nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒04‒11
seven papers chosen by
Eugene Beaulieu
University of Calgary

  1. The politicized pandemic: Ideological polarization and the behavioral response to COVID-19 By Grimalda, Gianluca; Murtin, Fabrice; Pipke, David; Putterman, Louis G.; Sutter, Matthias
  2. Demand for Protection: The Impact of Increased Populist Rhetoric on Trade Views By Kara Reynolds
  3. Political Economy and Structural Transformation: Democracy, Regulation and Public Investment By Monica Martinez-Bravo; Leonard Wantchekon
  4. Rally Post-Terrorism By Chen, Shuai
  5. COVID-19 and Voter Turnout in Europe and in Korea By JOE, Dong-Hee
  6. Robust Sparse Voting By Youssef Allouah; Rachid Guerraoui; L\^e-Nguy\^en Hoang; Oscar Villemaud
  7. Casualties of Trade Wars By Kara Reynolds; Benjamin H. Liebman

  1. By: Grimalda, Gianluca; Murtin, Fabrice; Pipke, David; Putterman, Louis G.; Sutter, Matthias
    Abstract: We investigate the relationship between political attitudes and prosociality in a survey of a representative sample of the U.S. population during the first summer of the COVID-19 pandemic. We find that an experimental measure of prosociality correlates positively with adherence to protective behaviors. Liberal political ideology predicts higher levels of protective behavior than conservative ideology, independently of the differences in prosociality across the two groups. Differences between liberals and conservatives are up to 4.4 times smaller in their behavior than in judging the government's crisis management. This result suggests that U.S. Americans are more polarized on ideological than behavioral grounds.
    Keywords: Polarization,Ideology,Trust in politicians,COVID-19,Prosociality,Health behavior,Worries
    JEL: D01 D72 D91 I12 I18 H11 H12
    Date: 2022
  2. By: Kara Reynolds
    Abstract: The recent backlash against globalization is often tied to the rise in populism over the past decade. This paper studies the degree to which an increase in populist rhetoric on the part of nation’s leaders can increase the support for trade protection among constituents using data from the International Social Survey Program’s (ISSP) National Identity module and the Global Populism Database between 1995 and 2013. I find evidence that support for protection does increase with the level of leftward-leaning populist rhetoric, or that which focuses on economic cleavages in society, by the country’s leaders. As one might expect, this increase in support is particularly strong among voters that identify with political parties on the left.
    Keywords: Populism, Trade Preferences
    JEL: F13
    Date: 2022
  3. By: Monica Martinez-Bravo (CEMFI, Centro de Estudios Monetarios y Financieros); Leonard Wantchekon (Princeton University)
    Abstract: A large literature in Economics has recently studied the process of structural transformation, understood as the process of reallocation of economic activities across sectors in the process of development. In this paper we review the literature that has identified the political economy factors that have facilitated on hindered this processes. In particular, we review the literature on the political distortions that can explain these differences in productivity and the prospects for transformation. We identify the limitations of this literature and suggest avenues for future research. We review the literature on political distortions and their relation to economic outcomes, including various forms of state capture and firm-political connections. We study the prevalence of each type of political distortion and its observed effects on economic outcomes, such as prices, procurement and, consequently, on unobserved outcomes such as consumer surplus and welfare. This review paper serves as the Inception paper of the Political Economy Theme of the Structural Transformation and Economic Growth (STEG) research consortium.
    Keywords: Institutions, distortions, policy, capture.
    JEL: D72 O1
    Date: 2021–10
  4. By: Chen, Shuai
    Abstract: This study examines whether the rally 'round the flag phenomenon is present in the context of terrorist attacks, and investigates the explanations for the related increase of confidence in political institutions and political approval of the incumbent's job performance. I exploit variations in terrorist occurrences and results across sub-national regions among EU countries from 2008 to 2016. I restrict the sample to only regions where at least one attack took place during the data period, in order to mitigate concerns over selectivity of terrorism in particular areas. I empirically show that both terrorism occurrence and its results (successful or failed attacks) are plausibly exogenous to the prior political and economic climate. Conducting a difference-in-differences analysis, I compare changes in political confidence and approval among individuals who were exposed to an attack in their region to those who were not. With another more sophisticated identification, I also compare such political changes after successful attacks to those after failed attacks of the same type. I find that post-terrorism, individual political confidence and support significantly increased by more than 10 percentage points, and that this political increment was 5 percentage points after successful attacks relative to failed ones. Furthermore, I explore various potential channels suggesting patriotism and civic engagement as mechanisms while rejecting perceived economic capture and political acquisition as alternative explanations. This paper first empirically analyzes the driver of the rally effect of terrorism by disentangling voluntary solidarity from economically or politically elicited solidarity.
    Keywords: Rally 'round the flag effect,Terrorism,Confidence in institutions,Political approval,Patriotism,Economic capture,Political acquisition
    JEL: D74 H12 P16
    Date: 2022
    Abstract: Even while we are suffering from the COVID-19 pandemic, cyclical events arrive mercilessly as scheduled. While some of them are held virtually (i.e., online), some cannot be completely virtualized, at least as of now, including national elections. A major risk in holding an election during a pandemic is the increase of contagion due to the gathering of people in polling stations and campaign events. The opposite direction of causality, that is, from contagion to voter turnout, is another serious, but much less recognized, risk, because voters may refrain from voting due to health concerns. This Brief reviews some of the empirical studies on the relation between the prevalence of COVID-19 and voter turnout in recent elections in Europe and Korea. It also discusses their implications for election administration during pandemic.
    Keywords: COVID-19; Voter Turnout; Europe; Korea; election; polling
    Date: 2022–02–21
  6. By: Youssef Allouah; Rachid Guerraoui; L\^e-Nguy\^en Hoang; Oscar Villemaud
    Abstract: Many modern Internet applications, like content moderation and recommendation on social media, require reviewing and score a large number of alternatives. In such a context, the voting can only be sparse, as the number of alternatives is too large for any individual to review a significant fraction of all of them. Moreover, in critical applications, malicious players might seek to hack the voting process by entering dishonest reviews or creating fake accounts. Classical voting methods are unfit for this task, as they usually (a) require each reviewer to assess all available alternatives and (b) can be easily manipulated by malicious players. This paper defines precisely the problem of robust sparse voting, highlights its underlying technical challenges, and presents Mehestan, a novel voting mechanism that solves the problem. Namely, we prove that by using Mehestan, no (malicious) voter can have more than a small parametrizable effect on each alternative's score, and we identify conditions of voters comparability under which any unanimous preferences can be recovered, even when these preferences are expressed by voters on very different scales.
    Date: 2022–02
  7. By: Kara Reynolds; Benjamin H. Liebman
    Abstract: Although trade wars have existed throughout modern history, there is little empirical evidence as to how countries choose which products to target for retaliatory tariffs. We develop a political economy model of trade policy to explain a country’s choice of product for retaliation and test the implications of this model using the choices of seven countries in two retaliation episodes: (1) the US imposition of steel and aluminum tariffs in 2018 and (2) the US passage of the Continued Dumping and Subsidy Offset Act (CDSOA) in 2000. The empirical results indicate that countries are more likely to sanction products with higher trade values and those in which they can extract terms-of-trade welfare, suggesting that trade wars move countries back to a terms-of-trade driven prisoner’s dilemma equilibrium. We find a significant amount of heterogeneity in the degree to which countries consider the political importance of producers when developing their retaliation list; for example, only the EU and Canada targeted products produced in politically important locales in 2018.
    Keywords: retaliation, trade wars, political economy of trade protection
    JEL: F13
    Date: 2022

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