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on Positive Political Economics |
| By: | Janne Tukiainen; Ilona Lahdelma; Mika Maliranta; Risto Rönkkö; Juho Saari |
| Abstract: | Young voters’ electoral behavior has been a particular target of interest because young people waver between apolitical and radical attitudes and the formally dominant main-stream parties suffer from this the most. We examine possible explanations into why this shift away from mainstream parties is happening by a conjoint survey experiment that tested for possible differences in policy preferences between young people aged 15 –29 and adults aged 30 – 79. We also survey the respondents’ media consumption habits, political sophistication, and trust in institutions. Results show that even though young people in Finland show no differences on average in policy preferences when compared to adults, they were systematically more in favor of voting for the populist extreme right. This difference is likely to stem from the young men who have less trust in institutions and less political sophistication than adults and an increased likelihood to get their political information from TikTok. |
| Keywords: | TikTok, young voters, political communication, policy preferences, political socialization |
| Date: | 2024–12–18 |
| URL: | https://d.repec.org/n?u=RePEc:pst:wpaper:351 |
| By: | Hans Gersbach |
| Abstract: | “Pendular Voting” presents a novel two-stage voting procedure: A randomly chosen citizen group votes on a proposal replacing the status quo. Depending on the outcome, a “counterproposal” ensues, that is closer to/further away from the status quo than the original proposal. All citizens vote pairwise on the status quo, initial proposal, and counterproposal (majority voting), the counterproposal being the default outcome in case of cyclical collective preferences. We analyze the process on a one-dimensional policy space, allowing for uncertainty about preference distribution. Manipulation may only occur in the first stage, without impacting the final outcome. Pendular Voting can engineer outcomes closer to the median voter’s preferences than standard procedures, even with selfish agenda setters. |
| Keywords: | democracy, manipulation, information sharing, referendum. |
| JEL: | C72 D70 D72 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11783 |
| By: | Augusto Cerqua; Samuel Nocito; Gabriele Pinto |
| Abstract: | We evaluate the impact of a recent reform that sharply increased the salaries of Italian local politicians on electoral competition and the valence attributes of the candidates elected. Exploiting misaligned election dates across Italian cities, we propose a novel methodology, the time-shifted control design (TSCD), to estimate the reform’s impact on municipalities up to 30, 000 inhabitants, representative of almost the entire universe of Italy’s local administrative units. We find a boost in the entry of new political candidates after the first post-reform electoral round, with no significant enhancement in the overall quality of the political class. These outcomes possibly stem from the varying distribution of compliers—whose candidacy decision is influenced by the reform—across diverse political and economic contexts. Thus, we find that in less affluent areas or those with fewer entry barriers, the pay rise drew a larger number of mayoral candidates, encouraging individuals from outside the political sphere to enter the competition. In the poorest contexts, we also observe a shift in the profile of councilors and members of the mayor’s executive committee, where the pay rise attracted individuals with lower educational levels but with experience in white-collar positions. |
| Keywords: | local governments, politicians’ wages, time-shifted control design |
| JEL: | D04 D72 J45 C13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11778 |
| By: | Mathias Bühler; Navid Sabet |
| Abstract: | Who drives social change—the people or activist elites? While progressive reforms are often championed by elites, their preferences may diverge from those of the broader group they aim to represent, producing unintended political consequences. We study this dynamic in the context of female suffrage in Germany, a reform driven by activist elites but ultimately lacking support from the broader female electorate. Using newly digitized voting data from Munich, linked to individual socioeconomic records, we identify the political preferences of elite and non-elite women. We exploit variation in elite composition based on pre-franchise socioeconomic characteristics, as well as variation in World War I widowhood, which increased the observability of non-elite women in household records. Precincts with more elite women supported the social-liberal party that had long advocated women’s rights, while those with greater non-elite female presence shifted toward nationalist parties promoting traditional gender norms. This divergence persists across multiple elections and is not explained by warrelated shocks or male voting behavior. Our findings suggest that formal inclusion alone may be insufficient to shift entrenched social and political hierarchies. |
| Keywords: | suffrage, elite |
| JEL: | N40 D70 P40 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11771 |
| By: | Davide Cipullo; Barton E. Lee |
| Abstract: | Analyzing U.S. House elections (2002-2010), measures of legislators’ effectiveness, and exogenous increases in Chinese import competition, we document a conditional relationship between legislative effectiveness and electoral success. In districts ex-posed to large trade shocks, incumbent legislators who were more effective legislators were more likely to be reelected compared to less effective incumbents. Instead, in districts exposed to small trade shocks, more effective incumbents were less likely to be reelected. Our results are driven by trade shocks affecting voters’ preferences for policy change and, in turn, their support for effective legislators. Our results have consequences for the effectiveness of future legislators. |
| Keywords: | legislative effectiveness, China shock, elections, trade shock |
| JEL: | D72 F14 P00 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11791 |
| By: | Aapo Stenhammar |
| Abstract: | While structural transformation is vital for economic development, it often counters resistance. To shed light on the tension between the political and economic effects of structural change, I study a policy that paid farmers to stop farming in 1970s Finland. Using over 290, 000 newly digitized Agricultural Census forms linked to rich register data, I find that this Field Reservation Policy led to farm closures but did not affect farmers’ income or geographical mobility. However, it had an important intergenerational effect. Children of the most affected farmers had 2.7% higher earnings and were more likely to work in office and managerial positions. Surprisingly, the positive effects on income are predominantly driven by children with lower cognitive skills. Despite the economic benefits, the policy faced a political backlash contributing to the rise of a populist rural party. I provide evidence for two separate explanations for this political reaction: identity-based backlash by offended farmers and negative externalities arising from field reservation. |
| Keywords: | structural change, intergenerational mobility, occupational choice, political populism |
| JEL: | J62 J24 O14 O25 D72 |
| Date: | 2024–02–14 |
| URL: | https://d.repec.org/n?u=RePEc:pst:wpaper:341 |
| By: | Busemeyer, Marius R.; Jäger, Felix; Baute, Sharon |
| Abstract: | This policy paper explores the relationship between perceptions of political efficacy and economic inequality. The latest findings from the Konstanz Inequality Barometer show that many people feel they have little influence on political decision-making and perceive political institutions as being unresponsive to their needs. As a result, they feel politically sidelined. The study identifies clear statistical correlations between perceptions of political efficacy and economic inequality. The paper concludes with concrete policy recommendations for (re)strengthening political participation. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cexpps:315732 |
| By: | Alessandro Sovera (Tampere University) |
| Abstract: | In the world of government and politics, the interaction between the executive and the legislature raises a fundamental question: Does a larger political class enhance public finance by boosting revenues, or does it constrain expenditures and financial stability? Using unique administrative data from Italian municipalities and a generalized difference in-difference strategy, this paper explores the fiscal impact of the roles that politicians play in local government. The study finds that a larger executive leads to increased expenditures, primarily driven by higher investments financed through capital transfers, while a larger legislature tends to constrain public spending. These patterns are understood by examining the role of specialization within a broader executive entity and the political divisions that figure within a larger council. Voters respond positively to additional spending by the executive, supporting upward career movement for the mayor and the reappointment of executive board members. On the other hand, councilors’ careers do not benefit from liberal spending behavior. This research contributes to the understanding of the complex relationship between political class size and state finances, a relationship which the literature has found to be ambiguous. |
| Keywords: | Budget, City council, Executive board, Local government, Local politicians, Politicians’ career |
| JEL: | D72 H11 H71 H72 P16 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:32 |
| By: | Batabyal, Amitrajeet; Beladi, Hamid |
| Abstract: | We analyze how deterministic political competition between the elites and the so-called creative class shapes economic outcomes in a stylized region. By deterministic, we mean a case where political power has shifted from the elites to the creative class with probability one. There are three groups in our region: workers, creative class members, and the elites. Unlike previous studies, tax policy in our region is set not by the elites but instead by the creative class. In this setting, we first present a counterintuitive result in which the creative class prefers to tax itself, and not the elites or the workers, with the tax proceeds being redistributed also to itself via lump-sum transfers. Second, we explain why this counterintuitive result makes sense. Finally, we discuss whether the above counterintuitive result will hold if the proceeds of taxation are redistributed using lump-sum transfers to all the groups in our region and not just to the creative class. |
| Keywords: | Creative Class, Elite, Lump-Sum Transfer, Political Competition, Tax Policy |
| JEL: | H21 R11 |
| Date: | 2025–01–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124205 |
| By: | Harashima, Taiji |
| Abstract: | Mutual trust and confidence are important to succeed not only in business but also in many other activities, which means that people do not necessarily behave totally selfishly, even in profit-maximizing activities. Non-selfish behaviors, in other words, behaviors induced by conscience and guilt, are particularly important to actualize the benefit of a group, team, organization, nation, or society as a whole. In this paper, I examine the role of conscience for the benefit of group membership and construct an economic model of conscience. Combining this model with a model of disinformation and mutual trust, I show that the level of conscience in an economy (society) is positively correlated with its efficiency and productivity. Furthermore, on the basis of this model, I discuss the political impact of conscience on, and argue that it will not be easy to establish, a democracy in a nation of low average conscience. |
| Keywords: | The benefit of group membership; Conscience; Democracy; Disinformation; Economic efficiency |
| JEL: | D80 |
| Date: | 2025–03–28 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124120 |
| By: | Fix, Blair |
| Abstract: | As billionaires dance in the halls of the second Trump administration, it’s haunting how well Plutarch’s two-thousand-year-old words describe the state of American politics. It’s a barren landscape of plutocratic insatiability. *** How did it get this way? *** One way to tell the story is to look at the battle between the ruling class and everyone else — a battle which elites are obviously winning. But another way to understand the struggle is to look at the war between factions of the ruling class — a battle that plays out largely within partisan politics. *** On this partisan front, the historical backdrop is that for forty years, Republicans have been playing a political shell game. As Jay Michaelson puts it, Republicans “appear populist … but act plutocrat”. What’s disorienting is that this shell game has worked. Although Republicans have historically governed for the benefit of the rich, they have recently rebranded themselves (successfully, it seems) as the party of the working class. *** Is this new Republican messaging sincere? Or is it gaslighting? Well, Trump’s billionaire-stacked administration is quickly answering the question for us. However, this essay is not primarily about Trump, nor is it focused on the future. Instead, it’s a journey into how the partisan politics of the past have shaped the American plutocracy of today. *** The essay consists of a deep dive into the realm of US state politics. The story will be simple and repetitive. Across states, I will measure the degree to which Republicans control each state’s legislature. Then I will observe, in a statistical sense, the policies and social outcomes that follow. That’s it. Of course, I’ll add commentary along the way. But the goal is to let the evidence speak for itself. And what leaps from the data is this: Republican control of state legislatures is systematically associated with the rich being (and becoming) richer. In short, American plutocracy seems to be a quintessentially Republican affair. *** And that’s not all. *** As we journey into the depths of US state politics, the plot will thicken. We’ll find striking partisan differences in the language used in state bills. We’ll see the many ways that Republicans help the rich and hurt workers. We’ll see the impact partisan politics have on the population as they work longer hours with less security. We’ll see the toll that Republican control takes on human welfare. And we’ll study the ways that Republicans gain power, despite enacting policies that are self-evidently bad for the majority. And we’ll reflect on the reasons that plutocracy can become self-reinforcing. *** Think of the evidence that follows as a case study in how the machinery of democracy can be used to benefit the few and harm the many. It’s a warning from the past about tactics that will no doubt be intensified by Trump and his posse of plutocrats. |
| Keywords: | capital as power, bankruptcy, crime, Democratic Party, differential accumulation, distribution, dominant capital, health, inequality, mortality, political parties, Republican Party, sabotage, states, tax, Trump, unions |
| JEL: | P1 P12 P14 D72 D6 D3 I1 H2 J5 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:313121 |
| By: | Beiser-McGrath, Liam; Bernauer, Thomas |
| Abstract: | We shed new light on a long-standing question in political science: When confronted with costly policy choices, do citizens form their preferences using material (economic) concerns or other-regarding motivations, such as the distribution of costs, and how are these moderated by political ideology? Using the case of carbon taxation, a widely advocated policy solution to climate change, we conducted survey experiments in Germany and the United States to assess the relative importance of these forms of preferences. The results show that individuals are primarily concerned with how a carbon tax would affect their individual income. There are also important cross-national differences with high-income German respondents being more receptive to redistributive policy design, especially in contrast to high-income Democrats who significantly decrease support for carbon taxation. These findings highlight how the constituencies generated by new policies can significantly alter the distribution of mass support for action on emerging societal problems. |
| Keywords: | carbon tax; environmental politics; climate policy; political economy; climate change |
| JEL: | Q50 H23 |
| Date: | 2024–04–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:120995 |