nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒08‒08
twelve papers chosen by
Eugene Beaulieu
University of Calgary

  1. Out of communal land: Clientelism through delegation of agricultural tenancy contracts By Takashi Kurosaki; Saumik Paul; Firman Witoelar
  2. Competing for Attention -- The Effect of Talk Radio on Elections and Political Polarization in the US By Ashani Amarasinghe; Paul A. Raschky
  3. The Political Polarization of Corporate America By Vyacheslav Fos; Elisabeth Kempf; Margarita Tsoutsoura
  4. Political Growth Collapses By Francisco, Rodriguez; Patrick, Imam
  5. False Narratives and Political Mobilization By Kfir Eliaz; Simone Galperti; Ran Spiegler
  6. Globalization and Political Economy of Food Policies: Insights from Planting Restrictions in Colonial Wine Markets By Meloni, Giulia; Swinnen, Johan
  7. Esoteric beliefs and opposition to Corona restrictions By Weidmann, Nils B.
  8. Church and State in historical political economy By Becker, Sascha O.; Pfaff, Steven
  9. Misspecified politics and the recurrence of populism By Razin, Ronny; Levy, Gilat; Young, Alwyn
  10. Populist civil society, the Wagner Group, and post-coup politics in Mali By Sebastian Elischer
  11. Voting to Persuade By Tsz-Ning Wong; Lily Ling Yang; Xin Zhao
  12. The Political Relation and Trade - The Case of US, China and Australia By Yifei Cai; Jamel Saadaoui; Yanrui Wu

  1. By: Takashi Kurosaki; Saumik Paul; Firman Witoelar
    Abstract: Do local institutions influence the nature of political clientelistic exchange? We find a positive answer in the context of a village institution prevalent in Java since the Dutch colonial rule, where democratically elected village heads receive usufruct rights over a piece of communal village land (bengkok land) as a compensation for their service in lieu of salary. To formulate how limited-term private ownership of bengkok land promotes clientelism, we model a timely delegation of agricultural tenancy contracts to villagers-cum-voters as an incumbent re-election strategy. Based on a household survey fielded in 2018 across 130 villages in Java, Indonesia, we find that the chances of a bengkok plot being rented out increase by 6 percentage points as the time of the next election becomes closer by one year, and sharecropping is preferred to a fixed-rental contract as the election approaches. The empirical results are statistically significant and remain largely unchanged against a series of robustness checks. We also find suggestive evidence of short-term efficiency loss from clientelistic politics over bengkok land.
    Keywords: tanah bengkok, political budget cycle, clientelism, agricultural tenancy, electoral competition, Indonesia.
    JEL: D72 H77 H83 O17 O18
    Date: 2021
  2. By: Ashani Amarasinghe; Paul A. Raschky
    Abstract: This paper studies the effects of talk radio, specifically the Rush Limbaugh Show, on electoral outcomes and attitude polarization in the U.S. We propose a novel identification strategy that considers the radio space in each county as a market where multiple stations are competing for listeners' attention. Our measure of competition is a spatial Herfindahl-Hirschman Index (HHI) in radio frequencies. To address endogeneity concerns, we exploit the variation in competition based on accidental frequency overlaps in a county, conditional on the overall level of radio frequency competition. We find that counties with higher exposure to the Rush Limbaugh Show have a systematically higher vote share for Donald Trump in the 2016 and 2020 U.S. presidential elections. Combining our county-level Rush Limbaugh Show exposure measure with individual survey data reveals that self-identifying Republicans in counties with higher exposure to the Show express more conservative political views, while self-identifying Democrats in these same counties express more moderate political views. Taken together, these findings provide some of the first insights on the effects of contemporary talk radio on political outcomes, both at the aggregate and individual level.
    Date: 2022–06
  3. By: Vyacheslav Fos; Elisabeth Kempf; Margarita Tsoutsoura
    Abstract: Executive teams in U.S. firms are becoming increasingly partisan. We establish this new fact using political affiliations from voter registration records for top executives of S&P 1500 firms between 2008 and 2020. The new fact is explained by both an increasing share of Republican executives and increased assortative matching by executives on political affiliation. Departures of politically misaligned executives are value-destroying for shareholders, implying the increasing political polarization of corporate America may not be in the financial interest of shareholders.
    JEL: G3
    Date: 2022–06
  4. By: Francisco, Rodriguez; Patrick, Imam
    Abstract: We argue that economic collapses can result from the adoption by political actors of strategies that generate severe negative economic externalities for society. We establish the conditions for political conflict to become economically destructive and develop a diagnostics toolkit to identify when income declines are consequence of the breakdown of conflict-management arrangements. When political conflict drives a collapse in growth, we expect the onset of the contraction to coincide with the intensification of political conflict, authority to be truly contested, politically advantageous strategies to generate negative externalities, economic collapse to be driven by productivity losses, short-term biases in policies to increase with contestation of power, and the policy framework to improve once political conflict recedes. We argue that all these conditions were satisfied in two of the largest peacetime collapses in modern history: Venezuela (2012-2020) and Zimbabwe (1997-2008).
    Keywords: Economic Growth, Growth Collapses, Venezuela, Zimbabwe, Political Economy, Appropriation.
    JEL: D72 D74 O11
    Date: 2022–07–04
  5. By: Kfir Eliaz; Simone Galperti; Ran Spiegler
    Abstract: We present an equilibrium model of politics in which political platforms compete over public opinion. A platform consists of a policy, a coalition of social groups with diverse intrinsic attitudes to policies, and a narrative. We conceptualize narratives as subjective models that attribute a commonly valued outcome to (potentially spurious) postulated causes. When quantified against empirical observations, these models generate a shared belief among coalition members over the outcome as a function of its postulated causes. The intensity of this belief and the members' intrinsic attitudes to the policy determine the strength of the coalition's mobilization. Only platforms that generate maximal mobilization prevail in equilibrium. Our equilibrium characterization demonstrates how false narratives can be detrimental for the common good, and how political fragmentation leads to their proliferation. The false narratives that emerge in equilibrium attribute good outcomes to the exclusion of social groups from ruling coalitions.
    Date: 2022–06
  6. By: Meloni, Giulia; Swinnen, Johan
    Abstract: Globalization transforms not just the economics of production and exchange in the world, but also the political economy of public policies. We analyze how wine regulations, and more specifically planting rights restrictions, have been affected by globalization, in particular colonial expansions of wine producing empires. We study several historic cases and find that (a) planting right restrictions and compulsory uprooting of vineyards are introduced to deal with falling wine prices as colonial wine production takes off and expands; (b) that enforcement of the restrictions and uprooting was difficult and often imperfect; and (c) that there was a strong persistence of the policies: after their introduction the restrictions remain in place for a long time (often centuries) and they are only removed after major shocks to the political economy equilibrium.
    Keywords: Political Economy, Marketing
    Date: 2021
  7. By: Weidmann, Nils B.
    Abstract: Disagreement over governmental measures against the spread of the Corona virus has led to increased societal division and polarization in many countries worldwide. Scholars typically locate the sources of resistance against these measures on the right of the political spectrum. This article argues that this explanation is too simple. Using fine-grained spatial data for Germany, it tests whether opposition to Corona restrictions (proxied with electoral support for a new party against governmental Corona measures) is systematically linked to esoteric and anthroposophical beliefs, which are traditionally found on the political left. Using new data on the distribution of natural healers, homeopathic doctors and Steiner schools, the article presents spatial analyses at the level of electoral districts and municipalities. The latter makes it possible to create matched samples for improved causal inference. Results confirm that both the presence of homeopathic doctors and Steiner schools are related to significantly higher opposition against Corona measures. This shows that resistance to governmental measures against the Corona pandemic originates from different societal groups, and will remain a major challenge for governments to address.
    Date: 2022
  8. By: Becker, Sascha O. (Monash U and U Warwick); Pfaff, Steven (University of Washington)
    Abstract: Over many centuries, church and state have grown together, and apart. Sometimes linked like Siamese twins, sometimes in conflict with each other. This chapter discusses the major themes in the literature on church and state, some of the findings in the political economy of religion, and evaluates emerging directions in research on church-state relations
    Keywords: Church ; State ; Secularization ; Political Economy ; Deregulation
    Date: 2022
  9. By: Razin, Ronny; Levy, Gilat; Young, Alwyn
    Abstract: We develop a dynamic model of political competition between two groups that differ in their subjective model of the data generating process for a common outcome. One group has a simpler model than the other group as they ignore some relevant policy variables. We show that policy cycles must arise and that simple world views—which can be interpreted as populist world views—imply extreme policy choices. Periods in which those with a more complex model govern increase the specification error of the simpler world view, leading the latter to overestimate the positive impact of a few extreme policy actions.
    Keywords: Horizon 2020; 681579
    JEL: D72 D83 K42
    Date: 2022–03–01
  10. By: Sebastian Elischer
    Abstract: The military coup of August 2020 upended Mali’s fragile liberal democratic order. The junta-led transitionary government defies international pressure to fasten the return of democratically-elected rulers and constitutional rule. The ability of the junta to shape the course of Malian politics rests on two interconnected pillars. First, there is public resentment towards the post-1991 political class and France’s military involvement in the country. The forces representing that resentment view the junta as change makers and have formed influential political organisations that oppose there turn to the status quo ante. Second, there is the security co-operation with Russian mercenaries, which provides the transitionary government with an alternative security partner. The paper traces the origins, evolution, and the future strength of these pillars. It concludes by outlining future political scenarios and the future role of the military in Malian politics.
    Keywords: democracy, Mali, military coup, Russia, Wagner Group
    JEL: D74 F50 F55 P48
    Date: 2022–07–12
  11. By: Tsz-Ning Wong; Lily Ling Yang; Xin Zhao
    Abstract: We consider a model of collective persuasion, in which members of an advisory committee receive private continuous signals and then vote on a policy change. A decision maker then decides whether to adopt the change upon observing each vote. Information transmission between the committee and the decision maker is possible if and only if there exists an infor- mative equilibrium with the unanimity rule. When the decision maker is more conservative, a higher level of consensus is needed to persuade her to abandon the status quo in equilib- rium. Our result thus provide a rationale for the use of the unanimity rule, despite its poor performance in information aggregation (Feddersen and Pesendorfer 1998). Furthermore, the continuous-signal model considered in this paper produces results that contrast the discrete-signal model considered in the literature (Battaglini 2017; Gradwohl and Feddersen 2018) and we discuss how the results depend on the coarseness of the signal structure.
    Keywords: Advisory committee, Persuasion, Voting
    JEL: D71 D72 D83
    Date: 2022–06
  12. By: Yifei Cai (Macau University of Science and Technology); Jamel Saadaoui (University of Strasbourg); Yanrui Wu (Business School, The University of Western Australia)
    Keywords: Structural vector autoregression, Local projection, Impulse response; US-China political relation; Australia-China trade
    JEL: C32 F14 F51
    Date: 2022

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