European Journal of Political Economy最新文献

Presidential Elections are critical moments for polyarchical systems, particularly in contexts of high social tension. In this regard, the 2018 presidential election in Brazil, which used a two-round system, is a significant case study. Intriguingly, the most divisive candidates went to the second round. Was this an institutional accident? Pairwise and positional voting procedures embody different generalizations of a majoritarian credo that underpins such elections. The paper mobilizes both perspectives and, using representative survey data, reconstructs the top four preferences of the Brazilian electorate a week before the election. The analysis reveals that the electoral winner, Jair Messias Bolsonaro – despite being a divisive candidate – was a Condorcet Winner and a Borda Winner. Conversely, the second-round loser, Fernando Haddad, was a Condorcet Loser. Thus, Bolsonaro’s victory in 2018 was not an institutional accident. The paper also explores possible alternative scenarios under different feasible sets of candidates through simulations, contributing to a deeper understanding of the role of decision procedures in critical junctures.

Supply-side policies take centre stage in the EU's post-pandemic recovery plans. This paper employs a benchmarking approach to quantify the potential impact of structural reforms in the EU Member States. Based on a comprehensive collection of structural indicators and a rich endogenous growth model, we evaluate reforms in five policy areas: (i) market competition and regulation; (ii) taxation; (iii) skills and education; (iv) labour markets; and (v) research and development. For each indicator and Member State, we simulate the closing of half of the gap with the EU's best performers, implying ambitious reforms for countries with significant distance to the frontier. For these stylised reforms, we find significant potential gains in employment and output, raising EU GDP by around 2% and 8% after five and twenty years, respectively. In the long run, the policies can increase EU GDP by over 20%. The policies also reduce economic disparities between countries, given different scope for reform. For countries with a sizable distance to the best performers, increases in potential GDP could exceed 40% when halving the gap across all indicators. Among the reforms considered here, human capital investment emerges as central for enhancing growth potential. In addition, we find synergies across reforms and countries and assess the sensitivity to alternative assumptions on technology dynamics in our model.

We investigate whether joining the European Monetary Union and losing the ability to set monetary policy affected the economic growth of Eurozone countries. We use the synthetic control approach to create a counterfactual scenario for how each Eurozone country would have evolved without adopting the euro. We let this matching algorithm determine which combination of other developed economies best resembles the pre-euro path of twelve Eurozone economies. Our estimates suggest that most countries’ economic growth was not significantly affected. There were some mild losers (France, Germany, Italy, and Portugal) and a clear winner (Ireland). The drivers of these economic gains and losses are heterogeneous. First, we find that Ireland’s economic gains are more modest when excluding profits and income earned by foreigners. Second, our results show that adopting the euro spurred government consumption and trade and deterred private consumption and investment, on average.

Judicial independence is a fundamental pillar of a liberal democracy. In one of its most basic functions, judicial independence impedes the ability to engage in executive overreach. Judicial manipulation, particularly the infamous practice of court-packing, threatens this pillar. Court-packing and other forms of judicial manipulation can exacerbate executive corruption and worsen government accountability and the rule of law. Using synthetic control analyses, we examine three countries (Hungary, Poland, and Turkey) that recently implemented waves of judicial manipulation that included outright court-packing. Our results provide evidence that in every case, executive corruption worsens and scores on accountability and rule of law decrease relative to the counterfactual. Furthermore, the gap between the de jure constitutional provisions and the actual de facto practice of those provisions (constitutional compliance) widens. In each case, these results are large in magnitude and almost always statistically significant.

We provide first evidence for the long-run causal impact that Chinese imports to European regions had on voting outcomes and revisit earlier estimates of the short-run impact for a methodological reason. The fringes of the political spectrum gained ground many years after the China shock plateaued and, unlike an earlier study by Colantone and Stanig (2018b), we do not find any robust evidence for a short-run effect on far-right votes. Instead, far-left and populist parties gained in the short run. We identify persistent long-run effects of import shocks on voting. These effects are biased towards populism and, to a lesser extent, to the far-right.

Although the large majority of Syrians fleeing the civil war remain in neighbouring or nearby countries, others embark on hazardous land or sea crossings in pursuit of the uncertain prospect of obtaining refugee status in Europe. Understanding in what ways Syrian migrants who stay in nearby countries differ from those who seek asylum in Europe can help to better target European asylum policies. We address this issue by combining two experimental databases of refugees in Egypt and Luxembourg. First, we measure original risk preferences on the Egypt sample and show that Cumulative Prospect Theory (CPT) is better suited for modelling refugee behaviour under risk than Expected Utility Theory (EUT). Second, we compare the risk preference parameters of the two samples under the CPT framework and find that, on average, refugees in Egypt are more loss averse and overweight low probabilities more than their counterparts who migrated to Luxembourg. These results suggest a possible self-selection process among refugees migrating to Europe based on their risk preferences, which challenges current policy schemes.

The development of the political system of countries is noisy, but in the longer run a strong relation to the economy emerges in the cross-country data for income, growth, and the main democracy indices. Two main theories explain these relations: (α) starts from the strong correlation between income and democracy, seeing income as the causal variable. It is the democratic transition, which is the political part of the theory of the grand transition. (β) starts from the much weaker correlation between democracy and economic growth, seeing democracy as the causal variable. This is a part of the primacy-of-institutions theory, where the political system is a key institution. The discussion needs (λ) a link-relation between growth and income. It connects the (α) and (β) theories, so that one may explain the other. The analysis looks at all six possible univariate relations between the three variables using kernel regressions on a large, unified data set. This method gives a clear picture. The strong α-relation can indeed explain the weak β-relation as spurious, but the weak β-relation predicts that the α-relation is very weak. Thus, (α) encompasses (β), but not vice versa.

If and how economic freedom is associated with environmental damage remains an open question. In this paper, I therefore combine data on greenhouse gas emissions and GDP per capita with the Economic Freedom of the World indices to test if economic freedom affects emissions. I do so in the context of estimating a standard Environmental Kuznets Curve in which economic freedom can both reduce overall levels as well as shift the shape of the curve. The results suggest that economic freedom reduces greenhouse gas emissions but also shifts the top point of the Kuznets Curve to the left.

Leaders who decide the allocation of resources are often chosen through contests. Due to imperfect monitoring, they often decide to allocate resources to themselves at the expense of others. This paper investigates how being selected in a contest affects such allocation through two channels: entitlement and self-selection effects. In our experiment, two players compete for the right to allocate resources between themself and a third, uninvolved player. We identify the entitlement effect by comparing the choices of participants who participated in the contest with those who were chosen randomly. Self-selection effect is identified by comparing the choices of winners and losers between treatments via a difference-in-difference approach. We find a significant effect of entitlement; people participating in the contest transfer fewer resources to the third player compared to those who did not participate. Further, we find no evidence that the people with specific distributional preferences self-select into the leaders’ role. Our findings suggest that the primary reason leaders allocate resources to themselves is their involvement in the contest rather than being a result of self-selection.