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on Positive Political Economics |
| By: | Marchand, Joseph (University of Alberta, Department of Economics); Wang, Yuhan (University of Alberta, Department of Economics) |
| Abstract: | Canada’s 2021 federal election was called early, two years after its previous 2019 election, rather than four years. The Liberal government’s perceived opportunity was to turn minority rule into a majority, based on their ongoing COVID-19 pandemic response and perfect incumbent success rate of recent provincial elections. Harmonizing official voting data of electoral districts to COVID data of more aggregate health regions, this is the first study to examine COVID-19 and voting in Canada, currently on the precipice of another election. Overall, COVID severity was associated with reduced voter turnout in the 2021 election, compared with 2019, as well as an increase in the Liberal vote share and a decrease in the Conservative vote share. Although these findings may have been anticipated, voters in Conservative dominant areas turned out more than voters in Liberal dominant areas, which may not have been anticipated, leading to Liberal gains well below a majority. |
| Keywords: | Canada; COVID-19; Early Elections; Public Health; Voting |
| JEL: | D72 H12 H51 I18 K16 |
| Date: | 2024–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:2024_011 |
| By: | Jean Lacroix; Pierre-Guillaume Méon; Kim Oosterlinck |
| Abstract: | The literature has pointed out the negative aspects of political dynasties. But can political dynasties help prevent autocratic reversals? We argue that political dynasties differ according to their ideological origin and that those whose founder was a defender of democratic ideals, for simplicity labeled pro-democratic dynasties, show stronger support for democracy. We analyze the vote by the French parliament on 10 July 1940 of an enabling act that granted full power to Marshall Philippe Pétain, thereby ending the Third French Republic and aligning France with Nazi Germany. Using data collected from the biographies of parliamentarians and information on their voting behavior, we find that members of a pro-democratic dynasty were 9.6 to 15.1 percentage points more likely to oppose the act than other parliamentarians. We report evidence that socialization inside and outside parliament shaped the vote of parliamentarians. |
| Date: | 2023–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/372587 |
| By: | Christoph Feldhaus (Department of Economics, Ruhr-University Bochum); Lukas Reinhardt (Centre for the Study of Social Cohesion, University of Oxford and Identity and Conflict Lab, Yale University); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, Germany, University of Innsbruck, Austria, IZA Bonn, Germany, and CESifo Munich) |
| Abstract: | In a democracy, it is essential that citizens accept rules and laws, regardless of which party is in power. We study why citizens in polarized societies resist rules implemented by political opponents. This may be due to the rules’ specific content, but also because of a general preference against being restricted by political opponents. We develop a method to measure the latter channel. In our experiment with almost 1, 300 supporters and opponents of Donald Trump, we show that polarization undermines rule-following behavior significantly, independent of the rules’ content. Subjects perceive the intentions behind (identical) rules as much more malevolent if they were imposed by a political opponent rather than a political ally. |
| Keywords: | Political polarization, Social identity, Outgroup, Economic preferences, Experiment |
| JEL: | C91 D90 D91 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2024_15 |
| By: | Glas, Alexander; Pavlova, Lora; Schölkopf, Julius |
| Abstract: | This policy brief analyses German professional forecasters' views on the upcoming US presidential election in November 2024 and its impact on the German economy. Depending on its outcome, the election can have a differential effect on Germany's foreign trade policy due to intensive trade ties between the USA and Germany. Furthermore, the USA has been one of the key supporters of Ukraine, providing billions in financial and military aid since Russia's invasion in 2022. Our analysis is based on recent data from the ZEW's Financial Market Survey (Finanzmarkttest, FMT), a long-standing survey of financial market experts and professional forecasters in Germany. The FMT is well-known for producing the ZEW Indicator of Economic Sentiment, one of the most important indicators for the German economy. For our analysis, we first asked respondents to assess the likelihood of a Trump victory, conditional on several events that may affect the election outcome. Next, we elicited scenario-based forecasts for German GDP growth and inflation over the upcoming president's tenure, depending on whether Trump or Harris wins the election. To better understand the differences in the conditional macroeconomic expectations, we asked the panellists which candidate they thought is more likely to achieve certain economic or political outcomes. Lastly, we included an open-ended question on possible measures the German government could take now to protect the German economy from potential adverse effects of the next US president's policies. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewpbs:306293 |
| By: | Laurent Bouton; Micael Castanheira De Moura; Allan Drazen |
| Abstract: | Popular and academic discussions have mostly concentrated on large donors, even though small donors are a major source of financing for political campaigns. We propose a theory of small donors with a key novelty: it centres on the interactions between small donors and the parties' fundraising strategy. In equilibrium, parties micro-target donors with a higher contribution potential (that is, richer and with more intense preferences) and increase their total fundraising effort in close races. The parties' strategic fundraising amplifies the effect of income on contributions, and leads to closeness, underdog and bandwagon effects. We then study the welfare effects of a number of common campaign finance laws. We find that, due to equilibrium effects, those tools may produce outcomes opposite to intended objectives. Finally, we identify a tax-and-subsidy scheme that mutes the effect of income while still allowing donors to voice the intensity of their support. |
| JEL: | D71 D70 H31 |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/378528 |
| By: | Christopher J. Neely |
| Abstract: | Presidential elections create uncertainty about future economic policy that translates into volatility in asset prices. How has the VIX performed around U.S. elections since 1988? |
| Keywords: | asset price volatility; stock market; stock market volatility; presidential elections |
| Date: | 2024–12–02 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:99209 |
| By: | Agnolin, Paolo; Colantone, Italo; Stanig, Piero |
| Abstract: | We study the implications of post-treatment bias in the context of the globalization backlash. We discuss whether horse-race regressions can inform about the relative role of economic vs. cultural drivers. We make three methodological points: (1) if and insofar as cultural variables are post-treatment with respect to economic factors, the estimates of the effect of economic shocks on voting are biased in regressions that include cultural controls (and vice versa); (2) for the same reason, such horse-race regressions do not allow to accurately estimate the relative role of economic vs. cultural factors; (3) one cannot infer mediation effects from changes in regression coefficients for a given factor of interest before and after including post-treatment controls. We accompany the methodological discussion with empirical evidence on the relevance of post-treatment bias in studies of the globalization backlash, both by replicating and expanding on earlier studies, and by presenting novel cross-country results on the culture-economy nexus. |
| Keywords: | Institutional and Behavioral Economics, International Relations/Trade, Sustainability |
| Date: | 2024–12–09 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:348541 |
| By: | Rüdiger Fahlenbrach (École Polytechnique Fédérale de Lausanne (EPFL); Swiss Finance Institute; European Corporate Governance Institute (ECGI)); Minsu Ko (Monash University); René M. Stulz (Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)) |
| Abstract: | Bank payout policy is strongly affected by regulation and politics, especially for the largest banks. Banks, but not industrial firms, have consistently lower payouts in times of high regulation uncertainty and under democratic presidents. After the Global Financial Crisis, bank regulators' influence on payout policies of the largest banks increases sharply and repurchases become more important than dividends for these banks. Repurchases respond more to regulatory climate changes than dividends. The stock-price reaction of the largest banks to the election of Donald Trump is larger than for small banks or industrial firms, and their repurchases increase sharply afterwards. |
| Keywords: | Financial institutions, payout policy, dividends, repurchases, regulation, political influence |
| JEL: | G21 G28 G35 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2486 |