nep-pol New Economics Papers
on Positive Political Economics
Issue of 2023‒03‒20
nine papers chosen by
Eugene Beaulieu
University of Calgary

  1. Shadow Lobbyists By D'Este, Rocco; Draca, Mirko; Fons-Rosen, Christian
  2. Disentangling individual biases in jury voting: An empirical analysis of voting behavior in the Eurovision Song Contest By Budzinski, Oliver; Gänßle, Sophia; Weimar, Daniel
  3. Income Misperception and Populism By Thilo N. H. Albers; Felix Kersting; Fabian Kosse
  4. The Political Economy of Slum Growth: Evidence from Brazil By Alves, Guillermo
  5. Mind your language: Political discourse affects deforestation in the Brazilian Amazon By Magalhães de Oliveira, Gustavo; Sellare, Jorge; Börner, Jan
  6. Non-Majoritarian Institutions - A Menace to Constitutional Democracy? By Voigt, Stefan
  7. Does voluntary disclosure of polarizing information make polarization deeper? An online experiment on Russo-Ukrainian War By Chapkovski, Philipp; Zakharov, Alexei
  8. Transparency and Policy Competition: Experimental Evidence from German Citizens and Politicians By Sebastian Blesse; Philipp Lergetporer; Justus Nover; Katharina Werner
  9. Politics and Housing: The Impact of the Political Environment on Residential Construction in Germany By Julius Range

  1. By: D'Este, Rocco (University of Sussex); Draca, Mirko (London School of Economics); Fons-Rosen, Christian (University of California, Merced)
    Abstract: Special interest influence via lobbying is increasingly controversial and legislative efforts to deal with this issue have centred on the principle of transparency. In this paper we evaluate the effectiveness of the current regulatory framework provided by the US Lobbying Disclosure Act (LDA). Specifically, we study the role of ex-Congressional officials who join US lobbying firms in positions that could be related to lobbying activity but without officially registering as lobbyists themselves. We find that firm lobbying revenues increase significantly when these potential 'shadow lobbyists' join, with effects in the range of 10-20%. This shadow lobbyist revenue effect is comparable to the effect of a registered lobbyist at the median of the industry skill distribution. As such, it is challenging to reconcile the measured shadow lobbyist effect with the 20% working time threshold for registering as a lobbyist. Based on our estimates, the unaccounted for contributions of unregistered lobbyists can be valued at $149 million USD in revenue terms and this effect is concentrated within the industry's largest and most active firms.
    Keywords: lobbying, revolving door, political money
    JEL: D72
    Date: 2023–02
  2. By: Budzinski, Oliver; Gänßle, Sophia; Weimar, Daniel
    Abstract: The Eurovision Song Contest is one of the worldwide biggest live media events and the world's leading broadcast of an international music competition. The countries of the European Broadcasting Union participate by sending an artist (or a group of artists) to the contest and both expert juries and the television audience of all participating countries vote in a special ranking and points system to determine the eventual winner. A substantial list of cultural economics papers empirically analyzed the voting behavior of juries (consisting of music industry professionals) and audiences to identify voting biases because of cultural and political influences on the voting bodies. Due to limited data availability, this literature suffered from having to treat the national juries as a black box even though they are composed of individuals with different demographic characteristics (age, gender, etc.) and expert backgrounds (industry managers, musicians, composers, music journalists, etc.). Our analysis benefits from utilizing new data about each individual member of the jury including their role within the jury (e.g., the chairperson) as well as about their individual votes in the ESC. Therefore, for the first time, we can disentangle the voting behavior of the juries and track the voting behavior of individual jury members. Based upon a rich dataset including personal characteristics (gender, age, career/professional background, nationality, cultural heritage, etc.) of both jury members (voters) and performing artists in the contest (voting objects), we analyze whether the increasing similarity between voter (jury member) and voting object (contest performer) correlates with upward biases in terms of awarded points. In doing so, we employ the concept of Mahalanobis distance to measure similarity and employ modern econometric regression methods to derive our results. Inter alia, we identify conditions under which the similarity of jury members with contestants leads to a pro-bias in voting (across different countries). Interestingly, the professional background of jury members also significantly influences the individual voting bias, for instance, experts with classical music backgrounds display significantly less bias than presenters of radio or television programs or music journalists. Altogether, our analysis allows us to look beyond the hitherto dominating 'country X is biased for/against country Y' conclusions and track voting biases on an individual level, based on personal characteristics.
    Keywords: voting bias, jury voting, Eurovision Song Contest, media economics, cultural economics
    JEL: Z10 L82 C01
    Date: 2023
  3. By: Thilo N. H. Albers; Felix Kersting; Fabian Kosse
    Abstract: We propose that false beliefs about the own current economic status are an important factor for explaining populist attitudes. Along with the subjects' receptiveness to right-wing populism, we elicit their perceived relative income positions in a representative survey of German households. We find that people with pessimistic beliefs about their income position are more attuned to populist statements. Key to understanding the misperception-populism relationship are strong gender differences in the mechanism: Misperception triggers income dissatisfaction for both men and women, but the former are much more likely to channel their discontent into affection for populist ideas.
    Keywords: Perception, income, populism
    JEL: D63 D72 D91 P16
    Date: 2022
  4. By: Alves, Guillermo
    Abstract: One-fourth of the world’s urban population lives in slums and the number of slum residents grew from 650 million in 1990 to 1 billion in 2018. Existing explanations for slum growth focus on rural-urban migration and poverty. While these factors are relevant for rapidly urbanizing low-income countries, slum growth is frequent in highly urbanized, middle-income countries in Latin America. This paper provides evidence from Brazil that local government actions can increase slum growth without changes in poverty or immigration. Using a regression discontinuity design in close elections, I find that victories by a center-left, pro-poor party in the 2000 municipal election strongly increased the share of households living in slums in 2010 compared to 2000. I explore the mechanisms behind this result with a novel panel of census tracts and data on municipalities’ policies, expenditures, and sociodemographics. A more permissive attitude towards the formation of new slums is the main candidate to explain the observed effect.
    Keywords: Economía, Investigación socioeconómica, Pobreza, Vivienda,
    Date: 2023
  5. By: Magalhães de Oliveira, Gustavo; Sellare, Jorge; Börner, Jan
    Abstract: Land users make decisions in an increasingly dynamic environment. Changes in expectations are driven by market and non-market factors, but research on market related drivers of land use change so far dominates in the literature. This paper examines how political discourses affect deforestation rates in the Brazilian Amazon region. Relying on novel data from Twitter, we present the first causal evidence of political discourse on deforestation. Our analysis relies on municipal level monthly panel data for 2019 with alternative remotely sensed measures of forest loss and vegetation fires as outcome variables. The effect of political discourse on these outcomes is identified using a shift-share regression approach. High exposure to laissez-faire political discourses increases forest loss by 2.3-3%, and fires by 2.2%. Our findings are robust across land tenure regimes, varying levels of policy enforcement, and alternative shift-share measures. Moreover, excluding dry season periods from the analysis does not change the main result. Land use in the Brazilian Amazon is highly sensitive to whether, how, and when authorities communicate their will to enforce environmental policy regulations. ‘Walking the talk’ remains imperative to protect the world’s tropical forests, but this study suggests that policy makers must carefully choose their words while walking.
    Keywords: Environmental Economics and Policy
    Date: 2023–03–06
  6. By: Voigt, Stefan
    Abstract: Over the last couple of decades, non-majoritarian institutions (NMIs) have been introduced in many countries. Of late, they have been criticized as promoting technocracy to the detriment of democracy. A number of political scientists even argue that they would strengthen populists and be, hence, one reason for democratic backsliding. This paper does three things: It firstly briefly discusses the empirical evidence for the claim that NMIs have strengthened populists. It secondly argues that not all NMIs are born equal and therefore proposes a taxonomy enabling us to distinguish different types. And it finally discusses the question how the delegation of policy-making competence to experts can be legitimized relying on a specific version of social contract theory. To develop the argument, the interdependence cost calculus developed by Buchanan and Tullock (1962) is modified by explicitly including the respective decision-making procedure, distinguishing between direct democracy, representative democracy, and expert decision-making.
    Keywords: Nonmajoritarian institutions, constitutional democracy, technocracy, independent regulatory agencies, populism, social contract theory
    JEL: H11 K38 P51
    Date: 2023
  7. By: Chapkovski, Philipp; Zakharov, Alexei
    Abstract: Does the animosity toward a holder of an opposite political opinion or the behavior toward someone whose opinion on a divisive issue is unknown depends on whether that opinion was disclosed or withheld voluntarily? In order to study this question, we conducted a pre-registered study in Russia, measuring the pro-war dictators' behavior towards their partners with aligned or conflicting views on the war in Ukraine using give-or-take modification of Dictator Game. In the presence of a large polarisation gap (outgroup discrimination), we did not find that intentional vs. unintentional disclosure of the recipients' positions affected the transfers of the dictators; at the same time, dictators' beliefs about the share of war supporters among experiment participants and the donations made by other dictators were causally affected. Our study is the first one to consider this dimension of social interactions, and contributes to the quickly growing literature on political polarisation.
    Keywords: disclosure; transparency; polarization; dictator game; war in Ukraine; Russia
    JEL: C91 C92 D64 D74 D82 D83
    Date: 2023–02–12
  8. By: Sebastian Blesse (Ludwig Erhard ifo Center for Social Market Economy and Institutional Economics and CESifo and ZEW Mannheim); Philipp Lergetporer (Technical University of Munich, TUM School of Management, TUM Campus Heilbronn and CESifo); Justus Nover (ZEW Mannheim and University of Mannheim); Katharina Werner (ifo Center for the Economics of Education and CESifo)
    Abstract: A lack of transparency about policy performance can pose a major obstacle to welfare-enhancing policy competition across jurisdictions. In parallel surveys with German citizens and state parliamentarians, we document that both groups misperceive the performance of their state’s education system. Experimentally providing performance information polarizes citizens’ political satisfaction between high- and low-performing states and increases their demand for greater transparency of states’ educational performance. Parliamentarians’ support for the transparency policy is opportunistic: Performance information increases (decreases) policy support in high-performing (low-performing) states. We conclude that increasing the public salience of educational performance information may incentivize politicians to implement welfare-enhancing reforms.
    Keywords: yardstick competition, beliefs, information, citizens, politicians, survey experiment
    JEL: H11 I28 D83
    Date: 2023–02
  9. By: Julius Range
    Abstract: Examining German residential construction activity using quarterly flows of building permits, this study investigates the linkage between politics and housing supply. Applying separate dynamic time series regression models for commercial property developers and owner-occupiers proves the heterogeneity of decision-making concerning considered external factors. The approach finds quarterly flows of building permits for residential property developments to be negative correlated with significant changes in election polls triggered by exogenous shocks. Owner-occupier building activity is found to be positive associated with household’s savings rate appearing to increase during times of crises. Slumps in construction activity are further identified during COVID-19 lockdown periods. The study results prove the impact of political surrounding factors on decision making processes related to residential construction contributing to the comprehensibility of German construction activity.
    Keywords: political uncertainty; residential construction
    JEL: R3
    Date: 2022–01–01

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