European Journal of Political Economy最新文献

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.

Were government bond risk premia affected by the media in addition to the effects of major events? Revisiting the European debt crisis, we analyze the role of television news in the rise and re-convergence of GIIPS bond spreads vis-à-vis Germany from 2007 to 2016. We use a dataset of more than one million human-coded news items from leading newscasts worldwide to identify over 25,000 news on the Eurozone and country-specific economic topics. Our findings emphasize the relevance of the tonality of news, such that an increasing share of positive (negative) news correlates with a decrease (increase) in spreads. Content-based endogenous clustering of news highlights the importance of news about institutions providing stability and “international financial support” to distressed countries in reducing bond spreads. Moreover, weekend news enables us to establish a causal link between country-specific news coverage and changes in spreads on the subsequent trading day.

The existing literature on populism has seen numerous attempts to empirically quantify this somewhat ambiguous concept. Despite notable advances, continuous measures of populism with a clear theoretical background and a considerable coverage are still hard to come by. This paper proposes a novel approach to measuring party populism by combining several different expert-surveys via supervised machine learning techniques. Employing the random forest regression algorithm, we greatly expand the geographical and temporal coverage of two well-known populism indicators, which are based on the discursive and the ideational approach, respectively. The resulting multidimensional measures capture party-level populism on a continuous 0–10 scale, covering 1920 parties in 169 countries from 1970 to 2019. Our measures accurately replicate both definitions of populism, although the indicators may be more suitable for predicting populist outcomes in Western countries, as compared to non-Western ones.