Democracy for Me
Rationalizing Democracy: The Perceptual Bias and (Un)Democratic Behavior
Suthan Krishnarajan
American Political Science Review, forthcoming
Abstract:
Democracy often confronts citizens with a dilemma: stand firm on democracy while losing out on policy or accept undemocratic behavior and gain politically. Existing literature demonstrates that citizens generally choose the latter -- and that they do so deliberately. Yet there is an alternative possibility. Citizens can avoid this uncomfortable dilemma altogether by rationalizing their understandings of democracy. When a politician advances undesired policies without violating democratic rules and norms, people find ways to perceive the behavior as undemocratic. When a politician acts undemocratically to promote desired policies, citizens muster up arguments for considering it democratic. Original survey experiments in the United States, and 22 democracies worldwide, provide strong support for this argument. It is thus not deliberate acceptance, but a fundamentally different perceptual logic that drives the widespread approval of undemocratic behavior in today’s democracies.
Corporate Political Spending and State Tax Policy: Evidence from Citizens United
Cailin Slattery, Alisa Tazhitdinova & Sarah Robinson
NBER Working Paper, August 2022
Abstract:
To what extent is U.S. state tax policy affected by corporate political contributions? The 2010 Supreme Court Citizens United v. Federal Election Commission ruling provides an exogenous shock to corporate campaign spending, allowing corporations to spend on elections in 23 states which previously had spending bans. Ten years after the ruling and for a wide range of outcomes, we are not able to identify economically or statistically significant effects of corporate independent expenditures on state tax policy, including tax rates, discretionary tax breaks, and tax revenues.
The Impact of Money in Politics on Labor and Capital: Evidence from Citizens United v. FEC
Pat Akey et al.
Stanford Working Paper, July 2022
Abstract:
The perceived increase in corporate political influence has raised concerns that corporations advance policies that benefit capital and harm labor. We examine whether money in politics harms labor using the surprise Supreme Court ruling Citizens United v. FEC (2010), which rendered bans on political spending unconstitutional, affecting roughly half of US states (treated states). In a difference-in-difference analysis, we find that treated states see increased political turnover and, surprisingly, increased labor income. We show evidence that these effects are driven by increased political competition whereby money allows for more political entry from firms that could not exert political influence in other ways. On net, the economic environment becomes more business-friendly and some of these gains are passed on to workers.
Economic Influence Activities and the Strategic Location of Investment
John de Figueiredo & Davin Raiha
Business and Politics, September 2022, Pages 292-317
Abstract:
This article examines the economic influence activities (EIAs) of firms. We argue that firms invest in jobs and establishments in districts of congressional committee members that have oversight over their businesses and industries. This investment increases as legislators’ power rises in Congress. Our theory makes three predictions. First, EIAs by firms will be higher in congressional districts where the legislators have substantial political influence over the firm, relative to districts where legislators have little influence over the firm. Second, EIAs will increase with the legislators’ power on the focal committee. Third, when a legislator exits the committee, EIAs will diminish, but previous investments in the district will remain. We test these predictions by analyzing the Trinet census of establishments, mapped into the committee structure of the US Congress, by tracking the investment and employment of firms in each industry in each congressional district over time. Using fixed-effects models, we show the predictions of the theory find substantial support in the US Senate but not the House. We explore causality by using exogenous exits of politicians by death and scandals to further complement our analysis, and discuss why EIAs may be less likely to occur and detect in the House.
Inequality in Agency Response: Evidence from Salient Wildfire Events
Sarah Anderson, Andrew Plantinga & Matthew Wibbenmeyer
Journal of Politics, forthcoming
Abstract:
Government agencies may be an additional source of unequal representation beyond that stemming from the differential responsiveness of elected officials. We use plausibly exogenous focusing events, which raise public demands for government provision of local public goods, to examine evidence of inequality in agency decision-making. Using the empirical case of wildfire risk management in the western U.S., we find that experiencing nearby wildfires raises the salience of wildfire risk and leads agencies to place a greater number of risk reduction projects nearby, even when wildfire risk has already been reduced. This effect predominates among high socioeconomic status communities, especially higher income, more educated, and whiter communities. Empirical evidence is consistent with a formal model in which public agencies perpetuate inequality due to differences in the costs of lobbying across demographically-varying communities and differences across communities in the benefits to agencies of responding to their demands.
Can Controls Curb Political Capture? Evidence from Patenting
Christine Cuny, Mihir Mehta & Wanli Zhao
NYU Working Paper, July 2022
Abstract:
Theories of congressional dominance contend that regulatory agencies can be captured by the politicians that oversee them. We examine whether control systems and transparency constrain such capture. Using the United States Patent and Trademark Office (USPTO) as a setting, we begin by providing causal evidence of political capture. Patent applications are more likely to be approved when submitted by firms with powerful congressional representation, even though the granted patents are of lower quality. We then document that limits on congressional authority over the USPTO's financing, via the America Invents Act of 2011, mitigates political capture. We also exploit patent examiner departures (and the reassignment of patent applications to a new examiner) to show that public transparency about the identity of a patent examiner constrains political capture. Our study provides novel insights about mechanisms that can constrain distortions in the regulatory process.
Democracy, state capacity and public finance
Joshy Easaw & Samuli Leppälä
Economic Inquiry, forthcoming
Abstract:
The paper addresses how democracy can affect public finance and state capacity investment. We show that the effect of democracy on public policy can take two forms: direct and indirect. The direct effect transpires when increasing democracy leads to an increase in public expenditure which results in increased public goods provision and reduced political rent. The indirect effect emerges when increased democracy leads to a reduction in state capacity investment and, subsequently, to a reduction in public goods provision. Paradoxically, lower political rents deteriorate the incumbent's incentive to invest in state capacity, at the expense of public goods provision.
Believe me, I am ignorant, but not biased
Manuel Foerster & Achim Voss
European Economic Review, forthcoming
Abstract:
In our political-agency setting, voters are uninformed about two traits of an incumbent politician: ability and bias. Voters observe the implemented policy and learn the state immediately before the election. We show that when the bias of biased politicians is strong such that voters prefer neutral politicians even if they have low ability, high-ability and biased politicians may secure re-election by appearing ignorant. Furthermore, we introduce a news shock that may reveal the state earlier, when a policy change is still possible. Raising the likelihood of a shock may decrease voter welfare if bias is very strong.
The Representational Consequences of Municipal Civil Service Reform
Nicholas Kuipers & Alexander Sahn
American Political Science Review, forthcoming
Abstract:
A prominent argument holds that the chief purpose of municipal civil service reform in the United States was to dislodge the overrepresentation of recent immigrants in city government. Using new data on all municipal employees from 1850 to 1940 and employing three research designs, we detect no evidence that the share of local government jobs held by foreign-born whites decreased following the introduction of reforms. Instead, we show that foreign-born whites -- Irish immigrants in particular -- experienced substantial gains in local government employment, concentrated in blue-collar occupations in small- and medium-sized municipalities. Our results call for a revisionist interpretation of Progressive Era reforms by questioning generalizations drawn from the experience of the largest cities in the United States. For most municipalities, instead, civil service reform in fact opened avenues to representation for members of foreign-born constituencies who had previously been locked out of government jobs.
Who Punishes Leaders for Lying About the Use of Force? Evaluating The Microfoundations of Domestic Deception Costs
Keren Yarhi-Milo & David Ribar
Journal of Conflict Resolution, forthcoming
Abstract:
It is a common stereotype that leaders lie, but for all our beliefs about how normal it is for a president to lie to the public we know next to nothing about how voters might actually view this conduct. Drawing from literature in behavioral economics, we theorize that voters apply their attitudes towards interpersonal lies when judging leaders, with people who see lying as more socially acceptable being less willing to punish leaders for exhibiting this behavior. Using a novel vignette-style survey experiment, we find strong support for our theory: despite widespread willingness to punish leaders who lie, individuals high in Machiavellianism and Self-Monitoring are far less willing to punish presidents for lying than their low-type peers, and in some cases do not punish at all. Using robustness checks and causal mediation analysis, we confirm that views regarding the moral acceptability of lying drive responses to presidential deception.