nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒09‒27
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. Elections, Political Connections and Cash Holdings: Evidence from Local Assemblies By Adeabah, David; Andoh, Charles; Asongu, Simplice; Akomea-Frimpong, Isaac
  2. Gender differences in re-contesting decisions: New evidence from French municipal elections By Julieta Peveri; Marc Sangnier
  3. Legislators in the Crossfire: The Effect of Transparency on Parliamentary Voting By Heloise Clolery
  4. Protection of natural and social resources. A political economy approach By Donatella Gatti
  5. Not all that glitters is gold: political stability and trade in Sub-Saharan Africa By Asongu, Simplice; Yapatake Kossele, Thales; Nnanna, Joseph
  6. Postbellum Electoral Politics in California and the Genesis of the Chinese Exclusion Act of 1882 By Vincent Geloso; Linan Peng
  7. Potentials and Solutions of Cooperative Games. By Masayuki Odora
  8. Voting, contagion and the trade-off between public health and political rights: quasi-experimental evidence from the Italian 2020 polls By Mello, M.; Moscelli, G.
  9. The Effect of Recent Technological Change on US Immigration Policy By Björn Brey
  10. Recovering non-monotonicity problems of voting rules By Umut Keskin; M. Remzi Sanver; H. Berkay Tosunlu

  1. By: Adeabah, David; Andoh, Charles; Asongu, Simplice; Akomea-Frimpong, Isaac
    Abstract: We examine the relationship between elections, political connections, and cash holdings in Ghanaian local assemblies. Using a panel dataset of 179local assemblies over a period 2012 to 2017, a panel regression and the generalized method of moments estimation techniques was employed for the analysis. We find that local assemblies hold less cash during election years, which suggests that election may be one of the potential factors to mitigate agency conflict in weak governance environment. Further, we demonstrate that local assemblies that have political connections hold less cash; however, political uncertainty makes these entities conducive to agency problems than their non-connected peers because they hold more cash. Additional analysis indicates that one year prior to elections, managerial conservatism kicks-in and leads managers to hold more cash in local assemblies that have political connections, which continues and becomes more pronounced in election years. Our results have implications for regulations on the cash management practices of local assemblies.
    Keywords: agency problem; cash holdings; generalized method of moments; panel regression; political connections
    JEL: C1 O1
    Date: 2021–01
  2. By: Julieta Peveri (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.); Marc Sangnier (University of Namur & Aix-Marseille Univ, CNRS, AMSE, Marseille, France.)
    Abstract: This paper studies differences across genders in the re-contesting decisions of politicians following electoral wins or defeats. Using close races in mixed-gender French local elections, we show that women are less likely to persist in competition when they lose compared to male runners-up, but are equally or more prone than male winners to re-contest when they win. Differences in observable characteristics or in the expected electoral returns of running again cannot fully account for these gender gaps in persistence. In contrast, the heterogeneity of the results across political ideology, age, experience and occupation suggests that behavioural explanations are at play. Additionally, we provide evidence that a woman's victory encourages former female challengers to re-contest but does not trigger the entry of new female candidates.
    Keywords: gender, competition, persistence, candidates, self-selection, elections
    JEL: D72 J24
    Date: 2021–09
  3. By: Heloise Clolery (CREST-Ecole polytechnique, France)
    Abstract: Legislators are agents who serve two different principals: their constituents and their Party. Legislators are caught in the crossfire if their Party leaders' position contradicts the electorate's interests. Legislators care about their reputation with both principals as they are career-motivated. Making their votes public increases the incentive to use voting for reputation-building, and therefore distortion in group decision-making. This paper first shows that reputational concerns drive the decision to participate in a vote. Second, the French transparency reform of 2014 provides a quasi-natural setting for a Difference-in-Differences analysis. Greater transparency has led to less participation and more alignment to the Party line. As such, knowing that their behavior is more easily observable, legislators prefer not to take sides, and additional information benefits Party leaders more than constituents in the short term. The effect size is sufficient to switch results in 12 percent of the vote outcomes.
    Keywords: Voting, Transparency, Party discipline, Principal agent
    JEL: D72 D82 H11
    Date: 2021–08–24
  4. By: Donatella Gatti
    Abstract: This paper studies the set-up (following a voting process) of institutional arrangements related to the protection of natural and social resources in a context of inequalities and environmental challenges. To analyze how institutional and legislative protection arises, three socioeconomic groups are considered: the educated bourgeoisie, the working classes and the ?nancial elite. Groups are di¤erentiated according to the following divides. Individuals belonging to the ?nancial elite only rely on capital incomes: they invest on ?rms running either polluting or non-polluting activities. Individuals belonging to the ?rst two groups are di¤erentiated on the following levels: the demand for redistribution (from the working class) and the claims for environment-friendly legislation in relation with clean transport means (by the educated bourgeoisie). We study the institutional framework chosen by individuals under di¤erent assumptions concerning the political vote: disjoint majority versus coalition voting. The main result is that -in reaction to the ?nancial elite being the unique winner of the disjoint majority vote- a people?s green coalition can emerge, whose redistributive and green choices run against the preferences of the ?nancial elite. This leads to the "greening" of the ?nancial elite, which in turn isolates the working classes in the political arena.
    Keywords: Institutions, political choice, redistribution, green legislation
    JEL: P48 P16 P51 Q59
    Date: 2021–09
  5. By: Asongu, Simplice; Yapatake Kossele, Thales; Nnanna, Joseph
    Abstract: This study examines linkages between political stability and trade openness dynamics in a panel of 44 countries in SSA from 1996 to 2016. The empirical evidence is based on the generalized method of moments. From the findings, the negative relationship between political stability and merchandise trade is not significant while the negative relationship between political stability and trade openness (exports plus imports) is significant. Hence, the findings do not validate the tested hypothesis that political stability/no violence increases trade in the sub-region. The perspective that some forms of political stability can slow down and prevent international trade is consistent with Oslon in Rise and Decline of Nations (RADON) and recent contributions to the economic development literature which have shown that not all forms of political stability are development friendly because much depends on the extent to which stability translates into, inter alia, good governance. The principal policy implication is that standards of political governance need to be boosted in order to improve the anticipated effects of political stability on trade, especially in the light of the ambitious African Continental Free Trade Area (AfCFTA). Other policy implications are discussed.
    Keywords: Political Stability; Trade; Sub-Saharan Africa
    JEL: F52 K42 O17 O55 P16
    Date: 2021–01
  6. By: Vincent Geloso (Department of Economics, George Mason University); Linan Peng (Department of Economics and Management, DePauw University)
    Abstract: After the Civil War, the Democratic party carried an important electoral penalty from being associated with the war. To deal with this penalty, the party took increasingly anti-immigration positions to compete with Republicans. This led some Republican strongholds such as California to become competitive and also forced Republicans to embrace stricter immigration proposals. In this paper, we argue that adopting anti-immigration and raising awareness against immigration made California increasingly competitive in electoral terms. This electoral competitiveness can serve to explain the genesis of the 1882 Chinese Exclusion Act.
    Keywords: Immigration, Chinese Exclusion Act, Anti-Chinese Movement, Political Economy
    JEL: J15 N31 H59
    Date: 2021–09–21
  7. By: Masayuki Odora (Graduate School of Economics, Waseda University, 1-6-1, Nishi-Waseda, Shinjuku-ku, Tokyo 169-8050, Japan.)
    Abstract: This study considers strategic communication before voting. Voters have partially conflicting interests rather than common interests. That is, voters cannot tell whether a collective decision is a matter of truth, such as guilty or innocent, or a matter of taste, such as left or right. A set of imperfectly informed voters communicates before casting their votes. From a statistical perspective, truth-telling by all voters in deliberation, coupled with majority rule, may lead to desirable outcomes asymptotically as the population of voters increases. Thus, from a statistical perspective, increasing the population of voters is desirable. This study, however, shows that truthful communication is not incentive-compatible with equilibrium behavior when the size of the electorate is sufficiently large. In particular, truthful communication by all voters is inconsistent with equilibrium for any voting rule and any degree of conflict when the population of voters becomes arbitrarily large. On the other hand, truthful communication might be an equilibrium for a small population of voters. Under these circumstances, voting rules matter. This study shows that majority rule most promotes truthful communication before voting.
    Keywords: Information aggregation, Common value elections, Private value elections, Deliberation, Voting rule, Conflicting interests
    JEL: C72 D71 D72
    Date: 2021–09
  8. By: Mello, M.; Moscelli, G.
    Abstract: In September 2020, a national-level constitutional referendum held alongside local administrative elections took place in Italy, resulting in a 22% average increase in the referendum turnout rate where more than one poll occurred. We exploit this quasi-experimental setting to estimate the e ect of voters' turnout on the spread of COVID-19, by employing an event-study design with a two-stage Control Function strategy. The estimated elasticities show that post-poll new COVID infections increased by an average of 1.1% for each additional percentage point of turnout. The findings suggest that national-level polls have the possibility to amplify nation-wide waves of contagion if held during peak periods of an epidemic. A cost-benefit simulation based on our estimates and real political events shows that averting an early general election in Spring 2021 has spared Italy up to about 362 million euros in additional hospital care costs and 22,900 deaths from COVID.
    Keywords: COVID-19; voting; civic capital; Control Function;
    JEL: C23 D72 H51 I18
    Date: 2021–09
  9. By: Björn Brey
    Abstract: Did recent technological change, in the form of automation, affect immigration policy in the United States? I argue that as automation shifted employment from routine to manual occupations at the bottom end of the skill distribution, it increased competition between natives and immigrants, consequently leading to increased support for restricting low-skill immigration. I formalise this hypothesis theoretically in a partial equilibrium model with constant elasticity of substitution in which technology leads to employment polarization, and policy makers can vote on immigration legislation. I empirically evaluate these predictions by analysing voting on low-skill immigration bills in the House of Representatives during the period 1973-2014. First, I find evidence that policy makers who represent congressional districts with a higher share of manual employment are more likely to support restricting low-skill immigration. Second, I provide empirical evidence that representatives of districts which experienced more manual-biased technological change are more likely to support restricting low-skill immigration. Finally, I provide evidence that this did not affect trade policy, which is in line with automation having increased employment in occupations exposed to low-skill immigration, but not those exposed to international trade.
    Keywords: political economy, voting, immigration policy, technological change
    JEL: F22 J61 K37 O30
    Date: 2021
  10. By: Umut Keskin (Istanbul Bilgi University); M. Remzi Sanver (LAMSADE - Laboratoire d'analyse et modélisation de systèmes pour l'aide à la décision - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); H. Berkay Tosunlu (LAMSADE - Laboratoire d'analyse et modélisation de systèmes pour l'aide à la décision - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: A social choice rule (SCR) is monotonic if raising a single alternative in voters' preferences while leaving the rankings otherwise unchanged is never detrimental to the prospects for winning of the raised alternative. Monotonicity is rather weak but well-known to discriminate against scoring elimination rules, such as plurality with a run off and single transferable vote. We define the minimal monotonic extension of an SCR as its unique monotonic supercorrespondence that is minimal with respect to set inclusion. After showing the existence of the concept, we characterize, for every non-monotonic SCR, the alternatives that its minimal monotonic extension must contain. As minimal monotonic extensions can entail coarse SCRs, we address the possibility of refining them without violating monotonicity provided that this refinement does not diverge from the original SCR more than the divergence prescribed by the minimal monotonic extension itself. We call these refinements monotonic adjustments and identify conditions over SCRs that ensure unique monotonic adjustments that are minimal with respect to set inclusion. As an application of our general findings, we consider plurality with a runoff, characterize its minimal monotonic extension as well as its (unique) minimal monotonic adjustment. Interestingly, this adjustment is not coarser than plurality with a runoff itself, hence we suggest it as a monotonic substitute to plurality with a runoff.
    Keywords: monotonicity,minimal monotonic extension,minimal monotonic adjustment,plurality with a runoff,voting rule
    Date: 2021

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