Divided government versus incumbency externality effect—Quasi-experimental evidence on multiple voting decisions

This paper explores the causal relationship between vote outcomes in different elections. We ask: (1) Does the partisan identity of the mayor influence the voter's decision in subsequent town council elections? (2) Do voters condition their vote for the mayor on the result of the last council election? The analysis mainProd. Type: FLPly relies on a regression discontinuity design focusing on close election outcomes based on municipal level data for Germany. We find that the party of the mayor can receive a significant bonus in the next town council election. Moreover, voters punish mayor candidates of parties that performed strongly in earlier council elections. Throughout the paper, we highlight how these findings can be related to an incumbency externality effect and to the theory of divided government.     

Rational Partisan Theory: Evidence for Seven OECD Economies

According to the Rational Partisan Theory of business cycles ("RPT"), ex ante uncertainty about the outcome of elections will generate post-election output growth fluctuations. This paper employs vote prediction equations and opinion polls to compute election win probability estimates for 62 elections in seven OECD economies. The probability estimates are used to calibrate partisan intervention terms entered in output growth regressions. For the UK and, to some extent, Canada and Australia, our results are supportive of the RPT. For the US, the calibrated intervention terms are dominated by a partisan dummy variable turned on after each election.     

Elections, Opportunism, Partisanship and Sovereign Ratings in Developing Countries

We empirically examine whether and how opportunistic and partisan political business cycle (“PBC”) considerations explain election‐period decisions by credit rating agencies (“agencies”) publishing developing country sovereign risk‐ratings (“ratings”). Analyses of 391 agency ratings for 19 countries holding 39 presidential elections from 1987–2000, initially suggest that elections themselves prompt rating downgrades consistent with opportunistic PBC considerations, that incumbents are all likely to implement election‐period policies detrimental to post‐election creditworthiness. But more refined analyses, integrating both opportunistic and partisan PBC considerations in a unified framework, suggest that election‐period agency downgrades (upgrades) are more likely as right‐wing (left‐wing) incumbents, become more vulnerable to ouster by challengers. Together, these results underscore the importance of integrating both opportunistic and partisan PBC considerations into any explanation of election‐period risk assessments of agencies and, perhaps, other private, foreign‐based financial actors important to the pricing and allocation of capital for lending and investment in the developing world.     

Estimating Presidential Elections: The Importance of State Fixed Effects and the Role of National Versus Local Information

Explaining the outcome of presidential elections is central to any model of American government. Previous researchers have found that economic conditions explain a substantial portion of the variation in vote outcomes. We make two contributions to this literature. First, we show that state partisan predisposition is the most important explanatory variable for the period 1972–1992. Several states are simply out of reach for one of the parties, no matter how favorable is the information about their candidate. Second, we find that national economic indicators have an effect on votes that is an order of magnitude larger than state-level aggregates. Presidents who try to curry favor with certain states through pork barrel projects are unlikely to be rewarded with large vote margins. Our model does a reasonable job forecasting the state-level vote for the 1996 election when the actual economic conditions are used as regressors. None the less we are skeptical that these type of models can accurately forecast the Electoral College winner because of the wide confidence intervals on each state's vote forecast and the potential error in predicted economic conditions.     

ECONOMIC VOTING AND ELECTORAL BEHAVIOR: HOW DO INDIVIDUAL,LOCAL, AND NATIONAL FACTORS AFFECT THE PARTISAN CHOICE?

What impact do income and other demographic factors have on a voter's partisan choice? Using post‐election surveys of 14,000 voters in 10 Australian elections between 1966 and 2001, I explore the impact that individual, local, and national factors have on voters' decisions. In these 10 elections, the poor, foreign‐born, younger voters, voters born since 1950, men, and those who are unmarried are more likely to be left‐wing. Over the past 35 years, the partisan gap between men and women has closed, but the partisan gap has widened on three dimensions: between young and old; between rich and poor; and between native‐born and foreign‐born. At a neighborhood level, I find that, controlling for a respondent's own characteristics, and instrumenting for neighborhood characteristics, voters who live in richer neighborhoods are more likely to be right‐wing, while those in more ethnically diverse or unequal neighborhoods are more likely to be left‐wing. Controlling for incumbency, macroeconomic factors do not seem to affect partisan preferences – Australian voters apparently regard both major parties as equally capable of governing in booms and busts.     

Local equilibrium equivalence in probabilistic voting models

Electoral equilibria depend upon candidates' motivations. Maximization of expected vote share may not lead to the same behavior as maximization of the probability of winning the election. Accordingly, it is desirable to understand when electoral equilibria are insensitive to the choice of candidate motivations. This paper examines sufficient conditions for local equilibrium equivalence between expected vote share maximization and maximization of probability of victory in the spatial model of elections with probabilistic voters.     

SEQUENTIAL VOTING WHEN LONG ELECTIONS ARE COSTLY

This paper analyzes sequential voting in binary elections when voters are motivated by a desire both to elect their preferred candidate and to avoid a long and costly election. I find a unique equilibrium in which a voter's action depends both on the intensity of the voter's preferences as well as how well the candidates have done in earlier voting rounds. This equilibrium results in momentum in which voters are more likely to vote for the candidate currently in the lead. Furthermore, the probability a voter votes for a candidate is increasing in the size of the candidate's lead. As a consequence, a candidate is more likely to win the election if the candidate's stronger supporters vote earlier in the election.     

Coordinated voting in sequential and simultaneous elections: some experimental evidence

This paper studies a situation wherein a set of voters choose between two alternatives in the presence of a payoff externality. Specifically, regardless of her intrinsic preference, a voter’s payoff is maximized should she vote for the alternative that garners a majority of the votes cast. Are votes coordinated on a single alternative? Using laboratory experiments, we examine voting patterns in sequential voting and simultaneous voting elections. Across both election types, we also vary the amount of information that an individual voter has regarding the intrinsic preferences of the other voters. Our main findings are as follows. In the “low” information treatment, sequential voting elections facilitate coordinated voting. However, in the “high” information treatment, voting patterns are not dependent on how the election is structured.     

Abstention and signaling in large repeated elections

I consider a two period model of repeated elections in which politicians update their beliefs about the preferences of the voters after the first period election and set second period policies accordingly. When voting is costless, a positive fraction of voters abstains for any finite population, but abstention vanishes in the limit of an arbitrarily large election. I demonstrate that in large elections, a single vote changes second period policies by an amount exponentially large compared to the probability of influencing the first period election if the probabilities with which voters vote for the two candidates differ. Using this, I prove that the limiting voting behavior in the first election is independent of the first period policy choices of the candidates. The incentive to vote to signal oneʼs preferences thus dominates the incentive to vote to increase the chances of electing oneʼs preferred candidate.     

Pivots versus signals in elections

We consider a two-period model of elections in which voters have private information about their policy preferences. A first-period vote can have two types of consequences: it may be pivotal in the first election and it provides a signal that affects candidates' positions in the second election. Pivot events are exceedingly unlikely, but when they occur the effect of a single vote is enormous. In contrast, vote totals always have some signaling effect, but the effect of a single vote is small. We investigate which effect - pivot or signaling - drives equilibrium voting behavior in large electorates.     

Do voters vote ideologically?

In this paper we address the following question: To what extent is the hypothesis that voters vote “ideologically” (i.e., they always vote for the candidate who is ideologically “closest” to them) testable or falsifiable? We show that using data only on how individuals vote in a single election, the hypothesis that voters vote ideologically is irrefutable, regardless of the number of candidates competing in the election. On the other hand, using data on how the same individuals vote in multiple elections, the hypothesis that voters vote ideologically is potentially falsifiable, and we provide general conditions under which the hypothesis can be tested.     

Coattails and the forces that drive them: Evidence from Mexico

Coattails and the forces behind them have important implications for the understanding of electoral processes and their outcomes. By focusing our attention on neighboring electoral sections that face the same local congressional election, but different municipal elections, and assuming that political preferences for local legislative candidates remain constant across neighboring electoral sections, we exploit variation in the strength of the municipal candidates in each of these electoral sections to estimate coattails from municipal to local congressional elections in Mexico. A one percentage increase in vote share for a municipal candidate translates, depending on his or her party, into an average of between 0.45 and 0.78 percentage point increase in vote share for the legislative candidates from the same party (though this effect may not have been sufficient to affect an outcome in any electoral district in our sample). In addition, we find that a large fraction of the effect is driven by individuals switching their vote decision in the legislative election, rather than by an increase in turnout.     

The effects of earmarks on the likelihood of reelection

Many models predict that incumbent legislators use government spending – “pork barrel” spending – to increase their vote shares in elections. To date, however, evidence for this hypothesis is scarce. Using recently available data on the sponsorship of earmarks in U.S. appropriations legislation, this paper tests the effects of earmarks on the likelihood of legislators' reelection. The results show that secured earmarks lead to higher vote shares. The analysis demonstrates that a $10 million increase in earmarks leads to as much as a one percentage point increase in vote share on election day. Furthermore, the paper tests for voter responses to earmarks when earmarks have few or many sponsors.     

How Much Does the State of the Economy Influence the Popularity of Austrian Parties? An Empirical Investigation

We estimate popularity functions for the Austrian parties Austrian People’s Party (ÖVP), Social Democrats (SPÖ) and Austrian Freedom party (FPÖ) between 1987 and 2010 (using annual data) as well as vote functions for the same Austrian parties in the 86 election districts in the national elections in 1999, 2002, 2006 and 2008. In most cases we find a statistically significant and theoretically predicted influence of three economic variables, namely the unemployment rate, inflation rate and growth rate of income, on both popularity and voting behavior. However, this influence is not robust and shows a tendency to decline over time.     

Polarization,Political Instability and Active Learning*

In a multiperiod setting, decision‐makers can learn about the consequences of their decisions through experimentation. We examine how polarization and political instability affect learning through experimentation. We distinguish two cases: (i) the decision to be made is not salient and does not affect the outcome of subsequent elections (exogenous elections) and (ii) the decision is salient and the election outcome depends on it (endogenous elections). It is shown that while the possibility of learning increases activism, the existence of political instability distorts learning. Furthermore, we demonstrate that, when elections are exogenous, polarization between political parties does not always decrease active learning.     

Electoral uncertainty and financial volatility: Evidence from two‐round presidential races in emerging markets

We study how the predictability and the decisiveness of electoral outcomes affect financial volatility. We argue that traders’ optimal investment strategies depend on their ability to make accurate electoral forecasts and the prospective losses associated with placing a bet on the wrong candidate. Using a triple difference‐in‐difference approach and data from two‐round presidential elections in five Latin American countries between 1999 and 2018, we find that financial volatility is greatest in the days immediately following unpredictable, decisive, elections. Postelectoral volatility also occurs following predictable, indecisive elections. The effect of learning the identity of the winning candidate on financial volatility is null when the election is unpredictable and indecisive, as well as when the election is decisive, but the outcome is predictable. These findings offer insights into investors seeking to hedge price risk around elections. They also have important implications regarding the relationship between public opinion polls and postelectoral financial volatility.     

Incumbency advantage in a proportional electoral system: A regression discontinuity analysis of Irish elections

The existence of a large incumbency advantage in the winner-takes-all plurality system of the United States is well documented. It is unclear whether incumbents in proportional systems should enjoy such a large advantage. Multi-seat constituencies make it difficult for individual incumbents to claim credit for the provision of local public goods and services. Moreover, multiple incumbents may dilute media attention thereby limiting name recognition advantage. We use a regression discontinuity design to estimate the causal effect of incumbency using election data from Ireland’s system of proportional representation with a single transferable vote (PR-STV). Incumbency causes an eighteen percentage point increase in the probability that a candidate in Ireland’s lower house of parliament wins a seat in the next election. Our results indicate that the protection of vulnerable incumbents from intra-party competition may be a source of incumbency advantage in multi-member district elections.     

The power of social mobilisation: The impact of monitoring the 2015 presidential elections in Poland

In recent years we have observed an increased engagement of citizen’s movements with elections in democratic polities. Yet our understanding of the influence that this engagement can have over elections is still rather limited. In this paper we study electoral consequences of citizens’ involvement in monitoring 2015 presidential elections in Poland. Our analysis provides strong support for arguments saying that watchdog organisations may have an important influence on electoral outcomes. Our findings suggest that in municipalities in which election observers were present the share of vote for an incumbent candidate, Bronis?aw Komorowski, was significantly lower than in municipalities where the watchdog organisation did not have its representatives. Our results are robust to several tests which allows us to argue that the effect we find should not be attributed to some unobservable factors.     

Political business cycles and construction licensing

We analyze the effects of opportunistic and partisan politics on the licensing of construction activities, which in turn determines the level of housing supply. In line with Political Business Cycle theory, we hypothesize that the municipal incumbent may manipulate the supply of construction permits before (general and local) elections in order to boost economic activity and voter satisfaction, or to accommodate special‐interest groups. Our findings, based on time‐series data from post‐socialist Tirana (Albania), are consistent with opportunistic and partisan incentives’ creating cycle effects in the licensing of construction permits. However, we find that the direction of opportunistic election cycles depends critically on the interaction between the municipal incumbent and the central‐level government. Our paper raises important questions about the effects of transition politics on spatial development in post‐socialist cities.     

Do non-citizens affect U.S. Congressional elections?

U.S. citizens against immigration argue that immigrants commit voter fraud and skew election outcomes towards progressive candidates. These arguments have increased in number and severity since the Supreme Court ruled in 2013 that states cannot require photo identification from voters. We examine whether the size of the non-citizen population is related to election outcomes. Previous research indicates that non-citizens sway elections in favour of progressive candidates but only in elections where the victory margin is small. We find no evidence of a relationship between non-citizens and vote outcomes. We find evidence that the percent of the population that is non-white is positively related to percent of votes cast for democratic candidates.