European Journal of Political Economy最新文献

We study the relationship between collusion and corruption in a stylized model of repeated procurement where the cost of reporting corrupt bureaucrats gives rise to a free riding problem. Cooperation among long-run (honest) firms alleviates free-riding in reporting. However, it also facilitates collusion in bidding by increasing the value of the collusive rent. In turn, bidding collusion facilitates cooperation in reporting by increasing the value of having honest bureaucrats, generating a trade-off between collusion and corruption.

The period of modern industrialisation is commonly characterised by gradual democratisation through enfranchisement and intra-elite competition between traditional landlords and emerging capitalists. This raises the question of whether the redistribution of de jure political power via suffrage expansion can catalyse the transition of intra-elite power structures, as reflected in political representation. This study explores the impact of suffrage extension, induced by the wartime tax increase in Japan during the mid-1900s, on the occupational composition of the House of Representatives. Employing a difference-in-differences approach, I demonstrate that the expansion of the electorate led to a significant decline in the seat shares of agricultural landlords, who initially constituted the dominant occupational group in the House. In consideration of the historical context, the overall findings suggest that suffrage extension likely played a crucial role in diversifying House politics away from a landlord-centred system.

This study provides a novel attempt to assess whether an early warning system (EWS) for systemic banking crises can produce better predictions when political indicators are used alongside traditional macro-financial indicators. Based on a dataset covering 32 advanced economies for the period 1975–2017, we show that the inclusion of political indicators significantly improves the predictive performance of the model. Our results suggest several channels, related to the role of constitutions and policy predictability, through which the political environment could affect the stability of a banking system. In particular, we find that majority governments, left-wing governments, and a longer time in office of the executive party are negatively correlated with systemic risk. This is robust to a large number of different specifications. Furthermore, we find that long-established institutional systems and plurality electoral systems (compared to proportional representation systems) are associated with a lower likelihood of crises. At the same time, crises are more likely when the incumbent government represents a nationalist platform.

This paper presents a theoretical model showing how political mistrust affects people’s preferences for Universal Basic Income (UBI) when its implementation involves a reduction in spending for other public services (welfare retrenchment). The model shows that individuals with lower levels of political mistrust are more likely to endorse UBI, reflecting their trust in the government’s ability to manage public resources and avoid wasteful retrenchment of other public services. The model also shows that generalised mistrust – characterised by agents’ expectations of their fellow citizens’ misbehaviour that can reduce the government’s fiscal capacity – does not significantly influence preferences for UBI when it involves a partial retrenchment of other public services. This result is driven by the agents’ perception that their fellow citizens’ misbehaviour would occur irrespective of the UBI implementation. The empirical analysis with 265 European regions from the European Social Survey (ESS) confirms the predictions of the model.

We study the effect of economic insecurity on electoral outcomes using data on municipal elections in Italy. We implement a difference-in-differences approach that exploits exogenous variation across municipalities in the share of inactive workers due to the economic lockdown introduced by the central government to deal with the Covid-19 pandemic. We show that lockdown-induced economic insecurity positively affected the electoral performance of progressive and left-wing parties, while it negatively affected conservative and far-right parties. Conversely, we find no effect for the populist Five Star Movement, local independent parties (i.e., Civic Lists), and electoral turnout. We provide evidence that extraordinary economic measures introduced by the central government to compensate workers for the economic insecurity can explain this shift in partisanship toward the left and the increasing support for pro-EU parties, away from euro-skeptic and populist forces.

Despite the large spread of fiscal rules around the world, there is still not enough evidence of their effectiveness in ensuring fiscal sustainability. Furthermore, there is little evidence of the impact of expenditure rules in countries’ fiscal performance. This paper evaluates the effectiveness of the Spanish expenditure rule that has been in force since 2012 in controlling the growth of public expenditure. We use a synthetic control methodology to analyze the impact of the rule on the evolution of current and primary expenditure within Spanish public administrations (2001–2018), avoiding the potential endogeneity problems of traditional econometric approaches. Overall, we find that the expenditure rule has largely improved budget sustainability by limiting both current and primary expenditure. These results are robust to different levels of government.

Three regimes of technology leadership are compared. Firstly, technological innovation in a unipolar world with one dominant country that can sell its technology to a set of small countries. Secondly, competition for leadership between two large countries, with small countries that are independent. Thirdly, a decoupled world in which all small countries are allied with one or the other big country. Small nations fare best when they are independent and large nations engage in leadership competition. Great power nations prefer unipolar leadership. If there are two big nations, they prefer a decoupled world that is partitioned into zones of influence, compared to competing with each other.

This study examines the effect of political alignment on the political budget cycle in multi-level local governments (municipal and regional governments). The central government may increase transfers to politically unaligned municipalities before local elections if (1) these municipalities are part of politically aligned regions and (2) the alignment of regional incumbents determines the political fate of the president. To formalize this hypothesis, we present a simple political agency model of multi-level governments. Using data from 226 Korean municipalities within 16 regions, and a regression discontinuity design, we find that, during local election years, the central government increases discretionary subsidies to municipalities that are part of aligned regions. In particular, subsidies increase significantly before local elections in unaligned municipalities if they are located in aligned regions. Finally, an increase in subsidies increases the regional vote share obtained by the ruling party.

Declining levels of turnout and growing distrust in political elites are often seen as symptoms of a crisis of representative democracy. Various proposals of reform have been made to reinvigorate representation and political participation. This paper focuses on one aspect of that debate: finding an alternative to FPTP, which is the electoral rule most frequently used in single-member districts, but which is criticized, among others, for allowing only a limited expression of voters' preferences. Many alternative rules are in use or have been suggested, such as Two-Round majority, Instant Runoff, Approval Voting, Majority Judgement, or Range Voting. The literature on these decision rules has concentrated on their formal properties. Yet, we know surprisingly little about how frequently these rules would lead to different outcomes in normal electoral settings. This paper improves our understanding of these rules by examining their mechanical effects. We start from data on voters' party utilities from “real-world” settings, based on CSES data. This allows simulating and comparing the outcomes of different electoral rules under a variety of distributions of voters' party preferences. We then analyze how frequently they lead to different outcomes and identify the contextual characteristics that explain these differences. For the latter question, we focus on a number of party system or electorate's characteristics, which have been highlighted in debates on challenges to representation (such as ideological polarization, party system fragmentation, or affective polarization).

The career prospects of politicians can significantly influence their policy decisions, including those related to environmental protection. This study examines how promotion incentives affect environmental outcomes by analyzing prefectural pollution and personnel data in China from 2003 to 2017. The research indicates that the promotion prospects of prefecture party secretaries were negatively affected by changes in their social networks with the transition of power. The difference-in-differences analyses, using the power transition as a shock, reveal that sulfur dioxide emissions significantly increased in prefectures governed by secretaries who had lost their connections. This was due to a decrease in officials' motivation to prioritize environmental protection, owing to their slim chances of promotion. The possibility of an increase in pollution as a result of growth competition is ruled out. The mechanism is demonstrated through text analysis of local governments' annual work reports.