nep-pol New Economics Papers
on Positive Political Economics
Issue of 2021‒11‒22
eight papers chosen by
Eugene Beaulieu
University of Calgary

  1. Socioeconomic factors and shifts in ideological orientation among political parties: Parliamentary elections in Slovakia from 1998 to 2020 By Bačo, Tomáš; Baumöhl, Eduard
  2. When Do Politicians Appeal Broadly? The Economic Consequences of Electoral Rules in Brazil By Moya Chin
  3. Does Income Inequality enter into an Aggregate Model of Voter Turnout? Evidence from Canada and Indian States* By J. Stephen Ferris; Bharatee Bhusana Dash; Marcel-Cristian Voia
  4. Quantifying political populism and examining the link with economic insecurity: evidence from Greece By Ntentas, Raphael
  5. Finite- and Large-Sample Inference for Ranks using Multinomial Data with an Application to Ranking Political Parties By Daniel Wilhelm; Magne Mogstad; Azeem Shaikh
  6. The Financial Drivers of Populism in Europe By Luigi Guiso; Massimo Morelli; Tommaso Sonno; Helios Herrera
  7. Free Trade and the Formation of Environmental Policy: Evidence from US Legislative Votes By Jevan Cherniwchan; Nouri Najjar
  8. Who Cares? Attitudes Towards Redistribution and Fiscal Austerity By Sarah Brown; Alexandros Kontonikas; Alberto Montagnoli; Mirko Moro; Dafni Papoutsaki; Willem Sas

  1. By: Bačo, Tomáš; Baumöhl, Eduard
    Abstract: We analyze the election results of political parties and ideological blocs in parliamentary elections held in the Slovak Republic from 1998 to 2020 across 79 districts (LAU 1 level). Interestingly, correlations among parties’ election results between consecutive elections are very high across all elections from 1998 until 2016, meaning that any increase or decrease in electoral support was almost uniform across all districts from one election to another. The last elections disrupted this trend, and in line with the significantly lower degree of correlation with prior elections for all ideological groups, we observe territorially heterogeneous voting behavior. Especially in districts with left-wing support, the electorate shifted toward what we refer to as ideologically vague parties. Within a seemingly unrelated regression (SUR) framework, we show that systematic influence of economic variables on the election results is present only for right-wing parties. For other ideological blocs, age and population density appear to be more influential factors. The “economically rational” right-wing election camp, however, has exhibited a decline in electoral support.
    Keywords: Economic voting,Elections,Popularity,Government support,Populism
    JEL: D72 E24 E61 P20
    Date: 2021
  2. By: Moya Chin
    Abstract: Electoral rules determine how voters' preferences are aggregated and translated into political representation, and their design can lead to the election of representatives who represent broader or narrower constituencies. Relying on a regression discontinuity design, I contrast single- and two-round elections in Brazilian municipal races. Two-round elections use two rounds of voting to elect a winner, ensuring that the eventual winner obtains at least 50% of the vote. Theoretically, this can provide incentives for candidates to secure a broader base of support. Consistent with this, I show that in two-round elections, candidates represent a more geographically diverse group of voters, public schools have more resources, and there is less variation in resources across public schools. Effects appear to be driven by strategic responses of candidates, rather than differential entry into races. These results suggest that two-round elections can lead candidates to secure broader bases of support and to distribute public goods more broadly.
    Keywords: Electoral institutions, voting theory, political responsiveness, political favoritism, education resources; candidate maximization problem; two-round election; voter threshold; appendix C. theory appendix; concentration of voter; swingable voter; Infrastructure; Income; Budget planning and preparation
    Date: 2021–08–27
  3. By: J. Stephen Ferris (Department of Economics, Carleton University); Bharatee Bhusana Dash (Department of Economics, Xavier University); Marcel-Cristian Voia (Department of Economics, University of Oreleans, France)
    Abstract: Conflict theory argues that greater income inequality induces greater political and electoral participation. Relative power theory argues that greater inequality leads to political alienation and electoral disengagement.
    Keywords: voter turnout, income inequality, Canadian time series and ARDL modeling, Indian state panel data, nonlinear relationships.
    JEL: D72 D78 H62
    Date: 2021–08–12
  4. By: Ntentas, Raphael
    Abstract: At this juncture of human history populism is ubiquitous and Greek politics constitute no exception. This paper sheds light on a methodology that quantifies political populism (i.e. parliamentary populist rhetoric) in Greece through a novel textual dataset, which includes 16.5 years filled with heated debates over times of economic peaks and valleys. Combining computer with human intelligence to identify populism based upon a creative dictionary and strict definitional guidelines that fit the Hellenic Parliament’s context, helps one explore perspectives unimagined just a few years ago. Besides, as Greece has gone through a series of sharp, intense and generalized socio-economic shocks, this paper uses an OLS multiple regression analysis to test whether there is a link between economic insecurity and political populism. Ultimately, it provides empirical evidence on a weak link, indicating economic insecurity’s minimal role in explaining the variation in political populism levels. Our results do offer some tentative insights into how political populism evolves in the country during 2004-2020, confirming the previous empirical finding that assigns higher levels of populism to December when heated parliamentary debates on the following year’s budget occur. Lastly, the empirical results indicate that populism does not intensify in conditions of crises, in alignment with the findings of some of the latest cross-national studies.
    JEL: N0
    Date: 2021–11
  5. By: Daniel Wilhelm (Daniel Wilhelm); Magne Mogstad (Magne Mogstad); Azeem Shaikh (Azeem M. Shaikh)
    Abstract: It is common to rank different categories by means of preferences that are revealed through data on choices. A prominent example is the ranking of political candidates or parties using the estimated share of support each one receives in surveys or polls about political attitudes. Since these rankings are computed using estimates of the share of support rather than the true share of support, there may be considerable uncertainty concerning the true ranking of the political candidates or parties. In this paper, we consider the problem of accounting for such uncertainty by constructing confidence sets for the rank of each category. We consider both the problem of constructing marginal confidence sets for the rank of a particular category as well as simultaneous confidence sets for the ranks of all categories. A distinguishing feature of our analysis is that we exploit the multinomial structure of the data to develop confidence sets that are valid in finite samples. We additionally develop confidence sets using the bootstrap that are valid only approximately in large samples. We use our methodology to rank political parties in Australia using data from the 2019 Australian Election Survey. We find that our finite-sample confidence sets are informative across the entire ranking of political parties, even in Australian territories with few survey respondents and/or with parties that are chosen by only a small share of the survey respondents. In contrast, the bootstrap-based confidence sets may sometimes be considerably less informative. These findings motivate us to compare these methods in an empirically-driven simulation study, in which we conclude that our finite-sample confidence sets often perform better than their large-sample, bootstrap-based counterparts, especially in settings that resemble our empirical application.
    Keywords: Confidence sets, Multinomial Data, Multiple Testing, Polls, Ranks, Surveys
    JEL: C12 C14 D31 I20 J62
    Date: 2021–11
  6. By: Luigi Guiso (Einaudi Institute for Economics and Finance and CEPR); Massimo Morelli (Bocconi University, IGIER, PERICLES and CEPR); Tommaso Sonno (University of Bologna and CEP (LSE)); Helios Herrera (Warwick University and CEPR)
    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.
    Date: 2021
  7. By: Jevan Cherniwchan (Department of Economics, Carleton University); Nouri Najjar (Department of Economics,)
    Abstract: We examine NAFTA’s effect on roll call votes on environmental legislation in the US House of Representatives. Our results suggest that reductions in US tariffs caused representatives of affected districts to significantly reduce their support for environmental policy, but reductions in Mexican tariffs did little to affect legislator behavior.
    Keywords: NAFTA, trade liberalization, voting, environmental policy
    JEL: F18 F64 F68 Q56 Q58
    Date: 2021–09–15
  8. By: Sarah Brown; Alexandros Kontonikas; Alberto Montagnoli; Mirko Moro; Dafni Papoutsaki; Willem Sas
    Abstract: We present new evidence showing that fiscal austerity strengthens support for redistribution, especially for the relatively well-off. Our theoretical model proposes two mechanisms to explain this heterogeneity in support for redistribution: ‘altruism’ and ‘appreciation’. We test our theoretical model’s predictions by matching attitudes reported in the British Social Attitudes Survey with local area-level spending cuts in England over the period 2010 to 2015. We exploit the spatial and temporal variation in spending cuts at the Local Authority level to compute a plausibly exogenous measure of the austerity shock. We find evidence for these two channels.
    Keywords: austerity, fiscal consolidation, fiscal policy, redistribution, political attitudes, altruism, appreciation
    JEL: D30 D64 E62 H20 H30 H60
    Date: 2021

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