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on Positive Political Economics |
| By: | Leonardo Cherici |
| Abstract: | This paper studies the relationship between economic inequality and political polarization in an electoral context where voters (poor or rich and cosmopolitan or nationalist) have preferences over a redistributive and a migration policy. Building on Besley and Persson (2021), I pro- pose a different version of their theoretical model where the two parties that compete to win the election do not have symmetric strategies and loyal voters of traditional left and right wing movements place different salience on migration. I then study how an increase in economic inequality can affect the electoral competition: inequality leads both parties to please more nationalist voters, however the polarization between the two increases. The results reflect the outcomes of recent elections in western democracies. |
| JEL: | D31 D63 D72 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dis:wpaper:dis2501 |
| By: | Robert Gold; Jakob Lehr |
| Abstract: | This paper shows that regional policies can decrease populist support. We focus on the "development objective" ("Objective-1") of the European Regional Development Fund (ERDF), meant to support lagging-behind regions. For causal inference, we exploit three sources of quasi-exogenous variation in a Regression-Discontinuity-Design (RDD), a Difference-in- Differences framework (DiD), and with matching techniques. Using NUTS3-level panel data on the outcomes of elections to the EU parliament, observed over the period 1999-2019, we consistently find that Objective-1 transfers reduces the vote share of right-fringe parties by about 2.5 pp. Left-fringe party support is not affected. Complementary analyses of individual-level survey data from the Eurobarometer show that the European Union’s regional policy increases trust in democratic institutions and decreases discontent with the EU. |
| Keywords: | Populism, Regional Policies, European Integration, Regression Discontinuity Design |
| JEL: | D72 H54 R11 R58 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_638 |
| By: | Carina Neisser (University of Cologne & IZA); Nils Wehrhöfer (Deutsche Bundesbank) |
| Abstract: | Public disclosure laws on politicians’ outside income aim to enhance electoral accountability, but their effects remain unclear and may backfire. Using a German disclosure reform, administrative tax data, and a difference-in-difference design, we show that MPs increased their outside income after public disclosure. We find suggestive evidence that the effect is driven by right-leaning MPs. A survey among voters shows that perceptions of outside income differ by party alignment: right-leaning voters view it as a sign of competence, while left-leaning voters associate it with weaker voter representation. These findings highlight the complex interplay between transparency, voter perception, and political behavior. |
| Keywords: | Tax data, outside income, politicians, income disclosure |
| JEL: | D72 D83 J45 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:354 |
| By: | Carlos Di Bonifacio; Guido Merzoni; Federico Trombetta |
| Abstract: | We document the presence of a strong incumbency disadvantage in local elections in a competitive autocracy: Venezuela. Using newly coded data on municipal election outcomes, we find that municipalities having experienced a narrow victory by the pro-regime party (PSUV) are 24 percentage points less likely to re-elect a pro-regime mayor in subsequent elections compared to those with marginal opposition victories. This disadvantage is primarily influenced by voter turnout, as participation rates increase on average by 6 percentage points in municipalities where the pro-regime party narrowly won. The incumbency disadvantage is driven precisely by those elections leading to a low future abstention rate. Overall, we stress the important role of voters’ mobilization even in the context of autocratic regimes. |
| JEL: | D71 D72 D78 D79 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:dis:wpaper:dis2402 |
| By: | Berliant, Marcus; Gouveia, Miguel |
| Abstract: | The literatures dealing with voting, optimal income taxation, implementation, and pure public goods are drawn on here to address the problem of voting over income taxes to finance a public good. In contrast with previous articles, general nonlinear income taxes that affect the labor-leisure decisions of consumers who work and vote are allowed. Uncertainty plays an important role in that the government does not know the true realizations of the abilities of consumers drawn from a known distribution, but must meet the realization-dependent budget; the tax system must be robust. Even though the space of alternatives is infinite dimensional, conditions on primitives are found to assure existence of a majority rule equilibrium. |
| Keywords: | Voting; Income taxation; Public good; Robustness |
| JEL: | D72 D82 H21 H41 |
| Date: | 2025–01–16 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123368 |
| By: | Brice Fabre (aParis School of Economics (PSE) and Institut des Politiques Publiques (IPP)); Marc Sangnier (Aix Marseille Univ, CNRS, AMSE, Marseille, France) |
| Abstract: | This paper uses French data to simultaneously estimate the impact of two types of connections on government subsidies allocated to municipalities. Investigating different types of connection in a same setting helps to distinguish between the different motivations that could drive pork-barreling. We differentiate between municipalities where ministers held office before their appointment to the government and those where they lived as children. Exploiting ministers’ entries into and exits from the government, we show that municipalities where a minister was mayor receive 30% more investment subsidies when the politician they are linked to joins the government, and a similar size decrease when the minister departs. In contrast, we do not observe these outcomes for municipalities where ministers lived as children. These findings indicate that altruism towards childhood friends and family does not fuel pork-barreling, and suggest that altruism toward adulthood social relations or career concerns matter. We also present complementary evidence suggesting that observed pork-barreling is the result of soft influence of ministers, rather than of their formal control over the administration they lead. |
| Keywords: | Local favouritism, distributive politics, Political Connections, personal connections. |
| JEL: | D72 D73 H50 H77 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:aim:wpaimx:2434 |
| By: | Edoardo di Porto (University of Naples Federico II Complesso Universitario di Monte Sant’Angelo, Via Cintia, 21, 80126 Napoli, Italia); Angela Parenti (University of Pisa, Via Ridolfi 10, 56124 Pisa, Italy); Sonia Paty (Université Lumière Lyon 2, CNRS, Université Jean- Monnet Saint-Etienne, emlyon business school, GATE Lyon Saint-Étienne UMR 5824, 35 rue Raulin, 69007 Lyon, FRANCE) |
| Abstract: | The existing literature identifies a negative relationship between jurisdiction size and voter participation. Previous studies have primarily examined this correlation through local government mergers or amalgamations, which often fail to establish a robust causal link due to limitations in natural experimental settings. To address this gap, we analyze the French experience of intermunicipal cooperation (2001–2018), where municipalities transfer specific responsibilities and fiscal revenues from the local to the intermunicipal level. Leveraging an exogenous population-based rule, our analysis reveals that voter turnout in municipal elections significantly declines in newly integrated communities. This reduction in participation is enduring, persisting even after the introduction of direct elections for intermunicipal governments. Further analysis on the mechanisms behind these effects shows that these municipalities experience a notable decrease in fiscal revenues for approximately two years following their integration decision. Our findings suggest that when less is at stake, in terms of responsibilities and fiscal revenues in highly integrated municipalities, citizens feel less involved and electoral participation decreases. |
| Keywords: | Decentralization, integration, electoral participation, fiscal revenues, cooperation, quasinatural experiment |
| JEL: | H2 H3 H7 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gat:wpaper:2502 |