nep-pol New Economics Papers
on Positive Political Economics
Issue of 2024‒01‒01
ten papers chosen by
Eugene Beaulieu, University of Calgary

  1. Migration Shocks, Elections, and Political Selection By Schirner, Sebastian; Hessami, Zohal
  2. Ethnic conflict : the role of ethnic representation By Bhalotra, Sonia; Clots-Figueras, Irma; Iyer, Lakshmi
  3. Shaking Up the System: When Populism Disciplines Elite Politicians By Emmanuelle Auriol; Nicolas Bonneton; Mattias Polborn
  4. Mimicking the Opposition: Bismarck's Welfare State and the Rise of the Socialists By Felix Kersting
  5. The Beauty Premium of Politicians in Offce By Klaus Gründler; Niklas Potrafke; Timo Wochner
  6. Sovereign Spreads and the Political Leaning of Nations By Johnny Cotoc; Alok Johri; César Sosa-Padilla
  7. Developmental Dictatorship and Middle Class-driven Democratisation By Park, Hyungmin
  8. Deliberative democracy in Lebanon: Prospects for democratic innovation By André Sleiman
  9. Policy-advising Competition and Endogenous Lobbies By Foerster, Manuel; Habermacher, Daniel
  10. The Dynamics of Social Identity, Inequality and Redistribution By Ghiglino, C.; Muller, A.

  1. By: Schirner, Sebastian; Hessami, Zohal
    JEL: D72 J15 H70 F22
    Date: 2023
  2. By: Bhalotra, Sonia (University of Warwick); Clots-Figueras, Irma (University of Kent); Iyer, Lakshmi (University of Notre Dame)
    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. Our results suggest that the political empowerment of minority communities can contribute to curbing civil conflict.
    Keywords: conflict ; violence ; religion ; political representation ; police ; close elections JEL codes: D72 ; D74 ; J15
    Date: 2023
  3. By: Emmanuelle Auriol; Nicolas Bonneton; Mattias Polborn
    Abstract: his article studies the behavior of rational voters who, although aware of the limitations of populist leaders, consider supporting them strategically. We present a moral hazard model of electoral accountability in which elite politicians are both office- and policy-motivated and face the risk of being replaced by elite or populist candidates. The optimal retention strategy depends on the policy implemented by the incumbent in the previous period and its perceived success, and involves differentiated punishment for a failing incumbent. Rational voters only vote for populists when the chosen policy is both perceived as failure and as benefiting the elites. This challenges the simplistic view of the populist vote as mere frustration with the elite.
    Date: 2023–11
  4. By: Felix Kersting (HU Berlin)
    Abstract: This paper examines the consequences of a government mimicking the policy of its competitor by studying the introduction of the welfare state in 19th century Germany. The reform conducted by the conservative government targeted blue-collar workers and aimed to reduce the success of the socialist party. The result based on a difference-in-differences design shows that the socialist party benefited in elections due to the reform. The analysis of the mechanism points to the socialist's issue ownership by strengthening its reform orientation, which voters followed. The results are not driven by other political and economic channels related to the reform.
    Keywords: welfare state; socialism; government; opposition; issue ownership; voting behavior; Germany;
    JEL: D74 H53 I38 N44 P16
    Date: 2023–11–09
  5. By: Klaus Gründler; Niklas Potrafke; Timo Wochner
    Abstract: The beauty premium in politics shows that attractive politicians are more likely to get elected to ofce than less attractive politicians, but little is known about whether beauty also shapes the behavior of members of parliament (MPs) once in ofce. We use newly collected data on the attractiveness and parliamen tary activity of 866 MPs in the German Bundestag over the period 2009-2017 to examine the link between beauty and parliamentary work. Our results show that attractive MPs are more likely to be absent from parliament and less active in labor-intensive background work than others. Consistent with our hypothesis of higher outside earnings and appear more often on television talk shows. Our results suggest that attractive MPs re-allocate their time from parliamentary work to other activity that increases their income and popularity.
    Keywords: attractiveness of politicians, parliamentary activity, members of parliament, political economy,
    JEL: D72 H11 J45 J70 K40
    Date: 2023
  6. By: Johnny Cotoc (McMaster University); Alok Johri (McMaster University); César Sosa-Padilla (University of Notre Dame/NBER)
    Abstract: Nations vary widely in how often they are governed by left-wing governments. Using data from 56 nations over 45 years, we find that the propensity of a nation to elect the left is positively correlated with both the average level and volatility of their sovereign spreads. To explain these facts, we build a quantitative sovereign default model in which two policymakers (left and right) alternate in power. Reelection probabilities are increasing in government spending, with the left having a small advantage (as found in the data). We use variation in the responsiveness of reelection probabilities to government spending in order to create economies that elect the left more or less frequently in equilibrium. We call these the left leaning and the right leaning economy. The left leaning economy faces worse borrowing terms due to higher default risk. Moreover, both policymakers have a greater reluctance for fiscal austerity and choose a higher share of government spending as compared to their counterparts in the right leaning economy. These features imply large welfare losses for households.
    Keywords: Sovereign default, Interest rate spread, Political turnover, Left-wing, Rightwing, Cyclicality of fiscal policy.
    JEL: F34 F41
    Date: 2023–11
  7. By: Park, Hyungmin (University of Warwick)
    Abstract: I investigate the motives behind economic growth under a dictatorship, exploring the tradeoff between pursuing higher future gains, which come with growing threats from the demand for democracy from the emerging middle class, and accepting lower gains for a relatively more stable regime. I propose a model where a dictator invests and acquires a rent, citizens educate their children for skilled jobs, and these children adopt democratic values through education. I find that a dictator invests in an underdeveloped economy for future gains. As the economy matures, investment decreases because more citizens get democratic values from higher education. Democracy follows an opposite investment trend: little investment is made when the economy is underdeveloped, but more investment is made as it develops. The analysis is generalised to cases where the dictator is legitimised by higher economic growth than in democracies, and where the dictator oppresses the middle class through high taxation.
    Keywords: Dictatorship ; Growth ; Democratisation ; Middle Class ; Democratic Values JEL Codes: D02 ; D72 ; O12 ; O43
    Date: 2023
  8. By: André Sleiman
    Abstract: This paper explores the opportunities and challenges linked to a possible use of deliberative democracy processes in Lebanon. It looks at the viability and feasibility of such initiatives, which are not prevalent in the country, by identifying the main impediments to their initiation and implementation, the different formats they could take, and the expected impact. It discusses how deliberative democracy could complement and diversify the democratic tools available to Lebanese actors and thus strengthen citizens’ ability to participate in public life. The aim of the paper is to encourage an initial discussion on this topic, raise awareness about its potential to contribute to democratic governance and respond to the demand of Lebanese actors interested in pursuing deliberative democracy efforts.
    Keywords: deliberation, democracy
    Date: 2023–12–14
  9. By: Foerster, Manuel; Habermacher, Daniel
    JEL: C72 D72 D82 D83
    Date: 2023
  10. By: Ghiglino, C.; Muller, A.
    Abstract: We provide a politico-economic theory of income redistribution with endogenous social identity of voters. Our analysis uncovers a non-monotonic relationship between market income inequality and redistributive taxation in line with the mixed evidence on the sign of their empirical relationship: taxation first increases with wage inequality as all voters identify with others, but then drops sharply as affluent voters switch to identify in-group. We further add ethnicity as an identification attribute. Consistent with existing empirical evidence, our model predicts that the presence of ethnic minorities and across ethnic group inequality reduce redistribution, while within ethnic group wage inequality increases it.
    Keywords: Inequality, Probabilistic Voting, Redistribution, Social Class, Social Identity, Tax Rate
    JEL: D64 D71 D72 H20
    Date: 2023–11–14

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