nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒09‒20
six papers chosen by
Eugene Beaulieu
University of Calgary

  1. Troll Farms and Voter Disinformation By Denter, Philipp; Ginzburg, Boris
  2. Is Voting Really Habit-Forming and Transformative? Long-Run Effects of Earlier Eligibility on Turnout and Political Involvement from the UK By Jonas Jessen; Daniel Kuehnle; Markus Wagner
  3. Chasing the Other 'Populist Zeitgeist'? Mainstream Parties and the Rise of Right-Wing Populism By Bayerlein, Michael
  4. The Financial Drivers of Populism in Europe By Luigi Guiso; Massimo Morelli; Tommaso Sonno; Helios Herrera
  5. Does political polarization affect economic expectations?: Evidence from three decades of cabinet shifts in Europe By Luis Guirola
  6. The Backlash of Globalization By Italo Colantone; Gianmarco Ottaviano; Piero Stanig

  1. By: Denter, Philipp; Ginzburg, Boris
    Abstract: Political agents often attempt to influence elections through "troll farms" that flood social media platforms with messages from fake accounts that emulate genuine information. We study the ability of troll farms to manipulate elections. We show that such disinformation tactics is more effective when voters are otherwise well-informed. Thus, for example, societies with high-quality media are more vulnerable to electoral manipulation.
    Keywords: Fake News, Disinformation, Troll Farms, Elections, Social Media, Information Aggregation, Fact-Checking
    JEL: D72 D83
    Date: 2021–09–03
  2. By: Jonas Jessen; Daniel Kuehnle; Markus Wagner
    Abstract: Habit formation theory and the transformative voting hypothesis both imply that voting has downstream consequences for turnout and political involvement. Although several studies have applied causal research designs to study this question, the long-run evidence is extremely limited, especially for potentially transformative effects. We jointly examine the short- and long-term impact of earlier voting eligibility on subsequent turnout and political involvement using rich panel data from the UK. Exploiting the eligibility cut-off for national elections within a regression discontinuity design, our precise estimates document a short-run increase in voting–for those able to vote earlier–alongside a contemporaneous increase in several measures of political involvement. However, we show that these short-term effects fade away quickly and do not translate into permanent changes in turnout propensity or political involvement. Our results imply that, in a setting with low institutional barriers to vote, the transformative effects of voting are short-lived at most.
    Keywords: Habit formation, transformative voting hypothesis, voter turnout, political involvement, regression discontinuity
    JEL: D01 D70 D72
    Date: 2021
  3. By: Bayerlein, Michael
    Abstract: This article answers the question of why certain European mainstream parties have changed their policy positions on the GAL-TAN (Green/Alternative/Libertarian vs. Traditional/Authoritarian/Nationalist) dimension in recent years. I argue that these changes can be explained through the electoral success of new right-wing populist parties and the ideological proximity of conservative mainstream parties towards these parties. These arguments were tested with econometric models of mainstream parties’ policy positions in 11 Western European democracies between 2002 and 2019. The results indicate that mainstream parties chase the other “populist zeitgeist” by changing their policy positions on the GAL–TAN dimension in response to the electoral success of right-wing populist parties. Mainstream parties respond to this threat by closing the distance to these parties on the GAL–TAN dimension. However, this responsiveness is largely constrained to conservative mainstream parties. The findings have important implications for understanding mainstream party responsiveness towards rivalling right-wing populist parties.
    Keywords: populism,electoral competition,spatial analysis,political parties,GAL-TAN dimension
    Date: 2021
  4. By: Luigi Guiso; Massimo Morelli; Tommaso Sonno; Helios Herrera
    Abstract: This paper argues that the financial crisis was a watershed in the burst of populism both on the demand side (voters behaviour) and on the supply side (political parties behaviour). On the demand side, we provide novel results on the causal effect of the financial crisis on trust, turnout and voting choices via its effects on voters economic insecurity. Economic insecurity peaks during the financial crisis and extends to segments of the population untouched by the globalization and robotization shocks. To establish causality, we use a pseudo-panel analysis and instrument the economic insecurity of different cohorts leveraging on a new methodology designed to highlight the different sensitivity to financial constraints for people in different occupations. On the supply side, we trace from manifestos the policy positions of old and new parties showing that the supply of populism had the largest jump right after the financial crisis. The size of the jump is largest in countries with low fiscal space and for parties on the left of the political spectrum. We provide a formal rationalization for the key role of fiscal space, showing how the pre-financial crisis shocks enter the picture as sources of a shrinking fiscal space.
    Keywords: Demand and Supply of Populism; Financial Crisis; Fiscal Space; Age-Earning Profiles
    JEL: D72 D78 D14 H30
    Date: 2021
  5. By: Luis Guirola (Banco de España)
    Abstract: Polarization can have economic effects if the hostility between political camps (i.e., affective polarization) shapes economic expectations. This paper shows that, in polarized contexts, agents disagree more over their expectations, and that partisan hostility – rather than differences in individual economic circumstances or beliefs about government policies – drives this disagreement. The causal impact of partisanship is identied from the discontinuity created by shifts in Prime Ministers’ cabinet. The study of 134 shifts between 1993 and 2019 in 27 European countries reveals that left and right supporters with identical circumstances and information sets update their expectations in opposite directions, evidencing a partisan bias. Its size ranges from 1.5 to 0 standard deviations across these cabinet shifts. The polarization of parties – measured by their left-right positions or their cooperation within coalitions – explains half this variation, and adverse economic conditions amplify it. The analysis points to affective polarization (rather than disagreements over the likely effects of government policy) as the driver of partisan bias. Partisan bias extends to variables unaffected by future policy and, even when parties have similar economic positions, bias increases withpolarization on non-economic dimensions. Overall, these findings suggest that political conflicts originally unrelated to economic matters could affect household behavior and policy debates and extend to the economic sphere.
    Keywords: expectations, polarization, political partisanship, motivated beliefs
    JEL: D14 D84 E71 F34 G01 H12
    Date: 2021–09
  6. By: Italo Colantone; Gianmarco Ottaviano; Piero Stanig
    Abstract: We review the literature on the globalization backlash, seen as the political shift of voters and parties in a protectionist and isolationist direction, with substantive implications on governments’ leaning and enacted policies. Using newly assembled data for 23 advanced democracies, we document a protectionist and isolationist shift in electorates, legislatures, and executives from the mid-1990s onwards. This is associated with a noticeable protectionist shift in trade policy –although with some notable nuances– especially since the financial crisis of 2008. We discuss the economics of the backlash. From a theoretical perspective, we highlight how the backlash may arise within standard trade models when taking into account the ‘social footprint’ of globalization. Then, we review the empirical literature on the drivers of the backlash. Two main messages emerge from our analysis: (1) globalization is a significant driver of the backlash, by means of the distributional consequences entailed by rising trade exposure; yet (2) the backlash is only partly determined by trade. Technological change, crisis-driven fiscal austerity, immigration, and cultural concerns are found to play an important role in creating politically consequential cleavages. Looking ahead, we discuss possible future developments, with specific focus on the issue of social mobility
    Keywords: Globalization, Social Footprint, Backlash
    Date: 2021

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