nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒06‒13
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Morals as Luxury Goods and Political Polarization By Benjamin Enke; Mattias Polborn; Alex Wu
  2. Disastrous Discretion - Ambiguous Decision Situations Foster Political Favoritism By Stephan A. Schneider; Sven Kunze
  3. Television Market Size and Political Accountability in the US House of Representatives By Balles, Patrick; Matter, Ulrich; Stutzer, Alois
  4. On Two Voting systems that combine approval and preferences: Fallback Voting and Preference Approval Voting By Eric Kamwa
  5. Economic Interests, Worldviews and Identities: Theory and Evidence on Ideational Politics By Elliott Ash; Sharun Mukand; Dani Rodrik
  6. The Influence of Politicians’ Sex on Political Budget Cycles: An Empirical Analysis of Spanish Municipalities By Israel Garcia; Bernd Hayo
  7. Social unacceptability for simple voting procedures By Ahmad Awde; Mostapha Diss; Eric Kamwa; Julien Yves Rolland; Abdelmonaim Tlidi
  8. The Political Economy of Plant Biotechnology: Farmers, Media and Opinion in India By Bharat Ramaswami; Milind Murugkar; N. Lalitha; Carl E. Pray
  9. Predicting Political Ideology from Digital Footprints By Michael Kitchener; Nandini Anantharama; Simon D. Angus; Paul A. Raschky
  10. The Political Economy of the Oil and Gas Sector in Emerging and Developing Countries By Simplice A. Asongu; Gerald Emmanuel Arhin; Abdul-Gafaru Abdulai; Justice Bawole
  11. Reward or Punishment? The Distribution of Life-Cycle Returns to Political Office By Dahlgaard, Jens Olav; Kristensen, Nicolai; Larsen, Frederik Kjøller
  12. Who Protests, What Do They Protest, and Why? By Erica Chenoweth; Barton H. Hamilton; Hedwig Lee; Nicholas W. Papageorge; Stephen P. Roll; Matthew V. Zahn
  13. The Chronology of Brexit and UK Monetary Policy By Martin Geiger; Jochen Güntner

  1. By: Benjamin Enke; Mattias Polborn; Alex Wu
    Abstract: This paper develops a theory of political behavior in which moral values are a luxury good: the relative weight that voters place on moral rather than material considerations increases in income. This idea both generates new testable implications and ties together a broad set of empirical regularities about political polarization in the U.S. The model predicts (i) the emergence of economically left-wing elites; (ii) that more rich than poor people vote against their material interests; (iii) that within-party heterogeneity is larger among Democrats than Republicans; and (iv) widely-discussed realignment patterns: rich moral liberals who swing Democrat, and poor moral conservatives who swing Republican. Assuming that parties set policies by aggregating their supporters’ preferences, the model also predicts increasing social party polarization over time, such that poor moral conservatives swing Republican even though their relative incomes decreased. We relate these predictions to known stylized facts, and test our new predictions empirically.
    JEL: D03 D72
    Date: 2022–04
  2. By: Stephan A. Schneider; Sven Kunze
    Abstract: Allocation decisions are vulnerable to political influence, but it is unclear in which situations politicians use their discretionary power in a partisan manner. We analyze the allocation of presidential disaster declarations in the United States, exploiting the spatiotemporal randomness of hurricane strikes from 1965–2018 along with changes in political alignment. We show that decisions are not biased when disasters are unambiguously strong or weak. Only in ambiguous situations, after medium-intensity hurricanes, do areas governed by presidents’ co-partisans receive up to twice as many declarations. This political bias explains 10 percent of total relief spending, totaling USD 450 million per year.
    Keywords: disaster relief, distributive politics, hurricanes, natural disasters, nonlinearity, party alignment, political favouritism, political economy, situational ambiguity
    JEL: D72 H30 H84 P16 Q54
    Date: 2022
  3. By: Balles, Patrick (University of Basel); Matter, Ulrich (University of Basel); Stutzer, Alois (University of Basel)
    Abstract: This paper examines the role of local TV market structure in US congressional politics, exploiting variation in the overlaps of political markets and TV markets. Local TV stations are hypothesized to report relatively more per US House representative in less populous markets (where the number of House districts covered is smaller), leading to better informed voters and more accountable representatives. We find that smaller markets are indeed associated with (i) higher coverage of representatives, and (ii) a higher level of voters' knowledge about their representatives. However, (iii) representatives of smaller and more congruent markets are only more likely to decide aligned with their constituents' policy preferences in highly competitive districts. This evidence suggests that local political news coverage on TV serves as a complement rather than a substitute in holding members of the US Congress accountable.
    Keywords: political accountability, market congruence, media coverage, TV markets, legislative voting, US Congress, voter knowledge, campaign finance
    JEL: D72 L82
    Date: 2022–05
  4. By: Eric Kamwa (LC2S - Laboratoire caribéen de sciences sociales - UA - Université des Antilles - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Preference Approval Voting (PAV) and Fallback Voting (FV) are two voting rules that combine approval and preferences. They were first introduced by Brams and Sanver (2009). Under PAV, voters rank the candidates and indicate which ones they approve of; with FV, they rank only those candidates they approve of. In this paper, we supplement the work of Brams and Sanver (2009) by exploring some other normative properties of FV and PAV. We show among other that FV and PAV satisfy and fail the same criteria; they possess two properties that AV does not: Pareto optimality and the fact of always electing the absolute Condorcet winner when he exists. For threecandidate elections and a very large electorate, we compare FV and PAV to other voting rules by evaluating the probabilities of satisfying the Condorcet majority criteria. We find that PAV performs better than the Borda rule. We also find that in terms of agreement, FV and PAV are closer to scoring rules than to Approval voting. Our analysis is performed under the Impartial Anonymous Culture assumption.
    Keywords: Approval Voting,Rankings,Condorcet,Properties,Impartial and Anonymous Culture
    Date: 2022–03–20
  5. By: Elliott Ash; Sharun Mukand; Dani Rodrik
    Abstract: We distinguish between ideational and interest-based appeals to voters on the supply side of politics, and integrate the Keynes-Hayek perspective on the importance of ideas with the Stigler-Becker approach emphasizing vested interests. In our model, political entrepreneurs discover identity and worldview “memes” (narratives, cues, frames) that shift beliefs about voters’ identities or their views of how the world works. We identify a complementarity between worldview politics and identity politics and illustrate how they may reinforce each other. Furthermore, we show how adverse economic shocks may result in a greater incidence of ideational politics. We use these results to analyze data on 60,000 televised political ads in U.S. localities over the years 2000 through 2018. Our empirical work quantifies ideational politics and provides support for the key model implications, including the impact of higher inequality on both identity and worldview politics.
    Keywords: economic interests, identity, narratives, ideational politics
    JEL: D72 P16
    Date: 2021
  6. By: Israel Garcia (University of Marburg); Bernd Hayo (University of Marburg)
    Abstract: Employing a sample of Spanish municipalities from the Madrid region for the period 2010−2019, we study the influence of a politician’s sex on political budget cycles (PBCs). The Madrid region is subject to a homogenous set of budget rules, which allows consistently categorising budget expenditure items as either ‘mandatory’ or ‘non-mandatory’ public services. Differentiating between four sizes of municipalities, the gender influence is studied along two dimensions: mayor’s sex and share of women in government. Except for the largest municipalities, we discover significant evidence of PBC-related changes, ranging between 3% and 7% of average municipal budgets, in mandatory spending for both sexes. On average, male and female mayors tend to increase pre-electoral mandatory spending, even when the government is gender balanced. However, in the (rare) case of female-dominated governments, mayors do not appear to engage in PBC-related activities, and may even decrease mandatory spending, before an election.
    Keywords: Gender, Political budget cycles, Signalling mechanism, Local politicians, Fiscal policy, Spanish municipalities, Madrid region
    JEL: C23 E62 D72 H72 J16
    Date: 2022
  7. By: Ahmad Awde (FEMTO-ST - Franche-Comté Électronique Mécanique, Thermique et Optique - Sciences et Technologies (UMR 6174) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE] - ENSMM - Ecole Nationale Supérieure de Mécanique et des Microtechniques - CNRS - Centre National de la Recherche Scientifique - UTBM - Université de Technologie de Belfort-Montbeliard); Mostapha Diss (CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]); Eric Kamwa (LC2S - Laboratoire caribéen de sciences sociales - UA - Université des Antilles - CNRS - Centre National de la Recherche Scientifique); Julien Yves Rolland (LMB - Laboratoire de Mathématiques de Besançon (UMR 6623) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE] - CNRS - Centre National de la Recherche Scientifique - UB - Université de Bourgogne); Abdelmonaim Tlidi (MAE2D - Laboratory MAE2D, University of Abdelmalek Essaadi)
    Abstract: A candidate is said to be socially acceptable if the number of voters who rank her among the most preferred half of the candidates is at least as large as the number of voters who rank her among the least preferred half (Mahajne and Volij, 2018). For every voting profile, there always exists at least one socially acceptable candidate. This candidate may not be elected by some well-known voting rules, which may even lead in some cases to the election of a socially unacceptable candidate, the latter being a candidate such that the number of voters who rank her among the most preferred half of the candidates is strictly less than the number of voters who rank her among the least preferred half. In this paper, our contribution is twofold. First, since the existence of a socially unacceptable candidate is not always guaranteed, we determine the probabilities of the existence of such a candidate. Then, we evaluate how often the Plurality rule, the Negative Plurality rule, the Borda rule and their two-round versions can elect a socially unacceptable candidate. We perform our calculations under both the Impartial Culture and the Impartial Anonymous Culture,
    Keywords: Voting,Social Unacceptability,Scoring Rules,Probability
    Date: 2022–03–05
  8. By: Bharat Ramaswami (Ashoka University); Milind Murugkar (Pragati Abhiyan, Nashik); N. Lalitha (Gujarat Institute of Development Research); Carl E. Pray (Department of Agricultural, Food and Resource Economics, Rutgers University)
    Abstract: Previous work has concluded that farmers (in developing countries) have limited voice in influencing agricultural research. However, in electoral democracies, farmers are not without political influence. The tension between these understandings is examined here by investigating the salience of farmers in the political economy of GM crop approvals in India. The paper assembles a unique data set that consists of media reports about GM crops in English, Gujarati and Marathi for the period 2010 to 2013. The media reports are coded for their content and opinion. The idea is that if firms locate themselves to be close to consumer preferences, then observing the product type (media reports) can be informative about consumer preferences. We find that it is urban interests that primarily shape the GM debate even though it has no interest in the pragmatic concerns of farmers. The immediate economic interest of farmers is emphasized more in the rural press which, however, carries limited debate on GM crops. The evidence is consistent with the notion that while farmers may not be important in shaping policy, they have the clout to defeat it. In particular, they are likely to oppose corporate control that affects their material interests.
    Date: 2022–02–24
  9. By: Michael Kitchener (SoDa Laboratories, Monash University); Nandini Anantharama (SoDa Laboratories, Monash University); Simon D. Angus (Department of Economics and SoDa Laboratories, Monash University); Paul A. Raschky (Department of Economics and SoDa Laboratories, Monash University)
    Abstract: This paper proposes a new method to predict individual political ideology from digital footprints on one of the world's largest online discussion forum. We compiled a unique data set from the online discussion forum reddit that contains information on the political ideology of around 91,000 users as well as records of their comment frequency and the comments' text corpus in over 190,000 different subforums of interest. Applying a set of statistical learning approaches, we show that information about activity in non-political discussion forums alone, can very accurately predict a user's political ideology. Depending on the model, we are able to predict the economic dimension of ideology with an accuracy of up to 90.63\% and the social dimension with an accuracy of up to 83.09\%. In comparison, using the textual features from actual comments does not improve predictive accuracy. Our paper highlights the importance of revealed digital behaviour to complement stated preferences from digital communication when analysing human preferences and behaviour using online data.
    Keywords: data mining, political ideolog, digital footprint, Reddit
    JEL: A10
    Date: 2022–06
  10. By: Simplice A. Asongu (Yaounde, Cameroon); Gerald Emmanuel Arhin (University of Manchester, UK); Abdul-Gafaru Abdulai (University of Ghana, Business School, Legon.); Justice Bawole (University of Ghana Business School, Legon)
    Abstract: This chapter surveys the literature on the political-economy of oil and gas governance by focusing on the exploration, production and revenue sharing in the hydrocarbon sector. Emphasis is placed on the extent to which oil and gas governance is shaped by geopolitics and interparty-party politics. We argue that the interests and ideas relative to the power of key stakeholders, such as political actors, multinational companies, the citizens and the state are relevant to the understanding of the form and shape of the emergence and performance of the institutions governing the oil and gas sectors of emerging and developing countries.
    Keywords: Political economy, oil and gas; development economies; inter-party politics; geopolitics; institutions; interests; ideas; power
    JEL: D72 H23 H77 P16 P48
    Date: 2022–01
  11. By: Dahlgaard, Jens Olav (Copenhagen Business School); Kristensen, Nicolai (VIVE - The Danish Centre for Applied Social Science); Larsen, Frederik Kjøller (University of Copenhagen)
    Abstract: How political office is remunerated will affect who decides to engage in politics. Even if average returns to office are positive, as unilaterally found in the literature, some office holders' returns are likely zero or negative. The timing of returns to office are crucial too, as politicians often have lucrative pensions and other types of delayed compensation. Utilizing data for all parliament candidates in Denmark from 1994 to 2015 linked to administrative data, we causally estimate the returns to office for first-time runners to parliament. We find large short-term average returns to office, corresponding to a 112% income increase. Quantile Difference-in-Difference estimates reveal considerable heterogeneity, but, strikingly, all MPs experience an economic gain during their first term. The distribution of life-cycle returns, computed as the net present value, reveals that candidates from the top quarter of the pre-office income distribution have no long-term economic gain from winning.
    Keywords: returns to office, political careers, proportional representation
    JEL: J33 J4
    Date: 2022–05
  12. By: Erica Chenoweth; Barton H. Hamilton; Hedwig Lee; Nicholas W. Papageorge; Stephen P. Roll; Matthew V. Zahn
    Abstract: We examine individuals’ decisions to attend protests during the summer of 2020. Our analysis examines two simultaneous movements: Black Lives Matter along with protests calling for less stringent public health measures to combat the COVID-19 (e.g., for swifter reopening of businesses). Our analysis is made possible by a unique staggered panel data set that is representative of the U.S., which was initially constructed to study COVID-19 and contains a host of sociodemographic, health, and economic variables. A wave of data collected in the summer of 2020 includes explicit variables on protest attendance, political views, and support for different movements. We link this data set to several others to explore factors that could influence attendance decisions, such as local histories of police violence and time-varying infection rates. We find that protest participants are a diverse set of individuals who are representative of the U.S. population—even more so than are voters on some demographic dimensions. We also provide evidence suggesting that protesting appears to be rational, i.e., a deliberate and intentional choice to be civically engaged that is responsive to costs and issue salience; one that, for some individuals, functions as an alternative to voting. Finally, we provide novel evidence of overlap: attending a Black Lives Matter protest increases the likelihood of attending a protest calling for fewer public health restrictions. Together, our findings challenge claims by partisan pundits that protests are driven by extremists with fringe views or that the 2020 movements were diametrically opposed along partisan identity lines. The novelty of our findings suggests that protest is a form of civic engagement that can draw attention to societal preferences broadly held by a kind of silent majority, one whose views might otherwise remain obscured by dominant narratives insisting we are hopelessly polarized.
    JEL: H00 H8 Z10
    Date: 2022–04
  13. By: Martin Geiger (Liechtenstein Institute); Jochen Güntner
    Abstract: The outcome of the referendum on the UK’s membership of the European Union in June 2016 was largely unanticipated by politicians and pundits alike. Even after the “Leave†vote, the uncertainty surrounding the withdrawal process might have affected the UK economy. We draw on an official list of political events published by the House of Commons Library and daily data on UK stock prices, exchange rates, and economic policy uncertainty to construct a novel instrument for Brexit shocks. Including a monthly aggregate of this time series into a vector-autoregressive model of the UK economy, we find that Brexit shocks were quantitatively important drivers of the business cycle in the aftermath of the referendum that lowered gross domestic product, consumer confidence, and monetary policy rates while raising CPI inflation. A counterfactual experiment, in which we shut down the endogenous response of UK monetary policy to Brexit shocks, reveals that the Bank of England fended off a stronger contraction of output in 2016 and 2018.
    Keywords: Brexit, business cycle, economic policy uncertainty, high-frequency identification, monetary policy
    JEL: E02 E31 E32 E44 E58 F15
    Date: 2022–05

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