nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒01‒10
eight papers chosen by
Eugene Beaulieu
University of Calgary

  1. Transitive Delegation in Social Networks: Theory and Experiment By Sang-Hyun Kim
  2. Identifying the Economic Determinants of Individual Voting Behaviour in UK General Elections By Chrysanthou, Georgios Marios; Guilló, María Dolores
  3. Opening heaven’s door: Public opinion and congressional votes on the 1965 Immigration Act By Giovanni Facchini; Timothy J. Hatton; Max F. Steinhardt
  4. Political Selection and Monetary Incentives in Local Parliamentary Systems By F. Cerina; M. Nieddu; A. Caria
  5. Electoral incentives, investment in roads, and safety on local roads By Massimiliano Ferraresi; Leonzio Rizzo; Riccardo Secomandi
  6. Using Polls to Forecast Popular Vote Share for US Presidential Elections 2016 and 2020: An Optimal Forecast Combination Based on Ensemble Empirical Model By Easaw, Joshy; Fang, Yongmei; Heravi, Saeed
  7. Call for reforming our democracies: rejuvenating the median voter By Fischer, Justina AV
  8. Pork, infrastructure and growth: Evidence from the Italian railway expansion By Roberto Bonfatti; Giovanni Facchini; Alexander Tarasov; Gian Luca Tedeschi; Cecilia Testa

  1. By: Sang-Hyun Kim (Yonsei University)
    Abstract: This paper develops a model of delegative democracy in which each voter can either vote directly or delegate her vote, together with the votes delegated to her, to another voter and analyzes the incentive for delegation and its impact on the quality of collective decision. A key finding is that as long as the delegation network is sufficiently ideologically homogeneous and large, voters are willing to delegate their votes even if they know neither who knows what nor who knows whom. I also show that delegation facilitates a better collective decision. The laboratory data confirm the theoretical predictions.
    Keywords: Voting, Delegation, Democracy, Delegative democracy, Information aggregation
    Date: 2021–12
  2. By: Chrysanthou, Georgios Marios (Department of Economics, University of Bath, BA2 7AY, UK.); Guilló, María Dolores (University of Alicante, D. Quantitative Methods and Economic Theory)
    Abstract: We explore the economic determinants of individual voting behaviour in five UK electoral cycles during 1992-2014. Using the Understanding Society and the British Household Panel Surveys, we investigate the importance of political sentiments and subjective economic evaluations disentangling persistence of party support and unobserved heterogeneity effects. We estimate joint dynamic tripartite models of party support and egocentric perceptions of current and prospective finances, permitting longitudinal simultaneous determination of perceptions of personal finances and political preferences. The results validate the economic voting hypothesis in cycles adjacent to economic downturns: support for the governing political party is positively related to individual perceptions of own financial wellbeing. Failing to account for simultaneity and not accounting for dynamics and initial political party support inflate the impact of personal financial evaluations.
    Keywords: egocentric economic evaluations; voting behaviour; political preferences; joint models; simultaneity; unobserved heterogeneity
    JEL: C33 C35 D72
    Date: 2021–12–23
  3. By: Giovanni Facchini; Timothy J. Hatton; Max F. Steinhardt
    Abstract: The Immigration Act of 1965 marked a dramatic shift in policy and one with major long term consequences for the volume and composition of immigration to the United States. Here we explore the political economy of a reform that has been overshadowed by the Civil Rights and Great Society programs. We find that public opinion was against expanding immigration, but it was more favorable to abolishing the old country of origin quota system. Votes in the House of Representatives and the Senate were more closely linked to opinion on abolishing the country of origin quotas than to public opinion on the volume of immigration. Support for immigration reform initially followed in the slipstream of civil rights legislation both among members of Congress and their constituents. The final House vote, on a more restrictive version of the bill, was instead more detached from state-level public opinion on civil rights and gained more support from those whose constituents wanted to see immigration decreased.
    Keywords: US immigration policy, 1965 Immigration Act, Congressional voting
    Date: 2021
  4. By: F. Cerina; M. Nieddu; A. Caria
    Abstract: Using a rich database on local politicians in Italian municipalities between 1985 and 1992, we implement a regression-discontinuity analysis to evaluate the causal effect of monetary incentives on the characteristics of politicians in local parliamentary systems. We find that higher expected wages result in more educated member of the local council (+0.8 years of schooling), but not in more educated mayors. While low-wage councils tend to elect mayors who are on average 1.5 years more educated than the mean councillor, this difference vanishes in high-wage councils. This finding is not solely explained by a ceiling effect, as council-elected mayors turn up being less educated in high-wage than in low-wage councils (-0.9 years). Our results highlight that the positive impacts of monetary incentives can be undone or even reversed in the parliamentary stage of the election process. More generally, they suggest that the effects of monetary incentives are not invariant across different institutional setting.
    Keywords: Political Selection;Parliamentary System;Monetary Incentives;Local Politicians
    Date: 2021
  5. By: Massimiliano Ferraresi (European Commission, Joint Research Centre (JRC), Ispra, Italy); Leonzio Rizzo (University of Ferrara, Ferrara, Italy and IEB, Barcelona, Spain.); Riccardo Secomandi (University of Ferrara, Ferrara, Italy.)
    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.
    JEL: D72 H12 H77 Z18
    Date: 2021–12
  6. By: Easaw, Joshy (Cardiff Business School); Fang, Yongmei (College of Mathematics and Informatics, South China Agricultural University, China); Heravi, Saeed (Cardiff Business School)
    Abstract: This study introduces the Ensemble Empirical Mode Decomposition (EEMD) technique to forecasting popular vote share. The technique is useful when using polling data, which is pertinent when none of the main candidates is the incumbent. Our main interest in this study is the short- and long-term forecasting and, thus, we consider from the short forecast horizon of 1-day to three months ahead. The EEMD technique is used to decompose the election data for the two most recent US presidential elections; 2016 and 2020 US. Three models, Support Vector Machine (SVM), Neural Network (NN) and ARIMA models are then used to predict the decomposition components. The final hybrid model is then constructed by comparing the prediction performance of the decomposition components. The predicting performance of the combination model are compared with the benchmark individual models, SVM, NN, and ARIMA. In addition, this compared to the single prediction market IOWA Electronic Markets. The results indicated that the prediction performance of EEMD combined model is better than that of individual models.
    Keywords: Forecasting Popular Votes Shares; Electoral Poll; Forecast combination, Hybrid model; Support Vector Machine
    Date: 2021–12
  7. By: Fischer, Justina AV
    Abstract: Aging populations threaten the future of Western societies and their democratic systems. An aging electorate leads to policies dominated by fear (of death), hindering important social reforms. This article describes this phenomenon from a political philosophy and behavioral psychology perspective and proposes a solution based on a new interpretation of social contract theory. Specifically, I propose the down-weighing of ballots of older voters by their remaining lifespans. I conclude with a discussion of the justice and the fairness of my proposal from the perspective of political philosophy and public economics.
    Keywords: median voter; social contract; aging population; voting
    JEL: H0 I3 J10 Z1
    Date: 2021–12–26
  8. By: Roberto Bonfatti; Giovanni Facchini; Alexander Tarasov; Gian Luca Tedeschi; Cecilia Testa
    Abstract: This paper studies the role played by politics in shaping the Italian railway network, and its impact on long-run growth patterns. Examining a large state-planned railway expansion that took place during the second half of the 19th century in a recently unified country, we first study how both national and local political processes shaped the planned railway construction. Exploiting close elections, we show that a state-funded railway line is more likely to be planned for construction where the local representative is aligned with the government. Furthermore, the actual path followed by the railways was shaped by local pork-barreling, with towns supporting winning candidates more likely to see a railway crossing their territory. Finally, we explore the long-run effects of the network expansion on economic development. Employing population and economic censuses for the entire 20th century, we show that politics at a critical junction played a key role in explaning the long-run evolution of local economies.
    Keywords: Infractural Development, Political Economy
    Date: 2021

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