nep-pol New Economics Papers
on Positive Political Economics
Issue of 2023‒05‒15
thirteen papers chosen by
Eugene Beaulieu
University of Calgary

  1. Election-Denying Republican Candidates Underperformed in the 2022 Midterms By Malzahn, Janet; Hall, Andrew B.
  2. Political Competitiveness, Regression Discontinuity and the Incumbency Effect By Jerome Archambault; Stanley L. Winer
  3. Identity Politics By Nicola Gennaioli; Guido Tabellini
  4. Political incentives and corruption evidence from ghost students By Leopoldo Fergusson
  5. Economic Integration and the Transmission of Democracy By Marco Tabellini; Giacomo Magistretti; Giacomo Magistretti
  6. Commodity windfalls, political regimes, and environmental quality By Olayinka Oyekola; Lotanna E. Emediegwu; Jubril Olayinka Animashaun
  7. Voting with Interdependent Values: The Condorcet Winner By Alex Gershkov; Andreas Kleiner; Benny Moldovanu; Xianwen Shi
  8. The Impact of Research and Development Expenditures on ESG Model in the Global Economy By Costantiello, Alberto; Leogrande, Angelo
  9. The Determinants of CO2 Emissions in the Context of ESG Models at World Level By Costantiello, Alberto; Leogrande, Angelo
  10. Order Independence in Sequential, Issue-by-Issue Voting By Alex Gershkov; Benny Moldovanu; Xianwen Shi
  11. Democratic Policy Decisions with Decentralized Promises Contingent on Vote Outcome By Ali Lazrak; Jianfeng Zhang
  12. Guns, pets, and strikes: an experiment on identity and political action By Ginzburg, Boris; Guerra, José-Alberto Guerra
  13. Social Welfare Functions with Voters Qualifications: Impossibility Results By Yasunori Okumura

  1. By: Malzahn, Janet (Stanford Institute for Economic Policy Research, Stanford U); Hall, Andrew B. (Stanford U)
    Abstract: We combine newly collected election data with records of public denials of the results of the 2020 election to estimate the degree to which election-denying Republican candidates for senator, governor, secretary of state, and attorney general over- or under-performed other Republicans in 2022. We find that the average vote share of election-denying Republicans in statewide races was approximately 2.3 percentage points lower than their co-partisans after accounting for state- level partisanship. Election-denying candidates received roughly 2 percentage-points more vote share than other Republican candidates in primaries, on average, although this estimate is quite uncertain. The general-election penalty is larger than the margin of victory in battleground states in recent close presidential elections, suggesting that nominating election-denying can- didates in 2024 could be a damaging electoral strategy for Republicans. At the same time, it is small enough to suggest that only a relatively small group of voters changed their vote in response to having an election-denying candidate on the ballot.
    Date: 2023–02
  2. By: Jerome Archambault; Stanley L. Winer
    Abstract: In an RDD study of the incumbency effect, observations somewhat away from the threshold separating winners and losers in an election are necessarily employed. We consider how incorporating the vote volatility of elections into a preferred index of electoral competitiveness or closeness, in contrast to the often used unadjusted vote share margin, affects the estimated incumbency effect through this route for Liberal party candidates in Canadian general elections, with emphasis on the post-1950 period. Estimation is by local linear nonparametric regression with a data driven bandwidth. We also consider how allowance for the competitiveness and outcomes of prior electoral contests alters the estimated incumbency effect. Comparisons of our results with previous work on incumbency in Canadian elections by Kendall and Rekkas (2012) in this journal are presented, along with a reproduction of their model, for the cases we consider, based on combining our refined and extended electoral data with their (volatility unadjusted) index of electoral closeness and different estimation methodology.
    Keywords: incumbency effect, regression discontinuity, political competitiveness, vote volatility, heterogeneity, interaction, organizational quality, reproduction
    JEL: D72 C40
    Date: 2023
  3. By: Nicola Gennaioli; Guido Tabellini
    Abstract: We offer a theory of changing dimensions of political polarization based on endogenous social identity. We formalize voter identity and stereotyped beliefs as in Bonomi et al. (2021), but add parties that compete on policy and also spread or conceal group stereotypes to persuade voters. Parties are historically connected to different social groups, whose members are more receptive to the ingroup party messages. An endogenous switch from class to cultural identity accounts for three major observed changes: i) growing conflict over cultural issues between voters and between parties, ii) dampening of political conflict over redistribution, despite rising inequality, and iii) a realignment of lower class voters from the left to the right. The incentive of parties to spread stereotypes is a key driver of identity-based polarization. Using survey data and congressional speeches we show that - consistent with our model - there is evidence of i) and ii) also in the voting realignment induced by the ”China Shock” (Autor et al. 2020).
    Date: 2023
  4. By: Leopoldo Fergusson
    Abstract: We study the effect of links between politicians on corruption under prevailing clientelism. Connections between politicians increase fabricated "ghost" students to obtain more national transfers, without raising the quality or quantity of education. Bureaucratic turnover, temporary and discretionary hiring, electoral fraud, and complaints against functionaries also increase. Effects on ghosts are larger in municipalities with more clientelism, discretion over resource spending, and weaker oversight. The findings favor a venal view of corruption, where politicians divert resources for personal gain rather than to favor their constituencies. Nonetheless, they have better future career prospects, reflecting a failure of electoral control.
    Keywords: Education, political agency, corruption, clientelism.
    JEL: D7 H5 H7 I2
    Date: 2023–04–19
  5. By: Marco Tabellini (Harvard Business School, NBER, CEPR, and IZA); Giacomo Magistretti (International Monetary Fund); Giacomo Magistretti (IMF)
    Abstract: In this paper, we study the effects of economic integration with democracies on individuals’ democratic values and on countries’ institutions. We combine survey data with country level measures of democracy from 1960 to 2015, and exploit improvements in air, relative to sea, transportation to derive a time-varying instrument for trade. We find that economic integration with democracies increases both citizens’ support for democracy and countries’ democracy scores. Instead, trade with non-democracies has no impact on either attitudes or institutions. The effects of trade with democracies are stronger when partners have a longer history of democracy, grow faster, spend more on public goods, and are culturally closer. They are also driven by imports, rather than exports, and by integration with partners that export higher quality goods and that account for a larger share of a country’s trade in institutionally intensive, cultural, and consumer goods as well as in goods that involve more face-to-face interactions and entail higher levels of bilateral trust. These patterns are consistent with trade in goods favoring the transmission of democracy by signaling the (actual or perceived) desirability of the latter. We examine alternative mechanisms, and conclude that none of them can, alone, explain our findings.
    Keywords: Democracy, political preferences, institutions, economic integration
    JEL: F14 F15 P16
    Date: 2023–01
  6. By: Olayinka Oyekola (Department of Economics, University of Exeter); Lotanna E. Emediegwu (Department of Economics, Policy and International Business, Manchester Metropolitan University); Jubril Olayinka Animashaun (Department of Economics, University of Manchester)
    Abstract: There are considerable differences in greenhouse gas emissions across countries, with little consensus on the extent to which political regimes affect environmental outcomes. This paper shows that the incentives that resource endowments and prices generate are key to understanding the influence of political regimes on emission outcomes. We analyze the relationship between commodity windfalls and CO2 emissions in a model of stratified political regimes, identifying the limits of democracies for environmental quality. To study the impact of international commodity prices on CO2 emissions, we use a panel of 179 countries covering the period 1970 to 2018. We then explore democracies and autocracies as channels for the heterogeneous effects of commodity windfalls on environmental quality. Our panel fixed effects estimation strategies account for the rich dynamics of contemporaneous emissions. Our baseline results show that commodity windfalls increase CO2 emissions in the long run. Similarly, countries with above threshold scores by measures of democratic institutions, such as executive recruitment, executive constraints, and political competition, have a significantly higher levels of CO2 emissions than those with lower scores. These results are robust to several sensitivity checks.
    Keywords: commodity windfalls, democracy, environmental quality, carbon emissions
    JEL: Q56 Q33 O13 H87 H11
    Date: 2023–04–17
  7. By: Alex Gershkov; Andreas Kleiner; Benny Moldovanu; Xianwen Shi
    Abstract: We generalize the standard, private values voting model with single-peaked preferences and incomplete information by introducing interdependent preferences. Our main results show how standard mechanisms that are outcome-equivalent and implement the Con- dorcet winner under complete information or under private values yield starkly di¤erent outcomes if values are interdependent. We also propose a new notion of Condorcet winner under incomplete information and interdependent preferences, and discuss its implemen- tation. The new phenomena in this paper arise because di¤erent voting rules (including dynamic ones) induce di¤erent processes of information aggregation and learning.
    Keywords: Voting, interdependent values, Condorcet winner
    JEL: D72
    Date: 2023–04
  8. By: Costantiello, Alberto; Leogrande, Angelo
    Abstract: We estimate the value of Research and Development Expenditures as a percentage of GDP-RDE in the context of Environmental, Social and Governance-ESG model. We use the ESG World Bank database. We analyze data from193 countries in the period 2011-2020. We apply a set of econometric techniques i.e. Pooled Ordinary Least Squares-OLS, Panel Data with Random Effects, Panel Data with Fixed Effects, Weighted Least Squares-WLS. We found that the level of RDE is positively associated, among others, to “Nitrous Oxide Emissions” and “Scientific and Technical Journal Articles”, and negatively associated, among others to “Heat Index 35”, “Maximum 5-day Rainfall”. Furthermore, we perform a cluster analysis with the application of the k-Means algorithm optimized with the Elbow Method. The results show the presence of four clusters. Finally, we confront eight different machine-learning algorithms to predict the future value of RDE. We find that Linear Regression is the best predictive algorithms. RDE is expected to growth on average of 0.07% for the analysed countries.
    Keywords: Analysis of Collective Decision-Making, General, Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behaviour, Bureaucracy, Administrative Processes in Public Organizations, Corruption, Positive Analysis of Policy Formulation, Implementation.
    JEL: D7 D70 D72 D73 D78
    Date: 2023–04–10
  9. By: Costantiello, Alberto; Leogrande, Angelo
    Abstract: We estimate the determinants of CO2 Emissions-COE in the context of Environmental, Social and Governance-ESG model at world level. We use data of the World Bank for 193 countries in the period 2011-2020. We found that the level of COE is positively associated, among others to “Methane Emissions”, “Research and Development Expenditures”, and negatively associated among others to “Renewable Energy Consumption” and “Mean Drought Index”. Furthermore, we have applied a cluster analysis with the k-Means algorithm optimized with the Elbow Method and we find the presence of four cluster. Finally, we apply eight machine-learning algorithms for the prediction of the future value of COE and we find that the Artificial Neural Network-ANN algorithm is the best predictor. The ANN predicts a reduction in the level of COE equal to 5.69% on average for the analysed countries.
    Keywords: Analysis of Collective Decision-Making, General, Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behaviour, Bureaucracy, Administrative Processes in Public Organizations, Corruption, Positive Analysis of Policy Formulation, Implementation.
    JEL: D7 D70 D72 D73 D78
    Date: 2023–04–20
  10. By: Alex Gershkov; Benny Moldovanu; Xianwen Shi
    Abstract: We study when the voting outcome is independent of the order of issues put up for vote in a spacial multi-dimensional voting model. Agents equipped with norm- based preferences that use a norm to measure the distance from their ideal policy vote sequentially and issue-by-issue via simple majority. If the underlying norm is generated by an inner-product – such as the Euclidean norm – then the voting outcome is order independent if and only if the issues are orthogonal. If the underlying norm is a general one, then the outcome is order independent if the basis defining the issues to be voted upon satisfies the following property: for any vector in the basis, any linear combination of the other vectors is Birkhoff-James orthogonal to it. We prove a partial converse in the case of two dimensions: if the underlying basis fails the above property then the voting order matters. Finally, despite existence results for the two-dimensional case and for the general lp case, we show that non-existence of bases with the above property is generic.
    Keywords: Sequential voting, order independence, norm-based preferences
    JEL: D72
    Date: 2023–04
  11. By: Ali Lazrak; Jianfeng Zhang
    Abstract: We study how decentralized utility transfer promises affect collective decision-making by voting. Committee members with varying levels of support and opposition for an efficient reform can make enforceable promises before voting. An equilibrium requires stability and minimal promises. Equilibrium promises exist and are indeterminate, but do share several key characteristics. Equilibria require transfer promises from high to low intensity members and result in enacting the reform. When reform supporters lack sufficient voting power, promises must reach across the aisle. Even if the coalition of reform supporters is decisive, promises must preclude the least enthusiastic supporters of the reform from being enticed to overturn the decision. In that case, equilibrium promises do not need to reach across the aisle. We also discuss a finite sequence of promises that achieve an equilibrium.
    Date: 2023–04
  12. By: Ginzburg, Boris; Guerra, José-Alberto Guerra
    Abstract: We study the role of collective action in creating shared identity and shaping subsequent social interactions. In a laboratory experiment, we offer subjects to sign an online petition, or ask whether they had participated in recent street protests. Afterwards, subjects interact in games that measure prosocial preferences. We find more altruism, trust, and trustworthiness within a pair of subjects who participated in collective action than in any other pair. Our structural estimation recovers individual prosocial preferences, showing that they increase as a result of joint participation. We then show that participating individuals receive private payoffs in subsequent interactions with fellow participants. Because of this, expecting higher participation by peers makes an individual more likely to participate. This mechanism suggests a reason why citizens participate in political collective action, and helps explain the role of coordination and signalling.
    Keywords: political identity, collective action, petitions, protests, social preferences, laboratory experiment
    JEL: C91 D72 D74
    Date: 2022–04–14
  13. By: Yasunori Okumura
    Abstract: We consider the social welfare function a la Arrow, where some voters are not qualified to evaluate some alternatives. Thus, the inputs of the social welfare function are the preferences of voters on the alternatives that they are qualified to evaluate only. Our model is a generalization of the peer rating model, where each voter evaluates the other voters (except for himself/herself). We demonstrate the following three impossibility results. First, if a transitive valued social welfare function satisfies independence of irrelevant alternatives and the Pareto principle, then a dictator who is qualified to evaluate all alternatives exists. Second, a transitive valued function satisfying the Pareto principle exists if and only if at least one voter is qualified to evaluate all alternatives. Finally, if no voter is qualified to evaluate all alternatives, then under a transitive valued social welfare function satisfying the weak Pareto principle and independence of irrelevant alternatives, all alternatives are indifferent for any preference profile of voters.
    Date: 2023–04

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