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on Positive Political Economics |
| By: | Monica Martinez-Bravo (CEMFI); 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. Did deficiencies in government performance further erode trust in public institutions? Did citizens’ ideology interfere with the way they processed information on government performance? To investigate these two 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 variable 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 in 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 controlled 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 areas of responsibility that are not clearly delineated. |
| Keywords: | trust, accountability, polarization, COVID-19 |
| JEL: | P00 D72 H1 H7 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2306&r=pol |
| By: | Thorsten Drautzburg; Igor Livshits; Mark L. J. Wright |
| Abstract: | The political process in the United States appears to be highly polarized: Data show that the political positions of legislators have diverged substantially, while the largest campaign contributions come from the most extreme donor groups and are directed to the most extreme candidates. Is the rise in campaign contributions the cause of the growing political polarization? In this paper, we show that, in standard models of campaign contributions and electoral competition, a free-rider problem among potential contributors leads naturally to polarization of campaign contributors but without any polarization in candidates’ policy positions. However, we go on to show that a modest departure from standard assumptions — allowing candidates to directly value campaign contributions (because of “ego rents” or because lax auditing allows them to misappropriate some of these funds) — delivers the ability of campaign contributions to cause policy divergence. Consistent with the model, we document that a candidate’s share of contributions in U.S. House of Representatives races is higher when her opponent's agenda is more extreme. |
| Keywords: | Polarization; Campaign Contributions; Agendas |
| JEL: | D72 H41 |
| Date: | 2022–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:94717&r=pol |
| By: | Juan Herreño; Matias Morales; Mathieu Pedemonte |
| Abstract: | We study the reaction of voters to shifts in local economic conditions. Using the departure from the gold standard of US trading partners in 1931 and the US in 1933, we exploit heterogeneity in export destinations, creating local differences in expenditure-switching in US counties by isolating the aggregate effects of the monetary shocks using time fixed effects. We find significant changes in local voting behavior in response to both shocks, one originating abroad, and another domestically. The response to both shocks have similar magnitude. We argue that voters punished and rewarded incumbents regardless of the shocks’ origin, implying strong feedback from economic conditions to electoral outcomes. |
| Keywords: | US Elections; Gold Standard; Economic Voting |
| JEL: | D72 N42 E61 |
| Date: | 2023–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:95894&r=pol |
| By: | Alberto Costantiello (LUM University Giuseppe Degennaro); Angelo Leogrande (LUM University Giuseppe Degennaro) |
| Abstract: | In this article, we estimate the role of Political Stability and Absence of Violence and Terrorism-PS in the context of Environmental, Social and Governance-ESG data at world level. We analyse data from 193 countries in the period 2011-2020. We apply Panel Data with Fixed Effects, Panel Data with Random Effects and Pooled Ordinary Least Square-OLS. We found that PS is positively associated, among others, to Population Density and Government Effectiveness, and negatively associated, among others, to Research and Development Expenditure and Maximum 5-day Rainfall. Furthermore, we apply the k-Means algorithm optimized with the application of the Elbow Method and we find the presence of four clusters. Finally, we propose a confrontation among eight different machine-learning algorithms for the prediction of PS and we find that the Polynomial Regression shows the higher performance. The Polynomial Regression predicts an increase in the level of PS of 0.25% 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 D7, D70, D72, D73, D78, 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 D7 |
| Date: | 2023–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-04055326&r=pol |
| By: | Alberto Costantiello (LUM University Giuseppe Degennaro); Angelo Leogrande (LUM University Giuseppe Degennaro) |
| Abstract: | We estimate the value of Voice and Accountability-VA in the context of the Environmental, Social and Governance-ESG data of the World Bank using data from 193 countries in the period 2011-2021. We use Panel Data with Fixed Effects, Panel Data with Random Effects and Pooled Ordinary Least Squares-OLS. We found that the level of VA is positively associated, among others, to "Maximum 5-Day Rainfall", and "Mortality Rate Under 5" and negatively associated, among others, to "Adjusted Savings: Natural Resources Depletion", and "Annualized Average Growth Rate in Per Capita Real Survey Mean Consumption or Income". Furthermore, we apply the k-Means algorithm optimized with the Elbow Method. We found the k-Means useless due to the low variance of the variable among countries with the result of a hyper-concentration of elements in a unique cluster. Finally, we confront eight machinelearning algorithms for the prediction of VA. Polynomial Regression is the best predictive algorithm according to R-Squared, MAE, MSE and RMSE. The level of VA is expected to growth on average of 2.92% for the treated 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 D7, D70, D72, D73, D78, 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 D7, 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 D7, D70, D72, D73, D78, Implementation D7, D70, D72, D73, D78 |
| Date: | 2023–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-04043775&r=pol |
| By: | Vladimir Benacek (Charles University, Faculty of Social Sciences, IPS, Prague, Czechia); Pavol Fric (Comenius University, Bratislava, Slovakia & Charles University, Faculty of Social Sciences, ISS, Prague, Czechia) |
| Abstract: | This paper analyses the erosion of democracy in the countries of Central and Eastern Europe from the perspective of political economy. We posit that the coinciding effects of political marketing and the state financing of parties represent a peculiar mix of liberal and étatist principles that have turned political regimes in the region into ossified democracies. Our theoretical analysis based on the economics of democracy of Anthony Downs revealed that voters are discriminated against as political consumers, which constrains their ability to function as sovereign principals in collective action. The dominance of political parties in the markets for both political and public goods is the leading cause of democracy´s ossification and its susceptibility to corruption. We propose attenuating this decline through mandatory political tax designations, which re-establish the lost link between political markets and the markets in public goods and make the top-down dominance of the hierarchies in power subject to the bottom-up control of citizens motivated to engage in collective action. Economics of democracy is a heterogeneous fusion of market and command economy. |
| Keywords: | public goods; democracy; collective action; political markets; financing of parties |
| JEL: | D73 D78 H4 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2023_11&r=pol |
| By: | Frédéric Docquier; Lucas Guichard; Stefano Iandolo; Hillel Rapoport; Riccardo Turati |
| Abstract: | We analyze the long-run evolution of populism and explore the role of globalization in shaping such evolution. We use an imbalanced panel of 628 national elections in 55 countries over 60 years. A rst novelty is our reliance on both standard (e.g., the "volume margin", or vote share of populist parties) and new (e.g., the "mean margin", a continuous vote-weighted average of populism scores of all parties) measures of the extent of populism. We show that levels of populism in the world have strongly fluctuated since the 1960s, peaking after each major economic crisis and reaching an all-time high – especially for right-wing populism in Europe – after the great recession of 2007-10. The second novelty is that when we investigate the "global" determinants of populism, we look at trade and immigration jointly and consider their size as well as their skill-structure. Using OLS, PPML and IV regressions, our results consistently suggest that populism responds to globalization shocks in a way which is closely linked to the skill structure of these shocks. Imports of low-skill labor intensive goods increase both total and right-wing populism at the volume and mean margins, and more so in times of de-industrialization and of internet expansion. Low-skill immigration, on the other hand, tends to induce a transfer of votes from left-wing to right-wing populist parties, apparently without aecting the total. Finally, imports of high-skill labor intensive goods, as well as high-skill immigration, tend to reduce the volume of populism. |
| Keywords: | Populism;Globalization |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2023-10&r=pol |
| By: | Leogrande, Angelo; Costantiello, Alberto |
| Abstract: | In this article, we estimate the value of Government Expenditure on Education-GEE in the context of Environmental, Social and Governance-ESG dataset of the World Bank. We use data from 193 countries in the period 2011-2020. We use Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled Ordinary Least Squares-OLS, and Weighted Least Squares-WLS. Our results show that the value of GEE is positively associated among others to “Case of Death, by communicable disease and maternal, prenatal and nutrition conditions”, and “Unemployment”, and negatively associated among others to “Hospital Beds” and “Government Effectiveness”. Furthermore, we apply the k-Means algorithm optimized with the Elbow Method and we find the presence of four clusters. Finally, we confront eight machine learning algorithms for the prediction of the future value of GEE. We found that the Polynomial Regression is the best predictive algorithm. The Polynomial Regression predicts an increase in GEE of 7.09% 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: | D70 D72 D73 D78 |
| Date: | 2023–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117216&r=pol |
| By: | Marco Battaglini; Valerio Leone Sciabolazza; Eleonora Patacchini |
| Abstract: | We study vote trading among U.S. Congress members. By tracking roll-call votes within bills across five legislatures and politicians' personal connections made during the school years, we document a propensity of connected legislators to vote together that depends on how salient the bill is to the politicians' legislative agenda. Although this activity does not seem to enhance U.S. Congress members' legislative effectiveness, vote trading is a strong predictor of future promotions to position of leadership. |
| JEL: | D72 D74 D91 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31169&r=pol |
| By: | Patricia Justino; Bruno Martorano; Laura Metzger |
| Abstract: | This paper studies the effect of austerity on forms of political participation—including voting, appealing for reform, and peaceful protesting—and the role of preferences for redistribution in shaping the relationship between individual exposure to austerity and political participation. The paper focuses on the case of the United Kingdom (UK) where, between 2011 and 2019, wide-ranging austerity policies were introduced to deal with high public debt in the aftermath of the 2007-08 financial crisis. |
| Keywords: | Austerity, Political participation, Redistribution, Welfare policy, Welfare |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2023-61&r=pol |
| By: | Akinnubi, Abiola |
| Abstract: | Deliberation and communication within the national space have had numerous implications on how citizens online and offline perceive government. It has also impacted the relationship between opposition and incumbent governments in the Indo-Pacific region. Authoritarian regimes have historically had control over the dissemination of information, thereby controlling power and limiting challenges from citizens who are not comfortable with the status quo. Social media and blogs have allowed citizens of these countries to find a way to communicate, and the exchange of information continues to rise. The quest by both authoritarian and democratic regimes to control or influence the discussion in the public sphere has given rise to concepts like cybertroopers, congressional bloggers, and commentator bloggers, among others. Cybertroopers have become the de facto online soldiers of authoritarian regimes who must embrace democracy. While commentator and congressional bloggers have acted with different strategies, commentator bloggers educate online citizens with knowledgeable information to influence the citizens. Congressional bloggers are political officeholders who use blogging to communicate their positions on ongoing national issues. Therefore, this work has explored various concepts synonymous with the Indo-Pacific public sphere and how it shapes elections and democracy. |
| Date: | 2022–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:8nj7y&r=pol |
| By: | Sallai, Dorottya; Schnyder, Gerhard; Kinderman, Daniel; Nölke, Andreas |
| Abstract: | Right-wing populist parties who obtain governmental power rely on ethno-nationalist mobilization for domestic legitimacy. They may therefore adopt policies that explicitly seek to disadvantage foreign multinational corporations (MNCs). Understanding what factors increase a foreign MNC’s exposure to adverse action by right-wing populists is an understudied question in the field of international business policy. We investigate this question in post-socialist member states of the European Union, which constitute extreme cases of right-wing populist government power. As such, they constitute a fertile ground to further our theoretical understanding of the distinction between calculable political risk and incalculable political uncertainty. Through a case study-based theory-building approach, which draws on existing literature and interview data, we derive a series of propositions and develop a research agenda. We identify factors at the country-, sector-, and firm-level that influence exposure to adverse policy action by host-country governments. We explore when political risk may turn into political uncertainty and provide suggestions to foreign MNCs operating in right-wing populist contexts on how to reduce this uncertainty. Our study provides insights for policy makers too, who should be aware of the impact political shifts towards right-wing populist governments have on political uncertainty for foreign companies. |
| Keywords: | business–government relations; MNE–host-country relations; multinational corporations (MNCs) and enterprises (MNEs); political risk; populism; 462-19-080 |
| JEL: | J50 |
| Date: | 2023–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118668&r=pol |