nep-pol New Economics Papers
on Positive Political Economics
Issue of 2022‒12‒05
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Voter Polarization and Extremism By Eguia, Jon; Hu, Tai-Wei
  2. Do explosions shape voting behavior? By Vargas, Juan F.; Purroy, Miguel E.; Coy, Felipe; Perilla, Sergio; Prem, Mounu
  3. Understanding the Concept of Political Behaviour By Gar, Ruqayya Aminu Dr.; Umar, Mohammed Nuru; Muhammad, Murtala
  4. The Effect of Recent Technological Change on US Immigration Policy By Björn Brey
  5. Uncertainty from dictatorship to democracy: Evidence from business communications By Gonzalez, Felipe; Coy, Felipe; Prem, Mounu; von Dessauer, Cristine
  6. The Economics of Women's Rights By Michèle Tertilt; Matthias Doepke; Anne Hannusch; Laura Montenbruck
  7. Municipal Brazilian electoral results in 2018-2022 and its association with excess mortality during 2020-2021 COVID-19 pandemic By Lima, Everton E. C. Dr.
  8. Income Stagnation and the Politics of Welfare State Retrenchment in Advanced Economies By Vlandas, Tim; Weisstanner, David
  9. Optimized Distortion and Proportional Fairness in Voting By Soroush Ebadian; Anson Kahng; Dominik Peters; Nisarg Shah
  10. Can Conflicts Unite a Nation? By Daryna Grechyna
  11. Identity and Corruption: A Laboratory Experiment By Cubel, Maria; Papadopoulou, Anastasia; Sanchez-Pages, Santiago
  12. It's Good Weather for More Government: The Effect of Weather on Fiscal Policy By Gustavo de Souza
  13. “The CDC Won’t Let Me Be.” The Opinion Dynamics of Support for CDC Regulatory Authority By Motta, Matt; Callaghan, Timothy; Trujillo, Kristin Lunz

  1. By: Eguia, Jon (Michigan State University, Department of Economics); Hu, Tai-Wei (University of Bristol)
    Abstract: We present a theory of endogenous policy preferences and electoral competition with boundedly rational voters who find it costly to process detailed information. Voters are otherwise fully rational, and they strategically choose how much memory to devote to processing political information. We find that even if all voters start with a common prior such that they all prefer a moderate policy over extreme alternatives to the left or the right, and even if voters observe only common signals that in the limit would assure a perfectly rational agent that the moderate policy is indeed best for everyone, a majority of voters eventually become extreme and the electorate becomes polarized: some voters support the left policy, and some support the right policy. Two fully rational parties respond by proposing extreme platforms, and thereafter, the policy outcome in every period is extreme.
    Keywords: Polarization; extremism; rational inattention; bounded memory; electoral competition
    JEL: D72
    Date: 2022–10–13
  2. By: Vargas, Juan F.; Purroy, Miguel E.; Coy, Felipe; Perilla, Sergio; Prem, Mounu
    Abstract: Violence in conflict settings is seldom random, making its effects indistinguishable from the intentions of the perpetrator. We leverage on the quasi-randomness of accidental landmine explosions to study how violence shapes electoral outcomes in Colombia. We combine the geolocation of landmine blasts with the coordinates of voting polls in a regression discontinuity design that compares polls close to which a landmine exploded just before the election to those close to which it did just afterward. Blasts within a month from election day depress turnout by 23%. In addition, those who do vote penalize the democratic left for the explosions and are more likely to support political parties with ties with illegal paramilitary groups.
    Date: 2022–07–07
  3. By: Gar, Ruqayya Aminu Dr.; Umar, Mohammed Nuru; Muhammad, Murtala
    Abstract: Political behaviour encompasses a combination of democratic attitudes and orientations that shows people as an essential part of a democratic development in the society. Political behavior literatures that exist are narrow and rely mostly on the traditionally drives and impulses to the analysis of political behavior such as socio-cultural cleavages determined lines. However, this study presents an academically comprehensive, and empirically well-explanation of the concept of political behavior. Significant for its practical understanding and adoption in political behavior discourse and analysis that is base on the most pressing issues and demands of the people. The study uses a qualitative method of data collection. Findings revealed that political behavior component include formal political participation and extra parliamentary activism. Formal political participation: involves citizens to take part in voting, enjoys right to contest in any office or position at the state or national levels, membership in political parties, pressure groups, civil societies, labour unions, market unions, and humanitarian advocacy groups. And extra parliamentary activism : involves protests or unconventional political engagement such as strike, demonstrations, petitions, or rallies, in order to attract attention and concerns to portray the electorates’ most pressing demands and needs towards government policies for the benefit of the general public.
    Date: 2022–09–21
  4. By: Björn Brey
    Abstract: Did recent technological change shape immigration policy in the United States? I argue that as automation shifted employment from routine to manual occupations, it increased competition between natives and immigrants. In turn, this lead to a more restrictive US immigration policy. I provide empirical evidence for this by analyzing voting on low-skill immigration bills in the House of Representatives. Policy makers representing congressional districts with a higher share of manual employment and those exposed to manual-biased technological change are more likely to support restricting low-skill immigration. Additional results on the effect of (i) immigration on wages, (ii) voter’s attitudes on low-skill immigration, and (iii) political polarization complete the analysis. I do not find a corresponding effect of technological change on trade policy consistent with the highlighted mechanism.
    Keywords: Political Economy, Voting, Immigration Policy, Technological Change
    Date: 2022–10
  5. By: Gonzalez, Felipe (Pontificia Universidad Católica de Chile); Coy, Felipe; Prem, Mounu; von Dessauer, Cristine
    Abstract: On the eve of a democratization by election, one of the most common forms of transition, dictators can use uncertainty about the future to win political support. We study the evolution of uncertainty from dictatorship to democracy in Chile using text analysis of business communications. We construct new measures of firm-level uncertainty and compare them to perceptions of international experts. We find that uncertainty changes little around the election triggering the transition and decreases markedly after the return to democracy. The exploitation of a misperceived high uncertainty epitomizes the type of errors dictators make before elections that threaten their power.
    Date: 2022–07–07
  6. By: Michèle Tertilt; Matthias Doepke; Anne Hannusch; Laura Montenbruck
    Abstract: Two centuries ago, in most countries around the world, women were unable to vote, had no say over their own children or property, and could not obtain a divorce. Women have gradually gained rights in many areas of life, and this legal expansion has been closely intertwined with economic development. We aim to understand the drivers behind these reforms. To this end, we distinguish between four types of women’s rights—economic, political, labor, and body—and document their evolution over the past 50 years across countries. We summarize the political-economy mechanisms that link economic development to changes in women's rights and show empirically that these mechanisms account for a large share of the variation in women's rights across countries and over time.
    JEL: D13 D72 J12 J16 N3 N40 O10 P0
    Date: 2022–11
  7. By: Lima, Everton E. C. Dr. (Unicamp)
    Abstract: Using municipal death registered Ministry of Health data and first-round electoral results of Presidential elections in 2018 and 2022, we evaluate the hypothesis if there is an association between excess mortality and political partisanship in Brazil. Given the political stance adopted by President Bolsonaro, favouring scientific discredit and neglecting the severity of the pandemic, it is expected that there is possibly a relationship between excessive mortality rates during COVID-19 health crisis and the number of municipal votes for Bolsonaro. Our results showed that in both elections the first-round percentage of municipal votes for Bolsonaro was positively associated with the peaks of excess deaths across Brazilian municipalities in 2020 and 2021. Another interesting result, even with the excess of mortality during the pandemic, Bolsonaro's political loyalty did not reduce during the second electoral period of 2022, and the positive association between excess deaths and votes still remained. A possible explanation to this fact is linked to the actual Brazilian political scenario, which is experiencing an environment of tribal politics and affective polarization.
    Date: 2022–10–16
  8. By: Vlandas, Tim (University of Oxford); Weisstanner, David
    Abstract: What are the political effects of income stagnation on the welfare state? To answer this question, we develop a simple political economy model linking stagnation to greater political support for welfare state retrenchment via three distinct mechanisms: (1) an altruistic mechanism where stagnation reduces altruistic motives for welfare state redistribution; (2) an insurance as ‘luxury good‘ mechanism where stagnation decreases the relative perceived gains from insurance; and (3) a subjective cost of taxation mechanism where stagnation heightens the relative costs of taxation. To test our argument, we combine novel data on the evolution of income stagnation to three existing datasets on individual preferences for the welfare state, on electoral behaviour of individuals, and on welfare state retrenchment. Our micro-level empirical analyses are consistent with our expectations. First, individuals facing stagnant or lower incomes support spending cuts to a greater extent. Second, individuals penalise the incumbent at the ballot box for retrenchment policies when their incomes are growing, but reward them if their income are stagnating. Thus, governments have electoral incentives to implement spending cuts when incomes stagnate. In turn, at the macro level, retrenchment is more pronounced in times when countries experience lower income growth. Taken together, our findings link the literature on income stagnation to comparative political economy studies of changing welfare states. In contrast to accounts focusing on the level of income and risk, this article helps us make sense of why governments find it politically attractive to retrench their welfare states, not despite but because of difficult economic times. Income stagnation does not only undermine the fiscal sustainability of welfare states, it also saps its political foundation.
    Date: 2022–01–22
  9. By: Soroush Ebadian (DCS - Department of Computer Science [University of Toronto] - University of Toronto); Anson Kahng (Department of Computer Science [Rochester] - University of Rochester [USA]); Dominik Peters (LAMSADE - Laboratoire d'analyse et modélisation de systèmes pour l'aide à la décision - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Nisarg Shah (DCS - Department of Computer Science [University of Toronto] - University of Toronto)
    Abstract: A voting rule decides on a probability distribution over a set of m alternatives, based on rankings of those alternatives provided by agents. We assume that agents have cardinal utility functions over the alternatives, but voting rules have access to only the rankings induced by these utilities. We evaluate how well voting rules do on measures of social welfare and of proportional fairness, computed based on the hidden utility functions. In particular, we study the distortion of voting rules, which is a worst-case measure. It is an approximation ratio comparing the utilitarian social welfare of the optimum outcome to the social welfare produced by the outcome selected by the voting rule, in the worst case over possible input profiles and utility functions that are consistent with the input. The previous literature has studied distortion with unit-sum utility functions (which are normalized to sum to 1), and left a small asymptotic gap in the best possible distortion. Using tools from the theory of fair multi-winner elections, we propose the first voting rule which achieves the optimal distortion Θ(√ m) for unit-sum utilities. Our voting rule also achieves optimum Θ(√ m) distortion for a larger class of utilities, including unit-range and approval (0/1) utilities. We then take a similar worst-case approach to a quantitative measure of the fairness of a voting rule, called proportional fairness. Informally, it measures whether the influence of cohesive groups of agents on the voting outcome is proportional to the group size. We show that there is a voting rule which, without knowledge of the utilities, can achieve an O(log m)-approximation to proportional fairness, which is the best possible approximation. As a consequence of its proportional fairness, we show that this voting rule achieves O(log m) distortion with respect to the Nash welfare, and selects a distribution that is approximately stable by being an O(log m)-approximation to the core, making it interesting for applications in participatory budgeting.
    Date: 2022–07
  10. By: Daryna Grechyna (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: Despite the global commitment to fostering peace, the world suffers from violent conflicts. Related literature connects intrastate ethnic conflicts to polarization, but the relationship between the other types of conflicts and polarization is unclear. I build a simple model where conflicts initiated by an external aggressor can reduce the political polarization of a country. Furthermore, I assess how violent conflicts in the form of foreign state-supported territorial disputes are related to the region-specific political support of the winner in presidential and parliamentary elections, exploring regional panel data from Georgia and Ukraine. The analysis suggests that differences in political preferences across regions decrease after a conflict. Finally, I confirm a negative association between conflicts and political polarization using country-level data from around the world. The model and evidence from the country-level data suggest that the structure of public policy could be a potential channel for political preferences alignment after a conflict.
    Keywords: violent conflict; political polarization; panel data.
    Date: 2022–11–17
  11. By: Cubel, Maria; Papadopoulou, Anastasia; Sanchez-Pages, Santiago
    Abstract: This paper explores the role of identity in voters’ decision to retain corrupt politicians. We build up a model of electoral accountability with pure moral hazard and bring it to the lab. Politicians must decide whether to invest in a public project with uncertain returns or to keep the funds for themselves. Voters observe the outcome of the project but not the action of the politician; if the project is unsuccessful, they do not know whether it was because of bad luck or because the politician embezzled the funds. We run two treatments; a control treatment and a treatment where subjects are assigned an identity using the minimal group paradigm. Our main result is that, upon observing a failed project, voters approve politicians of their same identity group significantly more often than in the control and compared to politicians of a different group. This is partially driven by a belief on same-identity politicians being more honest. We also observe that subjects acting as politicians are much more honest than expected by the equilibrium prediction.
    Date: 2022–09–15
  12. By: Gustavo de Souza
    Abstract: I show that weather conditions on election day affect future fiscal policy. When it rains during state elections, there is an increase in the relative income of voters, which is followed by an increase in expenditure and debt. The increase in expenditure is directed towards a larger police and safety budget. This result is compatible with a model of complementarity between consumption and public goods. In the model, high-income voters support an increase in safety budget because they benefit more from it than low-income voters.
    Keywords: public goods; Government size; fiscal policy; weather
    JEL: D7 H0 H4 H7
    Date: 2022–10–05
  13. By: Motta, Matt (Oklahoma State University); Callaghan, Timothy; Trujillo, Kristin Lunz
    Abstract: The Centers for Disease Control and Prevention (CDC) play a central role in responding to communicable disease threats. Its authority to do so, however, has recently met significant political and legal opposition. Unpacking the dynamics of public support for CDC authority is an important question, as doing so can provide insight into whether policymakers might have an incentive to expand (or curtail) the agency’s regulatory powers. In a demographically representative survey of 5,483 US adults, we find that most Americans support the CDC’s role in responding to health crises, although self-identified conservatives are less likely to do so. Consistent with the idea that opposition to CDC-authority may result (in part) from receptivity to elite anti-CDC rhetoric, the effect of ideology holds when accounting for respondents’ limited government and anti-expert attitudes; an effect we replicate in nationally representative data from the American National Election Study (ANES). Encouragingly, though, we find via a novel survey experiment that emphasizing the CDC’s central role in combating the spread of COVID-19 is associated with significantly stronger levels of support on the ideological right. We conclude by discussing how these findings might influence effective health communication in the face of mounting political and legal challenges to CDC regulatory authority.
    Date: 2022–09–07

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