nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒03‒15
five papers chosen by
Eugene Beaulieu
University of Calgary

  1. Electoral Earthquake: Natural Disasters and the Geography of Discontent By Cerqua, A.; Ferrante, C.; Letta, M.
  2. The Political Economy of the Prussian Three-class Franchise By Sascha O. Becker; Erik Hornung
  3. Trade after Trump: Can the Biden Administration Shore up the Eroding Foundations of American Leadership? By Craig VanGrasstek
  4. Economic uncertainty and divisive politics: evidence from the dos Españas By Sandra García-Uribe; Hannes Mueller; Carlos Sanz
  5. The Refugee Crisis and Right-Wing Populism: Evidence from the Italian Dispersal Policy By Campo, Francesco; Giunti, Sara; Mendola, Mariapia

  1. By: Cerqua, A.; Ferrante, C.; Letta, M.
    Abstract: The recent literature on the determinants of populism has highlighted the role of long-term trends of progressive isolation and prolonged economic stagnation in engendering discontent and, in turn, demand for political change. We investigate, instead, the potential of unanticipated local shocks in shaping the ‘geography of discontent’. Using comprehensive data at a fine spatial scale and a comparative natural experiment approach, we document that the occurrence of two destructive earthquakes in Italy resulted in sharply diverging electoral outcomes: while the 2012 Emilia quake did not alter voting behaviour, the 2009 L’Aquila earthquake paved the way for an impressive and persistent surge in right-wing populism in the most affected areas. Such heterogeneous patterns mainly originate from a stark contrast in post-disaster reconstruction processes and shifts in institutional trust. Our findings are consistent with the idea that not only “places that don’t matter”, but also “places that don’t recover”, can become populist hotbeds.
    Keywords: elections,populism,discontent,natural disasters,earthquakes
    JEL: D72 H12 Q54
    Date: 2021
  2. By: Sascha O. Becker; Erik Hornung
    Abstract: Did the Prussian three-class franchise, which politically over-represented the economic elite, affect policy-making? Combining MP-level political orientation, derived from all roll call votes in the Prussian parliament (1867–1903), with constituency characteristics, we analyze how local vote inequality, determined by tax payments, affected policy-making during Prussia’s period of rapid industrialization. Contrary to the predomi-nant view that the franchise system produced a conservative parliament, higher vote inequality is associated with more liberal voting, especially in regions with large-scale industry. We argue that industrialists preferred self-serving liberal policies and were able to coordinate on suitable MPs when vote inequality was high.
    JEL: D72 N43 N93 P26
    Date: 2019–06
  3. By: Craig VanGrasstek
    Abstract: The results of the 2020 elections do not mean a quick or easy return to U.S. leadership in the trading system. This examination instead stresses a series of global and domestic challenges, several of which stem from long-term shifts in power and wealth. In addition to the rise of China, these include a reputational hangover from the Trump administration and the proliferation of agreements that prize targeted liberalization over nondiscrimination. The Biden administration must also contend with protectionist industries, lack of comity between the branches of government, and the two parties’ contradictory priorities on trade-related issues. The net effect is that American statesmen may continue to assign a low priority to trade, their attention is more likely to be directed toward discriminatory than multilateral initiatives, and the administration will face competing demands that complicate the negotiation and approval even of free trade agreements with selected partners.
    Keywords: US trade policy, domestic politics, China, Biden administration, trade agreements
    Date: 2021–02
  4. By: Sandra García-Uribe (Banco de España); Hannes Mueller (IAE (CSIC) and Barcelona GSE); Carlos Sanz (Banco de España)
    Abstract: This article exploits two newspaper archives to track economic policy uncertainty in Spain in 1905-1945, a period of extreme political polarization. We find that the outbreak of the civil war in 1936 was anticipated by a striking upward level shift of uncertainty in both newspapers. We study the dynamics behind this shift and provide evidence of a strong empirical link between increasing uncertainty and the rise of divisive political issues at the time: socio-economic conflict, regional separatism, power of the military, and role of the church. This holds even when we exploit variation in content at the newspaper level.
    Keywords: economic policy uncertainty, civil war, social conflict, agrarian reform, natural language processing, tf-idf
    JEL: D72 D74 N14 N24 N44
    Date: 2021–01
  5. By: Campo, Francesco (University of Milan Bicocca); Giunti, Sara (University of Milan Bicocca); Mendola, Mariapia (University of Milan Bicocca)
    Abstract: This paper examines how the 2014-2017 'refugee crisis' in Italy affected voting behaviour and the rise of right-wing populism in national Parliamentary elections. We collect unique administrative data throughout the crisis and leverage exogenous variation in refugee resettlement across Italian municipalities induced by the Dispersal Policy. We find a positive and significant effect of the share of asylum seekers on support for radical-right anti-immigration parties. The effect is heterogeneous across municipality characteristics, yet robust to dispersal policy features. We provide causal evidence that the anti-immigration backlash is not rooted in adverse economic effects, while it is triggered by radical-right propaganda.
    Keywords: dispersal policy, voting behavior, refugee crisis, immigration, impact evaluation
    JEL: D72 F22 O15 P16
    Date: 2021–01

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