Radical Markets by Eric Posner and E. Glen Weyl: A Review Essay

By David K. Levine

Journal of Economic Literature, June 2020

At a time when standards of living have improved more than any time in history, this book makes a proposal for radical change. It is based—loosely—on market design principles. The plan for attacking overlapping ownership is reasonably well thought out...

Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence

By Marianne Bertrand, Matilde Bombardini, Raymond Fisman, and Francesco Trebbi

American Economic Review, July 2020

We explore the role of charitable giving as a means of political influence. For philanthropic foundations associated with large US corporations, we present three different identification strategies that consistently point to the use of corporate social re...

One in a Million: Field Experiments on Perceived Closeness of the Election and Voter Turnout

By Alan Gerber, Mitchell Hoffman, John Morgan, and Collin Raymond

American Economic Journal: Applied Economics, July 2020

During the 2010 gubernatorial elections, we elicit voter beliefs about the closeness of the election before and after showing different polls, which, depending on treatment, indicate a close or not-close race. Subjects update their beliefs in response to ...

Why is There so Little Money in U.S. Politics?

By Stephen Ansolabehere, John M. de Figueiredo, and James M. Snyder Jr

Journal of Economic Perspectives, Winter 2003

History-Bound Reelections

By Hans Gersbach

American Economic Journal: Microeconomics, August 2020

We introduce history-bound reelections. In their simple form, they consist in a "score-replication rule." Under such a rule, an incumbent has to match the highest vote share he or she has obtained in any previous election in order to be reelected. We deve...

Voting and Contributing When the Group Is Watching

By Emeric Henry and Charles Louis-Sidois

American Economic Journal: Microeconomics, August 2020

Members of groups and organizations often have to decide on rules that regulate their contributions to common tasks. They typically differ in their propensity to contribute and often care about the image they project; in particular, they want to be percei...

The Perils of High-Powered Incentives: Evidence from Colombia's False Positives

By Daron Acemoglu, Leopoldo Fergusson, James Robinson, Dario Romero, and Juan F. Vargas

American Economic Journal: Economic Policy, August 2020

We investigate the use of high-powered incentives for the Colombian military and show that this practice produced perverse side effects. Innocent civilians were killed and misrepresented as guerillas (a phenomenon known in Colombia as "false positives"). ...

Youth Enfranchisement, Political Responsiveness, and Education Expenditure: Evidence from the US

By Graziella Bertocchi, Arcangelo Dimico, Francesco Lancia, and Alessia Russo

American Economic Journal: Economic Policy, August 2020

We examine the link between the political participation of the young and fiscal policies in the United States. We generate exogenous variation in participation using the passage of preregistration laws, which allow the young to register before being eligi...

Criminal Deterrence When There Are Offsetting Risks: Traffic Cameras, Vehicular Accidents, and Public Safety

By Justin Gallagher and Paul J. Fisher

American Economic Journal: Economic Policy, August 2020

Numerous cities have enacted electronic monitoring programs at traffic intersections in an effort to reduce the high number of vehicle accidents. The rationale is that the higher expected fines for running a red light will induce drivers to stop and lead ...

The Economics of Urban Density

[Symposium: Productivity Advantages of Cities]

By Gilles Duranton and Diego Puga

Journal of Economic Perspectives, Summer 2020

Density boosts productivity and innovation, improves access to goods and services, reduces typical travel distances, encourages energy efficient construction and transport, and allows broader sharing of scarce urban amenities. However, density is also syn...

Facts and Myths about Misperceptions

By Brendan Nyhan

Journal of Economic Perspectives, Summer 2020

Misperceptions threaten to warp mass opinion and public policy on controversial issues in politics, science, and health. What explains the prevalence and persistence of these false and unsupported beliefs, which seem to be genuinely held by many people?...

Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects

By Clément de Chaisemartin and Xavier D'Haultfœuille

American Economic Review, September 2020

Linear regressions with period and group fixed effects are widely used to estimate treatment effects. We show that they estimate weighted sums of the average treatment effects (ATE) in each group and period, with weights that may be negative. Due to the n...

Patronage and Selection in Public Sector Organizations

By Emanuele Colonnelli, Mounu Prem, and Edoardo Teso

American Economic Review, October 2020

In all modern bureaucracies, politicians retain some discretion in public employment decisions, which may lead to frictions in the selection process if political connections substitute for individual competence. Relying on detailed matched employer-employ...

Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure

By David Autor, David Dorn, Gordon Hanson, and Kaveh Majlesi

American Economic Review, October 2020

Has rising import competition contributed to the polarization of US politics? Analyzing multiple measures of political expression and results of congressional and presidential elections spanning the period 2000 through 2016, we find strong though not de...

Voter Turnout with Peer Punishment

By David K. Levine and Andrea Mattozzi

American Economic Review, October 2020

We introduce a model where social norms of voting participation are strategically chosen by competing political parties and determine voters' turnout. Social norms must be enforced through costly peer monitoring and punishment. When the cost of enforcemen...

E-governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India

By Abhijit Banerjee, Esther Duflo, Clément Imbert, Santhosh Mathew, and Rohini Pande

American Economic Journal: Applied Economics, October 2020

Can e-governance reforms improve government policy? By making information available on a real-time basis, information technologies may reduce the theft of public funds. We analyze a large field experiment and the nationwide scale-up of a reform to India's...

Partisan Shocks and Financial Markets: Evidence from Close National Elections

By Daniele Girardi

American Economic Journal: Applied Economics, October 2020

This paper estimates the effect of partisan electoral victories on stock and bond markets. We employ a regression-discontinuity-based event study in a sample of 758 worldwide post-1945 national elections, using existing data on parliamentary elections and...

Hybrid All-Pay and Winner-Pay Contests

By Johan N. M. Lagerlöf

American Economic Journal: Microeconomics, November 2020

In many contests in economic and political life, both all-pay and winner-pay expenditures matter for winning. This paper studies such hybrid contests under symmetry and asymmetry. The symmetric model assumes very little structure but yields a simple close...

Does Information Break the Political Resource Curse? Experimental Evidence from Mozambique

By Alex Armand, Alexander Coutts, Pedro C. Vicente, and Inês Vilela

American Economic Review, November 2020

Natural resources can have a negative impact on the economy through corruption and civil conflict. This paper tests whether information can counteract this political resource curse. We implement a large-scale field experiment following the dissemination o...

Gambling over Public Opinion

By Deepal Basak and Joyee Deb

American Economic Review, November 2020

We consider bargaining environments in which public opinion provides leverage by making compromises costly. Two parties make initial demands, before knowing the public opinion. If deadlocked, they can bargain again after public opinion forms, but suffer r...