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on Positive Political Economics |
| By: | Henrik Egbert (University of Applied Sciences Anhalt - Germany) |
| Abstract: | In liberal democracies, the inability of voters to enforce campaign pledges represents an agency problem, as politicians can make non-binding promises during elections without incurring ex ante costs. This paper introduces an economic model of mandatory liability insurance for political campaign promises. Under this framework, candidates running for office must obtain liability insurance for at least one quantifiable policy target. Insurance companies screen candidates and assess risks, setting individualized premiums paid by the candidates that reflect candidate credibility, expertise, and policy feasibility. Insurance details are disclosed to the electorate, providing voters with additional information. After the election, an independent evaluation body determines whether the promised thresholds have been met. If a promise is not fulfilled, the insurer pays financial compensation into a public fund. Political liability insurance thus offers a potential solution to the problem of unenforceable campaign promises, promoting a more transparent and accountable electoral process. |
| Keywords: | campaign promises; political liability insurance; political accountability; agency problem; contractual democracy |
| JEL: | D72 D78 D82 G22 K16 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:sko:wpaper:bep-2026-05 |
| By: | Andrés Rodríguez-Pose; Ali Glisson |
| Abstract: | This paper examines the territorial reconfiguration of American electoral politics since the 1980s, tracing the remaking of Republican support from Reagan’s 1984 landslide to Trump’s three presidential campaigns (2016, 2020, 2024). Drawing on panel data for every presidential election from 1984 to 2024 across 722 commuting zones, we test whether regional development traps, defined as enduring economic underperformance, explain both the shift from Democrats to Republicans and the Republicans’ internal realignment. Mundlak/Correlated Random Effects estimates show backlash is overwhelmingly driven by structural, not cyclical, decline. Short-term economic fluctuations do not predict Republican swing, while long-run territorial position does so decisively. Voters are not responding to recessions. They are registering alienation from an economic order that has failed their communities for a generation. Trump’s gains concentrated in places persistently left behind, whose peripheral position has become entrenched. |
| Keywords: | Regional development traps; electoral geography; Republican Party; Trump; Reagan coalition; voting; territorial inequality; political realignment; United States |
| JEL: | D72 R11 R12 P16 O18 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2623 |
| By: | Julio Cáceres-Delpiano; Matilde Pinto Machado |
| Abstract: | Using precise data on the residences of municipal election candidates in Chile and regression- discontinuity design based on close elections, we estimate the causal effect of electing a candidate on the emergence of future candidacies within a very narrow radius of their home. We find that the election of a neighbor increases the emergence of candidates from the same neighborhood. We then examine whether these candidacies translate into electoral success and generate persistence in the geographic composition of councils. We find evidence of such persistence, driven by incumbent re-election and concentrated in neighborhoods where elected candidates are pivotal in the council or not politically aligned with the mayor. These dynamics imply that local political processes may perpetuate, rather than alleviate, spatial inequalities within municipalities. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:not:notnic:2026-10 |
| By: | Elliot Motte |
| Abstract: | This paper studies the production of offensive content by politicians on Twitter/X. Applying AI-based methods to the universe of tweets posted by members of the U.S. Congress (2017 - 2022), I measure the returns to offensive communication both in terms of online engagement and electoral support. I document that posting toxic tweets generates a sizable engagement premium and that these gains decrease with politicians' baseline toxicity. To examine how voters respond to offensive speech, I link the timing of toxic tweets to a large-scale electoral survey. Using an event study design around days marked by sharp spikes in representatives' toxic tweeting activity, I find that voting intentions for the politician increase in the following week. The increase is concentrated among ideologically aligned voters, while opponents display lower electoral support, widening the partisan voting gap. These findings highlight the presence of both online and electoral incentives to the production of offensive communication, which comes at the expense of growing polarization. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:not:notnic:2026-08 |
| By: | Ludek Kouba (Department of Economics, Faculty of Business and Economics, Mendel University in Brno, Czech Republic); Michal Madr (Department of Economics, Faculty of Business and Economics, Mendel University in Brno, Czech Republic) |
| Abstract: | While previous studies link social capital to environmental attitudes, we take a step further and ask whether trust translates into actual behaviour — voting for a Green party. We propose a post-materialist values channel through which social capital relates to Green electoral support, and examine it across European regions in one of the first studies of trust and observed electoral behaviour. Unlike most work, which relates survey-based attitudes to survey-based vote intentions, our dependent variable is real behaviour: the regional vote share of 41 European Green parties in parliamentary elections (2002–2022), matched with regional trust indicators from the European Social Survey. The estimations confirm our hypothesis that higher trust relates positively to Green electoral results, with highly statistically significant and robust associations for social, institutional, and international trust. A one-standard-deviation rise in regional social trust is associated with a 0.1-standard-deviation rise in Green support. In addition, post-materialist attitudes appear more important than redistributive preferences, and these associations are stronger in high-trust regions. This suggests that, in 21st-century Europe, typical Green voters are less oriented towards the left than previously thought and more driven by post-materialist values. |
| Keywords: | Social capital; trust; attitudes; post-materialist values; Green parties; parliamentary elections; European regions |
| JEL: | A13 D72 P16 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:men:wpaper:115_2026 |
| By: | Abel François; Nicolas Lagios; Pierre-Guillaume Méon |
| Abstract: | Can shared experiences across nations foster people’s attachment to a community beyond the nation-state? The answer is a priori ambiguous: international events bring nations together around a common frame, but they also set them against one another. To answer this question, we study the Eurovision Song Con- test, an annual competition broadcast to a large transnational audience and organized around shared European values. Comparing respondents surveyed just before and after their country’s participation in the show, we find that the contest raises European identification, which complements national identity rather than substituting for it. The effect persists over time and is independent of the outcome of the event. Regarding mechanisms, we show that Eurovision changes the values individuals attribute to Europe without changing their own values, and identification increases when the two align. Importantly, the event has electoral consequences: in countries that narrowly qualify for the final, votes in European Parliament elections shift toward more pro-European parties. |
| Keywords: | National identity; Supranational identity; Regional integration; Voting; Shared experiences; European integration; Eurovision Song Contest |
| JEL: | D72 D83 D91 Z13 |
| Date: | 2026–10–12 |
| URL: | https://d.repec.org/n?u=RePEc:sol:wpaper:2013/415112 |
| By: | Agarwal, Vikas; Karakaş, Oğuzhan; Limbach, Peter; Ren, Honglin |
| Abstract: | We document high persistence in shareholder turnout, creating predictable differences in effective voting power across firms. Accordingly, firms with lower turnout exhibit higher voting premia. For identification, we exploit the 2010 NYSE Rule 452 amendment eliminating broker authority over uninstructed shares as a shock to turnout in director elections. Further, we show that low turnout predicts contentious governance events where shareholder influence is more valuable, and that the negative voting premium-turnout relation is stronger when such events are more likely. Results indicate that investors price de facto voting power and that persistent shareholder participation shape the value of corporate control. |
| Keywords: | Shareholder voting participation, Value of voting rights, Broker non-vote rule, Contentious governance events, Voting power |
| JEL: | G11 G23 G41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cfrwps:344100 |
| By: | Ramona Müller; Matthias Wrede |
| Abstract: | Local governments’ discretion over tax rates may be used strategically when politicians perceive that a tax burden falls differently across voter groups. We study this mechanism in the context of Germany’s property tax reform, which created exogenous variation in the tax across voter groups and municipalities by allowing states to adopt different property valuation models. Some federal states implicitly set a higher tax for rental properties than for comparable owner-occupied units. We show that, over an average post-announcement period of 3.6 years, municipal tax multipliers increased by 15 percentage points more when two conditions were met: municipalities were governed by homeowner-friendly parties and were located in states where tenants will face a higher tax base per square meter. By identifying political drivers behind sharp increases in German property tax multipliers in recent years, we provide causal evidence that higher-level governments’ tax-base choices change the electoral incentives governing local tax rates. |
| Keywords: | property tax reform, local tax setting, voter favoritism, political economy of taxation |
| JEL: | H20 H27 H30 H71 H73 R51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13067 |
| By: | Sultan Mehmood; Rinchan Ali Mirza; Ekaterina Zhuravskaya |
| Abstract: | This paper examines how past ideological state-building constrains future reform. In Pakistan, General Zia’s regime (1977–1988) embedded religious identity into law, education, and political life. Two decades later, General Musharraf (1999–2008) sought to reverse course by pursuing a competing vision of national renewal. Leveraging a newly assembled district-level panel spanning half a century and an array of difference- in-differences strategies, we show that liberalizing reforms under Musharraf triggered a severe backlash in districts previously Islamized by Zia’s policies, reflected in heightened political violence and rising electoral support for Islamist parties. Evidence supports a mechanism In which Zia’s Islamization increased exposure to religious extremism among school-age cohorts. Relative to earlier cohorts, these cohorts were more likely to attend madrasas (religious seminaries) teaching more hard line religious doctrine. The districts that later display backlash also exhibit higher early marriage rates among girls, slower gains in female literacy, and greater Qur’an readership, consistent with a reorientation toward more conservative social and political preferences. These findings suggest that when states fuse Islamist ideology with governance, they create enduring constraints on future policy change. Past ideological investments can thus limit the effectiveness of later efforts at secularization or reform. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:not:notnic:2026-16 |
| By: | Abhay Aneja; Guo Xu |
| Abstract: | States that delegate governance to local officials face a trade-off between the benefits of local knowledge and the costs of biased administrators. Can imposing federal standards discipline bias and improve uniformity? We study this question by examining the introduction of federal standards to apply for citizenship under the 1906 Naturalization Act. Using newly-digitized census records covering over five million immigrants and a 30-year period, we show that standardizing adjudication of citizenship applications resulted in rapid convergence of naturalization practices across cities. While naturalizations were around 30% higher in election years pre-reform, this electoral cycle disappeared after the introduction of federal standards. Exploiting the staggered adoption of municipal civil service reforms aimed at removing patronage during the Progressive Era, we find that the reduction in political cycles was strongest in unreformed cities. Finally, the contraction in election year naturalizations changed the composition of new citizens. Affected cohorts earned 7% more, were more likely to enter citizenship-restricted occupations, and gave children more Americanized names. Our results thus show that standardizing administrative procedures can discipline politically-biased policy implementation. |
| JEL: | H1 H7 J15 N41 N42 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35903 |
| By: | Guillaume Chapelle; Julia Paul-Venturine; Camille Urvoy (CY Cergy Paris Université, THEMA) |
| Abstract: | When a national government relaxes a local regulation, do local ocials comply, or find other ways to keep the same rules in place? We study a 2014 French reform that abolished floor area ratios (FAR), a widely used cap on building density, with the explicit goal of expanding housing construction. We assemble a new geospatial panel tracking three zoning tools floor area ratios, building heights, and coverage ratios | over 15 years across 118 municipalities in the Paris region, linked to building permits, housing stock, and transaction prices. Comparing municipalities where FAR existed before the reform to those where it did not, we show that local governments o set the deregulation by tightening the two instruments they retained: maximum heights fell, coverage ratios tightened, and permit denials rose. Density did not increase in previously regulated areas, and we detect no e ect on prices, consistent with the limited change in supply. The regulatory tightening was strongest where mayors faced closer elections and where property values are higher, not where mayors belong to parties opposing the reforming government, pointing to electoral accountability rather than partisanship. Top-down deregulation can therefore be substantially undercut when local governments retain complementary instruments, suggesting reforms must either limit local discretion directly or realign local incentives. |
| Keywords: | Decentralization, Fiscal federalism, Local political incentives, Upzoning, Land use regulations |
| JEL: | H77 R52 R38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ema:worpap:2026-12 |
| By: | Fischer, Sabine |
| Abstract: | So far, 2026 is not proving a good year for the Putin regime. The front line in Ukraine is barely moving, Ukrainian drones and missiles are striking targets deep inside Russian territory, the economy is faltering and public sentiment is deteriorating. Under these difficult conditions, the Kremlin administration has to engineer another victory for the ruling United Russia party, as the State Duma elections are due to take place from 18 to 20 September. Yet the Russian parliament is scarcely able to fulfil its function as a source of legitimacy in Putin's personalised dictatorship. This is evident both from the chronic weakness of the parties loyal to the regime and from the farcical circumstances surrounding the exclusion of the Yabloko party from the election. |
| Keywords: | State Duma, manipulation, Kremlin, russian parties, United Russia, UR, Yabloko, Liberal Democratic Party of Russia, LDPR, Commu |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:344116 |
| By: | Nicolas Dietl; Susanne Keller; Sebastian Krautheim |
| Abstract: | Geopolitical tensions threaten to fragment the global economy into rival blocs. As a driver of this fragmentation, we propose a demand-side channel grounded in social identity theory: consumers value goods partly by the political and economic values embodied in their origin. We embed this in a trade model with two countries that are similar in terms of political values and one dissimilar country, with the US, the EU and China as our benchmark example. We show that a geopolitical shock raising the salience of political over economic values diverts trade toward the similar pair and can also make a previously unattractive standards-harmonization agreement between them mutually beneficial. A subsequent estrangement of the similar pair, through diverging political values or trade-war measures, can reverse both effects and push the world economy from two blocs toward three. We also apply the framework to an estrangement of the US from the EU and Canada. Both a US divergence in political values and trade-war measures divert trade toward the EU-Canada pair, but only the former can make a previously unattractive EU-Canada agreement mutually beneficial. |
| Keywords: | globalization backlash, friend-shoring, geopolitics, social identity, identity politics, trade agreements, TTIP, value-based trade |
| JEL: | F02 F13 F15 F50 D91 Z13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13053 |