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QAPEC Feature Publications

Religion and abortion: The role of politician identity

Sonia Bhalotra, Irma Clots-Figueras and Lakshmi Iyer

Debates around abortion typically invoke religion and politics but there is no causal evidence of the impact of politician religion on abortion. Leveraging quasi-random variation in politician religion generated by close elections in India and controlling for the party affiliation of politicians, we find lower rates of sex-selective abortion in districts won by Muslim state legislators, consistent with a higher reported aversion to abortion among Muslims compared to Hindus. The competing hypothesis that this reflects weaker son preference among Muslims is undermined by stated preference data and by demonstrating that fertility and girl-biased infant mortality increase in Muslim-won districts.

Citizen Forecasts of the 2021 German Election

Andreas E. Murr and Michael S. Lewis-Beck

There are various scientific approaches to election forecasting: poll aggregation, structural models, electronic markets, and citizen forecasting. With respect to the German case, the first two approaches—polls and models—perhaps have been the most popular. However, relatively little work has been done deploying citizen forecasting (CF), the approach described in this article. In principle, CF differs considerably from other methods and appears, on its face, quite simple. Before an election, citizens are asked in a national survey who they think will win. As the percentage of expectations for party X increases, the likelihood of an X win is judged to be higher. The method has been applied regularly with success in other established democracies, such as the United Kingdom and the United States.

Does Party Competition Affect Political Activism?

Anselm Hager, Johannes Hermle, Lukas Hensel, and Christopher Roth

Does party competition affect political activism? This paper studies the decision of party supporters to join political campaigns. We present a framework that incorporates supporters’ instrumental and expressive motives and illustrates that party competition can either increase or decrease party activism. To distinguish between these competing predictions, we implemented a field experiment with a European party during a national election. In a seemingly unrelated party survey, we randomly assigned 1,417 party supporters to true information that the canvassing activity of the main competitor party was exceptionally high. Using unobtrusive, real-time data on party supporters’ canvassing behavior, we find that respondents exposed to the high-competition treatment are 30% less likely to go canvassing. To investigate the causal mechanism, we leverage additional survey evidence collected two months after the campaign. Consistent with affective accounts of political activism, we show that increased competition lowered party supporters’ political self-efficacy, which plausibly led them to remain inactive.

Vote Expectations Versus Vote Intentions: Rival Forecasting Strategies

Andreas E. Murr, Mary Stegmaier and Michael S. Lewis-Beck

Are ordinary citizens better at predicting election results than conventional voter intention polls? The authors address this question by comparing eight forecasting models for British general elections: one based on voters' expectations of who will win and seven based on who voters themselves intend to vote for (including ‘uniform national swing model’ and ‘cube rule’ models). The data come from ComRes and Gallup polls as well as the Essex Continuous Monitoring Surveys, 1950–2017, yielding 449 months with both expectation and intention polls. The large sample size permits comparisons of the models' prediction accuracy not just in the months prior to the election, but in the years leading up to it. Vote expectation models outperform vote intention models in predicting both the winning party and parties' seat shares.

Security Transitions

Thiemo Fetzer, Pedro C. L. Souza, Oliver Vanden Eynde and Austin L. Wright

How do foreign powers disengage from a conflict? We study this issue by examining the recent, large-scale security transition from international troops to local forces in the ongoing civil conflict in Afghanistan. We construct a new dataset that combines information on this transition process with declassified conflict outcomes and previously unreleased quarterly survey data of residents' perceptions of local security. Our empirical design leverages the staggered roll-out of the transition, and employs a novel instrumental variables approach to estimate the impact. We find a significant, sharp, and timely decline of insurgent violence in the initial phase: the security transfer to Afghan forces. We find that this is followed by a significant surge in violence in the second phase: the actual physical withdrawal of foreign troops. We argue that this pattern is consistent with a signaling model, in which the insurgents reduce violence strategically to facilitate the foreign military withdrawal to capitalize on the reduced foreign military presence afterward. Our findings clarify the destabilizing consequences of withdrawal in one of the costliest conflicts in modern history, and yield potentially actionable insights for designing future security transitions.

UN Peacekeeping and Households' Well-Being in Civil Wars

Vincenzo Bove, Jessica Di Salvatore and Leandro Elia

Civil wars affect the economic conditions of households by disrupting economic transactions and harming their psychological well-being. To restore basic conditions for local economic recovery in conflict-torn regions, the international community has only a limited number of tools at its disposal. We ask whether UN peacekeeping is one instrument to mitigate the negative effect of conflict on households' economic well-being. We argue that, by reducing violence and heightening perceptions of safety, UN missions (i) encourage labor provision and economic exchanges, and (ii) instill confidence by reducing the psychological impact of daily stressors. Combining high-frequency household survey data and information on subnational deployment of UN peacekeepers in South Sudan, we show that peacekeepers' military presence improves security (observed and perceived), which in turn revitalizes local economies and households' subjective well-being. These improvements ultimately boost households' consumption, partially countering the negative effect of ongoing civil wars by keeping local communities' economy afloat.

Do party leadership contests forecast British general elections?

Andreas Erwin Murr

When assessing election forecasts, two important criteria emerge: their accuracy (precision) and lead time (distance to event). Curiously, in both 2010 and 2015 the most accurate forecasts came from models having the longest lead time—albeit at most 12 months. Can we increase the lead time further, supposing we tolerate a small decrease in accuracy? Here, we develop a model with a lead time of more than 3 years. Our Party Leadership Model relies on the votes of MPs when selecting their party leader. We assess the forecasting quality of our model with both leave-one-out cross-validation and a before-the-fact forecast of the 2019 general election. Compared to both simple forecasting methods and other scientific forecasts, our model emerges as a leading contender. This result suggests that election forecasting may benefit from developing models with longer lead times, and that party leaders may influence election outcomes more than is usually thought.

Roberts' weak welfarism theorem : a minor correction.

Peter Hammond

Roberts’ “weak neutrality” or “weak welfarism” theorem concerns Sen social welfare functionals which are defined on an unrestricted domain of utility function profiles and satisfy independence of irrelevant alternatives, the Pareto condition, and a form of weak continuity. Roberts (Rev Econ Stud 47(2):421–439, 1980) claimed that the induced welfare ordering on social states has a one-way representation by a continuous, monotonic real-valued welfare function defined on the Euclidean space of interpersonal utility vectors—that is, an increase in this welfare function is sufficient, but may not be necessary, for social strict preference. A counter-example shows that weak continuity is insufficient; a minor strengthening to pairwise continuity is proposed instead and its sufficiency demonstrated.

Did Terrorism Affect Voting in the Brexit Referendum?

Vincenzo Bove, Georgios Efthyvoulou and Harry Pickard

This article contributes to the recent research on Brexit and public opinion formation by contending that the determinants of the referendum results should be evaluated against the background of wider public security concerns. The British public has long regarded terrorism as a top concern, more so than in any other European country. Terrorist attacks on UK soil raised voters' awareness of security issues and their saliency in the context of the EU referendum. The study finds that locations affected by terrorist violence in their proximity exhibit an increase in the share of pro-Remain votes, particularly those that experienced more sensational attacks. Using individual-level data, the results show that in the aftermath of terrorist attacks, citizens are more likely to reconsider the security risks involved in leaving the EU.

Beliefs about public debt and the demand for government spending?

Christopher Roth, Sonja Settele and Johannes Wohlfart

We examine how beliefs about the debt-to-GDP ratio affect people’s attitudes towards government spending and taxation. Using representative samples of the US population, we run a series of experiments in which we provide half of our respondents with information about the debt-to-GDP ratio in the US. Based on a total of more than 4,000 respondents, we find that most people underestimate the debt-to-GDP ratio and reduce their support for government spending once they learn about the actual amount of debt, but do not substantially alter their attitudes towards taxation. The treatment effects seem to operate through changes in expectations about fiscal sustainability and persist in a four-week follow-up.

Leader Identity and Coordination

Sonia Bhalotra, Irma Clots-Figueras, Lakshmi Iyer, and Joseph Vecci

This paper examines policy effectiveness as a function of leader identity. We experimentally vary leader religious identity in a coordination game implemented in India, and focus upon citizen reactions to leader identity, controlling for leader actions. We find that minority leaders improve coordination, while majority leaders do not. Alternative treatment arms reveal that affirmative action for minorities reverses this result, while intergroup contact improves the effectiveness of leaders of both identities. We also find that minority leaders are less effective in towns with a history of intergroup conflict. Our results demonstrate that leader and policy effectiveness depend upon citizen reactions, conditioned by social identity and past conflict.

Beliefs about Racial Discrimination and Support for Pro-Black Policies

Ingar Haaland and Christopher Roth

This paper provides representative evidence on beliefs about racial discrimination and examines whether information causally affects support for pro-black policies. Eliciting quantitative beliefs about the extent of hiring discrimination against blacks, we uncover large disagreement about the extent of racial discrimination with particularly pronounced partisan differences. An information treatment leads to a convergence in beliefs about racial discrimination but does not lead to a similar convergence in support of pro-black policies. The results demonstrate that while providing information can substantially reduce disagreement about the extent of racial discrimination, it is not sufficient to reduce disagreement about pro-black policies.

Tariffs and Politics: Evidence from Trump's Trade Wars

Thiemo Fetzer and Carlo Schwarz

We use the recent trade escalation between the USA and its trade partners to study whether retaliatory tariffs are politically targeted. We find comprehensive evidence using individual and aggregate voting data suggesting that retaliation is carefully targeted to hurt Trump. We develop a simulation approach to construct counterfactual retaliation responses allowing us to quantify the extent of political targeting while also studying potential trade-offs. China appears to place great emphasis on achieving maximal political targeting. The EU seems to have been successful in maximising political targeting while at the same time minimising the potential damage to its economy.

Fake Reviews

Jacob Glazer, Helios Herrera, Motty Perry

We propose a model of product reviews in which some are genuine and some are fake in order to shed light on the value of information provided on platforms like TripAdvisor, Yelp, etc. In every period, a review is posted which is either genuine or fake. We characterise the equilibrium of the dynamic model and prove that it is unique. In equilibrium, valuable learning takes place in every period. Fake reviews, however, do slow down the learning process. It is established that any attempt by the platform to manipulate the reviews is counterproductive.

Shadow Lobbyists

Rocco d’Este, Mirko Draca and Christian Fons-Rosen

Special interest influence via lobbying is increasingly controversial and legislative efforts to deal with this issue have centered on the principle of transparency. In this paper we evaluate the effectiveness of the current regulatory framework provided by the US Lobbying Disclosure Act (LDA). Specifically, we study the role of ex-Congressional officials who join US lobbying firms in positions that could be related to lobbying activity but without officially registering as lobbyists themselves. We find that firm lobbying revenues increase significantly when these potential ‘shadow lobbyists’ join, with effects in the range of 10-20%. This shadow lobbyist revenue effect is comparable to the effect of a registered lobbyist at the median of the industry skill distribution. As such, it is challenging to reconcile the measured shadow lobbyist effect with the 20% working time threshold for registering as a lobbyist. Based on our estimates, the contribution of unregistered ex-Congressional officials could explain 4.9% of the increase in sectoral revenues, compared to 24.0% for the group of registered officials.

Citizen Forecasting 2020: A State-by-State Experiment

Andreas E. Murr and Michael S. Lewis-Beck

The leading approaches to scientific election forecasting in the United States consist of structural models, prediction markets and opinion polling. With respect to the last, by far the dominant mode relies on vote intention polling, e.g., “If the election were held tomorrow, who would you vote for?” However, there exists an abiding opinion polling strategy that shows a good deal of promise—citizen forecasting. That is, rather than query on vote intention, query on vote expectation, e.g., “Who do you think will win the upcoming election?” This approach has been pursued most extensively in the United Kingdom (Murr 2016) and the United States (LewisBeck and Tien 1999). Recent performance evaluations have shown that in the United Kingdom vote expectations clearly offer more predictive accuracy than vote intentions (Murr et al. forthcoming) and that in the United States vote expectations appear to be superior to an array of rival forecasting tools (Graefe 2014). However, the timing of the data collection has forced most of the studies using citizen forecasts to forecast elections ex post, i.e., after they occurred. Indeed, to date, there are only two ex ante citizen forecasting papers to have appeared before a national election (Lewis-Beck and Stegmaier 2011; Murr 2016). Both these efforts forecasted British General Elections, with Murr (2016) relatively most accurate among 12 academic forecasts (Fisher and Lewis-Beck 2016).

Labor Market Concerns and Support for Immigration

Ingar Haaland and Christopher Roth

Do labor market concerns affect support for immigration? Using a large, representative sample of the US population, we first elicit beliefs about the labor market impact of immigration. To generate exogenous variation in beliefs, we then provide respondents in the treatment group with research evidence showing no adverse labor market impacts of immigration. Treated respondents update their beliefs and become more supportive of immigration, as measured by self-reported policy views and petition signatures. Treatment effects also persist in an obfuscated follow-up study. Our results demonstrate that information about the labor market impact of immigration causally affects support for immigration.

Does Information Change Attitudes Towards Immigrants?

Alexis Grigorieff , Christopher Roth and Diego Ubfal

Strategies aimed at reducing negative attitudes toward immigrants are at the core of integration policies. A large literature shows that misperceptions about the size and characteristics of immigrants are common. A few studies implemented interventions to correct innumeracy regarding the size of the immigrant population, but they did not detect any effects on attitudes. We study whether providing information not only about the size but also about the characteristics of the immigrant population can have stronger effects. We conduct two online experiments with samples from the United States, providing one-half of the participants with five statistics about immigration. This information bundle improves people’s attitudes toward current legal immigrants. Most effects are driven by Republicans and other groups with more negative initial attitudes toward immigrants. In our second experiment, we show that treatment effects persist one month later. Finally, we analyze a large cross-country survey experiment to provide external validity to the finding that information about the size of the foreign-born population is not enough to change policy views. We conclude that people with negative views on immigration before the intervention can become more supportive of immigration if their misperceptions about the characteristics of the foreign-born population are corrected.

Negative Voters? Electoral Competition with Loss-Aversion

Ben Lockwood and James Rockey

This paper studies the effect of voter loss aversion in preferences over both candidate policy platforms and candidate valence on electoral competition. Loss-aversion over platforms leads to both platform rigidity and reduced platform polarisation, whereas loss-aversion over valence results in increased polarisation and the possibility of asymmetric equilibria with a self-fulfilling (dis)-advantage for the incumbent. The results are robust to a stochastic link between platforms and outcomes; they hold approximately for a small amount of noise. A testable implication of loss-aversion over platforms is that incumbents adjust less than challengers to shifts in voter preferences. We find some empirical support for this using data for elections to the US House of Representatives.

The Race to the Base

Dan Bernhardt, Peter Buisseret and Sinem Hidir

We study multi-district legislative elections between two office-seeking parties when one party has an initial valence advantage that may shift and even reverse during the campaign; and, each party cares not only about winning a majority, but also about its share of seats. When the initial imbalance favoring one party is small, each party targets the median voter. For moderate imbalances, the advantaged party maintains the centre-ground, but the disadvantaged party retreats to target its core supporters; and for large imbalances, the advantaged party advances toward its opponent, raiding its moderate supporters in pursuit of an outsized majority.

Can Workfare Programs Moderate Conflict? Evidence from India

Thiemo Fetzer

Can public interventions persistently reduce conflict? Adverse weather shocks, through their impact on incomes, have been identified as robust drivers of conflict in many contexts. An effective social insurance system moderates the impact of adverse shocks on household incomes, and hence, could attenuate the link between these shocks and conflict. This paper shows that a public employment program in India, by providing an alternative source of income through a guarantee of 100 days of employment at minimum wages, effectively provides insurance. This has an indirect pacifying effect. By weakening the link between productivity shocks and incomes, the program uncouples productivity shocks from conflict, leading persistently lower conflict levels.

Political Booms, Financial Crises

Helios Herrera, Guillermo Ordoñez, and Christoph Trebesch

Political booms, measured by the rise in governments’ popularity, predict financial crises above and beyond better known early warning indicators, such as credit booms. This predictive power, however, only holds in emerging economies. We argue that governments in developing countries have stronger incentives to “ride” unsound credit booms in order to boost their popularity, rather than implementing corrective policies that could prevent crises but are politically costly. We provide evidence of the relevance of this mechanism, partly by constructing a new cross-country data set on government popularity based on opinion polls.

Conversations on Social Choice and Welfare

Peter J. Hammond.

Following an initiative of Social Choice and Welfare, this is the result of an interview conducted by email exchange during the period from July 2017 to February 2018, with minor adjustments later in 2018. Apart from some personal history, topics discussed include: (i) social choice, especially with interpersonal comparisons of utility; (ii) utilitarianism, including Harsanyi's contributions; (iii) consequentialism in decision theory and in ethics; (iv) the independence axiom for decisions under risk; (v) welfare economics under uncertainty; (vi) incentive compatibility and strategy-proof mechanisms, especially in large economies; (vii) Pareto gains from trade, and from migration; (viii) cost benefit analysis and welfare measurement; (ix) the possible future of normative economics.

Fundamental utilitarianism and intergenerational equity with extinction discounting.

Graciela Chichilnisky, Peter J. Hammond & Nicholas Stern

Ramsey famously condemned discounting “future enjoyments” as “ethically indefensible”. Suppes enunciated an equity criterion which, when social choice is utilitarian, implies giving equal weight to all individuals’ utilities. By contrast, Arrow (Contemporary economic issues. International Economic Association Series. Palgrave Macmillan, London, 1999a; Discounting and Intergenerational Effects, Resources for the Future Press, Washington DC, 1999b) accepted, perhaps reluctantly, what he called Koopmans’ (Econometrica 28(2):287–309, 1960) “strong argument” implying that no equitable preference ordering exists for a sufficiently unrestricted domain of infinite utility streams. Here we derive an equitable utilitarian objective for a finite population based on a version of the Vickrey–Harsanyi original position, where there is an equal probability of becoming each person. For a potentially infinite population facing an exogenous stochastic process of extinction, an equitable extinction biased original position requires equal conditional probabilities, given that the individual’s generation survives the extinction process. Such a position is well-defined if and only if survival probabilities decline fast enough for the expected total number of individuals who can ever live to be finite. Then, provided that each individual’s utility is bounded both above and below, maximizing expected “extinction discounted” total utility—as advocated, inter alia, by the Stern Review on climate change—provides a coherent and dynamically consistent equitable objective, even when the population size of each generation can be chosen.

The Political Economy of Liberal Democracy

Sharun W Mukand, Dani Rodrik

This paper develops a taxonomy of political regimes that distinguishes between three sets of rights—property rights, political rights and civil rights. The truly distinctive nature of liberal democracy is the protection of civil rights (equal treatment by the state for all groups) in addition to the other two. The paper shows how democratic transitions that are the product of a settlement between the elite (who care mostly about property rights) and the majority (who care about political rights), generically fail to produce liberal democracy. Instead, the emergence of liberal democracy requires low levels of inequality and weak identity cleavages.

The Withdrawal of UN Peace Operations and State Capacity: Descriptive Trends and Research Challenges

Jessica Di Salvatore and Andrea Ruggeri

While United Nations Peace Operations (UN POs) have moved away from traditional, security-focused mandates in the last generation of peace missions, most research on the effectiveness of peace missions continues to evaluate success based on security outcomes —such as levels of violence on the battlefield, civilian victimization, duration of ceasefires and violence containment.1 Few studies adopt broader and longer-term criteria for evaluation. Pioneers of this change, Doyle and Sambanis reframed the terms of peacekeeping from a focus on military strategies to a focus on peacebuilding.2 But while they showed that multidimensional missions can foster democratization and participatory peace in post-conflict societies, there is still debate among scholars and policy-makers about the use of peace missions as effective tools for state-building.3 Most of the discussion, especially among scholars, pays little attention to whether peace operations creates stable polities and institutions that endure when the international presence eventually leaves. In other words, if peace missions are beneficial for state capacity, is their legacy strong enough to avoid the possible pitfalls associated with PO withdrawal?

Can Terrorism Abroad Influence Migration Attitudes at Home?

Tobias Böhmelt,Vincenzo Bove,Enzo Nussio

This article demonstrates that public opinion on migration “at home” is systematically driven by terrorism in other countries. Although there is little substantive evidence linking refugees or migrants to most recent terror attacks in Europe, news about terrorist attacks can trigger more negative views of immigrants. However, the spatial dynamics of this process are neglected in existing research. We argue that feelings of imminent danger and a more salient perception of migration threats do not stop at national borders. The empirical results based on spatial econometrics and data on all terrorist attacks in Europe for the post-9/11 period support these claims. The effect of terrorism on migration concern is strongly present within a country but also diffuses across states in Europe. This finding improves our understanding of public opinion on migration, as well as the spillover effects of terrorism, and it highlights crucial lessons for scholars interested in the security implications of population movements.

Did Austerity Cause Brexit

Thiemo Fetzer

This paper documents a significant association between the exposure of an individual or area to the UK government's austerity-induced welfare reforms begun in 2010, and the following: the subsequent rise in support for the UK Independence Party, an important correlate of Leave support in the 2016 UK referendum on European Union membership; broader individual-level measures of political dissatisfaction; and direct measures of support for Leave. Leveraging data from all UK electoral contests since 2000, along with detailed, individual-level panel data, the findings suggest that the EU referendum could have resulted in a Remain victory had it not been for austerity.

Positive and negative campaigning in primary and general elections

Dan Bernhard and Meenakshi Ghosh

We analyze primary and general election campaigning. Positive campaigning builds a candidate's reputation; negative campaigning damages a rival's. Each primary candidate hopes to win the general election; but failing that, he wants his primary rival to win. We establish that general elections always feature more negative campaigning than positive, as long as reputations are easier to tear down than build up. In contrast, if the effects of primary campaigns strongly persist, primary elections always feature more positive campaigning than negative. This reflects that a primary winner benefits only from his positive primary campaigning in general elections, and negative campaigning by a rival hurts.

Information Aggregation and Turnout in Proportional Representation: A Laboratory Experiment

Helios Herrera, Aniol Llorente-Saguer and Joseph C McMurray

The swing voter’s curse is useful for explaining patterns of voter participation, but arises because voters restrict attention to the rare event of a pivotal vote. Recent empirical evidence suggests that electoral margins influence policy outcomes, even away from the 50% threshold. If so, voters should also pay attention to the marginal impact of a vote. Adopting this assumption, we find that a marginal voter’s curse gives voters a new reason to abstain: to avoid diluting the pool of information. The two curses have similar origins and exhibit similar patterns, but the marginal voter’s curse is both stronger and more robust. In fact, the swing voter’s curse turns out to be on a knife edge: in large elections, a model with both pivotal and marginal considerations and a model with marginal considerations alone generate identical equilibrium behaviour.

The Marginal Voter’s Curse

Helios Herrera, Aniol Llorente-Saguer and Joseph C McMurray

The swing voter’s curse is useful for explaining patterns of voter participation, but arises because voters restrict attention to the rare event of a pivotal vote. Recent empirical evidence suggests that electoral margins influence policy outcomes, even away from the 50% threshold. If so, voters should also pay attention to the marginal impact of a vote. Adopting this assumption, we find that a marginal voter’s curse gives voters a new reason to abstain: to avoid diluting the pool of information. The two curses have similar origins and exhibit similar patterns, but the marginal voter’s curse is both stronger and more robust. In fact, the swing voter’s curse turns out to be on a knife edge: in large elections, a model with both pivotal and marginal considerations and a model with marginal considerations alone generate identical equilibrium behaviour.

Erasing ethnicity? Propaganda, nation building, and identity in Rwanda.

Arthur Blouin and Sharun W. Mukand

This paper examines whether propaganda broadcast over radio helped to change interethnic attitudes in postgenocide Rwanda. We exploit variation in exposure to the government’s radio propaganda due to the mountainous topography of Rwanda. Results of lab-in-the-field experiments show that individuals exposed to government propaganda have lower salience of ethnicity, have increased interethnic trust, and show more willingness to interact face-to-face with members of another ethnic group. Our results suggest that the observed improvement in interethnic behavior is not cosmetic and reflects a deeper change in interethnic attitudes. The findings provide some of the first quantitative evidence that the salience of ethnic identity can be manipulated by governments.

Was Brexit Triggered by the Old and Unhappy? Or by Financial Feelings?

Federica Liberini , Andrew J.Oswald, Eugenio Proto & Michela Redoano

On 23 June 2016, the United Kingdom voted in favour of ‘Brexit’. This paper is an attempt to understand why. It examines the micro-econometric predictors of anti-EU sentiment. The paper provides the first evidence for the idea that a key channel of influence was through a person’s feelings about his or her own financial situation. By contrast, the paper finds relatively little regression-equation evidence for the widely discussed idea that Brexit was favoured by the old and the unhappy. The analysis shows that UK citizens’ feelings about their incomes were a substantially better predictor of pro-Brexit views than their actual incomes. This seems an important message for economists, because the subject of economics has typically avoided the study of human feelings in favour of ‘objective’ data.

Dispute Resolution Institutions and Strategic Militarization

Adam Meirowitz, Massimo Morelli, Kris Ramsay & Francesco Squintani

Engagement in a destructive war can be understood as the “punishment” for entering into a dispute. Institutions that reduce the chance that disputes lead to war make this punishment less severe. This may incentivize hawkish policies like militarization and potentially offset the benefits of peace brokering. We study a model in which unmediated peace talks are effective at improving the peace chance for given militarization but lead to more militarization and ultimately to a higher incidence of war. Instead, a form of third-party mediation inspired by work of Myerson effectively brokers peace in emerged disputes and also minimizes equilibrium militarization.

Vanguards in Revolution

Mehdi Shadmehr & Dan Bernhardt

Revolutionary vanguards, their radicalism and coercive actions, and their interactions with ordinary citizens and the state are common threads in narratives of revolutionary movements. But what are the defining features of revolutionary vanguards? The literature is replete with terms that allude to some notion of a revolutionary vanguard (e.g., revolutionary entrepreneurs, entrepreneurs of violence, early-risers), but the essence of these conceptions and their implications for revolutionary process remain obscure. We identify and differentiate the two main notions of vanguards, the Leninist and “early-riser” notions, and develop a formal framework that captures their distinguishing features, deriving their implications for the likelihood of revolution. We then use this framework to study three related and overlooked topics: (a) state strategies in mitigating the vanguard's influence on citizens; (b) citizens' preferences for the degree of vanguard radicalism; and (c) the vanguards' use of coercion against citizens.

An Experimental Study of the Investment Implications of Bankruptcy Rules

Mürüvvet Büyükboyacı, Mehmet Yiğit Gürdal, and Özgür Kibris

In bankruptcy laws, proportionality is the universal norm when allocating the liquidation value of a bankrupt firm among creditors. The theoretical literature on bankruptcy proposes two prominent alternatives to proportionality: the equal awards and the equal losses principles. We use an experiment to analyze and compare actual creditor behavior under these three principles. More specifically, we test the following hypotheses: replacing proportionality with equal losses increases total investment while replacing proportionality with equal awards decreases total investment; under all three principles individual investment choices decrease in response to an increase in the probability of bankruptcy or an increase in risk aversion; total investment difference between proportionality and either of the other two principles is independent of the probability of bankruptcy as long as both induce an interior equilibrium. The results of the nonparametric tests and random effects Tobit regression analyses we conduct on our experimental data offer support for all hypotheses.

Global crises and populism: the role of Eurozone institutions

Luigi Guiso, Helios Herrera, Massimo Morelli, Tommaso Sonno

Populist parties are likely to gain consensus when mainstream parties and status quo institutions fail to manage the shocks faced by their economies. Institutional constraints, which limit the possible actions in the face of shocks, result in poorer performance and frustration among voters who turn to populist movements. We rely on this logic to explain the different support of populist parties among European countries in response to the globalization shock and to the 2008–11 financial and sovereign debt crisis. We predict a greater success of populist parties in response to these shocks in Eurozone (EZ) countries, and our empirical analysis confirms this prediction. This is consistent with voters’ frustration for the greater inability of the EZ governments to react to difficult-to-manage globalization shocks and financial crises. Our evidence has implications for the speed of construction of political unions. A slow, staged process of political unification can expose the European Union to a risk of political backlash if hard to manage shocks hit the economies during the integration process.

Political Competition, Tax Salience and Accountability. Theory and some evidence from Italy

Emanuele Bracco and Francesco Porcelli

This paper argues that electoral competition may hinder rather than foster political accountability, especially when elected officers can choose among a number of tax instruments. We develop a political agency model showing that politicians in more competitive jurisdictions use less salient tax instruments more intensely. Defining salience as visibility or, analogously, as voters' awareness of the costs associated with specific government revenue sources, we argue that voters are less likely to hold politicians to account for the associated tax burden of a less salient instrument. This in turn implies that strategic politicians will more heavily rely on less salient revenue sources when electoral competition is stronger. Using data on Italian municipal elections and taxes over a 10-year period, we determine the degree of salience of various tax instruments, including property taxes (high salience) and government fees for official documents (low salience). We then show that mayors facing stronger competition for re-election use less salient tax instruments more intensely.