|
on Positive Political Economics |
| By: | Daron Acemoglu (MIT and NBER); Georgy Egorov (Kellogg School ofManagement and NBER); Konstantin Sonin (University of Chicago) |
| Abstract: | In turbulent times, political labels become increasingly uninformative about politicians’ true policy preferences or their ability to withstand the influence of special interest groups. We offer a model in which politicians use campaign rhetoric to signal their political preferences in multiple dimensions. In equilibrium, the less popular types try to pool with the more popular ones, whereas the more popular types seek to separate themselves. The ability of voters to process information shapes politicians’ campaign rhetoric. If the signals on the cultural dimension are more precise, politicians signal more there, even if the economy is more important to voters. The unpopular type benefits from increased conformity, which bridges the candidates’ rhetoric and makes it more difficult for voters to make an informed decision. |
| Keywords: | elections, multidimensional signaling, populism, culture, conformity |
| JEL: | D72 D84 P00 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-34 |
| By: | Torun Dewan (Department of Government, London School of Economics and Political Science); Christopher Kam (Department of Political Science, University of British Columbia); Jaakko Meriläinen (Department of Economics, Stockholm School of Economics); Janne Tukiainen (Department of Economics, University of Turku) |
| Abstract: | Hirschman’s Exit, Voice, and Loyalty (1970) proposed that organiza tions persist when loyalty tempers incentives to exit after adverse shocks. We test this argument using newly digitized individual-level voting records from 28 English constituencies (1832-1868), covering 134, 000 real votes. Voters could exit by switching parties, use voice by splitting their two votes between opposing parties, or remain loyal. Exploiting favorite candidates’ exit as a negative shock to the choice set, we show that candidate exits increased party switching more than expressing voice. We show that candidate exit initially induces substantial voter exit and voice, especially among Liberal voters, but that these responses attenuate sharply by the mid-1860s, consistent with the consolidation of party organizations and the emergence of durable partisan loyalty. |
| Keywords: | candidate turnover, electoral volatility, exit-voice-loyalty, party loyalty, political development, vote switching, voting behavior |
| JEL: | D72 N43 P00 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:tkk:dpaper:dp178 |
| By: | Daron Acemoglu; Georgy Egorov; Konstantin Sonin |
| Abstract: | In turbulent times, political labels become increasingly uninformative about politicians’ true policy preferences or their ability to withstand the influence of special interest groups. We offer a model in which politicians use campaign rhetoric to signal their political preferences in multiple dimensions. In equilibrium, the less popular types try to pool with the more popular ones, whereas the more popular types seek to separate themselves. The ability of voters to process information shapes politicians’ campaign rhetoric. If the signals on the cultural dimension are more precise, politicians signal more there, even if the economy is more important to voters. The unpopular type benefits from increased conformity, which bridges the candidates’ rhetoric and makes it more difficult for voters to make an informed decision. |
| JEL: | D72 D84 P00 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34909 |
| By: | Do, Quynh; Mahmood, Rafat; Mavisakalyan, Astghik; Tyers, Leigh |
| Abstract: | This paper studies the causal impact of female political representation on legislative behavior, social attitudes, and gender-based crime. Using a regression discontinuity design based on close mixed-gender electoral contests, we compare electorates that narrowly elected female versus male candidates. We link computational text analysis of parliamentary debates, roll-call votes, post-election survey responses, and administrative police records from 2010 to 2022 in Australia. We document three main findings. First, female MPs devote significantly more attention to gender-related issues in parliamentary speech and are more likely to support gender-related legislation, including measures addressing gender-based violence, with no evidence of differential voting absence. Second, exposure to a narrowly elected female MP shifts constituent attitudes toward greater support for women's rights. Third, electorates that narrowly elect a female MP experience a statistically and economically meaningful decline in gendered crime rates during the subsequent term. Together, the results indicate that female representation can shape policy priorities, social attitudes, and downstream gendered outcomes, even within a disciplined party system. |
| Keywords: | Female political representation, Legislative behaviour, Public attitudes, Gender-based crime, Regression discontinuity design |
| JEL: | J16 D72 I38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1722 |
| By: | Marco Battaglini; Valerio Leone Sciabolazza,; Mengwei Lin; Eleonora Patacchini |
| Abstract: | It has long been observed that there is little money in U.S. politics compared to the stakes. But what if contributions are not fully observable or non-monetary in nature and thus not easily quantifiable? We study this question with a new data set on the top 1000 donors in U.S. congressional races. Since top donors do not randomly support candidates, we propose an identification strategy based on information about top donors' deaths and the observed variations in candidates' performance after these events. The death of a top donor significantly decreases a candidate's chances of being elected in the current and future election cycles. Moreover, it affects the legislative activities of elected candidates. These effects do not depend on top donors' monetary contributions to a candidate but on their prominence and their total contributions during the election campaign. |
| Keywords: | Campaign Finance; Top Donors; Tullock Paradox; Electoral Outcomes; Political Networks |
| JEL: | D72 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp277 |
| By: | Ignacio Lago; André Blais |
| Abstract: | This paper examines how asymmetric regional decentralization affects the politics of public goods provision. Using survey data from Belgium, Canada, Germany, and Spain, as well as panel data from 709 legislative elections in 73 democracies between 1960 and 2018, the study analyzes how centralized, symmetric, and asymmetric territorial arrangements influence electoral accountability and party nationalization. The authors find that asymmetric decentralization decreases electoral accountability in national elections but increases it in regional elections, and that it contributes to greater territorial heterogeneity in partisan support. |
| Keywords: | Accountability; asymmetric decentralization; economic voting; nationalization; public goods |
| JEL: | H70 H77 D72 |
| Date: | 2026–01–14 |
| URL: | https://d.repec.org/n?u=RePEc:ida:wpaper:wp2601 |
| By: | Federica Lanterna (Department of Economics, Society and Politics, University of Urbino Carlo Bo); Giovanni Marin (Department of Economics, Society and Politics, University of Urbino Carlo Bo, SEEDS Sustainability Environmental Economics and Dynamics Studies and Fondazione Eni Enrico Mattei); Agnese Sacchi (Department of Economics, Society and Politics, University of Urbino Carlo Bo and IDEAGOV) |
| Abstract: | Environmental challenges increasingly shape political discourses across Europe, yet their influence on actual environmental governance remains unclear. This paper examines the political economy mechanisms linking environmental change, party platforms, and the decentralisation of environmental protection expenditure in 27 EU member states from 2002 to 2022. We distinguish between political signalling – the commitments parties make in electoral manifestos – and policy implementation, measured through actual decentralised environmental spending. Our results reveal a sharp asymmetry: while extreme events substantially increase the salience of environmental protection in party platforms, they do not translate into changes in the territorial allocation of environmental expenditure. Instead, decentralisation responds primarily to long-term structural conditions, such as the relative weight of locally versus globally relevant emissions. Political orientations of governing coalitions, whether on environmental issues or decentralisation, show no systematic association with spending outcomes. Taken together, these findings highlight a persistent gap between electoral incentives and policy implementation in multilevel environmental governance, consistent with public-choice theories emphasising institutional inertia and limited political responsiveness beyond the stage of platform competition. |
| Keywords: | Decentralisation, environmental protection, natural disasters, political announcements, voters preferences |
| JEL: | H70 H72 H77 Q54 Q58 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2026.07 |
| By: | Müller, Karsten (National University of Singapore, NUS Business School and Risk Management Institute, and CEPR); Schwarz, Carlo (University of Bocconi, Department of Economics and IGIER, and PERICLES, CEPR, CAGE); Shen, Zekai (University of Bocconi, Department of Economics) |
| Abstract: | Social media platforms are often credited with empowering grassroots movements in the pursuit of political freedoms. In this paper, we show how social media can also be exploited by political elites to undermine democratic institutions, using the January 6th , 2021 Capitol insurrection as a case study. We present three main findings. First, by exploiting plausibly exogenous variation in Twitter usage, we document that social media exposure predicts participation in the Capitol attack, donations for anti-democratic causes, beliefs in election fraud, and support for the January 6th rioters. Second, Donald Trump's tweets questioning the election's integrity were followed by spikes in "Stop the Steal" activity on Twitter and pro-Trump donations originating from high Twitter usage counties. Third, the insurrection and Trump's account deletion were followed by a decrease in the public expression of toxic political and "Stop the Steal" messaging by pro-Trump users on Twitter, but had little effect on privately held beliefs about the election outcome and pro-Trump donations. |
| Keywords: | Social Media, January 6th, Election Denial, Content Moderation JEL Classification: L82, J15, O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:794 |
| By: | Lauren Cohen; Bo Li |
| Abstract: | We find that randomly assigned peers play a sizable and unique role in shaping political economy. Closely seated, and exogenously assigned, US Senate peers have a significant impact on Congressional voting, shifting votes by 11.9 percentage points (t=7.34). Physical distance is the largest and most consistent of any characteristic outside of party or state in impacting voting behavior. The distance effect is concentrated in the closest peers, existing for up to 19.6 feet on the Senate floor, then dissipating. Close peers additionally increase the probability of aisle-crossing (voting with the opposite party), with the aisle-crossing impact being roughly eight times larger on the final votes on bills. We then utilize a state-of-the-art AI-enhanced computer vision model based on real-time interactions using CSPAN video data at every 10-second interval amongst Congressional members. Using these observed interactions, we find that face-to-face interactions are associated with significant impacts on immediately pending votes. The interactions are largely driven by distance, with aisle-seated Senators from both parties being amongst the most likely to engage in face-to-face interactions across party lines. By conducting counterfactuals through randomized Senate seating, 59 consequential bills would have switched outcomes over our 30-year sample period. |
| JEL: | C53 C82 D72 D78 D82 H10 P0 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34925 |
| By: | Beramendi, Pablo; Besley, Timothy; Levi, Margaret |
| Abstract: | Political inequality is a distinctive type of inequality, which cannot be reduced to economic or power inequalities. The article frames political equality as trying to achieve ‘equal consideration’ among members of a polity, arguing that assessing whether this is achieved requires looking at process as well as outcomes. The analysis focuses on two core dimensions that can be studied empirically: patterns of political participation and political representation. Studying these reinforces the idea that, even in advanced democracies, politics is an elite activity concentrated among the educated and those with material and ideological resources. The article discusses the consequences of political inequality framed as equal consideration and a range of reforms that have been proposed to reduce it. |
| Keywords: | equal consideration; political equality; political participation; political representation |
| JEL: | J1 |
| Date: | 2024–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137517 |
| By: | Federico Favaretto and Donato Masciandaro |
| Abstract: | This chapter, using a political economy approach, uncovers the relationships between populism, on the one side, and monetary and banking policies, on the other side. The analysis is based on three assumptions. First, both monetary and banking policies can produce redistributive effects. Second, political consensus can be associated with redistribution. Third, populists, being politicians, are myopic players, hence heavily influenced by citizens’ financial and group heterogeneities. Given these assumptions, two different models are studied. Concerning monetary policies, a nexus between populism and central bank (in)dependence (CBI) can emerge where the populist aim to influence the monetary policy design after a macroeconomic shock that requires public bailouts. Regarding banking policy, our chapter defines populism as Democratic Rioting, in which citizens are assumed to be heavily influenced in their policy choice by psychological group dynamics. This explains why populist consensus emerges and may deliver different policy choices depending on non-banking news such as public welfare choices and immigration. |
| Keywords: | Populism, Political Economics, Monetary Policy, Banking Policy, Inequality, Central Bank Independence, Behavioural economics |
| JEL: | D72 D78 E31 E52 E58 E62 E71 P16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp26267 |
| By: | Campos, Nauro (University College London); Ginefra, Flavia (LSE); Martelli, Angelo (LSE); Terzi, Alessio (University of Cambridge) |
| Abstract: | This paper reviews research across economics, political economy, political science, and public policy to investigate how institutions shape the adoption, implementation, and durability of climate policies. We examine how formal institutions (i) coordinate implementation capacity, (ii) anchor long-term commitments, and (iii) mediate distributional conflict. We also discuss how informal institutions, such as social norms and trust, further condition whether formal mechanisms translate into durable action. We distinguish quasi-experimental evidence from correlational and case-based findings, identifying where economic methods could further sharpen evidence, and conclude with a research agenda focused on institutional interdependencies and the conditions under which institutions can facilitate the adoption of effective and irreversible climate policies. |
| Keywords: | climate change, institutions, political economy, climate governance |
| JEL: | D72 H11 P48 O43 O44 Q54 Q58 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18424 |
| By: | Kelsey Q. Wright (Max Planck Institute for Demographic Research, Rostock, Germany); Asli Ebru Şanlitürk (Max Planck Institute for Demographic Research, Rostock, Germany); Emily S. Mann |
| Abstract: | Pronatalism — the ideology promoting increased birth rates as a political and civilizational imperative — has experienced a resurgence in U.S. media and policy discourse, yet scholars have long argued it functions as ideological framing rather than evidence-based demographic policy. This study tests that argument directly by examining whether empirical changes in fertility rates predict the volume and tone of pronatalism-adjacent media coverage across politically distinct U.S. outlets. Drawing on age- and race/ethnicity-specific fertility data, alongside article volume and tone data from the Global Database of Events, Language, and Tone (GDELT) over the period 2017-2022, we analyze coverage of four themes—fertility rates, population and demographic change, aging populations, and reproductive and maternal health—across 23 conservative, progressive, and neutral news outlets. Using linear regression models with year fixed effects, we find that changes in fertility rates do not significantly predict article volume for any outlet type or theme. Results for tone are similarly null, with one exception: increases in fertility among women aged 25–44 are significantly associated with more positive coverage of reproductive and maternal health in progressive outlets, likely reflecting political rather than demographic dynamics. The most pronounced shifts in coverage — particularly conservative outlets' dramatically more positive tone following the 2020 election — appear driven by electoral context rather than demographic reality. These findings provide quantitative support for the claim that pronatalist media discourse selectively deploys demographic evidence in order to operate as an ideological regime of truth. |
| Keywords: | USA, fertility, fertility decline, mass media, pronatalism |
| JEL: | J1 Z0 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2026-007 |
| By: | Raffaele Fiorentino; Simona Mandile |
| Abstract: | This paper examines the unintended consequences of policies perceived as inequitable by leveraging Italy’s Quota 100 pension reform, which denied early retirement to workers with identical contribution histories who did not meet an age cutoff. Using SHARE data and a difference-in-differences design, we first establish that excluded workers experienced no change in unemployment or disability status, while their relative probability of being retired fell mechanically. We then document a significant deterioration in their mental health, with effects emerging immediately upon the reform’s introduction and persisting for at least two years. These effects are concentrated among workers who satisfy the contribution requirement but are denied eligibility solely on the basis of age, implicating perceived unfairness as a primary channel. Using European Social Survey data and a regression discontinuity design, we find that the reform led to a reduction in trust in institutions among age-ineligible workers. Finally, electoral data show that the League, the reform’s principal architect, suffered vote share losses in municipalities with higher concentrations of excluded workers, with penaltiesexceeding any gains accrued in areas with more beneficiaries. |
| Keywords: | pension reform, mental health, perceived unfairness, institutional trust, electoral accountability |
| JEL: | J26 I10 D3 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12518 |
| By: | Olga Popova (Leibniz Institute for East and Southeast European Studies); Milena Nikolova (University of Groningen); Sarah Grace See (University of Groningen); Vladimir Otrachshenko (National Bank of Slovakia) |
| Abstract: | How do macroeconomic conditions shape people’s trust in political institutions? This paper addresses this question by analyzing the association between inflation, unemployment, and political trust using repeated cross-sectional data from over two million individuals across 148 countries between 2006 and 2023. We find that high unemployment is strongly and consistently linked to lower confidence in national governments and reduced approval of national leaders. In contrast, the influence of inflation is substantially smaller—typically four to eight times weaker—and less robust across specifications. Perceptions of national economic performance, personal financial insecurity, and corruption appear to be key channels underlying these relationships. While inflation is linked to lower political trust mostly in upper-middle- and high-income countries, the negative association between unemployment and trust is widespread across all income levels. These findings suggest that unemployment remains a global and salient challenge that governments should prioritize. |
| JEL: | I31 H11 E31 J60 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:svk:wpaper:1121 |
| By: | José Alves; João Jalles; Lucas Menescal |
| Abstract: | This paper examines how expansions of the public-sector wage bill and employment affect government performance when political incentives and institutional constraints shape bureaucratic behaviour. Using data for 41 emerging and developing economies over 1997-2019, we construct annual measures of public-sector efficiency based on frontier methods and analyses how different sources of payroll growth translate into subsequent efficiency. To distinguish politically discretionary payroll expansions from externally induced adjustments, we decompose wage-bill changes into a component driven by natural disasters and a residual component reflecting policy-driven variation. This distinction contrasts emergency-driven administrative responses with payroll growth more likely to reflect patronage, weak accountability, or soft budget constraints. We find that discretionary increases in the wage bill are systematically followed by declines in public-sector efficiency, whereas disaster-driven payroll changes have small and transitory effects. These effects are conditioned by fiscal decentralization and institutional quality: stronger governance and subnational accountability mitigate efficiency losses. The results contribute to the public choice literature on bureaucratic incentives and the political economy of government size. |
| Keywords: | Government Efficiency; Public Sector Employment; Fiscal Decentralization; Government Wages; Panel Data Analysis; Local Projections; Nonlinear Effects. |
| JEL: | C23 H11 H72 H77 E62 J45 O43 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp04082026 |
| By: | Francesc, Pujol; Juan Carlos, Molero |
| Abstract: | This paper presents a method to make measurable how media coverage releases information. We consider two causes of bias regarding how the different newspapers manage and present government issues from Barack Obama’s presidential inaugural address. In our empirical analysis, we find that there is a bias according to the political party which dominates in each State. Also, a second bias arises from some previous economic and social features among the different States. In this sense, media moves according to some selected characteristic of the States. The release of information is influenced, among others, by variables like Afro-American citizenship, unemployment or poverty. But, testing ideology and economic and social bias at the same time, we can conclude that only economic reasons really finally matter. |
| Keywords: | government, political economy, media cover, bias. |
| JEL: | H80 H89 |
| Date: | 2025–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125196 |