European Journal of Political Economy最新文献

In view of the increased importance of debt developments in the EU governance framework, this paper investigates the accuracy and the main economic causes of forecast errors in (government) debt projections. We find a positive average debt forecast error for European Union member states, which increases with the projection horizon. Underestimation of debt growth is particularly relevant for countries with high government debt. The main drivers of the debt forecast errors seem to be partly outside direct government control: Wrongly projected overall GDP developments and stock flow adjustments - a factor which has not been considered in the literature so far. Moreover, the high uncertainty in debt forecasts is also inherent in the European Commission’s benchmark forecasts: only their now-cast remains unbiased.

Many governments have been reported to systematically manipulate official statistics. However, scholarly research has not extensively dealt with the determinants of data manipulation, beyond the effect of autocracy. We extend the literature by including institutional factors hypothetically affecting data manipulation. Regressing the gap between GDP – predicted by night-time lighting data – and „official“ GDP on these institutional factors suggests that economic openness and democracy decrease manipulation, while decentralization increases manipulation. Political openness decreases manipulation for countries under-reporting GDP and increases manipulation for countries over-reporting GDP. Surprisingly, no effects are found for press freedom and the independence of the statistical office.

This paper presents a model of delegative democracy, wherein each voter has the choice to either directly vote or delegate their vote, along with any votes delegated to them, to another voter. I examine the incentives for delegation and how this affects the quality of collective decision-making. Specifically, by assuming the delegation network to be a ring network, I analyze symmetric Nash equilibria both with and without the delegation option. A key finding is that when the delegation network is sufficiently ideologically homogeneous and large, voters are inclined to delegate their votes, even in situations where they lack knowledge about who knows what or who knows whom. Furthermore, I demonstrate that delegation facilitates improved collective decision-making. Theoretical predictions are corroborated by laboratory data.

In 1997, after a costly bailout, the central government of Mexico passed legislation intending to improve subnational finances through fiscal decentralization. As a result, many states rapidly began to accumulate debt during the following decade. Subnational public debt grew threefold between 1996 and 2006. The global financial crisis only aggravated the debt accumulation problem, which increased by 320% between 2006 and 2016. In response, a new law with a set of fiscal rules for subnational governments was enacted in 2016, namely, the Law of Fiscal Discipline (LDF) for states and municipalities. This study evaluates the impact of the fiscal rule alert system on the levels of debt accumulation across Mexican states. Using a quarterly panel dataset comprising the period 2013–2020 and employing difference-in-differences techniques, we observe a significant reduction of 4% in public debt between treated and untreated states and 5.8% in debt per capita. Moreover, we document that even after the first wave of the COVID-19 pandemic, the new fiscal rule effectively reduced the pace of subnational public debt in Mexico.

Increasing discontent and the associated growing support for populist parties have been attributed to several drivers, including globalization, technological change, and migration waves. We analyse a phenomenon that encompasses a mix of economic and cultural grievances — the logistic revolution. The Italian logistics industry is characterized by a heavy reliance on low-paying and precarious contracts, it employs a large number of foreign workers, and is dominated by multinational corporations. The construction of large logistic hubs can increase the feeling of economic insecurity and trigger cultural backlash against foreign workers and large corporations. This, in turn, can create a favourable environment for populist radical right-wing parties that portray themselves as protectors of traditional values and national identity, and as defenders of the working class against the perceived threats posed by globalization, immigration, and large corporations. Through an IV and a DiD approach, we provide evidence that the support for Lega, a populist radical-right party, grew in Italian municipalities where new logistic hubs have been built.

Voters across the world are often complicit in electing bad-quality legislators to political office. This problem is particularly salient in India, where candidates accused of criminality often succeed at the polls. Why do voters show a willingness to cast their ballots for candidates accused of wrongdoing? Using primary individual-level voter survey data from the Bihar 2020 state assembly elections, this paper examines whether ethnic voting can explain this surprising voter behavior. Contrary to voter preference theory, I find that voters exhibit a stronger negative response to candidates accused of criminality when they belong to their preferred ethnic party. Voter support for the non-ethnic falls by 89.2% for violent charges. Coethnicity further reduces electoral support by 67% for violent criminals. This pattern holds regardless of the voters’ level of news consumption, political knowledge, education status, and income. These findings suggest that the electoral success of criminal politicians could be attributed to other factors such as a lack of proper institutions or lower state capacity rather than the voters’ underlying ethnic preferences.

Public procurement regulations aim to ensure the state minimizes contract award prices by specifying the processes to be used in issuing calls for tenders and award of contracts. Cost minimization goals may be complemented by ancillary objectives such as supporting small firms or disadvantaged groups. Recent theory suggests procurement regulations and practices constraining the ability to exercise discretion in awarding contracts may increase average procurement costs. Using detailed data on procurement awards in 33 European countries, we find that restrictions on exercise of discretion are associated with higher average contract prices, and that increases in prices are greater in countries with above average government effectiveness. We also show that realizing price-reducing benefits from exercising greater discretion, where permitted by law, reduces the probability small firms win contracts and continue to do so. Our findings point to a tradeoff between the potential to lower prices by exercising discretion and policies that aim to increase the likelihood SMEs are awarded contracts.

By making use of voting-rights acts, minorities have forced cities to convert from at-large elections to district elections when there is racially polarized voting and the minority percentage on the city council is significantly below the percentage of the minority population. The voting-rights acts also provide for the creation of majority/minority districts so that minorities are more likely to be elected to city councils. This article undertakes a detailed theoretical analysis of both district and at-large elections and shows that minorities are likely to be better off when there are at-large elections. In at-large voting systems, winning council candidates represent the median over all voters. In contrast, when there are district elections, each council member represents the interests of the median voter in their district. City council policy is then determined by the median council member, whose district represents few if any minorities. Various complications, such as non-voting, are considered with surprising results.

When are voters willing to enfranchise a new group? In this paper, we analyze whether and how the extent of direct democracy affects the willingness of the electorate to extend suffrage to young people. We exploit a new municipality-level dataset from two Swiss federal referendums that concerned lowering the voting age from 20 to 18. Based on a Difference-in-Differences (DiD) design, we demonstrate that support for lowering the voting age is lower within the context of direct democracy but that the negative effect disappears and even becomes positive if the youth population is already enfranchised at the local level at the time of the federal vote. This finding is consistent with the interpretation that voters react systematically to the expected power loss resulting from suffrage extensions, which is larger under a direct-democratic setting. However, once the new group is enfranchised on the local level, direct democracy can foster contact between the old and new electorate and can increase support for further suffrage extensions. In addition, we provide evidence of socio-demographic factors that affect the electorate’s willingness to lower the voting age.