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on Positive Political Economics |
| By: | Edo, Anthony (CEPII, Paris); Renault, Thomas (CES, University of Paris); Valette, Jérôme (CEPII, Paris) |
| Abstract: | How does the electoral success of a far-right political force shape the strategies and policy platforms of mainstream candidates? We answer this question by exploiting the political shock of the creation of the Front National, an anti-immigration party, in 1972 and its sudden electoral breakthrough in the 1980s. Through a comprehensive textual analysis of candidate manifestos in French parliamentary elections from 1968 to 1997, we find that right-wing candidates respond to local far-right success, measured as voting shares, by amplifying the salience of immigration in their manifestos. They also adopt more negative positions on immigration and increasingly associate it with issues such as crime and the welfare state. In contrast, the ideological positions of left-wing candidates do not shift in response to far-right electoral gains. We finally show that the strategic adjustments of right- wing candidates help mitigate electoral losses to far-right competitors. |
| Keywords: | party platform, electoral competition, anti-immigrant parties, political economy, immigration |
| JEL: | F22 P16 D72 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18311 |
| By: | Clemence Tricaud; Romain Wacziarg |
| Abstract: | In this paper, we argue that recent trends in party seat margins and election vote margins result from structural changes in the nature of US political competition. We assemble a comprehensive database of electoral results for the House, Senate and presidential contests, from the 19th century until today. Seat margins declined in the recent period, so the margins of control of the House, Senate, and Electoral College by either party have become smaller. However, this was not accompanied by a decline in the margins of victory at the constituency level. We propose a model of electoral competition with multiple districts that can rationalize these trends. We show theoretically that an increase in politicians’ information about voter preferences, together with the growing nationalization of politics, can account for the decrease in seat margins and the concurrent stability in vote margins. As implied by the model, we document that campaign contributions received by House and Senate candidates are increasingly concentrated in a dwindling set of swing constituencies. |
| JEL: | D72 P0 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34566 |
| By: | Shuhei Kitamura; Ryo Takahashi; Katsunori Yamada |
| Abstract: | Electoral accountability is a cornerstone of democratic governance, yet whether voters effectively punish corruption remains theoretically and empirically contested. While canonical models predict that corruption revelations reduce incumbent support, strategic voting considerations—especially beliefs about others’ behavior—can yield ambiguous accountability outcomes. We exploit a major corruption scandal involving Japan’s ruling party during a national election to examine how social information shapes electoral responses to misconduct. In a pre-registered field experiment, we randomly provided voters with information about prevailing social norms of intolerance toward the scandal. This intervention significantly increased overall turnout and challenger support, particularly among swing voters, consistent with enhanced accountability. Yet the same treatment increased incumbent support among ruling-party loyalists. We show that these heterogeneous effects are systematically driven by voters’ prior beliefs about others’ voting intentions: those expecting others to punish sanctioned more when learning they would not, whereas those expecting tolerance defended more when learning others would punish. These findings reconcile conflicting evidence on electoral accountability by showing how strategic considerations fundamentally shape democratic sanctioning, and suggest that information campaigns can either strengthen or undermine accountability depending on the distribution of voter expectations, with important implications for anti-corruption interventions. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1289r |
| By: | Patrick A. Testa |
| Abstract: | Elections select officeholders and policies, but they also signal to political actors where to invest their time and money. This paper presents a framework for understanding these effects, in which political investors (e.g., donors, activists) allocate resources where expected political fundamentals favor their party. Investors possess idiosyncratic local knowledge but also public information in the form of recent election results. These signals are complementary: where local knowledge is good, even the narrowest vote-share majorities can align beliefs and concentrate investment. I apply this framework to the changing political geography of the United States between 1940 and 1972, when urban and minority areas came into play for the Democratic Party. A regression discontinuity design based on close presidential elections shows that counties narrowly won by Democrats saw pronounced increases in Democratic local officeholding and voter support in subsequent election periods. This does not reflect direct impacts of presidential elections on local offices, but rather indirect shifts through political investment, including heightened activity in newspaper advertising, phone banking, and civil rights mobilization. Effects are concentrated in urban, Black, and union areas where dense organizational networks enhanced local political knowledge. Together, the findings show how elections organize political actors not only at the ballot box but through the information they convey. |
| JEL: | D72 J15 J18 N32 N42 P16 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34585 |
| By: | Sandholtz, Wayne Aaron (Nova School of Business and Economics) |
| Abstract: | This paper provides experimental evidence on the electoral effect of a large education reform in a developing democracy. The reform significantly improved school quality on many dimensions (Romero, Sandefur, & Sandholtz, 2020). In this paper, I show that the reform reduced the incumbent party's pres- idential vote share by 2.1 percentage points (5%). The reform also reduced teachers' job satisfaction, support for the incumbent government, and political engagement. Electoral effects were positively correlated with effects on teachers' political engagement; the reform lost most votes where it caused greatest political disengagement of teachers. |
| Keywords: | randomized controlled trial, elections, policy feedback, political economy, public service delivery, development, education, Liberia |
| JEL: | I25 O10 P00 C93 D72 H41 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18346 |
| By: | Asatryan, Zareh; Christofzik, Désirée I.; Nover, Justus |
| Abstract: | We study the degree and nature of political budget cycles in public investments when two instruments are available: investments by core governments and, more indirectly, by state-owned enterprises (SOEs). While fiscal pressure on core budgets may induce politicians to shift election-induced investments to SOEs, voters' uncertainties in clearly attributing the benefits of SOE investments to incumbent politicians may encourage the opposite. Using administrative micro-data for over 10, 500 SOEs and their public owners at the municipal level in Germany, we document substantial election cycles in both instruments. This suggests that German municipal councilors use investments broadly to enhance their re-election prospects. The total effect of elections on municipal investments in our sample is over EUR 1 billion for the pre-election year in each electoral cycle, while the past literature focusing only on core budgets would miss about a third of this effect. |
| Keywords: | election cycles, core budgets, outsourcing, transparency |
| JEL: | H11 L32 D72 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:333898 |
| By: | Despina Gavresi (DEM, University of Luxembourg); Anastasia Litina (Department of Economics, University of Macedonia); Sofia Tsitou (University of Ioannina) |
| Abstract: | This paper identifies societal aging as a key driver of populism in Europe, emphasizing the non-linear relationship between the two. Using multilevel regression analysis on individuals from 29 European countries between 2002 and 2021, we analyze how societal aging ; measured by the age dependency ratio and its square shapes populist attitudes. Drawing on ten rounds of the European Social Survey, we examine voting, trust in political institutions, and immigration attitudes. Our findings reveal a U-shaped relationship between societal aging and political behaviour. We argue that demographic structure of society influences political attitudes beyond individual aging. The results highlight the importance of accounting for non-linear demographic effects when analyzing political behavior in aging societies. |
| Keywords: | Societal Aging, Political Behaviour, Non-Linear Dynamics |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:mcd:mcddps:2025_05 |
| By: | Shuhei Kitamura; Ryo Takahashi; Katsunori Yamada |
| Abstract: | Elections are a primary mechanism through which citizens can hold politicians accountable for misconduct. However, whether voters actually punish corruption at the ballot box remains an open question, as electoral decisions often involve strategic considerations, including beliefs about how others think and behave. To better understand how such strategic considerations operate in this context, we conducted a pre-registered information intervention during a major political corruption scandal in Japan. The treatment provided information about the prevailing social norm—specifically, the perceived social intolerance of the scandal. The treatment increased turnout and support for a challenger, particularly among swing voters who initially believed that others were intolerant of corruption. Among party loyalists with more lenient prior beliefs, the same information backfired, increasing support for the incumbent. The turnout effect among swing voters was sizable—approximately six percentage points—comparable in magnitude to benchmark mobilization interventions involving personalized contact or social pressure. To account for these patterns, we develop a simple model that incorporates mechanisms—notably moral reinforcement and identity reinforcement—that generate predictions consistent with the observed heterogeneity in responses. By highlighting how perceptions of prevailing norms shape voter behavior in the presence of strategic considerations, this study contributes to a broader understanding of how democratic institutions can remain resilient in the face of political misconduct. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1289 |
| By: | Jesús Fernández-Villaverde (University of Pennsylvania); Tomohide Mineyama (International Monetary Fund); Dongho Song (Johns Hopkins University) |
| Abstract: | We study how uneven gains from globalization can endogenously generate protectionism as a political equilibrium. Using U.S. data, we document that regions more exposed to import competition display stronger opposition to globalization, especially among households with little financial wealth, and that firms in trade-exposed sectors sharply increase lobbying expenditures. To interpret these patterns, we develop and quantify a general equilibrium Ricardian model with heterogeneous households, input–output linkages, and endogenous trade policy shaped by voting and lobbying. Distributional shocks reallocate political support among voters, while lobbying propagates through production networks, generating strategic complementarities that sustain protectionism. Calibrated to U.S.–China sectoral data from 1991–2019, the model accounts for rising inequality, declining support for globalization, and key aggregate trends in consumption and trade. |
| Keywords: | Globalization, heterogeneous households, multi-sector, production network, Ricardian trade, voting, political lobbying |
| JEL: | D57 D58 D63 D72 F1 F2 F4 F6 |
| Date: | 2026–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:pen:papers:26-001 |
| By: | Stefano Carattini; Ian Fletcher; Chad W. 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. |
| JEL: | D72 H23 P0 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34559 |
| By: | Walter, Johannes |
| Abstract: | Rising political polarization generates significant negative externalities for democratic institutions and economic stability, yet scalable interventions to reduce polarization remain scarce. In this paper, I study whether AI chatbots can reduce political polarization. In two preregistered online RCTs with representative U.S. samples, I find that AI significantly reduces polarization on the Ukraine war and immigration policy. In Experiment 1, AI reduced polarization by 20 percentage points, with effects persisting for one month. Experiment 2 pits AI against incentivized human persuaders and Static Text. I find no significant difference in effectiveness: all three reduced polarization by roughly 10 percentage points. While AI conversations were rated as more enjoyable, mechanism analysis reveals that persuasion is driven by learning and trust, not enjoyment. These results demonstrate AI's scalable persuasive power, highlighting its dual-use potential: it can be deployed to effectively reduce polarization, but also poses risks of misuse. |
| Keywords: | Political Polarization, AI Persuasion, Experimental Economics, Information Provision |
| JEL: | D72 D83 D91 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:334534 |
| By: | Despina Gavresi (DEM, University of Luxembourg); Anastasia Litina (Department of Economics, University of Macedonia); Ioannis Patios (University of Macedonia) |
| Abstract: | This paper examines how exposure to a wide range of macroeconomic downturns shapes individual attitudes to politics and support for variety of populist attitudes in Europe. We try to capture the long-run and the contemporaneous exposure to crises. We first focus on economic downturns experienced during the impressionable years between ages 18 and 25. We use repeated cross-sectional data from the Eurobarometer surveys and exploit cross-country and cohort variation in exposure to recessions. Our baseline analysis relies on fixed-effects regressions controlling for individual characteristics and contemporaneous economic conditions. We then attempt to address identification concerns. To this end we implement a difference-in-differences design that compares cohorts differentially exposed to downturns within the same country. We find that individuals exposed to macroeconomic downturns in early adulthood are more likely to support populist parties and exhibit lower trust in national and European political institutions later in life. |
| Keywords: | Populism; Political attitudes; Institutional trust; OLS, Difference-in-differences |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:mcd:mcddps:2025_06 |
| By: | Alves, Daniel H. |
| Abstract: | After several failed attempts in previous years, Brazil's Plano Real finally ended hyperinflation in 1993–1994, and a significant driver of inequality and poverty was eliminated as a result. By combining data from Congress and newspaper archives, 17 interviews, and secondary sources, this article takes a qualitative approach to explore the notion that increased electoral competition and effective coalition management enabled price stabilization. Fernando Henrique Cardoso (PSDB), the economy minister leading the plan and the winner of the 1994 presidential election, campaigned as the anti-inflation candidate, promising newly enfranchised low-income voters that reining in prices would boost their earnings. Meanwhile, the minoritarian executive took advantage of coalitional tools to cultivate legislative alliances and approve the plan's measures. For analytical generalization, a potential model is proposed for further investigations on the relationship between competitive elections, cross-party cooperation, and price stability in nine other country cases within and outside Latin America. Related Articles: Adegboye, Alex, Kofo Adegboye, Uwalomwa Uwuigbe, Stephen Ojeka, and Eyitemi Fasanu. 2023. “Taxation, Democracy, and Inequality in Sub-Saharan Africa: Relevant Linkages for Sustainable Development Goals.” Politics & Policy 51(4): 696–722. https://doi.org/10.1111/polp.12547. Segatto, Catarina Ianni, and Daniel Béland. 2018. “The Limits of Partisanship: Federalism, the Role of Bureaucrats, and the Path to Universal Health Care Coverage in Brazil.” Politics & Policy 46(3): 416–41. https://doi.org/10.1111/polp.12252. Zimerman, Artur, and Flávio Pinheiro. 2020. “Appearances Can be Deceptive: Political Polarisation, Agrarian Policy, and Coalitional Presidentialism in Brazil.” Politics & Policy 48(2): 339–71. https://doi.org/10.1111/polp.12345. |
| Keywords: | Brazil; coalition dynamics; cross-party cooperation; electoral competition; inequality; inflation; Latin America; macroeconomic stabilization; political economy; politics of public policy; poverty |
| JEL: | J1 |
| Date: | 2024–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130713 |
| By: | Hervé Crès (Division of Social Science, New York University in Abu Dhabi, 129188, Abu Dhabi, UAE); Mich Tvede (School of Economics, University of Sheffield, Sheffield S10 2TU, UK) |
| Abstract: | Majority voting is widely observed to produce stable policy outcomes, despite theoretical predictions of instability in multidimensional policy spaces. The present paper shows that stability can arise because voters have non-ordered preferences. We model preferences as correspondences within d-dimensional policy spaces and introduce a geometric measure of orderedness based on the angular spread α of strictly preferred alternatives. Our main result is that majority equilibria exist provided α |
| Keywords: | ambiguity, centerpoint theorem, collective decision-making, Euclidean preferences, majority equilibrium, non-ordered preferences, status quo bias, voting |
| JEL: | C65 D71 D72 D81 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:shf:wpaper:2025010 |
| By: | Farooq, Imran; Mavrotas, George; Cassimon, Danny |
| Abstract: | This paper explores the effects of temporary and permanent components of foreign aid grants and loans on fiscal decisions amid changes in Pakistan's political regime over the period 1973-2020. The results show that political regimes change leads to higher government current expenditures driven by political polarization, resulting in increased foreign loans. In contrast, foreign grants are mainly influenced by donor interests and intentions in aid recipient countries, but political regimes change are irrelevant. The response of fiscal variables to political regimes change reflect conditionalities linked to foreign aid inflows, particularly via the IMF, such as increased revenue and debt service to reduce average debt maturity, thereby reducing domestic borrowing. However, current expenditures increase, thereby reducing capital expenditures due to political polarization for foreign loans and, vice versa, for foreign grants. Moreover, it affects only temporary aid components as temporary loans do not significantly affect fiscal decisions; conversely, temporary grants support revenue-based fiscal adjustments by osting revenue and domestic borrowing to cover increased debt service payments and current expenditures, thereby reducing public investment. Permanent loans promote investment and domestic borrowing but reduce current spending, without affecting tax revenues and debt service payments. Permanent grants, on the other hand, increase government borrowing, revenue, and overall government size. The findings suggest that aid donors should focus on grants rather than loans for heavily indebted countries and implement debt relief initiatives to prevent aid from being used solely for debt service repayment. Conditional aid should be provided to strengthen political institutions in order to reduce government size through expenditure-based fiscal adjustments. Additionally, temporary aid grants should be used for revenue-led fiscal adjustments, and permanent aid should target investment in countries with low GDP growth. |
| JEL: | D72 F35 O11 O23 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:iob:wpaper:2026.01 |
| By: | Martorano, Bruno (Maastricht Graduate School of Governance, RS: GSBE MGSoG); Metzger, Laura; Justino, Patricia; Iacoella, F. |
| Abstract: | We study whether exposure to social movements campaigning against income and gender income inequality shifts individual beliefs about inequality, reshapes preferences for redistribution, and translates into political participation in the UK. Since the Great Recession of the 2010s, the UK has seen significant growth in social movements, particularly those mobilizing against inequality. We focus on income and gender income inequality, two persistent and politically contested forms of inequality in advanced democracies like the UK. Responses to social movements can diverge sharply between them. Using observational data, we show that exposure to protests against inequality is strongly correlated with increased support for redistribution. To identify causal effects, we complement this evidence with an online experiment in which we randomly assign 1, 436 UK citizens to follow real social movement content focused on either income or gender income inequality over a two-week period on Facebook. Participants exposed to information about income inequality increase support for reducing income disparities, while those exposed to gender income inequality support targeted measures to address gender gaps. Both groups favor higher taxes on the wealthy and are more likely to take political action, including signing a petition, contacting a politician, or meeting a public official. |
| JEL: | D31 D72 H23 I38 J16 O15 |
| Date: | 2025–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2025027 |
| By: | Halling, Aske (Aarhus University); Cecchini, Mathilde (University of Southern Denmark); Grønhøj, Benedicte Omand |
| Abstract: | Research shows that frontline workers often discriminate based on race or ethnicity. However, citizens can also display discriminatory behavior—for instance, by requesting service only from workers of the same ethnic or religious background. This discrimination exercised by citizens towards frontline employees remains underexplored. Drawing on studies of citizen–state interactions, discrimination, and political ideology, we investigate when the public finds such requests acceptable. Using a vignette survey experiment with 2, 067 Danish citizens, we find that language-based requests are seen as more acceptable than those based on religion. Political ideology significantly shapes these views: right-leaning individuals are more accepting when the requester is from the ethnic majority, while left-leaning individuals are more accepting when the requester is from an ethnic minority. While these single-country findings may not generalize beyond one-to-one interactions characterized by high intimacy, they shed light on how ideology influences public attitudes toward ethnically motivated service preferences and highlight the need to further examine citizen-driven discrimination in public service settings. |
| Date: | 2025–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:gpsb6_v1 |
| By: | Despina Gavresi (DEM, University of Luxembourg); Anastasia Litina (Department of Economics, University of Macedonia) |
| Abstract: | In an era marked by repeated crises and the growing traction of populist movements, understanding the deep-rooted factors shaping EU cohesion has become increasingly urgent. This paper investigates how lifetime exposure to economic recessions influences individual attitudes toward the European Union (EU). Resorting to rich micro-data from the European Social Survey (ESS) and the Eurobarometer, we construct a detailed measure of economic hardship experienced during lifetime, capturing not just isolated downturns but the accumulated burden of multiple recessions over time. Importantly, we distinguish between various types of shocks-including output contractions, unemployment surges, consumption drops, participation in IMF adjustment programs, and the asymmetry or symmetry of crises across EU member states. We show that individuals with greater lifetime exposure to these economic shocks are more likely to distrust EU institutions, oppose further integration, vote for Eurosceptic parties, and support exiting the EU. These patterns are especially pronounced for asymmetric shocks, which disproportionately affect specific regions or countries, in contrast to symmetric shocks, which appear to foster a sense of shared fate and solidarity. A series of robustness tests-including placebo checks, heterogeneity analyses, diverse shock types and designs exploiting EU institutional structure -confirms the persistent impact of economic trauma on EU attitudes, underscoring the need to address historical recessions to safeguard cohesion and democratic legitimacy in the context of the EU. |
| Keywords: | Populism; Political attitudes; Institutional trust; OLS, Difference-in-differences |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:mcd:mcddps:2025_07 |