Keywords: coalitional bargaining, coalitions, government formation, incumbency advantage, local government, multi-party system
    JEL: C26 D72
    Date: 2021–01
  11. By: Halvor Mehlum; Gisle Natvik; Ragnar Torvik
    Abstract: We show that under fairly general conditions, the combination of (i) competitive markets, (ii) free entry, and (iii) democracy is inconsistent with allocative efficiency. This fundamental impossibility result, which has not been derived before, holds whenever not only prices, but also policy, responds to factor allocations. We develop a theory where agents enter an occupation (more generally, enter an economic activity) and thereafter make a policy decision. Thus, each voter's self interest becomes endogenous to the entry decision. In our baseline model, the policy instrument that citizens decide upon is simply taxation. Workers in occupations whose services are in high demand by the government have an incentive to vote for high taxes. Voters in occupations whose services are in low demand by the government have an incentive to vote for low taxes. We show that the socially efficient size of the public sector cannot be sustained in equilibrium, despite free entry into occupations. We generalize our theory, and show how our impossibility result extends well beyond the baseline model. We also discuss how departing from competitive markets may affect equilibrium outcomes. Our analysis implies that when assessing causes and consequences of factor allocations, it is key to acknowledge how allocations affect not only prices, but also policies.
    Keywords: Political Economy, Efficiency and Democracy, Endogenous Political Interests, The Size of Government, Labor Market Institutions, Dutch Disease
    Date: 2021–01
  12. By: Algan, Yann (Sciences Po, Paris); Dalvit, Nicolò (Sciences Po, Paris); Do, Quoc-Anh (Sciences Po, Paris); Le Chapelain, Alexis; Zenou, Yves (Monash University)
    Abstract: We study how social interaction and friendship shape students' political opinions in a natural experiment at Sciences Po, the cradle of top French politicians. We exploit arbitrary assignments of students into short-term integration groups before their scholar cursus, and use the pairwise indicator of same-group membership as instrumental variable for friendship. After six months, friendship causes a reduction of differences in opinions by one third of the standard deviation of opinion gap. The evidence is consistent with a homophily-enforced mechanism, by which friendship causes initially politically-similar students to join political associations together, which reinforces their political similarity, without exercising an effect on initially politically-dissimilar pairs. Friendship affects opinion gaps by reducing divergence, therefore polarization and extremism, without forcing individuals' views to converge. Network characteristics also matter to the friendship effect.
    Keywords: political opinion, polarization, friendship effect, social networks, homophily, extremism, learning, natural experiment
    JEL: C93 D72 Z13
    Date: 2020–12
  13. By: James Lake; Jun Nie
    Abstract: A common narrative is that COVID-19 cost Trump re-election. We do not find supporting evidence; if anything, the pandemic helped Trump. However, we find substantial evidence that voters abandoned Trump in counties with large increases in health insurance coverage since the Affordable Care Act, presumably fearing the roll-back of such expansion. Absent this effect, our estimates imply Trump would been on the precipice of re-election by winning Georgia, Arizona, Nevada, and only losing Wisconsin by a few thousand votes. Finally, while US trade war tariffs boosted Trump’s support, foreign trade war tariffs and US agricultural subsidies had little effect.
    Keywords: 2020 US Presidential election, Covid-19, Affordable Care Act, health insurance coverage, trade war, political economy, trade policy
    JEL: D72 F13 F14 I18
    Date: 2021
  14. By: Lydia Mechtenberg (University of Hamburg); Grischa Perino (University of Hamburg); Nicolas Treich (University Toulouse Capitole, INRAE, Toulouse School of Economics); Jean-Robert Tyran (University of Vienna, University of Copenhagen and CEPR (London)); Stephanie Wang (University of Pittsburgh)
    Abstract: This paper presents a two-wave survey experiment on self-image concerns in moral voting. We elicit votes on the so-called Horncow Initiative. This initiative required subsidization of farmers who refrain from dehorning. We investigate how non-consequentialist and non-deontological messages changing the moral self-signaling value of a Yes vote affect selection and processing of consequentialist information, and reported voting behavior. We find that a message enhancing the self-signaling value of a Yes vote is effective: voters agree more with arguments in favor of the initiative, anticipate more frequently voting in favor, and report more frequently having voted in favor of the initiative.
    Keywords: moral bias, voting, multi-wave field experiment, information avoidance
    JEL: C93 D72 D91
    Date: 2021–01–04
  15. By: Dasgupta, Aditya; Kapur, Devesh
    Abstract: Government programs often fail on the ground because of poor implementation by local bureaucrats. Prominent explanations for poor implementation emphasize bureaucratic rent-seeking and capture. This article documents a different pathology that we term bureaucratic overload: local bureaucrats are often heavily under-resourced relative to their responsibilities. We advance a two-step theory explaining why bureaucratic overload is detrimental to implementation as well as why politicians under-invest in local bureaucracy, emphasizing a lack of electoral incentives. Drawing on a nationwide survey of local rural development officials across India, including time-usage diaries that measure their daily behavior, we provide quantitative evidence that (i) officials with fewer resources are worse at implementing rural development programs, plausibly because they are unable to allocate enough time to managerial tasks and (ii) fewer resources are provided in administrative units where political responsibility for implementation is less clear. The findings shed light on the political economy and bureaucratic behavior underpinning weak local state capacity.
    Date: 2021–01–12
  16. By: Torun Dewan (Department of Government, London School of Economics and Political Science, Houghton Street, London WC2A 2AE, United Kingdom.); Christopher Kam (Department of Political Science, University of British Columbia, Vancouver Campus C425 1866 Main Mall, Vancouver, BC Canada V6T 1Z1); Jaakko Meriläinen (Centro de Investigación Económica and Department of Economics, ITAM, Av. Camino Santa Teresa 930, Col. Héroes de Padierna, Del. Magdalena Contreras, 10700 Ciudad de México, Mexico); Janne Tukiaianen (Department of Economics, Turku School of Economics, Rehtorinpellonkatu 3, FI-20014 University of Turku, Finland; VATT Institute for Economic Research, Arkadiankatu 7, FI-00101, Helsinki, Finland)
    Abstract: We explore the connection between social class, social mobility, and voting behavior in nineteenth-century England. To avoid pitfalls associated with survey or aggregate data on voting behavior, we use administrative longitudinal records preceding secret ballot on voters’ choices and occupation. These data reveal that the landed gentry, farm workers, non-skilled workers and white-collar workers voted, on average, more for the Conservatives, and petty bourgeoisie and skilled workers for the Liberals. The changes in voting behavior within individuals due to social mobility are immediate and mainly consistent with the same cleavage. Our interpretation is that voting was influenced by economic incentives.
    Keywords: Class-based voting, economic voting, social mobility, voting behavior, poll books
    JEL: D72 N33 N93
    Date: 2021–01
  17. By: Vera Tolstova
    Abstract: This paper studies a politico-economic dynamic general equilibrium model to quantify the importance of endogenous fertility in explaining the generosity of redistribution and education policies in the U.S. Policies are endogenised as outcomes of majority voting. I find that accounting for endogenous fertility is essential for strong performance of the model in matching the levels of both transfers and education subsidies in the U.S. economy. The predictions of the model regarding a cross-section of U.S. states are used to verify the plausibility of fertility decision responses to policies and, consequently, to support the credibility of this result.
    Keywords: voting; endogenous fertility; redistribution; education;
    JEL: D72 E62 H52 I24 I38 J13
    Date: 2021–01
  18. By: Takaaki Abe (School of Political Science and Economics, Waseda University)
    Abstract: An (n,k)-game is a voting game in which each player has exactly one vote, and decisions are made by at least k affirmative votes of the n players. A power index is a measure of the a priori power of the n voters. The purpose of this paper is to show what axioms of power indices generate stable coalition structures for each (n,k)-game. Using the stability notion of the core, we show that a coalition structure containing a minimal winning coalition is stable for a wide range of general power indices satisfying a set of axioms, such as the Shapley-Shubik, Banzhaf, normalized Banzhaf, and Deegan-Packel power indices. Moreover, we also show that a coalition structure that represents a two-party system can be stable if the two large parties are close enough in size. Some unstable coalition structures are also analyzed.
    Keywords: coalition structure; core; majority voting; power index
    JEL: C71
    Date: 2020–10
  19. By: Paola Conconi; Giovanni Facchini; Maurizio Zanardi
    Date: 2020–07–07
  20. By: Dasgupta, Aditya
    Abstract: Can technological change contribute to political turnover? Influential theories suggest that technological change represents a form of creative destruction that can weaken incumbents and strengthen outsiders, leading to political turnover. This paper investigates a large-scale historical natural experiment: the impact of the green revolution on single-party dominance in India. Drawing on a theoretical framework based on models of contests, this paper argues that high-yielding variety (HYV) crops strengthened the incentives and capacity of a politically excluded group, in this case agricultural producers, to seek greater political representation. Exploiting the timing of the introduction of HYV crops, together with district-level variation in suitability for the new crop technology, instrumental variables analyses show that the green revolution played a pivotal role in the rise of agrarian opposition parties and decline of single-party dominance. The findings support theories linking technological change to political turnover, with important implications for the political economy of democratization.
    Date: 2021–01–12
  21. By: Azad, Kalam
    Abstract: We study the effect of democracy on migration using different panel data estimators. Our analysis controls for persistence in migration and country fixed effects. Employing the dynamic fixed effects estimation, we find a significantly positive and robust effect of democracy on migration. Our baseline results show that migration increases by 29\% in the long-run due to democracy. When addressing the endogeneity of democracy with instruments, our models provide comparable results.
    Keywords: Migration, Immigration, democracy, Incentives, Human rights, democratization waves
    JEL: P16
    Date: 2020–03–31

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