nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒11‒01
nine papers chosen by
Eugene Beaulieu
University of Calgary

  1. How does legislative behavior change when the country becomes democratic? The case of South Korea By F. Lagona; Fabio Padovano
  2. It Takes Money to Make MPs: Evidence from 150 Years of British Campaign Spending By Julia Cage; Edgard Dewitte
  3. The Heterogeneous Price of a Vote: Evidence from Multiparty Systems, 1993-2017 By Yasmine Bekkouche; Julia Cage; Edgard Dewitte
  5. Policy Experimentation in China: the Political Economy of Policy Learning By Shaoda Wang; David Y. Yang
  6. Past Exposure to Macroeconomic Shocks and Populist Attitudes in Europe By Gavresi, Despina; Litina, Anastasia
  7. The Poverty Effect of Democratization: Disaggregating Democratic Institutions By Christoph Doerffel
  8. Perceptions and Preferences for Redistribution By Stefanie Stantcheva
  9. Preferences for Giving Versus Preferences for Redistribution By Johanna Mollerstrom; Avner Strulov-Shlain; Dmitry Taubinsky

  1. By: F. Lagona (UiB - University of Bergen, Università degli Studi Roma Tre); Fabio Padovano (CREM - Centre de recherche en économie et management - CNRS - Centre National de la Recherche Scientifique - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - UNICAEN - Université de Caen Normandie - NU - Normandie Université)
    Abstract: The Political Legislation Cycle theory predicts a peak of legislative production in the pre-electoral period, when legislators focus on voters' welfare to be reelected. This paper verifies the theory on South Korean legislative production (1948–2016); it is the first test of the theory in a country undergoing a process of democratization, thus providing evidence relevant also for the conditional political cycles literature. Two insofar untested hypotheses are verified: 1) peaks of legislative production should increase with the degree of democracy; 2) as the party system and the mechanisms of legislative checks and balances develop, the PLC should become more evident in bills of legislative rather than executive's initiative. A hurdle model estimated on both laws of parliamentary proposal and of government assignment lends empirical support to both hypotheses, with the noticeable feature that PLC in Korea appear more in the form of an upward trend than of pre-electoral peaks. © 2021 Elsevier B.V.
    Keywords: Autocracy,Conditional political cycles,Democratic transition,Executive vs. parliamentary legislative initiative,Hurdle model,Over-dispersion,Political legislation cycles,Zero inflation
    Date: 2021–09
  2. By: Julia Cage (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Edgard Dewitte (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We study electoral campaigns over the long run, through the lens of their spending. In particular, we ask whether changing media technologies and electoral environments impacted patterns of spending and their correlation with electoral results. To do so, we build a novel exhaustive dataset on general elections in the United Kingdom from 1857 to 2017, which includes information on campaign spending (itemized by expense categories), electoral outcomes and socio-demographic characteristics for 69, 042 election-constituency candidates. We start by providing new insights on the history of British political campaigns, in particular the growing importance of advertising material, including via digital means, to the detriment of paid staff and electoral meetings. We then show that there is a strong positive correlation between expenditures and votes, and that overall the magnitude of this relationship has strongly increased since the 1880s, with a peak in the last quarter of the 20th century. We link these transformations to changes in the conduct of campaigns, and to the introduction of new information technologies. We show in particular that the expansion of local radio and broadband Internet increased the sensitivity of the electoral results to differences in campaign spending. These results encourage greater contextualization in the drafting of campaign finance regulations.
    Keywords: Elections,Campaign finance,Electoral expenditures,Information technologies
    Date: 2021–09–01
  3. By: Yasmine Bekkouche (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); Julia Cage (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Edgard Dewitte (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: What is the impact of campaign spending on votes? Does it vary across election types, political parties or electoral settings? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that handle the endogenous and strategic nature of campaign spending in multiparty systems. This paper provides novel contributions in both of these areas. We build a new comprehensive dataset of all French legislative and UK general elections over the 1993-2017 period. We propose new empirical specifications, including a new instrument that relies on the fact that candidates are differentially affected by regulation on the source of funding on which they depend the most. We find that an increase in spending per voter consistently improves candidates' vote share, both at British and French elections, and that the effect is heterogeneous depending on candidates' party. In particular, we show that spending by radical and extreme parties has much lower returns than spending by mainstream parties, and that this can be partly explained by the social stigma attached to extreme voting. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of why campaigns matter.
    Date: 2020–12–01
  4. By: Lizhe Xu
    Abstract: The present article is an attempt to explore the debates surrounding the extent and nature of political marketing, and discuss the benefits and limitations of applying theories and practices of political marketing to political communication, furthermore, will value the theories of political marketing in terms of their potential impact on political communication practices. Key Words: politics, marketing, communication, political marketing, political communication
    Date: 2021–09
  5. By: Shaoda Wang; David Y. Yang
    Abstract: Many governments have engaged in policy experimentation in various forms to resolve uncertainty and facilitate learning. However, little is understood about the characteristics of policy experimentation, and how the structure of experimentation may affect policy learning and policy outcomes. We aim to describe and understand China’s policy experimentation since 1980, among the largest and most systematic in recent history. We collect comprehensive data on policy experimentation conducted in China over the past four decades. We find three main results. First, more than 80% of the experiments exhibit positive sample selection in terms of a locality’s economic development, and much of this can be attributed to misaligned incentives across political hierarchies. Second, local politicians allocate more resources to ensure the experiments’ success, and such effort is not replicable when policies roll out to the entire country. Third, the presence of sample selection and strategic effort is not fully accounted for by the central government, thus affecting policy learning and distorting national policies originating from the experimentation. Taken together, these results suggest that while China’s bureaucratic and institutional conditions make policy experimentation at such scale possible, the complex political environments can also limit the scope and bias the direction of policy learning.
    JEL: D72 D8 O2 P16 P21
    Date: 2021–10
  6. By: Gavresi, Despina; Litina, Anastasia
    Abstract: This paper explores the interplay between past exposure to macroeconomic shocks and pop-ulist attitudes. We document that individuals who experienced a macroeconomic shock during their impressionable years (between 18 and 25 years of age), are currently more proneto 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 differentialindividual exposure to macroeconomic shocks during impressionable years. Our findings sug-gest that it is not only current exposure to shocks that matters (see e.g., Guiso et al. (2020))but also past exposure to economic recessions, which has a persistent positive effect on therise of populism. Interestingly, the interplay between the two, i.e., past and current exposure to economic shocks, has a mitigating effect on the rise of populism. Individuals who wereexposed to economic shocks in the past are less likely to manifest populist attitudes whenfaced with a current crisis, as suggested by the experience-based learning literature.
    Keywords: Macroeconomic Shocks, Trust, Attitudes, Populism
    JEL: D72 E60 F68 P16 Z13
    Date: 2021–07–25
  7. By: Christoph Doerffel (Friedrich Schiller University Jena)
    Abstract: This paper analyzes which institutional features contribute to poverty reduction when countries democratize. For this, theories and data are used that distinguish between different areas of democratic institutions – namely electoral, liberal, participatory, deliberative, and egalitarian democratic institutions. The data analysis uses semi-parametric treatment effects estimates to estimate average treatment effects of democratization on poverty reduction and estimates this separately for countries with relatively weaker and stronger institutions at the time of democratization. The estimations reveal no clear pattern of a specific, predominant area of institutions while others are remain less important. In each area of institutions, some of its features contribute to poverty reduction and some do not. Especially, the hypothesis that stronger institutions lead to poverty reduction cannot confirmed. Stronger institutions only lead to significant poverty reduction for the institutions of executive and legislative being elected, and judicial constraints on the executive. For most other significant effects, weaker institutions lead to poverty reduction. This is likely due to triggered changes in institutions by democratization that only occur when institutions are still relatively weak, rather than due to growth or inequality changes. When the effect of democratization on poverty reduction is significant, it is meaningful in size (ranging from around 12 to 25 percent during the first five years after democratization, depending on the specific mid- and low-level institution). The pattern is the clearest for deliberative, participatory, and egalitarian institutions and less clear for electoral and liberal democratic institutions. This illustrates that institutions which capture how responsive policymaking is to its constituencies are more important for poverty reduction than institutions that capture formal aspects of democracy.
    Keywords: Poverty, Democracy, Human Development
    JEL: I32 O15 P48
    Date: 2021–10–14
  8. By: Stefanie Stantcheva
    Abstract: The relationship between the degree of inequality and the demand for redistribution has been a central question in political science and political economy. The famous median-voter model predicts that higher inequality, reflected in a growing gap between the income of the average and the median voter, should lead to increased demand for redistribution, as policymakers cater to the median voter’s preferences (Meltzer and Richard, 1981). Yet, using data from OECD countries, Kenworthy and McCall (2008) show that, despite increases in inequality in those countries, there was no corresponding increase in demand for redistribution. Part of the explanation of this puzzle lies in the realization that it is not only (or even mainly) reality, but perceptions that shape support for policy. This article will explore recent evidence using large-scale social economics surveys and experiments that sheds lights on beliefs about inequality, social mobility, diversity and immigration, social position, and understanding of how policies work.
    JEL: H1 H2 P16
    Date: 2021–10
  9. By: Johanna Mollerstrom; Avner Strulov-Shlain; Dmitry Taubinsky
    Abstract: We report the results of an online experiment studying preferences for giving and preferences for group-wide redistribution in small (4-person) and large (200-person) groups. We find that the desire to engage in voluntary giving decreases significantly with group size. However, voting for group-wide redistribution is precisely estimated to not depend on group size. Moreover, people’s perception of the size of their reference group is malleable, and affects their desire to give. These results suggest that government programs, such as progressive tax-and-transfer systems, can help satisfy other-regarding preferences for redistribution in a way that creating opportunities for voluntary giving cannot.
    JEL: D63 D9
    Date: 2021–10

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