nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒04‒25
ten papers chosen by
Eugene Beaulieu
University of Calgary

  1. The Impact of Campaign Finance Rules on Candidate Selection and Electoral Outcomes: Evidence from France By Nikolaj Broberg; Vincent Pons; Clemence Tricaud
  2. The political economy of financing climate policy – Evidence from the solar PV subsidy programs By De Groote, Olivier; Gautier, Axel; Verboven, Frank
  3. Party’s rating and electoral forecasting: the case of French Presidential in 2022 By François Facchini
  4. Political Activists as Free-Riders: Evidence from a Natural Field Experiment By Anselm Hager; Lukas Hensel; Johannes Hermle; Christopher Roth
  5. Hierarchical political power and the value of cash holdings By Jia Liu; Oleksandr Talavera; Shuxing Yin; Mao Zhang
  6. Registering Returning Citizens to Vote By Doleac, Jennifer; Eckhouse, Laurel; Foster-Moore, Eric; Harris, Allison; Walker, Hannah; White, Ariel
  7. Self-Interest in Public Service: Evidence from School Board Elections By Stephen B. Billings; Hugh Macartney; Geunyong Park; John D. Singleton
  8. Bridging state and nonprofit: Differentiated embeddedness of Chinese political elites in charitable foundations By Ma, Ji
  9. Democratization, Elite Capture and Economic Development By Andrew D. Foster; Mark R. Rosenzweig
  10. Political motives of excess leverage in state-owned firms By Oleksandr Talavera; Shuxing Yin; Mao Zhang

  1. By: Nikolaj Broberg; Vincent Pons; Clemence Tricaud
    Abstract: This paper investigates the effects of campaign finance rules on electoral outcomes. In French departmental and municipal elections, candidates competing in districts above 9,000 inhabitants face spending limits and are eligible for public reimbursement if they obtain more than five percent of the votes. Using an RDD around the population threshold, we find that these rules increase competitiveness and benefit the runner-up of the previous race as well as new candidates, in departmental elections, while leaving the polarization and representativeness of the results unaffected. Incumbents are less likely to get reelected because they are less likely to run and obtain a lower vote share, conditional on running. These results appear to be driven by the reimbursement of campaign expenditures, not spending limits. We do not find such effects in municipal elections, which we attribute to the use of a proportional list system instead of plurality voting.
    JEL: D72 K16 P16
    Date: 2022–02
  2. By: De Groote, Olivier; Gautier, Axel; Verboven, Frank
    Abstract: We analyze the political impact of a generous solar panel subsidization program. Subsidies far exceeded their social benefit and were partly financed by new taxes to adopters and by electricity surcharges to all consumers. We use local panel data from Belgium and find a decrease in votes for government parties in municipalities with high adoption rates. This shows that the voters’ punishment for a costly policy exceeded a potential reward by adopters who received the generous subsidies. Further analysis indicates that punishment mainly comes from non-adopters, who change their vote towards anti-establishment parties.
    Keywords: financing climate policy; photovoltaic systems; retrospective voting, buying votes
    JEL: C23 D72 H23 Q48
    Date: 2022–04–07
  3. By: François Facchini (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article is an update and extension of the electoral forecasting model of Lafay, Facchini and Auberger (2007) for the French presidential elections of 2022. Lafay and al. argued that the Socialist Party's rating was a good way to predict the vote split in the second round of elections between the left and the right. Socialist Pary's rating, nonetheless, cannot explain Emmanuel Macron's victory in the 2017 elections. This does not mean that party ratings are not a good predictor of the 2022 elections, if a number of adjustments are made. Based on party ratings the indicators proposed in this article argue that the scores in the first round of the April 2022 elections should be as follows: 30.5% for Emmanuel Macron, 22.7% for Valérie Pécresse (all the candidates of right wing), 18,7% for Marine Le Pen and 24.7% for the left and far left. The second round Macron - Pécresse is favorable to Emmanuel Macron, but depends fundamentally on the vote transfers between the left and the outgoing President. If the left abstains and Marine Le Pen's election rallies to the candidate of the right (LR), then Valérie Pécresse can win with a score of 51% against 49%.
    Date: 2022–03–23
  4. By: Anselm Hager (Humboldt University); Lukas Hensel (Guanghua School of Management); Johannes Hermle (University of California, Berkeley and IZA); Christopher Roth (University of Cologne, ECONtribute, briq, CESifo, Cage)
    Abstract: How does a citizen’s decision to participate in political activism depend on the partic-ipation of others? We conduct a nationwide natural field experiment in collaboration with a major European party during a recent national election. In a party survey, we randomly provide canvassers with true information about the canvassing intentions of their peers. When learning that more peers participate in canvassing than previously believed, canvassers significantly reduce both their canvassing intentions and behavior. An additional survey among party supporters underscores the importance of free-riding motives and reveals that there is strong heterogeneity in motives underlying supporters’ behavioral responses.
    Keywords: Political activism, natural field experiment, strategic behavior, beliefs, motives
    JEL: D8 P16
    Date: 2022–04
  5. By: Jia Liu (University of Portsmouth); Oleksandr Talavera (University of Birmingham); Shuxing Yin (University of Sheffield); Mao Zhang (University of St Andrews)
    Abstract: This study examines the relation between hierarchical political power and the value of cash holdings. To model the power structure, we utilize the hierarchical civil service system to distinguish between the holders of high- and low-level political power. We find that directors with high-level political power increase the market value of cash, whereas those with low-level political power have no impact. The effects are stronger in regions where politicians are subject to greater political pressures and in firms experiencing acute agency conflicts. The findings suggest that the multi-faceted nature of political power is of great significance to corporate wealth.
    Keywords: Political power; Political capital; High- and low-ranking political directors; Board heterogeneity; Value of cash holdings
    JEL: G30 G32 P16
    Date: 2022–03
  6. By: Doleac, Jennifer (Texas A&M University); Eckhouse, Laurel (Metropolitan State University of Denver); Foster-Moore, Eric (Metropolitan State University of Denver); Harris, Allison (Yale University); Walker, Hannah (University of Texas at Austin); White, Ariel (MIT)
    Abstract: Millions of people in the US are eligible to vote despite past criminal convictions, but their voter participation rates are extraordinarily low. In this study, we report the results of a series of randomized controlled trials (RCTs) of mail-based interventions aimed at encouraging people with criminal records to register to vote in North Carolina. We use a novel approach to identify and contact this population, using a combination of administrative data and data from a commercial vendor. In our main experiment, conducted in the fall of 2020, we find that, on average, our mailers increased voter registration by 0.8 percentage points (12%), and voter turnout in the general election by 0.5 percentage points (11%). By contrast, our treatment has no effect on a comparison group of people without criminal records who live in the same neighborhoods. We find suggestive evidence that treatment effects vary across demographic groups and with the content of mailers. For instance, effects were smaller for Black recipients, and smaller when extra "civil rights framing"cwas added to the mailer text. Overall, we demonstrate that it is possible to identify, contact, and mobilize a marginalized group that is not effectively targeted by existing outreach efforts. Our results speak to how organizations can increase voter registration and turnout among people with criminal records, without necessarily changing laws to broaden eligibility.
    Keywords: criminal justice reform, civic engagement, voting, crime
    JEL: K42 K16
    Date: 2022–02
  7. By: Stephen B. Billings; Hugh Macartney; Geunyong Park; John D. Singleton
    Abstract: In this paper, we show that the election of a new school board member causes home values in their neighborhood to rise. This increase is identified using narrowly-decided contests and is driven by non-Democratic members, whose neighborhoods appreciate about 4% on average relative to those of losing candidates. We find that student test scores in the neighborhood public schools of non-Democratic winners also relatively increase, but this effect is driven by changing student composition, including via the manipulation of attendance zones, rather than improvements in school quality (as measured by test score value-added). Notably, we detect no differential changes when comparing neighborhood or scholastic outcomes between winning and losing Democratic school board candidates. These results suggest that partisan affiliation is correlated with private motivations for seeking public office.
    JEL: D72 H75 I24
    Date: 2022–02
  8. By: Ma, Ji (The University of Texas at Austin)
    Abstract: How are political elites embedded in both civil and political domains? I studied 246 Chinese political elites who also served on nonprofit foundations' boards from 2011 to 2015 and conceptualized a framework for understanding the state-nonprofit relationship before 2015. The political elites can build horizontal connections with foundations, helping the party-state reach nonprofit actors. They can also build vertical connections with political groups, helping foundations access political resources. The dual-role elites' connectedness with foundations and in the polity varies by their primary positions in the political system. An effective communication between the state and nonprofit actors needs elites to have strong connections in both civil and political domains, but the situation in China is far from ideal---those embedded in foundations are disconnected in polity, and those connected in polity are marginalized in foundations.
    Date: 2022–03–01
  9. By: Andrew D. Foster; Mark R. Rosenzweig
    Abstract: We show using a theoretical framework that embeds a voting model in a general-equilibrium model of a rural economy with two interest groups defined by land ownership that the effects of democratization—a shift from control of public resources by the landed elite to a democratic regime with universal suffrage—on the portfolio of public goods is heterogeneous, depending the population landless. In accord with the model and empirical findings from micro data on the differing material interests of the two land classes, we find, based on 30-year panel data describing the democratization of Indian villages, that democratization in villages with a larger landless population share shifted resources away from public irrigation, secondary schools, and electrification and towards programs that increase employment. When the landed farmers have a large population share, public resources were shifted towards irrigation, secondary schools and electrification and away from employment programs.
    JEL: D72 H41 O1 O13 O40
    Date: 2022–02
  10. By: Oleksandr Talavera (University of Birmingham); Shuxing Yin (University of Sheffield); Mao Zhang (University of St Andrews)
    Abstract: This study explores the political motives of excess leverage in state-owned firms. To measure the excess leverage, we follow Gao et al. (2013) to estimate how state firms would behave if they were non-state firms. Using a panel of Chinese firms, we find that, on average, state firms take excess leverage (i.e., overleveraged) compared to otherwise similar non-state firms. Examining the determinants of such leverage difference, our results suggest that the excess leverage of state-owned firms positively relates to regional unemployment pressure and economic pressure faced by municipal politicians. Such effects are more pronounced in local state-owned firms. Our paper provides evidence that government control leads to significant political influence over the real decisions of firms.
    Keywords: excess leverage, state-owned firms, political motives, unemployment and economic pressure
    JEL: G30 G32 G34
    Date: 2022–03

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