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on Positive Political Economics |
| By: | Aleksandra Conevska; Can Mutlu |
| Abstract: | In this paper, we address a longstanding puzzle over the functional form that better approximates voter's political utility. Though it has become the norm in the literature to represent the voters' political utility with concave loss functions, for decades scholars have underscored this assumption's potential shortcomings. Yet there exists little to no evidence to support one functional form assumption over another. We fill this gap by first identifying electoral settings where the different functional forms generate divergent predictions about voter behavior. Then, we assess which functional form better matches observed voter and abstention behavior using Cast Vote Record (CVR) data that captures the anonymized ballots of millions of voters in the 2020 U.S. general election. Our findings indicate that concave loss functions fail to predict voting and abstention behavior and it is the reverse S-shaped loss functions, such as the Gaussian function, that better match the observed voter behavior. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.03196 |
| By: | Ernesto Dal Bó; Claudio Ferraz; Frederico Finan; Pedro Pessoa |
| Abstract: | We evaluate the effects of a program in Brazil that selects and trains new politicians, addressing three main challenges: selection bias from program screening, self-selection into candidacy, and the need to quantify the contributions of both selection and training in a holistic evaluation. Our findings show that the program raised political entry by doubling candidacy rates and increasing electoral success by 69%. However, much of the overall effect was driven by screening, which accounted for 30% of the increase in candidacy and 43% of the increase in election rates, while also making the candidate pool more diverse, competent, and committed to democratic values. Renewing the political class involves trade-offs, as some traits favored by the program did not align with voter preferences, and also reduced the descriptive representation of low-income individuals. |
| JEL: | D72 P0 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33251 |
| By: | Schib, Tobias (University of Basel); Stutzer, Alois (University of Basel) |
| Abstract: | Small-scale federal democracies depend on the active participation of individuals in local political office. Both anecdotal evidence and empirical studies across Western democracies indicate a growing difficulty in recent decades to recruit candidates for municipal offices. This study examines the impact of monetary compensation and workload on the supply of candidates for municipal councils, drawing on the economic theory of political selection. Using data from municipal elections in over 500 municipalities across three Swiss cantons since the 1970s, we apply two-way fixed effects models to analyze the relationship between compensation, workload, and candidate supply. Our findings show that higher salaries do not lead to more competitive local elections or longer terms in office. However, reducing the workload associated with municipal mandates appears to be a more effective strategy for increasing candidate supply, particularly in recruiting women. |
| Keywords: | political selection, candidate pool, compensation for public office, local council, workload |
| JEL: | D72 J45 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17524 |
| By: | Dominik Bruckner; Marco Sahm |
| Abstract: | Intra-party contests, such as the US primaries, are often used to select a candidate for a subsequent cross-party election. A more accurate selection may improve the quality of the candidate but detract more resources from the subsequent campaign. We model this trade-off as a problem of contest design and show that extreme accuracy levels are optimal: maximum accuracy if the potential candidates are sufficiently heterogeneous, and a highly random selection otherwise. In an extension of our model, the heterogeneity between potential candidates reflects the degree of political polarization within a party. Our results explain varying primary designs within and between countries and shed light upon the paradox of limited competition within democratic parties. |
| Keywords: | contest design, accuracy, elections, intra-party competition, political polarization |
| JEL: | C72 D72 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11474 |
| By: | Tamilina, Larysa; Ma, Wenting |
| Abstract: | Conflicts generate profound shocks that destabilize political systems and erode the legitimacy of governing regimes. In the context of Ukraine, these adverse effects have taken on a distinct form, referred to here as the "Ukrainian Syndrome." The phenomenon describes the paradoxical coexistence of a strong belief in the democratic regime with a significant distrust in the political institutions that uphold it. This study seeks to explain the Ukrainian Syndrome by examining the processes of institutional trust formation. The analysis is based on data from a nationally representative survey conducted in November 2024, utilizing fsQCA as the primary methodological framework. The findings reveal that individuals tend to base their trust in political institutions on pragmatic evaluations of institutional performance, largely disregarding ideological commitments to democracy or optimism about Ukraine’s long-term statehood in these assessments. As a result, Ukrainians' aspirations for and commitment to democratic governance persist independently of their trust in democratic institutions. |
| Keywords: | Trust, institutions, democracy, Ukraine, fsQCA. |
| JEL: | C1 K4 P2 |
| Date: | 2024–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123112 |
| By: | Mikhail Chernov; Vadim Elenev; Dongho Song |
| Abstract: | We propose a novel time-series econometric framework to forecast U.S. Presidential election outcomes in real time by combining polling data, economic fundamentals, and political prediction market prices. Our model estimates the joint dynamics of voter preferences across states. Applying our approach to the 2024 Presidential Election, we find a two-factor structure driving the vast majority of the variation in voter preferences. We identify electorally similar state clusters without relying on historical data or demographic models of voter behavior. Our simulations quantify the correlations between state-level election outcomes. Failing to take the correlations into account can bias the forecasted win probability for a given candidate by more than 10 percentage points. We find Pennsylvania to be the most pivotal state in the 2024 election. Our results provide insights for election observers, candidates, and traders. |
| JEL: | C32 C53 D72 P0 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33339 |
| By: | Crowe, Sabina; Gmeiner, Michael; Ille, Sebastian |
| Abstract: | We use NielsenIQ US retail scanner data to show that changes in sales patterns can be used to predict US presidential election results at the county level. Using a probit model, we regress 2016 election results against sales of various products six months prior to the election. We employ the results and the sales data for 2020 to forecast presidential election results in the same year. Comparison to actual election outcomes shows that our work correctly predicts election results in 86.47% of cases across 2, 602 US counties. We further study how changes in the consumption of certain goods influences voter turnout as well as Democrat and Republican votes. |
| Keywords: | elections; prediction; preferences; consumption; permission request sent to publisher |
| JEL: | D70 E20 |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126511 |
| By: | Condor Iturrizaga Ronny |
| Abstract: | This paper examines the effects of Peru's 1969 Land Reform on the political representation of marginalized ethnic groups in local elections. Using electoral data from 1963 to 1983, I employ surname analysis and a skin color detection algorithm to identify ethnic groups. I show that greater exposure to land reform increases the candidacy of marginalized ethnic groups, but has no effect on their electoral success. I explore potential channels and find the creation of political parties of peasant or worker origin could be plausible mechanisms for the presence of more candidates from marginalized ethnic groups. |
| JEL: | N5 Q1 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:aep:anales:4722 |
| By: | Otrachshenko, Vladimir (National Bank of Slovakia (NBS)); Popova, Olga (Leibniz Institute for East and Southeast European Studies (IOS)) |
| Abstract: | This paper contributes to a better understanding of the drivers of electoral support for Green parties and the environmental actions they promote, which is key to ensuring the long-term feasibility of environmental policies. We examine whether individual environmental preferences translate into voting for Green parties and analyze the mechanisms behind this effect. Employing an individual-level survey from developed and developing economies matched with the political parties' programs globally, we find that individuals who prefer environmental protection over economic growth are likely to translate their preferences into voting and supporting Green parties. These findings are robust to alternative definitions of Green parties and environmental preferences and to potential endogeneity concerns. The key mechanisms behind this relationship are changes in the stringency of environmental regulations, individual economic and social insecurity, and individual- and country-level exposure to environmental changes. The effect of environmental preferences on Green party voting is less pronounced among individuals living in rural areas and economically disadvantaged individuals, including those with lower education and income. These results suggest that support for Green parties and environmental policies is contingent on voters' economic security even when environmental preferences are strong, emphasizing the need for Green parties to address voters' economic concerns. |
| Keywords: | environmental preferences, Green parties, sustainable development, voting |
| JEL: | D72 H11 Q56 Q58 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17475 |
| By: | Kalliyil, Muneer (Indian Institute of Management Bangalore); Sahoo, Soham (Loughborough University) |
| Abstract: | We investigate the role of political favouritism in the private education market. Using constituency-level panel data and a close-election regression discontinuity design, we estimate the causal effect of having a politician aligned with the state ruling party on the growth of private educational institutions in India. We find that constituencies represented by aligned politicians have a higher growth rate in the number of private schools, while the effect is insignificant for government schools. Similar patterns are also found for higher education institutions. As potential mechanisms, we explore political influence over bureaucratic processes and discrepancies in the enforcement of government regulations. |
| Keywords: | ruling party alignment, private schools, close elections, regression discontinuity design, India |
| JEL: | D72 D73 H11 H75 I25 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17527 |
| By: | Daryna Grechyna; Rhema Vaithianathan |
| Abstract: | This paper analyzes the welfare implications of children’s enfranchisement within a political economy framework that emphasizes the trade-offs in public policy when the electorate includes different age groups. Public spending is financed by tax revenues, meaning that higher spending on child-rearing results in lower pensions, and vice versa. We derive the political equilibrium under Markov strategies and compare welfare across various suffrage schemes and demographic groups. The franchise that maximizes welfare across demographic groups depends on the fertility rate in the economy. Policies chosen when all demographic groups have voting rights are Pareto-improving compared to those chosen under the standard voting rights system, which excludes children from the electorate, when the fertility rate is low, and Pareto-reducing when the fertility rate is high. This result is driven by the surplus or shortage of funds available to finance pensions, depending on the ratio of workers to retirees in the economy. Public investment in child care can change the fertility rate and shift the economy toward a new optimal franchise. |
| Keywords: | demeny voting, children’s enfranchisement, fertility, public policy, welfare |
| JEL: | H21 J13 D60 D72 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11553 |
| By: | Batabyal, Amitrajeet; Kourtit, Karima; Nijkamp, Peter |
| Abstract: | This paper introduces a model of political competition under distinct institutional regimes to trace the economic performance of what we call “techno-creative places.” Specifically, we analyze how political competition in high-tech places that are creative in the sense of Richard Florida affects fiscal (tax) policy and consequent economic outcomes. There are three stylized groups of actors in our analysis: laborers or workers, techno-creative class members or entrepreneurs, and the elites who make the political decisions. We study two broad institutional-economic scenarios. In the first (second) scenario, the likelihood of political power shifting permanently from the elites to entrepreneurs is an increasing (decreasing) function of the net income of a representative techno-creative entrepreneur. Our study addresses the institutional implications of both scenarios and then comments on the implications of these two scenarios for the welfare of the elites and the techno-creative entrepreneurs. |
| Keywords: | Techno-Creative Class, Elite, Entrepreneur, Political Competition, Tax Policy |
| JEL: | H21 R11 |
| Date: | 2024–07–23 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122778 |
| By: | Emilia Brito Rebolledo; Jesse Bruhn; Thea How Choon; E. Anna Weber |
| Abstract: | How does gender composition influence individual and group behavior? To study this question empirically, we assembled a new, national sample of United States city council elections and digitized information from the minutes of over 40, 000 city-council meetings. We find that replacing a male councilor with a female councilor results in a 25p.p. increase in the share of motions proposed by women. This is despite causing only a 20p.p. increase in the council female share. The discrepancy is driven, in part, by behavioral changes similar to those documented in laboratory-based studies of gender composition. When a lone woman is joined by a female colleague, she participates more actively by proposing more motions. The apparent changes in behavior do not translate into clear differences in spending. The null finding on spending is not driven by strategic voting; however, preference alignment on local policy issues between men and women appears to play an important role. Taken together, our results both highlight the importance of nominal representation for cultivating substantive participation by women in high-stakes decision making bodies; and also provide evidence in support of the external validity of a large body of laboratory-based work on the consequences of group gender composition. |
| JEL: | C9 H7 J16 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33223 |
| By: | Niklas Potrafke |
| Abstract: | To which extent does business experience of politicians influence economic policies and economic outcomes? I review the new empirical literature which examines this question. The survey encompasses the literature on business politicians at the national, sub-national and local level. The results show that business politicians were active in promoting globalization and market-oriented economic reforms and influenced budget composition. Business politicians prioritized public investment expenditure and increased spending on infrastructure, roads and transport. They decreased spending on public consumption and transfers. The market-oriented policies translated into effects on economic outcomes. In the US states, for example, market-oriented policies of business politicians increased economic growth. Future research should examine how businesspeople in parliament influence economic policies and outcomes and employ survey experiments to investigate voters’ perceptions of business politicians. |
| Keywords: | political leaders, business background, business politicians, economic policies and outcomes |
| JEL: | D72 H11 K10 O47 P10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11502 |
| By: | Muringani, Jonathan; Dahl Fitjar, Rune; Rodríguez-Pose, Andrés |
| Abstract: | This paper examines the complex relationship between political and social trust, government quality, and economic development across 208 regions in the European Union (EU). We use a pooled data generalized structural equation model (GSEM) to show that political trust serves as a fundamental driver of regional economic development in the EU. Political trust is, in turn, influenced by both social trust and government quality. Social trust and government quality have quadratic effects on political trust, showing diminishing returns, while the effect of political trust on economic development is linear. Political trust mediates the relationship between social trust and economic development entirely, while government quality retains a direct relationship with economic development. These findings underscore the fundamental role that political trust plays as a mechanism through which both formal and informal institutions shape regional development. |
| Keywords: | political trust; social trust; quality of government; regional economic development; EU |
| JEL: | R11 H11 D73 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125630 |
| By: | Guglielmo Briscese; John A. List |
| Abstract: | Field experiments provide the clearest window into the true impact of many policies, allowing us to understand what works, what does not, and why. Yet, their widespread use has not been accompanied by a deep understanding of the political economy of their adoption in policy circles. This study begins with a large-scale natural field experiment that demonstrates the ineffectiveness of a widely implemented intervention. We leverage this result to understand how policymakers and a representative sample of the U.S. population update their beliefs of not only the policy itself, but the use of science and the trust they have in government. Policymakers, initially overly optimistic about the program’s effectiveness, adjust their views based on evidence but show reduced demand for experimentation, suggesting experiment aversion when results defy expectations. Among the U.S. public, support for policy experiments is high and remains robust despite receiving disappointing results, though trust in the implementing institutions declines, particularly in terms of perceptions of competence and integrity. Providing additional information on the value of learning from unexpected findings partially mitigates this trust loss. These insights, from both the demand and supply side, reveal the complexities of managing policymakers’ expectations and underscore the potential returns to educating the public on the value of open-mindedness in policy experimentation. |
| JEL: | C9 C93 H4 H41 O12 O36 P1 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33239 |