Whither Political Economy? Theories, Facts and Issues (original) (raw)
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Recent Economic Perspectives on Political Economy, Part I
British Journal of Political Science, 2008
In recent years some of the best theoretical work on the political economy of political institutions and processes has begun surfacing outside the political science mainstream in high quality economics journals. This two-part paper surveys these contributions from a recent five-year period. In Part I, the focus is on elections, voting and information aggregation, followed by treatments of parties, candidates, and coalitions. In Part II, papers on economic performance and redistribution, constitutional design, and incentives, institutions, and the quality of political elites are discussed. Part II concludes with a discussion of the methodological bases common to economics and political science, the way economists have used political science research, and some new themes and arbitrage opportunities. This is the second part of a two-part survey of articles germane to political science found in the leading economics journals in recent years. We undertook this task because it had become apparent in recent years that a considerable body of formal political economy began appearing in the top economics journals. In the five-year period from the point we commenced this project (2000)(2001)(2002)(2003)(2004), we found more than one hundred articles in the five leading journals. 1 From this universe we survey approximately sixty, with references to many others as well. In Part I, the focus was on elections, voting and information aggregation, followed by a treatment of parties, candidates, and coalitions. In this part we examine papers on redistribution, constitutional design, and the incentives and quality of political elites. We conclude with a discussion of the methodological and theoretical foundations of political economy shared by economist and political scientist alike, the resources each political economy type draws from the other's literature, and some available intellectual arbitrage opportunities. James Robinson, three referees, and especially those of the editor, Albert Weale.
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Most of economics takes politics for granted. Through some (often implausible) assumptions, it seeks to explain away political structures by characterizing them as stable and predictable or as inconsequential in understanding what goes on in an economy. Such attempts are misguided, and this book shows how governments and political institutions are composed of people who respond to incentives and whose behavior and choices can be studied through the lens of economics. This book aims to bridge the gap between economics and politics, and in doing so hopes to instill in the reader a deeper appreciation for social scientific thinking. Opening with a refresher on microeconomics and an introduction to the toolkit of political economy, it ensures that the necessary building blocks are in place before building up from the level of the individual and the firm to show how a political-economic equilibrium can be achieved. The text explores how to separate primitives-the external parts of a model that we cannot affect-from outcomes-the internal parts of a model that we can. Moreover, it demonstrates that economic and political issues alike can be studied within the same general framework of analysis. Political Economy and Policy Analysis offers readers the chance to gain a more sophisticated understanding of political processes, economic processes, and the interplay among them. Adopting an applied microeconomics approach, it will be ideal for upper-level undergraduate or postgraduate courses on political economy, public choice, or policy analysis.
ECONOMIC ANALYSIS OF POLITICAL INSTITUTIONS: AN INTRODUCTION
This paper surveys four game-theoretic models of politics, to offer an introduction to the analysis of political institutions. The first two models focus on electoral competition, to show how successful candidates' equilibrium strategies may differ under different electoral systems. The other two models probe the consequences of legislative bargaining under different constitutional structures.
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This paper is an interdisciplinary analysis of the benefits and limits of political competition. We start from the economic theory of monopoly and extend its implications on matters concerning political action. If the state is defined as the institution that holds the monopoly on coercion over a given territory, are the democratic selection process (internal political competition) and the possibility open to an economic agent to leave for more economically free jurisdictions (international political competition) enough to temper its reach? By referring to the inherent limits that plague collective action, voter rational ignorance, and the possibility of redistributing benefits and incumbent decision-maker collaboration when it comes to trading votes, we argue that democratic competition cannot be considered an effective restraint against political discretion. Because of this, we consider that international political competition can offer better protection against political action. H...
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This article discusses recent empirical and theoretical research on the electoral rule, which is one feature of modern democracies. It determines that the electoral rule systematically shapes economic policy. An outline of some key objectives of electoral rules is presented in the first section; it further notes the stability and systematic selection that characterize real-world constitutions. It then introduces the main concepts that categorize different electoral rules, and explains how these elements help shape the accountability of government and the size of political rents and corruption. Finally, the article deals with representation in government and a variety of fiscal policy choices.
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This thesis consists of three papers unified by a common focus on the behavior of voters and politicians in elections. Chapter 1 considers informal voting in Australian elections. In Australia, there are around5-6% of voters who submit an informal vote, which doesn't count towards the total. In this chapter, I make use of a natural experiment, based on exogenous changes in electorate boundaries, to identify what factors influence the number of informal votes. I find that factors that feature in the traditional theory on voter decisions, competitiveness and number of other voters, do not affect the rate of informal voting. Instead I find that more candidates on the ballot results in higher levels of informal voting. Halving the number of options would reduce informal voting by 27%. This effect is present regardless of the level of education, indicating it is likely a decision to abstain rather than an error. Chapter 2, deals with the role of politicians' personal ideology in determining their voting behaviour. I extend recent empirical findings by applying a text-as-data approach to analyse speeches in parliament following a recent politically charged moment in Australia-a national survey on same sex marriage (SSM). I estimate opposition to SSM in parliamentary speeches and measure how speech changed following the SSM vote. I find that Opposers of SSM became stronger in their opposition once the results of the national survey were released, v regardless of how their electorate voted. No consistent and statistically significant change is seen in the behavior of Supporters of SSM. This result indicates that personal ideology played a more significant role in determining changes in speech than did the position of the electorate. In Chapter 3, I analyze the transition to instant runoff voting (IRV) that is occurring in some jurisdictions in the U.S. There are mixed findings in the literature on the benefits of IRV for voters and politicians, making informed debate around its adoption challenging. Analysis of the Minneapolis-St. Paul Metro Area, which has strong natural experiment characteristics, indicates that the introduction of IRV caused a 9.6 percentage point increase in turnout for Mayoral elections. The effect is larger for precincts that have higher poverty rates. Text based sentiment analysis of mayoral debates across the U.S., a new approach in this area, indicates that the introduction of IRV improved the civility of debates with candidates substituting
The Political Economy of Dynamic Elections: A Survey and Some New Results
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We survey and synthesize the political economy literature on dynamic elections in the two traditional settings, spatial preferences and rent-seeking, under perfect and imperfect monitoring of politicians’ actions. We define the notion of stationary electoral equilibrium, which encompasses previous approaches to equilibrium in dynamic elections since the pioneering work of Barro (1973), Ferejohn (1986), and Banks and Sundaram (1998). We show that repeated elections mitigate the commitment problems of both politicians and voters, so that a responsive democracy result holds in a variety of circumstances; thus, elections can serve as mechanisms of accountability that successfully align the incentives of politicians with those of voters. In the presence of term limits, however, the possibilities for responsiveness are attenuated. We also touch on related applied work, and we point to areas for fruitful future research, including the connection between dynamic models of politics and dyn...
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This paper is an attempt to analyze bonds and their relevance within the confines of economics. They are discussed as both exogenous and endogenous variables. More specifically, the bonds of democratic politics are compared with those of non-democratic politics. It is argued that only those societies that have at their disposition certain kinds of bonds will be able to sustain democracy. It is further argued that the differential effects of democratic vs. non-democratic regimes on the respective bonds are rather weak. But then again, different kinds of democratic institutions might well have an effect on the prevalent bonds found in a society.