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on Positive Political Economics |
| By: | Pedro Albarrán (University o Alicante); Carmen Herrero (University o Alicante & Ivie); Antonio Villar (Universidad Pablo de Olavide & ISEAK) |
| Abstract: | In this paper, we conduct an empirical analysis of the transition from voters' preferences to electoral outcomes, a process significantly influenced by the electoral system. We introduce a measure called 'support' that summarizes voters’ preferences. Then, we examine how these preferences are compressed under the plurality voting mechanism, which forces to select just one option. This choice is captured by the 'affinity', which singles out the preferred party for each voter. The final decision, though, is affected by strategic considerations and several other factors. Using survey data from three Spanish regions (Andalusia, Madrid, and the Valencian Community) prior to their respective Regional Elections, our findings indicate that political representation in all three Regional Parliaments would be more diverse if based on voters’ complete preferences (i.e., support). In all instances, smaller parties lose ground, a trend that emerges even before strategic considerations. These results suggest that the electoral system may exacerbate political polarization, diverging from social preferences. |
| Keywords: | Voting; regional elections; surveys; voters’ preferences; political support; political representation; Spain. |
| JEL: | N36 D64 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pab:wpaper:24.02&r= |
| By: | Prato, Carlo; Wolton, Stephane |
| Abstract: | The Condorcet Jury Theorem and subsequent literature establish the feasibility of information aggregation in a common-value environment with exogenous policy options: a large electorate of imperfectly informed voters almost always selects the correct policy option. Rather than directly voting for policies, citizens in modern representative democracies elect candidates who make strategic policy commitments. We show that intermediation by candidates sometimes improves policy choices and sometimes impedes information aggregation. Somewhat paradoxically, the possibility of information aggregation by voters encourages strategic conformism by candidates. Correlated information or partisan biases among voters can mitigate the political failure we un- cover. We also discuss possible institutional solutions. |
| Keywords: | information aggregation; elections; representative democracy; Elections; Information aggregation; Representative democracy |
| JEL: | D72 |
| Date: | 2022–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:115180&r= |
| By: | Giampaolo Bonomi |
| Abstract: | We study polarization in a probabilistic voting model with aggregate shocks and a decreasing marginal utility from office rents. In equilibrium, parties offer different policies, despite being rent-motivated and ex-ante identical from the point of view of voters. When candidates compete on a single policy issue, parties' equilibrium payoffs increase in voter polarization, even when the change is driven by the supporters of the opposite party becoming more extreme. With multiple policy issues, parties benefit if the society is split into two factions and the ideological cohesion within such factions increases. We connect our results to empirical evidence on polarizing political communication, party identity, and zero-sum thinking, and find that polarization could be reduced by intervening on the electoral rule. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2405.20564&r= |
| By: | Richter, Dirk (Bern University Hospital for Mental Health); Richter, Mona |
| Abstract: | Democracy is under threat in many countries, particularly from illiberal and right-wing populist parties. This does not reveal a social trend towards conservatism and right-wing to far-right positions among the population, as moral and social attitudes are generally becoming increasingly liberalised. The shift to the right is primarily taking place within the political system, where right-wing conservative and illiberal parties are recognising insecurities among the population and taking up certain trigger topics (e.g. migration, climate, gender and identity issues) in order to increase their share of the vote. To put it in economic terms: The shift to the right does not follow a demand from the voting population, but follows a supply by political parties. Political systems can therefore react accordingly and counter populist positions appropriately. Progressive-left parties can do this by ensuring that the issues and positions they launch do not exacerbate social insecurities, while conservative-right parties can do this by maintaining a clear distance from illiberal positions in terms of content and rhetoric. |
| Date: | 2024–06–07 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:2p38n&r= |
| By: | Jesus Fernandez-Villaverde (University of Pennsylvania, NBER, and CEPR); Carlos Sanz (Banco de Espana and CEMFI) |
| Abstract: | Due to a last-minute fight among the candidates, Vox, a party at the right end of the Spanish political spectrum, could not run in Santa Cruz de Tenerife, a relatively representative electoral constituency, in the general election of July 23, 2023. Since this fight was a power struggle within Vox unrelated to any fundamental in the constituency or ideological differences among the candidates, we can exploit this event as a quasinatural experiment to measure the effects of new parties on electoral outcomes. Using three different but complementary research designs (matching, synthetic controls, and a triple-difference analysis), we get to the same main result: Vox’s presence significantly increases votes for the right as a whole. The increase in votes for the right caused by Vox’s presence is particularly strong in areas with high unemployment. The presence of Vox also reduces protest votes but, on the other hand, votes for the left are unaffected. |
| Keywords: | New parties, quasi-natural experiments, electoral outcomes |
| JEL: | D72 N30 N40 Z13 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:pen:papers:24-014&r= |
| By: | Giulia Buccione; Brian G. Knight |
| Abstract: | We investigate the rise of the religious right in the context of the Moral Majority and Jimmy Carter, the first Evangelical President. During Carter's Presidency, the Moral Majority, an Evangelical group headed by televangelist Jerry Falwell, turned against the incumbent Carter, a Democrat, and campaigned for Ronald Reagan, a Republican, in the 1980 Election. To investigate the role of religious groups and leaders in the political persuasion of followers, we first develop a theoretical model in which single-issue religious voters follow better-informed religious leaders when choosing which candidates to support. Using data from county-level voting returns, exit polls, and surveys, we document that Evangelical voters indeed shifted their support from Carter in 1976 to Reagan in 1980. We also provide three pieces of evidence that the Moral Majority played a role in this switching: survey data on Moral Majority campaign issues, exposure to Jerry's Falwell's television ministry, and exposure to state headquarters of the Moral Majority. |
| JEL: | P0 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32551&r= |
| By: | Réka Juhász; Nathan J. Lane |
| Abstract: | We examine the ways in which political realities shape industrial policy through the lens of modern political economy. We consider two broad “governance constraints”: i) the political forces that shape how industrial policy is chosen and ii) the ways in which state capacity affects implementation. The framework of modern political economy suggests that government failure is not a necessary feature of industrial policy; rather, it is more likely to emerge when countries pursue industrial policies beyond their governance capacity constraints. As such, our political economy of industrial policy is not fatalist. Instead, it enables policymakers to constructively confront challenges. |
| JEL: | L52 O25 P00 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32507&r= |
| By: | António Afonso; José Alves; João Tovar Jalles; Sofia Monteiro |
| Abstract: | This paper explores the nuanced relationship between fiscal decentralization and fiscal sustainability. Employing panel data analyses, it scrutinizes how decentralization influences fiscal discipline across different governmental levels. Results for 185 countries show that while tax decentralization often hampers the degree of fiscal responsiveness, potentially due to misaligned local and national objectives and loss of scale efficiency, spending decentralization can enhance fiscal outcomes by promoting efficient resource allocation. These findings are contextualized within a broad range of economic and political environments, highlighting that the impacts of decentralization are contingent upon local capacities and overarching governance frameworks. Hence, we contribute to the understanding of fiscal policies’ complexity in decentralized systems and offer significant policy insights for fiscal sustainability in varied administrative contexts. |
| Keywords: | panel data analysis, fiscal sustainability, decentralization, fiscal rules, political cycles, time-varying coefficients |
| JEL: | H11 H77 H72 H73 E62 C23 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11132&r= |
| By: | José M. Menudo (Department of Economics, Universidad Pablo de Olavide); Francisco A. Borja (Department of Economics, Universidad San Francisco de Quito) |
| Abstract: | This paper examines the influence of the French liberal school in the formation of the Andean republics—Ecuador, Colombia, Peru, and Chile. Our primary focus lies on the teaching of political economy during the last two thirds of the 19th century. Our scrutiny to the chairs of political economy and a text mining analysis of their textbooks allows us to conclude that the French liberal school exerted a stronger influence compared to its British counterpart. In addition, the influence varied from the Chilean enthusiast reception to the political obstacles in the case of Colombia. |
| Keywords: | French liberal economists, Latin America, Spread of economic ideas, Teaching of Political Economy.. |
| JEL: | B31 B12 A11 A20 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pab:wpaper:24.01&r= |
| By: | Dmitry Veselov (HSE University); Alexander Yarkin (Brown University) |
| Abstract: | Industrial policies, such as infrastructure investments and export tariffs, affect the allocation of labor and incomes across sectors, attracting substantial lobbying efforts by special interest groups. Yet, the link between structural change and lobbying remains underexplored. Using more than 150 years of data on parliamentary petitions in USA and Britain, we measure historical lobbying and document several stylized facts. First, lobbying over industrial policies follows a hump-shaped path in the course of structural change, while agricultural lobbying steadily declines. Second, big capitalists (manufacturers, merchants) are most active in lobbying for industrialization. Third, industrial concentration increases progressive lobbying, while concentrated landownership slows it down. We explain these patterns in a simple model of structural change augmented with a heterogeneous agents lobbying game. Model simulations match the dynamics of structural change, inequality, and lobbying for industrialization in the British data. |
| Keywords: | political economy, structural change, lobbying, wealth distribution, growth |
| JEL: | D33 D72 N10 N41 O14 O41 O43 P00 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0260&r= |
| By: | McGovern, Patrick; Obradović, Sandra; Bauer, Martin W. |
| Abstract: | Has rising income inequality become a scandalous social problem as the English ethical socialist R. H. Tawney anticipated in an earlier era? We examine the salience and framing of income inequality within major UK and US newspapers over the period 1990–2015. Specifically, this includes the global banking crisis of 2008, which was the most significant financial crisis in capitalist economies since the Great Depression of 1929. Did this event trigger a public outcry? We divide the overall search into a full corpus for quantitative analysis of media salience and a smaller corpus for in-depth qualitative analysis of media frames. We find that media coverage of income inequality increased across the period in both countries and especially after 2008. With this increase, there is a shift in frame prevalence, with pre-2008 frames focusing on conceptualising rising income inequality while post-2008 frames focus on managing rising inequality (through interventions, policies and identifying scale of solutions needed). This shift is accompanied by a more polarised sentiment on income inequality, an increase in moralising language and a more balanced political slant. The proposed ‘solutions’ become absorbed within established repertoires offered by the political right and left, limiting the emergence of a Tawney Moment. Consequently, the rise in income inequality has not generated the kind of scandalising public outcry that Tawney would expect. We conclude by examining the possible reasons for the lack of outrage in the mass media. |
| Keywords: | United States; frame analysis; income inequality; mass media; United Kingdom |
| JEL: | N0 |
| Date: | 2023–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:123556&r= |
| By: | Banerjee, Swapnendu; Saha, Soumyarup |
| Abstract: | We explore a power relationship between a ‘corrupt’ politician and a political worker where the politician can order an illegal corrupt effort to be performed by the worker. Using a moral hazard structure we show that when the politician’s power is sufficiently high the politician optimally uses power and relies less on wage incentives. But when the power is low, the politician optimally shuns power and relies more on wage incentives. We also talk about optimal bolstering of power through threats depending on the level of power of the politician. This model has implications on the larger principal-agent structure, although we model it as a political corruption game. |
| Keywords: | Power, Corruption, Hidden Action, Perception, Bolstering |
| JEL: | D86 J47 K42 |
| Date: | 2024–05–30 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121109&r= |