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on Positive Political Economics |
| By: | Caroline Le Pennec; Vincent Pons |
| Abstract: | We use 201,000 observations from repeated survey data in 61 elections and 9 OECD countries since 1952 to study the formation of vote choices and policy preferences in the electoral season and assess how TV debates contribute to this process. We find that the share of voters who state a pre-election vote intention corresponding to their final vote choice increases by 15 percentage points in the two months preceding the election. Changes in individual vote choices mostly result from changes in beliefs on competing candidates and in issue salience, and they generate aggregate shifts in predicted vote shares. Instead, policy preferences remain remarkably stable over time. We use an event study to estimate the impact of TV debates, and find that they affect significantly neither individual vote choice and preference formation nor aggregate vote shares. This suggests that information continuously received by voters exerts more influence on their behavior. |
| JEL: | D72 D83 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26572&r=all |
| By: | Thushyanthan Baskaran; Zohal Hessami; |
| Abstract: | While still far from parity, female representation in politics has continuously increased over the last two decades worldwide. In light of this development, we analyze whether higher female representation has substantive effects on policy choices using the example of child care – a public good arguably valued by women. We hand-collect micro-data for 224,448 candidates running in the local council elections of 2002, 2008 and 2014 across 1,632 municipalities in the German state of Bavaria. Exploiting an open-list electoral system, we run RDD regressions centered around mixed-gender races for the last council seat that accrues to a party. We find that a female victory in a mixed-gender race accelerates the expansion of public child care provision by 40%. Our main strategy to explore mechanisms uses information from hand-collected minutes of 7,721 monthly council meetings. We show that an additional woman changes “the conversation”: female councilors speak up more often and child care is discussed more frequently in the council. |
| Keywords: | female politicians, gender, political selection, child care provision, local councils |
| JEL: | D72 D78 H70 J13 J16 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8005&r=all |
| By: | Epper Thomas; Fehr Ernst; Senn Julien |
| Abstract: | Increasing inequality and associated egalitarian sentiments have again put redistribution on the political agenda. Support for redistribution may also be affected by altruistic and egalitarian preferences, but knowledge about the distribution of these preferences in the broader population and how they relate to political support for redistributive policies is still scarce. In this paper, we take advantage of Swiss direct democracy, where people voted several times in national plebiscites on strongly redistributive policies, to study the link between other-regarding preferences and support for redistribution in a broad sample of the Swiss population. Based on a recently developed non-parametric clustering procedure, we identify three disjunct groups of individuals with fundamentally different other-regarding preferences: (i) a large share of inequality averse people, (ii) a somewhat smaller yet still large share of people with an altruistic concern for social welfare and the worse off, and (iii) a considerable minority of primarily selfish individuals. Controlling for a large number of determinants of support for redistribution, we document that inequality aversion and altruistic concerns play an important role for redistributive voting that is particularly pronounced for above-median income earners. However, the role of these motives differs depending on the nature of redistributive proposals. Inequality aversion has large and robust effects in plebiscites that demand income reductions for the rich, while altruistic concerns play no significant role in these plebiscites. |
| Keywords: | Social preferences, altruism, inequality aversion, preference heterogeneity, demand for redistribution |
| JEL: | D31 D72 H23 H24 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:339&r=all |
| By: | Sarah El Khishin (Lecturer in Economics, BAEPS, The British University in Egypt); Mohamed Zaky (Lecturer in Economics, Faculty of Economics and Political Science, Cairo University) |
| Abstract: | Fiscal policy is empirically proven in many papers as procyclical in developing countries as a result of longstanding weaknesses in budgetary and political institutions. We investigate the cyclicality of fiscal policy in Egypt and the influence of budgetary and political institutions on fiscal indicators during economic cycles. We measure the cyclicality of different components of the Egyptian budget in a disaggregated manner. Golden rule violation in Egypt adversely affected fiscal aggregates and contributed to adopting a countercyclical behavior during business cycles; then a procyclical policy over the long run when debt and deficit reach uncontained levels. Moreover, common pool, principal-agent and voracity problems in Egypt have also influenced the cyclicality of fiscal policy in Egypt as they have lead into an exacerbated pressure on public expenditure during booms and recessions in the examined period. Re-adopting the Golden rule to control the current spending trends and limit discretionary fiscal interventions is recommended. In the longer term, we recommend enhancing the quality of political institutions through changing the electoral system towards a party-based, rather than an individual-based system in order to moderate opportunistic abuse of fiscal aggregates and limit political influences over the budget |
| Date: | 2019–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1351&r=all |
| By: | Kaplan, Emin Ahmet; Erul, Rana Dayıoğlu |
| Abstract: | Recent inabilities to find an escape point from the global crisis has demonstrated that multilateral institutions cannot fulfill the functions expected from them anymore. In this respect, the policies to be adopted by democratic countries are thought to be essential in the escape from global turmoil and crisis. Therefore, the objective of this study is to measure the effects of institutional and socioeconomic variables on economic growth with regard to the significance of political regime types or democracy, within a government. Thus, 85 countries in four types of political regimes were included in the analysis by the period of 1984-2015. As a result, it has been acknowledged that multilateral institutions, which have been ineffective in producing a solution, should be reassessed within the context of recent global developments, these assessments should be performed by countries within the framework of their tendencies towards democratization and developing their sociocultural infrastructures. |
| Keywords: | Globalization; global turmoil; multilateralism; democracy and economic growth; political regimes |
| JEL: | C33 O43 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98280&r=all |
| By: | Vincent Pons; Clémence Tricaud |
| Abstract: | To predict others’ behavior and make their own choices, voters and candidates can rely on information provided by polls and past election results. We isolate the impact of candidates’ rankings using an RDD in French local and parliamentary two-round elections, where up to 3 or 4 candidates can qualify for the second round. Candidates who barely ranked first in the first round are more likely to run in the second round (5.6pp), win (5.8pp), and win conditionally on running (2.9 to 5.9pp), than those who barely ranked second. The effects are even larger for ranking second instead of third (23.5, 9.9, and 6.9 to 12.2pp), and also present for ranking third instead of fourth (14.6, 2.2, and 3.0 to 5.0pp). The impact of rankings is largest when the candidates have the same political orientation (making coordination relatively more important and desirable), but it remains strong when two candidates only qualify for the second round (and there is no need for coordination). Overall, our evidence suggests that both coordination and bandwagon effects are important drivers of the behavior of candidates and voters and of election outcomes. |
| JEL: | D72 D83 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26599&r=all |
| By: | Gulzar, Saad; Rueda, Miguel R.; Ruiz, Nelson A. |
| Abstract: | How do campaign contribution limits alter the influence of donors over elected officials? We propose a model to explore this question and test its implications using data from Colombian municipalities. Using a regression discontinuity design that exploits institutional rules determining contribution limits based on population thresholds, we find that looser campaign limits reduce the number of donors per candidate and increase the average donations received by the winner of the election. Moreover, we document that donors who contributed to the winner of the election are more likely to receive contracts from the supported candidate upon taking office. These patterns suggest that looser campaign limits increase the influence of fewer individuals in campaigns. A higher influence of donors over elected officials is reflected by the fact that looser limits are associated with more kickbacks for each donor, which are awarded in a more discretionary way. |
| Keywords: | Democracia, Investigación socioeconómica, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:dbl:dblwop:1429&r=all |
| By: | Bobonis, Gustavo J.; Gertler, Paul J.; Gonzalez-Navarro, Marco; Nichter, Simeon |
| Abstract: | Political clientelism is considered a fundamental reason why politicians are not accountable and responsive to their constituencies. In this working paper, we study whether transparency initiatives – more specifically, top-down anti-corruption audits – can reduce the incidence of vote-buying and political clientelism in the context of Brazil’s municipal government anti-corruption program. This program selected municipalities at random to audit municipal finances, which allows for causal inference. We combine the audit program data for a sample of municipalities in the country’s Northeast region with a dedicated longitudinal survey we conducted in 2011-2013 of a large representative sample of impoverished rural households. This enables us to estimate short and long-term effects of the government anti corruption audits on subsequent levels of vote-buying and political clientelism. |
| Keywords: | Corrupción, Democracia, Fortalecimiento institucional, Gobernabilidad, Investigación socioeconómica, Sector público, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:dbl:dblwop:1463&r=all |
| By: | Bullock, J. |
| Abstract: | There are many journalistic and anecdotal accounts about the prevalence of electoral corrals in Brazil, geographic areas where brokers, politicians, or community leaders influence residents to vote for a specific candidate. In this paper, I investigate one particular type of suspected electoral corral: the favela, urban slum. This analysis focuses on the 1000+ favelas in the city of Rio de Janeiro, Brazil. I explore whether or not vote share is indeed more concentrated in urban slums, and then whether or not vote concentration is related to criminal dominance. I contend that politicians in Rio de Janeiro have incentives to work with criminal groups in order to get more votes, and that finding a way to access these electoral corrals may be an election-winning strategy. Using novel, geospatial data and introducing a new text dataset on criminal dominance in Rio de Janeiro, I show that vote concentration is indeed more concentrated in urban slums and, within these slums, even more concentrated in slums that have steady criminal dominance from one election to the next. |
| Keywords: | Ciencia conductual, Democracia, Desarrollo, Investigación socioeconómica, Pobreza, Violencia, Corrupción, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:dbl:dblwop:1390&r=all |
| By: | Antoine Camous; Russell Cooper |
| Abstract: | This paper studies the determination of income taxes in a dynamic setting with human capital accumulation. The goal is to understand the factors that support an outcome without complete redistribution, given a majority of relatively poor agents. In the analysis, the internal dynamics of income are not sufficient to prevent complete redistribution under majority rule without commitment. However, a political influence game across the population limits the support for expropriatory taxation and preserves incentives. In some cases, the outcome of the game corresponds with the optimal allocation under commitment. |
| JEL: | D72 D74 E62 H31 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26654&r=all |
| By: | Ying Bai; Ruixue Jia |
| Abstract: | We argue that China, with its long history, a relatively stable political system, and multiple regime changes, provides us an opportunity to investigate the political economy of administrative hierarchy. Using prefecture-level panel data and exploiting regime changes during AD1000-2000, we find that gaining and losing importance in the political hierarchy led to the rise and decline of different prefectures (measured by population density and urbanization). Moreover, political hierarchy shapes regional development via both political and market channels (reflected by public employment and transportation networks). More broadly, our study serves as new evidence on how politics shapes economic geography and offers a context to understand changes in economic activity location in the long run. |
| JEL: | H11 N95 O11 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26652&r=all |
| By: | Haoyuan Ding; Hanming Fang; Shu Lin; Kang Shi |
| Abstract: | We use China's recent anti-corruption campaign as a natural experiment to examine the (market expected) equilibrium consequences of (anti-)corruption. We argue that the announcement of inspections of provincial governments by the Central Commission for Discipline Inspection (CCDI) on May 17, 2013 represents a significant departure of past norms of anti-corruption campaigns, and thus serves a rare empirical opportunity to examine the equilibrium effects of anti-corruption campaigns for firms. We first present a conceptual framework to illustrate the channels through which anti-corruption actions can influence firms. Using an event study approach and May 17, 2013 as the event date, we find that, overall, the stock market responded positively to the announcement of strong anti-corruption actions. The announcement returns are significantly lower for luxury-goods producers, and SOES, large firms, or politically connected firms earn lower returns than private, small, or non-connected firms. We also find that existing local institutions play a crucial role in determining the announcement returns across firms. Moreover, a long-term difference-in-differences analysis shows that higher returns during the event window are associated with more subsequent entries of new firms and faster expansions of existing firms. Finally, we also provide direct evidence consistent with the endogenous grits effect. |
| JEL: | D7 D72 G34 G38 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26656&r=all |
| By: | Andre Assumpcao |
| Abstract: | This paper examines voters' responses to the disclosure of electoral crime information in large democracies. I focus on Brazil, where the electoral court makes candidates' criminal records public before every election. Using a sample of local candidates running for office between 2004 and 2016, I find that a conviction for an electoral crime reduces candidates' probability of election and vote share by 10.3 and 12.9 percentage points (p.p.), respectively. These results are not explained by (potential) changes in judge, voter, or candidate behavior over the electoral process. I additionally perform machine classification of court documents to estimate heterogeneous punishment for severe and trivial crimes. I document a larger electoral penalty (6.5 p.p.) if candidates are convicted for severe crimes. These results supplement the information shortcut literature by examining how judicial information influences voters' decisions and showing that voters react more strongly to more credible sources of information. |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1912.10958&r=all |
| By: | Etienne Fize (Département d'économie); Charles Louis-Sidois (Universität Mannheim) |
| Abstract: | We investigate the impact of compulsory military service on turnout and political preferences. Exploiting the suspension of mandatory conscription for French men, we observe a significant and positive impact of military service on turnout. We estimate that the service increases turnout by approximately 7 percentage points. We also investigate the impact of conscription on political preferences. When we control for selection into the military service, we observe no support for a change in preferences of former conscripts. |
| Keywords: | Voting; Turnout; Political Behaviour; Military Service |
| JEL: | D72 F52 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/45gqdl5l4387f9b9l12gr2g3kt&r=all |
| By: | Baric, Laura-Kristin; Geiger, Niels |
| Abstract: | This survey documents the different arguments discussed in the academic literature on whether and how economic inequality and the emergence and stability of democratic political systems are connected. While early research in this domain has often focused on new and emerging democracies, this paper also provides an overview of the more recent literature in economics and neighboring fields that discusses democratization as well as established democracies' stability and other institutional traits. In doing so, the survey contains a critical review of both theoretical and empirical contributions on the topic. The different arguments are systematically evaluated and their core hypotheses are distilled in order to document the main lines of argumentation prevalent in the literature. Together with a summary of the theoretical arguments, the main findings of related empirical research are also documented and shortly discussed. Whereas taken together, research so far generally does not suggest any conclusive results concerning economic inequality and the emergence of democracies, the survey indicates that the stability and institutional quality of established democracies can be negatively affected by economic inequality, and it outlines the conditions for this to occur. However, additional research especially on some of the more tentative hypotheses is required to allow for a more profound understanding of the different channels and relationships. Therefore, points of departure for further research, e. g. on how to operationalize specific theoretical constructs of interest and thereby on how to get a better understanding of the relations, are also suggested. |
| Keywords: | economic inequality,institutions,democracy,political stability |
| JEL: | D63 D72 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:142019&r=all |
| By: | Federica Ceron (UP1 UFR02 - Université Panthéon-Sorbonne - UFR d'Économie - UP1 - Université Panthéon-Sorbonne); Stéphane Gonzalez (UJM - Université Jean Monnet [Saint-Étienne], GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We provide an axiomatic characterization of Approval Voting without the approval balloting assumption. The dichotomous structure of the informational basis of Approval voting as well as its aggregative rationale are jointly derived from a set of normative conditions on the voting procedure. The first one is the well-known social-theoretic principle of consistency; the second one, ballot richness, requires voters to be able to express a sufficiently rich set of opinions; the last one, dubbed no single-voter overrides, demands that the addition of a voter to an electorate cannot radically change the outcome of the election. Such result is promising insofar it suggests that the informational basis of voting may have a normative relevance that deserves formal treatment. |
| Keywords: | Approval voting,balloting procedure,Informational basis,Evaluative voting |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02440615&r=all |
| By: | Freille, S.; Avramovich, C.; Moncarz, P.; Sofietti, P. |
| Abstract: | This paper explores the relationship between political influence activities by interest groups and benefits obtained in the form of public contracts. We propose an electoral competition model where interest groups make ex-ante campaign contributions to candidates and ex-post lobbying contributions (efforts). Campaign contributions are useful to bias the election result although an aggressive campaign fight encourages interest groups to concentrate in lobbying activities. Using a novel and unique dataset at the individual level, we find that lobbying meetings are positively correlated with public contract amount and the probability of obtaining a contract. This result holds when controlling for unobserved heterogeneity. Campaign contributions are not significantly related to either public contract amount or the probability of winning contracts. |
| Keywords: | Corrupción, Democracia, Investigación socioeconómica, Transparencia, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:dbl:dblwop:1392&r=all |
| By: | Giovanni Facchini; Paola Conconi; Maurizio Zanardi |
| Date: | 2020–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/300614&r=all |
| By: | Hui, Hon Chung |
| Abstract: | This paper explores the effects of political events on foreign exchange returns in Malaysia. We identify five recent events that induce political uncertainty on investors, namely the 13th General Election (GE13), the imprisonment of a key opposition politician, the scandal from the 1MDB exposé, the appointment of a new Central Bank Governor and the 14th General Election (GE14). Using an event study, our findings show that the imprisonment of the opposition party leader triggered a favourable response from the foreign exchange market. However, market reactions to the 1MDB scandal were followed largely unfavourable. The GE13 triggered unfavourable market response, while the reverse is true for market reactions to GE14. Market response to the appointment of the new Central Bank Governor was rather favourable. The Event Study is the first of its kind that examines the foreign exchange market implications of key political events in Malaysia. There are practical considerations emanating from these findings. |
| Keywords: | 1MDB, general election, market model, exchange rate, confidence, Malaysia |
| JEL: | D72 D73 F31 O38 |
| Date: | 2019–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98149&r=all |
| By: | Jeremy Bowles; Horacio Larreguy |
| Abstract: | We examine how candidate selection into the supply of policy information determines its electoral effects. In a nationwide debate initiative designed to solicit and rebroadcast policy promises from Liberian legislative candidates, we randomized the encouragement of debate participation across districts. The intervention substantially increased the debate participation of leading candidates but led to uneven electoral returns for these candidates, with incumbents benefiting at the expense of challengers. These results are driven by differences in compliance: complying incumbents, but not challengers, positively selected into debate participation based on the congruence of their policy priorities with those of their constituents. |
| Keywords: | accountability, information, selection |
| JEL: | D72 O12 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:375&r=all |
| By: | Hui, Hon Chung |
| Abstract: | In this paper, Event Studies are conducted to examine the effects of political events on foreign exchange returns in Malaysia, Singapore and Philippines. The political events of interest in this paper cover the general elections in all three countries. Some of the salient findings are as follows. First, the 13th General Election in Malaysia led to a mostly negative response from the foreign exchange market, with a sharper than expected Ringgit depreciation. Second, the 14th Malaysian General Election elicited a rather positive reaction from the foreign exchange market – there was far less depreciation of the Ringgit than what was previously believed. Third, both the 2011 and 2015 General Elections in Singapore were followed by positive reactions from the market. Fourth, presidential elections in the Philippines produced contrasting results – the election of Benigno Aquino III was greeted with optimism, whereas his successor, Rodrigo Duterte received a less welcoming reception from the foreign exchange market, with the Philippine Peso depreciating more than the predicted amount in the market model. |
| Keywords: | general election, event studies, exchange rate, confidence |
| JEL: | D72 D73 F31 O38 |
| Date: | 2019–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98148&r=all |
| By: | Christian Ruckteschler (University of Oxford); Adeel Malik; Ferdinand Eibl (King’s College London) |
| Abstract: | Although non-tariff measures (NTMs) have surpassed tariffs as the most prevalent instrument of trade protection globally, our knowledge of what drives these NTMs is extremely limited. This paper sheds light on the political determinants of non-tariff protection using a rich empirical setting in Morocco. Taking advantage of a bilateral EU-Morocco trade agreement that resulted in an across the board tariff cut and a subsequent rise in NTMs, we use a difference-in-differences regression framework to show that sectors with close prior political connections to the royal family received disproportionately higher levels of non-tariff protection than unconnected sectors. We also demonstrate that, in the wake of the EU-induced tariff cut, connected sectors were mainly compensated through technical barriers to trade that depend on administrative oversight and are vulnerable to political influence. |
| Date: | 2019–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1352&r=all |