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on Positive Political Economics |
| By: | Ogeda, Pedro Molina (Sao Paulo School of Economics); Ornelas, Emanuel (Sao Paulo School of Economics); Soares, Rodrigo R. (Insper, São Paulo) |
| Abstract: | We show that the Brazilian trade liberalization in the early 1990s led to a permanent relative decline in the vote share of left-wing presidential candidates in the regions more affected by the tariff cuts. This happened even though the shock, implemented by a right-wing party, induced a contraction in manufacturing and formal employment in the more affected regions, and despite the left's identification with protectionist policies. To rationalize this response, we consider a new institutional channel for the political effects of trade shocks: the weakening of labor unions. We provide support for this mechanism in two steps. First, we show that union presence—proxied by the number of workers directly employed by unions, by union density, and by the number of union establishments—declined in regions that became more exposed to foreign competition. Second, we show that the negative effect of tariff reductions on the votes for the left was driven exclusively by political parties with historical links to unions. Furthermore, the impact of the trade liberalization on the vote share of these parties was significant only in regions that had unions operating before the reform. These findings are consistent with the hypothesis that tariff cuts reduced the vote share of the left partly through the weakening of labor unions. This institutional channel is fundamentally different from the individual-level responses, motivated by economic or identity concerns, that have been considered in the literature. |
| Keywords: | trade shocks, elections, unions, Brazil |
| JEL: | F13 D72 J51 F16 F14 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14849&r= |
| By: | Leonzio Rizzo; Massimiliano Ferraresi; Riccardo Secomandi |
| Abstract: | It is widely recognized that politicians deliberately allocate goods and services just prior to the election, and road investments are arguably among the most visible infrastructure to influence voters. Using a comprehensive dataset on Italian municipalities over the period 2010-2015, we test whether investments in roads and transport services are affected by political manipulations close to elections using as independent variables the year-in-term dummies. We exploit the staggered time of local election to show, indeed, that investment spending on road and transport in the year before election is 30% higher than in the electoral year. Further analyses suggest that our results are more marked (i) in cities guided by a mayor who can run for re-election and (ii) in municipalities with a lower share of educated voters. We isolated the portion of the (exogenous) correlation between the probability of observing an accident and the amount of expenditure on road services that is induced by the political cycle by using the year-in-the-term dummies as instruments. We did not detect any relationship between the increase of investments in road services induced by the political cycle and the local need for road safety, as the probability of having an accident in local roads remained unchanged. Taken together, these findings suggest that politicians manipulate the budget only for re-electoral purposes. Therefore, it is needed a rule, binding visible expenditures, such as those on road services, of the year before the election, or allowing visible expenditures not to exceed those of the previous year within the mandate of the mayor. Such rules would let avoid or at least reduce the estimated inefficient spending by properly programming investment according to real needs and not to electoral convenience. |
| Keywords: | Political Budget Cycle; road accidents; municipalities; local elections; road investments |
| JEL: | D72 H12 H77 Z18 |
| Date: | 2021–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:20210710&r= |
| 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 |
| Abstract: | A voting rule is monotonic if a winning candidate never becomes a loser by being raised in voters' rankings of candidates, ceteris paribus. Plurality with a runoff is known to fail monotonicity. To see how widespread this failure is, we focus on French presidential elections since 1965. We identify mathematical conditions that allow a logically conceivable scenario of vote shifts between candidates that may lead to a monotonicity violation. We show that eight among the ten elections held since 1965 (those in 1965 and 1974 being the exceptions) exhibit this theoretical vulnerability. To be sure, the conceived scenario of vote shifts that enables a monotonicity violation may not be plausible under the political context of the considered election. Thus, we analyze the political landscape of these eight elections and argue that for two of them (2002 and 2007 elections), the monotonicity violation scenario was plausible within the conjuncture of the time. |
| Keywords: | French presidential elections,plurality with a runoff,monotonicity |
| Date: | 2021–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03413280&r= |
| By: | Sergei Bazylik; Magne Mogstad; Joseph P. Romano; Azeem Shaikh; Daniel Wilhelm |
| 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. |
| JEL: | C12 C14 D31 I20 J62 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29519&r= |
| By: | Mr. Simon Johnson; Ms. Priscilla S Muthoora |
| Abstract: | In this paper, we review the role of the political economy in inclusive growth. We find that political economy forces on the demand and supply side have weakened redistribution over time and contributed to a new wave of populism. We document growing support for a rethink of the social contract to make growth more inclusive and discuss some of its broad elements. |
| Keywords: | Political Economy; Inequality; Redistribution; Growth; Labor program; income skew; skew of voter turnout; opposition to Redistribution; public social; Income inequality; Income; Inclusive growth; Fiscal redistribution; Global; Europe; Social protection spending; COVID-19; government policy; populist government; government commitment; inhibiting government responsiveness; government legitimacy |
| Date: | 2021–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/082&r= |
| By: | Samuel Bazzi (BU - Boston University [Boston]); Gabriel Koehler-Derrick (Harvard University [Cambridge]); Benjamin Marx (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Why do religious politics thrive in some societies but not others? This paper explores the institutional foundations of this process in Indonesia, the world's largest Muslim democracy. We show that a major Islamic institution, the waqf, fostered the entrenchment of political Islam at a critical historical juncture. In the early 1960s, rural elites transferred large amounts of land into waqf —a type of inalienable charitable trust—to avoid expropriation by the government as part of a major land reform effort. Although the land reform was later undone, the waqf properties remained. We show that greater intensity of the planned reform led to more prevalent waqf land and Islamic institutions endowed as such, including religious schools, which are strongholds of the Islamist movement. We identify lasting effects of the reform on electoral support for Islamist parties, preferences for religious candidates, and the adoption of Islamic legal regulations (sharia). Overall, the land reform contributed to the resilience and eventual rise of political Islam by helping to spread religious institutions, thereby solidifying the alliance between local elites and Islamist groups. These findings shed new light on how religious institutions may shape politics in modern democracies. |
| Keywords: | Religion,Institutions,Land reform,Islam,Sharia Law |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03391857&r= |
| By: | Kenny, Michael; Luca, Davide |
| Abstract: | Relatively little research has explored whether there is a systemic urban-rural divide in the political and socioeconomic attitudes of citizens across Europe. Drawing on individual-level data from the European Social Survey, we argue that there are strong and significant differences between the populations in these different settings, especially across western European countries. We suggest that this divide is a continuum, running on a gradient from inner cities to suburbs, towns and the countryside. The differences are explained by both composition and contextual effects, and underscore how a firmer appreciation of the urban-rural divide is integral to future place-based policy responses. |
| Keywords: | Europe; geography of discontent; political disenchantment; regional inequality; urban-rural divide |
| JEL: | D72 R20 R58 Z13 |
| Date: | 2021–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112683&r= |
| By: | Alessandra Casella (Columbia University [New York]); Antonin Macé (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, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Voters have strong incentives to increase their influence by trading votes, acquiring others' votes when preferences are strong in exchange for giving votes away when preferences are weak. But is vote trading welfare-improving or welfare-decreasing? For a practice long believed to be central to collective decisions, the lack of a clear answer is surprising. We review the theoretical literature and, when available, its related experimental tests. We begin with the analysis of logrolling - the exchange of votes for votes. We then focus on vote markets, where votes can be traded against a numeraire. We conclude with procedures allowing voters to shift votes across decisions - to trade votes with oneself only. We find that vote trading and vote markets are typically inefficient; more encouraging results are obtained by allowing voters to allocate votes across decisions. |
| Keywords: | bundling,quadratic voting,vote trading,storable votes,logrolling,Vote markets,Storable votes,Vote trading,Logrolling,Quadratic voting,Bundling,vote markets |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:halshs-02922012&r= |