nep-pol New Economics Papers
on Positive Political Economics
Issue of 2023‒08‒14
eighteen papers chosen by
Eugene Beaulieu, University of Calgary

  1. Blowback: The Effect of Sanctions on Democratic Elections By Matthieu Crozet; Julian Hinz
  2. The Political Effects of the 1918 Influenza Pandemic in Weimar Germany By Stefan Bauernschuster; Matthias Blum; Erik Hornung; Christoph Koenig
  3. The Usage of Internet in the Context of ESG Model at World Level By Angelo Leogrande
  4. Pack-Crack-Pack: Gerrymandering with Differential Turnout By Laurent Bouton; Garance Genicot; Micael Castanheira; Allison L. Stashko
  5. Political Preferences and the Spatial Distribution of Infrastructure: Evidence from California's High-Speed Rail By Pablo D. Fajgelbaum; Cecile Gaubert; Nicole Gorton; Eduardo Morales; Edouard Schaal
  6. Black Empowerment and White Mobilization: The Effects of the Voting Rights Act By Andrea Bernini; Giovanni Facchini; Marco Tabellini; Cecilia Testa
  7. The promise of representative democracy: deliberative responsiveness By Claudia Landwehr; Armin Schäfer
  8. The political economy of populism: An agenda-theoretic approach with special reference to Germany By Heise, Arne
  9. Ethnic conflict: the role of ethnic representation By Sonia Bhalotra; Irma Clots-Figueras; Lakshmi Iyer
  10. Policy Diffusion through Elections By Shigeoka, Hitoshi; Watanabe, Yasutora
  11. Even in the best of both worlds, you can't have it all: How German voters navigate the trilemma of mixed-member proportionality By Pascal Langenbach; Tobias Rommel
  12. Natural disasters and voter gratitude: What is the role of prevention policies? By Carla Morvan; Sonia Paty
  13. Unpleasant Surprises? Elections and Tax News Shocks By Mr. Antonio David; Can Sever
  14. Are the Upwardly-Mobile More Left-Wing? By Clark, Andrew E.; Cotofan, Maria
  15. Political participation patterns of the emerging middle classes in Peru and the Philippines By Never, Babette; Anselmetti, Chiara
  16. Immigration and support for anti-immigrant parties in Europe By Jäger, Julian
  17. Turning no tides: Union effects on partisan preferences and the working-class metamorphosis By Hadziabdic, Sinisa
  18. Competitive Capture of Public Opinion By Ricardo Alonso; Gerard Padró I Miquel

  1. By: Matthieu Crozet (RITM - Réseaux Innovation Territoires et Mondialisation - Université Paris-Saclay); Julian Hinz
    Abstract: Sanctions are meant to coerce political adversaries through economic measures. However, evidence for their effectiveness is scarce. In this paper we assess the impact of sanctions on a democracy-France-by studying the electoral consequences of the sanctions and countersanctions imposed between Russia and Western countries. Contrary to most of the existing literature we find clear evidence for exposure to the sanctions to cause an increase in the vote share for pro-Russian (and far-right) candidates during the French 2017 presidential election. Locally, the impact on voting is substantial. Back-of-the-envelope calculations indicate that about 16, 300 votes for the main far-right candidate can be directly attributed to the sanctions' impact. This is the total number of votes cast in a medium-sized French city. It is however not nearly enough to have affected the outcome of the election at the national level.
    Keywords: Sanctions, Elections, Embargo
    Date: 2023–07–04
  2. By: Stefan Bauernschuster; Matthias Blum; Erik Hornung; Christoph Koenig
    Abstract: How do health crises affect election results? We combine a panel of election results from 1893–1933 with spatial heterogeneity in excess mortality due to the 1918 Influenza to assess the pandemic’s effect on voting behavior across German constituencies. Applying a dynamic differences-in-differences approach, we find that areas with higher influenza mortality saw a lasting shift towards left-wing parties. We argue that pandemic intensity increased the salience of public health policy, prompting voters to reward parties signaling competence in health issues. Alternative explanations such as pandemic-induced economic hardship, punishment of incumbents for inadequate policy responses, or polarization of the electorate towards more extremist parties are not supported by our findings.
    Keywords: pandemics, elections, health, voting behavior, issue salience, issue ownership, Weimar Republic
    JEL: D72 I18 N34 H51
    Date: 2023
  3. By: Angelo Leogrande (LUM University Giuseppe Degennaro)
    Abstract: In this article, I estimate the value of "Individual Using Internet"-IUI in the context of Environmental, Social and Governance-ESG database of the World Bank. I use data from 193 countries for the period 2011-2020. I found that among others the value of IUI is positively associated to "Methane Emissions" and "People Using Safely Managed Sanitation Services" and negatively associated among others to "Fossil Fuel Energy Consumption" and "Renewable Energy Consumption". I apply the k-Means algorithm for the clusterization optimized with the Elbow Method and we find the presence of three clusters. Finally, I confront eight machine-learning algorithms to predict the future value of IUI. I found that the best predictive algorithm is Linear Regression and that the value of IUI is expected to decrease on average of 0.30% 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 Classification: 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 JEL Classification: D7, D70, D72, D73, D78
    Date: 2023–06–24
  4. By: Laurent Bouton; Garance Genicot; Micael Castanheira; Allison L. Stashko
    Abstract: This paper studies the manipulation of electoral maps by political parties, known as gerrymandering. At the core of our analysis is the recognition that districts must have the same population size but only voters matter for electoral incentives. Using a novel model of gerrymandering that allows for heterogeneity in turnout rates, we show that parties adopt different gerrymandering strategies depending on the turnout rates of their supporters relative to those of their opponents. The broad pattern is to "pack-crack-pack" along the turnout dimension. That is, parties benefit from packing both supporters with a low turnout rate and opponents with a high turnout rate in some districts, while creating districts that mix supporters and opponents with intermediate turnout rates. This framework allows us to derive a number of empirical implications about the link between partisan support, turnout rates, and electoral maps. Using a novel empirical strategy that relies on the comparison of maps proposed by Democrats and Republicans during the 2020 redistricting cycle in the US, we then bring such empirical implications to the data and find support for them.
    JEL: D72
    Date: 2023–07
  5. By: Pablo D. Fajgelbaum; Cecile Gaubert; Nicole Gorton; Eduardo Morales; Edouard Schaal
    Abstract: How do political preferences shape transportation policy? We study this question in the context of California's High-Speed Rail (CHSR). Combining geographic data on votes in a referendum on the CHSR with a model of its expected economic benefits, we estimate the weight of economic and non-economic considerations in voters' preferences. Then, comparing the proposed distribution of CHSR stations with alternative placements, we use a revealed-preference approach to estimate policymakers' preferences for redistribution and popular approval. While voters did respond to expected real-income benefits, non-economic factors were a more important driver of the spatial distribution of voters' preferences for the CHSR. While the voter-approved CHSR would have led to modest income gains, proposals with net income losses also would have been approved due to political preferences. For the planner, we identify strong preferences for popular approval. A politically-blind planner would have placed the stations closer to dense metro areas in California.
    JEL: D72 O18 R10 R42
    Date: 2023–07
  6. By: Andrea Bernini; Giovanni Facchini; Marco Tabellini; Cecilia Testa
    Abstract: The 1965 Voting Rights Act (VRA) paved the road to Black empowerment. How did southern whites respond? Leveraging newly digitized data on county-level voter registration rates by race between 1956 and 1980, and exploiting pre-determined variation in exposure to the federal intervention, we document that the VRA increases both Black and white political participation. Consistent with the VRA triggering counter-mobilization, the surge in white registrations is concentrated where Black political empowerment is more tangible and salient due to the election of African Americans in county commissions. Additional analysis suggests that the VRA has long-lasting negative effects on whites' racial attitudes.
    JEL: D72 H70 J15 N92
    Date: 2023–07
  7. By: Claudia Landwehr (Johannes Gutenberg-University Mainz, Germany); Armin Schäfer (Johannes Gutenberg-University Mainz, Germany)
    Abstract: In the eyes of its citizens, liberal democracy is connected to at least three promises – the promises of autonomy, equality and rationality. To what extent citizens can view these promises as being fulfilled will affect political trust and support for democracy. The rise of populism and trends towards technocratic government have rightly been interpreted as arising from a gap between normative aspirations and institutional and practical realities. Does this mean that we should adjust our ideals to reality, or that we should strive to bring realities closer to the ideal? Self-proclaimed “realists” argue that democratic ideals are unattainable and that we should therefore settle for a second-best alternative, such as a competitive oligarchy. Against this position, we point out that deliberative democracy offers an attractive ideal for successful representation that can inform democratic innovation. However, deliberative democracy also remains institutionally underdetermined and needs to develop better criteria that enable us to determine if, how and under what conditions the attempt to fulfil democracy’s promises succeeds in practice. In this paper, we suggest a criterion of deliberative responsiveness as a measure for representative democracy’s success in fulfilling promises of autonomy, equality, and rationality. We go on to show in what respects these promises tend to be broken in contemporary representative democracies and discuss strategies for institutional reform that have potential to counteract these problems.
    Date: 2023–07–12
  8. By: Heise, Arne
    Abstract: Populism in modern Western democracies is on the rise. The existing literature concentrates on explanations based on the growing socio-economic and socio-cultural polarisation of modern societies driven by globalisation and individualisation on the one hand and the unresponsiveness of unrepresentative governments and non-majoritarian bodies on the other hand. Although such explanations certainly contribute partly to our understanding of the phenomenon called 'populism' - particularly the (right or left-wing) extremist dimension of it -, it does not sufficiently explain the seemingly non-ideological 'populism of the middle class' which, at least in Germany, accounts for the bigger, yet less visible part of populism. The objective of the paper is to focus on systematic weaknesses of collective decision-making in liberal-representative democracies in explaining populism (particularly of the middle class) as a growing critique of the institutions of liberal democracy.
    Keywords: Populism, liberal democracy, political economy, minority rule, elites
    JEL: D70 D72 H40 P10 P5
    Date: 2023
  9. By: Sonia Bhalotra; Irma Clots-Figueras; Lakshmi Iyer
    Abstract: We investigate the impact of the political representation of minority groups on the incidence of ethnic conflict in India. We code data on Hindu-Muslim violence and Muslim political representation in India and leverage quasi-random variation in legislator religion generated by the results of close elections. We find that the presence of Muslim legislators results in a large and significant decline in Hindu-Muslim conflict. The average result is driven by richer states and those with greater police strength.
    Keywords: Conflict, Violence, Religion, political representation, Elections
    Date: 2023
  10. By: Shigeoka, Hitoshi (Simon Fraser University); Watanabe, Yasutora (University of Tokyo)
    Abstract: Staggered difference-in-differences designs are pervasive in policy evaluations but little is known about the mechanisms of policy diffusion: How and why do such policies spread across jurisdictions? In this study, we highlight the role of elections in policy diffusion in settings where municipal elections are asynchronous due to historical reasons. First, we empirically show the presence of policy diffusion using neighbors' election cycles as instruments for neighbors' policy adoption. Second, we further demonstrate interactions of municipalities' election cycles with neighbors' adoption and show that they follow neighbors' policy only during their own election timing, indicating that policy diffuses through elections.
    Keywords: policy diffusion, elections, subsidy, child healthcare, political budget cycles
    JEL: D04 D78 H73 H75
    Date: 2023–06
  11. By: Pascal Langenbach (Max Planck Institute for Research on Collective Goods); Tobias Rommel (Technical University of Munich)
    Abstract: The fragmentation of the party system has confronted the German mixed-member proportional electoral system with a trilemma. It can only ensure two out of three goals: proportionality, guaranteed representation of district winners, and a fixed and predictable size of the Bundestag. This paper studies how citizens position themselves in this trilemma. Using original survey data, we find that all goals are popular and no combination of goals commands majority support. This suggests that electoral reform is politically difficult not only because of the self-interest of parties but also because of widely perceived trade-offs. At the same time, our findings indicate that voters can be a constructive force for reform. More knowledgeable voters can form coherent and meaningful preferences over electoral rules. Voters are also receptive to the logical constraints of the system: informing respondents about the trilemma trade-offs in an experimental setting makes them more accepting of reform proposals.
    Date: 2023–07–17
  12. By: Carla Morvan (Université Lyon 2, CNRS, Université Jean Monnet Saint-Étienne, GATE Lyon Saint-Étienne UMR 5824, F-69130, Ecully, FRANCE); Sonia Paty (Université Lyon 2, CNRS, Université Jean Monnet Saint-Étienne, GATE Lyon Saint-Étienne UMR 5824, F-69130, Ecully, FRANCE)
    Abstract: Natural disasters and related prevention policies can affect voter decisions. In this study, we analyze how the occurrence of natural disasters changes voters’ behavior at municipal elections and how prevention policies can mitigate the impact of such catastrophic events on budget accounts and might potentially be rewarded by citizens in upcoming elections. We exploit original data on French municipalities where incumbents sought reelection between 2008 and 2020. To estimate the probability of re-election at the municipal level in the event of a natural disaster we apply a Heckman model based strategy to avoid selection bias. We find that the occurrence of natural disasters significantly decreases the chances of reelection of incumbent mayors. However, although we show that natural hazard prevention plans significantly mitigate the impact of catastrophic events on budget accounts, citizens do not reward such prevention policies in upcoming elections. We confirm the hypothesis of myopia: voters reward incumbents for delivering investment spending or decreasing debt but not for investing in spending on disaster preparedness.
    Keywords: Elections, natural disasters, prevention policies, natural experiment
    JEL: D72 Q54
    Date: 2023
  13. By: Mr. Antonio David; Can Sever
    Abstract: Unanticipated changes in tax policy are likely to have different macroeconomic effects compared to anticipated changes due to several mechanisms, including fiscal foresight and policy uncertainty. It is therefore important to understand what drives such policy surprises. We explore the nature of unanticipated tax policy changes by focusing on a political economy determinant of those events, namely the timing of elections. Using monthly data for 22 advanced economies and emerging markets over the period 1990-2018, we show that implementation lags tend to be significantly longer for tax policy change announcements that are made during the pre-election periods, thereby leading to a lower likelihood of “tax news shocks”. We also find that implementation lags become much shorter for tax policy changes that are announced in the aftermath of elections, generating more frequent tax news shocks. This pattern remains similar for different tax measures or types of taxes. The findings are robust to a number of checks, including alternative definitions of tax news shocks, or to controlling for various economic and institutional factors.
    Keywords: Tax Shocks; Electoral Cycles; Political Economy
    Date: 2023–06–30
  14. By: Clark, Andrew E. (Paris School of Economics); Cotofan, Maria (King's College London)
    Abstract: It is well-known that the wealthier are more likely to have Right-leaning political preferences. We here in addition consider the role of the individual's starting position, and in particular their upward social mobility relative to their parents. In 18 waves of UK panel data, both own and parental social status are independently positively associated with Rightleaning voting and political preferences: given their own social status, the upwardly-mobile are therefore more Left-wing. We investigate a number of potential mediators: these results do not reflect the relationship between well-being and own and parents' social status, but are rather linked to the individual's beliefs about how fair society is.
    Keywords: social mobility, voting, redistribution, satisfaction, fairness
    JEL: A14 C25 D31 D63 J28 J62
    Date: 2023–07
  15. By: Never, Babette; Anselmetti, Chiara
    Abstract: The growing middle classes in middle-income countries may play a key role in current trends of democratic backsliding, online activism and lifestyle politics. This contribution uncovers which modes of political participation are prevalent among the middle classes in Peru and the Philippines, including new forms of online participation and lifestyle politics for sustainability. Drawing on household surveys conducted in 2018, we use latent class analysis and logit regressions to analyse, first, the characteristics of online vs offline participation, and second, the role of political consumption and online activism for political participation dynamics. The latter analysis contributes to the gateway/getaway debate of lifestyle politics. In both countries, we find four comparable classes: a substantial disengaged class that is not engaging in any political participation, an all-round activist class, an online activist class and a class that mostly engages in civil society activities. Further classes with specific participation patterns and socio-demographic characteristics could be identified for each country. Although the online activists in both countries are unlikely to engage in any other form of political participation, a clear empirical case for lifestyle politics as a separate mode of participation only exists among young Peruvians with a steady job. In the Philippines, political consumption as a form of lifestyle politics blends in with other types of political participation.
    Keywords: Political participation, online activism, lifestyle politics, political consumption, latent class analysis, middle class, democratic backsliding
    Date: 2023
  16. By: Jäger, Julian
    Abstract: My paper analyzes the link between immigration and support for anti-immigrant parties in Europe. I assemble a unique data set on the share of foreigners for 356 regions in 26 European countries and construct a novel scale for the anti-immigrant position of political parties. I find that Europeans are less supportive of anti-immigrant parties in regions with a higher share of foreigners, consistent with group contact theory. The negative association is driven by Europeans with proredistribution attitudes and is stronger among those with tertiary education, who live in the city, are in the labor force, of younger age, and female. I address several endogeneity concerns, e.g., using a shift-share instrumental variable approach, which provides evidence for a causal channel.
    Keywords: Europe, Immigration, Political preferences
    JEL: D72 J15 Z13
    Date: 2023
  17. By: Hadziabdic, Sinisa
    Abstract: Relying on panel data for Germany, Switzerland, the United Kingdom, and the United States, the paper examines the impact of union membership on partisan preferences. By leveraging panel data to control for time-invariant selection effects, we show that unions exert a small consistent left-wing influence on the average wage earner who becomes affiliated, but they are no longer able to modify the preferences of working-class members. A longitudinal approach reveals that changes in partisan preferences can be linked to members' preexisting predispositions and to the prevalent political views within unions. Unions mainly attract individuals who already share their political inclinations before joining. These preexisting left-wing convictions allow an additional left-wing shift to take place through a value congruence mechanism provoked by interactions with long-term union members who are even more left-wing oriented than the newcomers. Symmetrically, working-class joiners exhibit less pronounced left-wing inclinations before becoming affiliated, a gap that widens further after they join as a consequence of their unmet expectations.
    Keywords: Gewerkschaften, Klassen, Paneldaten, politische Parteien, vergleichende Politikwissenschaf, class, comparative politics, panel data, political parties, trade unions
    Date: 2023
  18. By: Ricardo Alonso; Gerard Padró I Miquel
    Abstract: We propose a general equilibrium model where two special interest groups (SIGs) compete to influence public opinion. Citizens with heterogeneous priors over a binary state of the world receive reports drawn from a continuous message space by a variety of sources. The two opposite SIGs attempt to push their own agenda (one SIG to persuade citizens towards one state of the world, the other towards the alternative state of the world) by capturing the messages these sources convey. We characterize the equilibrium level of capture of each source by competing SIGs as well as the equilibrium level of information transmission. We show that capture increases the prevalence of the ex ante most informative messages. As a consequence, rational citizens discount such informative reports. Opposite capturing efforts do not cancel each other and result in a loss of social learning. We show that efforts to capture an information source are strategic substitutes: citizens' skepticism of messages favoring the view of the SIG that is expected to capture that source dampen the incentives of the opposite SIG. Strategic substitution exacerbates horizontal differentiation so the information landscape becomes more polarized. We finally show that increased demand for information when SIGs want to fire up the base can exacerbate differentiation, increase capture, and reduce information transmission in equilibrium.
    JEL: D72 D80 D83
    Date: 2023–06

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