nep-pol New Economics Papers
on Positive Political Economics
Issue of 2023‒02‒20
seventeen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Mobile internet and the rise of political tribalism in Europe By Manacorda, Marco; Tabellini, Guido; Tesei, Andrea
  2. Comparing Voting Methods : 2016 US Presidential Election By Herrade Igersheim; François Durand; Aaron Hamlin; Jean-François Laslier
  3. The Economics of Woman's Rights The Mary Paley and Alfred Marshall Lecture By Michele Tertilt; Matthias Doepke; Anne Hannusch; Laura Montenbruck
  4. The political economy of public sector absence By Callen, Mike; Gulzarz, Saad; Hasanain, Ali; Khan, Muhammad Yasir; Rezaeek, Arman
  5. Electoral Cycles in Tax Reforms By Mr. Antonio David; Can Sever
  6. Legacies of victimization: Evidence from forced resettlement in Zimbabwe By Shelley Liu
  7. Taste of home: Birth town bias in Geographical Indications By Resce, Giuliano; Vaquero-Piñeiro, Cristina
  8. Is Democracy Good for Growth? | Development at Political Transition Time Matters By Sima, Di; Huang, Fali
  9. Elections and norms of behaviour: a survey By Marco Giani; Pierre-Guillaume Méon
  10. The Status Quo and Belief Polarization of Inattentive Agents: Theory and Experiment By Vladimir Novak; Andrei Matveenko; Silvio Ravaioli
  11. Trust in institutions and the profile of inequality: A worldwide perspective By Domenico Moramarco; Flaviana Palmisano
  12. Expecting Brexit By Dhingra, Swati; Sampson, Thomas
  13. The political economy of reforming agricultural support policies By Vos, Rob; Martin, Will; Resnick, Danielle
  14. Electoral Accountability and Local Support for National Policies By Alabrese, Eleanora; Liberini, Federica; Porcelli, Francesco; Redoano, Michela; Russo, Antonio
  15. Accounting for the long-term stability of the welfare-state regimes in a model with distributive preferences and social norms By Gilles Le Garrec
  16. Support for Renewable Energy, The Case of Windpower By Robert Germeshausen; Sven Heim; Ulrich Wagner
  17. International Trade, Global Inequality and Specialization from a Political Economy Perspective By Clara Brenck; Duncan Foley

  1. By: Manacorda, Marco; Tabellini, Guido; Tesei, Andrea
    Abstract: We study the political effects of the diffusion of mobile Internet between 2007 and 2017, using data on electoral outcomes and on mobile Internet signal across the 84, 564 municipalities of 22 European countries. We find that access to mobile Internet increased voters' support for right-wing populist parties and for parties running on extreme socially conservative platforms, primarily in areas with greater economic deprivation. Using survey data, we also show that mobile Internet increased communitarian attitudes, such as nationalism and dislike of strangers and minorities. We conclude that mobile Internet benefitted right-wing populist parties because, in line with findings in social psychology, it fostered offline tribalism.
    Keywords: populism; communitarianism; Europe; mobile internet
    JEL: D72 D91 L86
    Date: 2022–10–14
  2. By: Herrade Igersheim (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique, UNISTRA - Université de Strasbourg); François Durand (Nokia Bell Labs); Aaron Hamlin (The Center for Election Science, Redding); Jean-François Laslier (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This paper presents data from a survey leading up to the 2016 US presidential elections. Participants were asked their opinions about the candidates and were also asked to vote according to three alternative voting rules, in addition to plurality: approval voting, range voting, and instant runoff voting. The participants were split into two groups, one facing a set of four candidates (Clinton, Trump, Johnson, and Stein) and the other a set of nine candidates (the previous four plus Sanders, Cruz, McMullin, Bloomberg, and Castle). The paper studies three issues: (1) How do US voters use these alternative rules? (2) What kinds of candidates, in terms of individual preferences, are favored by which rule? (3) Which rules empirically satisfy the independence of eliminated alternatives? Our results provide evidence that, according to all standard criterion computed on individual preferences, be there utilitarian or of the Condorcet type, the same candidate (Sanders) wins, and that evaluative voting rules such as approval voting and range voting might lead to this outcome, contrary to direct plurality and instant runoff voting (that elects Clinton) and to the official voting rule (that elected Trump).
    Keywords: US Presidential election., Approval voting, range voting, instant runoff, strategic voting
    Date: 2022–01–01
  3. By: Michele 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
    Keywords: Women's Rights, Female Suffrage, Family Economics, Bargaining, Political Economy
    JEL: D13 D72 E24 J12 J16 N4 N30 O10 O43
    Date: 2022–11
  4. By: Callen, Mike; Gulzarz, Saad; Hasanain, Ali; Khan, Muhammad Yasir; Rezaeek, Arman
    Abstract: The paper examines how politics relates to public sector absenteeism, a chronic and intractable public service delivery problem in many developing countries. In Punjab, Pakistan, we document that political interference routinely protects doctors from bureaucratic sanction, while personal connections between doctors and politicians and a lack of political competition are associated with more doctor absence. We then examine how politics impacts the success of an at-scale policy reform to combat absenteeism. We find that the reform was more effective at increasing doctor attendance in politically competitive constituencies, both through increased monitoring and through senior health officials being able to respond more effectively to the data gathered on poor performing clinics. Our results demonstrate that politics can block the success of reform; instead of lifting poor performers up, the reform only improved places that had already been performing better. The evidence collectively points to the fundamental importance of accounting for political incentives in policy design and implementation.
    Keywords: Elsevier deal
    JEL: J1
    Date: 2023–02–01
  5. By: Mr. Antonio David; Can Sever
    Abstract: We examine electoral cycles in tax reforms using monthly data over the period of 1990-2018 for 22 advanced economies and emerging markets. We show that governments tend to avoid announcing tax reforms during the months running up to elections. In addition, they become more likely to announce those reforms in the first few months following elections, indicating that “political capital” plays a role in the timing of reforms. These patterns are broad-based regarding the changes in tax base and rate, and for various types of taxes. We also find that the pre-election decrease in the likelihood of tax reform announcements is stronger in emerging markets, and weaker in the countries with relatively better institutional quality. Finally, our results indicate that neither fiscal rules nor IMF programs appear to have differential effects on electoral cycles in tax reforms.
    Keywords: Tax Reforms; Electoral Cycles; Political Economy; Institutional Quality; reform announcement; elections in the sample; announcements decrease; election dummy; election variable; Fiscal rules; Probit models; Personal income tax; Social security contributions; Emerging and frontier financial markets; Global
    Date: 2022–11–04
  6. By: Shelley Liu
    Abstract: How does wartime victimization shape victims' political attitudes in the long run? We argue that violence increases politics' salience to victimized communities, which in turn increases these communities' political awareness and evaluation of governance quality decades after war has ended. We examine Protected Villages in the Zimbabwe Liberation War (1972-79).
    Keywords: Political attitudes, Political violence, Resettlement, Zimbabwe, Post-conflict, Political participation
    Date: 2023
  7. By: Resce, Giuliano; Vaquero-Piñeiro, Cristina
    Abstract: We investigate the role of local favoritism in the Geographical Indications (GIs) quality scheme, one of the main pillars of agri-food policy in the EU. Taking advantage of a rich and unique municipalities' geo-referenced database over the 2000-2020 period, we evaluate whether the birthplaces of Regional council members are favored in the acknowledgment of GIs in Italy. To address the potential confounding effects and selection biases, we combine a Difference in Difference strategy with machine learning methods for counterfactual analysis. Results reveal that councilors' birth municipalities are more likely to obtain their products certified as GIs. The birth town bias is more substantial in areas where the level of institutional quality is lower, there is higher corruption, and lower government efficiency, suggesting that the mediation of politicians is determinant where the formal standardized procedures are muddled.
    Keywords: Political Economy; Geographical Indications; Political representation; Electoral success; Local Development.
    JEL: D72 L66 Q18 R11
    Date: 2023–02–07
  8. By: Sima, Di (Nanjing Audit University); Huang, Fali (Singapore Management University)
    Abstract: Is democracy a better political regime for economic prosperity than autocracy? This paper shows that the answer depends on the initial economic development level during the democratic transition when the foundation of institutions was laid. Democracy fa-cilitates growth only in countries that already have adequate development at transition time. These countries are more likely to create and sustain growth-enhancing insti-tutions than others. Without appropriate development, democracy does not improve growth; this applies to about 40% of the third-wave democratized countries. These results are based on a sample of 153 countries in 1960-2010 and robust to various spec-ifications and endogeneity issues.
    Keywords: Democracy; Growth; Economic Development; Institutions; Critical Junc-ture; Democratization; Modernization; Human Capital.
    JEL: D73 E02 I25 O10 O43 P16 P48
    Date: 2022–11–27
  9. By: Marco Giani; Pierre-Guillaume Méon
    Abstract: This paper surveys the recent literature on the relation between social norms and electoral outcomes. It argues that the relation goes both ways: social norms can affect electoral outcomes and vice versa.
    Date: 2023–01–05
  10. By: Vladimir Novak; Andrei Matveenko; Silvio Ravaioli
    Abstract: We show that rational but inattentive agents can become polarized ex-ante. We present how optimal information acquisition, and subsequent belief formation, depend crucially on the agent-specific status quo valuation. Beliefs can systematically - in expectations over all possible signal realizations conditional on the state of the world - update away from the realized truth and even agents with the same initial beliefs might become polarized. We design a laboratory experiment to test the model’s predictions. The results confirm our predictions about the mechanism (rational information acquisition), its effect on beliefs (systematic polarization) and provide general insights into demand for information.
    Keywords: Polarization, Beliefs Updating, Rational Inattention, Status Quo, Experiment
    JEL: C92 D72 D83 D84 D91
    Date: 2023–01
  11. By: Domenico Moramarco; Flaviana Palmisano
    Abstract: This paper investigates the importance of accounting for the profile of inequality in the analysis of institutional trust. Drawing on individual data from 82 countries around the world over the 1981-2021 period, it sheds light on the potential limitations of exploring the impact of the income distribution's shape on trust, using—as is traditional in the literature—a single inequality indicator. Results suggest that total income inequality and institutional trust are positively associated but this aggregated result hides some troubling countervailing effects.
    Keywords: Trust, Institutions, Inequality, Income inequality, Political attitudes
    Date: 2023
  12. By: Dhingra, Swati; Sampson, Thomas
    Abstract: The Brexit vote precipitated the unravelling of the UK's membership of the world's deepest economic integration agreement. This paper reviews evidence on the realized economic effects of Brexit. The 2016 Brexit referendum changed expectations about future UK-EU relations. Studying its consequences provides new insights regarding the economic impacts of news and uncertainty shocks. Voting for Brexit had large negative effects on the UK economy between 2016 and 2019, leading to higher import and consumer prices, lower investment, and slower real wage and GDP growth. However, at the aggregate level, there was little or no trade diversion away from the EU, implying that many of the anticipated long-run effects of Brexit did not materialize before the new UK-EU trade relationship came into force in 2021.
    Keywords: Brexit; UK economy; import prices; consumer prices; ES/V004514/1; ES/V007270/1
    JEL: J1 L81
    Date: 2022–01–25
  13. By: Vos, Rob; Martin, Will; Resnick, Danielle
    Abstract: Agricultural support policies cost more than US$800 billion per year in transfers to the farm sector worldwide. Support policies based on subsidies and trade barriers are highly distortive to markets and are also regressive as most support is provided to larger farmers. On balance, the incentives this support creates appear to increase greenhouse gas emissions that contribute to climate change. In addition, some subsidies undermine the production of more nutrient-dense commodities that are otherwise critical for the improvement of dietary outcomes. This paper first highlights that better outcomes could be achieved if even a small portion of agricultural subsidies were repurposed into investments in research and development (R&D) dedicated to productivity-enhancing and emission-reducing technologies. This would create multiple wins — mitigating global climate change, reducing poverty, increasing food security, and improving nutrition. Nonetheless, the political economy challenges to doing so are sizeable. Because current support policies are often politically popular and serve well-organized interests, reform is difficult without committed political leadership and multilateral collaboration. Using several case studies of both successful and failed changes of agricultural support policies in China, India, and the EU and the United States, we highlight lessons learned about the political economy constraints on and possibilities for reform.
    Keywords: CHINA; EAST ASIA; ASIA; INDIA; SOUTH ASIA; EUROPEAN UNION COUNTRIES; UNITED STATES; USA; NORTH AMERICA; AMERICAS; agriculture; agricultural policies; climate change; commodities; farmers; food security; greenhouse gas emissions; markets; market disruptions; nutrition; political systems; subsidies; trade barriers; economic reform; emission-reducing technologies
    Date: 2022
  14. By: Alabrese, Eleanora (University of Warwick); Liberini, Federica (QMUL); Porcelli, Francesco (University of Bari); Redoano, Michela (University of Warwick); Russo, Antonio (University of Sheffield)
    Abstract: We study the provision of information by local governments that supports individual compliance with nationwide regulation, and how this provision relates to the electoral process. We use information about individual mobility (compliance with the lockdown) and Facebook posts by Italian local governments during the Covid 19 pandemic. We show that in municipalities where mayors were up for reelection, local governments provided significantly more covid-related information. This information caused a significant decrease in mobility and excess mortality. However, these effects seem to arise only in the northern regions of the country, where the impact of the pandemic was more severe. JEL Codes: TBD
    Keywords: Covid ; Elections ; Facebook
    Date: 2023
  15. By: Gilles Le Garrec (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: After the Esping-Andersen' (1990) seminal study, welfare states are standardingly clustered in three identifiable regimes, liberal for Anglo-Saxon countries, corporatist for Continental Europe and social-democratic for Nordic countries, into which the levels of income redistribution can be ranked, from the lowest for the first to the highest for the last. By finding that most European continental countries are now clustered in the high-taxation group along with Nordic countries, a recent study by Péligry and Ragot (2022) has suggested that the welfare states can evolve and change over time, casting doubt on the long-term stability of the canonical clustering.
    Keywords: Redistribution, voting behavior, fairness, endogenous preferences
    Date: 2023–01
  16. By: Robert Germeshausen; Sven Heim; Ulrich Wagner
    Abstract: The rise of societal goals like climate change mitigation and energy security calls for rapid capacity growth in renewable electricity sources, yet citizens’ support is put to a test when such technologies emit negative local externalities. We estimate the impact of wind turbine deployment on granular measures of revealed preferences for renewable electricity in product and political markets. We address potentially endogenous siting of turbines with an IV design that exploits quasi experimental variation in profitability induced by subsidies. We find that wind turbines significantly reduce citizens’ support locally, but this effect quickly fades with distance from the site. We assess policy instruments for enhancing citizens’ support for renewable energy in light of our results
    Keywords: Renewable Energy, Wind Power, Public Support, Elections, Externalities
    JEL: D12 D72 Q42 Q48 Q50
    Date: 2023–02
  17. By: Clara Brenck (Department of Economics, New School for Social Research, USA); Duncan Foley (Department of Economics, New School for Social Research, USA)
    Abstract: In this paper we discuss possible explanations for persistent global inequalities from a political economy perspective. Different from what Smith and Marx assume in the long period method – that both capital and labor are fully mobile – we assume that labor is not mobile across regions. The lack of labor mobility is an important abstract problem to theorize about capitalist development in a globalized context. Including such assumption in the dual problem of consumption-growth and wage-profit rate, the model sheds light on some channels in which uneven development and specialization may occur: different wages and equalized profit rates can be achieved by different labor qualities or different access to technologies. If labor qualities are different, wage differences would represent only the difference in labor productivity and effective wages would be equalized, without any specialization. If technologies are different, on the other hand, specialization may occur, and trade is thus established. The lack of technological mobility can occur due to increasing returns to scale, product differentiation and different socioeconomic characteristics of countries.
    Keywords: Long period method, labor mobility, global inequality, technological differences, specialization, trade
    JEL: D30 E11 F12
    Date: 2023–02

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