nep-pol New Economics Papers
on Positive Political Economics
Issue of 2024‒04‒29
ten papers chosen by
Eugene Beaulieu, University of Calgary

  1. Special Interest Groups Versus Voters and the Political Economics of Attention By Balles, Patrick; Matter, Ulrich; Stutzer, Alois
  2. Import shocks and voting behavior in Europe revisited By Backes, Annika; Müller, Steffen
  3. Speed of Payment in Procurement Contracts: The Role of Political Connections∗ By Ricardo Dahis; Bernardo Ricca; Thiago Scot
  4. Public Attitudes Towards Immigration in Canada: Decreased Support and Increased Political Polarization By Mohamadian, Mehdi; Javdani, Mohsen; Heroux-Legault, Maxime
  5. The Swing Voter’s Curse Revisited: Transparency’s Impact on Committee Voting By Bandyopadhyay, Siddhartha; Deb, Moumita; Lohse, Johannes; McDonald, Rebecca
  6. The effects of cellphone coverage expansion on wealth and political behavior By Ge, Shuning; Grossman, Guy; Kosec, Katrina; Lal, Apoorva; Laughlin, Benjamin
  7. Setting the course after elections in Indonesia: President Prabowo Subianto and the complex legacy of Jokowi By Heiduk, Felix
  8. Banking Behaviour and Political Business Cycle in Africa: The Role of Independent Regulatory Policies of the Central Bank By Daniel Ofori-Sasu; Elikplimi Komla Agbloyor; Dennis Nsafoah; Simplice A. Asongu
  9. Democracy, Neoliberalism, and Financial Oligarchy By Nardy Antunes, Davi José; Tunes Mazon, Marilia
  10. Gauging Preference for Democracy in Absence of Free Speech By Josie I Chen; Louis Putterman; Diego Ramos-Toro

  1. By: Balles, Patrick; Matter, Ulrich; Stutzer, Alois
    Abstract: We investigate whether US House representatives favour special interest groups over constituents in periods of low media attention to politics. Analysing 666 roll calls from 2005 to 2018, we show that representatives are more likely to vote against their constituency's preferred position the more special interest money they receive from groups favouring the opposite position. The latter effect is significantly larger when less attention is paid to politics due to distraction by exogenous newsworthy events like natural disasters. The effect is mostly driven by short-term opportunistic behaviour than the short-term scheduling of controversial votes into periods with high news pressure.
    Keywords: Attention, campaign finance, interest groups, legislative voting, mass media, roll call voting, US House of Representatives
    JEL: D72 L82 L86
    Date: 2024–01–08
  2. By: Backes, Annika; Müller, Steffen
    Abstract: We provide first evidence for the long-run causal impact that Chinese imports to European regions had on voting outcomes and revisit earlier estimates of the short-run impact for a methodological reason. The fringes of the political spectrum gained ground many years after the China shock plateaued and, unlike an earlier study by Colantone and Stanig (2018b), we do not find any robust evidence for a short-run effect on far-right votes. Instead, far-left and populist parties gained in the short run. We identify persistent long-run effects of import shocks on voting. These effects are biased towards populism and, to a lesser extent, to the far-right.
    Keywords: globalization, import shocks, populism, voting behavior
    JEL: D72 F6 J2
    Date: 2024
  3. By: Ricardo Dahis (Department of Economics, Monash University); Bernardo Ricca (Insper); Thiago Scot (Development Impact (DIME), World Bank)
    Abstract: We provide evidence of a new channel through which politicians can exchange favors with campaign donors: earlier payment in procurement contracts. We exploit an electoral reform in Brazil that bans corporate contributions and partially breaks down the relationship between donors and politicians. Using a within-firm difference-in-differences identification strategy, we find that connected firms experience longer payment terms post-reform. The effect is larger in municipalities with low liquidity, where payment delays are more common, and for contracts awarded through a competitive tendering process. Our results point to the importance of designing rules that curb discretion over the contract execution process in government purchases.
    Keywords: Payment timeliness, public procurement, political connections
    JEL: D72 H57 H72
    Date: 2024–04
  4. By: Mohamadian, Mehdi (Provincial Health Service Authority of British Columbia); Javdani, Mohsen (Simon Fraser University); Heroux-Legault, Maxime (University of British Columbia, Okanagan)
    Abstract: We explore the evolution and determinants of attitudes towards immigration in Canada, utilizing Canadian Election Studies surveys from 1988 to 2019. Our analysis indicates a notable trend: a consistent decrease in anti-immigrant sentiments until the mid-2000s, followed by a shift around 2008 towards gradually more negative attitudes towards immigration. To better understand the factors influencing these attitudes, we examine a comprehensive set of variables. While economic factors seem to have some association with these attitudes, our findings more significantly underscore the role of group-level socio-psychological factors. Additionally, our analysis identifies an emerging polarization along political party lines beginning around 2006. Assessing the relative impact of these factors, our analysis suggests that political party identification has become increasingly significant in influencing attitudes toward immigration.
    Keywords: public attitudes towards immigration, socio-psychological factors, social identity, immigration
    JEL: J15 D72 Z13
    Date: 2024–04
  5. By: Bandyopadhyay, Siddhartha; Deb, Moumita; Lohse, Johannes; McDonald, Rebecca
    Abstract: Majority voting is considered an efficient information aggregation mechanism in committee decision-making. We examine if this holds in environments where voters first need to acquire information from sources of varied quality and cost. In such environments, efficiency may depend on free-riding incentives and the ‘transparency’ regime - the knowledge voters have about other voters’ acquired information. Intuitively, more transparent regimes should improve efficiency. Our theoretical model instead demonstrates that under some conditions, less transparent regimes can match the rate of efficient information aggregation in more transparent regimes if all members cast a vote based on the information they hold. However, a Pareto inferior swing voter’s curse (SVC) equilibrium arises in less transparent regimes if less informed members abstain. We test this proposition in a lab experiment, randomly assigning participants to different transparency regimes. Results in less transparent regimes are consistent with the SVC equilibrium, leading to less favourable outcomes than in more transparent regimes. We thus offer the first experimental evidence on the effects of different transparency regimes on information acquisition, voting, and overall efficiency.
    Keywords: Information acquisition; Voting; Transparency; Swing voter
    Date: 2024–03–07
  6. By: Ge, Shuning; Grossman, Guy; Kosec, Katrina; Lal, Apoorva; Laughlin, Benjamin
    Abstract: Taking advantage of Ghana’s gradual extension of cellphone towers in the early 2000s, we analyze the wealth effects of cellphone coverage expansion in a developing country setting using a difference-in-differences (event study) research design. We proxy local wealth using night-time light density over 1996–2016 and an asset ownership-based index from the 2000 and 2010 censuses. We find that cellphone coverage expansion significantly r raised wealth in Ghana. We then explore possible downstream effects of cellphone coverage expansion on electoral outcomes. We find no evidence that better off citizens reward incumbents, either in presidential or parliamentary elections. Using Afrobarometer survey data, this null finding appears to be because citizens do not give the government credit for economic improvements that are due to decisions made by private telecommunications companies. Further, increases in cellphone coverage significantly decrease vote-buying, which may be due to voters being harder to buy off when they are better off.
    Keywords: capacity development; mobile units; living standards; political aspects; Ghana; Africa; Sub-Saharan Africa; Western Africa
    Date: 2024
  7. By: Heiduk, Felix
    Abstract: In mid-February, the world's largest elections took place in Indonesia over the course of a single day. Around 205 million eligible voters were called to the polls to elect a new president, vice president and almost 20, 000 representatives for the national, pro­vincial and district parliaments. The spotlight was largely centred on the presidential election, as the president plays a prominent role in the country's political system, and according to the official results released on 20 March, General Prabowo Subianto will be assuming office in October. His election as head of state is seen by some observers as a threat to Indonesian democracy or even a return to dictatorship. However, it is much more likely that Prabowo will maintain the policies of his predecessor Jokowi, who prioritised the economic development of the country. Nonetheless, democratic institutions and procedures are likely to be further weakened. Germany and the EU should be prepared for Indonesia to adopt a more active and self-confident foreign policy stance under Prabowo as Jakarta will likely come to be driven by a decidedly transactional understanding of international cooperation.
    Keywords: Indonesia, elections, General Prabowo Subianto, Joko Widodo ("Jokowi"), Gerindra Party, Golka Party, Sukarnoputri Megawati
    Date: 2024
  8. By: Daniel Ofori-Sasu (University of Ghana Business School); Elikplimi Komla Agbloyor (University of Ghana Business School); Dennis Nsafoah (Niagara University); Simplice A. Asongu (Johannesburg, South Africa)
    Abstract: This study examines the effect of regulatory independence of the central bank in shaping the impact of electoral cycles on bank lending behaviour in Africa. It employs the dynamic system Generalized Method of Moments (SGMM) Two-Step estimator for a panel dataset of 54 African countries over the period, 2004-2022. The study found that banks lend substantially higher during election years, and reduce lending patterns thereafter. The study shows that countries that enforce monetary policy autonomy of the central bank induce a negative impact on bank lending behaviour while those that apply strong macro-prudential independent action and central bank independence reduce lending in the long term. The study provides evidence to support that regulatory independence of the central bank dampens the positive effect of elections on bank lending around election years while they amplify the reductive effects on bank lending after election periods. There is a wake-up call for countries with weak independent central bank regulatory policy to strengthen their independent regulatory policy frameworks and political institutions. This will enable them better strategize to yield a desirable outcome of bank lending to the real economy during election years.
    Keywords: Political Economy; Political Credit Cycles, Electoral Cycle; Central Bank Regulatory Independence; Bank lending Behaviour
    JEL: D7 D72 G2 G3 E3 E5 E61 G21 L10 L51 M21 P16 P26
    Date: 2024–01
  9. By: Nardy Antunes, Davi José; Tunes Mazon, Marilia
    Abstract: The thesis of this paper is that the conception of liberal democracy developed by Schumpeter and consecrated by American political science has always been characterized by concealing existing power structures, presuming that the political system is impervious to pressures from the economy and society. The economic, social, political, and cultural transformations of recent decades have undermined the remaining assumptions that supported liberal democracy. A true simulacrum, the political system has become a dictatorship of the rich. This work highlights two aspects of this process. The unprecedented concentration of capital and power in the hands of a financial oligarchy has eliminated power alternatives, imposing its interests through control of the mass media and suppressing the debate on the great destinies of societies. At the same time, recent technological changes, along with neoliberal policies, have disorganized the labor market and the very structure of classes by eliminating numerous jobs and careers and turning work into an appendix of the social reproduction process, where jobs are intermittent and task-based. The result has been the re-emergence of a mass of rootless, undifferentiated, and depoliticized individuals with no capacity to understand contemporary political situations and organize in defense of their interests. These are the basis for the resurgence of fascist trends in contemporary societies.
    Keywords: Democracy, Neoliberalism, and Financial Oligarchy
    JEL: B31 N2
    Date: 2024–01
  10. By: Josie I Chen; Louis Putterman; Diego Ramos-Toro
    Abstract: Whether people prefer a democratic system is difficult to judge when speaking freely carries personal dangers. We introduce an incentivized experimental task to reveal implicit preference for democracy without referencing politically-sensitive terms. We validate the task with data from émigrés from Greater China living in North America, demonstrating our experimental tool’s ability to gauge favorability toward democracy when participants come from backgrounds where eliciting such views is challenging. We corroborate the task’s accuracy and its ability to uncover patterns in democratic sentiment with data from a representative US sample and from a diverse set of participants in China.
    Date: 2023

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