Pub Date : 2025-08-27DOI: 10.1016/j.ejpoleco.2025.102732
Youngseok Park
This paper examines how economic sanctions affect internal resource allocation in North Korea. Drawing on insights from the political economy of authoritarian regimes, I propose that as sanctions intensify, the regime reallocates resources to maintain elite loyalty at the expense of weapons development. Using satellite-based nighttime lights data as a proxy for regional economic activity, I find that sanctions increase light intensity in elite-dominated areas like Pyongyang, while brightness declines around nuclear facilities. These findings suggest that sanctions may unintentionally reinforce regime stability by redirecting resources toward the ruling elite.
{"title":"A dictator’s retort to economic sanctions: Evidence from North Korea","authors":"Youngseok Park","doi":"10.1016/j.ejpoleco.2025.102732","DOIUrl":"10.1016/j.ejpoleco.2025.102732","url":null,"abstract":"<div><div>This paper examines how economic sanctions affect internal resource allocation in North Korea. Drawing on insights from the political economy of authoritarian regimes, I propose that as sanctions intensify, the regime reallocates resources to maintain elite loyalty at the expense of weapons development. Using satellite-based nighttime lights data as a proxy for regional economic activity, I find that sanctions increase light intensity in elite-dominated areas like Pyongyang, while brightness declines around nuclear facilities. These findings suggest that sanctions may unintentionally reinforce regime stability by redirecting resources toward the ruling elite.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102732"},"PeriodicalIF":2.4,"publicationDate":"2025-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144912191","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-26DOI: 10.1016/j.ejpoleco.2025.102738
Michael Berlemann , Marina Eurich , Timur Eckmann
For governments, the occurrence of natural disasters creates the opportunity to demonstrate their willingness and competence in providing prompt and efficient disaster aid. A number of studies has investigated the political consequences of providing disaster aid by analyzing the effects of such aid on subsequent election results. However, the findings of these studies have not yielded a coherent picture. This paper makes a contribution to the existing literature by employing high-frequency (daily) survey data on presidential approval. The combination of this data with wildfire data and information on Federal Emergency Management Agency (FEMA) aid approvals and denials reveals that Barack Obama gained in support among survey respondents for whom FEMA aid was approved by the president, while he was not punished for denials of FEMA assistance. We show that this effect is exclusively driven by respondents without party affiliation and that the effect is temporary.
{"title":"Make it burn? Wildfires, disaster aid and presidential approval","authors":"Michael Berlemann , Marina Eurich , Timur Eckmann","doi":"10.1016/j.ejpoleco.2025.102738","DOIUrl":"10.1016/j.ejpoleco.2025.102738","url":null,"abstract":"<div><div>For governments, the occurrence of natural disasters creates the opportunity to demonstrate their willingness and competence in providing prompt and efficient disaster aid. A number of studies has investigated the political consequences of providing disaster aid by analyzing the effects of such aid on subsequent election results. However, the findings of these studies have not yielded a coherent picture. This paper makes a contribution to the existing literature by employing high-frequency (daily) survey data on presidential approval. The combination of this data with wildfire data and information on Federal Emergency Management Agency (FEMA) aid approvals and denials reveals that Barack Obama gained in support among survey respondents for whom FEMA aid was approved by the president, while he was not punished for denials of FEMA assistance. We show that this effect is exclusively driven by respondents without party affiliation and that the effect is temporary.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102738"},"PeriodicalIF":2.4,"publicationDate":"2025-08-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144895914","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-26DOI: 10.1016/j.ejpoleco.2025.102747
Dmitriy Vorobyev , Azamat Valei , Andrei Matveenko
Using a pivotal costly voting model, we analyze how participation and approval quorum requirements, applied separately or jointly, affect turnout, election outcomes, and welfare. To characterize an optimal quorum rule, we first show that equally strict participation and approval quorums often yield similar outcomes, unless the two settings result in equilibria that differ in terms of whether voters can coordinate on participation. Second, any combination of quorum types can be replaced by either an approval or participation quorum alone, with negligible or no impact on equilibrium. Using these results, we suggest that to maximize turnout, no quorum is optimal unless low status quo support is expected, in which case a strict approval quorum is preferred. To increase the status quo’s chances of winning, a strict approval quorum or no quorum works best. From a voter welfare perspective, an approval quorum near half the electorate or no quorum at all are reasonable choices. These results hold whether we use Bayesian Nash equilibrium or quantal response equilibrium as the solution concept.
{"title":"Approval vs. participation quorums","authors":"Dmitriy Vorobyev , Azamat Valei , Andrei Matveenko","doi":"10.1016/j.ejpoleco.2025.102747","DOIUrl":"10.1016/j.ejpoleco.2025.102747","url":null,"abstract":"<div><div>Using a pivotal costly voting model, we analyze how participation and approval quorum requirements, applied separately or jointly, affect turnout, election outcomes, and welfare. To characterize an optimal quorum rule, we first show that equally strict participation and approval quorums often yield similar outcomes, unless the two settings result in equilibria that differ in terms of whether voters can coordinate on participation. Second, any combination of quorum types can be replaced by either an approval or participation quorum alone, with negligible or no impact on equilibrium. Using these results, we suggest that to maximize turnout, no quorum is optimal unless low status quo support is expected, in which case a strict approval quorum is preferred. To increase the status quo’s chances of winning, a strict approval quorum or no quorum works best. From a voter welfare perspective, an approval quorum near half the electorate or no quorum at all are reasonable choices. These results hold whether we use Bayesian Nash equilibrium or quantal response equilibrium as the solution concept.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102747"},"PeriodicalIF":2.4,"publicationDate":"2025-08-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144908882","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-25DOI: 10.1016/j.ejpoleco.2025.102744
Matthias Neuenkirch , Maria Repko , Enzo Weber
Since the Russian invasion of Ukraine on February 24, 2022, the West has been intensively discussing its support strategy. Hawkish positions of strengthening Ukraine via armaments, financial resources, and sanctions against Russia compete with dovish views of avoiding further escalation of the military and geopolitical conflict. We analyse how international financial markets perceived this news. We create a comprehensive data set of news related to the early phase of the war and measure reactions of five key financial markets. The results show that stronger support for Ukraine had a positive impact after the first weeks of the war when the Ukrainian position in the war improved, but a negative (or at least less positive) influence before. Thus, financial markets seem to have perceived support as a risk of further escalation threatening business prospects in the first phase. However, a hawkish line was a positive signal for financial markets after the change in perceptions.
{"title":"Hawks and Doves: Financial market perception of Western support for Ukraine","authors":"Matthias Neuenkirch , Maria Repko , Enzo Weber","doi":"10.1016/j.ejpoleco.2025.102744","DOIUrl":"10.1016/j.ejpoleco.2025.102744","url":null,"abstract":"<div><div>Since the Russian invasion of Ukraine on February 24, 2022, the West has been intensively discussing its support strategy. Hawkish positions of strengthening Ukraine via armaments, financial resources, and sanctions against Russia compete with dovish views of avoiding further escalation of the military and geopolitical conflict. We analyse how international financial markets perceived this news. We create a comprehensive data set of news related to the early phase of the war and measure reactions of five key financial markets. The results show that stronger support for Ukraine had a positive impact after the first weeks of the war when the Ukrainian position in the war improved, but a negative (or at least less positive) influence before. Thus, financial markets seem to have perceived support as a risk of further escalation threatening business prospects in the first phase. However, a hawkish line was a positive signal for financial markets after the change in perceptions.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102744"},"PeriodicalIF":2.4,"publicationDate":"2025-08-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144896176","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-14DOI: 10.1016/j.ejpoleco.2025.102734
Vaibhav Keshav , Meghana Vaidya
This study is the first to examine the impact of the Russia–Ukraine Conflict on the United States (US) Money Market Fund (MMF) industry. Using granular data, we observe a significant outflow of $22 billion in US Prime MMFs compared to government MMFs. This suggests a “flight for safety” among investors. We report no prime MMF asset outflows in the European MMFs. Our results are robust for various fund-level controls and multiple fixed effects. This study provides new insights into how geopolitical events, like the Russia–Ukraine conflict, affect capital markets. Finally, we discuss its implications for investors, policymakers, and regulators concerned about maintaining financial stability during geopolitical turmoil.
{"title":"Geopolitical spillover: The Russia–Ukraine invasion and its effects on money market funds","authors":"Vaibhav Keshav , Meghana Vaidya","doi":"10.1016/j.ejpoleco.2025.102734","DOIUrl":"10.1016/j.ejpoleco.2025.102734","url":null,"abstract":"<div><div>This study is the first to examine the impact of the Russia–Ukraine Conflict on the United States (US) Money Market Fund (MMF) industry. Using granular data, we observe a significant outflow of $22 billion in US Prime MMFs compared to government MMFs. This suggests a “flight for safety” among investors. We report no prime MMF asset outflows in the European MMFs. Our results are robust for various fund-level controls and multiple fixed effects. This study provides new insights into how geopolitical events, like the Russia–Ukraine conflict, affect capital markets. Finally, we discuss its implications for investors, policymakers, and regulators concerned about maintaining financial stability during geopolitical turmoil.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102734"},"PeriodicalIF":2.4,"publicationDate":"2025-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144861246","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-12DOI: 10.1016/j.ejpoleco.2025.102736
Bram Gootjes
Why do some countries act swiftly when confronted with fiscal unsustainability, while others delay action? This study investigates the inertia in correcting unsound fiscal policy within the European Union (EU) from 2002 to 2019, using real-time data drawn from annual policy reports of the European Commission (EC). The results show that, on average, EU countries take three years to formulate adjustment plans after their fiscal policies are marked as unsustainable by the EC. Key drivers of the timing of fiscal consolidation plans include the domestic output gap, elections, cabinet size, and the activation of an Excessive Deficit Procedure (EDP). The analysis provides new evidence that the functioning of the EDP is heavily politicized: its influence tends to diminish during European election years, in countries with long-standing fiscal risks, in smaller EU countries, and where national governments lean more to the right relative to the European Parliament. Additional findings highlight that neglecting the need for fiscal consolidation may overlook key factors driving delays in such policies, potentially leading to misleading policy guidance.
{"title":"Kicking the can down the road? A real-time data analysis of delayed fiscal consolidation","authors":"Bram Gootjes","doi":"10.1016/j.ejpoleco.2025.102736","DOIUrl":"10.1016/j.ejpoleco.2025.102736","url":null,"abstract":"<div><div>Why do some countries act swiftly when confronted with fiscal unsustainability, while others delay action? This study investigates the inertia in correcting unsound fiscal policy within the European Union (EU) from 2002 to 2019, using real-time data drawn from annual policy reports of the European Commission (EC). The results show that, on average, EU countries take three years to formulate adjustment plans after their fiscal policies are marked as unsustainable by the EC. Key drivers of the timing of fiscal consolidation plans include the domestic output gap, elections, cabinet size, and the activation of an Excessive Deficit Procedure (EDP). The analysis provides new evidence that the functioning of the EDP is heavily politicized: its influence tends to diminish during European election years, in countries with long-standing fiscal risks, in smaller EU countries, and where national governments lean more to the right relative to the European Parliament. Additional findings highlight that neglecting the need for fiscal consolidation may overlook key factors driving delays in such policies, potentially leading to misleading policy guidance.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102736"},"PeriodicalIF":2.4,"publicationDate":"2025-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144826456","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-07DOI: 10.1016/j.ejpoleco.2025.102742
Nora Aboushady , Chahir Zaki
We use new data on political connections from the World Bank Enterprise Surveys to examine the impact of connections on firms' participation in international trade through global value chains (GVCs) for six lower middle income MENA countries and territories (Morocco, Tunisia, Egypt, the West Bank and Gaza, Jordan, and Lebanon). Our findings add to the literature on “hidden protection” and corruption in the region: trade- and investment policies and regulations are tailored to benefit or protect politically connected firms. Our findings suggest that politically connected firms are more likely to participate in GVCs by 9.8 percentage points and that the intensity of their participation in GVCs increases by 4.1 percentage points. Combining political connections and grand corruption increases firms' participation in GVCs by 13.6 percentage points.
{"title":"Political connections and participation in global value chains: Evidence from MENA firms","authors":"Nora Aboushady , Chahir Zaki","doi":"10.1016/j.ejpoleco.2025.102742","DOIUrl":"10.1016/j.ejpoleco.2025.102742","url":null,"abstract":"<div><div>We use new data on political connections from the World Bank Enterprise Surveys to examine the impact of connections on firms' participation in international trade through global value chains (GVCs) for six lower middle income MENA countries and territories (Morocco, Tunisia, Egypt, the West Bank and Gaza, Jordan, and Lebanon). Our findings add to the literature on “hidden protection” and corruption in the region: trade- and investment policies and regulations are tailored to benefit or protect politically connected firms. Our findings suggest that politically connected firms are more likely to participate in GVCs by 9.8 percentage points and that the intensity of their participation in GVCs increases by 4.1 percentage points. Combining political connections and grand corruption increases firms' participation in GVCs by 13.6 percentage points.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102742"},"PeriodicalIF":2.4,"publicationDate":"2025-08-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144809644","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-05DOI: 10.1016/j.ejpoleco.2025.102727
Chiara Tomasi , Quoc Thai Le , Thi Ngoc Lan Nguyen
This paper investigates the heterogeneous effects of bribery on the productivity of small and medium-sized enterprises (SMEs) in Vietnam. Using panel data from the Vietnam Small and Medium Enterprise Survey (VSMES) and an instrumental variable approach to address endogeneity, we find that corruption generally reduces firm productivity. However, its impact varies across institutional contexts: the negative effect is stronger in provinces with efficient regulatory environments and weaker where firms face high bureaucratic burdens or identify government inefficiency as a key constraint. These findings support a weak form of the “grease the wheels” hypothesis, suggesting bribery may act as a costly coping strategy in poorly governed settings. The results highlight the importance of regulatory quality in moderating the effects of corruption and point to the need for reforms that address both corruption and bureaucratic inefficiencies.
{"title":"Greasing or Grinding? Regulatory context and the productivity effects of corruption: Evidence from Vietnamese SMEs","authors":"Chiara Tomasi , Quoc Thai Le , Thi Ngoc Lan Nguyen","doi":"10.1016/j.ejpoleco.2025.102727","DOIUrl":"10.1016/j.ejpoleco.2025.102727","url":null,"abstract":"<div><div>This paper investigates the heterogeneous effects of bribery on the productivity of small and medium-sized enterprises (SMEs) in Vietnam. Using panel data from the Vietnam Small and Medium Enterprise Survey (VSMES) and an instrumental variable approach to address endogeneity, we find that corruption generally reduces firm productivity. However, its impact varies across institutional contexts: the negative effect is stronger in provinces with efficient regulatory environments and weaker where firms face high bureaucratic burdens or identify government inefficiency as a key constraint. These findings support a weak form of the “grease the wheels” hypothesis, suggesting bribery may act as a costly coping strategy in poorly governed settings. The results highlight the importance of regulatory quality in moderating the effects of corruption and point to the need for reforms that address both corruption and bureaucratic inefficiencies.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102727"},"PeriodicalIF":2.4,"publicationDate":"2025-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144771485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-05DOI: 10.1016/j.ejpoleco.2025.102735
Robin Grier , Kevin Grier , Florence Muhoza
We analyze the causal effects of large and sustained increases in female legislative representation on several measures of women's well-being. Across all our outcome variables, we find no significant results. These null results continue to hold when we use different criteria for defining a significant increase or allow for differences in treatment effects based on the country's political regime. We conclude that, at least on average, this increased representation does not significantly increase measures of women's well-being.
{"title":"The effect of increased women's legislative representation on women's well-being","authors":"Robin Grier , Kevin Grier , Florence Muhoza","doi":"10.1016/j.ejpoleco.2025.102735","DOIUrl":"10.1016/j.ejpoleco.2025.102735","url":null,"abstract":"<div><div>We analyze the causal effects of large and sustained increases in female legislative representation on several measures of women's well-being. Across all our outcome variables, we find no significant results. These null results continue to hold when we use different criteria for defining a significant increase or allow for differences in treatment effects based on the country's political regime. We conclude that, at least on average, this increased representation does not significantly increase measures of women's well-being.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102735"},"PeriodicalIF":2.4,"publicationDate":"2025-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144809643","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-08-04DOI: 10.1016/j.ejpoleco.2025.102726
Xiangyu Shi
In this paper, I argue that national leaders and institutions jointly determine cross-country income differences. I document two novel cross-country stylized facts: (1) national leaders in democracies have more pre-tenure work experience, a novel measure of leaders’ capabilities, than those in non-democracies, and (2) leaders with more diverse work experience lead to better economic performance in democracies and to higher regime stability in non-democracies. I establish robustness by several instrumental variable approaches, a regression discontinuity design based on close elections, and (quasi-)random leadership transitions. I build an endogenous growth model with political selection and institutional transitions to rationalize these facts. Quantitative exercises based on this model suggest that the differences in the channel of political selection and in the role of leaders can explain the persistent income gap between democracies and non-democracies.
{"title":"Leaders and institutions as joint determinants of economic growth","authors":"Xiangyu Shi","doi":"10.1016/j.ejpoleco.2025.102726","DOIUrl":"10.1016/j.ejpoleco.2025.102726","url":null,"abstract":"<div><div>In this paper, I argue that national leaders and institutions jointly determine cross-country income differences. I document two novel cross-country stylized facts: (1) national leaders in democracies have more pre-tenure work experience, a novel measure of leaders’ capabilities, than those in non-democracies, and (2) leaders with more diverse work experience lead to better economic performance in democracies and to higher regime stability in non-democracies. I establish robustness by several instrumental variable approaches, a regression discontinuity design based on close elections, and (quasi-)random leadership transitions. I build an endogenous growth model with political selection and institutional transitions to rationalize these facts. Quantitative exercises based on this model suggest that the differences in the channel of political selection and in the role of leaders can explain the persistent income gap between democracies and non-democracies.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"89 ","pages":"Article 102726"},"PeriodicalIF":2.4,"publicationDate":"2025-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144766673","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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