Political Aid Cycles

By Michael Faye and Paul Niehaus

American Economic Review, December 2012

Researchers have scrutinized foreign aid's effects on poverty and growth, but anecdotal evidence suggests that donors often use aid for other ends. We test whether donors use bilateral aid to influence elections in developing countries. We find that recip...

Revolving Door Lobbyists

By Jordi Blanes i Vidal, Mirko Draca, and Christian Fons-Rosen

American Economic Review, December 2012

Washington's "revolving door"—the movement from government service into the lobbying industry—is regarded as a major concern for policy-making. We study how ex-government staffers benefit from the personal connections acquired during their pub...

The Iceberg Theory of Campaign Contributions: Political Threats and Interest Group Behavior

By Marcos Chamon and Ethan Kaplan

American Economic Journal: Economic Policy, February 2013

We present a model where special interest groups condition contributions on the receiving candidate's support and also her opponent's. This allows interest groups to obtain support from contributions as well as from threats of contributing. Out-of-equilib...

Political Price Cycles in Regulated Industries: Theory and Evidence

By Rodrigo M. S. Moita and Claudio Paiva

American Economic Journal: Economic Policy, February 2013

The early work of Stigler (1971) treats the regulatory process as the arbitration of conflicting economic and political interests rather than a pure welfare-maximizing effort. This paper builds on these ideas and models the regulatory process as a game...

On Economics: A Review of Why Nations Fail by D. Acemoglu and J. Robinson and Pillars of Prosperity by T. Besley and T. Persson

By W. Bentley MacLeod

Journal of Economic Literature, March 2013

The purpose of this essay is to review the books Why Nations Fail by Daron Acemoglu and James Robinson, and Pillars of Prosperity by Timothy Besley and Torsten Persson. The essay briefly discusses the main contributions of the books and ...

School Inputs, Household Substitution, and Test Scores

By Jishnu Das, Stefan Dercon, James Habyarimana, Pramila Krishnan, Karthik Muralidharan, and Venkatesh Sundararaman

American Economic Journal: Applied Economics, April 2013

Empirical studies of the relationship between school inputs and test scores typically do not account for household responses to changes in school inputs. Evidence from India and Zambia shows that student test scores are higher when schools receive unan...

The Gorbachev Anti-Alcohol Campaign and Russia's Mortality Crisis

By Jay Bhattacharya, Christina Gathmann, and Grant Miller

American Economic Journal: Applied Economics, April 2013

Political and economic transition is often blamed for Russia's 40 percent surge in deaths between 1990 and 1994. Highlighting that increases in mortality occurred primarily among alcohol-related causes and among working-age men (the heaviest drinkers), th...

Inferring Strategic Voting

By Kei Kawai and Yasutora Watanabe

American Economic Review, April 2013

We estimate a model of strategic voting and quantify the impact it has on election outcomes. Because the model exhibits multiplicity of outcomes, we adopt a set estimator. Using Japanese general-election data, we find a large fraction (63.4 percent, 84...

Public Monopoly and Economic Efficiency: Evidence from the Pennsylvania Liquor Control Board's Entry Decisions

By Katja Seim and Joel Waldfogel

American Economic Review, April 2013

We estimate a spatial model of liquor demand to analyze the impact of government-controlled retailing on entry patterns. In the absence of the Pennsylvania Liquor Control Board, the state would have roughly 2.5 times the current number of stores, highe...

Commercial Imperialism? Political Influence and Trade during the Cold War

By Daniel Berger, William Easterly, Nathan Nunn, and Shanker Satyanath

American Economic Review, April 2013

We provide evidence that increased political influence, arising from CIA interventions during the Cold War, was used to create a larger foreign market for American products. Following CIA interventions, imports from the US increased dramatically, while...

Why People Vote: Ethical Motives and Social Incentives

By S. Nageeb Ali and Charles Lin

American Economic Journal: Microeconomics, May 2013

Some individuals vote because they are motivated by a civic duty to do so, whereas others may vote because they wish to appear prosocial to others. This paper proposes a simple framework that captures these motivations, and provides results consistent ...

Does Less Income Mean Less Representation?

By Eric Brunner, Stephen L. Ross, and Ebonya Washington

American Economic Journal: Economic Policy, May 2013

We assemble a novel dataset of matched legislative and constituent votes and demonstrate that less income does not mean less representation. We show: (i) The opinions of high- and low-income voters are highly correlated; the legislator's vote often refle...

Social Capital and Political Accountability

By Tommaso Nannicini, Andrea Stella, Guido Tabellini, and Ugo Troiano

American Economic Journal: Economic Policy, May 2013

We investigate a channel through which social capital may improve economic well-being and the functioning of institutions: political accountability. The main idea is that voters who share values and beliefs that foster cooperation are more likely to vo...

Economics versus Politics: Pitfalls of Policy Advice

By Daron Acemoglu and James A. Robinson

Journal of Economic Perspectives, Spring 2013

The standard approach to policy making and advice in economics implicitly or explicitly ignores politics and political economy and maintains that if possible, any market failure should be rapidly removed. This essay explains why this conclusion may be inc...

The Transmission of Democracy: From the Village to the Nation-State

By Paola Giuliano and Nathan Nunn

American Economic Review, May 2013

We provide evidence that a tradition of village democracy is associated with the presence of national democracy today. We also show that a tradition of local democracy is associated with attitudes which are more supportive of democracy, with better qualit...

The Impact of Crime and Insecurity on Trust in Democracy and Institutions

By Luisa Blanco and Isabel Ruiz

American Economic Review, May 2013

This paper examines the impact of crime and insecurity on support for and satisfaction with democracy and trust in institutions. We use survey data from the Latin American Public Opinion Project (LAPOP) for Colombia during the 2004-2010 period. We find th...

A Theory of Strategic Voting in Runoff Elections

By Laurent Bouton

American Economic Review, June 2013

This paper analyzes the properties of runoff electoral systems when voters are strategic. A model of three-candidate runoff elections is presented, and two new features are included: the risk of upset victory in the second round is endogenous, and many...

Preferences and Incentives of Appointed and Elected Public Officials: Evidence from State Trial Court Judges

By Claire S. H. Lim

American Economic Review, June 2013

We study how two selection systems for public officials, appointment and election, affect policy outcomes, focusing on state court judges and their criminal sentencing decisions. First, under appointment, policy congruence with voter preferences is att...

Campaign Contributions over CEOs' Careers

By Adam Fremeth, Brian Kelleher Richter, and Brandon Schaufele

American Economic Journal: Applied Economics, July 2013

Individuals dominate money in politics, accounting for over 90 percent of campaign contributions, yet studies of drivers of individuals' giving are scarce. We analyze data on all contributions made between 1991 and 2008 by all 1,556 people who became S...

What Does Health Reform Mean for the Health Care Industry? Evidence from the Massachusetts Special Senate Election

By Mohamad M. Al-Ississ and Nolan H. Miller

American Economic Journal: Economic Policy, August 2013

We exploit the surprise election of Republican Scott Brown to the US Senate to evaluate the market's assessment of the impact of the recent US health reform legislation on the health care industry. We find that Brown's election was associated with abnorma...