nep-pol New Economics Papers
on Positive Political Economics
Issue of 2024‒05‒13
nine papers chosen by
Eugene Beaulieu, University of Calgary

  1. Drain the Swamp: A Theory of Anti-Elite Populism By Gabriele Gratton; Barton E. Lee
  2. Policy Rules and Political Polarization By Carsten Hefeker; Michael Neugart
  3. Elections for sale? Evidence from cash transactions around elections in Italy By Giuseppe De Feo; Giacomo De Luca; Mario Gara; Marianna Siino
  4. Elections and (mis)reporting of COVID-19 mortality By Parrendah Adwoa Kpeli; Günther G. Schulze; Nikita Zakharov
  5. Red Herrings : A Model of Attention-Hijacking by Politicians By Belguise, Margot
  6. Paying off populism: EU-Regionalpolitik verringert Unterstützung populistischer Parteien By Gold, Robert; Lehr, Jakob
  7. The Ties that Bind: Immigration and the Global Political Economy By Panizzon, Marion
  8. Valuing the Future: Changing Time Horizons and Policy Preferences By Gazmararian, Alexander F.
  9. Local Crime and Prosocial Attitudes: Evidence from Charitable Donations By Perroni, Carlo; Scharf, Kimberley; Smith, Sarah; Talavera, Oleksandr; Vi, Linh

  1. By: Gabriele Gratton (UNSW Business School); Barton E. Lee (ETH Zurich)
    Abstract: We study a model of popular demand for anti-elite populist reforms that drain the swamp: replace experienced public servants with novices that will only acquire experience with time. Voters benefit from experienced public servants because they are more effective at delivering public goods and more competent at detecting emergency threats. However, public servants’ policy preferences do not always align with those of voters. This tradeoff produces two key forces in our model: public servants’ incompetence spurs disagreement between them and voters, and their effectiveness grants them more power to dictate policy. Both of these effects fuel mistrust between voters and public servants, sometimes inducing voters to drain the swamp in cycles of anti-elite populism. We study which factors can sustain a responsive democracy or induce a technocracy. When instead populism arises, we discuss which reforms may reduce the frequency of populist cycles, including recruiting of public servants and isolating them from politics. Our results support the view that a more inclusive and representative bureaucracy protects against anti-elite populism. We provide empirical evidence that lack of trust in public servants is a key force behind support for anti-elite populist parties and argue that our model helps explain the rise of anti-elite populism in large robust democracies.
    Date: 2024–04
  2. By: Carsten Hefeker; Michael Neugart
    Abstract: We develop a model to analyze policymakers’ incentives to install policy rules, comparing the case of no rule with a binding and a contingent policy rule that allows policymakers to suspend the rule in response to a sufficiently large shock. First, abstracting from political polarization, we show that the choice of the policy rule depends on policymakers’ policy targets. Depending on the policy target, there is an unambiguous ranking going from a no-rule regime to a contingent rule to a binding rule. Next, allowing for political polarization, the incentive to install the different types of rules changes with political polarization between different policymakers and their probability of being elected into office. Increasing political polarization when there is a sufficiently high election probability for policymakers with a high policy target increases the preference for more binding policy rules. It also leads to stricter rules in a contingent rule regime.
    Keywords: contingent policy rules, political polarization, time inconsistency, electoral uncertainty
    JEL: D78 E60
    Date: 2024
  3. By: Giuseppe De Feo; Giacomo De Luca; Mario Gara; Marianna Siino
    Abstract: This paper studies the dynamics of electoral corruption in the context of local elections in Italy. It exploits the asynchronous nature in the timing of mayoral elections to estimate a relationship between elections and the municipality-level amount exchanged through cash transactions. Cash transactions are sourced from a unique comprehensive dataset, taken from the Aggregate Anti–Money Laundering (AML) Reports between 2008 and 2018, which all Italian financial intermediaries are mandated to file with reference to transactions worth \euro 15, 000 or more. The difference-in-difference estimates, including municipality and time fixed effects, suggest that the municipal elections in Italy systematically trigger an anomalous increase in the volume of cash transactions, which we interpret as evidence of electoral corruption, i.e. an intense circulation of money to secure electoral support in the shadow of the law. Exploring the heterogeneity of our main result along several potential mediating factors confirms some intuitively appealing patterns, such as tighter competition, the presence of active criminal organizations, as well as the size of the municipality budget, let us show which significantly affects the volume of cash transactions. Our results can be used to define better anticorruption policies on political campaign practices specifically focusing on cash payments. The same approach can be easily applied to other countries and contexts, by drawing on the data submitted to AML authorities by financial intermediaries.
    Keywords: D72, D73, F33, G28, K42
    Date: 2024–03
  4. By: Parrendah Adwoa Kpeli; Günther G. Schulze; Nikita Zakharov (Department of International Economic Policy, University of Freiburg)
    Abstract: We investigate the effect of elections on underreporting COVID-19 mortality, measured as the difference between excess mortality and official statistics. Our identification strategy takes advantage of a natural experiment of the unanticipated onset of the Coronavirus pandemic in 2020 and the asymmetric electoral schedule of presidential elections around the world, in which some countries faced the pandemic with upcoming elections in the next two years, while others did not have this electoral pressure. Contrary to conventional wisdom that governments manipulate information downwards to enhance reelection probabilities, we find that democratic governments facing elections in the following years report COVID fatalities more truthfully. We explain the result by a potential aversion to the costs associated with exposed underreporting: using Gallup poll data for 2020 we show that underreporting of COVID-19 mortality potentially undermines trust in government but only in relatively democratic countries.
    Keywords: COVID-19, data manipulation, elections, democracy
    Date: 2024–04
  5. By: Belguise, Margot (University of Warwick)
    Abstract: Politicians often use red herrings to distract voters from scandals. When do such red herrings succeed? I develop a model in which an incumbent runs for re-election and potentially faces a scandal. Some incumbents enjoy telling “tales†(attention-grabbing stories) while others use tales to distract voters from the scandal. Multiple equilibria can arise: one with a norm of tale-telling in which red herrings succeed and another with a norm against tale-telling in which they fail. Increased media attention to tales has a nonmonotonic effect, facilitating red herrings at low attention levels, but serving a disciplinary function at high levels. JEL Codes: C72 ; D72 ; D83 ; D91 ; L82
    Date: 2024
  6. By: Gold, Robert; Lehr, Jakob
    Abstract: Wie kann der Aufstieg des Populismus gestoppt werden? Angesichts der bevorstehenden Wahlen zum Europäischen Parlament und der Präsidentschaftswahlen in den USA beschäftigt diese Frage politische Entscheidungsträger in vielen westlichen Demokratien. Unsere Studie zeigt, dass regionalpolitische Maßnahmen die Unterstützung populistischer Parteien wirksam verringern können. Konkret finden wir, dass die EU-Regionalpolitik, die in die Entwicklung von rückständigen Regionen investiert, dazu führt, dass der Stimmenanteil rechtspopulistischer Parteien um 15-20% sinkt. Darüber hinaus erhöhen regionalpolitische Investitionen das Vertrauen in demokratische Institutionen und verringern die Unzufriedenheit mit der EU.
    Abstract: How to break the populist wave? With the elections to the European Parliament ahead, and the Presidential Elections in the US looming, this question bothers policymakers in many Western democracies. Our study shows that regional policies effectively decrease populist support. Specifically, EU Regional Policy investing into the development of lagging-behind regions decreases the vote share obtained by right-fringe populist parties by 15-20 percent. Moreover, regional policy investments increase trust in democratic institutions, and decreases discontent with the EU.
    Keywords: Populismus, Regionalpolitik, Europäische Integration, Regressionsdiskontinuitätsdesign, Populism, Regional Policies, European Integration, Regression Discontinuity Design
    Date: 2024
  7. By: Panizzon, Marion
    Abstract: Extract In political economy, the factors leading a person to leave her country have received considerable attention, and diverse authors have evaluated the role played by determinants of migration differently. In their book “The ties that bind, ” David Leblang, Professor of Politics at the University of Virginia and the Director of the Batten School of Public Policy Studies, and Benjamin Helms, Assistant Professor of International Affairs at Texas A&M University, rank migration for work or to gain an education as less relevant than is widely believed. In their view, what leads people to move is the desire to participate politically, by voting, and eventually to qualify for citizenship. Disaggregated by skill level, this implies that, to attract a highly skilled migrant, the host state needs to prioritize granting access to political rights, while excessively high scores of linguistic aptitudes must be scrapped. For the lower skilled migrants too, host state politics play a role, but more passively, as in the absence of hostile, right-wing politics and corruption. About the author Marion Panizzon, Senior Research Fellow, World Trade Institute Cite Marion Panizzon, The Ties that Bind: Immigration and the Global Political Economy, International Relations of the Asia-Pacific, 2024;, lcae006,
    Date: 2024–04–25
  8. By: Gazmararian, Alexander F.
    Abstract: The short time horizons of citizens is a prominent explanation for why governments fail to tackle significant long-term public policy problems. Actual evidence of the influence of time horizons is mixed, complicated by the difficulty of determining how individuals' attitudes would differ if they were more concerned about the future. I approach this challenge by leveraging a personal experience that leads people to place more value on the future: parenthood. Using a matched difference-in-differences design with panel data, I compare new parents with otherwise similar individuals and find that parenthood increases support for addressing climate change by 4.3 percentage points. Falsification tests and two survey experiments suggest that longer time horizons explain part of this shift in support. Not only are scholars right to emphasize the role of individual time horizons, but changing valuations of the future offer a new way to understand how policy preferences evolve.
    Date: 2024–04–06
  9. By: Perroni, Carlo (University of Warwick); Scharf, Kimberley (University of Nottingham); Smith, Sarah (University of Bristol); Talavera, Oleksandr (University of Birmingham); Vi, Linh (Aston University)
    Abstract: Combining longitudinal postcode-level data on charitable donations made through a UK giving portal with publicly available data on local crime and neighborhood characteristics, we study the relationship between local crime and local residents’ charitable giving and we investigate the possible mechanisms underlying this relationship. An increase in local crime corresponds to a sizeable increase in the overall size of unscheduled charitable donations. This effect is mainly driven by the responses of female and gender unclassified donors. Donation responses also reflect postcode variation in socio-economic characteristics, levels of mental health, and political leanings, but mainly so for female and gender-unidentified donors.
    Keywords: Charitable Donations, Prosocial Behavior, Crime JEL Classification: H41, D64, D91, J15
    Date: 2024

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