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on Positive Political Economics |
| By: | Salvatore Barbaro (Johannes-Gutenberg University, Germany) |
| Abstract: | Research from various disciplines has addressed the relationships between electoral systems and political polarization. The results are inconclusive. This paper systematically examines how different electoral systems either promote political polarization or render it unattractive for candidates to distinguish themselves through polarization. We assume a polarized electorate and investigate Condorcet-consistent voting procedures as well as scoring rules, both single and two-staged. |
| Keywords: | Elections, Voting Schemes, Political Polarization, Scoring Rules |
| JEL: | D71 |
| Date: | 2024–06–14 |
| URL: | https://d.repec.org/n?u=RePEc:jgu:wpaper:2411&r= |
| By: | Alabrese , Eleonora (University of Bath and QAPEC); Fetzer, Thiemo (University of Warwick, University of Bonn, ECONtribute, STICERD, CAGE, NIESR, CESifo, and CEPR.) |
| Abstract: | Do opinion polls sway turnout and shape political competition in majoritarian systems? Can they strengthen the persistence of safe seats? Analysing national opinion polls during UK general elections and the perceived safeness of constituencies, we find that pre-election polls significantly affect voter turnout. Non-competitive elections predicted by national polls suppress turnout, especially in areas with low perceived electoral competition. This reinforces the advantage of trailing parties in their strongholds, potentially fuelling party demand for safe seats that may give rise to demands for gerrymandering. This can exacerbate spatial polarization of the electoral landscape, with implications for governance regarding opinion polling. |
| Keywords: | Opinion Polls ; Closeness ; Voters Behaviour ; Firstpast-the-post ; UK general elections JEL Codes: D72 ; P16 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1494&r= |
| By: | Anna-Sophie Kurella (University of Mannheim, Germany); Salvatore Barbaro (Johannes-Gutenberg University, Germany) |
| Abstract: | Western democracies are grappling with escalating political polarization. While scholars have explored various societal and economic factors contributing to this phenomenon, the influence of the electoral system has received limited attention. In this paper, we argue that the use of the proportional representation system (PR), a common electoral approach, contributes to the rise in polarization. PR systems prioritize voters’ top preferences, allowing candidates to increase their electoral support even as the proportion of citizens strongly opposed to them grows. We formally demonstrate that PR systems incentivize candidates and parties to adopt extreme positions, a trend discouraged under the Borda count system. Using the Borda count as a benchmark, our empirical analyses with data from the Comparative Study of Electoral Systems (CSES) confirm that polarizing candidates, often positioned at ideological extremes, benefit under PR voting rules. Our study reveals an additional asymmetric effect of PR systems, which disproportionately favors right-leaning polarizing candidates. This phenomenon is attributed to the more pronounced disagreement that far-right ideology provokes among moderate and left-leaning citizens compared to radical left ideologies. |
| Keywords: | Elections, Voting Schemes, Political Polarization, Proportional Representation |
| JEL: | D71 |
| Date: | 2024–06–14 |
| URL: | https://d.repec.org/n?u=RePEc:jgu:wpaper:2410&r= |
| By: | Fabio Padovano (CREM-CNRS, Condorcet Center for Political Economy, University of Rennes 1 and DSP, Università Roma Tre, Italy); Youssoufa Sy (University of Rennes, CNRS, CREM - UMR 6211, Condorcet Center for Political Economy, F-35000 Rennes, France; and the European Doctorate in Law and Economics (EDLE), Erasmus University Rotterdam, The Netherlands.) |
| Abstract: | The Political Legislation Cycles (henceforth, PLC) theory predicts peaks of legislative production before elections, as incumbents adopt vote-maximizing strategies to secure reelection. Like for budget cycles, the presence of legislative cycles can be interpreted as quantitative evidence of a dynamic inefficiency in the agency relationship between voters and politicians. This paper presents the first panel test of PLC theory, to identify the institutional features that contribute to this inefficiency. The test exploits a brand-new dataset including the legislative activity of 19 countries, mainly from 1975 to the 2010s. The estimates show that the total number of laws decreases by 14% at the beginning of a new legislature and increases roughly by 40% near its end, when elections are held at the expected time. The magnitude of this cycle increases by 55 percentage points in PR electoral systems compared to majoritarian ones, by 45 percentage points in parliamentary governments compared to presidential ones and by at least 9 percentage points in countries with a degree of decentralization higher than the average. Finally, the level of democracy affects the PLC in a nonlinear way. |
| Keywords: | Political legislation cycles, Economic theory of legislation, Comparative institutional analysis, Negative binomial regression. |
| JEL: | C49 D72 H19 H61 H62 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:tut:cccrwp:2023-02-ccr&r= |
| By: | Aytimur, R. Emre; Suen, Richard M. H. |
| Abstract: | How does the quality of information received by voters affect political polarisation? We address this long-standing question using an election competition model in which voters have to infer an unknown state from some noisy and biased signals. Their policy preferences are shaped by the posterior belief, which is unknown to the parties when they choose their platforms. The greater the uncertainty faced by the parties, the greater the incentive to polarise. We show that better information can either promote or suppress polarisation, depending on the gap between voters' and politicians' beliefs (disagreement). We also examine the welfare implications of polarisation. |
| Keywords: | Polarisation, Voter Information, Bayesian Learning, Election |
| JEL: | D72 D80 |
| Date: | 2024–05–17 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121112&r= |
| By: | Salvatore Barbaro (Johannes-Gutenberg University, Germany); Anna-Sophie Kurella (University of Mannheim, Germany); Maike Roth (Johannes-Gutenberg University, Germany) |
| Abstract: | One of the primary goals of the social sciences is to understand the factors influencing fluctuations in support for political parties. However, the relationship between electoral outcomes and electorate preferences can be tenuous. The aggregation function’s impact on translating voters’ preferences into outcomes can vary significantly. Conversely, electoral outcomes may not accurately reflect how voters perceive winning or losing parties. Through an empirical case study, we examine short and long-term data. Our analysis reveals several key findings: Firstly, applying different electoral methods yields significantly divergent outcomes. Secondly, electoral trends do not necessarily align with voters’ perceptions of the respective parties over time. Lastly, plurality-based methods can result in seat share gains for parties even in the face of declining support. |
| Keywords: | Elections, Voting Schemes |
| JEL: | D71 |
| Date: | 2024–06–14 |
| URL: | https://d.repec.org/n?u=RePEc:jgu:wpaper:2412&r= |
| By: | Alastair Langtry; Niklas Potrafke; Marcel Schlepper; Timo Wochner |
| Abstract: | This paper presents novel empirical evidence that gambling style behaviour – which has been documented in many areas of economic decision-making – is important in politics. We show that politicians ‘gamble for re-election’ in the context of a political leader selection. To overcome challenges arising from secret ballots, we exploit unique access to leaked information on MPs’ individual decisions in a de facto vote for the 2021 leadership election of Germany’s centre-right parties. MPs are more likely to vote for a riskier candidate when faced with tougher re-election races in their constituency. Quantitatively, a 10 pp. decrease in the probability to be re-elected is associated with a 2.9 pp. increase in the likelihood to vote for the riskier candidate. These results match the predictions derived from our model of rational risk-taking. Gambling for re-election provides a new explanation for intra-party dissent and rationalises why parties may choose low quality leaders when better ones are available. |
| Keywords: | risk-taking, politicians’ behaviour, political leader selection, intra-party competition |
| JEL: | D72 D81 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11125&r= |
| By: | Lucie Coufalová (Masaryk University, Faculty of Economics and Administration, Department of Economics, Brno, Czech Republic); Michaela Kecskésová (Masaryk University, Faculty of Economics and Administration, Department of Economics, Brno, Czech Republic); Štěpán Mikula (Masaryk University, Faculty of Economics and Administration, Department of Economics, Brno, Czech Republic); Michal Ševčík (Masaryk University, Faculty of Economics and Administration, Department of Economics, Brno, Czech Republic) |
| Abstract: | This paper examines the impact of regional development on democracy building in the Czech Republic following the fall of the Iron Curtain and the autocratic communist regime in 1989. By exploiting the variation in regional development arising from the economic transition process, we identify that regional development, approximated by nighttime light intensity growth, leads to a rise in voter turnout in parliamentary elections. The heightened voter turnout is associated with increased electoral support for pro-system, pro-democratic parties, indicating that regional development facilitates democracy building. Conversely, we find no effect of regional development on the electoral support for the direct successor of the pre-1989 Communist Party. This suggests that while regional development may mitigate anti-system sentiment, it does not eliminate nostalgia for the fallen autocratic regime. |
| Keywords: | economic voting; Czech parliamentary elections; democracy building; voter turnout; economic transition; nighttime lights; regional development; communotropic voting |
| JEL: | D72 P25 O18 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:mub:wpaper:2024-04&r= |
| By: | Regula HAENGGLI FRICKER; Weil Leopold |
| Abstract: | Legitimacy is the bedrock of any democratic regime. Effective governance crucially relies on citizens’support of the political system and the decisions it produces. This study investigates how participatory budgeting as a novel form of political participation relates to legitimacy perceptions. In a conjoint vignette survey experiment, we asked respondents to rate the legitimacy of hypothetical participatory budget decision processes, relating to a Swiss local context and differing in three attributes: (1) the opportunity to introduce policy proposal (agenda-setting), (2) the opportunity to vote on a proposal according to different voting methods, (3) whether the decision is in line with the respondent’s policy preferences or not. We find that participation in agenda-setting, (preferential) voting, and outcome favorability significantly increase the perceived legitimacy of participatory udgeting processes. However, our findings suggest that novel participation opportunities do not alleviate the difference in perceived legitimacy between the winners and losers created by policy decisions. |
| Keywords: | Legitimacy, Democratic Innovations, Participatory Budgeting, Voting Methods, Decision-marking |
| Date: | 2023–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:fri:fribow:fribow00532&r= |
| By: | Mona Förtsch |
| Abstract: | Do changes in public infrastructure impact voter turnout? After reunification numerous high schools have been closed in East Germany. Difference-in-differences estimations show that high school closures between 1992 and 2010 triggered a decline in voter turnout in the following state election, suggesting a sense of resignation among voters. However, this effect is not mirrored in national elections, indicating that voters do not extend their frustration to a higher level. The decline in voter turnout in state elections is rather short-living. This suggests that while voters may initially react to changes in local public infrastructure, they demonstrate resilience, at least in the medium term. |
| Keywords: | Local schools, Voter turnout, Resilience, Germany, Elections |
| JEL: | D72 H40 R10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ifowps:_411&r= |
| By: | Diegmann, André (IWH Halle); Pohlan, Laura (Institute for Employment Research (IAB), Nuremberg); Weber, Andrea (Central European University) |
| Abstract: | We study how connections to German federal parliamentarians affect firm dynamics by constructing a novel dataset to measure connections between politicians and the universe of firms. To identify the causal effect of access to political power, we exploit (i) new appointments to the company leadership team and (ii) discontinuities around the marginal seat of party election lists. Our results reveal that connections lead to reductions in firm exits, gradual increases in employment growth without improvements in productivity. The economic effects are mediated by better credit ratings while access to subsidies or procurement contracts are documented to be of lower importance. |
| Keywords: | politicians, firm performance, identification, political connections |
| JEL: | O43 L25 D72 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17031&r= |
| By: | Arija Prieto, Pablo; Antonini, Marcello; Ammi, Mehdi; Genie, Mesfin; Paolucci, Francesco |
| Abstract: | The COVID-19 pandemic is one of the most significant public health crises in modern history, with considerable impacts on the policy frameworks of national governments. In response to the pandemic, non-pharmaceutical interventions (NPIs) and mass vaccination campaigns have been employed to protect vulnerable groups. Through the lens of Political Budget Cycle (PBC) theory, this study explores the interplay between incumbent electoral concerns and political dynamics in influencing the implementation of NPIs and vaccination rollout within the administrative regions of Italy and Spain during the period spanning June 2020 to July 2021. The results reveal that incumbents up for the next scheduled election are 5.8 % more likely to increase the stringency of containment measures than those that face a term limit. The findings also demonstrate that the seats of the incumbent and coalition parties in parliament and the number of parties in the coalition have a negative effect on both the efficiency of the vaccination rollout and the stringency of NPIs. Additionally, the competitiveness of the election emerges as an important predictor of the strictness of NPIs. Therefore, our results suggest that incumbents may strategically manipulate COVID-19 policy measures to optimize electoral outcomes. The study underscores the substantive influence of political incentives, competitive electoral environments, and government coalitions on policy formulation during health emergencies. |
| Keywords: | COVID-19 policy responses; electoral competitiveness; Italy; non-pharmaceutical Interventions; political budget cycle theory; Spain; vaccine rollout |
| JEL: | D72 I18 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123715&r= |
| By: | Bergh, Andreas (Research Institute of Industrial Economics (IFN)); Kärnä, Anders (Sveriges Riksbank) |
| Abstract: | Populist parties have grown rapidly in popularity in most European countries, and are increasingly common in government coalitions. Analyzing 183 populist parties in 33 European countries from 1980 to 2021, we estimate the average effect of being in government on election results. On average, we find a post-power penalty at about 6 percentage points for populist parties lose about in the election after being part of the government. The size of the post-power penalty does not vary with growth, inequality, social spending, globalization, or unemployment during their term. Our results suggest that populist parties thrive when they can channel voters’ negative sentiments without having the responsibility of governing. |
| Keywords: | Electoral competition; Populism; Political parties |
| JEL: | P16 |
| Date: | 2024–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1491&r= |
| By: | Mehic, Adrian (Research Institute of Industrial Economics (IFN)) |
| Abstract: | This paper examines the electoral impact of increased foreign tourism, using data from Croatia. Exploiting exogenous variation in travel times to coastal municipalities from improved road infrastructure, I show that foreign tourism reduces nationalist voting and increases the center-left vote share. This effect is partly due to manufacturing spillovers and demographic shifts within municipalities. Further complementing these findings, individual-level survey data indicates that workers within the hospitality sector are more likely to hold left-wing views. I further show that this is likely driven by economic concerns, rather than the diffusion of socially liberal views. |
| Keywords: | Infrastructure; Tourism; Voting; Nationalism |
| JEL: | D72 F63 L83 O18 Z32 |
| Date: | 2024–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1490&r= |
| By: | Bown , Chad P. (Peterson Institute and Centre for Economic Policy Research); Conconi, Paola (Oxford University); Erbahar , Aksel (Erasmus University Rotterdam and Tinbergen Institute); Trimarchi, Lorenzo (Université de Namur) |
| Abstract: | This paper shows that the Electoral College system used to elect presidents of the United States (US) distorts US federal policies in favor of key industries in swing states. Using detailed data on US trade policies during the past few decades, we find that the level of trade protection granted to an industry during a presidential term depends on its importance in expected swing states in elections at the end of that term. Crucially, swing-state politics only matters during first terms, when the incumbent president can be reelected. We next examine the effects of politically motivated trade protection, exploiting exogenous changes in the identity of swing states across terms and heterogeneous exposure to these political shocks across industries. We find that swing-state politics generates winners and losers: it fosters growth in protected industries, but hampers growth in downstream industries. |
| Keywords: | Electoral College; swing states; trade protection; supply chains |
| JEL: | D72 D78 F13 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0729&r= |
| By: | Piero Stanig; Italo Colantone; Gianmarco Ottaviano |
| Abstract: | Is there a popular backlash against globalization? When did it start and in which forms? What do we know about its causes? We address these questions in the context of advanced democracies. We see the “globalization backlash” as the political shift of voters and parties in a protectionist and isolationist direction, with substantive implications on governments’ leaning and enacted policies. We discuss the empirical evidence on the backlash. We develop a theoretical discussion within the framework of the crisis of embedded liberalism. We nest within this framework theoretical results from international economics showing how the backlash may arise within standard trade models when considering the “social footprint” of globalization. These theoretical insights are consistent with available empirical evidence pointing to the role of globalization as a driver of the backlash. Yet, globalization is only one of the drivers of the backlash. There are other economic factors playing a similar role, such as technological change, fiscal austerity, and immigration. Moreover, cultural concerns such as status-threat, authoritarianism, and nativism do play a relevant role, with a significant interplay with economic drivers. This calls for a broad and comprehensive approach to the backlash, both from an academic and from a policy making perspective. Classification-JEL Keywords |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp24226&r= |
| By: | Hanyuan Jiang |
| Abstract: | In the study of the Political Resource Curse (Brollo et al., 2013), the authors identified a new channel to investigate whether the windfalls of resources are unambiguously beneficial to society, both with theory and empirical evidence. This paper revisits the framework with a new dataset. Specifically, we implemented a regression discontinuity design and difference-in-difference specification |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2405.19897&r= |
| By: | Veselov, Dmitry (Higher School of Economics (HSE)); Yarkin, Alexander |
| Abstract: | Industrial policies, such as infrastructure investments and export tariffs, affect the allocation of labor and incomes across sectors, attracting substantial lobbying efforts by special interest groups. Yet, the link between structural change and lobbying remains underexplored. Using more than 150 years of data on parliamentary petitions in USA and Britain, we measure historical lobbying and document several stylized facts. First, lobbying over industrial policies follows a hump-shaped path in the course of structural change, while agricultural lobbying steadily declines. Second, big capitalists (manufacturers, merchants) are most active in lobbying for industrialization. Third, industrial concentration increases progressive lobbying, while concentrated landownership slows it down. We explain these patterns in a simple model of structural change augmented with a heterogeneous agents lobbying game. Model simulations match the dynamics of structural change, inequality, and lobbying for industrialization in the British data. |
| Keywords: | political economy, structural change, lobbying, wealth distribution, growth |
| JEL: | D33 D72 N10 N41 O14 O41 O43 P00 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17045&r= |
| By: | Busemeyer, Marius R.; Giger, Nathalie; Wehl, Nadja |
| Abstract: | In this paper, we focus on individuals' perceptions of their own position within the income distribution and argue that ideological biases influence these perceptions. In particular, we take into account the two-dimensional ideological space of European party systems and develop arguments about social class mis-identification (economic dimension) and cultural threat and privilege (cultural dimension) leading to either over- or underestimation. We use novel survey data from the Konstanz Inequality Barometer (2020 and 2022) and find that socially conservative individuals are more likely to underestimate their relative income position, i.e. they perceive themselves to be worse off than they are. By contrast, individuals with a rightist position on the economic ideology are more likely to overestimate their relative position. These biases have downstream consequences for electoral behavior as well. Our findings have important consequences for our understanding of individuals' perceptions of inequality but also, more broadly, for the politics of redistribution. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cexwps:297972&r= |
| By: | Dmitry Veselov (National Research University Higher School of Economics); Alexander Yarkin (Brown University) |
| Abstract: | Industrial policies, such as infrastructure investments and export tariffs, affect the allocation of labor and incomes across sectors, attracting substantial lobbying efforts by special interest groups. Yet, the link between structural change and lobbying remains underexplored. Using more than 150 years of data on parliamentary petitions in USA and Britain, we measure historical lobbying and document several stylized facts. First, lobbying over industrial policies follows a hump-shaped path in the course of structural change, while agricultural lobbying steadily declines. Second, big capitalists (manufacturers, merchants) are most active in lobbying for industrialization. Third, industrial concentration increases progressive lobbying, while concentrated landownership slows it down. We explain these patterns in a simple model of structural change augmented with a heterogeneous agents lobbying game. Model simulations match the dynamics of structural change, inequality, and lobbying for industrialization in the British data. |
| Keywords: | political economy, structural change, lobbying, wealth distribution, growth |
| JEL: | D33 D72 N10 N41 O14 O41 O43 P00 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hig:wpaper:266/ec/2024&r= |
| By: | Marcel Caesmann; Janis Goldzycher; Matteo Grigoletto; Lorenz Gschwent |
| Abstract: | The spread of propaganda, misinformation, and biased narratives from autocratic regimes, especially on social media, is a growing concern in many democracies. Can censorship be an effective tool to curb the spread of such slanted narratives? In this paper, we study the European Union's ban on Russian state-led news outlets after the 2022 Russian invasion of Ukraine. We analyze 775, 616 tweets from 133, 276 users on Twitter/X, employing a difference-in-differences strategy. We show that the ban reduced pro-Russian slant among users who had previously directly interacted with banned outlets. The impact is most pronounced among users with the highest pre-ban slant levels. However, this effect was short-lived, with slant returning to its pre-ban levels within two weeks post-enforcement. Additionally, we find a detectable albeit less pronounced indirect effect on users who had not directly interacted with the outlets before the ban. We provide evidence that other suppliers of propaganda may have actively sought to mitigate the ban's influence by intensifying their activity, effectively counteracting the persistence and reach of the ban. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.03393&r= |