An Experiment in Candidate Selection

By Katherine Casey, Abou Bakarr Kamara, and Niccoló F. Meriggi

American Economic Review, May 2021

Are ordinary citizens or political party leaders better positioned to select candidates? While the American primary system lets citizens choose, most democracies rely instead on party officials to appoint or nominate candidates. The consequences of these ...

The Role of Electoral Incentives for Policy Innovation: Evidence from the US Welfare Reform

By Andreas Bernecker, Pierre C. Boyer, and Christina Gathmann

American Economic Journal: Economic Policy, May 2021

How do governors' reelection motives affect policy experimentation? We develop a theoretical model of this situation, and then test the predictions in data on US state-level welfare reforms from 1978 to 2007. This period marked the most dramatic shift in ...

Fiscal Policy in Europe: Controversies over Rules, Mutual Insurance, and Centralization

[Symposium: European Union]

By Florin Bilbiie, Tommaso Monacelli, and Roberto Perotti

Journal of Economic Perspectives, Spring 2021

We discuss the main fiscal policy issues in Europe, focusing on two that are at the core of the current debate. The first is that the government deficit and debt were, from the outset, the key objects of contention in the debate that led to the creation...

The Capital Asset Pricing Model

[Symposium: Fortieth Anniversary of CAPM]

By André F. Perold

Journal of Economic Perspectives, Summer 2004

The Capital Asset Pricing Model (CAPM) revolutionized modern finance. Developed in the early 1960s by William Sharpe, Jack Treynor, John Lintner and Jan Mossin, the model provided the first coherent framework for relating the required return on an investm...

Homefront: Black Veterans and Black Voters in the Civil Rights Era

By Thomas Koch, Trevon D. Logan, and John M. Parman

AEA Papers and Proceedings, May 2021

While the role of World War II veterans in the civil rights movement has been well documented, debate about the causal effect of military service remains. Combining detailed information on World War II enlistments and Civil Rights Commission data on voter...

Up the Political Ladder: Gender Parity in the Effects of Electoral Defeats

By Melanie Wasserman

AEA Papers and Proceedings, May 2021

This paper investigates whether an electoral defeat has different effects on the subsequent political involvement of male and female candidates for state office. Using US state legislative election returns from 1972 to 2010 and a regression discontinuity ...

Custom Elections and Local Policies: The Case of Canada's First Nations

By Fernando M. Aragón and Anke S. Kessler

AEA Papers and Proceedings, May 2021

We examine the effect of community-designed electoral codes on Canadian First Nation communities. Adopting a custom code for local elections allows for changes such as increasing term duration, creating appeal and supervisory bodies, and incorporating tra...

Appropriate Institutions? Traditional Governance and Public Goods Provision in Oaxaca, Mexico

By Gustavo J. Bobonis, Juan C. Chaparro, Marco Gonzalez-Navarro, and Marta Rubio-Codina

AEA Papers and Proceedings, May 2021

What are the consequences of the adoption of traditional governance institutions among indigenous groups for local government affairs? We study the 1995 Usos y Costumbres traditional governance reform in the state of Oaxaca, which legitimized these struct...

Are We Consuming Too Much?

By Kenneth Arrow, Partha Dasgupta, Lawrence Goulder, Gretchen Daily, Paul Ehrlich, Geoffrey Heal, Simon Levin, Karl-Göran Mäler, Stephen Schneider, David Starrett, and Brian Walker

Journal of Economic Perspectives, Summer 2004

This paper articulates and applies frameworks for examining whether consumption is excessive. We consider two criteria for the possible excessiveness (or insufficiency) of current consumption. One is an intertemporal utility-maximization criterion: actual...

Cycles of Fire? Politics and Forest Burning in Indonesia

By Clare Balboni, Robin Burgess, Anton Heil, Jonathan Old, and Benjamin A. Olken

AEA Papers and Proceedings, May 2021

This paper examines the link between electoral incentives and environmental degradation by exploiting a satellite dataset on 107,000 forest fires and 879 asynchronous district elections in Indonesia. Fires represent a cheap but illegal means of converting...

Jackson, the Bank War, and the Legacy of the Second Bank of the United States

By Peter L. Rousseau

AEA Papers and Proceedings, May 2021

President Jackson vetoed the bill to recharter the Second Bank of the United States on July 10, 1832. I describe events leading to the veto and through the bank's dissolution in 1836 using private correspondence and official government documents. These ...

How to Subvert Democracy: Montesinos in Peru

By John Mcmillan and Pablo Zoido

Journal of Economic Perspectives, Fall 2004

Which of the democratic checks and balances--opposition parties, the judiciary, a free press--is the most forceful? Peru has the full set of democratic institutions. In the 1990s, the secret-police chief Montesinos systematically undermined them all with ...

Digital Dystopia

By Jean Tirole

American Economic Review, June 2021

Autocratic regimes, democratic majorities, private platforms, and religious or professional organizations can achieve social control by managing the flow of information about individuals' behavior. Bundling the agents' political, organizational, or religi...

Persistent Political Engagement: Social Interactions and the Dynamics of Protest Movements

By Leonardo Bursztyn, Davide Cantoni, David Y. Yang, Noam Yuchtman, and Y. Jane Zhang

American Economic Review: Insights, June 2021

We study the causes of sustained participation in political movements. To identify the persistent effect of protest participation, we randomly indirectly incentivize Hong Kong university students into participation in an antiauthoritarian protest. To iden...

Foreign Influence and Domestic Policy

By Toke S. Aidt, Facundo Albornoz, and Esther Hauk

Journal of Economic Literature, June 2021

In an interconnected world, economic and political interests inevitably reach beyond national borders. Since policy choices generate external economic and political costs, foreign state and non-state actors have an interest in influencing policy actions i...

On the (Ir)Relevance of Distribution and Labor Supply Distortion to Government Policy

By Louis Kaplow

Journal of Economic Perspectives, Fall 2004

Should the assessment of government policies, such as the provision of public goods and the control of externalities, deviate from first-best principles to account for distributive effects and the distortionary cost of labor income taxation? For example, ...

Minority Salience and Political Extremism

By Tommaso Colussi, Ingo E. Isphording, and Nico Pestel

American Economic Journal: Applied Economics, July 2021

We investigate how the salience of an ethnic minority affects the majority group's voting behavior. We use the increased salience of Muslim communities during Ramadan as a natural experiment. Exploiting exogenous variation in the distance of election date...

Inducing Cooperation through Weighted Voting and Veto Power

By Antonin Macé and Rafael Treibich

American Economic Journal: Microeconomics, August 2021

We study the design of voting rules for committees representing heterogeneous groups (countries, states, districts) when cooperation among groups is voluntary. While efficiency recommends weighting groups proportionally to their stakes, we show that accou...

Policy Experimentation in Committees: A Case against Veto Rights under Redistributive Constraints

By Vincent Anesi and T. Renee Bowen

American Economic Journal: Microeconomics, August 2021

We study optimal policy experimentation by a committee. We consider a dynamic bargaining game in which committee members choose either a risky reform or a safe alternative each period. When no redistribution is allowed, the unique equilibrium outcome is g...

Political Alignment, Attitudes toward Government, and Tax Evasion

By Julie Berry Cullen, Nicholas Turner, and Ebonya Washington

American Economic Journal: Economic Policy, August 2021

We ask whether attitudes toward government play a causal role in the evasion of US personal income taxes. As turnover elections move voters in partisan counties into and out of alignment with the party of the president, we find with alignment (i) taxpayer...