nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒05‒09
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. The 2020 US Presidential Election and Trump's Trade War By James Lake; Jun Nie
  2. Not-so-strategic voters. Evidence from an in situ experiment during the 2017 French presidential election By Antoinette Baujard; Isabelle Lebon
  3. Do Labels Polarise? Theory and Evidence from the Brexit Referendum By Su-Min; Alexandru
  4. The Political Consequences of Green Policies: Evidence from Italy By Italo Colantone; Livio Di Lonardo; Yotam Margalit; Marco Percoco
  5. Political Support, Cognitive Dissonance and Political Preferences By Tanja Artiga González; Francesco Capozza; Georg D. Granic
  6. Ideological Spillovers across the Atlantic? Evidence from Trump's Presidential Election By Joan Costa-i-Font; Martin Ljunge
  7. Exit polls and voter turnout in the 2017 French elections By Alberto Grillo; Eva Raiber
  8. Pacem in Terris: Are Papal Visits Good News for Human Rights? By Marek Endrich; Jerg Gutmann
  9. When Does Money Matter for Elections? By Julia Cage; Edgard Dewitte
  10. Who Benefits from Political Connections in Brazilian Municipalities By Pedro Forquesato
  11. Lobbying for Trade Liberalization and its Policy Influence By Yuting Gao
  12. Expecting Brexit By Swati Dhingra; Thomas Sampson
  13. Political stability and economic growth in developing economies: lessons from Morocco, Tunisia and Egypt ten years after the Arab Spring By Nizar Becheikh
  14. Living and perceiving a crisis: how the pandemic influenced Americans' preferences and beliefs By Guglielmo Briscese; Maddalena Grignani; Stephen Stapleton

  1. By: James Lake; Jun Nie
    Abstract: The trade war initiated by the Trump administration is the largest since the US imposed the Smoot-Hawley tariffs in the 1930s and was still raging when he left office. We analyze how the trade war impacted the 2020 US Presidential election. Our results highlight the political salience of the trade war: US trade war tariffs boosted Trump’s support but foreign retaliation hurt Trump. In particular, the pro-Trump effects of US trade war tariffs were crucial for Trump crossing the recount thresholds in Georgia and Wisconsin. These effects cross political and racial lines, suggesting the mechanism operates through the impact on local economies rather than political polarization. Even more important politically, voters abandoned Trump in counties with large expansions of health insurance coverage since the Affordable Care Act, presumably fearing the roll-back of such expansion. Absent this anti-Trump effect, Trump would have been on the precipice of re-election by winning Georgia, Arizona, Nevada, and only losing Wisconsin by a few thousand votes.
    Keywords: 2020 US Presidential election, Trump, Affordable Care Act, health insurance, trade war, tariffs, retaliation
    JEL: D72 F13 F14 I18
    Date: 2022
  2. By: Antoinette Baujard (UJM - Université Jean Monnet [Saint-Étienne]); Isabelle Lebon (CREM - Centre de recherche en économie et management - CNRS - Centre National de la Recherche Scientifique - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - UNICAEN - Université de Caen Normandie - NU - Normandie Université)
    Abstract: An experiment carried out in situ during the 2017 French presidential election provides the natural conditions in which to disentangle the motivations of expressive voting and strategic voting as determinants of voters' choice. Under the two-round plurality rule, when voters vote for a single candidate in the first round, they may wish primarily to express which is their favorite candidate, or, rather, to influence the outcome of the second-round outcome by strategic voting. These two motives may coincide or conflict. We show that insincere strategic voting is relatively low in this context since it represents less than 7% of the votes cast. When the expressive and the strategic motives conflict with each other, i.e., where expression requires giving up any influence on the outcome of the election, we show that voters are twice as likely to eschew strategic voting as to vote strategically.
    Keywords: In Situ Experiment,Strategy vs. Expression dilemma,Expression of preferences,Voting behavior,Strategic behavior,Two-round plurality vote
    Date: 2022–02
  3. By: Su-Min; Alexandru
    Abstract: Why has geographical political polarisation increased in recent times? We propose a theoretical social learning mechanism whereby policy preferences become more homogeneous within geographical units, yet increasingly heterogeneous between units over time as voters become better informed on the views of those in their vicinity. To study our model’s predictions, we exploit the delayed implementation of Brexit and its salience in the elections following the 2016 referendum. Analysing constituency-level longitudinal-data, we find that voters updated their Brexit views after observing the referendum’s local results, and acted upon their new beliefs in the following elections. We document a two percentage-point relative decrease in the (anti-Brexit) Liberal Democrat vote share in constituencies where Leave narrowly won, mirrored by an increase for the Conservatives. Our findings have implications for how group-based identities form more broadly.
    Keywords: Elections, Brexit, Local Contextual Effects, Information, Social Learning, Political Attitudes
    JEL: D71 D72
    Date: 2022–04–11
  4. By: Italo Colantone; Livio Di Lonardo; Yotam Margalit; Marco Percoco
    Abstract: For many governments enacting green policies is a priority, but these often entail substantial and uneven costs on citizens. How does the introduction of green policies affect voting? We study this question in the context of a major ban on polluting cars introduced in Milan. The policy was strongly opposed by the right-wing populist party Lega, portraying it as a “radical-chic-leftist” initiative penalizing common people. We show that owners of banned vehicles—who incurred a median loss of €3,750—were significantly more likely to vote for Lega in the subsequent elections. This electoral shift does not stem from increased environmental skepticism, but rather from the perceived unfairness of the policy and its pocketbook implications. In fact, recipients of compensation from the local government were not more likely to switch to Lega. The findings underscore that addressing the distributive consequences is key for advancing green policies that are politically sustainable.
    Keywords: environmental politics, green policies, distributional consequences, compensation mechanisms
    JEL: P10 D70 Q50
    Date: 2022
  5. By: Tanja Artiga González; Francesco Capozza; Georg D. Granic
    Abstract: Voters often express support for a candidate whose policy platforms differ from their ideal policy preferences. We argue that under these circumstance acts of expressing support can causally change voters’ policy preferences. We conceptualize our arguments in a theoretical model of policy preference changes rooted in cognitive dissonance theory. A pre-registered, online experiment with 1,200 U.S. participants confirms our main hypotheses. As predicted by cognitive dissonance theory, voters align their policy preferences with those of the supported candidate. The more important the policy issue, the sharper the change in preferences. We also find that larger pre-support policy distance and higher effort in expressing support increases the magnitude of preference changes. Our results suggest that policy preferences can change mechanically after voters express support for a candidate.
    Keywords: political participation, political support, political preferences, cognitive dissonance, online experiment
    JEL: C91 D72 D91
    Date: 2022
  6. By: Joan Costa-i-Font; Martin Ljunge
    Abstract: Ideological spillovers refer to the modification of an individual’s core beliefs after learning about other people’s beliefs. We study one specific international ideological spillover, namely, the effect of the unexpected election of a United States (US) president (Donald Trump on the 9th of November 2016), who openly questioned the so-called ‘core liberal consensuses, on European’s core political beliefs. Using a regression discontinuity design (RDD) around the election event, we show that the Trump presidential election (TPE) gave rise to a ‘backlash effect’. That is, it steered core European beliefs in two specific domains, making Europeans more favourable to globalisation and international mobility (about 10% change in the overall Likert scale range of the statement that immigrants contribute to a country). Contrasting with the hypotheses of ‘belief contagion’, we do not find evidence that TPE steered illiberal beliefs. Furthermore, TPE improved (deteriorated) the view Europeans have of their own country (the United States).
    Keywords: political shocks, belief formation, information spillovers, backlash effect, pluralistic ignorance, Trump presidential election, political beliefs, the social formation of beliefs
    JEL: P16 D72 F50 Z10
    Date: 2022
  7. By: Alberto Grillo (Aix-Marseille University, CNRS, AMSE, Marseille, France); Eva Raiber (Aix-Marseille University, CNRS, AMSE, Marseille, France)
    Abstract: Belgian and Swiss media regularly interfere during French elections by releasing exit polls before polling stations close. These foreign media profit from a law forbidding the same behavior by their French counterparts to receive large inflows of web visits from France. We exploit the unusual timing and degree of confidence with which exit polls were released in the second round of the 2017 presidential elections to investigate their effect on voter turnout. Our analysis is based on comparing turnout rates at different times on the election day, in the first and second round, and with respect to previous elections. We find a significant decrease in turnout of around 3 to 4 percentage points after the exit polls' publication which is suggestive of a causal effect, although similar trends were observed in previous elections. The effect is stronger in departments close to the Belgian border shortly after the release of the exit polls. We do not find clear evidence that either candidate benefited from the decrease in turnout, yet we cannot exclude the presence of a small underdog effect which reduced the winning margin by around 1 percentage point.
    Keywords: exit polls, voter turnout, underdog effect, bandwagon effect
    JEL: D72
    Date: 2022–04
  8. By: Marek Endrich; Jerg Gutmann
    Abstract: We analyze the effect of state visits by the Catholic pope on human rights in the host country to understand how a small theocracy like the Vatican can exert disproportionate political influence in international politics. Our theoretical model of the strategic interaction between the Catholic Church and host governments shows how the pope’s use of conditional approval and criticism incentivizes governments to refrain from human rights violations. Drawing on a new dataset of papal state visits outside Italy and a novel identification strategy, we test for the first time whether governments react by improving human rights protection in anticipation of a papal visit. Our empirical analysis offers robust evidence in support of this causal effect.
    Keywords: Catholic Church, human rights, international political economy, pope, repression, rewards, sanctions
    JEL: D74 D78 F50 K38 P16 P26 P48 Z12
    Date: 2022
  9. By: Julia Cage (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po); Edgard Dewitte (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: This paper studies electoral campaigns over the long run, through the lens of their spending. In particular, we ask whether changing media technologies and electoral environments have impacted patterns of campaign spending, and their correlation with electoral results. To do so, we build a novel exhaustive dataset on general elections in the United Kingdom from 1857 to 2017, which in­cludes information on campaign spending (itemized by expense categories), electoral outcomes and socio­demographic characteristics for 69,042 election­-constituency­-candidates. We start by providing new insights on the history of British political campaigns, documenting in particular the growing importance of advertising material (including via digital means), to the detriment of paid staff and electoral meetings. Using a saturated fixed effects model, we then show that there is a strong positive correlation between expenditures and votes, and that overall the magnitude of this relationship has strongly increased since the 1880s, peaking in the last quarter of the 20th century. We link these transformations to changes in the conduct of campaigns, and to the introduction of new information technologies. We show in particular that the expansion of local radio and broadband Internet increased the sensitivity of the electoral results to differences in campaign spending.
    Abstract: Cet article étudie les campagnes électorales sur le long terme, à travers le prisme de leurs dépenses. En particulier, nous investiguons l'impact des évolutions majeures dans les technologies de l'information et les contextes électoraux sur les niveaux, allocations et influences des dépenses des candidats. Pour ce faire, nous construisons un nouvel ensemble de données exhaustif sur les élections générales au Royaume­Uni de 1857 à 2017, qui comprend des informations sur les dépenses de campagne (détaillées par catégories de dépenses), les résultats électoraux et les caractéristiques socio­démographiques de 69042 candidats­-élections­-circonscriptions. Nous commençons par apporter de nouveaux éclairages sur l'histoire des campagnes politiques britanniques, en documentant notamment l'importance croissante du matériel publicitaire (y compris via des moyens numériques), au détriment du personnel rémunéré et des meetings électoraux. À l'aide d'un modèle à effets fixes, nous montrons ensuite qu'il existe une forte corrélation positive entre les dépenses des candidats et les résultats électoraux de ceux­ci, et que, dans l'ensemble, la magnitude de cette relation a fortement augmenté depuis les années 1880, pour atteindre un pic dans le dernier quart du XXe siècle. Nous lions ces transformations à des changements dans les stratégies de campagne et à l'introduction de nouvelles technologies de l'information. Nous montrons en particulier que l'expansion de la radio locale et de l'ADSL a augmenté la sensibilité des résultats électoraux aux différences de dépenses de campagne.
    Keywords: Electoral campaigns,Campaign spending,Elections
    Date: 2022–03–10
  10. By: Pedro Forquesato
    Abstract: A main issue in improving public sector efficiency is to understand to what extent public appointments are based on worker capability, instead of being used to reward political supporters (patronage). I contribute to a recent literature documenting patronage in public sector employment by establishing what type of workers benefit the most from political connections. Under the (empirically supported) assumption that in close elections the result of the election is as good as random, I estimate a causal forest to identify heterogeneity in the conditional average treatment effect of being affiliated to the party of the winning mayor. Contrary to previous literature, for most positions we find positive selection on education, but a negative selection on (estimated) ability. Overall, unemployed workers or low tenure employees that are newly affiliated to the winning candidate's party benefit the most from political connections, suggesting that those are used for patronage.
    Date: 2022–04
  11. By: Yuting Gao (Indiana University, Department of Economics)
    Abstract: Lobbying activities are important to the promotion of Free Trade Agreements (FTAs). I quantify the influence of lobbying on ratification probability of FTA by constructing a novel dataset containing all lobbying activities about FTAs in the United States. I setup a contest model of lobbying where heterogeneous players choose lobbying expenditures to affect the ratification probability of FTAs. I use structural gravity estimation to predict the trade profit gains from FTAs and use Maximum Likelihood estimation to back out the ratification probabilities. Results show that lobbying expenditures in manufacturing sector increase ratification probability by 21 percentage points on average, and the expected gains from lobbying are five times of the lobbying expenditures on average. Additionally, free riding lowers lobbying expenditures by 40%. These findings highlight the effects of lobbying on the formation of international agreements.
    Keywords: lobbying, free trade agreement, trade liberalization, contest model
    Date: 2022–04
  12. By: Swati Dhingra; Thomas Sampson
    Abstract: The Brexit vote precipitated the unravelling of the UK’s membership of the world’s deepest economic integration agreement. This paper reviews evidence on the realized economic effects of Brexit. The 2016 Brexit referendum changed expectations about future UK-EU relations. Studying its consequences provides new insights regarding the economic impacts of news and uncertainty shocks. Voting for Brexit had large negative effects on the UK economy between 2016 and 2019, leading to higher import and consumer prices, lower investment, and slower real wage and GDP growth. However, at the aggregate level, there was little or no trade diversion away from the EU, implying that many of the anticipated long-run effects of Brexit did not materialize before the new UK-EU trade relationship came into force in 2021.
    Keywords: Brexit, trade policy, uncertainty, exchange rates
    JEL: E22 E65 F13 F15 F16 F31 F40
    Date: 2022
  13. By: Nizar Becheikh (American University in Cairo)
    Abstract: In 2011, the Arab region has seen an unprecedented popular uprising commonly referred to as the "Arab Spring". The objective of this paper is to analyze the economic performance and institutional changes that have taken place in Egypt, Tunisia, and Morocco following the Arab Spring, and understand the interconnect between the socio-political context on the one side, and economic performance and growth on the other side, in a period marked by severe turbulences, especially in Tunisia and Egypt. The analysis covers the economic, institutional, competitiveness, business environment, infrastructural, and human capital aspects in the three countries. It is based on the author's own research and knowledge of the region, the recent emerging literature on the topic, newspaper archives, and the publicly available economic and business data and reports provided by international organizations. Our analysis shows that Tunisia, the country that has ignited the Arab Spring, was the one most hit by its aftermath on the economic, social, and institutional levels. We argue that, although pure authoritarian regimes were historically a failure in the region, "Western" democracy has so far shown several limits when applied into the Arab region context as it led to neither socio-political stability nor economic growth.
    Keywords: economic growth,institutions,political stability,Arab Spring,Egypt,Morocco,Tunisia,Political Economy
    Date: 2021–06–30
  14. By: Guglielmo Briscese; Maddalena Grignani; Stephen Stapleton
    Abstract: Crises can cause important societal changes by shifting citizens' preferences and beliefs, but how such change happens remains an open question. Following a representative sample of Americans in a longitudinal multi-wave survey throughout 2020, we find that citizens reduced trust in public institutions and became more supportive of government spending after being directly impacted by the crisis, such as when they lost a sizeable portion of their income or knew someone hospitalized with the virus. These shifts occurred very rapidly, sometimes in a matter of weeks, and persisted over time. We also record an increase in the partisan gap on the same outcomes, which can be largely explained by misperceptions about the crisis inflated by the consumption of partisan leaning news. In an experiment, we expose respondents to the same source of information and find that it successfully recalibrates perceptions, with persistent effects. We complement our analysis by employing machine learning to estimate heterogeneous treatment effects, and show that our findings are robust to several specifications and estimation strategies. In sum, both lived experiences and media inflated misperceptions can alter citizens' beliefs rapidly during a crisis.
    Date: 2022–02

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