Political Economy
Paper Session
Sunday, Jan. 7, 2024 10:15 AM - 12:15 PM (CST)
- Chair: Dana Foarta, Stanford University
Corporate Capture of Congress in Carbon Politics: Evidence from Roll Call Votes
Abstract
How special interests shape legislative decisions is a fundamental question in political economy. In this paper, we examine the influence of corporations on climate change legislation, which plays an important role in addressing the negative externalities associated with greenhouse gas emissions. Using a comprehensive sample of votes on contested climate bills in the US House of Representatives and Senate, we find that politicians with high carbon dependency, i.e., those whose campaigns received more contributions from carbon intensive firms, are more likely to cast anti-climate votes. This relation is stronger when politicians face greater electoral pressure. Using the narrow defeat of focal politicians to generate plausibly exogenous shocks to their elected peers' carbon dependency, we find that the relation is likely causal. We further find evidence that carbon intensive firms benefit from their connected politicians casting anti-climate votes.Our evidence highlights the influence of corporate interests on climate policy. The results that campaign contributions by carbon emitting firms enable these firms to tilt climate legislation in their favor suggest that entrenched special interests can use their political influence to undermine the role of government in addressing climate change.
Cross-State Strategic Voting
Abstract
We estimate that 3.1% of the US voter population is registered to vote in two states, opening up the possibility for them to choose where to vote. Double registration is 3.5 times more likely in the wealthiest 1% of zip codes vs. the bottom quartile, giving wealthy Americans more voting power. Double-registrants respond to both incentives and costs, disproportionately choosing swing states (higher incentive) and states which automatically send out mail-in ballots (lower cost). We call this behavior cross-state strategic voting (CSSV) and estimate there were 217,000 such votes involving swing states in the 2020 presidential election. While there are more Democrat double-registrants, Republicans are more responsive to swing-state incentives. The net effect did not alter the 2020 election, although it could change the outcome in closer elections (e.g., Florida in 2000) or if one party increased CSSV relative to the other.Does Political Power Concentration Threaten Long-term Investment? Evidence from China
Abstract
This paper presents evidence that an increase in political power concentration within a government reduces private investment. Our study focuses on a wave of municipal leadership consolidation in China, where chiefs of police departments were appointed as adjunct supervisors of courthouses. This consolidation of executive and judicial powers leads to an aggressive increase in police law enforcement targeting private businesses for rent-seeking purposes. Subsequently, courts exhibit increased bias towards the police in appeal cases related to police enforcement. Anticipating future infringements on property rights, businesses decrease their capital investment by 10.2% and R&D investment by 9.5%. Firms experiencing a reduction in investment also see a decrease in their stock returns, by about 3%, which underlines the broader economic implications of investment decisions influenced by the political environment. Our findings also demonstrate that business owners reallocate their investments from cities with heightened political power concentration to other regions.Keep your Enemies Closer: Strategic Candidate Adjustments in U.S. and French Elections
Abstract
A key tenet of representative democracy is that politicians should adjust their discourse and policies to the voters who elect them. The Median Voter Theorem (MVT) predicts that, if candidates are fully strategic, they will adjust to their opponent’s platform until converging to the median voter. Despite its importance in political economy, we lack direct rigorous tests of the convergence mechanism underlying the MVT. In this paper, we provide direct evidence that candidates adjust their discourse toward their competitors, and that they converge to each other in ideological tone and rhetorical complexity. We collect the content of 9,000 candidate websites before a primary or general election for the U.S. House of Representatives between 2002 and 2016 as well as 57,000 campaign manifestos issued by candidates running in the first or second round of the French parliamentary and local elections between 1958 and 2022. We first show that, as their electorate broadens, candidates running in both election stages tend to converge to the center of the ideology or complexity scales, and to diversify the set of topics they focus on, in the second stage. Second, we exploit cases in which the identity of candidates qualified for the second round is quasi-random, by focusing on elections in which candidates narrowly won their primary (in the U.S.) or narrowly qualified for the runoff (in France). Using a regression discontinuity design, we find that second-round candidates converge to the platform of their actual opponent, as compared to the platform of the runner-up who did not qualify for the last round. Our findings suggest that politicians are strategic and that, even though they do not fully converge to the median voter, the convergence mechanism underlying this prediction is real.The Effect of Childhood Environment on Political Behavior: Evidence from Young U.S. Movers, 1992-2021
Abstract
We ask how childhood environment shapes political behavior. We measure young voters’ participation and party affiliation in nationally comprehensive voter files and reconstruct their childhood location histories based on their parents’ addresses. We compare outcomes of individuals who moved between the same origin and destination counties but at different ages. Those who spend more time in the destination are more influenced by it: Growing up in a county where their peers are 10 percentage points more likely to become Republicans makes them 4.7 percentage points more likely to become Republican themselves upon entering the electorate. The effects are of similar magnitude for Democratic partisanship and turnout. These exposure effects are primarily driven by teenage years, and they persist but decay after the first election. They reflect both state-level factors and factors varying at a smaller scale such as peer effects.JEL Classifications
- P0 - General