nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒10‒25
nine papers chosen by
Eugene Beaulieu
University of Calgary

  1. Protecting Natural and Social Resources: A political economy approach By Donatella Gatti
  2. Round-Robin Political Tournaments: Abstention, Truthful Equilibria, and Effective Power By Roland Pongou; Bertrand Tchantcho
  3. Prosecutor Politics: The Impact of Election Cycles on Criminal Sentencing in the Era of Rising Incarceration By Chika O. Okafor
  4. Technology and clientelist politics in India By Steven I. Wilkinson
  5. The Poverty Effect of Democratization By Christoph Dörffel; Andreas Freytag
  6. Contract clientelism: How infrastructure contracts fund vote-buying By Alisha Holland; Will Freeman
  7. Protecting democracy: The relevance of international democracy promotion for term limits By Leininger, Julia; Nowack, Daniel
  8. Coase and the Scottish Political Economy Tradition By Alexander Dow & Sheila Dow
  9. Trade shocks, labour markets and elections in the first globalisation By Bräuer, Richard; Hungerland, Wolf-Fabian; Kersting, Felix

  1. By: Donatella Gatti (Université Sorbonne Paris Nord)
    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 fiÂ…nancial elite. Groups are differentiated according to the following divides. Individuals belonging to the fiÂ…nancial elite only rely on capital incomes: they invest on Â…firms running either polluting or non-polluting activities. Individuals belonging to the first two groups are differentiated 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 different assumptions concerning the political vote: disjoint majority versus coalition voting. The main result is that -in reaction to the Â…financial elite being the unique winner of the disjoint majority vote- a peopleÂ’s green coalition can emerge, whose redistributive and green choices run against the preferences of the Â…financial elite. This leads to the “greening” of the fiÂ…nancial elite, which in turn isolates the working classes in the political arena.
    Keywords: Institutions, political choice, redistribution, green legislation
    JEL: A1
    Date: 2021
  2. By: Roland Pongou (Department of Economics, University of Ottawa, Ottawa, ON); Bertrand Tchantcho (Department of Mathematics, École Normale Supérieure, University of Yaoundé I, Cameroon; Université de Cergy Pontoise)
    Abstract: A round-robin political tournament is an election format where multiple candidates contest in pairs, and votes are aggregated using a general rule to form a social ranking. We formalize this tournament as a strategic form game and provide a necessary and sufficient condition under which truthful voting is a Nash equilibrium. Building on this analysis, we study the concept of effective power, defined as a voter's ability to bring about a social ranking that maximizes his preferences. We show that the classical theories of political power do not translate into effective power in general. We then provide a full characterization of the classes of political tournaments and utility metrics for which these theories capture effective power. We offer both structural and behavioral interpretations of the findings, and derive practical implications for the design of political tournaments that are compatible with truth-telling.
    Keywords: Round-robin Political Tournaments; Ranked Voting; Hyper-preferences; Truthful Equilibria; Effective Power; Psychology; Political Design.
    Date: 2021
  3. By: Chika O. Okafor
    Abstract: I investigate how political incentives affect the behavior of district attorneys (DAs). I develop a theoretical model that predicts DAs will increase sentencing intensity in an election period compared to the period prior. To empirically test this prediction, I compile one of the most comprehensive datasets to date on the political careers of all district attorneys in office during the steepest rise in incarceration in U.S. history (roughly 1986-2006). Using quasi-experimental methods, I find causal evidence that being in a DA election year increases total admissions per capita and total months sentenced per capita. I estimate that the election year effects on admissions are akin to moving 0.85 standard deviations along the distribution of DA behavior within state (e.g., going from the 50th to 80th percentile in sentencing intensity). I find evidence that election effects are larger (1) when DA elections are contested, (2) in Republican counties, and (3) in the southern United States--all these factors are consistent with the perspective that election effects arise from political incentives influencing DAs. Further, I find that district attorney election effects decline over the period 1986-2006, in tandem with U.S. public opinion softening regarding criminal punishment. These findings suggest DA behavior may respond to voter preferences--in particular to public sentiment regarding the harshness of the court system.
    Date: 2021–10
  4. By: Steven I. Wilkinson
    Abstract: This paper argues that new computer, smartphone, and universal ID technologies are reducing the incentives for political clientelism in the delivery of social programmes in India, especially by allowing party leaders to bypass local brokers to credit-claim for better service delivery and allowing politicians to deliver programmatic service delivery much more efficiently than in the past, with fewer diversions.
    Keywords: Clientelism, India, Technology, Benefit programmes, Service delivery, Technological change
    Date: 2021
  5. By: Christoph Dörffel (Friedrich Schiller University Jena); Andreas Freytag (Friedrich Schiller University Jena)
    Abstract: In this paper we examine the interrelatedness between regime types of democracy and non-democracy and poverty reduction. The liberal international order and democratic principles have been challenged by the populace’s general discontent in recent years, while the reduction of poverty is a central goal of the global development agenda as embodied by the Sustainable Development Goals. Democracies could promote poverty reduction by encouraging redistribution, lifting barriers for poor people, or giving better access to the institutions of society. Democracies might hinder poverty reduction if they are captured by elites or become dysfunctional in general. Our data cover around 140 countries and a period from 1980-2018. We use a mix of methods to address endogeneity concerns. In dynamic panel estimates that control for past influences of poverty, GDP and inequality we find no significant impact of democratization on poverty rates. In more flexible and causal treatment effects estimates we find democratization reduces poverty rates by about 11-14% in the first five years after democratization on a 95% significance level and about 20% 10-14 years after democratization on a 90% significance level. Although we find mixed results, we are still confident that democratic political institutions matter greatly, and societies are better off when the political systems are more inclusive. The fact that our results do not find clear support for this suggest that this is too often not the case, even in democracies.
    Keywords: Poverty, Democracy, Human Development
    JEL: I32 O15 P48
    Date: 2021–10–13
  6. By: Alisha Holland; Will Freeman
    Abstract: Where does the money come from to buy votes? We argue that an important source of funds for vote-buying comes from 'contract clientelism', or the provision of public contracts to private firms in exchange for campaign donations. Using quantitative data on Colombian infrastructure contracts, we demonstrate that municipalities exhibit an 'electoral contracting cycle' in which incumbents assign low-quality contracts while on the campaign trail. Contract manipulations are more common in municipalities with higher reports of clientelist activity.
    Keywords: Contracts, vote-buying, Clientelism, Infrastructure, Colombia, Public goods, Firms
    Date: 2021
  7. By: Leininger, Julia; Nowack, Daniel
    Abstract: The question of whether and how democracy can be promoted and protected through international support has recently gained relevance. On the one hand, the withdrawal of NATO troops from Afghanistan has reignited a public debate on the limits of democracy promotion. On the other hand, the need for international democracy protection is growing due to an increase in autocratisation trends worldwide. DIE research shows that it is possible to effectively support and protect democracy. In this context, both the protection of central democratic institutions, such as term limits for rulers, and the promotion of democratic forces that pro-actively resist attempts at auto¬cratisation are central. Since 2010, autocratisation trends have been characterised by the fact that they often slowly erode achieved democratisation successes and consolidate autocracies. The circumvention and abolition of presidential term limits by incumbent presidents are part of the typical 'autocratisation toolbox'. Term extensions limit democratic control and expand presidential powers. Democracy promotion and protection play a relevant role in preserving presidential term limits, and thus in protecting democracy. They contribute towards improving the 'duration' and 'survival chances' of presidential term limits. The more international democracy promotion is provided, the lower the risk that term limits will be circumvented. For example, a DIE analysis found that a moderately high democracy promotion mean of $2.50 per capita over four years on average halves the risk of presidential term limits being circumvented. Based on quantitative analysis and case studies, the following recommendations for international democracy promoters emerge: Use democracy promotion and protection in a complementary way. On the one hand, democracy must be promoted continuously, as the organisational and oppositional capacity of political and civil society actors can only be built up in the long term. On the other hand, democracy protectors must also react in the short term to political crises with ad hoc measures and diplomatic means. Democracy promotion is a risky investment that pays off. Whether it is possible to promote democracy in the long term and protect it from autocratisation depends above all on domestic forces and institutions. For them, too, political crises are open-ended. While inaction tends to play into the hands of autocrats, context-sensitive engagement at least offers the possibility of contributing to the preservation of democracy. Strengthen democracy protection through regional organisations. Regional organisations such as ECOWAS and the African Union offer regional political structures that can help with de-escalation and ensure credible commitments on the part of the incumbents. International donors could therefore coordinate with regional organisations in situations where democracy is at stake.
    Date: 2021
  8. By: Alexander Dow & Sheila Dow (Department of Economics, University of Victoria)
    Abstract: Coase’s work took a different approach to that of standard economics and he made a series of reflections over the years setting out his methodological views. He first employed this approach in his path-breaking paper on ‘The Nature of the Firm’, which was drafted while in his first academic post, at the Dundee School of Economics and Commerce. The distinctive Scottish political economy approach still dominated economics in Scotland at the time, although the Dundee School stood apart from it. The purpose of this paper is to consider how far Coase was influenced by being in Dundee, and in particular by the Scottish political economy tradition. We find little evidence of influence from the Scottish tradition while Coase was at Dundee. Nevertheless we identify many features of Coase’s methodology which accord with the Scottish tradition. In particular we draw out the similarities with Adam Smith’s approach, which Coase had encountered before coming to Dundee. We conclude that there was a missed connection with the Scottish tradition as it had continued in Scotland into the twentieth century.
    Keywords: Ronald Coase, Scottish political economy, economic methodology, law and economics
    Date: 2021–10–09
  9. By: Bräuer, Richard; Hungerland, Wolf-Fabian; Kersting, Felix
    Abstract: This paper studies the economic and political effects of a large trade shock in agriculture - the grain invasion from the Americas - in Prussia during the first globalisation (1871-1913). We show that this shock accelerated the structural change in the Prussian economy through migration of workers to booming cities. In contrast to studies using today's data, we do not observe declining per capita income and political polarisation in counties affected by foreign competition. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitise data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian trade data to isolate exogenous variation.
    Keywords: agriculture,elections,Germany,globalisation,import competition,labour market,migration,Prussia,trade shock
    JEL: F14 F16 F66 F68 N13 R12
    Date: 2021

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