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on Positive Political Economics |
| By: | Panunzi, Fausto; Pavoni, Nicola; Tabellini, Guido |
| Abstract: | This paper studies electoral competition over redistributive taxes between a safe incumbent and a risky opponent. As in prospect theory, economically disappointed voters become risk lovers, and hence are intrinsically attracted by the more risky candidate. We show that, after a large adverse economic shock, the equilibrium can display policy divergence: the more risky candidate proposes lower taxes and is supported by a coalition of very rich and very disappointed voters, while the safe candidate proposes higher taxes. This can explain why new populist parties are often supported by economically dissatisfied voters and yet they run on economic policy platforms of low redistribution. We show that survey data on the German SOEP are consistent with our theoretical predictions on voters' behavior. |
| Keywords: | Behavioral political economics; populism; prospect theory |
| JEL: | D7 D9 H00 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15213&r= |
| By: | Bante, Jana; Helmig, Felix; Prasad, Lara; Scheu, Lea Deborah; Seipel, Jean Christoph; Senkpiel, Helge; Geray, Markus; von Schiller, Armin; Sebudubudu, David; Ziaja, Sebastian |
| Abstract: | This study assesses whether the use of electronic government (e-government) services affects political attitudes. The results, based on evidence generated in Botswana, indicate that e-government services can, in fact, have an impact on political attitudes. E-government services are rapidly being rolled out around the globe. Governments primarily expect efficiency gains from these reforms. Whether e-government in particular, and information and communication technology (ICT) in general, affect societies is hotly debated. There are fears that democracy may be compromised by surveillance, censorship, fake news, interference in elections and other strategies facilitated by digital tools. This discussion paper adds to the nascent literature by investigating if the expanding e-government usage in Botswana affects individual support for democracy, regime satisfaction and interpersonal trust. Methodologically, the study relies on observational and experimental evidence. The observational approach assesses the impact of the usage of different e-services such as e-payments and electronic tax return filings on political attitudes. The experimental approach incentivises taxpayers to file their tax returns electronically. Both approaches build on an original in-person survey gauging the political attitudes of 2,109 citizens in Greater Gaborone. The survey was conducted in February and March 2020. In terms of results, we do not identify a general substantive effect for the impact of all e-services on political attitudes. For some of the e-services and attitudes tested, however, we find significant evidence. Furthermore, our study yields significant results for several of the linkages between the causal steps within our causal mechanisms. For instance, we find that e-government can empower citizens to engage in political activities and that, although e-government users on average report that the government is not addressing their needs, a simple incentivising message can significantly improve people's feelings in this regard. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:diedps:162021&r= |
| By: | Gaurav Bhattacharya (Jawaharlal Nehru University); Meeta Keswani Mehra (Jawaharlal Nehru University) |
| Abstract: | In the ambit of politics of special interest groups, this paper addresses the linkages between trade and environmental policies in imperfect commodity markets. A duopoly market is characterised by two-way trade in differentiated products that are polluting in nature. Firms in each country act as Cournot competitors in the international market and have direct stakes in both trade and environmental policies set by the incumbent government. Results suggest that in comparison to the baseline scenario where the incumbent is purely benevolent, the political equilibrium is characterised by higher import tariffs and lower pollution taxes. The voting support from political action groups (here firms) induces the incumbent to choose policies that favour them in general. However, the degree of product differentiation tends to bring down the divergence in policy outcomes under the two scenarios. Interdependencies between trade and environmental policies are also affected by the existence of producer lobbies. Unlike in case of the social optimum, the incumbent faces a trade-off between considerations for campaign funds from lobbies and the welfare motive for the population in general. Our study shows that environmental polices act as strategic substitutes, and trade policies may or may not be strategic substitutes. We find that complementarities in trade policies (a tariff war) arise only when incumbent governments are less corrupt. This outcome is attributed to the interdependencies between trade and environmental policies. For a less corrupt policy maker, the loss in campaign funds is outweighed by the net gains from environmental regulations, viz. improved environmental quality, gain/loss in consumer and producer surplus, pollution tax revenue, and tariff revenue. Therefore, the likelihood of trade wars would be lower if politicians are more corrupt. |
| URL: | http://d.repec.org/n?u=RePEc:ind:citdwp:21-03&r= |
| By: | Pantelis Kammas (Athens University of Economics and Business); Maria Poulima (Department of Economics, University of Ioannina); Vassilis Sarantides (Department of Economics, University of Sheffield, UK) |
| Abstract: | This paper seeks to investigate the role of electoral personalism and long-run partisan loyalty on the allocation of local public goods. To this end, we exploit the discontinuity in the political landscape of Greece after a brief military junta (1967-1974) to link the parties established after 1974 with their political ancestors during the pre-dictatorial era. In particular, after 1974 Greece is a ‘new democracy’ with infant political parties that were trying to increase their political power by maintaining the networks of their (pre-junta) political ancestor parties. Consistent with expectations, empirical findings suggest that incumbents directed public investment resources to regions characterized by long-run loyalty in favor of their party. Moreover, our analysis illuminates the channel of this association by highlighting the important role of strong Members of Parliament (MPs) with ministerial positions. This result is in line with the literature suggesting that powerful MPs typically favor their home districts under an Open-List Proportional Representation (OLPR) electoral system. This is because OLPR induces intra-party competition as candidates compete over their co-partisans in order to get elected. In this political environment, powerful MPs attempt to maintain their networks of political patronage in the loyal prefectures of their affiliated party, whereas the party expropriates their electoral influence. |
| Keywords: | public investment, partisan loyalty, open-list proportional representation |
| JEL: | H1 H4 D7 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2021004&r= |
| By: | Amory Gethin (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, WIL - World Inequality Lab); Clara Martínez-Toledano (WIL - World Inequality Lab , Imperial College London); Thomas Piketty (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, WIL - World Inequality Lab) |
| Abstract: | This paper provides new evidence on the long-run evolution of political cleavages in 21 Western democracies by exploiting a new database on the vote by socioeconomic characteristic covering over 300 elections held between 1948 and 2020. In the 1950s-1960s, the vote for democratic, labor, social democratic, socialist, and affiliated parties was associated with lower-educated and low-income voters. It has gradually become associated with higher-educated voters, giving rise to "multi-elite party systems" in the 2000s-2010s: high-education elites now vote for the "left", while high-income elites continue to vote for the "right". This transition has been accelerated by the rise of green and anti-immigration movements, whose key distinctive feature is to concentrate the votes of the higher-educated and lower-educated electorate, respectively. Combining our database with historical data on political parties' programs, we provide evidence that the reversal of the educational cleavage is strongly linked to the emergence of a new "sociocultural" axis of political conflict. We also discuss the evolution of other political cleavages related to age, geography, religion, gender, and the integration of new ethnoreligious minorities. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wilwps:halshs-03226118&r= |
| By: | Do, Quoc-Anh; Lee, Yen-Teik; Nguyen, Bang Dang; Nguyen, Kieu-Trang |
| Abstract: | Does more political power always lead to more favoritism? The usual affirmative answer overlooks scrutiny's role in shaping the pattern of favoritism over the ladder of power. When attaining higher-powered positions under even stricter scrutiny, politicians may reduce quid-pro-quo favors towards connected firms to preserve their career prospect. Around close Congress elections, we find RDD-based evidence of this adverse effect that a politician's win reduces his former classmates' firms stock value by 2.8%. As predicted, this effect varies by cross-state scrutiny, politicians' power, firms' size and governance, and connection strength. It diminishes as a politician's career concern fades over time. |
| Keywords: | close election; congressmen; favoritism; political connection; Power; RDD; scrutiny |
| JEL: | D72 D73 D85 G14 G32 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15141&r= |
| By: | Giuliano, Paola; Wacziarg, Romain |
| Abstract: | We argue that low levels of social capital are conducive to the electoral success of populist movements. Using a variety of data sources for the 2016 US Presidential election at the county and individual levels, we show that social capital, measured either by the density of memberships in civic, religious and sports organizations or by generalized trust, is significantly negatively correlated with the vote share and favorability rating of Donald Trump around the time of the election. |
| Keywords: | populism; social capital; voting behavior |
| JEL: | D72 Z1 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15140&r= |
| By: | Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Bjørnskov, Christian (Aarhus University, Denmark) |
| Abstract: | There is scant systematic empirical evidence on what explains variation in academic freedom. Making use of a new indicator and panel data covering 64 countries 1960–2017, we investigate how de facto academic freedom is affected by, in particular, political institutions. We find that moving to electoral democracy is positive, as is moving to electoral autocracy from other autocratic systems, suggesting the importance of elections. Communism has a strongly detrimental effect. Legislatures that are bicameral are associated with more academic freedom, while legislatures that become more diverse and more ideologically to the right also seem to stimulate this type of freedom. Presidentialism and coups do not appear to matter much, while more proportional electoral systems strengthen academic freedom. More judicial accountability stimulates academic freedom, and richer countries experience more of it. The results suggest that the political sphere exerts a clear but complex influence on the degree to which scholarly activities are free. |
| Keywords: | Academic freedom; Politics; Democracy; Institutions; Ideology |
| JEL: | D72 I23 K40 |
| Date: | 2021–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1388&r= |
| By: | Bekkouche, Yasmine; Cagé, Julia; Dewitte, Edgard |
| Abstract: | What is the impact of campaign spending on votes? Does it vary across election types, political parties or electoral settings? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that handle the endogenous and strategic nature of campaign spending in multiparty systems. This paper provides novel contributions in both of these areas. We build a new comprehensive dataset of all French legislative and UK general elections over the 1993-2017 period. We propose new empirical specifications, including a new instrument that relies on the fact that candidates are differentially affected by regulation on the source of funding on which they depend the most. We find that an increase in spending per voter consistently improves candidates' vote share, both at British and French elections, and that the effect is heterogeneous depending on candidates' party. In particular, we show that spending by radical and extreme parties has much lower returns than spending by mainstream parties, and that this can be partly explained by the social stigma attached to extreme voting. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of why campaigns matter. |
| Keywords: | Campaign expenditures; Campaign finance reform; Campaign financing; Elections; Heterogeneous effects of campaign spending; Multiparty electoral data |
| JEL: | D72 H7 P48 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15150&r= |
| By: | Francois, Patrick; Trebbi, Francesco; Xiao, Kairong |
| Abstract: | This paper investigates, theoretically and empirically, factional arrangements within the Chinese Communist Party (CCP), the governing political party of the People's Republic of China. Using detailed biographical information of political elites in the Central Committee and provincial governments, we present a set of new empirical regularities within the CCP, including systematic patterns of cross-factional balancing at different levels of the political hierarchy and substantial faction premia in promotions. We propose and estimate an organizational economic model to characterize factional politics within single-party nondemocratic regimes. |
| Keywords: | China; Chinese Communist Party; Factions; political economy; Single Party Regime |
| JEL: | P3 P48 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15226&r= |