nep-pol New Economics Papers
on Positive Political Economics
Issue of 2023‒01‒16
sixteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Voters' Perceptions and Evaluations of Dynastic Politics in Japan By MIWA Hirofumi; KASUYA Yuko; ONO Yoshikuni
  2. The Lion's Share: Evidence from Federal Contracts on the Value of Political Connections By Senay Agca; Deniz Igan
  3. Repeat Voting: Two-Vote May Lead More People To Vote By Sergiu Hart
  4. How Economic, Political, and Institutional Factors Influence the Choice of Exchange Rate Regimes? New Evidence from Selected Countries of the MENA Region By Najia Maraoui; Thouraya Hadj Amor; Islem Khefacha; Christophe Rault
  5. Broadband Internet and Attitudes Towards Migrants: Evidence from Spain By Golin, Marta; Romarri, Alessio
  6. Electoral Turnovers By Benjamin Marx; Vincent Pons; Vincent Rollet
  7. Corporate Donations and Political Rhetoric: Evidence from a National Ban By Julia Cagé; Caroline Le Pennec; Elisa Mougin
  8. Women Use More Positive Language than Men: Candidates’ strategic use of emotive language in election campaigns By Tiffany BARNES; Charles CRABTREE; MATSUO Akitaka; ONO Yoshikuni
  9. The Management of the Pandemic and its Effects on Trust and Accountability By Monica Martinez-Bravo; Carlos Sanz
  10. Free public transit and voter turnout By Pereira, Rafael H. M.; Vieira, Renato. S.; Bizzarro, Fernando; Barbosa, Rogério J.; Dahis, Ricardo; Ferreira, Daniel Travassos
  11. The loser's long curse: electoral consequences of a class conflict By Jaakko Meriläinen; Matti Mitrunen
  12. International democracy promotion in times of autocratization: From supporting to protecting democracy By Leininger, Julia
  13. Measuring democracy By Krieger, Tommy
  14. Small Campaign Donors By Laurent Bouton; Julia Cagé; Edgard Dewitte; Vincent Pons
  15. The Political Economy of Populism By Sergei Guriev; Elias Papaioannou
  16. On the Determinants and Outcomes of IMF Loans: A Political Economy Approach By Jala Youssef; Chahir Zaki

  1. By: MIWA Hirofumi; KASUYA Yuko; ONO Yoshikuni
    Abstract: Political family dynasties are a staple part of Japanese politics. According to one study, Japan has the fourth highest number of dynastic politicians among democratic countries, after Thailand, the Philippines, and Iceland. As a result, many scholars have qualitatively studied how these political families are born and managed. In contrast to the abundance of qualitative research, however, very little quantitative research has focused on how Japanese voters view political dynasties. To understand this question, we conducted two nationwide surveys. Our major findings are that while the majority of respondents dislike dynastic candidates, they also value specific attributes of dynastic candidates, such as their political networks, their potential for ministerial appointments, and their ability to bring “pork projects†to their constituencies. These results serve as benchmark information on dynastic politics in Japan. They are also distinct from the findings of existing studies that Japanese voters are neutral about whether a candidate is from a dynastic family in voting decisions.
    Date: 2022–12
  2. By: Senay Agca; Deniz Igan
    Abstract: We examine the role of political connections in receiving federal funds during an unexpected surge in government defense spending. While the data do not allow identification of a causal link, the analysis uncovers that politically connected firms were awarded larger amounts in federal contracts when available funds increased. Specifically, firms that lobbied received around one third more in the amount of defense contracts compared to those that did not lobby. Similar evidence holds for campaign contributions and board connections. The increase in the amount of contracts obtained is observed primarily for firms that had limited ability to efficiently support Pentagon efforts, and when contracts received less scrutiny. Between political connections and merit-based channels in government contracting, the results mainly, but not exclusively, support the first channel.
    Keywords: Lobbying, Campaign contributions, Board connections, Political connections, Corporate revenue, Government spending, Procurement, Federal contracts
    JEL: D72 G38 H57 H61 P16
    Date: 2022–12
  3. By: Sergiu Hart
    Abstract: A "repeat voting" procedure is proposed, whereby voting is carried out in two identical rounds. Every voter can vote in each round, the results of the first round are made public before the second round, and the final result is determined by adding up all the votes in both rounds. It is argued that this simple modification of election procedures may well increase voter participation and result in more accurate and representative outcomes.
    Date: 2022–11
  4. By: Najia Maraoui (University of Monastir); Thouraya Hadj Amor (University of Monastir); Islem Khefacha (University of Monastir); Christophe Rault (University of Orléans)
    Abstract: In this paper, we investigate how economic, political, and institutional factors affect the choice of exchange rate regimes using data on eight Middle East and North Africa (MENA) countries over the 1984-2016 period. Specifically, we run random-effects ordered probit regressions of the likelihood of exchange rate regimes on the potential determinants of exchange rate regimes. Three important findings emerge from the analysis. The first finding is that political and institutional factors play an important role in determining the exchange rate regime in MENA countries, where a democratic political regime and a low level of corruption increase the probability of opting for a fixed regime, while strong governments, political stability (such as less internal conflicts and more government stability), more law and order enforcement, and a left-wing government decrease the probability of opting for a fixed regime. The second finding is that bureaucracy, independent central banks, elections, terms of trade, and monetary independence have no effect on the choice of exchange rate regimes. The third finding is that financial development is not a robust determinant of the choice of exchange rate regimes. Our results still hold when considering alternative specifications, and they have important implications for policymakers in MENA countries
    Date: 2021–10–20
  5. By: Golin, Marta (University of Zurich); Romarri, Alessio (University of Milan)
    Abstract: In this paper, we empirically evaluate the effect of exposure to broadband Internet on attitudes towards immigrants. We combine innovative survey data from Spain with information on the characteristics of the Spanish telephony infrastructure. To address the endogeneity of Internet availability, we exploit the fact that high-speed Internet in its early phases was supplied through the existing fixed telephone lines. We use landlines penetration as an instrument for broadband diffusion at the municipality level, and use data from both the pre- and post-Internet period to estimate a difference-in-difference instrumental variable model. We document a positive effect of broadband Internet penetration on attitudes towards immigrants at the municipality level. This result is particularly strong among young and urban individuals. Looking at mechanisms, we find that broadband Internet is associated with a better knowledge of (national) immigration dynamics and smaller concerns about the effects of migration on the labor market. Finally, using a combination of survey and electoral data, we find that broadband Internet penetration reduces political support for the Partido Popular, Spain's traditional right-wing party.
    Keywords: internet, attitudes, immigration
    JEL: D72 D83 J15
    Date: 2022–12
  6. By: Benjamin Marx (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Vincent Pons (Harvard Business School - Harvard University [Cambridge], CEPR - Center for Economic Policy Research - CEPR, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research); Vincent Rollet (MIT - Massachusetts Institute of Technology)
    Abstract: In most national elections, voters face a key choice between continuity and change. Electoral turnovers occur when the incumbent candidate or party fails to win reelection. To understand how turnovers affect national outcomes, we study the universe of presidential and parliamentary elections held since 1945. We document the prevalence of turnovers over time and estimate their effects on economic performance, trade, human development, conflict, and democracy. Using a close-elections regression discontinuity design (RDD) across countries, we show that turnovers improve country performance. These effects are not driven by differences in the characteristics of challengers, or by the fact that challengers systematically increase the level of government intervention in the economy. Electing new leaders leads to more policy change, it improves governance, and it reduces perceived corruption, consistent with the expectation that recently elected leaders exert more effort due to stronger reputation concerns.
    Date: 2022–02
  7. By: Julia Cagé (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Caroline Le Pennec (HEC Montréal - HEC Montréal); Elisa Mougin (Sciences Po - Sciences Po, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: Do campaign finance regulations influence politicians? We study the effects of a French ban on corporate donations passed in 1995. We use a difference-indifferences approach and a novel dataset combining the campaign manifestos issued by every candidate running for a seat in the French parliament with detailed data on their campaign contributions. We show that banning corporate donations discourages candidates from advertising their local presence during the campaign, as well as economic issues. The ban also leads candidates from non-mainstream parties to use more polarized language. These findings suggest that private donors shape politicians' topics of interest, and that campaign finance reforms may affect the information made available to voters through their impact on candidates' rhetoric.
    Keywords: Elections, Campaign finance, Corporate donations, Campaign manifestos, Political rhetoric, Text analysis
    Date: 2021–07–27
  8. By: Tiffany BARNES; Charles CRABTREE; MATSUO Akitaka; ONO Yoshikuni
    Abstract: How do political candidates strategically use emotive language for electoral purposes? We argue that women candidates are more constrained in the strategies available to them in shielding themselves from backlash on the campaign trail. To test our theoretical expectations, we construct and use a dataset of approximately 165, 000 Tweets from 2, 662 candidates and responses to these Tweets that were posted during the last two UK General Elections. Our analysis of candidate Tweets finds that women candidates are more positive and less negative than their men counterparts, regardless of whether they are incumbent or challengers. Importantly, this pattern of women’s behavior is not simply reflective of socialization. Indeed, our results show that negative Tweets attract more attention (in terms of the number of replies and likes) for both men and women, but that negative Tweets from women candidates are met with more negative responses than those from men. In other words, women candidates face backlash when they engage in negative emoting. These findings suggest that, consistent with our argument, women candidates are strategically motivated to behave in gender-typical ways in election campaigns.
    Date: 2022–12
  9. By: Monica Martinez-Bravo (CEMFI, Centro de Estudios Monetarios y Financieros); Carlos Sanz (Banco de España)
    Abstract: The COVID-19 pandemic took place against the backdrop of growing political polarization and distrust in political institutions in many countries. Furthermore, most governments fell short of expectations regarding preparedness and quality in the management of the pandemic. Did deficiencies in government performance further erode trust in public institutions? Did citizens’ ideology interfere on the way they processed information on their government performance? To investigate both questions, we conducted a pre-registered online experiment in Spain in November 2020. Respondents in the treatment group were provided information on the number of contact tracers in their region, a key policy under the control of regional governments. We find that individuals greatly over-estimate the number of contact tracers in their region. When we provide the actual number of contact tracers, we find: a decline in trust in governments; a reduction on willingness to fund public institutions; and a decrease in COVID-19 vaccine acceptance. We also find that individuals endogenously change their attribution of responsibilities when receiving the treatment. In regions where the regional and central governments are ruled by different parties, sympathizers of the regional incumbent react to the negative news on performance by attributing greater responsibility for it to the central government. We call this the blame shifting effect. In those regions, the negative information does not translate into lower voting intentions for the regional incumbent government. These results suggest that the exercise of political accountability may be particularly difficult in settings with high political polarization and where areas of responsibility are not clearly delineated.
    Keywords: Trust, accountability, polarization, COVID-19.
    JEL: P00 D72 H1 H7
    Date: 2022–09
  10. By: Pereira, Rafael H. M.; Vieira, Renato. S.; Bizzarro, Fernando (Harvard University); Barbosa, Rogério J.; Dahis, Ricardo; Ferreira, Daniel Travassos
    Abstract: Transportation costs are an under-appreciated barrier to political participation. Here we examine whether a large-scale intervention to lower these costs, the adoption of a fare-free transit policy on election day in Brazil, increases voter turnout. Taking into account the different timing of when municipalities adopted a fare-free transit policy between the first and second rounds of the country's 2022 presidential election, we use different event study designs to examine the policy impact on voter turnout rates, election outcomes, and human mobility levels. We find no effect of the policy on turnout or election outcomes, but we find a positive effect, between 7.2\% and 17.5\% increase, on mobility levels on election day. While reducing transportation monetary costs may improve people’s access to polling places, our findings suggest it is not sufficient on its own to increase voter turnout.
    Date: 2022–12–16
  11. By: Jaakko Meriläinen; Matti Mitrunen
    Abstract: This paper presents evidence of political legacies of exposure to a violent class conflict over 100 years. We revisit the Finnish Civil War of 1918 and first trace out the impact of local conflict exposure on electoral outcomes over a quarter-century period between the World Wars. The electoral performance of left-wing parties that backed the insurgents was persistently and negatively affected by civil war casualties on both sides of the conflict.
    Keywords: Civil conflict, Class, Elections, Politics, Conflict, War
    Date: 2022
  12. By: Leininger, Julia
    Abstract: The worldwide wave of autocratization is doing away with many of the democratic achievements made since 1989. Scholarship on international democracy promotion is yet to theorise how democracy can be protected from autocratization. Such a theory must account for different democratic and autocratic trajectories as well as integrate theoretical approaches from international relations and comparative politics in the study of democracy promotion. However, such a combined perspective is still missing. One reason for this is that the field lacks a clear concept of "protection" and does not yet systematically integrate evidence from democratization research. This paper addresses this research gap. It is the first attempt to develop a concept theory of democracy promotion, which includes support and protection of democracy. Coupling this with a depiction of six phases of regime change, this paper makes a second contribution: based on the proposed conceptual and theoretical integration, it generates a series of testable anchor points for further empirical analysis on what strategies are most likely to be effective during the various phases of regime change.
    Keywords: democracy promotion, democratization, autocratization, concept-formation
    Date: 2022
  13. By: Krieger, Tommy
    Abstract: This short article contributes to the Elgar Encyclopedia of Public Choice by summarizing the literature on the measurement of democracy. I proceed in two step. In the first part, I describe the classical approach for producing a measure of democracy and sketch an alternative approach. The second part provides an overview about existing democracy index.
    Keywords: Democracy, index numbers, measurement of democracy, political institutions, regime classification
    JEL: C43 O43 P00
    Date: 2022
  14. By: Laurent Bouton (GU - Georgetown University [Washington], CEPR - Center for Economic Policy Research - CEPR, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research); Julia Cagé (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Edgard Dewitte (Sciences Po - Sciences Po); Vincent Pons (Harvard Business School - Harvard University [Cambridge], CEPR - Center for Economic Policy Research - CEPR, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research)
    Abstract: We study the characteristics and behavior of small campaign donors and compare them to large donors by building a dataset including all the 340 million individual contributions reported to the U.S. Federal Election Commission between 2005 and 2020. Thanks to the reporting requirements of online fundraising platforms first used by Democrats (ActBlue) and now Republicans (WinRed), we observe contribution-level information on the vast majority of small donations. We first show that the number of small donors (donors who do not give more than $200 to any committee during a two-year electoral cycle) and their total contributions have been growing rapidly. Second, small donors include more women and more ethnic minorities than large donors, but their geographical distribution does not differ much. Third, using a saturated fixed effects model, we find that race closeness, candidate ideological extremeness, whether candidates and donors live in the same district or state, and whether they have the same ethnicity increase contributions, with lower effects for small donors. Finally, we show that campaign TV ads affect the number and size of contributions to congressional candidates, particularly for small donors, indicating that pull factors are relevant to explain their behavior.
    Keywords: Campaign finance, Campaign contributions, Small donations, ActBlue, WinRed, TV advertising
    Date: 2021–12–06
  15. By: Sergei Guriev (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Elias Papaioannou (London Business School)
    Abstract: We synthesize the literature on the recent rise of populism. First, we discuss definitions and present descriptive evidence on the recent increase in support for populists. Second, we cover the historical evolution of populist regimes since the late nineteenth century. Third, we discuss the role of secular economic factors related to cross-border trade and automation. Fourth, we review studies on the role of the 2008–09 global financial crisis and subsequent austerity, connect them to historical work covering the Great Depression, and discuss likely mechanisms. Fifth, we discuss studies on identity politics, trust, and cultural backlash. Sixth, we discuss economic and cultural consequences of growth in immigration and the recent refugee crisis. We also discuss the gap between perceptions and reality regarding immigration. Seventh, we review studies on the impact of the internet and social media. Eighth, we discuss the literature on the implications of populism's recent rise. We conclude outlining avenues for further research.
    Date: 2022–09
  16. By: Jala Youssef (University of Paris 1 Panthéon-Sorbonne); Chahir Zaki (Cairo University and Lead Economist, Economic Research Forum (ERF))
    Abstract: The main objective in this paper is to empirically analyze the economic and political determinants of IMF lending in low- and middle-income countries. Compared to the existing literature, our main contribution is twofold. First, using the IMF Monitoring of Fund Agreements (MONA) database, we merge domestic political and institutional factors with international political economy factors to analyze IMF lending determinants. Second, we use the predicted values of determinants of IMF lending as instruments to explain the consequences of this lending on economic outcomes. Our main findings show that economic and political proximity to the IMF major shareholders matter for the likelihood of obtaining an IMF non-concessional loan. Furthermore, most of the loans seem to exert either an insignificant or a negative effect on the trend component of GDP, confirming that such loans can stabilize the economies in the short term without improving the long run steady growth. Yet, democratic regimes compared to autocratic ones improve the effects of these loans on economic growth and other outcomes (such as the current account and inflation). By contrast, key physical and human capital variables do not seem to be significantly affected by such loans.
    Date: 2021–10–20

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