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on Positive Political Economics |
| By: | Vasiliki Fouka; Marco Tabellini |
| Abstract: | In this chapter, we discuss how immigration affects identity, with implications for politics. We build on key insights from social psychology and their formalization in economics to derive predictions about how immigration changes both self-identification and categorization of others into groups. These immigration-induced identity changes can explain two recent political transformations that have characterized many Western democracies: the rise of right-wing populism and the realignment of voters and parties along a socio-cultural, rather than economic, dimension of political conflict. We also discuss how immigration can reshape group boundaries and political cleavages, depending on the characteristics of immigrants, host populations, and the local context. We highlight open questions and possible directions for future research |
| Keywords: | Immigration, refugees, social identity, nationalism, redistribution, populism, polarization |
| JEL: | D91 J15 D72 N32 Z13 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26247 |
| By: | Weinmann, Carina (Department of Social Sciences, Heinrich Heine University Düsseldorf); Jandura, Olaf (Faculty of Business Studies, University of Applied Sciences Düsseldorf); Petersen, Thomas (The Institut für Demoskopie Allensbach) |
| Abstract: | Today, citizens’ media repertoires have become more individualized than ever. Research suggests that this has changed how people gauge the climate of opinion: While some, as suggested by the spiral of silence theory, still rely on the mass media, for others, social media are the key indicator. There are first hints that political affiliation is decisive in this matter. Our paper seeks to find evidence for this line of reasoning regarding supporters of two opposing German political parties. Based on a representative survey of German voters, we examined which factors determine the perceived congruence between the majority’s and people’s own opinion. Our analyses show that for supporters of the right-wing political party, one central factor is discussing politics via social networking sites. Our findings add to the knowledge on how the processes suggested by the spiral of silence theory are shaped by today’s media landscape and the current political situation. |
| Keywords: | climate of opinion, mass media; political affiliation; political parties; social media; spiral of silence |
| JEL: | D72 |
| URL: | https://d.repec.org/n?u=RePEc:ddf:wpaper:63 |
| By: | Crescioli, Tommaso; Van Overbeke, Toon |
| Abstract: | How does market power affect the political behavior of small business owners? As the growing market power of large multinational firms has fundamentally changed the opportunity structure for small businesses and their beneficiaries, we try to understand how those economic developments influence European democracies. We argue that growing market power lowers small business owners’ trust in key democratic institutions and the functioning of markets, driving them to reject incumbents and shift their support to radical right parties. We employ firm-level, individual-level, and regional-level data on fourteen European countries to test this argument. Our findings indicate that rising market power, measured by combining mergers and increases in market concentration, is associated with the declining economic performance of micro-firms. In turn, mergers and the declining economic share of these firms are robust predictors of anti-incumbent and increased radical right voting both at the individual and constituency levels. This article provides the first analysis of the effect of market concentration on rich democracies and, in doing so, offers a novel explanation for the surprising radical right support among small business owners in Europe. |
| Keywords: | market power;political economy;voting behavior;radical right;democratic institutions |
| JEL: | D72 D74 L12 |
| Date: | 2026–10–04 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141231 |
| By: | James Horton (Methodist University, Charles M. Reeves School of Business and Economics) |
| Abstract: | Political support for education spending depends heavily on electoral participation. This paper examines two opposing mechanisms linking voter turnout to state education budgets. Broader participation might amplify demand by increasing the beneficiary share of the electorate, thereby raising political support for spending. Alternatively, it could dilute interest-group influence if organized beneficiaries wield disproportionate power during low-turnout elections but lose relative leverage as the voting pool expands. To evaluate these dynamics, I construct a state-year measure of "adult exposure" as the share of voting-age adults living with school-age children. In a Two-Way Fixed Effects model covering 2012-2022, the interaction is negative across all specifications. At average exposure, higher turnout is associated with a smaller education budget share. While the estimates are imprecise, the results favor interest-group dilution and cast doubt on meaningful demand amplification. Ultimately, the fiscal effect of electoral participation depends entirely on the specific interests it brings into the political process. |
| Keywords: | median voter, voter turnout, electorate composition, education spending, public choice |
| JEL: | D72 H75 I22 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:mtd:wpaper:002 |
| By: | Selcen Çakır (Department of Economics, University of Turku); Asli Ceren Cinar (Department of Political Science, Trinity College Dublin); Florian Foos (Department of Government, London School of Economics and Political Science); Konstantinos Matakos (Department of Political Economy, King's College London); Janne Tukiainen (Department of Economics, University of Turku) |
| Abstract: | Parties may trade local choice for leadership control when recruiting candidates, either to promote loyalists or to diversify candidate pools. We quantify the resource cost of centralization using the British Conservative Party’s 2006 A-list reform, which increased national influence over nominations. A-list parliamentary candidates were less locally embedded than other Conservative candidates. Difference-in-differences estimates show that A-list candidacies raised party (non-personal) campaign spending by roughly 11–21%, with no detectable change in candidates’ personal spending or short-run vote share. The increase occurred for both female and male A-list candidates. By 2015, the party further increased its spending. A simple vote-production model maps these estimates into the cost of offsetting weaker local appeal. For vote–spending elasticities between 0.10 and 0.25, offsetting a one-percentage-point appeal deficit requires roughly 11–30% more party funds. The results quantify a previously implicit price of centralized party control. |
| Keywords: | centralized nominations, party control, campaign finance, political selection, vote elasticity, difference-in-differences, United Kingdom |
| JEL: | D72 P16 C23 C26 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:tkk:dpaper:dp180 |
| By: | Jesús Fernández-Villaverde; Carlos Sanz |
| Abstract: | How socially distinct are competing political parties' candidate pools? Since names encode cultural milieu, lineage, linguistic origin, and ancestry that standard socioeconomic variables miss, we measure social sorting across parties with names, predicting affiliation out of sample within municipality-years. Across more than 2.5 million local-election candidates, names pick the right-wing candidate in a random within-municipality pair 55.8\% of the time in Spain and 56.5\% in France. Given names alone do most of the work: around 55.0%. Under a stylized model of intergenerational transmission of political orientation, this translates to an implied gap of about 25 p.p. in parental naming propensities. The signal is stable in Spain but doubles in France by 2026. Within ideological families, names separate parties as sharply as across the right--left divide, even more so in France. The Spanish cleavage is linguistic and growing. The French one runs through names of immigrant origin and is strongest in large cities. |
| JEL: | C53 D72 J15 Z13 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35820 |
| By: | Wintemute, Garen J.; Velasquez, Bradley; Robinson, Sonia; Neumann, Krista; Cruz, Shaina Sta; Shev, Aaron; Tancredi, Daniel Joseph (University of California, Davis); Tomsich, Elizabeth A.; Wright, Mona A.; Pear, Veronica |
| Abstract: | Background: Political violence and the rise of authoritarianism are emerging threats to the nation’s health, stability, and future as a representative democracy. To inform and facilitate prevention efforts, we present new and updated findings on the public’s views on authoritarianism and its support for and willingness to engage in election-related and pro- or anti-government violence. Methods: Findings are from Wave 5, conducted May 15-June 15, 2026, of a nationally representative annual longitudinal survey of adult members of the Ipsos KnowledgePanel that was initiated in 2022. Findings are for the cohort as a whole and for subgroups defined by political party/Make America Great Again (MAGA) movement affiliation. Year-to-year change for items included in 2025 and 2026 is estimated using mean change scores. Cross-sectional findings for 2026 are presented as weighted prevalences and item scores. Results: The completion rate was 90.7%; there were 7, 552 respondents. Nearly 90% of respondents continued to consider it very or extremely important that the US remain a democracy (change 0.01, 95% CI -0.00, 0.03). Agreement with expressions of authoritarianism was much less common; it decreased for the statement, “having a strong leader for America is more important than having a democracy” (change -0.04, 95% CI -0.07, -0.02) and others. In 2026, 2.1% (95% CI 1.6%, 2.7%) of respondents agreed strongly or very strongly that President Trump should be made king, but nearly half (47.7%, 95% CI 46.2%, 49.2%) agreed strongly or very strongly that he should be impeached and removed from office. There was little agreement with 5 actions the federal government might take in 2026 that employed violence to enforce its policies or suppress its critics in the US; the prevalence of strong or very strong agreement ranged between 4.4% and 9.6%. Across 12 items, there was very little agreement with actions—including violence—the federal government might take to subvert elections; strong or very strong agreement ranged between 2% and 4%. Willingness to commit violence was rare. For example, only 1.6% (95% CI 1.2%, 2.1%) were very or completely willing to use violence “to make sure that President Trump remains in office after his term ends.” Decreases from 2025 to 2026 in support for expressions of authoritarianism and for government-initiated violence were common across the spectrum of party/MAGA movement affiliations. Conclusions: With national elections a few months away, Americans remained strongly supportive of democracy, did not endorse authoritarianism, and rejected the use of force by the current federal government to enforce its policies or subvert elections. They were deeply unwilling to engage in violence. These hopeful findings can inform and guide efforts to preserve democracy and prevent political violence. |
| Date: | 2026–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:xv3yk_v1 |
| By: | Austin Lieberman; Matthew I. Jones |
| Abstract: | We create a set of 6 axioms relating to strategic voting and study them on single transferable vote (STV), Meek STV, Bloc, Chamberlin-Courant, Monroe, and k-Borda. For Chamberlin-Courant, Monroe, and k-Borda, we implement ``optimistic'' and ``pessimistic'' models for handing incomplete ballots, thus turning each of the three into two separate voting rules. We determine which voting rules satisfy each axiom. We find that under Chamberlin-Courant and k-Borda, the optimistic models encourage burying, while the pessimistic models encourage truncation strategies, indicating that the handling of partial ballots has tremendous implications for strategic voting. We define an axiom called no skipped payment that differentiates similar rules, as Meek STV and Chamberlin-Courant satisfy it, while STV and Monroe fail. Each voting rule was found to fail favorite betrayal, revealing that none of them are completely immune to strategic voting. In general, STV variants are relatively resistant to strategic voting while Monroe is susceptible to a wide range of strategies. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.37373 |
| By: | Lottie Field; Réka Juhász; Michele Zampa |
| Abstract: | We study how politics shapes industrial policy through two paradigmatic twentieth-century cases: the Cassa per il Mezzogiorno in Italy (1950–1984) and Kennedy's Moonshot in the United States (1961–1972). Drawing on historical and primary political sources, we show that each policy originated in a broader political project rather than in an economic diagnosis: the Christian Democrats' pursuit of national integration and democratic consolidation, and Kennedy's New Frontier. We introduce the concept of industrial policy vision - a publicly articulated, transformational objective that political leaders attach to a set of ideals and pursue through state-led intervention in the economy - and develop a five-component definition that makes it empirically tractable. We then trace each vision through decades of newspaper coverage, combining topic modeling and sentiment analysis with systematic close reading. In both cases, public debate proceeded largely within the frame the vision set, granting the policies tolerance for setbacks and expense. The cases diverge in their fates: the Moonshot's bounded vision was redeemed on schedule, while the Cassa's open-ended vision was exhausted by accumulated failure and the policy outlived it only briefly. This divergence points to our central conclusion: while a vision holds, it sets the terms on which an industrial policy's performance is judged, including what counts as failure and how much time the policy is given to deliver. |
| JEL: | D78 L52 N42 N44 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35802 |
| By: | Lotte Swank (University of Groningen); Otto Swank (Erasmus University Rotterdam); Joes de Natris (Ministry of Foreign Affairs) |
| Abstract: | In multi-party parliamentary democracies, governments emerge from post-election bargaining. We study coalition formation in Dutch municipalities. Bargaining models and a norm that "the largest party should govern" predict that party rank affects coalition formation. Using regression discontinuity designs, we find no causal effect of party rank on coalition inclusion. Instead, governments follow a broad-coalition logic: when two parties jointly win a narrow majority, they nevertheless include a third party in 95\% of cases. Parties that participate in coalitions excluding a relatively large party are less likely to enter the next coalition, consistent with dynamic penalties for violating a broad-coalition norm. |
| Keywords: | Coalition formation, Bargaining models, Regression Discontinuity Design, Democratic norms |
| Date: | 2026–10–05 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20260076 |
| By: | Juan Beccuti; Manvir Schneider |
| Abstract: | We study reward design for delegated representatives who acquire costly information and vote on a binary governance proposal. Effort improves both private information and delegated voting weight. We show that no payment rule can make sincere voting strictly optimal at every positive effort profile under a non-neutral prior, while fixed budgets limit accuracy in large symmetric committees. We then compare proportional sharing with a conditional rule that rewards only members of a sufficiently large winning coalition. Unlike proportional sharing, which supports sincere voting only through indifference, the conditional rule makes sincere voting strictly optimal at symmetric positive effort profiles. It supports sincere equilibria with the same effort as proportional sharing and, under suitable reward-cost conditions, with strictly higher effort and decision accuracy. Insincere equilibria may nevertheless coexist. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.07959 |
| By: | Brekke, Kjell (University of Oslo); Nyborg, Karine (University of Oslo) |
| Abstract: | We show that ideologically motivated disrespect triggers social processes helping individuals protect their self-image and social image, causing ideological and affective polarization as by-products. If even small shares of the population are less respected by one side of the ideological spectrum than the other, ideological views are polarized in equilibrium for almost everyone, including those equally respected by all. Although everyone socializes only with the like-minded in equilibrium, homophily is not assumed but emerges endogenously. The sets of characteristics disrespected by each side determine segregation and polarization patterns, while the degree of polarization depends strongly on exposure to non-peers’ views. |
| Keywords: | affective and ideological polarization, image preferences, reluctant social learning, social migration |
| JEL: | D72 D91 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18956 |
| By: | Hao Yu |
| Abstract: | When a subset of alternatives is allowed to be the collective choice, one approach is to study the social choice correspondence defined on agents' preferences over alternatives. This paper considers a different approach. We argue that agents should have preferences directly over outcomes. We consider the social choice problem on a closed real interval, and assume a single-peaked domain over intervals. Our focus is on the peak-only social choice function, referred to as the voting scheme. The leftright scheme, which generalizes the minmax scheme, is the only strategy-proof voting scheme. Adding anonymity, it reduces to the generalized median scheme. For an odd number of agents, the median scheme is the only voting scheme satisfying efficiency, anonymity, and strategy-proofness. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.08435 |