nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒08‒15
fourteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Electoral Competition, Voter Bias, and Women in Politics By Thomas Le Barbanchon; Julien Sauvagnat
  2. Personality Traits and Cognitive Ability in Political Selection By Markus Jokela; Jaakko Meriläinen; Janne Tukiainen; Åsa von Schoultz
  3. Social Media and Democracy By Gradwohl, Ronen; Heller, Yuval; Hillman, Arye
  4. Refugees, Right-Wing Populism and Propaganda: Evidence from the Italian Dispersal Policy By Francesco Campo; Sara Giunti; Mariapia Mendola
  5. (Mis-)information technology: Internet use and perception of democracy in Africa By Joël Cariolle; Yasmine Elkhateeb; Mathilde Maurel
  6. The political economy of Maduro’s economic policies By Rodriguez, Francisco
  7. Do in-group biases lead to overconfidence in performance? Experimental evidence By Lia Q. Flores; Miguel A. Fonseca
  8. Social Media and Democracy By Ronen Gradwohl; Yuval Heller; Arye Hillman
  9. Exit polls and voter turnout in the 2017 French elections By Alberto Grillo; Eva Raiber
  10. Crafty Oligarchs, Savvy Voters: Democracy Under Inequality In Rural Pakistan By Alweena Hasan; Abdul Khaliq
  11. Polynomial Voting Rules By Wenpin Tang; David D. Yao
  12. The Politics Of Media Economy In Pakistan By Azwar Muhammad Aslam
  13. Political Adverse Selection By Leonardo Bursztyn; Jonathan T. Kolstad; Aakaash Rao; Pietro Tebaldi; Noam Yuchtman
  14. Successful Tax Reforms in the Recent International Experience: Lessons in Political Economy and the Nuts and Bolts of Increasing Country Tax Revenue Effort By Jorge Martinez-Vazquez

  1. By: Thomas Le Barbanchon (Bocconi University [Milan, Italy]); Julien Sauvagnat (Bocconi University [Milan, Italy])
    Abstract: Only a quarter of the members of the world's national parliaments are women. Despite significant progress in recent years, women remain largely under-represented among elected politicians. This study provides some explanations for the under-representation of women in politics using data from the past seven French legislative elections. On the one hand, the analyses suggest that there is a preference bias among voters towards male candidates. In addition, political parties contribute to reproducing the under-representation of women in elected office by running fewer female candidates in constituencies where voter bias is high. To promote women's access to political office, the 2000 law to promote equal access of women and men to electoral mandates and elective offices, also known as the parity law, requires French political parties to nominate women as 50% of their candidates or face financial penalties. As expected, the application of this law has led to an increase in the proportion of women candidates. However, this proportion is relatively lower in electoral districts where the vote is close compared to those where a majority is more easily obtained. In these competitive districts, paying a fine for not complying with the parity rule is more advantageous than the risk of losing the election by running a woman rather than a man. This suggests that parties still prefer to put forward male rather than female candidates to increase their chances of winning.
    Date: 2022–03
  2. By: Markus Jokela (Department of Psychology and Logopedics, University of Helsinki.); Jaakko Meriläinen (Centro de Investigación Económica and Department of Economics, ITAM.); Janne Tukiainen (Department of Economics, University of Turku; VATT Institute for Economic Research.); Åsa von Schoultz (Faculty of Social Sciences, University of Helsinki.)
    Abstract: We present the first comprehensive evidence on the role of cognitive ability and personality traits in the selection of electoral candidates and election of politicians. Using unique data that combine population registers and election statistics from local government elections in Finland with tests of cognitive and non-cognitive ability of men administered by the Finnish Defense Forces, we document two main findings. First, political parties select candidates who fare better than the office-eligible population in both intelligence and personality tests that capture three dimensions of cognitive and seven dimensions of non-cognitive ability. Second, elected politicians possess more desirable traits than nonelected candidates. Our results show that a voter-oriented open-list system is able to select competent, motivated, and honest representatives. We also assess the relative importance of cognitive abilities and personality traits, present evidence of no trade-offs between politician quality and descriptive representation, and illustrate that political competition may be an important contextual factor shaping selection.
    Keywords: candidate entry, cognitive ability, election, open-list PR system, personality, political selection
    JEL: D72 J24
    Date: 2022–07
  3. By: Gradwohl, Ronen; Heller, Yuval; Hillman, Arye
    Abstract: We study the ability of a social media platform with a political agenda to influence voting outcomes. Our benchmark is Condorcet’s jury theorem, which states that the likelihood of a correct decision under majority voting increases with the number of voters. We show how information manipulation by a social media platform can overturn the jury theorem, thereby undermining democracy. We also show that sometimes the platform can do so only by providing information that is biased in the opposite direction of its preferred outcome. Finally, we compare manipulation of voting outcomes through social media to manipulation through traditional media.
    Keywords: Bayesian persuasion; Political agenda; Information manipulation; Condorcet Jury Theorem; Biased signals
    JEL: D72 D82 P16
    Date: 2022–06–30
  4. By: Francesco Campo; Sara Giunti; Mariapia Mendola
    Abstract: This paper examines how the 2014-2017 ‘Refugee Crisis’ in Italy affected voting behavior and the rise of right–wing populism in national Parliamentary elections. We collect novel administrative data across all Italian municipalities and leverage exogenous variation in refugee resettlement induced by the Dispersal Policy. We find a positive and significant effect of the share of asylum seekers on support for radical-right anti-immigration parties. The effect is heterogeneous across municipality characteristics, yet robust to dispersal policy features. We provide causal evidence that the anti–immigration backlash is not rooted in adverse economic effects, while it is triggered by radical–right propaganda.
    Keywords: Immigration, Refugee Crisis, Voting Behavior, Dispersal Policy, Propaganda.
    JEL: D72 F22 O15 P16
    Date: 2022–04
  5. By: Joël Cariolle (Fondation pour les Etudes et Recherches sur le Développement International (FERDI)); Yasmine Elkhateeb (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne and Cairo University); Mathilde Maurel (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, CNRS, FERDI)
    Abstract: This paper investigates the impact of internet use as a means of accessing news on African citizens' demand for and perception of the supply of democracy. This question is addressed using cross-sectional data from the last three rounds of the Afrobarometer survey for a sample of 25 African countries between 2011 and 2018. Using an instrumental variable approach to control for the possible endogeneity bias between internet use and citizens'perceptions, we found that using the internet to get news has a negative and significant effect on the demand for and on the perceived supply of democracy. The negative effect is channeled through two main factors. The first factor is the confidence in governments and governmental institutions, which is undermined by the use of the internet. In particular, we find that this internet-induced lower confidence translates into a higher probability of engaging in street protests instead of increased political participation. The second driving factor is the (mis-)information channel. On the one hand, we show that internet users' perception of the supply of democracy negatively diverges from experts' ratings. On the other hand, we document further that internet use increases the likelihood of incoherence in the respondent's stance about her demand for democracy. Finally, we show that the negative effect we found is mitigated when the internet is complemented by traditional media sources, especially the radio, to get informed. The findings of this study suggest that internet use is not neutral and tends to undermine citizens' preferences for democracy and alter perceptions about the functioning of political institutions
    Keywords: Internet news; democracy; Africa
    JEL: D72 D83 L86 P16
    Date: 2022–03
  6. By: Rodriguez, Francisco
    Abstract: This paper provides a political economy explanation for Venezuela's suboptimal macroeconomic policy choices during the Nicolás Maduro administration. Venezuela’s political system, embodied in the 1999 Constitution, dramatically increased the stakes of power, raising both the benefits of being in power and the costs of leaving office. It also significantly increased the frequency with which elections were held, exposing the government to a near-permanent state of electoral exposure. The combination of high stakes of power and high electoral exposure raised the incentives for policymakers to focus on the short-term effects of policies and disregard their long-term consequences. We explain why this mix proved toxic when the economy was hit with a large negative shock that required it to implement adjustments with significant near-term costs.
    Keywords: Venezuela, Nicolás Maduro, Economics, political economy
    JEL: H12 H3
    Date: 2020–10–01
  7. By: Lia Q. Flores (School of Economics and Management, University of Porto); Miguel A. Fonseca (University of Exeter and NIPE, Universidade do Minho)
    Abstract: Is the phenomenon of people overestimating their skill relative to their peers (overplacement) exacerbated by group affiliation? Social identity theory predicts people evaluate in-group members more positively than out-group members, and we hypothesized that this differential treatment may result in greater overplacement when interacting with an out-group member. We tested this hypothesis with 301 US voters affiliated with either the Republican or Democratic party in the run-up to the 2020 Presidential election, a time when political identities were salient and highly polarized. We found there is a higher tendency for overplacement when faced with an out-group opponent than with an in-group opponent. Decomposition analysis suggests this difference is due to underestimating the opponent, as opposed to overestimating one's own performance to a higher degree. Moreover, any tendency to incur in overplacement is mitigated when faced with an opponent with the same political identity relative to one with a neutral one. Group affiliation biases initial priors, and that effect is unchanged when participants are asked to update their beliefs.
    Keywords: Overconfidence; Belief updating; Motivated beliefs; Overplacement; Social identity; Political affiliation; Competition
    JEL: E62 I31 I38 O30
    Date: 2022–07
  8. By: Ronen Gradwohl; Yuval Heller; Arye Hillman
    Abstract: We study the ability of a social media platform with a political agenda to influence voting outcomes. Our benchmark is Condorcet's jury theorem, which states that the likelihood of a correct decision under majority voting increases with the number of voters. We show how information manipulation by a social media platform can overturn the jury theorem, thereby undermining democracy. We also show that sometimes the platform can do so only by providing information that is biased in the opposite direction of its preferred outcome. Finally, we compare manipulation of voting outcomes through social media to manipulation through traditional media.
    Date: 2022–06
  9. By: Alberto Grillo (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Eva Raiber (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université)
    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: underdog effect,voter turnout,exit polls,bandwagon effect
    Date: 2022–03–15
  10. By: Alweena Hasan (MPhil Scholar, PIDE); Abdul Khaliq (MPhil Scholar, PIDE)
    Abstract: This book preeminently focuses on understanding the Pakistani voters particularly the rural voters in depth. The book is revolving around the voting behavior of the rural people: why they vote and what they think about it. Most of the literature on Pakistan revealed that the rural voters are very constrained in terms of ability to consent as leaders and inclusion.
    Keywords: Crafty Oligarchs, Savvy Voters, Democracy, Rural, Pakistan,
    Date: 2021
  11. By: Wenpin Tang; David D. Yao
    Abstract: We propose and study a new class of polynomial voting rules for a general decentralized decision/consensus system, and more specifically for the PoS (Proof of Stake) protocol. The main idea, inspired by the Penrose square-root law and the more recent quadratic voting rule, is to differentiate a voter's voting power and the voter's share (fraction of the total in the system). We show that while voter shares form a martingale process, their voting powers follow a super-martingale that decays to zero over time. This prevents any voter from controlling the voting process, and thus enhances decentralization. When the initial total volume of votes (or stakes) is large, we show a phase transition in share stability (or the lack thereof), corresponding to the voter's initial share relative to the total. We also study the scenario in which trading (of votes/stakes) among the voters is allowed, and quantify the level of risk sensitivity (or risk averse) that will remove any incentive for a voter to trade.
    Date: 2022–06
  12. By: Azwar Muhammad Aslam (Mphil Scholar, PIDE)
    Abstract: Media plays a critical role as opinion-shaper in Pakistan. The burgeoning forms of media in the form of electronic, print, and social media, shape national narratives about politics, society and culture. Also, with respect to economy, the role is becoming more pronounced when factors such as commercialization, advertisements, political economy, TRPs, media as an avenue for culture industry, and digitization are brought into light In the light of this debate, the current webinar is an attempt to
    Keywords: Politics, Media Economy,
    Date: 2021
  13. By: Leonardo Bursztyn; Jonathan T. Kolstad; Aakaash Rao; Pietro Tebaldi; Noam Yuchtman
    Abstract: We study how the politicization of policies designed to correct market failures can undermine their effectiveness. The Patient Protection and Affordable Care Act (ACA) was among the most politically divisive expansions of the US government. We examine whether partisanship distorted enrollment and market outcomes in the ACA insurance marketplaces. Controlling for observable characteristics and holding fixed plans and premiums available, Republicans enrolled less than Democrats and independents in ACA marketplace plans. Selection out of the ACA marketplaces was strongest among Republicans with lower expected healthcare costs, generating adverse selection. Computing enrollment and average cost with and without partisan differences, we find that this political adverse selection reduced enrollment by around three million people and raised average costs in the marketplaces, increasing the level of public spending necessary to provide subsidies to low-income enrollees by around $105 per enrollee per year. Lower enrollments and higher costs are concentrated in more Republican areas, potentially contributing to polarized views of the ACA.
    JEL: H0 I13 L38
    Date: 2022–07
  14. By: Jorge Martinez-Vazquez (International Center for Public Policy, Georgia State University, USA)
    Abstract: The main objective of this paper is to extract practical lessons on increasing tax revenue effort that are relevant to developing countries. Specifically, it focuses on insights from two dimensions: the political economy requirements to generate public support for reform and the technical factors (“nuts and bolts”) of substantially increasing tax revenue effort. General topics covered include the political economy preconditions that facilitate tax reform, how and by whom tax reform should be implemented, the timing of reform efforts, determinants of current tax effort, tax policy choice options, tax administration options, and the enhancement of tax morale and compliance norms. The paper also profiles successful examples of recent tax reforms from 29 countries worldwide. It concludes with lessons from both the literature and these countries’ experiences, empowering reform-minded politicians and administrators to shape their own jurisdictions’ strategies for increasing tax revenue effort.
    Date: 2021–11–18

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