nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒07‒26
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. Voting under Threat: Evidence from the 2020 French local elections By Elsa Leromain; Gonzague Vannoorenberghe
  2. Faithful accounting in MMP-elections By Stensholt, Eivind
  3. Making mobilization work: The choice of electoral systems. By Ignacio Lago
  4. Voting in Shareholders Meetings By Laurent Bouton; Aniol Llorente-Saguer; Antonin Macé; Dimitrios Xefteris
  5. Concentration of power and Populism's Rise in America: evidence from recent US elections By Mitoko, Jeremiah
  6. A Note on Asymmetric Policies: Pandering and State-specific Costs of Mismatch in Political Agency By Guido Merzoni; Federico Trombetta
  7. The Political Economy of Kazakhstan: A Case of Good Economics, Bad Politics? By Commander, Simon; Prieskienyte, Ruta
  8. Clientelism and governance By Pranab K. Bardhan
  9. Does voting on tax fund destination imply a direct democracy effect? By Nicolas Jacquemet; Stéphane Luchini; Antoine Malézieux
  10. Who Votes for Library Bonds? A Principal Component Exploration By Eric Jacobson

  1. By: Elsa Leromain (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Gonzague Vannoorenberghe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: We study how Covid-related risk affected participation across the French territory in the March 2020 local elections. We document that participation went down disproportionately in towns exposed to higher Covid-19 risk. Towns that lean towards the far-right saw a stronger drop in turnout, in particular in the vicinity of clusters. We argue that these patterns are partly a result of risk perceptions, and not only of political considerations. We use data on the drop in cinema admissions in early March 2020 and show that these went down more around infection clusters, especially in areas with substantial vote for the far-right. Taken together, our findings suggest that the fear of Covid-19 may have been on average more prevalent among far-right voters, contributing to a drop in their electoral participation.
    Keywords: Electoral turnout, Local elections, Covid-19, Far-right
    JEL: D74
    Date: 2021–07–08
  2. By: Stensholt, Eivind (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: In MMP-elections for legislatures, political parties compete for a voter’s support in two ways: for a first vote to the party’s candidate in a single-seat constituency and for a second vote to the party’s list of candidates. To obtain party representation proportional to the second votes, a nationwide second vote tally compensates with list seats to parties with a sub-proportional number of constituency seats. The German Bundestag has 299 constituency seats, and 299 list seats is the legal norm, but it got 410 list seats in the 2017 election. This deviation also violates a principle, stated by the federal constitutional court, that voters have equal influence. First and second vote may support different parties, but in the same ballot. The ballots’ combinations of first and second vote are essential for approximation of both proportionality and the legal norm. Unfortunately, the combinations are ignored: The result would have been the same if first and second votes had been collected in separate ballot boxes. Compensation based on “faithful accounting” uses the combinations to represent the set Λ(P) of voters with second vote to party P according to the set’s size, rather than representing P itself, while keeping the number of list seats close to the norm. Another seat reduction, of 42 seats with 2017 data, is obtained if CDU and CSU, working as one party in the Bundestag, also run as one party in elections.
    Keywords: Mixed member proportional; equal influence; legitimacy; assembly size
    JEL: D72
    Date: 2021–07–14
  3. By: Ignacio Lago
    Abstract: This paper examines the adoption of electoral systems in the last two centuries. I argue that proportional representation (PR) was adopted to make party mobilization more effective when majoritarian electoral systems with many and geographically small districts were no longer an efficient response to the problem of collective action in mass elections. With the expansion of suffrage and the parallel process of national integration, mass parties became technologically feasible and took care of bringing voters to the ballot box. As primary and secondary mobilization are more effective in electoral systems with few and geographically large districts, majoritarian rules were progressively replaced with proportional rules. PR was endorsed by those parties that found it easier to attract voters using a single mobilization strategy with strong economics of scale, and resisted by locally focused parties. This argument is tested using longitudinal and cross section data at both the country and party levels.
    Keywords: Collective Action; Electoral System; Nationalization; Mobilization; Political Parties; Proportional Representation.
    JEL: H72 H74 H77
    Date: 2021–07
  4. By: Laurent Bouton; Aniol Llorente-Saguer; Antonin Macé; Dimitrios Xefteris
    Abstract: This paper studies voting in shareholders meetings. We focus on the informational efficiency of different voting mechanisms, taking into account that they affect both management's incentives before the meeting and shareholders' decisions at the meeting. We first focus on the case in which the management does not affect the proposal being voted on. We prove that, for any distribution of shareholdings, the one-share-one-vote mechanism (1S1V) dominates the one-person-one-vote mechanism (1P1V), independently of whether or how shareholdings correlate with information accuracy. We also show that 1S1V becomes efficient only if votes are fully divisible. Second, we consider the case in which the management decides whether to put the proposal to a vote. The properties of a voting mechanism then depend both on its voting efficiency and on how it affects managers' incentives to select good proposals. We uncover a trade-off between selection and voting efficiency underlying the comparison of 1S1V and 1P1V: the higher voting efficiency of 1S1V implies worse selection incentives. In some cases, the negative effect of worse selection incentives on shareholders' welfare can be large enough to wash out the higher voting efficiency of 1S1V.
    JEL: D72 G3
    Date: 2021–07
  5. By: Mitoko, Jeremiah
    Abstract: What explains the recent rise of undesirable populist mobilization in US politics? In this paper, I examine the hypothesis that the rise of undesirable populist politics is related to the increased concentration of power on the US president. After presenting the main theoretical arguments, I use Cooperative Congressional Election Study (CCES) survey data from the 2008, 2012 and 2016 elections to explore whether perceived power structure can explain the rise of populism. I find that more concentrated power is indeed linked to clusters of undesirable populist mobilization. That is, concentrated power is associated with political mobilization based on constructed cleavages (e.g. identity such as race, religion, ethnicity, gender, shared history, region, social symbols or language) rather than structural cleavages (e.g. class, economic goods, education, rights or security distinctions). The most significant policy implication of the paper is the insight that efforts to ameliorate populist politics, if accompanied by more concentration of political power, will be counterproductive.
    Keywords: Populism and American politics; Political efficacy; Nationalization of Elections; Concentration of Power
    JEL: D7 D82 H13 H7 P16
    Date: 2021–07–13
  6. By: Guido Merzoni; Federico Trombetta
    Abstract: We study the implications of state dependent costs of policy mismatch in political agency models where politicians have reputational concerns and "good" politicians share the same objectives with the voters. We find that state-dependent costs can increase the set of parameters where pandering is an equilibrium strategy. Indeed, in our model, pandering can arise even without office rents. Moreover, we show that voters do not necessarily prefer biased politicians to be in favour of the policy that produces the cheapest expected cost of mismatch. We discuss the implications of those results for populism, environmental policies and the equilibrium incentives to over- or under-provide lockdowns or other mitigation measures.
    JEL: D72 D78
    Date: 2021
  7. By: Commander, Simon (IE Business School, Altura Partners); Prieskienyte, Ruta (University of Bath)
    Abstract: Can autocracies and their associated institutions successfully implement economic policies that promote growth and investment? Can 'good economics' somehow offset the effects of 'bad' politics? Kazakhstan is a case where an autocratic regime has actively projected market-friendly policies and attracted significant amounts of incoming investment. These policies are to some extent reflected in the country's governance ratings, although there has been a significant amount of investment disputes that question the attachment to the rule of law. Moreover, the political regime remains strongly personalized around the founder President, his family and associates. This is reflected in the economics of the autocracy whereby a large public sector and a set of privately held businesses coexist to mutual benefit. The latter have been formed around a very small number of highly connected individuals whose initial accumulation of assets allows them also to act as necessary gatekeepers for entrants. Competition as a result remains limited in both economic and political domains. Yet, uncertainties over the future leadership, along with latent rivalry over access to resources and markets, make the political equilibrium quite fragile. In short, 'bad' politics both squeezes the space for, and distorts the benefits from, 'good' economics.
    Keywords: political networks, autocracy, investment
    JEL: D72 H11 L14 P26
    Date: 2021–07
  8. By: Pranab K. Bardhan
    Abstract: Unlike much of the growing literature on political clientelism, this short paper contains mainly the author's general reflections on the broad issues of governance (or mis-governance including corruption), democracy, and state capacity that clientelism has an impact on. It then analyses how its incidence changes with the process of development, and the kind of policy issues that it generates. Finally, the paper suggests some research gaps in this literature.
    Keywords: vote-buying, Clientelism, Politics, Governance, Democracy, State capacity, Policy
    Date: 2021
  9. By: Nicolas Jacquemet (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 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, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Stéphane Luchini (CNRS - Centre National de la Recherche Scientifique, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Antoine Malézieux (CEREN - Centre de Recherche sur l'ENtreprise [Dijon] - BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC))
    Abstract: Does giving taxpayers a voice over the destination of tax revenues lead to more honest income declarations? Previous experiments have shown that giving participants the opportunity to select the organization that receives their tax funds tends to increase tax compliance. The aim of this paper is to assess whether this increase in compliance is induced by the sole fact of giving subjects a choice — a "direct democracy effect". To that aim, we ask participants to a tax evasion game to choose, in a collective or individual choice setting, between two very similar organizations which provide the same social (ecological) benefits. We elicit compliance for both organizations before the choice is made so as to control for the counter-factual compliance decision. We find that democracy does not increase compliance, and even observe a slight negative effect — in particular for women. Our results confirm the existence of a commitment effect of democracy, leading to favor more the selected organization when it was actively chosen. The commitment effect of democracy is however not enough to overcome the decrease in the level of compliance. Thanks to response times data, we show that prior choice on similar options as compared to a purely random selection weakens the preference for honesty. One important field application of our results is that democracy in tax spending must offer real choices to tax payers to improve compliance.
    Keywords: Commitment,Direct democracy effect,Voting,Tax evasion game
    Date: 2021–09
  10. By: Eric Jacobson
    Abstract: Previous research has shown a relationship between voter characteristics and voter support for tax bonds. These findings, however, are difficult to interpret because of the high degree of collinearity across the measures. From 13 demographic measures of voters in a library bond election, seven independent principal components were extracted which accounted for 95 percent of the variance. Whereas the direct demographic measures showed inconsistent relationships with voting, the principal components of low SES, college experience, female and service job were related to affirmative voting, while high home value was related to negative voting.
    Date: 2021–06

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