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on Positive Political Economics |
| By: | Philipp Denter; Boris Ginzburg |
| Abstract: | Political agents often aim to influence elections through troll farms -- organisations that disseminate messages emulating genuine information. We study the behaviour of a troll farm that faces a heterogeneous electorate of partially informed voters, and aims to achieve a desired political outcome by targeting each type of voter with a specific distribution of messages. We show that such tactics are more effective when voters are otherwise well-informed, for example, when the media is of high quality. At the same time, increased polarisation, as well as deviations from Bayesian rationality, can reduce the negative effect of troll farms and restore efficiency of electoral outcomes. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.03241 |
| By: | Feldhaus, Christoph (Ruhr University Bochum); Reinhardt, Lukas (University of Oxford); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | In a democracy, it is essential that citizens accept rules and laws, regardless of which party is in power. We study why citizens in polarized societies resist rules implemented by political opponents. This may be due to the rules' specific content, but also because of a general preference against being restricted by political opponents. We develop a method to measure the latter channel. In our experiment with almost 1, 300 supporters and opponents of Donald Trump, we show that polarization undermines rule-following behavior significantly, independent of the rules' content. Subjects perceive the intentions behind (identical) rules as much more malevolent if they were imposed by a political opponent rather than a political ally. |
| Keywords: | political polarization, social identity, outgroup, economic preferences, experiment |
| JEL: | C91 D90 D91 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17448 |
| By: | Kärnä, Anders (Research Institute of Industrial Economics (IFN)); Meriläinen, Jaakko (Department of Economics, Stockholm School of Economics); Norell, John (Department of Economics, Stockholm University) |
| Abstract: | The increasing electoral success of populist radical-right parties poses a significant challenge to established political parties in Western democracies. While mainstream parties often maintain a policy of non-cooperation with these newcomers, such cordon sanitaire strategies can become increasingly costly as radical parties gain support. This study examines the conditions under which established parties abandon their exclusionary stance, focusing on the case of the Sweden Democrats in Swedish municipal politics. We adapt time-series econometric methods to identify unknown thresholds at which exclusion costs become untenable, leading to shifts in coalition formation strategies. Our analysis reveals a critical threshold at approximately 19% electoral support, beyond which the probability of Sweden Democrats’ inclusion in governing coalitions significantly increases. We demonstrate that as radical party support approaches this threshold, coalition sizes expand, office rents are redistributed, and the ideological dispersion of governing parties widens. Once the threshold is surpassed, these trends reverse. Our findings highlight the trade-offs mainstream parties face in responding to the rise of challenger parties and contribute to broader debates on coalition formation, party system change, and the accommodation of anti-establishment parties in democratic systems. |
| Keywords: | Coalition formation; Cordon sanitaire; Populist radical right; Sweden Democrats |
| JEL: | D72 P16 |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1507 |
| By: | Orkun Saka; Yuemei Ji; Clement Minaudier |
| Abstract: | We show that politicians facing a binding term limit are more likely to engage in financial de-liberalisation than those facing re-election, but only in the wake of a financial crisis. In particular, they implement policies that tend to favour incumbent financial institutions over the general population, such as increasing barriers to entry in the banking sector. We rationalise this behaviour with a theory of political accountability in which crises generate two opposite effects: they increase the salience of financial policies to voters but also create a window of opportunity for politicians captured by the financial industry to push potentially harmful reforms. In line with the implications of our model, we show that revolving doors between the government and the financial sector play a key role in encouraging bank-friendly policies after crises. |
| Keywords: | financial crises, political accountability, democracies, term-limits, special-interest groups |
| JEL: | D72 D78 G01 P11 P16 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11461 |
| By: | Nordin, Martin (Lund University); Stanfors, Maria (Lund University) |
| Abstract: | Women have made substantial gains in education and outperform men regarding educational attainment across the OECD, but the consequences of this reversal of the gender gap in education (RGE) have not been well researched. We address the association between the RGE and partnering, employment, and support for a right-wing populist party in Sweden. We explore the differential impacts of women's educational advancements versus men's lagging by using cross-sectional register data and within-areal age variation in RGE. Results show that RGE is negatively associated with partnering and employment prospects among individuals with a low level of education. Results suggest that men's educational disadvantage may contribute to growing support for right-wing populist parties and that shifting gender gaps in education may foster frustration in various areas of life and anti-egalitarian values. |
| Keywords: | gender gap in education, partnership, employment, political opinion |
| JEL: | J12 I24 Z13 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17437 |
| By: | Bengtsson, Erik; Kersting, Felix |
| Abstract: | In a large social science literature, unequal rural class structures ("landlordism") are associated with authoritarian political outcomes. This paper revisits the debate focusing on the electoral consequences of land inequality in Prussia, the locus classicus of the pernicious effects of landlordism, and Sweden, often perceived as Prussia’s opposite, with a farmer-dominated social structure and stable democratization. Investigating the late 19th and early 20th century, we show that agrarian inequality was higher in Sweden than in Prussia, already putting the theory of a landlordism-authoritarianism connection in question. In contrast to the existing hypothesis, our within country-analysis indicates no positive correlation between land inequality and electoral support for the Conservative and Nazi parties and a positive correlation with turnout. We discuss social mobilization and declining social control of the landed elites as mediating institutional factors. |
| Date: | 2024–11–04 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:2jgq8 |
| By: | Awad, Emiel; Judd, Gleason; Riquelme, Nicolas |
| Abstract: | How do interest groups learn about and influence politicians over time? We develop a game-theoretic model where an interest group can lobby a politician while learning about their ideological alignment. Our analysis reveals a fundamental tradeoff: interest groups must balance gathering information against exerting immediate influence, while politicians strategically manage their reputations to shape future interactions. These strategic forces generate systematic dynamics: policies and transfers shift in tandem, with early-career politicians showing greater policy variance and extracting larger rents through reputation management than veterans. Uncertainty about alignment increases policy volatility as groups experiment with offers, while institutional features like committee power and revolving-door incentives systematically alter both learning incentives and influence strategies. Our results shed new light on how interest group influence evolves across political careers and varies with institutional context. |
| Date: | 2024–11–11 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:834vd |
| By: | Matthew Gould (Department of Economics and Finance, Brunel University London, Cleveland Road, Uxbridge, UB8 2TL, UK); Matthew D. Rablen (School of Economics, University of Sheffield, Sheffield S1 4DT, UK) |
| Abstract: | We focus on the preferences of a salient group of highly-experienced individuals who are entrusted with making decisions that affect the lives of millions of their citizens, heads of government. We test for the presence of a fundamental behavioral bias, loss aversion, by examining heads of governments choice of decision rules for international organizations. Loss averse leaders would choose decision rules that oversupply negative (blocking) power at the expense of positive power (to initiate affirmative action), causing potential welfare losses through harmful policy persistence and reform deadlocks. If loss aversion is muted by experience and high-stakes it may not be exhibited in this context. We find evidence of significant loss aversion implied in the Qualified Majority rule of the Treaty of Lisbon, when understood as a Nash bargaining outcome. World leaders may be more loss averse than the populous they represent. |
| Keywords: | Loss aversion, Behavioral biases, Voting, Bargaining, Voting power, EU Council of Ministers |
| JEL: | D03 D81 D72 C78 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:shf:wpaper:2024011 |
| By: | Yannick Bury; Lars P. Feld |
| Abstract: | In this paper, we study whether local spending of intergovernmental grants is influenced by mayoral elections in the grant receiving municipality. We exploit the implementation of the German federal government’s second economic stimulus package of 2009 (K2) in the state of Baden-Wuerttemberg as natural experiment. In the context of this package, all municipalities in Baden-Wuerttemberg received lump-sum grants for local public investment spending. Applying a difference-in-differences and instrumental variables approach to ensure exogeneity of the decision of mayors to run for re-election, we provide evidence that, in the absence of an election, K2 grants led to an increase in a municipality’s spending on long-run investment, while municipalities in which the incumbent mayor stood for re-election used grants to increase both, long-run and rapidly visible short-run investment expenditures. Moreover, we provide evidence in favor of the flypaper effect for all municipalities, except for those in which the incumbent mayor did not seek re-election. |
| Keywords: | intergovernmental grants, flypaper effect, political budget cycles |
| JEL: | H30 H72 H77 H81 E61 E62 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11457 |
| By: | Researcher, AS Independent |
| Abstract: | "Divided We Fall: A Multidisciplinary Analysis of Polarization, Social Divides, and the Fragility of Unity in Human Societies" explores the escalating threat of polarization and tribalism in modern human societies. By examining historical case studies, such as Nazi Germany and McCarthyism, alongside contemporary events like Brexit and the U.S. elections of 2016 and 2024, the paper identifies recurring patterns in how societal divisions are exploited for political and ideological gain. The analysis integrates insights from social psychology, highlighting cognitive biases like confirmation bias, in-group/out-group dynamics, and heuristic-driven decision-making, which leave individuals vulnerable to manipulation. The paper also delves into the role of emerging technologies, such as social media and AI-driven propaganda, in amplifying divisions, creating echo chambers, and eroding democratic norms. Beyond diagnosing the problem, it explores opportunities for fostering unity, drawing on historical examples of collective action, such as post-WWII reconstruction and the global response to the COVID-19 pandemic. The findings underscore the fragility of social cohesion and emphasize the urgent need for proactive leadership, media responsibility, and grassroots mobilization to counter polarization. This multidisciplinary framework aims to provoke discussion on how humanity can navigate its growing divides and build resilience against future existential threats. The paper also explores how modern technologies—such as social media algorithms and artificial intelligence—amplify polarization, creating echo chambers and eroding trust in democratic processes. Insights from social psychology, including heuristics, cognitive biases, and tribalism, highlight the vulnerabilities that make societies susceptible to manipulation. Finally, the paper discusses pathways to unity through shared goals, historical examples of successful collaboration, and the necessity of ethical leadership and robust institutions. The findings underscore the urgent need for proactive measures to counteract polarization, emphasizing education, transparency, and collective action as essential tools for preserving democracy and fostering global unity in the face of existential threats such as climate change and technological disruption. |
| Date: | 2024–11–22 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:wzm5d |
| By: | Kleine, Mareike |
| Abstract: | Transparency lies at the heart of canonical theories of international negotiations and institutions—yet it is rarely directly measured or explained. This paper explores the potential downsides of transparency reforms in intergovernmental negotiations and institutions. We argue that as formal international meetings open up to the public, negotiators face incentives to shift deliberations to more informal and opaque venues, especially for sensitive and domestically contested issues. To test when and why this occurs, we present new data on three decades of intergovernmental negotiations in the Council of the European Union (1990-2019), and in particular the use of informal breaks where no minutes are taken. We find that recourse to such breaks—especially at lunch time—has increased substantially, and that ministers often take these opportunities to discuss controversial topics. We deploy quantitative and qualitative analyses to show that variations in informal breaks correlate both with institutional enhancements to transparency and with specific concerns over antagonistic political mobilization at home, notably in the form of Euroscepticism. These findings challenge received positive and normative theories about transparency in international institutions, and contribute to the literature on informal governance, negotiation studies, EU politics, and the transnational democratic deficit. |
| Keywords: | transparency; secrecy; informal governance; intergovernmental negotiations; international organization; domestic politics; European Union; informality |
| JEL: | F50 D70 D82 |
| Date: | 2024–11–04 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124152 |
| By: | Costa-Font, Joan (London School of Economics); Cowell, Frank A. (London School of Economics) |
| Abstract: | This paper examines a behavioural explanation for the Brexit referendum result, the role of an individual's inequality aversion (IA). We study whether the referendum result was an "unconsidered Leave" partially driven by people's low aversion to inequality. We use a representative sample of the UK population fielded in 2017, and analyse the extent to which lottery-based individual IA estimates predict their Brexit vote. We consider alternative potential drivers of IA in both income and health domains; these include risk aversion, locus of control, alongside socio-economic and demographic characteristics. A greater aversion to income inequality predicts a lower probability of voting for Leave, even when controlling for risk aversion and other drivers of the Brexit vote. This effect is only true among men, for whom an increase in income IA by one standard deviation decreases their likelihood of voting for leaving the EU by 5% on average. Had there been a greater IA, the overall referendum result might have been different. However, the effect of health inequality aversion is not significantly different from zero. |
| Keywords: | Brexit, inequality aversion, income inequality aversion, health inequality aversion, imaginary grandchild, risk aversion, locus of control |
| JEL: | H1 I18 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17439 |