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on Positive Political Economics |
| By: | Baldi, Guido; Forster, Stephan |
| Abstract: | Models of political budget cycles assume that politicians use fiscal policy to increase their chances of re-election. However, empirical results for advanced economies provide ambiguous support for the existence of such electoral cycles. Also, studies focusing on the regional or local level of advanced economies have found a variety of different results. In this paper, we use data at the sub-federal level of Switzerland from 1978 through 2015 to test for the presence of political budget cycles. Swiss regions called cantons are highly autonomous with regard to budgetary policy and have established direct democratic systems with frequent referendums that often affect budgetary issues. In most cantons, there are fiscal policy rules that restrict the budgetary leeway of governments. Against the backdrop of public discussions in several European countries on adopting more direct democratic elements, the Swiss experience on political budget cycles provides an interesting case study. Overall, the system of government is designed to foster consensus seeking and gradual adjustment. These features should make the short-run opportunistic or partisan use of fiscal policy less likely in Swiss cantons. Rather surprisingly, however, we find at least some evidence for an electoral cycle in government spending. For government revenue or the overall budget, our empirical results do not point to an electoral cycle. |
| Keywords: | Political budget cycle, fiscal policy, direct democracy |
| JEL: | D72 E62 H62 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99397&r=all |
| By: | Wouters, Olivier J. |
| Abstract: | Importance: Government efforts to lower drug costs and other legislative and regulatory initiatives may be counteracted by campaign donors and lobbyists in the pharmaceutical and health product industry. Objective: To review how much money the pharmaceutical and health product industry spent on campaign contributions and lobbying in the US from 1999 to 2018 at the federal and state levels. Design and Setting: Analysis of federal-level and state-level data obtained from the Center for Responsive Politics and the National Institute on Money in Politics, respectively. These nonprofit, nonpartisan organizations track federal and state campaign contributions and lobbying expenditures by individuals and groups. Exposures: Lobbying expenditures and contributions to political campaigns. Main Outcomes and Measures: Total spending, inflation adjusted to 2018 dollars using the US Consumer Price Index, on lobbying and campaign contributions by year, source, and state. Results: From 1999 to 2018, the pharmaceutical and health product industry recorded $4.7 billion- A n average of $233 million per year-in lobbying expenditures at the federal level, more than any other industry. Of the spending, the trade group Pharmaceutical Research and Manufacturers of America accounted for $422 million (9.0%), and the other 19 top companies and organizations in this industry accounted for $2.2 billion (46.8%). The industry spent $414 million on contributions to candidates in presidential and congressional elections, national party committees, and outside spending groups. Of this amount, $22 million went to presidential candidates and $214 million went to congressional candidates. Of the 20 senators and 20 representatives who received the most contributions, 39 belonged to committees with jurisdiction over health-related legislative matters, 24 of them in senior positions. The industry contributed $877 million to state candidates and committees, of which $399 million (45.5%) went to recipients in California and $287 million (32.7%) went to recipients in 9 other states. In years in which key state referenda on reforms in drug pricing and regulation were being voted on, there were large spikes in contributions to groups that opposed or supported the reforms. Conclusions and Relevance: From 1999 to 2018, the pharmaceutical and health product industry spent large sums of money on lobbying and campaign contributions to influence legislative and election outcomes. These findings can inform discussions about how to temper the influence of industry on US health policy. |
| JEL: | R14 J01 |
| Date: | 2020–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:103689&r=all |
| By: | Peri, Giovanni (University of California, Davis); Rees, Daniel I. (University of Colorado Denver); Smith, Brock (Montana State University) |
| Abstract: | There is surprisingly little evidence on how terror attacks impact elections. With only a few exceptions, previous studies in this literature have focused on a particular country or attack, limiting their generalizability. Ours is the first comprehensive, multi-country examination of the effects of terror attacks on political opinions and election outcomes. The results provide little evidence that terror attacks are systematically related to Europeans' attitudes towards immigrants and how much trust they have in government. International terror attacks are, however, associated with an increase in the vote share received by nationalistic parties in Europe. These results are relevant to the ongoing debate among academics over the effectiveness of terror attacks. |
| Keywords: | terrorism, elections, nationalism, terror attack |
| JEL: | D72 D74 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13090&r=all |
| By: | Fabian, Mark (Brookings Institution); Breunig, Robert (Australian National University); De Neve, Jan-Emmanuel (University of Oxford) |
| Abstract: | We use well-being data from the Gallup Daily Poll and a measure of racial animus derived from Google search data to explain why racial identification became politically salient in the 2016 Presidential Election. We find that the oft-observed positive relationship between racial animus and Trump's vote share is eliminated by introducing an interaction between racial animus and a measure of the basic psychological need for relatedness. We also find that rates of worry have a strong and significant positive association with Trump's vote share, but this is offset by high levels of relatedness. Together, these two results imply that racial voting behavior in 2016 was driven by a desire for in-group affiliation as a way of buffering against economic and cultural anxiety. Such behavior is well established in laboratory studies in self-determination theory and worldview defense theory. We find no effect on Trump's performance from social capital or exposure to trade shocks. This suggests that the economic roots of Trump's success may be overstated and that the need for relatedness is a key underlying driver of contemporary political trends in the US. |
| Keywords: | well-being, voting, racialized economics, nativism, Trump |
| JEL: | D72 F1 I0 I3 P16 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13022&r=all |
| By: | Repetto, Luca (Department of Economics); Cipullo, Davide (Department of Economics); Carozzi, Felipe (Department of Geography and Environment) |
| Abstract: | This paper studies how political fragmentation affects government stability. We show that each additional party with representation in Parliament increases the probability that the incumbent government is unseated by 4 percentage points. Governments with more resources at their disposal for bargaining are less likely to be replaced. When they are, new government leaders are younger and better educated, suggesting instability may induce positive selection. We interpret our results in light of a bargaining model of coalition formation featuring government instability. Our findings indicate that the rising fragmentation in parliaments worldwide may have a substantial impact on stability and political selection. |
| Keywords: | Government Stability; Fragmentation; No-confidence votes; Bargaining; Alignment effect |
| JEL: | H10 H70 R50 |
| Date: | 2020–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2020_001&r=all |
| By: | Heise, Arne; Serfraz Khan, Ayesha |
| Abstract: | This paper attempts to shed some light on the developments of welfare states in highly developed nations since World War Two (WW2) within the context of a narrative which seeks to combine institutional distinctions, termed “varieties of capitalism,” with the historical regimes of regulation theory in a political economy perspective which puts interested political actors at centre stage. It will be argued that in a liberal democracy, the elite has the framing and agenda-setting power to “manufacture a political will” according to its interests. The welfare state is not the result of a long social struggle on the part of the needy; rather, it results in its general features from the minimal state of meritocratic exigencies. Under the very peculiar circumstances of the post-WW2 era, this even translated into a rise in social welfare spending to more than a third of national income. The particular design of welfare state organisation was the subject-matter of political conflict, and a clear distinction between liberal and coordinated market economies can be attributed to cultural differences and institutional settings. Yet the core of the welfare state conception serves the interest of the meritocracy as much as those who benefit from social programmes and re-distribution. And the neoliberal attack on the welfare state since the 1980s is not a necessary re-calibration due to changing economic conditions or a growing lack of solidarity among the people but an expression of a modified cost-benefit analysis from the elite’s perspective. |
| Keywords: | welfare state; Keynesian national welfare state; Schumpeterian competition state; elite; agenda theory |
| JEL: | B50 H10 H55 I30 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99279&r=all |
| By: | Joshua AIZENMAN; ITO Hiroyuki |
| Abstract: | This paper investigates the political-economy trilemma: policy makers face a trade-off of choosing two out of three policy goals or governance styles, namely, (hyper-)globalization, national sovereignty, and democracy. We develop a set of indexes that measure the extent of attainment of the three factors for 139 countries in the period of 1975-2016. Using these indexes, we examine the validity of the hypothesis of the political-economy trilemma by testing whether the three trilemma variables are linearly related. We find that, for industrialized countries, there is a linear relationship between globalization and national sovereignty (i.e., a dilemma), and that for developing countries, all three indexes are linearly correlated (i.e., a trilemma). We also investigate whether and how three political-economic factors affect the degree of political and financial stability. The results indicate that more democratic industrialized countries tend to experience more political instability, while developing countries tend to be able to stabilize their politics if they are more democratic. The lower level of national sovereignty an industrialized country attains, the more stable its political situation tends to be, while a higher level of sovereignty helps a developing country to stabilize its politics. Globalization brings about political stability for both groups of countries. Furthermore, more globalized countries, whether industrial or developing, tend to experience more financial stability. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20018&r=all |
| By: | Mostapha Diss (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); Eric Kamwa (LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles); Abdelmonaim Tlidi (ENSA Marrakech - École nationale des sciences appliquées de Marrakech) |
| Abstract: | Given a collection of individual preferences on a set of candidates and a desired number of winners, a multi-winner voting rule outputs groups of winners, which we call committees. In this paper, we consider five multi-winner voting rules widely studied in the literature of social choice theory: the k-Plurality rule, the k-Borda rule, the k-Negative Plurality rule, the Bloc rule, and the Chamberlin-Courant rule. The objective of this paper is to provide a comparison of these multi-winner voting rules according to many principles by taking into account a probabilistic approach using the well-known Impartial Anonymous Culture (IAC) assumption. We first evaluate the probability that each pair of the considered voting rules selects the same unique committee in order to identify which multi-winner rules are the most likely to agree for a given number of candidates and a fixed target size of the committee. In this matter, our results show that the Chamberlin-Courant rule and the k-Plurality rule on one side, and the k-Borda rule and the Bloc rule on the other side, are the pairs of rules that most agree in comparison to other pairs. Furthermore, we evaluate the probability of every multi-winner voting rule selecting the Condorcet committee à la Gehrlein when it exists. The Condorcet committee à la Gehrlein is a fixed-size committee such that every member defeats every non-member in pairwise comparisons. In addition, we compare the considered multi-winner voting rules according to their ability (susceptibility) to select a committee containing the Condorcet winner (loser) when one exists. Here, our results tell us that in general, the k-Borda rule has the highest performance amongst all the considered voting rules. Finally, we highlight that this paper is one of the very rare contributions in the literature giving exact results under the Impartial Anonymous Culture (IAC) condition for the case of four candidates. |
| Keywords: | Scoring rules,Chamberlin-Courant,Borda,Condorcet,Voting,Committee |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02147735&r=all |