nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒08‒30
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Partisan affect and political outsiders By Fernanda Herrera
  2. Understanding the Origins of Populist Political Parties and the Role of External Shocks By Eugenio Levi; Isabelle Sin; Steven Stillman
  3. Immigrants as Future Voters By Arye L. Hillman; Ngo Van Long
  4. Concurrent elections and voting behaviour: evidence from an Italian referendum By Francesco Armillei; Enrico Cavallotti
  5. Political ideology and public views of the energy transition in Australia and the UK By Zeynep Clulow; Michele Ferguson; Peta Ashworth; David Reiner
  6. Reversal of Fortune for Political Incumbents: Evidence from Oil Shocks By Arezki, Rabah; Djankov, Simeon; Nguyen, Ha; Yotzov, Ivan
  7. Voting, Contagion and the Trade-Off between Public Health and Political Rights: Quasi-Experimental Evidence from the Italian 2020 Polls By Mello, Marco; Moscelli, Giuseppe
  8. Group Size and Protest Mobilization across Movements and Countermovements By Anselm Hager; Lukas Hensel; Johannes Hermle; Christopher Roth
  9. Persuasion and Information Aggregation in Elections By Carl Heese; Stephan Lauermann
  10. Past Exposure to Macroeconomic Shocks and Populist Attitudes in Europe By Gavresi, Despina; Litina, Anastasia
  11. (Successful) Democracies Breed Their Own Support By Daron Acemoglu; Nicolás Ajzenman; Cevat Giray Aksoy; Martin Fiszbein; Carlos A. Molina
  12. Does voting on tax fund destination imply a direct democracy effect? By Nicolas Jacquemet; Stéphane Luchini; Antoine Malézieux
  13. Media Coverage of Immigration and the Polarization of Attitudes By Sarah Schneider-Strawczynski; Jérôme Valette
  14. Lobbying Behind the Frontier By Matilde Bombardini; Olimpia Cutinelli Rendina; Francesco Trebbi

  1. By: Fernanda Herrera
    Abstract: We examine the effects of introducing a political outsider to the nomination process leading to an election. To this end, we develop a sequential game where politicians -- insiders and outsiders -- make a platform offer to a party, and parties in turn decide which offer to accept; this process conforms the voting ballot. Embedded in the evaluation of a party-candidate match is partisan affect, a variable comprising the attitudes of voters towards the party. Partisan affect may bias the electorate's appraisal of a match in a positive or negative way. We characterize the conditions that lead to the nomination of an outsider and determine whether her introduction as a potential candidate has any effect on the winning policy and on the welfare of voters. We find that the victory of an outsider generally leads to policy polarization, and that partisan affect has a more significant effect on welfare than ideology extremism.
    Date: 2021–08
  2. By: Eugenio Levi (Masaryk University); Isabelle Sin (Motu Economic and Public Policy Research); Steven Stillman (Free University of Bozen-Bolzano)
    Abstract: We use electoral survey data to examine the impact that two large external shocks had on the development of New Zealand First (NZF), one of the oldest populist parties in the OECD. We find that structural reforms, which led to large negative impacts on particular locations, and immigration reforms, which led to large spatially concentrated increases in skilled migration, both increased voting for NZF in its first years of existence. These shocks led to changes in political attitudes and policy preferences and had persistent effects on voting for NZF even twenty years later. Overall, they play an important role in explaining the rise of populism in NZ. Understanding how these shocks led to the development of NZF is particularly relevant for thinking about how populism has been extending its reach in the 2010s.
    Keywords: Populism; political parties; trade; immigration; shocks
    JEL: D72 P16 H40
    Date: 2021–08
  3. By: Arye L. Hillman; Ngo Van Long
    Abstract: Immigration policies in western democracies have often been contrary to the policies predicted by the mainstream theory of international economics. In particular, political parties that, according to economic theory, should adopt policies beneficial for lower-income voter-constituencies, have not protected workers from labor-market competition or from a fiscal burden of financing welfare-dependent immigrants. We explain the contradiction by accounting for immigrants as future voters. We identify a political principal-agent problem based on ego-rents from political office. Our theory predicts voter defection from worker-supported political-establishment parties to new-entrant anti-immigration political candidates and parties. We give a hearing to alternative interpretations of the evidence.
    Keywords: international migration, political ego rents, immigrant welfare dependency, immigration amnesties, political entry barriers, policy exceptionalism
    JEL: F22 F66 H53 P16
    Date: 2021
  4. By: Francesco Armillei; Enrico Cavallotti
    Abstract: In September 2020 Italy held a constitutional referendum. On the same election days, many municipalities and some regions held municipal and regional elections. We exploit this unique occasion, caused by the unexpected Covid-19 crisis, to obtain a causal estimate of the effects of the overlap of concurrent elections on the referendum results. When the referendum overlaps with either municipal or regional elections, we find a positive effect on turnout and on the proportion of blank and null votes. We also find a quantitatively small but statistically significant effect on the referendum preferences. We interpret the results through the use of the calculus of voting model, exploiting a slightly modified version of the most widespread one in the literature. Our findings are relevant from a policy-making standpoint, with respect to both fostering turnout and reducing election organizational costs.
    Keywords: Concurrent elections, Voting behaviour, Referendum, Calculus of voting
    Date: 2021
  5. By: Zeynep Clulow (EPRG, CJBS, University of Cambridge); Michele Ferguson (University of Queensland); Peta Ashworth (University of Queensland); David Reiner (EPRG, CJBS, University of Cambridge)
    Keywords: Political parties, public opinion, climate policy, energy policy
    JEL: D72 P18 Q42 Q48
    Date: 2021–03
  6. By: Arezki, Rabah (African Development Bank and Harvard’s Kennedy School of Government); Djankov, Simeon (London School of Economics and Peterson Institute for International Economics); Nguyen, Ha (World Bank); Yotzov, Ivan (University of Warwick & CAGE)
    Abstract: Using a new dataset of 198 national elections across 48 democracies, this paper is the first to systematically examine the effects of oil price shocks on incumbents’ political fortunes in developed oil-importing countries. We find that oil price increases systematically lower the odds of reelection for incumbents and increase the likelihood of changes in the ideology of the incoming government. These shocks are found to operate through lowering consumption growth.
    Keywords: Elections, Incumbent, Oil Prices, Economic Shocks JEL Classification: D72; E21; P16; Q43
    Date: 2021
  7. By: Mello, Marco (University of Surrey); Moscelli, Giuseppe (University of Surrey)
    Abstract: We exploit a quasi-experimental setting provided by an election day with multiple polls to estimate the effect of voters' turnout on the spread of new COVID-19 infections and to quantify the policy trade-off implied by postponing elections during high infection periods. We show that post-poll new COVID cases increased by 1.1% for each additional percentage point of turnout. The cost-benefits analysis based on our estimates and real political events shows that averting an early general election has saved Italy up to about e362 million in additional hospital care costs and e7.5 billion in values of life saved from COVID.
    Keywords: control function, endogeneity, event-study, public health, civic capital, voting, COVID-19
    JEL: C23 D72 H51 I18
    Date: 2021–08
  8. By: Anselm Hager (Humboldt-Universität zuBerlin); Lukas Hensel (Peking University); Johannes Hermle (University of California,Berkeley); Christopher Roth (University of Cologne, ECONtribute, briq, CESifo, CAGE Warwick, CEPR)
    Abstract: Many social movements face fierce resistance in the form of a countermovement. When deciding to become politically active, a movement supporter, therefore, has to consider both her own movement’s activity, but also that of the opponent. This paper studies the decision of a movement supporter to attend a protest when faced with a counterprotest. We implement two field experiments among supporters of a right- and left-leaning movement ahead of two protest-counterprotest interactions in Germany. Supporters were exposed to low or high official estimates about their own and the opposing group’s turnout. We find that the size of the opposing group has no effect on supporters’ protest intentions. However, as the own protest gets larger, supporters of the right-leaning movement become less, while supporters of the left-leaning movement become more willing to protest. We argue that the difference is best explained by stronger social motives on the political left.
    Keywords: social movements; right-wing populism; political activism; field experiment
    Date: 2021–08
  9. By: Carl Heese (University of Vienna, Department of Economics); Stephan Lauermann (University of Bonn, Department of Economics)
    Abstract: This paper studies a large majority election with voters who have heterogeneous, private preferences and exogenous private signals. We show that a Bayesian persuader can implement any state-contingent outcome in some equilibrium by providing additional information. In this setting, without the persuader's information, a version of the Condorcet Jury Theorem holds. Persuasion does not require detailed knowledge of the voters' private information and preferences: the same additional information is effective across environments. The results require almost no commitment power by the persuader. Finally, the persuasion mechanism is effective also in small committees with as few as 15 members.
    Keywords: Information Aggregation, Bayes Correlated Equilibria, Persuasion, Condorcet Jury Theorem
    JEL: C72 D72 D82
    Date: 2021–08
  10. By: Gavresi, Despina; Litina, Anastasia
    Abstract: This paper explores the interplay between past exposure to macroeconomic shocks and populist attitudes. We document that individuals who experienced a macroeconomic shock during their impressionable years (between 18 and 25 years of age), are currently more prone to voting for populist parties, and manifest lower trust both in national and European institutions. We use data from the European Social Survey (ESS) to construct the differential individual exposure to macroeconomic shocks during those years. Our findings suggest that it is not only exposure to current economic shocks that matters (see e.g., \citet{guiso2020economic}) but also past exposure to economic recessions, which has a persistent effect on the rise of populism. Analytically, past economic shocks are associated with a fall in trust in national and European institutions and a rise in anti-immigrant attitudes. Interestingly, the interplay between the two, i.e., past and current exposure to economic shocks, has a mitigating effect on the rise of populism, meaning that individuals who were exposed to economic shocks in the past are less likely to manifest populist attitudes when faced with a current crisis.
    Keywords: Macroeconomic Shocks, Trust, Attitudes, Populism
    JEL: D72 E60 F68 P16 Z13
    Date: 2021–07–25
  11. By: Daron Acemoglu; Nicolás Ajzenman; Cevat Giray Aksoy; Martin Fiszbein; Carlos A. Molina
    Abstract: Using large-scale survey data covering more than 110 countries and exploiting within-country variation across cohorts and surveys, we show that individuals with longer exposure to democracy display stronger support for democratic institutions. We bolster these baseline findings using an instrumental-variables strategy exploiting regional democratization waves and focusing on immigrants’ exposure to democracy before migration. In all cases, the timing and nature of the effects are consistent with a causal interpretation. We also establish that democracies breed their own support only when they are successful: all of the effects we estimate work through exposure to democracies that are successful in providing economic growth, peace and political stability, and public goods.
    JEL: P16
    Date: 2021–08
  12. 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
  13. By: Sarah Schneider-Strawczynski (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, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 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); Jérôme Valette (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates the extent to which media impact immigration attitudes by modifying the salience of this topic. We measure the salience of immigration using original data including all the news covered on the main French national television evening news programs between 2013 and 2017. We combine this information with individual panel data that enable us to link each respondent to his/her preferred TV channel for political information. This allows us to address ideological self-selection into channels with individual-channel fixed effects. In contrast to prior evidence in the literature, we do not find that an increase in the salience of immigration necessarily drives natives' attitudes in a specific direction. Instead, our results suggest that it increases the polarization of natives by pushing individuals with moderate beliefs toward the two extremes of the distribution of attitudes. We show that these results are robust to controlling for differences in the framing of immigration-related subjects across TV channels. Conversely to priming, framing is found to drive natives' attitudes in very specific directions.
    Keywords: Immigration,Media,Polarization
    Date: 2021–08
  14. By: Matilde Bombardini; Olimpia Cutinelli Rendina; Francesco Trebbi
    Abstract: This chapter investigates the non-market response of firms to international trade shocks increasing the level of competition in U.S. industries. Lobbying expenditures increase as a consequence of import changes related to the China shock. The effect on lobbying is not homogeneous across firms and it concentrates particularly in those producers which are behind the technological frontier. We discuss theoretical mechanisms driving lobbying of firms away from the technological frontier: not only the cost-benefit trade-off between innovation and lobbying is relatively less appealing for low productivity firms, but the collective action ability of low productivity firms improves after a competitive shock.
    JEL: D72 P48
    Date: 2021–08

This nep-pol issue is ©2021 by Eugene Beaulieu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.