nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒05‒16
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Income Contingency and the Electorate's Support for Tuition By Philipp Lergetporer; Ludger Woessmann
  2. Does Demography Determine Democratic Attitudes? By Rainer Franz Kotschy; Uwe Sunde
  3. Party’s rating and electoral forecasting: the case of French Presidential in 2022 By François Facchini
  4. Becoming neighbors with refugees and voting for the far-right? The impact of refugee inflows at the small-scale level By Fremerey, Melinda; Hörnig, Lukas; Schaffner, Sandra
  5. The Effects of Institutions on the Relationship between Politics and Trade By Samuel HARDWICK; Shiro ARMSTRONG
  6. The crooked timber that bore fruit: Peruvian fascist intellectuals of the 1930s and the echoes of their influence nowadays By César Castillo-García
  7. Research of citizens' behavior in a political campaign in searching for and monitoring political advertising in The Slovak Republic By Marcel Lincényi; Jaroslav Čársky
  8. How Economic, Political and Institutional Factors Influence the Choice of Exchange Rate Regimes? New Evidence from Selected Countries of the MENA Region By Maraoui, Najia; Amor, Thouraya Hadj; Khefacha, Islem; Rault, Christophe
  9. Can Leaders Persuade? Examining Movement in Immigration Beliefs By Hassan Afrouzi; Carolina Arteaga; Emily Weisburst
  10. Collective Learning and Distributive Uncertainty By Ginzburg, Boris
  11. Coalition formation versus free riding in rent-seeking contests (title of the paper) By Lukas Block
  12. Political economy of secession: Lessons from the early years of the Irish Free State By Kenny, Sean; McLaughlin, Eoin

  1. By: Philipp Lergetporer; Ludger Woessmann
    Abstract: We show that the electorate’s preferences for using tuition to finance higher education strongly depend on the design of the payment scheme. In representative surveys of the German electorate (N>18,000), experimentally replacing regular upfront by deferred income-contingent payments increases public support for tuition by 18 percentage points. The treatment turns a plurality opposed to tuition into a strong majority of 62 percent in favor. Additional experiments reveal that the treatment effect similarly shows when framed as loan repayments, when answers carry political consequences, and in a survey of adolescents. Reduced fairness concerns and improved student situations act as strong mediators.
    Keywords: tuition, higher education finance, income-contingent loans, voting
    JEL: H52 I22 D72
    Date: 2022
  2. By: Rainer Franz Kotschy; Uwe Sunde
    Abstract: This paper presents new evidence on how demography affects attitudes toward democracy and policy preferences. The empirical analysis disentangles age effects from cohort effects and separates their role from economic and political factors that shape political preferences in a given period, using survey responses for more than 200,000 individual observations from 90 countries. The results show that the support for democracy increases with age and, at the same time, depends on cohort-specific factors that are related to past experiences with democracy and socioeconomic status. The findings shed new light on the role of demography in terms of life-cycle and cohort effects for political attitudes.
    Keywords: demographic change, stability of democracy, modernization hypothesis
    JEL: D72 O17 O43 P48
    Date: 2022
  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: Fremerey, Melinda; Hörnig, Lukas; Schaffner, Sandra
    Abstract: We investigate the effect of the refugee inflow between 2014 and 2017 on voting for the far-right party Alternative for Germany (AfD) in the national parliamentary election in 2017 in Germany. Drawing on unique small-scale data enables us to distinguish between the contact theory, captured by the inflow of refugees into the immediate neighborhood (1km x 1km), and county-level (NUTS 3) effects, which might pick-up other, broader factors such as media coverage or specific county-level policies. We alleviate concerns of an endogenous refugee allocation by a shift-share instrument. Our results indicate that the contact theory is valid in urban West Germany, i. e., higher refugee inflows in West German urban neighborhoods decrease the shares of far-right voting, while there is no robust evidence of a relationship between refugee inflow and far-right vote shares in East Germany and rural West Germany.
    Keywords: voting behavior,neighborhood characteristics,refugees,immigration
    JEL: D72 J15 R23
    Date: 2022
  5. By: Samuel HARDWICK; Shiro ARMSTRONG
    Abstract: This paper examines the relationship between trade and the ups and downs of political relations between countries, and how institutional arrangements might affect that relationship. An index of ‘political distance’ between countries is constructed using high-frequency events data. After showing that monthly data, rather than quarterly or annual data, better reflects the time horizon of political shocks to trade, we estimate a set of structural gravity models using monthly panel data. We find that WTO membership, democratic political systems and strong domestic governance institutions are associated with a reduced impact of political vagaries on trade between countries. Joint WTO membership is associated with a weaker relationship between politics and trade, including for non-democratic trading partners. This WTO effect is stronger when recent years (2017 to 2021) characterized by global trade uncertainty are excluded from the sample.
    Date: 2022–04
  6. By: César Castillo-García (Department of Economics, New School for Social Research)
    Abstract: In contrast to European and other Latin American experiences, researchers understand Peruvian fascism as a simple mimicry (a political alternative of the 1930s that regimes and movements look to replicate) or the product of transnational propaganda looking for public support to Mussolini and Franco. To avoid this reductionism, this paper proposes a double-sided definition based on Vajda (1976) and Paxton (1998) to understand fascism as a movement and an ideology. That enables us to identify the Peruvian fascism by studying the actions and ideas of three intellectuals who sympathized with it: José de la Riva-Agüero, Raúl Ferrero Rebagliatti, and Víctor Andrés Belaúnde. I argue that their discourse is a symbiosis between Peruvian authoritarian political tradition and European fascisms. Even though these fascist intellectuals did not create a strong political movement, they incepted political concepts regarding social policy, the government, the nation, the relations between State and the church, and anti-Marxism in public discussion. As a result, they passed on elements of the political repertory supported by the current new right-wing populism in Peru.
    Date: 2022–04
  7. By: Marcel Lincényi (Alexander Dubček University of Trenčín); Jaroslav Čársky (Alexander Dubček University of Trenčín)
    Abstract: The research study thematically focuses on the behaviour of citizens of the Slovak Republic in the campaign for active search and monitoring of political advertising. The authors tried to find out the degree of effectiveness of the use of marketing tools and forms of political advertising. Among other things, the research showed that most of the interviewed Slovaks are actively interested in political advertising in the election campaign. Research has shown that the most effective political advertising is in the audiovisual and online media and, conversely, the least effective in the print media, pre-election leaflets and billboards.
    Keywords: political advertising,marketing tools,marketing,public opinion,politics,Slovak Republic
    Date: 2021–03–30
  8. By: Maraoui, Najia (Monastir University); Amor, Thouraya Hadj (Monastir University); Khefacha, Islem (Monastir University); Rault, Christophe (University of Orléans)
    Abstract: In this paper, we investigate how economic, political and institutional factors affect the choice of exchange rate regimes, using data on eight MENA (Middle East and North Africa) countries over the 1984-2016 period. Specifically, we run random-effects ordered probit regressions of the likelihood of exchange rate regimes on potential determinants of exchange rate regimes. Three important findings emerge from the analysis. i) Political and institutional factors play an important role in determining the exchange rate regime in MENA countries: a democratic political regime and a low level of corruption increases the probability to opt for a fixed regime. While, strong governments, political stability such as less internal conflicts and more government stability, more law and order enforcement and left-wing Government decreases the probability to opt for a fixed regime. ii) Bureaucracy, independent central banks, elections, terms of trade as well as the monetary independence have no effect on the choice of exchange rate regimes. iii) Financial development is not a robust determinant of the choice of exchange rate regimes. Our results still hold when considering alternative specifications and have important implications for policy makers in MENA countries.
    Keywords: exchange rate regimes, country risk, political and institutional factors, panel data, ordered probit regression, MENA
    JEL: C23 F33 F55 H80
    Date: 2022–04
  9. By: Hassan Afrouzi; Carolina Arteaga; Emily Weisburst
    Abstract: Can political leaders change constituents’ beliefs? If so, is it rhetoric, identity, or the interaction of the two that matters? We construct a large-scale experiment where participants are exposed to anti-immigrant and pro-immigrant speeches from both Presidents Obama and Trump. We benchmark these treatments to versions recorded by an actor to control for speech messages. Our findings show that both leader messages and sources matter. Holding messages fixed, leaders persuade when participants hear unanticipated messages from sources perceived as reliable, consistent with a Bayesian framework. This evidence supports the hypothesis that individuals will “follow their leader” to new policy positions.
    Keywords: leaders, political beliefs, partisan identity, polarization, immigration
    JEL: D83 C90
    Date: 2022
  10. By: Ginzburg, Boris
    Abstract: I study a committee that is considering a costly project whose distributive consequences are unknown. The committee is divided into two factions. Support of both factions is required for the project to be approved. By delaying approval, the committee can gradually learn which faction benefits from the project. I show that a project that gives a lower payoff to everyone is more likely to be approved than a more socially efficient project. Furthermore, the equilibrium amount of learning is excessive, and a deadline on adopting the project is socially optimal in a wide range of settings.
    Keywords: voting, learning, reform adoption, collective experimentation, distributive uncertainty
    JEL: D72 D83
    Date: 2022–03–09
  11. By: Lukas Block (Paderborn University)
    Abstract: We study lobby group formation in a two-stage model where the players first form lobby groups that then engage in a rent-seeking contest to influence the legislator. However, the outcome of the contest affects all players according to the ideological distance between the implemented policy and the players' preferences. The players can either lobby by themselves, form a coalition of lobbyists or free ride. We find that free coalition formation is reasonable if either players with moderate preferences face lobby groups with extreme preferences, or if there are two opposing coalitions with an equal number of members. Otherwise, there are always free riders among the players. (abstract of the paper)
    Keywords: Group formation, Rent-seeking, Free riding
    JEL: C71 D72 D74
    Date: 2022–04
  12. By: Kenny, Sean; McLaughlin, Eoin
    Abstract: We apply insights from the political economy of secession to analyse the early years of the Irish Free State (IFS). The IFS was fortuitous in a debt settlement that enabled it to begin its existence debt free, whilst also receiving financial assistance to quell civil unrest. Yet the IFS was unable to continue to provide the welfare spending inherited from the old regime thereby exacerbating inequality. The IFS also maintained a sterling peg, which led to a milder experience of the depression era. Ultimately however, the benefits of independence were not forthcoming in the early years of the IFS.
    Keywords: Ireland,economic history,independence,secession
    JEL: N14 N44
    Date: 2022

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