nep-pol New Economics Papers
on Positive Political Economics
Issue of 2023‒09‒11
nine papers chosen by
Eugene Beaulieu, University of Calgary

  1. Are Campaign Promises Effective? By Ganslmeier, Michael
  2. The Decline of Manufacturing Employment and the Rise of the Far-Right in Austria By Bekhtiar, Karim
  3. Who mobilises non-voters? Right-wing populism and unequal turnout By Armin Schäfer
  4. The Central Influencer Theorem: Spatial Voting Contests with Endogenous Coalition Formation By Subhasish M. Chowdhury; Sang-Hyun Kim
  5. Economic Determinants of Populism By Carl Leonard Fischer; Lorenz Meister
  6. The Politics of Academic Research By Ringgenberg, Matthew C.; Shu, Chong; Werner, Ingrid M.
  7. Europe's gone 'right' – A comparative study of stock market reactions to populist success in Sweden and Italy By Mueller, Lukas; Bartel, Merlin; Schiereck, Dirk
  8. Evolution from political fragmentation to a unified empire in a Malthusian economy By Chu, Angus; Peretto, Pietro; Furukawa, Yuichi
  9. Political violence and economic activity in Bangladesh: A robust empirical investigation By Christophe Muller; Ahmed Yousuf

  1. By: Ganslmeier, Michael
    Abstract: In democracies, political parties promise to expand social benefits to attract voters in the lead-up to elections. However, we know relatively little whether such campaign promises effectively sway benefiting voters. Using a regression-discontinuity design, we estimate the causal effects of an electoral pledge made by the German conservative party to expand pension benefits ahead of the parliamentary election in 2013. The results show that the promise increased alignment with the pledge-making party by 12.2% among eligible beneficiaries. These gains originate from the re- alignment of individuals who traditionally support left-wing platforms, while it had no mobilizing effect on inactive voters. In addition, we find that the pledge effect is larger among individuals with lower economic and social security. Finally, the policy-induced alignment gain is transitory as it disappears once the pledge is fulfilled. Overall, our paper shows that electoral pledges related to social benefits are rather temporarily persuasive than permanently mobilizing.
    Keywords: campaign promises, electoral pledges, social benefits, policy feedbacks, prospective voting
    JEL: D72 D91 H55 I38
    Date: 2023
  2. By: Bekhtiar, Karim (Institute for Advanced Studies Vienna, Austria)
    Abstract: In recent decades right-wing populist parties have experienced increased electoral success in many western democracies. This rise of the far-right, which is strongly built on the support of the working class, coincides with a sharp decline of the manufacturing sector. This paper analyzes the contribution of this manufacturing decline to the rise of the Austrian far-right. Overall the decline in manufacturing employment has strongly contributed to this rightward shift in the political landscape, with the manufacturing decline explaining roughly 43% of the observed increase in far-right vote-shares between 1995 and 2017. This effect is entirely driven by increases in natives unemployment rates, which increased considerably due to the manufacturing decline. Regarding the influences of the forces underlying the manufacturing decline, namely international trade and automation technologies, suggests that both forces contributed in roughly equal parts to this development.
    Keywords: Manufacturing, Trade, Robots, Voting, Populism
    JEL: D72 F14 J21 J23 O14 R23
    Date: 2023–08
  3. By: Armin Schäfer (Johannes Gutenberg-University Mainz, Germany)
    Abstract: This paper examines the relationship between the election performance of the Alternative for Germany (AfD) and voter turnout in the German federal elections. It analyses data from a variety of sources, including data from the 299 constituencies, data from 979 neighbourhoods in 30 cities, and two individual-level datasets, including panel data and the post-election cross-section of the German Longitudinal Election Study (GLES). The paper finds that the AfD was successful in mobilising former non-voters in the 2017 federal election, but there was no further mobilisation in the 2021 election. The conclusion is that populist parties are unlikely to succeed in increasing voter turnout in the long run.
    Date: 2023–09–01
  4. By: Subhasish M. Chowdhury (Department of Economics, University of Sheffield, Sheffield S1 4DT, UK); Sang-Hyun Kim (School of Economics, Yonsei University, Seoul 03722, South Korea)
    Abstract: We introduce a spatial voting contest without the ‘one person, one vote’ restriction. Players exert costly effort to influence the policy and the outcome is obtained through an adjustment function. Players are heterogeneous in terms of the position in the policy line, disutility function, and the effort cost. In equilibrium, two groups endogenously emerge: players in one group try to implement more leftist policy, while those in the other group try more rightist one. Since the larger group suffers a more severe free-riding problem, the equilibrium policy converges to the center only when the larger group has a cost advantage. We demonstrate how the location of the center (i.e., the steady-state point) can be either median, or a mean of all points, or a mean of the extreme points, depending on the convexities of the utility and cost functions. This reflects some well-known results as special cases. We extend the model to an infinite horizon setting and show that the median outcome can be reached only under certain conditions.
    Keywords: Spatial Competition; Contest; Lobbying; Median Voter Theorem
    JEL: C72 D72 D74 D78
    Date: 2023–08
  5. By: Carl Leonard Fischer; Lorenz Meister
    Abstract: The rise of populism challenges numerous Western democracies and their institutions. In this round-up, we examine economic and societal conditions that are driving forces behind populism. We focus on five domains that are closely interlinked with populist support: globalization, financial crises, migration, inequality, and social mobility. Each domain offers unique insights into how societal shifts, economic disruptions, and perceived injustices can fuel anti-establishment sentiments. As these factors collectively shape the political landscape, understanding their interplay becomes crucial in devising strategies to sustain and strengthen the stability of democracies and institutions.
    Date: 2023
  6. By: Ringgenberg, Matthew C. (U of Utah); Shu, Chong (U of Utah); Werner, Ingrid M. (Ohio State U)
    Abstract: We develop a novel measure of political slant in research to examine whether political ideology influences the content and use of academic research. Our measure examines the frequency of citations from think tanks with different political ideologies and allows us to examine both the supply and demand for research. We find that research in Economics and Political Science displays a liberal slant, while Finance and Accounting research exhibits a conservative slant, and these differences cannot be accounted for by variations in research topics. We also find that the ideological slant of researchers is positively correlated with that of their Ph.D. institution and research conducted outside universities appears to cater more to the political party of the current President. Finally, political donations data confirms that the ideological slant we measure based on think tank citations aligns with the political values of researchers. Our findings have important implications for the structure of research funding.
    JEL: G12 G14
    Date: 2023–05
  7. By: Mueller, Lukas; Bartel, Merlin; Schiereck, Dirk
    Abstract: We analyze the reactions of national equity markets to the election of far-right populist governments in Italy and Sweden in September 2022. We apply event study methodology to samples of 285 Swedish and 144 Italian stocks. Share prices of Italian stocks largely aligned in the week before the vote. Conversely, the Swedish electoral outcome hit markets by surprise. Share prices adjusted in the days following the vote. We use firm-level increases in intraday volatility before the vote to estimate sensitivities to electoral outcomes. Dollar-neutral long-minus-short strategies based on these sensitivities prove explanatory power of historical intraday volatility in Sweden, where post-event reactions and uncertainty were evident. The model identified those stocks that are most sensitive to the election outcome.
    Date: 2023
  8. By: Chu, Angus; Peretto, Pietro; Furukawa, Yuichi
    Abstract: What are the origins of political fragmentation in Europe and political unification in China? This study develops a Malthusian growth model with multiple states to explore interstate competition and the endogenous evolution of human society from political fragmentation to a unified empire. Our model features an agricultural society with citizens and rulers in a Malthusian environment in which the expansion of one state may come at the expense of another state, depending on the elasticity of the land ratio with respect to the ratio of population between states. If this elasticity is less than unity, then multiple states coexist (i.e., political fragmentation) in the long run. However, if this elasticity is equal to unity, then only one state (i.e., political unification) will survive in the long run. Which state becomes the unified empire depends on the state's military power, agricultural productivity, and its rulers' preference for rent-seeking Leviathan taxation. We also discuss the historical relevance of these theoretical predictions.
    Keywords: Interstate competition; unified empire; Malthusian growth theory
    JEL: H2 H56 O4
    Date: 2023–08
  9. By: Christophe Muller (Aix-Marseille Sciences Economiques); Ahmed Yousuf (Aix Marseille Université Économiques)
    Abstract: Using daily and monthly level nightlight products from the National Aeronautics and Space Administration (NASA) Black Marble suite (NASA and Administration (2199)) and extrapolating hartal-related violence data with a keyword search from the geocoded Armed Conflict Location & Event Data Project (ACLED) database, we investigate the impact of such events on economic activity in Bangladesh. We focus our investigation first at daily level and secondly at monthly level. At daily level, we utilize autoregressive conditional heteroskedasticity (ARCH) estimation to factor in the deeply autoregressive nature of daily nightlights, to identify immediate (within-day) effects from hartals, individually for key subdistricts. At the monthly level, to factor in the emergent consequent spatial dependence, we analyze countrywide dynamics using a split-panel jackknife bias-corrected maximum-likelihood estimations to see overall effects from lagged hartal event counts. At daily level, over 2012–21, in the capital Dhaka, we find that daily hartals have an immediate statistically significant impact of -0.9 percent on daily nightlights. However, this effect does not hold across all subdistricts and only does so for a select number of subdistricts. At the monthly level, we find evidence of statistically significant countrywide effects of 1.6 percent.
    Date: 2023–08–11

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