Chasing votes with the public budget

This paper examines the distribution of public resources by an incumbent seeking re-election. I present a model to explain the behavior of an incumbent redistributing public goods and cash transfers. According to the model, politicians use the government budget as a portfolio for electoral investment and diversify expenditure in order to target different groups of voters at the same time. I construct a unique data set of the promises made by the president of Colombia from 2002 to 2010 to municipalities throughout the country's various regions. The empirical results show some evidence that promises of cash transfers targeted swing voters, promises of public goods simultaneously targeted both core and swing municipalities, while opposition municipalities received few promises of cash transfers and public goods, which is consistent with the prediction of the model.     

Partially Revealing Campaign Promises

Candidates competing for political office give promises to voters. There are no legal restraints preventing incumbents from breaking their electoral promises. This paper models campaign promises as pure cheap talk and asks why is it influential. We propose that a candidate's campaign promises are a partially revealing signal of her policy preference type. The incumbent's policy choice is yet another signal of her type. Policy choice is a costly signal (unlike campaign promises). The incumbent keeps her electoral promises in order to preserve ambiguity about her type, which is necessary to assemble a winning majority for reelection. She keeps her promises regardless of information about the efficiency of different public policies which she receives upon taking office. Therefore, campaign promises generate inefficiencies in public policy.     

A new approach to measure tactical voting: evidence from the British elections

Although tactical voting attracts a great deal of attention, it is very hard to measure as it requires knowledge of both individuals’ voting choices as well as their unobserved preferences. In this article, we present a simple empirical strategy to nonparametrically identify tactical voting patterns directly from balloting results. This approach allows us to study the magnitude and direction of strategic voting as well as to verify which information voters and parties take into account to determine marginal constituencies. We show that tactical voting played a significant role in the 2010 election, mainly for Liberal–Democratic voters supporting Labour. Moreover, our results suggest that voters seem to form their expectations based on a national swing in vote shares rather than newspaper guides published in the main media outlets or previous election outcomes. We also present some evidence that suggests that campaign spending is not driving tactical voting.     

Social Security and Growth in an Altruistic Economy

This paper studies the macroeconomic impact of private and public intergenerational transfers in the presence of endogenous growth. It focuses on two-sided altruism implying that individuals have both a motive to make gifts to their parents and a motive to leave bequests to their children. The growth effects of social security depend on whether children are making gifts to their parents or parents are leaving bequests to their children. Which of the transfers is operative, in turn, depends on the size of social security benefits. Social security is legislated endogenously. The introduction of a social security program which definitely reduces per capita income growth and harms future generations is contemplated by altruistic individuals even if non-altruistic individuals disapprove it.     

Vote buying and campaign promises

What explains the wide variation across countries in the use of vote buying and policy promises during election campaigns? We address this question, and account for a number of stylized facts and apparent anomalies regarding vote buying, using a model in which parties cannot fully commit to campaign promises. We find that high vote buying is associated with frequent reneging on campaign promises, strong electoral competition, and high policy rents. Frequent reneging and low party competence reduce campaign promises. If vote buying can be financed out of public resources, incumbents buy more votes and enjoy an electoral advantage, but they also promise more public goods. Vote buying has distributional consequences: voters targeted with vote buying pre-election may receive no government benefits post-election. The results point to obstacles to the democratic transition from clientelist to programmatic forms of electoral competition: parties may not benefit electorally from institutions that increase commitment.     

SIGNALING THROUGH POLITICAL CAMPAIGNS: ELECTIONS AS A REVELATION MECHANISM

Political campaigns are usually seen either as a way of passing information about candidates' intended policies to the voters or as a political liability of the candidates towards the interest groups that finance them. We provide a different interpretation of political campaigns using a political competition model for campaign promises and spending. In a principal–agent framework, elections are shown to be a truth revelation mechanism, in which the principal (voters) induces truthful revelation of ability by the agent (candidates). Campaign promises and spending coexist as an integral part of this mechanism. Political competition is then derived endogenously.     

Transparency and Economic Policy

We provide a two period model of political competition in which voters imperfectly observe the electoral promises made to other voters. Imperfect observability generates an incentive for candidates to offer excessive transfers even if voters are homogeneous and taxation is distortionary. Government spending is larger than in a world of perfect observability. Transfers are partly financed through government debt, and the size of the debt is higher in less transparent political systems. The model provides an explanation of fiscal churning; it also predicts that groups whose transfers are less visible to others receive higher transfers, and that imperfect transparency of transfers may lead to underprovision of public goods. From the policy perspective, the main novelty of our analysis is a separate evaluation of the transparency of spending and the transparency of revenues. We show that the transparency of the political system does not unambiguously improve efficiency: transparency of spending is beneficial, but transparency of revenues can be counterproductive because it endogenously leads to increased wasteful spending.     

Intergenerational transfers and demographic transition

This paper presents an analysis of demographic transition based on the endogenous evolution of intergenerational transfers along an economy's endogenous path of development. Two-period-lived agents belonging to overlapping generations choose optimally their desired levels of consumption and fertility, together with their desired sizes of transfers to both parents and children. Parents are more efficient than children in producing output, but some parental time must be devoted to child-rearing. At low levels of development, fertility is high and the flow of net intergenerational transfers is from the young to the old. At high levels of development, fertility is low and the flow of net transfers is from the old to the young. These results accord strongly with empirical observations and the analysis may be seen as formalising, for the first time, a long-standing and well-respected hypothesis in the demographic transition literature.     

民主制度的责任视角:一个基本模型

竞争性民主是现代民主制度的主要实现方式。政治竞争的一些内在特征,包括选民"选择"行为特点、信息不对称以及候选人事前承诺不可置信等问题常常导致无效竞争。保证民主选举中竞争有效运行的关键在于存在保证竞选人在当选后的任期中会努力实现自己承诺的责任机制,从而提高事前承诺的可置信程度。文章通过一个简单的正式模型展示了这一点,进而尝试从选举机制、评价机制与声誉机制等方面初步探讨构建审责机制的可能路径。     

A SAVINGS SUBSIDISATION SYSTEM IN A MODEL OF ENDOGENOUS FERTILITY AND ENDOGENOUS GROWTH: AN EXTENSION OF WIGGER (1999)

Population ageing is now an established demographic characteristic of many economies. Economists working in the endogenous growth theory tradition have sought to model the relationship between public pensions, financed on a 'Pay-As-You-Go' basis, and the growth in per capita incomes. The resultant intergenerational wealth redistribution from young to older people seems to decrease private savings, diminish capital accumulation, and lower the growth of per capita incomes. The underlying transmission mechanism appears to be a crowding out effect in private capital markets contingent upon the introduction of public pension systems. A growing literature exists on the interrelationships between public pension schemes, fertility rates and endogenous growth. Following Wigger's (1999) pioneering overlapping generations endogenous growth model, we extend this model to examine the effects of a savings subsidisation system on the rate of per capita income growth, fertility and voluntary intrafamily wealth transfers, where parents view children both as an insurance good and a consumption good. Moreover, children care about the consumption levels of their parents. An increase in contributions to a savings subsidised public pension scheme will crowd out private intergenerational transfers from the young to the old and thereby negate the usefulness of children as an insurance good.     

Political budget cycles and voting within a federal country: The influence of political alignment

We study how distributive politics affects political budget cycles and voting within a federal country. Our model predicts not only that the president favors politically aligned governors with larger transfers, but also that voters favor gubernatorial candidates aligned with the expected presidential incumbent because larger transfers are expected in the future. These predictions are upheld by the data from Argentinean provinces during the 1984–2014 period. Our findings imply that political alignment can trump the selection effect of voting the most competent candidate. This can help explain in particular coattail effects when gubernatorial and presidential elections are concurrent.     

Can money buy EU love?

We explore the role played by Cohesion Policy in the Brexit referendum and the subsequent 2017 general election. Although the UK has been a net contributor to the EU, some regions receive significant amounts of regional aid funds. We find that while Cohesion Policy is positively correlated with the remain vote, this relationship is weak. Most of the variation in the remain vote is explained by economic factors. In contrast, there is a robust negative correlation between Cohesion Policy and voter turnout. We estimate that had there not been this negative relationship, some 2 million more voters would have participated in the referendum, which is more than the winning margin between the remain and leave votes. Our analysis of the 2017 election suggests that Conservatives lost and Labour gained votes in the regions that benefited from Cohesion Policy, while remain-supporting regions showed gains for the Liberal Democrats.     

TRANSFERS FROM MIGRANTS TO THEIR CHILDREN: EVIDENCE THAT ALTRUISM AND CULTURAL FACTORS MATTER

This paper focuses on the determinants of financial inter vivos transfers by migrants living in France in 2003 to their adult children. From a theoretical viewpoint, such transfers may be explained either by altruism or by exchange. While parents would direct their assistance to their less well off children under altruism, support should be channeled to children who live nearby their parents under the exchange motive. We assess the relevance of these two motives using the French PRI survey. Unequal sharing is frequently observed and children are more likely to receive financial transfers when they are in poor circumstance, but not necessarily when living in proximity to parents. We also emphasize the role of cultural factors as determinants of the parental allocation among children. Muslim parents, in particular, are more likely to make transfers to sons than to daughters.     

An index number framework for explaining changes in input productivity– an application to energy efficiency

Lott (2009) finds that nonvoted ballot rates for down-ballot races are greater than those for presidential races, and newer technologies that reduce nonvoted presidential ballots create even greater rates of nonvoting down-ballot than the same older voting technologies. The conclusion is momentous: adopting voting technologies that minimize under-voting in presidential races actually increases under-voting across all races on the same ballot. This study extends Lott's by examining the Congressional vote on the Help America Vote Act of 2002 (HAVA 2002), which established a program to provide funds to states in order to replace punch card voting systems with newer technologies. We focus on the racial component of Lott's finding, specifically that Hispanic-American voters exhibit greater rates of voter fatigue than do white voters. This study posits that, given the large Hispanic-American populations in California and Texas and their propensity to support Democrats in these states, House Democrats from these states would not view the HAVA 2002 as favourably as House Democrats from other parts of the US. Among other results presented here, the data show that support for HAVA 2002 among California and Texas House Democrats was 11.6 percentage points below that of House Democrats from the other 48 states.     

Electoral competition with policy-motivated candidates

In the multi-dimensional spatial model of elections with two policy-motivated candidates, we prove that the candidates must adopt the same policy platform in equilibrium. Moreover, when the number of voters is odd, if the gradients of the candidates' utility functions point in different directions, then they must locate at some voter's ideal point and a strong symmetry condition must be satisfied: in particular, it must be possible to pair some voters so that their gradients point in exactly opposite directions. If the number of dimensions is more than two, then our condition is knife-edge. When the number of voters is even, the situation is worse: such equilibria never exist, regardless of the dimensionality of the policy space.     

Tactical Redistribution Between Regions When Parties and Voters Care About Ideology

In this paper, redistributive transfers between regions are examined in a political economy model where both parties and voters are led by selfish as well as ideological motives, the latter taking the form of egalitarian objectives. Parties announce election platforms about how to distribute funds between regions and different income types, and voters react to these platforms when casting their vote. It is found that regional transfers are completely tactical; it is the political power of a region that decides if it will be a receiver or a contributor. Ideological goals are reached by redistributive transfers between different income types.     

Taxes, Transfers, and Voter Behavior in U.S. Midterm Elections

The effects of changes in per capita real GDP, real taxes and real government transfer payments on midterm congressional election outcomes during the 1946–2002 period are examined. Voters are found to take all of these, except taxes and transfers at the state and local government levels, into account in casting their ballots. However, the weights they place on each are found not to be the same. Consequently, the common practice of summarizing the economic conditions faced by voters through disposable income seems to be inappropriate. Also, omission of tax and transfer variables from the vote equation, and using vote swing rather than vote share as the dependent variable is found to result in underestimation of the coefficient of per capita GDP growth.     

Who are the trustworthy,we think?

A representative Swedish sample was asked to judge the relative trustworthiness of people from different groups, characterized by several dimensions such as political views and reading habits. A significant similarity effect was found in each of the seven dimensions analyzed. For example, rightwing voters consider Social Democratic voters to be much less trustworthy than rightwing voters, and vice versa. Thus, perceived trustworthiness appears to decrease generally with social distance, for which social identity theory offers a plausible explanation. Moreover, people who are old and live in small cities are generally considered more trustworthy than young people living in big cities. The results suggest reasons behind discrimination other than those underlying taste-based and statistical discrimination.     

Unequal opportunities and public policy: The impact of parental disability benefits on child postsecondary attendance

This paper uses Canada's National Longitudinal Survey of Children and Youth to examine whether greater cash transfers available to parents with disabilities when their child was aged 5 to 15 increase the chances that the child will attend postsecondary education (PSE) as a young adult. We exploit differences across provinces and over time in the generosity of provincial disability benefits programs in Canada and find that higher disability benefits when the child was aged 5 to 15 years increase the probability that he or she will have attended or be attending PSE by age 19 to 25. The estimated effect size increases with the severity of the parental disability and the number of disabled parents. Because lower disability benefits significantly worsen performance of public school aged children on standardized math tests and elevate anxiety symptoms, one plausible pathway from disability benefit levels to PSE attendance may be through the cognitive and non‐cognitive skills children acquire by the age of 15. We conclude that the level of disability transfers available early in a child's life mitigates the impact of having a parent with a disability as a source of inequality of opportunity and of unequal probability of PSE participation.     

On the demand for grandchildren: tied transfers and the demonstration effect

It is argued that parents provide help with housing downpayments in order to encourage the production of grandchildren, and that such a subsidization emanates from the “demonstration effect:” a child's propensity to furnish parents with attention and care can be conditioned by parental example. Parents who desire such transfers in the future have an incentive to make transfers to their own parents in order to instill appropriate preferences in their children. This generates a derived demand for grandchildren since potential grandparents will be treated better by their adult children if the latter have their own children to whom to demonstrate the appropriate behavior. Empirical work indicates behavior consistent with subsidization of the production of grandchildren and the demonstration effect.