Political Economy

Paper Session

Friday, Jan. 6, 2017 8:00 AM – 10:00 AM

Hyatt Regency Chicago, New Orleans
Hosted By: American Economic Association
  • Chair: Katherine E. Casey, Stanford University

Voter Preferences and Political Change: Evidence From the Political Economy of Shale Booms

Viktar Fedaseyeu
,
Bocconi University
Erik Gilje
,
University of Pennsylvania
Philip Strahan
,
Boston College

Abstract

This paper studies how shifts in voter preferences affect political change. Support for conservative interests rises after shale booms and Republican candidates gain votes, nearly doubling the probability of incumbency changes. Roll-call voting becomes more conservative after shale booms across many issues, including those unrelated to energy. These changes occur as Republicans win seats from Democrats, as opposed to Democratic incumbents voting more conservatively. Even among incumbent Democrats who do vote more conservatively, we find no increase in their re-election likelihood. The results suggest that incumbent politicians face challenges committing to move toward new voter preferences.

Variation in Political Favoritism: Theory and Evidence From the Hungarian Media

Ferenc Szucs
,
University of California-Berkeley
Adam Szeidl
,
Central European University

Abstract

We document time variation in political favoritism and link it to variation in government<br />
centralization. We start with a relational contracting model in which centralization increases<br />
inecient favoritism, because the greater span of control in the allocation of future projects<br />
allows the government to extract higher bribes from rms. We then present evidence for fa-<br />
voritism by showing that during 1994-2014 in Hungary, under right-wing governments state-<br />
owned rms (but not private rms) heavily tilted advertising to low-circulation right-connected<br />
media. Ownership changes and advertising on billboards help rule out alternative explanations<br />
based on shared ideology. Under left-wing governments, state-owned rms did not tilt advertis-<br />
ing to left-connected media. Because the right was politically more centralized, these ndings<br />
are consistent with the model. Finally, we estimate the welfare cost of inecient favoritism on<br />
the right to be about a third of the advertising budget.

Transparency in Parliamentary Voting

Christine Benesch
,
University of St. Gallen
Katharina E. Hofer
,
University of St. Gallen
Monika Butler
,
University of St. Gallen

Abstract

We use a change in the voting procedures of one of the two chambers of the Swiss parliament to explore how transparency affects the voting behavior of its members. Until 2013, the Upper House (Council of States) had voted by a show of hands. Legislators’ decisions could only be verified ex post through the time-consuming screening of online videos. In 2014, halfway through the legislative period, the chamber switched to electronic voting with online publication of individual decisions, significantly increasing transparency.
Data cover individual voting behavior during the 2011- 2015 legislative period. In a difference-in- difference framework, the Lower House (National Council), serves as a control group. Not only have the voting procedures of the Lower House remained unchanged since 2007 but also the legislative texts of the votes we analyze are the same in both chambers. This unique framework makes it possible to estimate the causal effects of transparency on legislators’ choices.
Members of the Upper House are significantly less likely to deviate from their party line after the reform. While parties benefit from improved conformity, voters lose influence over their legislators. Two legislators representing the same canton are less likely to cast an aligned vote if their parties have distinct party lines.

Political Dynasties and the Incumbency Advantage in Party-Centered Environments

Jon H. Fiva
,
BI Norwegian Business School
Daniel M. Smith
,
Harvard University

Abstract

What explains the dynastic perpetuation of political power within some families in democracies? A handful of studies have documented a causal effect of incumbency on dynasty formation in candidate-centered electoral environments. However, dynasties exist in party-centered environments as well, and the causal mechanisms underlying their formation may differ. In this study, we investigate the relationship between the incumbency advantage and the probability of forming a political dynasty under the closed-list proportional representation electoral system of Norway using an original data set of all candidates in parliamentary elections from 1945-2013. A regression discontinuity design reveals that the incumbency advantage exists even in this party-centered environment. However, although we document a share of dynasties (7 percent) that is comparable to the United States and other democracies, we find no evidence that incumbency has a causal effect on their formation. This finding suggests some form of internal party organizational network as a mechanism underlying dynastic politics that operates beyond the incumbency advantage.

Candidate Competition and Voter Learning in Sequential Primary Elections: Theory and Evidence

George Deltas
,
University of Illinois-Urbana-Champaign
Mattias Polborn
,
University of Illinois-Urbana-Champaign

Abstract

We develop a model of sequential presidential primaries in which several horizontally and vertically differentiated candidates compete against each other. Voters are incompletely informed about candidate valence and learn over time from election results in previous districts. We analyze the effects of learning about candidate quality, and the effects of candidate withdrawal on the vote shares, using data from the 2000-2012 Democratic and Republican presidential primaries. Consistent with the predictions of the model, the withdrawal of a candidate has a bigger effect on the vote shares of candidates in the same political position, vote variability declines over time in a pattern consistent with learning, and a tilt of the electorate towards a particular political position disproportionately increases the vote shares of the weak candidates espousing that position (relative to the strong candidates in that position).

Popular, But Not Powerful: Local Candidates Under Closed-List Proportional Representation

Jon H. Fiva
,
BI Norwegian Business School
Askill H. Halse
,
University of Oslo
Daniel M. Smith
,
Harvard University

Abstract

Geographic representation is considered to be an important factor in candidate nominations, even under closed-list proportional representation, and may also matter for distributive policy outcomes. However, since nominations are determined strategically, the causal effects of representation for local areas are difficult to identify. We study nominations, voter behavior, and distributive policies in a closed-list proportional representation (PR) setting, Norway, using data on candidates and their hometowns from 1953 to 2013. Exploiting as-good-as-random election outcomes for candidates who are marginally close to winning a seat in parliament, we find that parties obtain higher support in subsequent elections in the hometowns of local candidates who are narrowly elected. This effect appears to be driven by an increase in the probability of having a local candidate at the top of the party list in the next election. We find no effect of local representation on geographically targeted policies which might benefit the hometown. Our results suggest that local candidates under closed-list PR are able to attract and mobilize local voters, but either do not have the power to obtain local distributive benefits or are not interested in seeking them.
JEL Classifications
  • D7 - Analysis of Collective Decision-Making