nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒09‒26
eleven papers chosen by
Eugene Beaulieu
University of Calgary

  1. Are Elections Enough? By Shirleen Manzur
  2. Vote Early and Vote Often? Detecting Electoral Fraud from the Timing of 19th Century Elections By Francesco Ferlenga; Brian G. Knight
  3. Public debt and the political economy of reforms By Pierre C. Boyer; Christoph Esslinger; Brian Roberson
  4. Voter Turnout in Concurrent Votes By Foellmi, Reto
  5. The political consequences of mass repatriation By Edoardo Cefalà
  6. A Theory of Illiberal Democracy and Political Transitions By Chris Bidner; Shirleen Manzur
  7. Are Firms Gerrymandered? By Artés, Joaquín; Kaufman, Aaron Russell; Richter, Brian Kelleher; Timmons, Jeffrey F.
  8. Sleeping with the enemy. Partners’ political attitudes and risk of separation By Bruno Arpino; Alessandro Di Nallo
  9. Does Political Partisanship Cross Borders? Evidence from International Capital Flows By Kempf, Elisabeth; Luo, Mancy; Schafer, Larissa; Tsoutsoura, Margarita
  10. On spatial majority voting with an even (vis-a-vis odd) number of voters: a note By Anindya Bhattacharya; Francesco Ciardiello
  11. The Political Economy of the Decline in Antitrust Enforcement in the United States By Lancieri, Filippo; Posner, Eric; Zingales, Luigi

  1. By: Shirleen Manzur (Simon Fraser University)
    Abstract: While political regimes are often distinguished in a binary manner as democracy and autocracy, many countries deemed democracies fail to fulfill fundamental characteristics of a full democracy. This paper focuses on characteristics of political regimes - in particular, election and liberalism. The paper at first documents the historical trend and pattern of transitions and differences in belief systems across countries distinguished by the characteristics of their political institutions. Using multiple empirical approaches, the paper then analyzes how these characteristics can affect an economy’s growth. The results suggest that the aggregated characteristics of competitive elections alongside liberalism, as in full democracies, is required for a political regime to fuel growth. Even with competitive elections, regimes with illiberalism does not have a significantly different impact on growth than regimes with no elections. The paper further explores various mechanisms to gain insight into the heterogeneous effect of political characteristics on growth.
    Date: 2022–08
  2. By: Francesco Ferlenga; Brian G. Knight
    Abstract: This paper develops a new approach to detecting electoral fraud. Our context involves repeaters, individuals voting in multiple states in the U.S. during 19th Century Congressional Elections. Given high travel times, and the associated difficulties of voting in multiple states on the same day, we exploit the staggered introduction of holding federal elections on the first Tuesday after the first Monday in November (1T1M). The key finding is that county-level turnout rates fell when the closest neighboring state coordinated on 1T1M. This result is consistent with 1T1M adoption making repeating more difficult. In terms of mechanisms, the pattern is stronger in states that had not yet adopted the secret ballot, consistent with the secret ballot itself reducing voter fraud. The pattern is also driven by smaller population counties, consistent with repeaters particularly inflating turnout rates in these places.
    JEL: D70 H7 P0
    Date: 2022–08
  3. By: Pierre C. Boyer (CREST, Ecole Polytechnique, Institut Polytechnique de Paris); Christoph Esslinger (Managing Director; Brian Roberson (Purdue University, Department of Economics, Krannert School of Management)
    Abstract: How do electoral incentives influence the choice to experiment with a policy that generates uncertain future benefits? To answer this question, we examine a two-period model of redistributive politics with uncertain policy outcomes involving a mixture of private and public benefits. In equilibrium, we find that the intertemporal tradeoff between current policy costs and future benefits creates an incentive for politicians to use public debt to smooth spending across periods. The higher the share of policy that are in the form of a public good, the higher the level of available debtrelated spending on targeted policies that is necessary.
    Keywords: Political Competition; Public Debt; Reforms; Redistributive Politics; Debt and Spending Limits.
    JEL: C72 D72 D78 H6
    Date: 2022–08–15
  4. By: Foellmi, Reto
    Abstract: This paper studies voter turnout in concurrent votes. We develop a theoretical model that incorporates proposition salience and two types of voting costs. The first type is fixed costs of going to the polls that are to be paid only once per voting day. The second type is information costs that must be paid for each vote separately. Our model explains how the net benefit of concurrent votes, defined as salience minus information costs, enters a voter's utility function and thereby affects turnout. We test our model predictions using data on concurrent propositions in Switzerland from 1981-2016. Our results suggest that both the proposition with the highest net benefit and the sum of the net benefits of all concurrent propositions are important determinants of the individual turnout decision. We also find that the marginal impact on turnout rises with the net benefit of a proposition.
    Keywords: Concurrent votes, turnout, rational voter model, referendums
    JEL: D72 D90
    Date: 2022–08
  5. By: Edoardo Cefalà
    Abstract: What happens when the electorate of a country is suddenly increased by hundreds of thousands of new potential voters? How do parties adjust their strategies in response to such an event? To address these questions I exploit a quasi-experiment represented by the arrival in France of about 1 million repatriates from Algeria, the so-called pieds noirs, which happened in 1962. To study the causal impact of the pieds noirs on voting, I instrument their location choice based on the average temperature by department. I find that the arrival of the pieds noirs increased turnout and the vote share of far-right parties while it decreased the vote share of center-right parties in both legislative and presidential elections between 1962 and 1974. I then analyse how this shock affected the political strategies of the different French parties by looking at more than 10,000 political manifestos issued by candidates in the legislative elections during the same period. I show that far-right parties behaved as a political entrepreneur and started to discuss issues associated with the pieds noirs already in 1962. The other parties subsequently adapted their manifestos using the same words of the far-right. These findings shed light on how radical parties can affect mainstream ones by pushing new issues in their agenda.
    Keywords: mass repatriation; pieds noirs; vote share
    Date: 2022
  6. By: Chris Bidner (Simon Fraser University); Shirleen Manzur (Simon Fraser University)
    Abstract: We develop a model of illiberal democracies--a formal democracy within which Elites manage to exert outsized infuence. We use the model to better understand (i) the conditions that promote illiberal democracy, (ii) why illiberal democracy is harmful to, yet popular among, Citizens, and (iii) the nature of transitions between liberal democracy, illiberal democracy, and outright non-democracy. In the model, Citizens decide whether to resist Elite attempts at exerting in uence. Elite influence has two main consequences: policy is distorted and the risk of transitioning to non-democracy is heightened. In understanding the popularity of illiberal democracy, we emphasize the role of economic and social heterogeneity among Citizens. Specifically, some Citizens benefit from the policy distortion, but all are harmed by the prospect of non-democracy. We show how the risk of democratic erosion leading to illiberal democracy increases as the Elite become weaker, and that the e ect of mobility is nuanced. The model explains the relatively frequent transitions between illiberal democracy and non-democracy and shows how the existence of liberal democracy in fact relies upon these dynamics. We also provide some preliminary empirical support for our model from the World Values Survey and Polity IV data.
    Date: 2022–06
  7. By: Artés, Joaquín; Kaufman, Aaron Russell; Richter, Brian Kelleher; Timmons, Jeffrey F.
    Abstract: We provide the first evidence that firms, not just voters, are gerrymandered. We compare allocations of firms in enacted redistricting plans to counterfactual distributions constructed using simulation methods. We find that firms are over-allocated to districts held by the mapmakers' party when partisans control the redistricting process. Firms are more proportionately allocated by redistricting commissions. Our results hold when we account for the gerrymandering of seats: holding fixed the number of seats the mapmakers' party wins, firms tend to obtain more firms than expected. Our research reveals that partisan mapmakers target more than just voters.
    Date: 2022
  8. By: Bruno Arpino (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Alessandro Di Nallo (Dondena Centre, Università Bocconi)
    Abstract: Does politics conflict with love? We aim at answering this question by examining the effect on union dissolution of partners' (mis)match on political preferences, defined as self-reported closeness, intention to vote, or vote for a specific party. Previous studies argued that partners' heterogamy may increase risk of union dissolution because of differences among partners in lifestyles, attitudes, and beliefs, and/or because of disapproval from family and community members. We posit that similar arguments can apply to political heterogamy and test the effect of this new heterogamy dimension using UK data from the British Household Panel Study (BHPS) and the UK Household Longitudinal Study (UKHLS). The data offer a unique opportunity to disentangle the role of heterogamy by political preferences from the effects of heterogamies in other domains (e.g., ethnicity and religiosity) and from that of other partners' characteristics, while also covering a long period of time (from 1991 to 2021). The data also allow to implement a more specific analysis about the referendum on UK's permanence in the European Union (known as the Brexit referendum). We find a positive effect of political preferences heterogamy on union dissolution. In addition, diverging opinions on the Brexit referendum is associated to higher chances of partnership break-up.
    Keywords: union dissolution; divorce; separation; heterogamy; homogamy; political preferences; United Kingdom.
    Date: 2022–09
  9. By: Kempf, Elisabeth; Luo, Mancy; Schafer, Larissa; Tsoutsoura, Margarita
    Abstract: Does partisan perception shape the flow of international capital? We provide evidence from two settings, syndicated corporate loans and equity mutual funds, to show ideological alignment with foreign governments affects the cross-border capital allocation by U.S. institutional investors. Our empirical strategy ensures direct economic effects of foreign elections or government ties between countries are not driving the result. Ideological alignment with foreign countries may also affect capital allocation of non-U.S. investors and can explain patterns in bilateral investment. Combined, our findings imply partisan perception is a global phenomenon and its economic effects transcend national borders.
    Date: 2022
  10. By: Anindya Bhattacharya; Francesco Ciardiello
    Abstract: In this note we consider situations of (multidimensional) spatial majority voting. We show that under some assumptions usual in this literature, with an even number of voters if the core of the voting situation is singleton (and in the interior of the policy space) then the element in the core is never a Condorcet winner. This is in sharp contrast with what happens with an odd number of voters: in that case, under identical assumptions, it is well known that if the core of the voting situation is non-empty then the single element in the core is the Condorcet winner as well.
    Date: 2022–08
  11. By: Lancieri, Filippo; Posner, Eric; Zingales, Luigi
    Abstract: Antitrust enforcement in the United States has declined since the 1960s. We investigate the political causes of this decline by looking at who made the crucial decisions and the strength of their popular mandate. Using a novel framework to understand the determinants of regulatory capture and several new datasets, we find that there was no public support for the weakening of antitrust enforcement. The decline in antitrust enforcement was the result of a collection of technocratic decisions made in politically unaccountable ways, mostly by regulators and judges. Behind the scenes, big business played a major role in influencing these agents; but other factors (like the increase in private sector pay relative to government pay) and intellectual currents mattered as well.
    Date: 2022

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