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on Positive Political Economics |
| By: | Campa, Pamela (Stockholm School of Economics); Saygin, Perihan (Autonomous University of Barcelona); Tumen, Semih (Amazon) |
| Abstract: | How can women's representation improve in countries that do not embrace legislated gender quotas? We study municipal elections in Turkey during 2009-2019. A conservative dominant party, Erdogan's AKP, is often challenged by a Kurdish party that promotes gender equality in electoral lists. Exploiting within-municipality variation, we find that the Kurdish party winning leads AKP to increase its share of female candidates by 25 to 30% in the next election. Other opposition parties winning has a substantially lower impact. Our results suggest that one party empowering women can help reducing gender gaps in lists across-the-board. |
| Keywords: | women political representation, electoral competition |
| JEL: | D72 J16 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17386 |
| By: | Rivera, Eduardo (MIT); Seira, Enrique (MSU); Jha, Saumitra (Stanford U) |
| Abstract: | Democratic values are eroding just as citizens perceive increasing corruption, with numerous cases implicating the highest-level politicians. Could perceived increases in apex corruption be weakening democracy? We first present event study analyses of more than 170 high-profile corruption scandals involving some of the most prominent politicians in 17 Latin American countries. We show that in the aftermath of such apex corruption scandals, support for democracy falls by 0.07ð ‘ ð ‘‘, support for authoritarianism rises by 11% and violent protests rise by 70%. We complement these results with a field experiment in Mexico. Randomized exposure to footage of apex corruption scandals, particularly implicating politicians known for their anticorruption platforms, decreases individuals’ support for democracy by 0.15ð ‘ ð ‘‘, willingness to trust politicians and neighbors in incentivized games by 18% and 11%, volunteering as election observers by 45%, and actual voter turnout by about 5ð ‘ ð ‘ , while raising stealing from local mayors by 4%. The undermining of democratic values produces latent effects that even cumulate four months later. Seeking solutions, priming national identity proved an unsuccessful antidote, but providing exposure to national stock index funds holds some promise. |
| JEL: | C72 C93 D02 D72 D73 D91 K42 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:4166 |
| By: | Philipp Denter |
| Abstract: | Two office-driven politicians compete in an election by proposing policies. There are two possible states of the world: climate change is either mild, with no lasting effect on welfare if addressed properly, or severe, leading to reduced welfare even with appropriate measures. Voters receive signals about the state but may interpret them in a non-Bayesian way, holding motivated beliefs. An equilibrium always exists where voters ignore signals suggesting severe consequences, causing politicians to propose policies for mild climate change -- even when they know otherwise. If severe climate change leads to only moderate welfare losses, another efficient equilibrium exists. In this equilibrium, voters trust politicians to choose the optimal policies, implying voters choose to trust their signals, which in turn encourages optimal policy choices by politicians. The model highlights the role of political rhetoric and trust in government, and a first glance at the data reveals patterns consistent with the models predictions. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.20982 |
| By: | Nandwani, Bharti; Roychowdhury, Punarjit |
| Abstract: | This paper examines whether granting property inheritance rights to women improves their participation in politics as election candidates in India. In patriarchal societies like India, conservative gender norms often discourage women from active political engagement, reinforced by social sanctions for non-compliance. Additionally, political involvement demands significant time and financial resources, making it particularly challenging for women. Enhancing property rights has the potential to financially empower women, alleviating both social and economic constraints. Using state-level variation in legal changes to women's property rights and leveraging large-scale administrative data on elections in India, we find that improved property rights lead to a rise in female candidacy and an increased likelihood of electoral success for women. We also observe that regional parties field more female candidates, and there is a notable increase in the entry of 'new' female candidates post-reform. Furthermore, using extensive household survey data, we show that this rise in political participation is driven by improvements in women's financial autonomy, education, and economic awareness following the inheritance reforms. Our analysis confirms that these results are not confounded by pre-existing trends and are robust to treatment effect heterogeneity. |
| Keywords: | Gender, India, Female Political Participation, Property Rights |
| JEL: | J16 D72 K11 O12 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1517 |
| By: | Lottie Field |
| Abstract: | This paper produces the first cross-country comparable, scalable method of categorising organisations as political or bureaucratic. I use this method to construct new data on the politicisation of organisations designing industrial policy in 116 countries. Thus, this paper produces the first systematic global analysis of the politicisation of industrial development organisations. I produce the following four stylised facts. First, industrial policymaking is predominantly political. Over 60% of the industrial policy organisations in my data are run by politicians. Second, lower-income countries use a higher proportion of political organisations to do their industrial policy. Third, there is great variation in the proportion of political organisations in each policy area. Politicians run 30% of Export Import and Central banks. Politicians run 60% of organisations focused on primary commodities. Fourth, the proportion of organisations run by bureaucrats is positively and statistically significantly correlated with several measures of bureaucratic quality. This relationship is robust to controlling for the number of industrial policy organisations and GDP per capita. |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:oxf:wpaper:1055 |
| By: | Mitchell Linegar; Betsy Sinclair; Sander van der Linden; R. Michael Alvarez |
| Abstract: | Large Language Models (LLMs) can assist in the prebunking of election misinformation. Using results from a preregistered two-wave experimental study of 4, 293 U.S. registered voters conducted in August 2024, we show that LLM-assisted prebunking significantly reduced belief in specific election myths, with these effects persisting for at least one week. Confidence in election integrity was also increased post-treatment. Notably, the effect was consistent across partisan lines, even when controlling for demographic and attitudinal factors like conspiratorial thinking. LLM-assisted prebunking is a promising tool for rapidly responding to changing election misinformation narratives. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.19202 |
| By: | Casey, Katherine (Stanford U); Glennerster, Rachel (U of Chicago) |
| Abstract: | Why are there few debates in low-information elections where they have the greatest potential to inform vote choices? Consistent with weak incentives to reveal their quality or make policy commitments, we find only a quarter of Parliamentary candidates in Sierra Leone privately volunteer to debate. Publicizing their choices through guaranteed dissemination platforms allows voters to punish those who abstain and sharply increases participation. Randomly improving platform quality induces frontrunners to join. We document high voter willingness to pay to access debates and private sector interest in disseminating them, confirming that candidate reluctance and not market viability is the main barrier. |
| JEL: | D72 O12 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:4178 |
| By: | Bitton, Gal; Treger, Clareta |
| Abstract: | Affective polarization—interpersonal animus between political rivals—is a growing global concern. Existing research shows it affects a-political domains, influencing residential, relational, financial, and labor market choices. This study explores whether political rivalry in a polarized era spills over to another non-partisan domain: welfare provision. We examine whether political biases shape perceptions of welfare deservingness, typically guided by effort cues and political ideology. Using the Israeli 2023 judicial reform crisis as a case study, we conducted a pre-registered experiment among Israelis, manipulating the effort cues and political affiliations of hypothetical welfare recipients. We find that while motivated recipients are generally seen as more deserving, political biases significantly skew these evaluations. Out-group recipients are viewed as less deserving than in-group members. Additionally, motivation bears a higher reward for recipients absent political cues, as compared to both in- and out-group motivated recipients. The study highlights the societal risks of escalating political divisions. |
| Date: | 2024–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:upqs8 |
| By: | Batabyal, Amitrajeet; Beladi, Hamid |
| Abstract: | We analyze how a permanent shift in political power in a region that is creative a la Richard Florida affects tax policy and economic outcomes. There are three groups of individuals in our region: laborers or workers, creative class members or entrepreneurs, and the elites. The elites initially hold political power but then they lose it to the creative class. We describe the Markov perfect equilibrium of the political game between the above three groups. Specifically, we first derive the optimal taxes that are levied on the elites and on the creative class, by the creative class. Next, we compute the discounted utility of the elites when the creative class holds political power and compare this to their utility when they are in control of politics. |
| Keywords: | Creative Class, Elite, Entrepreneur, Political Game, Tax Policy |
| JEL: | H21 R11 |
| Date: | 2024–06–08 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122595 |
| By: | Nadja Dwenger; Ingrid Hoem Sjursen; Jasmin Vietz |
| Abstract: | Many societies aim to design policies based on meritocratic fairness, which involves two principles: (i) paying individuals with equal performance equally (fair equality) and (ii) paying individuals with higher performance more (fair inequality). Yet, often it is impossible to respect both simultaneously. This paper provides novel evidence on the importance individuals attach to each principle from a large-scale experiment in the United States. We document large heterogeneity in preferences. Individuals incur substantial personal costs to implement their preferred principle. Republican supporters are more likely to prefer fair inequality. The findings offer insights into the political economy of redistribution and public policy design. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11289 |
| By: | Shapeng Jiang; Lijia Wei; Chen Zhang |
| Abstract: | In recent years, large language models (LLMs) have attracted attention due to their ability to generate human-like text. As surveys and opinion polls remain key tools for gauging public attitudes, there is increasing interest in assessing whether LLMs can accurately replicate human responses. This study examines the potential of LLMs, specifically ChatGPT-4o, to replicate human responses in large-scale surveys and to predict election outcomes based on demographic data. Employing data from the World Values Survey (WVS) and the American National Election Studies (ANES), we assess the LLM's performance in two key tasks: simulating human responses and forecasting U.S. election results. In simulations, the LLM was tasked with generating synthetic responses for various socio-cultural and trust-related questions, demonstrating notable alignment with human response patterns across U.S.-China samples, though with some limitations on value-sensitive topics. In prediction tasks, the LLM was used to simulate voting behavior in past U.S. elections and predict the 2024 election outcome. Our findings show that the LLM replicates cultural differences effectively, exhibits in-sample predictive validity, and provides plausible out-of-sample forecasts, suggesting potential as a cost-effective supplement for survey-based research. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.01582 |
| By: | Hans Gersbach; Kremena Valkanova |
| Abstract: | This paper introduces Voting with Random Proposers (VRP) procedure to address the challenges of agenda manipulation in voting. In each round of VRP, a randomly selected proposer suggests an alternative that is voted on against the previous round's winner. In a framework with single-peaked preferences, we show that the VRP procedure guarantees that the Condorcet winner is implemented in a few rounds with truthful voting, and in just two rounds under sufficiently symmetric preference distributions or if status quo positions are not extreme. The results have applications for committee decisions, legislative decision-making, and the organization of citizens' assemblies and decentralized autonomous organizations. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.20476 |
| By: | Abel François; Nicolas Lagios; Pierre-Guillaume Méon |
| Abstract: | We estimate the causal effect of the electoral system on corruption by leveraging a specificity of the French electoral law where the electoral system for municipal councils depends on municipal population. Specifically, municipalities with fewer than 1, 000 inhabitants use an individual majority system, while those above this threshold use a proportional list system. Exploiting that discontinuity in a regression discontinuity design and using survey and actual corruption data, we find that the proportional list system results in higher levels of perceived and actual corruption than the individual majority system. |
| Keywords: | corruption, electoral systems, local government |
| JEL: | D72 D73 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11328 |
| By: | Mills, Stuart; Whittle, Richard |
| Abstract: | The UK Behavioural Insights Team transformed nudging and behavioural economics from nascent ideas to key policy tools for the UK Coalition Government. This article argues that political economic circumstances significantly contributed to the success of this ‘nudge’ programme. The Global Financial Crisis (GFC) created a ‘contest of authority’ over dominant policy approaches. By framing the crisis as a crisis of rationality, behavioural perspectives gained political support. The GFC also saw that the UK Government (from 2010) adopt a programme of fiscal austerity. Nudging complemented this programme by suggesting effective policy could be made cheaply. Using various accounts of nudging in the UK from those involved in its development, we demonstrate the role of the country’s political economy in the behavioural turn. We conclude by reflecting on the role of behavioural insights today, given a political–economic landscape much changed since 2010. |
| Keywords: | austerity; behavioural economics; nudge; political economy |
| JEL: | D90 |
| Date: | 2024–10–25 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126042 |
| By: | Dobbels, Gregory; Tavakalov, Suren |
| Abstract: | We provide evidence that local preferences for neighborhood characteristics play an important role in shaping the political economy of residential land-use regulations and their distributional consequences. We leverage a land-use regulation reform in Houston, TX that reduced the minimum lot size---permitting denser single-family housing---while allowing incumbent property owners on individual city blocks to opt out of the change and adopt higher alternative minimum lot sizes. Initially wealthier, whiter neighborhoods were more likely to opt out and adopt higher minimum lot sizes after the reform. Supply of denser housing increased in areas that did not opt out. We develop a model where incumbents set minimum lot size. Incumbents trade off potential gains from redevelopment and local spillovers from housing density. The local nature of block-level regulatory decisions allows us to distinguish between preferences for neighborhood density and alternative political economy motives for regulation. Model estimates reveal large, negative local externalities from density that vary across incumbent socio-economic groups. Our results suggest that local control can tailor regulation to heterogeneous incumbent preferences, possibly making reform more politically feasible. However, doing so will likely limit supply in areas where housing demand is the highest. |
| Keywords: | Urban Economics; Housing Economics; Inequality |
| JEL: | R12 R13 R14 R3 R30 R31 R38 |
| Date: | 2024–05–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122679 |
| By: | Harstad, Bard (Stanford U); Kessler, Anke (Simon Fraser U) |
| Abstract: | We study how international agreements can take advantage of domestic time-inconsistency problems in the context of environmental policies. For example, policymakers will prefer future policies to be sustainable, but find it tempting to raise consumption when being in office. We find the equilibrium number of signatory countries to be higher than when preferences are time consistent, especially when the political environment is unstable and polarized, and the international spillovers are limited. In contrast to the traditional literature, the model can also explain why countries sign conventions with mandates that do not vary with the coalition size. |
| JEL: | F53 H87 Q54 Q58 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecl:stabus:4210 |
| By: | Marina Azzimonti-Renzo; Nirvana Mitra |
| Abstract: | We examine how the post-pandemic trajectory of risk-free rates—from historically low levels in 2020 to a steep rise in 2022—affects sovereign debt management and default risk in emerging markets (EMs). Using a dynamic political economy model, we show that weak institutional environments with political incentives to engage in corruption spending lead to over-borrowing and increased default risk, especially during low-rate periods. As rates rise, EMs face high risks of default or the need for austerity programs, depending on the severity of productivity shocks. While International Financial Institution (IFI) lending provides short-term relief, it can fuel moral hazard and corruption. Making IFI loans contingent on anti-corruption efforts reduces default risk. However, even full monitoring cannot eliminate the incentives for fiscal mismanagement, as governments may still over-borrow during favorable periods without addressing sustainability. We also find that Quantitative Performance Criteria (QPC), such as a debt-ceiling rule, are less effective as they leave room for corruption that creates default risk and can generate welfare losses relative to a scenario without IFI debt. |
| Keywords: | Sovereign Debt Crises; Institutions; Corruption; Sovereign Default; IFI loans; Emerging Markets |
| JEL: | D72 E43 F34 E62 F41 |
| Date: | 2024–10–25 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedrwp:99074 |
| By: | Kronauer, Martin |
| Abstract: | The paper directs attention to the rise of the extreme Right in the context of political and social changes within European societies during the last forty years. This brings the legacy of neoliberalism into focus. The author holds that neoliberalism and the rise of the extreme Right are linked in two ways: neoliberalism in itself is an antidemocratic and socially destructive political project, and by undermining social foundations of citizenship, it paved the way for the extreme Right. The latter exploits social fears rooted in societies that ever more drift apart. |
| Keywords: | Neoliberalism, policy, inequality, citizenship, extreme Right |
| JEL: | E65 F66 F68 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:305269 |