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on Positive Political Economics |
| By: | Francesco Fasani (University of Milan, CEPR, CReAM, RF-Berlin and IZA); Simone Ferro (University of Milan); Alessio Romarri (Department of Applied Economics, Universitat Autònoma de Barcelona, IEB and RF-Berlin); Elisabetta Pasini (Alma Economics) |
| Abstract: | This paper provides the first causal evaluation of the political impact of asylum seekers in the UK. Although they are dispersed across areas on a no-choice basis, political bargaining between central and local governments introduces potential endogeneity in their allocation. We address this concern with a novel IV strategy that exploits predetermined public-housing characteristics. Focusing on 2004-2019, we estimate a sizeable increase in the Conservative-Labour vote share gap in local elections: a one within-area standard deviation increase in dispersed asylum seekers widens the gap by 3.1 percentage points in favour of the Conservatives. We observe a similar shift to the right in national elections and longitudinal survey data on voting intentions, along with an increase in the Leave vote in the Brexit referendum. Electoral gains are observed for UKIP as well, although this finding is less robust. No effect is detected for non-dispersed asylum seekers, who forgo subsidised housing and make independent residential choices. Turning to mechanisms, voters move to the right without becoming more hostile towards foreigners. Leveraging the universe of MPs' speeches, we show that representatives from more exposed areas emphasise asylum and migration more, with no systematic change in tone or content. This heightened salience appears to shape voters' choices, with Conservative MPs particularly effective at channelling discontent. |
| Keywords: | Refugees; Elections; Brexit; MP speeches. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2520 |
| By: | Kröper, Marius |
| Abstract: | This paper studies the long-run effects of non-strategic administrative failures on voter participation. I exploit a natural experiment from Berlin's 2021 elections, in which hundreds of precincts experienced ballot shortages, multi-hour queues, and unlawful polling closures. Using precinct-level administrative data and a stacked event study design, I show that precincts exposed to administrative failures in the 2021 Berlin election experienced a 1.8 percentage points (2.4\%) decline in turnout across three subsequent elections over the next four years. The drop is concentrated in in-person voting and only partially offset by increases in postal participation in subsequent elections. Effects are largest among young voters, welfare recipients, and residents with migration backgrounds. Survey evidence suggests two mechanisms: disrupted civic habit formation and short-term erosion of institutional trust. |
| Keywords: | State Capacity, Voter Turnout, Voting Costs, Administrative Failure |
| JEL: | D72 H11 H70 R50 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:tudcep:333402 |
| By: | Matteo Gamalerio (University of Barcelona); Massimo Morelli (Bocconi University); Margherita Negri (University of St Andrews) |
| Abstract: | We show that polities using plurality rule to elect their policymakers are more likely to adopt more restrictive immigration policies than those using dual-ballot systems. Plurality rule provides stronger incentives for right-wing, anti-immigrant parties to run alone, as opposed to joining a coalition with other right-wing parties that offer a less restrictive immigration policy. We prove the result theoretically and empirically. Our theoretical results hold with sincere and strategic voters, with and without endogenous turnout, and can be extended to the comparison between plurality rule and proportional representation without majority bonuses in parliamentary elections. Empirically, we combine municipal-level data on migration-related expenditures and mayoral elections and establish causality using a regression discontinuity design. |
| Keywords: | electoral rules; immigration; salience |
| JEL: | D72 J24 J61 R23 |
| Date: | 2025–11–24 |
| URL: | https://d.repec.org/n?u=RePEc:san:econdp:2503 |
| By: | Kerndl, Benedikt |
| Abstract: | This study examines whether there are common economic characteristics shared by populists upon assuming power and investigates the impact of these policies on the economy. The research focuses on four key characteristics associated with populism: Protectionism and Globalization, The Economics of Migration, Macroeconomics, and The Democratic Status. The paper finds that populist leaders, especially right-wing populists, exhibit xenophobic rhetoric and pursue policies of economic and migratory nationalism and protectionism. Additionally, countries governed by populists tend to experience adverse economic outcomes, including declines in real GDP, high levels of debt, and erosion of democratic institutions such as an independent judiciary, quality of elections, and freedom of the press and media. A case study on Donald Trump's presidency reveals that his macroeconomic agenda closely aligns with typical populists and right-wing populists. His trade and migration policies reflect protectionism and prioritize domestic workers' concerns, while his behavior as president affected the democratic institutions of the United States. The research underscores the need for further comprehensive investigations into the economic implications of populism. |
| Keywords: | Populism, Right-Wing Populism, USA, U.S. Economy, Donald Trump, Economic Populism |
| JEL: | P16 E65 F13 J61 D72 H63 O43 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:333420 |
| By: | Darius, Philipp (Hertie School); Drews, Wiebke; Neumeier, Andreas; Riedl, Jasmin |
| Abstract: | Social media platforms play an increasingly important role in political campaigning, enabling parties to bypass traditional media and mobilize support directly. While prior research highlights the online prominence of far-right and radical populist actors, most studies are limited to single platforms or national contexts. This study presents the first cross- platform and cross-national analysis of digital campaign communication by 401 parties across all 27 EU member states during the 2024 Euro- pean Parliament election. Using data from Facebook, Instagram, TikTok, X/Twitter, and YouTube, we examine party activity and audience engage- ment. By linking digital trace data with expert surveys, we test whether populist radical right parties disproportionately succeed in raising engage- ment online. Our findings confirm strong platform-specific advantages of radical populist parties, particularly on TikTok, YouTube and Facebook. We also observe high engagement for far-left populist parties with similar emotional and anti-elitist communication strategies. The more Eurosceptic positions a party holds, or the more frequently experts describe them to use emotional appeals or anti-elitist communication, the more audience engagement they received across several platforms. Overall the findings emphasize a disproportionate online support for radical populist parties across the European Union. |
| Date: | 2025–11–24 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:42vfx_v1 |
| By: | Gabriel Ehrlich; Owen Kay; Aditi Thapar |
| Abstract: | We use close parliamentary elections as natural experiments to estimate the debt sensitivity of interest rates. Relative to an election in which one party barely secures a majority, an election in which no party achieves a majority causes the debt-to-GDP ratio to increase by 17 percentage points, while real interest rates rise by 99 basis points. If elections only impact real rates via debt, our results imply that a one percentage point increase in the debt-to-GDP ratio causes a 5.8 basis point increase in real rates, larger than most previous estimates and suggesting potential reverse causality from rates to debt. |
| Keywords: | national debt; real interest rates; crowding out; regression discontinuity design |
| JEL: | E62 H63 |
| Date: | 2025–11–17 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:102173 |
| By: | Alleman, James; Liebenau, Jonathan |
| Abstract: | When and why did the founders and investors of the most successful digital economy companies use their wealth, influence, and "megaphone" in the political arena to further extreme conservative policies – when and why did Silicon Valley turn right? The position of a few far-right individuals such as Peter Thiel and his associates have long been understood but the ability of the American tech sector to foster a long-term rightist agenda has become much more apparent in recent years. Here we focus on two major policy failures that fostered the turn to the right, a consequence of the Telecom Act of 1996 and the application of Justice Robert Bork's principles of competition. After a brief overview, we review the internet's initial promise to become a force for public good, minority and diverse interests, individual and social welfare and its subsequent abject failure to fulfil much of that promise. We will then address how and why the internet is a threat to democracy by virtue of the ways in which it has taken the turn to the right. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itse25:331247 |
| By: | Yan, Shunyao (Santa Clara University - Marketing); Miller, Klaus M. (HEC Paris) |
| Abstract: | We study how polarizing content shapes two economic outcomes on a major European news website: engagement (time on site) and commitment (paid subscriptions). Using advances in natural language processing, we construct deep-learning and large-language-model-based textual measures of polarization tailored to a multiparty system. We combine comprehensive supply and demand data-the full publisher-wide article inventory with user-level clicks and subscription outcomes-to track how consumers interact with polarizing articles. To identify causal effects, we use two theoretically distinct instruments: (i) a Bartik-style design that interacts users' stable topic preferences with weekly shifts in the supply of polarizing content; and (ii) an election shock that raises political salience for a subset of readers. We document a "polarization trap": exogenous increases in exposure to polarizing content raise engagement (time on site) but reduce the probability of subscribing. The negative subscription effect is driven more by the affective than the ideological dimension of polarization and is strongest during high-salience political periods. These results imply a strategic trade-off for publishers: content that maximizes short-run attention can undermine the formation of a loyal, paying subscriber base. |
| Keywords: | Polarization; Subscriptions; Online Media; News Consumption; Instrumental Variables; Natural Language Processing |
| JEL: | M00 |
| Date: | 2025–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1585 |
| By: | Gemma Dipoppa; Annalisa Pezone |
| Abstract: | All states adopt systems to surveil political activists. How do they decide whom to watch and why? We study the logic of state surveillance using the first complete individual-level database of those monitored by a state — 152, 000 Italians born between 1816 and 1932, encompassing both democratic and authoritarian regimes. We focus on education: exploiting a discontinuous expansion in primary schooling in municipalities above a population and age threshold, we show that cohorts exposed to more years of school experienced an uptick in surveillance. The effect is largest for working classes, who were monitored for longer periods, subjected to harsher measures, and disproportionately targeted when affiliated with communist ideologies. Yet treated cohorts did not become more politically active, indicating that surveillance expanded not in reaction to increased mobilization, but as a preventive strategy rooted in fears of working-class empowerment. These findings reveal how states view educated yet excluded groups as politically threatening and prioritize their surveillance, potentially generating inequalities in groups' ability to influence political change. |
| JEL: | N43 N44 O33 O38 P00 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34492 |
| By: | Bohacek, Radim (CERGE-EI); Myck, Michal (Centre for Economic Analysis, CenEA) |
| Abstract: | We examine the consequences of political persecution under the communist regime on labor market outcomes using life history data from the Czech sample of the Survey of Health, Ageing and Retirement in Europe. The risk of persecution is instrumented using unique administrative data on the intensity of political oppression. We find strong evidence of career degradation as a consequence of persecution-driven job losses. Our estimates suggest that earnings in jobs following such a loss carried a penalty of over 60 percent that accumulated over time to substantially lower retirement benefits. We document the gravity of economic consequences for ordinary citizens persecuted by the authoritarian regime as well as effective compensating schemes implemented by democratic governments after 1989. |
| Keywords: | communist regimes, political persecution, discrimination, wage differentials, life histories |
| JEL: | J70 J31 N34 C21 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18282 |
| By: | Shang-Jin Wei; Yifan Zhou |
| Abstract: | Using transaction-level data on US congressional stock trades, we find that lawmakers who later ascend to leadership positions perform similarly to matched peers beforehand but outperform them by 47 percentage points annually after ascension. Leaders’ superior performance arises through two mechanisms. The political influence channel is reflected in higher returns when their party controls the chamber, sales of stocks preceding regulatory actions, and purchase of stocks whose firms receiving more government contracts and favorable party support on bills. The corporate access channel is reflected in stock trades that predict subsequent corporate news and greater returns on donor-owned or home-state firms. |
| JEL: | G10 P1 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34524 |
| By: | Bau, Nicolas; Dietrich, Simone |
| Abstract: | We review the literature on the political economy of foreign aid, examining the geopolitical returns generated by Official Development Assistance (ODA). Our paper identifies conditions under which donors are able to influence political and economic outcomes in recipient countries, shape their behavior in global affairs, and adjust to domestic and international challenges. First, we introduce our paper and outline the structure of our review. Second, we examine how the international system influences foreign aid motivations. Third, we discuss the literature on aid-giving practices and their geopolitical effects. Fourth, we explore the relationship between aid and international organizations. Fifth, we identify key challenges to the traditional aid architecture. Sixth, building on an emerging body of research in international development finance, we propose future directions for the study of ODA in a contested global landscape. Finally, we conclude by summarizing the main insights from our review. |
| Keywords: | foreign aid, geopolitics, foreign policy, development, international organizations, development finance, aid effectiveness |
| JEL: | F35 O19 P45 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:331878 |
| By: | Browne, Stephen; Matthys, Frederik; Palm, Detlef; Baumann, Max-Otto |
| Abstract: | This discussion paper advances a new vision for the United Nations (UN)'s development function at a moment when the organisation is facing profound pressures and persistent scepticism about its relevance. Although a consensus exists that reform is overdue, past initiatives have been too incremental, focusing on coordination and efficiency without addressing deeper institutional and political pathologies. The result is a UN development system that has grown financially large but is losing political significance. It is increasingly shaped by donor earmarking, entrenched patronage and a project delivery model that bears little resemblance to how national development actually occurs. Our vision marks a significant departure from the UN's historical role as an aid channel predicated on the North-South divide. Instead, the UN's future relevance lies in leveraging its universal legitimacy, normative authority and convening power. We argue for a UN development system that: 1. Acts as a trusted knowledge facilitator: providing high-level and technical advice, supporting peer exchange and helping governments navigate complex policy trade-offs in ways that are independent, politically informed and normatively grounded. 2. Engages in public advocacy that matters: elevating norms, correcting misinformation and shaping national debates in line with globally agreed standards, with sensitivity to national contexts. 3. Applies universality in practice: moving beyond the outdated distinction between donor and recipient to engage with all member states - including middle- and high-income countries - through global monitoring and peer accountability. 4. Serves as an actor of last resort in fragile settings: providing operational support only where national governments cannot or will not act, with strict sunset clauses and safeguards against unintentional harm. This reconceptualisation is not primarily about money. It implies a financially smaller but politically stronger UN development system that is less dependent on donors and more relevant to today's multipolar world. The real benchmark for success is not the volume of aid provided but the quality of advice, advocacy and resulting cooperation. Reaching this vision will be difficult. The UN's development apparatus is shaped by vested interests, path dependency and political inertia. Yet, opportunities for change exist. The collapse of traditional aid financing, the insistence of middle-income countries on equitable partnerships and fatigue with the current project-heavy model all point towards the need for a new approach. The Secretary-General's UN80 Initiative offers a platform for bold ideas, but only if the debate moves beyond technical fixes and acknowledges the political trade-offs inherent in transformation. |
| Keywords: | United Nations, Development, UN80, Reform, Multilateralism, Global Governance, Beyond Aid, Policy Advice, Universality, Patronage |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:diedps:333387 |
| By: | Robert Kubinec; Aseem Mahajan |
| Abstract: | In this paper, we provide a novel measure for greenwashing -- i.e., climate-related misinformation -- that shows how polluting companies can use social media advertising related to climate change to redirect criticism. To do so, we identify greenwashing content in 11 million social-political ads in Meta's Ad Targeting Datset with a measurement technique that combines large language models, human coders, and advances in Bayesian item response theory. We show that what is called greenwashing has diverse actors and components, but we also identify a very pernicious form, which we call political greenwashing, that appears to be promoted by fossil fuel companies and related interest groups. Based on ad targeting data, we show that much of this advertising happens via organizations with undisclosed links to the fossil fuel industry. Furthermore, we show that greenwashing ad content is being micro-targeted at left-leaning communities with fossil fuel assets, though we also find comparatively little evidence of ad targeting aimed at influencing public opinion at the national level. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.14930 |
| By: | Yash Prajapati |
| Abstract: | This paper examines public goods and evaluates the mechanism through the game theory. Public goods are characterized by nonexclusivity and nonrivalry and this creates fundamental challenges for allocation. We analyze why competitive markets undersupply public goods by deriving the inefficiency formally through Nash equilibrium. The paper evaluates theoretical solutions including Lindahl pricing, Clarke-Groves mechanisms, and voting schemes. The paper will cover their efficiency properties and practical limitations. We show how strategic interaction leads to free-riding behavior using roommates dilemma and other examples. We also cover why a large household lives in messy conditions not because individuals are lazy, but because they are rational players in a Nash equilibrium. We also examine voting mechanisms, the median voter theorem, and recent developments in truth-revealing mechanisms. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.15686 |