nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒01‒03
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Labor Unions and the Electoral Consequences of Trade Liberalization By Pedro Molina Ogeda; Emanuel Ornelas; Rodrigo R. Soares
  2. The Revelation Incentive for Issue Engagement By Chitralekha Basu; Matthew Knowles
  3. Public opinion of a government-enabled technology, by the example of Internet voting: survey evidence from Russia By Valeria Babayan; Israel Marques II; Michael Mironyuk; Aleksei Turobov
  4. Voice and Political Engagement : Evidence From a Natural Field Experiment By Hager, Anselm; Hensel, Lukas; Roth, Christopher; Stegmann, Andreas
  5. Political inclusion and democracy in Africa: some empirical evidence By Tii N. Nchofoung; Simplice A. Asongu; Vanessa S. Tchamyou; Ofeh M. Edoh
  6. Micromotives and macromoves : Political preferences and internal migration in England and Wales By Efthyvoulou, Georgios; Bove, Vincenzo; Pickard, Harry
  7. The Central Influencer Theorem: Spatial Voting Contests with Endogenous Coalition Formation By Subhasish M. Chowdhury; Sang-Hyun Kim
  8. Fiscal Rules and the selection of politicians : theory and evidence from Italy By Gamalerio, Matteo; Trombetta, Federico
  9. An updated OECD framework on drivers of trust in public institutions to meet current and future challenges By Monica Brezzi; Santiago González; David Nguyen; Mariana Prats
  10. A Primer on Trade and Inequality By Dani Rodrik
  11. Twin Peaks: Expressive Voting and Soccer Hooliganism By David K Levine; Salvatore Modica; Junze Sun
  12. Economic and social polarization dynamics in the EU By G. Garau; A. Tola; M.V. Camerada; S. Lampreu; S. Carrus

  1. By: Pedro Molina Ogeda; Emanuel Ornelas; Rodrigo R. Soares
    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
  2. By: Chitralekha Basu (University of Cologne); Matthew Knowles (University of Cologne)
    Abstract: How do parties choose issues to emphasize in campaigns, and when does electoral competition force parties to address issues important to voters? Empirical studies have found that although parties focus disproportionately on favourable issues in campaigns, they also spend much of the `short campaign' addressing the same issues - and especially if these are salient issues. We write a model of multiparty competition with endogenous issue salience, where, in equilibrium, parties behave in line with these patterns. In our model, parties' issue emphases have two effects: influencing voter priorities, and also informing voters about their issue positions. Thus, parties trade off two incentives when choosing issues to emphasize: increasing the importance of favorable issues ('the salience incentive'), and revealing their positions on salient issues to sympathetic voters ('the revelation incentive'). The relative strength of these two incentives determines how far elections constrain parties to respond to voters' initial issue priorities.
    Keywords: Electoral competition; Issue salience; Issue selection; Party strategy; Campaigns
    JEL: D72 D83
    Date: 2021–12
  3. By: Valeria Babayan (National Research University Higher School of Economics); Israel Marques II (National Research University Higher School of Economics); Michael Mironyuk (National Research University Higher School of Economics); Aleksei Turobov (National Research University Higher School of Economics)
    Abstract: What are the determinants of individual-level trust in Internet-based voting in non-democracies? Modern digital and electronic transformations of the electoral process offer citizens new forms of voting, however it is not clear which citizens are prepared to trust these innovations. Existing work on trust in internet-based voting has mainly focused on Western democracies, where well-functioning institutions curb potential abuses. As a consequence, existing perspectives have drawn on work on technology adoption and focused on individual-level cost-benefit analyses and elite framing of these technologies. In non-democracies, however, there are few checks and balances on electoral manipulations that allow the authorities to shape outcomes extra-legally. In such settings, institutional trust in the authorities and beliefs about the ease with which internet-based voting can be abused take on new and greater salience. In this paper, we provide an exploratory analysis aimed at testing whether existing perspectives help explain trust in internet-based voting in electoral non-democracies, as well as whether concerns about abuse also play a role. To test these arguments, we make use of an online survey of over 16,250 respondents in the Russian Federation, a case regarded as archetypical in the literature on electoral non-democracies. Our findings provide important insights into public opinion surrounding novel electoral procedures, generally, and internet-based voting, more specifically, in non-democracies. These insights, in turn, have important implications for our understanding of attitudes towards electoral integrity in non-democracies and the potential for popular constraints on the ability of autocrats to modify electoral procedures to reproduce power
    Keywords: Internet voting, Institutional trust, Risk, Electoral Processes, Public opinion, Technology adoption, online voting, Russia, COVID
    JEL: D8 D72
    Date: 2021
  4. By: Hager, Anselm (Humboldt University); Hensel, Lukas (Peking University); Roth, Christopher (University of Cologne, ECON tribute, briq, CESifo, CAGE Warwick, CEPR, MPI Bonn); Stegmann, Andreas (University of Warwick, briq, Cage, CEPR,)
    Abstract: We conduct a natural field experiment with a major European party to test whether giving party supporters the opportunity to voice their opinions increases their engagement in the party’s electoral campaign. In our experiment, the party asked a random subset of supporters for their opinions on the importance of different topics. Giving supporters more opportunities to voice their opinions increases their engagement in the campaign as measured using behavioral data from the party’s smartphone application. Survey data reveals that our voice treatments also increase other margins of campaign effort as well as perceived voice. Our evidence highlights that parties can increase their supporters’ investment in the democratic process by implementing policies that increase their voice.
    Keywords: Political engagement ; Inclusion ; Voice ; Agency ; Natural Field Experiment ; Canvassing JEL Classification: D8 ; P16
    Date: 2021
  5. By: Tii N. Nchofoung (University of Dschang, Cameroon); Simplice A. Asongu (Yaoundé, Cameroon); Vanessa S. Tchamyou (Yaoundé, Cameroon); Ofeh M. Edoh (Yaoundé, Cameroon)
    Abstract: The objective of this study is to examine the effect of political inclusion on democracy in Africa. The results of the analyses through the OLS, system GMM, IV-Tobit and IV-2SLS show that political inclusion enhances democracy in Africa. This result is robust across alternative specifications of political inclusion and democracy. Besides, the results equally stood when controlled for colonisation and internal conflicts. As policy implications, policy makers in Africa should enhance their fight for political inclusion as one of the gateways to promoting democracy. In this respect, national laws could be put in place, which impose gender quotas in political positions in every country. Equally, the African Union could sign a convention on these quotas for respective countries to ratify.
    Keywords: Political inclusion; democracy; Africa
    JEL: I32 O55 P16 P43 P50
    Date: 2021–12
  6. By: Efthyvoulou, Georgios (University of Sheffield); Bove, Vincenzo (University of Warwick, Department of Politics and International Studies and CAGE); Pickard, Harry (Newcastle University Business School)
    Abstract: When people migrate internally, do they tend to move to locations that reflect their political preferences? To address this question, we first compile a unique panel dataset on the universe of population movements in England and Wales across 346 local authority districts over the period 2002-2015, and estimate a gravity model of internal migration. We show that proximity in partisan composition exerts an important positive effect on migration flows, which is of a similar order of magnitude as wage differentials or ethnic proximity. We then use individual surveybased data over the same time period to investigate some of the micro-foundations underlying the macromoves. We find that political alignment to the district of residence contributes to individuals' sense of belonging and fitting in consistent with the existence of a political homophily mechanism and that a migrant's political ideology can predict the partisanship of the destination district.
    Keywords: Internal migration ; Residential mobility ; Neighbourhood preference ; Polarization ; Political sorting ; Gravity models
    Date: 2021
  7. By: Subhasish M. Chowdhury (University of Bath); Sang-Hyun Kim (Yonsei University)
    Abstract: We analyze a spatial voting contest without the “one person, one vote” restriction. Players exert continuous influence effort and incurs cost accordingly. They can be heterogeneous in terms of position, disutility function, and cost function. In equilibrium, two groups endogenously emerge: players in one group try to implement more leftist policy, while those in the other group more rightist one. Since the larger group suffers more severe free-riding problem, the equilibrium policy does not converge to the center if the larger group does not have a cost advantage. We demonstrate how the location of the center (i.e., the steady-state point) depends the convexities of the utility and cost functions. We extend the model to a dynamic setting.
    Keywords: Spatial Competition; Contest; Lobbying; Median Voter Theorem
    JEL: C72 D72 D74 D78
    Date: 2021–12
  8. By: Gamalerio, Matteo; Trombetta, Federico
    Abstract: Fiscal rules, i.e., constraints to the policymaking discretion of elected officials, are widely used tools to regulate fiscal policies. We build a simple model that combines scal rules with endogenous entry into politics, showing how scal rules can negatively affect the quality (in terms of education) of candidates running for office. The mechanism behind this effect is due to the differential ability in choosing the correct policy between high and low education politicians and the fact that fiscal rules constraint politicians' actions, creating a relatively higher entry cost for high education politicians. Consistent with the model, the empirical analysis developed with data from Italian municipalities and a difference-in-discontinuity design shows that fiscal rules negatively affect candidates' education. We also show that municipalities where fiscal rules meaningfully restrict the action space of politicians (i.e., those not ex-ante financially constrained) drive the effect. In addition, we provide evidence that high education politicians are more likely to choose the correct policy when scal rules do not apply. These results highlight a new general equilibrium effect of fiscal rules. Reducing policymaking discretion may alleviate inter-jurisdictional externalities and pork-barrel spending. However, it may also lower the quality of the political class.
    Keywords: fiscal rules ; selection of politicians ; deficit, difference-in-discontinuity JEL Classification: D72 ; H62 ; H70 ; H72
    Date: 2021
  9. By: Monica Brezzi; Santiago González; David Nguyen; Mariana Prats
    Abstract: Trust between citizens and their governments is crucial for the legitimacy and functioning of democracies. This paper discusses the main determinants of people’s trust in public institutions and their measurement, in times of crisis as well as for a long-term, strong, inclusive and green recovery. It presents evidence on the great variation in the levels and drivers of trust across public institutions, across levels of government within countries, and among population groups. It also identifies three main trust challenges for public governance that were heightened by the COVID-19 crisis: i) people’s views on the credibility and effectiveness of government action on intergenerational and often global challenges; ii) the changes in political participation and political attitudes; and iii) an increasing distrust of and disengagement from democratic processes. Building on previous OECD work, and taking into account lessons from other crises and handling of the COVID-19 pandemic, the paper introduces a revised and expanded version of the OECD Framework on Drivers of Trust in Public Institutions. Furthermore, it discusses how this Framework is applied in the OECD Trust Survey. Both the Framework and the Survey aim to provide governments with actionable evidence to build and maintain people’s trust as the basis for successful planning and policy reforms, allowing democracies to be fitter, stronger and more resilient in the future.
    Keywords: COVID-19, democracy, intergenerational challenges, measurement, public trust
    JEL: D02 H12 H11
    Date: 2021–12–22
  10. By: Dani Rodrik
    Abstract: In the public imagination globalization’s adverse effects have loomed large, contributing significantly to the backlash against the political mainstream and the rise of far-right populism. The literature on trade and inequality is in fact exceptionally rich, with important theoretical insights as well as extensive empirical findings that sheds light on this recent experience. Some of the key results of this literature, discussed here, are as follows: Redistribution is the flip side of the gains from trade, and it becomes larger relative to net gains from trade in the advanced stages of globalization. Compensation is difficult for both economic and political reasons. International trade often differs from other market exchanges, raising fairness concerns in ways that domestic markets do not. The economic benefits of deep integration are generally ambiguous. Dynamic or growth gains from trade are uncertain.
    JEL: F02 F16
    Date: 2021–11
  11. By: David K Levine; Salvatore Modica; Junze Sun
    Date: 2021–12–22
  12. By: G. Garau; A. Tola; M.V. Camerada; S. Lampreu; S. Carrus
    Abstract: Inequality, from a social and economic point of view, produces a widespread sense of injustice, which culminates in the erosion of trust in institutions, politics, and the market economy. This is also relevant from a geopolitical perspective, especially when placed in correlation with the crisis of liberal democracies, often accompanied by the spread of nationalist currents capable of bringing into question the pillars of the EU system. In the past, differences in opportunity were prevalent only in less developed countries but recently, disparities have extended to Western countries and industrial economies as well. Financial crisis, market distortions, asymmetrical globalization and political choices are some of the factors underlying growing inequality around the world. We are seeing a progressive impoverishment of the middle class and the correlated concentration of national wealth in favor of a small minority (Stiglitz, 2014), the rise of a hyper-paid elite (Piketty, 2018; Saez and Zucman, 2019), and reduced upward economic mobility (Krueger, 2021). These phenomena should be considered in light of the aggregation of individual behaviors to better understand the increasing disintegration of the social fabric, which is in many cases considered the cause of the political metamorphosis of some States. This research analyzes statistical evidence with the aim of carrying out a comparative analysis between countries and regions, in order to assess dynamics of social and economic polarization in the EU. The results of the study, considered on a local scale, could contribute to better policy making to achieve the Agenda 2030 objectives.
    Keywords: Socio-economic polarization;Poverty;Inequality
    Date: 2021

This nep-pol issue is ©2022 by Eugene Beaulieu. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.