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on Positive Political Economics |
| By: | Gualtieri, Giovanni (National Research Council, Italy); Nicolini, Marcella (University of Pavia); Sabatini, Fabio (Sapienza University of Rome); Ventura, Marco (Sapienza University of Rome) |
| Abstract: | We study the electoral repercussions of the L'Aquila earthquake in 2009, one of Italy's most catastrophic post-WWII seismic events. We construct a unique municipality-level dataset, combining high-resolution data on the ground acceleration recorded during the earthquake with European election results and social capital metrics. Our findings indicate that the intensity of the shock positively influenced support for the incumbent national government but provided no electoral advantage to local incumbents. Analyzing potential transmission mechanisms, we find that relief measures did not automatically translate into political rewards. Instead, social capital played a pivotal role in shaping post--disaster electoral outcomes. The national government's electoral gains were concentrated in municipalities with a low density of civic organizations, where citizens relied predominantly on political institutions for assistance. Individual level evidence from survey data further supports our findings. Nonetheless, the impact of the earthquake was not enduring. In the subsequent elections, the incumbent government experienced a decline in support in the very municipalities where it had initially gained favor following the disaster. |
| Keywords: | elections, relief spending, redistribution, social capital, natural disasters, Italy, Silvio Berlusconi |
| JEL: | D72 H10 H12 Q54 Z1 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17758 |
| By: | Matilde Bombardini; Francesco Trebbi |
| Abstract: | This paper presents a holistic view of the channels of political influence of large corporations in modern democracies, focusing not only on well-studied instruments, such as campaign contributions and lobbying, but also on more opaque ones, such as charitable giving, political connections, dark money, public advocacy, and employee mobilization. Our quantitative perspective draws on recent work on US politics, including congressional voting, special interest politics, corporate political connections, grassroots, and philanthropic activities. In the process, the chapter offers also a discussion of recent methodological innovations around money in politics. We conclude with some considerations on corporate political disclosure. |
| JEL: | D73 D78 P0 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33696 |
| By: | André Diegmann; Laura Pohlan; Andrea Weber |
| Abstract: | We study how connections to German federal parliamentarians affect firm dynamics by constructing a novel dataset linking politicians and election candidates to the universe of firms. To identify the causal effect of access to political power, we exploit (i) new appointments to the company leadership team and (ii) discontinuities around the marginal seat of party election lists. Our results reveal that connections lead to reductions in firm exits, gradual increases in employment growth without improvements in productivity. Adding information on credit ratings, subsidies and procurement contracts allows us to distinguish between mechanisms driving the effects over the politician’s career. |
| Keywords: | politicians, firm performance, identification, political connections |
| JEL: | O43 L25 D72 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11691 |
| By: | Barbara Biasi; Wayne Aaron Sandholtz |
| Abstract: | Public service reforms often provoke political backlash. Can they also yield political benefits for the politicians who champion them? We study a Wisconsin law that weakened teachers’ unions and liberalized pay, prompting mass protests. Exploiting its staggered implementation across school districts, we find that the reform cut union revenues, raised student test scores, and increased pay for some teachers. Exposure to the law increased the incumbent governor’s vote share by about 20% of his margin of victory and reduced campaign contributions to his opponent. Gains were larger in districts with stronger unions ex ante and in those where more voters benefited from the reform. Our findings highlight how even politically risky reforms can generate electoral benefits under the right circumstances. |
| JEL: | I20 J31 J45 P11 P46 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33666 |
| By: | Francesco Bilotta; Alberto Binetti; Giacomo Manferdini |
| Abstract: | We propose a supervised method to detect causal attribution in political texts, distinguishing between expressions of merit and blame. Analyzing four million tweets shared by U.S. Congress members from 2012 to 2023, we document a pronounced shift toward causal attribution following the 2016 presidential election. The shift reflects changes in rhetorical strategy rather than compositional variation in the actors or topics of the political debate. Within causal communication, a trade-off emerges between positive and negative tone, with power status as the key determinant: government emphasizes merit, while opposition casts blame. This pattern distinguishes causal from purely affective communication. Additionally, we find that blame is associated with lower trust in politicians, perceived government effectiveness, and spreads more virally than merit. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.06550 |
| By: | Barbara Biasi; Wayne Sandholtz |
| Abstract: | Public service reforms often provoke political backlash. Can they also yield political benefits for the politicians who champion them? We study a Wisconsin law that weakened teachers' unions and liberalized pay, prompting mass protests. Exploiting its staggered implementation across school districts, we find that the reform cut union revenues, raised student test scores, and increased pay for some teachers. Exposure to the law increased the incumbent governor's vote share by about 20% of his margin of victory and reduced campaign contributions to his opponent. Gains were larger in districts with stronger unions ex ante and in those where more voters benefited from the reform. Our findings highlight how even politically risky reforms can generate electoral benefits under the right circumstances. |
| Keywords: | education reform, political feasibility, collective bargaining, teacher salaries. |
| JEL: | I20 P46 P11 J31 J45 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11817 |
| By: | Elisabeth Kempf; Mancy Luo; Margarita Tsoutsoura |
| Abstract: | We examine how the political ideology of corporate leaders shapes cross-border firm networks. Exploiting changes in ideological alignment between U.S. firm CEOs and foreign governments around close foreign elections, we show that U.S. firms are more likely to terminate trade relationships with countries led by governments whose ideology becomes more distant from that of their CEOs. The impact is concentrated among CEOs holding strong political views, and is particularly pronounced for shorter trade relationships, suggesting ideological alignment is more relevant in more flexible and substitutable connections. Our findings highlight the role of ideology in shaping the formation and persistence of international firm networks. |
| JEL: | F1 G41 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33712 |
| By: | Biasi, Barbara (Yale School of Management); Sandholtz, Wayne Aaron (Nova School of Business and Economics) |
| Abstract: | Public service reforms often provoke political backlash. Can they also yield political benefits for the politicians who champion them? We study a Wisconsin law that weakened teachers' unions and liberalized pay, prompting mass protests. Exploiting its staggered implementation across school districts, we find that the reform cut union revenues, raised student test scores, and increased pay for some teachers. Exposure to the law increased the incumbent governor's vote share by about 20% of his margin of victory and reduced campaign contributions to his opponent. Gains were larger in districts with stronger unions ex ante and in those where more voters benefited from the reform. Our findings highlight how even politically risky reforms can generate electoral benefits under the right circumstances. |
| Keywords: | Teacher Salaries, Collective Bargaining, Political Feasibility, Education Reform |
| JEL: | I20 P46 P11 J31 J45 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17836 |
| By: | Federico Weinschelbaum; David K. Levine; Felipe Zurita |
| Abstract: | Does the ability of the electorate to replace corrupt politicians deter corruption? This paper analyzes the limitations of electoral accountability. We show that if the electorate cannot commit elections offer no defense against corruption. However, when a commitment technology exists, the electorate can strategically choose to remove only those caught taking bribes. This incentivizes corrupt politicians to pass up bribe opportunities for which the value is small. We then examine how improved monitoring can impact outcomes and show that increasing information quality does not always benefit the electorate. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:udt:wpecon:2025_08 |
| By: | Falkenberg, Max; Cinelli, Matteo; Galeazzi, Alessandro; Bail, Christopher A.; Benito, Rosa; Bruns, Axel; Gruzd, Anatoliy; Lazer, David; Lee, Jae K.; McCoy, Jennifer (Georgia State University) |
| Abstract: | With a folk understanding that political polarization refers to socio-political divisions within a society, many have proclaimed that we are more divided than ever. In this account, polarization has been blamed for populism, the erosion of social cohesion, the loss of trust in the institutions of democracy, legislative dysfunction, and the collective failure to address existential risks such as Covid-19 or climate change. However, at a global scale there is surprisingly little academic literature which conclusively supports these claims, with half of all studies being U.S.-focused. Here, we provide an overview of the global state of research on polarization, highlighting insights that are robust across countries, those unique to specific contexts, and key gaps in the literature. We argue that addressing these gaps is urgent, but has been hindered thus far by systemic and cultural barriers, such as regionally stratified restrictions on data access and misaligned research incentives. If continued cross-disciplinary inertia means that these disparities are left unaddressed, we see a substantial risk that countries will adopt policies to tackle polarization based on inappropriate evidence, risking flawed decision-making and the weakening of democratic institutions. |
| Date: | 2025–04–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:3wzfq_v1 |
| By: | Caballero, Maria Esther (Carnegie Mellon University); Ippedico, Giuseppe (University of Nottingham); Peri, Giovanni (University of California, Davis) |
| Abstract: | We study how the US presidential election of 2016 affected the subsequent inflow of Mexican-born immigrants. We use the "Matricula Consular de Alta Seguridad" data to construct proxies for annual inflows and internal movements of Mexican-born individuals, including undocumented immigrants, across US commuting zones. We find that a 10-percentage point increase in the Republican vote share in a commuting zone reduced inflows by 1.8 percent after the 2016 Trump election. The internal relocation of established Mexican immigrants primarily explains this reduction, though inflows of new immigrants decreased as well. |
| Keywords: | migration, networks, political shocks |
| JEL: | D72 F22 J61 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17787 |
| By: | Docquier, Frédéric (LISER); Rapoport, Hillel (Paris School of Economics) |
| Abstract: | We investigate the relationship between immigration and right-wing populism, which we characterize as a self-reinforcing process. Anti-immigrant rhetoric and populist policies lead to a deterioration in the skill level of immigrants. This in turn fuels populist support. Historical and contemporary studies are suggestive of such dynamics. In particular, recent cross-country evidence shows that low-skill immigration tends to exacerbate populism, while high-skill immigration tends to mitigate it. Conversely, populist policies and xenophobic attitudes have a strong repulsive effect on highly-skilled immigrants and result in adverse immigrant selection. We use the empirical results from those studies to inform a theoretical model of joint determination of immigrants’ skill-ratio and right-wing populism levels. The model displays multiple equilibria. In this framework, structural trends such as internet penetration, erosion of the middle class, demographic pressure from poor countries or adverse cyclical shocks make the inferior equilibrium – the vicious circle of xenophobia -- more likely. |
| Keywords: | right-wing populism, immigration, vicious circle |
| JEL: | D72 F22 F52 J61 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17754 |
| By: | Michela Chessa (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | The contemporary political landscape presents a complex and highly dynamic system characterized by fragile equilibria. We argue that while traditional cooperative game theory tools remain valuable, complex political processes need a more comprehensive analysis. By exploiting the natural isomorphism between simple cooperative games and hypergraph structures, we propose novel analytical frameworks for modeling and interpreting complex political scenarios. We apply hypergraph proper coloring, chromatic number analysis and a new measure of fragmentation to examine voting patterns within a council. We apply our analytical framework to the case of the United Nations Security Council. We formalize a persistent ideological division between Western and Non-Western member states, but we also reveal a certain fragmentation across years, in particular between Western states. This methodological approach offers promising insights for anticipating and interpreting future developments in complex political systems. |
| Keywords: | Voting system, UNSC, Hypergraphs, Chromatic number, Fragmentation |
| JEL: | C71 D72 D85 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2025-16 |
| By: | Matthias Doepke; Hanno Foerster; Anne Hannusch; Michèle Tertilt |
| Abstract: | During the first half of the twentieth century, many US states enacted laws restricting women’s labor market opportunities, including maximum hours restrictions, minimum wage laws, and night-shift bans. The era of so-called protective labor laws came to an end in the 1960s as a result of civil rights reforms. In this paper, we investigate the political economy behind the rise and fall of these laws. We argue that the main driver behind protective labor laws was men’s desire to shield themselves from labor market competition. We spell out the mechanism through a politico-economic model in which singles and couples work in different sectors and vote on protective legislation. Restrictions are supported by single men and couples with male sole earners who compete with women for jobs. We show that the theory’s predictions for when protective legislation will be introduced are well supported by US state-level evidence. |
| Keywords: | protective legislation, political economy, women's rights, labor market competition, structural transformation, family economics, gender |
| JEL: | D13 D72 D78 E24 J12 J16 N30 O10 O43 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_686 |
| By: | Levi, Eugenio (Link Campus University); Bayerlein, Michael (German Institute for International and Security Affairs); Grimalda, Gianluca (University of Passau); Reggiani, Tommaso G. (Cardiff University) |
| Abstract: | We study how preferences for migration-related narratives differ between private and public contexts and how social media fuel opinion polarization. Using a German representative sample (n=1, 226), we found that individuals, especially from the left and center, avoided publicly endorsing anti-migration narratives. In an experiment on Twitter (n=19, 989) we created four Twitter profiles, each endorsing one of the narratives. Far-right users exhibited markedly different engagement patterns. While initial public endorsements, measured by follow-back rates, aligned with private preferences, social media interactions amplified support for the most hostile and polarizing narrative. We conclude that social media significantly distort private preferences and amplify polarization. |
| Keywords: | immigration, narratives, political polarization, economic reciprocity, survey experiment, field experiment, group identity, social media, Twitter |
| JEL: | D72 D91 C93 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17749 |