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on Positive Political Economics |
| By: | Antonella Ianni; Margarita Katsimi; Helia Marreiros |
| Abstract: | This paper investigates a voting model in which two candidates strategically compete in a winner-take-all election. Voters consider both the spatial dimension of policy positions and other attributes, or valence, of each candidate. Candidates are policy motivated and endeavor to make specific attributes ”salient” in voters’ minds by leveraging their comparative advantages to influence the voting outcome - a form of ”heresthetic” behaviour. The paper offers three contributions. First, it characterizes Salient Political Equilibria and suggests ways in which the notion of salience can be made operational. Second, it provides novel experimental evidence supporting voting salient behaviour. Third, it offers empirical evidence that candidates internalize the externality that ensues from voters salient behaviour, in the context of the European migration crisis of 2015. The theoretical, experimental, and empirical findings challenge the conventional median voter paradigm and its implications by highlighting the significant impact of voters’ salience on electoral outcomes. |
| Keywords: | voting, salience, valence, heresthetic, experiment |
| JEL: | D72 D91 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12200 |
| By: | Luis Guirola (AQR-IREA, University of Barcelona); Gonzalo Rivero |
| Abstract: | We study how political polarization impacts trust in the government and independent institutions. We gather microdata from 27 countries over three decades and identify 142 government changes. For each of these events, we run a difference in differences design comparing left and right-wing supporters to identify the effect on trust caused by a particular party controlling the executive. The estimated effect ranges from 0 to 2.1 standard deviations, and is systematically larger when party polarization is stronger– this variable alone explains 72% of the variation. The effect propagates onto trust in the European Central Bank and other institutions outside government control. Examining the mechanism, we find evidence consistent with a) lack of knowledge about independence and b) that elections under high polarization are high-stakes events affecting multiple dimensions, including subjective wellbeing, and trust toward the political system as a whole. |
| Keywords: | political polarization, trust, institutions, politics JEL classification:D72, D14, D02 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:aqr:wpaper:202505 |
| By: | Stefano Carattini; Ian Fletcher; Chad Kendall; Michael K. Price; Arthur Vu |
| Abstract: | Many socially desirable policies are not implemented because of their ex-ante unpopularity, but this unpopularity may be overcome through experience with the policy. In this paper, we examine how opposition to carbon pricing in the state of Washington turned into support after voters experienced a cap-and-trade policy with revenues earmarked for environmental purposes – "cap-and-invest." Analyzing voting behavior at the census block group level, we observe that support varies by political affiliation as expected, but experience consistently increases support across the board. Using a proprietary survey, we further show that the increase in support among voters in Washington state is specific to the cap-and-invest policy they experienced; support for carbon pricing or climate policies more generally remained unchanged. |
| Keywords: | carbon pricing, experience, public support, voting, polarization |
| JEL: | C93 D72 D83 H23 H71 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12206 |
| By: | Becker, Max; Flach, Johanna; von Ondarza, Nicolai |
| Abstract: | The European Union operates largely in accordance with the principles of consensus democracy - that is, it seeks to integrate as many parties spanning the political spectrum of its member states as possible. Amid the recent growth of far-right parties at both the national and European level, this approach has led to the increased participation of such forces in EU institutions. Analysis of key actors at the EU level shows that since no later than the 2024 European elections, representatives of far-right parties have been involved in all major EU decisions. The centres of their influence are the European Council and the Council of the EU, where they participate as leaders or partners in national governments. But they are increasingly becoming more influential in the European Parliament, which has shifted to the right and where alternative majorities are now possible. At the same time, significant differences remain between the far-right parties. Ultimately, the extent of their influence and which far-right trend predominates within the EU system depends mainly on the largest force in European politics - the European People's Party. |
| Keywords: | European Union, European Parliament, consensus democracy, far-right parties, European Council, Council of the EU, European People's Party (EPP), European Conservatives and Reformists (ECR), Patriots for Europe (PfE), Europe of Sovereign Nations (ESN) |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:329912 |
| By: | H\'ector Hermida-Rivera |
| Abstract: | This note characterizes every qualified majority voting rule with a quota $q$ strictly greater than half of the voter set in environments with just two alternatives through anonymity, responsiveness, and $q$-neutrality. Crucially, the latter imposes independence of the labels of the alternatives only for all preference profiles in which some alternative is strictly top-ranked by at least $q$ voters. Thus, this note generalizes May's (1952, Theorem, p.~682) well-known axiomatic characterization of the simple majority voting rule to qualified majority voting rules with a quota $q$ strictly greater than half of the voter set. In doing so, it shows that these qualified majority voting rules are precisely distinguished by their "degree" of neutrality. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.19823 |
| By: | Paolo Buonanno; Giacomo Plevani |
| Abstract: | This paper shows how enduring agrarian institutions shaped the long-run political consequences of historical shocks. We study Italy’s sharecropping system (mezzadria) - a centuries-old fifty-fifty contract that structured rural relations across central Italy - and link its prewar prevalence to Socialist and Communist voting from 1913 to 1948. Using harmonized data for 720 agrarian zones and a combination of cross-sectional, entropy-balanced, and spatial RDD designs, we find that sharecropping was politically neutral before World War I but became a center of rural unrest and Fascist repression afterward. Areas with more sharecroppers experienced greater strike activity, targeted violence, and enduring left alignment. A daily panel of 1921 events shows repression peaking during annual contract renewals. The results reveal a “revolt-repression-realignment” mechanism through which local economic institutions converted wartime shocks into lasting partisan divides. |
| JEL: | P16 N54 N44 D72 D74 Q15 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1214 |
| By: | Boris Ginzburg |
| Abstract: | This paper models voters who invest effort to determine whether a particular claim relevant to their voting choices is correct. If a voter succeeds in determining whether the claim is correct, this information is shared via a social network. I show that increased connectivity makes voters more informed about basic facts, but less informed about complicated issues. At the same time, polarization makes voters less informed overall. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.15454 |
| By: | Yaron Azrieli (The Ohio State University); Ritesh Jain (University of Liverpool); Semin Kim (Yonsei University) |
| Abstract: | We study the design of voting mechanisms in a binary social choice environment where agents' cardinal valuations are independent but not necessarily identically distributed. The mechanism must be anonymous - the outcome is invariant to permutations of the reported values. We show that if there are two agents then expected welfare is always maximized by an ordinal majority rule, but with three or more agents there are environments in which cardinal mechanisms that take into account preference intensities outperform any ordinal mechanism. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2025rwp-265 |
| By: | Garg, Devansh |
| Abstract: | We present an agent-based simulation of democratic decision-making in which autonomous learning agents interact under alternative electoral institutions and social structures. The model integrates six voting mechanisms (Plurality, Approval, Borda, IRV, STV, PR with D'Hondt and Sainte-Laguë divisors), a multi-round coalition protocol with binding/non-binding contracts and side-payments, turnout and ballot-error realism, and networked interaction on Erdös–Rényi, Barabási–Albert, and Watts–Strogatz graphs with homophily. Agents use reinforcement learning algorithms (PPO, A2C, A3C) with a social-welfare objective based on the inequality-averse Atkinson function, augmented by fairness regularizers (representation loss, participation fairness, envy-freeness proxy) and explicit participation costs. We report diagnostics-rich evaluations covering representation and proportionality (e.g., Gallagher, Loosemore–Hanby), fragmentation (effective number of parties), strategic behavior, coalition stability, and welfare/inequality. Classic regularities emerge—e.g., two-bloc competition under Plurality (Duverger-consistent), greater proportionality and fragmentation under PR, and differential seat allocation under D'Hondt vs Sainte-Laguë—providing face validity. The framework delivers a reproducible virtual laboratory for mechanism comparison, institutional design, and welfare–fairness trade-off analysis at population scale. |
| Date: | 2025–10–14 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:mp9kh_v1 |
| By: | Kampmann, David |
| Abstract: | In many US Tech corporations such as Meta, Alphabet, and SpaceX, founders still hold shareholder voting control. How can we better understand the concentration of insider control in Tech? Drawing on quantitative and qualitative data to examine the rise of US start-up investments post-dotcom, this article demonstrates that a small group of new venture capital (VC) entrants played a key role in advancing founder control in Tech to win deals against established VC firms and make outsized capital gains. I argue that the VC market follows a winners-take-all logic, which facilitated the uptake of founder control in Tech via dual-class shares because of the success of new VC entrants and early founder-controlled tech firms exiting between 2010 and 2014, and the growing investments by nontraditional, “passive” investors post-2010. This matters because the winners-take-all logic reinforces capital concentration among leading VCs while many Tech monopolies are now controlled by a small tech elite fraction. |
| Keywords: | saving and capital investment; ratings and ratings agencies; technology; ideology; G24 investment banking; O16 financial markets; USA; corporate finance and governance; brokerage; competition; venture capital; political economy and comparative economic systems; corporate governance |
| JEL: | J1 F3 G3 |
| Date: | 2025–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129826 |
| By: | Disslbacher, Franziska (Vienna University of Economics and Business); Haselmayer, Martin; Rapp, Severin; Lehner, Lukas; Windisch, Franziska |
| Abstract: | This paper investigates how participation in a citizens’ assembly affects individuals’ redistributive preferences and (perceived) role in democracy. We implement a pre-registered field experiment embedded in a real-world citizens’ assembly on wealth inequality in Austria. Using a three-group-design comparing assembly participants, non-selected volunteers, and a population sample, we isolate the causal effects of taking part in a citizens’ assembly from self-selection into participation. We find that while participating in the citizens’ assembly substantially improves factual knowledge about the wealth distribution and promotes convergence around specific tax policy proposals, notably a EUR 1 million allowance, it has no measurable effect on political efficacy or broader civic engagement. We also document significant political self-selection: individuals willing to participate in the citizens’ assembly were already more engaged and supportive of redistribution than the general population. These findings suggest that while deliberative formats can foster informed convergence on policy proposals, their ability to mobilize broader publics is limited – especially if they primarily engage the already supportive and, as in this case, lack institutional anchoring that might facilitate spillover into more institutionalized political arenas. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2025–10–14 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:zcuw6_v1 |
| By: | Samuel Hardwick |
| Abstract: | Trade agreements are often understood as shielding commerce from fluctuations in political relations. This paper provides evidence that World Trade Organization membership reduces the penalty of political distance on trade at the extensive margin. Using a structural gravity framework covering 1948 to 2023 and two measures of political distance, based on high-frequency events data and UN General Assembly votes, GATT/WTO status is consistently associated with a wider range of products traded between politically distant partners. The association is strongest in the early WTO years (1995 to 2008). Events-based estimates also suggest attenuation at the intensive margin, while UN vote-based estimates do not. Across all specifications, GATT/WTO membership increases aggregate trade volumes. The results indicate that a function of the multilateral trading system has been to foster new trade links across political divides, while raising trade volumes among both close and distant partners. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.17303 |