Political Capital
Demagogues and the Economic Fragility of Democracies
Dan Bernhardt, Stefan Krasa & Mehdi Shadmehr
American Economic Review, October 2022, Pages 3331-3366
Abstract:
We investigate the susceptibility of democracies to demagogues, studying tensions between representatives who guard voters' long-run interests and demagogues who cater to voters' short-run desires. Parties propose consumption and investment. Voters base choices on current-period consumption and valence shocks. Younger/poorer economies and economically disadvantaged voters are attracted to the demagogue's disinvestment policies, forcing farsighted representatives to mimic them. This electoral competition can destroy democracy: if capital falls below a critical level, a death spiral ensues with capital stocks falling thereafter. We identify when economic development mitigates this risk and characterize how the death-spiral risk declines as capital grows large.
The Influence of Local Patriotism on Participation in Local Politics, Civic participation, Trust in Local Government and Collective Action
Sean Richey
American Politics Research, forthcoming
Abstract:
Patriotism is conceived of as a national-level concept. I posit that people hold similarly strong feelings toward their municipal area. Based on long-standing theories of patriotism in national politics, I show how local patriotism influences local politics. Using novel preregistered survey data from an online sample matched to nationally representative data in terms of gender, age, and race, I show that people have feelings of love, indifference, or hate toward their municipality. I also find a strong positive correlation between loving one's municipality and participation in local politics, civic participation, and trust in local government. I also conducted two preregistered survey experiments that show that priming feelings of love and/or hate towards one's town strongly motivates the willingness to sacrifice to solve local collective action problems. Specifically, stimuli that evoked these feelings made participants much more likely to donate the payment they earned from completing the survey to solve a town problem. These results show the crucial importance of local patriotism for understanding local politics.
Governors and electoral hazard in the allocation of federal disaster aid
Thomas Husted & David Nickerson
Southern Economic Journal, forthcoming
Abstract:
U.S. public disaster aid provide elected officials opportunities to engage in "electoral hazard," where an incumbent can influence the probability of re-election by allocating aid to influence voters' expectations of their future welfare. This is the first test for electoral hazard in the allocation of federal aid to counties exposed to the risk of economic loss from disasters by incumbent state governors running for re-election. Using a unique county-level data set, we estimate the determinants of the equilibrium allocation strategy of an incumbent in the presence of electoral hazard. Controlling for loss and the demographic, economic and political characteristics of at-risk counties, we find the average incumbent governor seeking re-election actively engages in the manipulation of voter expectations by allocating greater shares and magnitudes of the largest federal disaster aid program to those at-risk counties that awarded the incumbent governor a plurality of votes in the preceding election.
Bureaucratic Revolving Doors and Interest Group Participation in Policymaking
Kyuwon Lee & Hye Young You
Journal of Politics, forthcoming
Abstract:
There is growing concern about the movement of individuals from private sectors to bureaucracies, yet it is unclear how bureaucratic revolving doors affect connected firms' political participation. We argue that when connected individuals enter government, connected firms reduce their proactive forms of participation because their connected bureaucrats possess firm-specific technical and legal knowledge to help them achieve their policy objectives. We test our intuition by constructing a novel dataset on career trajectories of bureaucrats in the Office of the US Trade Representative (USTR) and firms that are connected to USTR's revolving-door bureaucrats. Empirical results show that firms with connections to USTR bureaucrats decrease their lobbying spending and participation on advisory committees under the USTR. The decrease in political participation is stronger when connected bureaucrats are more influential in policy production. Our findings suggest that decreases in interest groups' political activities might not imply that their influence on policymaking is diminished.
The political economy of state economic development incentives: A case of rent extraction
Russell Sobel, Gary Wagner & Peter Calcagno
Economics & Politics, forthcoming
Abstract:
There is a large literature examining the macroeconomic effects of state economic development incentives on employment, income, tax revenue, and growth. At best, these incentives are found to be weakly effective at job creation, but inefficient due to the distortions, secondary effects, and increased rent-seeking they encourage, with little public accountability. Given the evidence on their inefficiency, what explains their continued popularity? We find that large development incentives create substantial benefits for incumbent politicians in the form of both higher campaign contributions (particularly from business, labor, and construction sectors) and higher margins of victory at election time. Thus, political rent extraction may be the best explanation for the continued existence and popularity of these relatively ineffective incentive programs in states.
The Forest Ranger (and the Legislator): How Local Congressional Politics Shape Policy Implementation in Agency Field Offices
Cory Struthers et al.
Journal of Public Administration Research and Theory, October 2022, Pages 685-701
Abstract:
Research on political control over government bureaucracy has primarily focused on direct exercises of power such as appointments, funding, agency design, and procedural rules. In this analysis, we extend this literature to consider politicians who leverage their institutional standing to influence the decisions of local field officials over whom they have no explicit authority. Using the case of the US Forest Service (USFS), we investigate whether field-level decisions are associated with the political preferences of individual congressional representatives. Our sample encompasses 7,681 resource extraction actions initiated and analyzed by 107 USFS field offices between 2005 and 2018. Using hierarchical Bayesian regression, we show that under periods of economic growth and stability, field offices situated in the districts of congressional representatives who oppose environmental regulation initiate more extractive actions (timber harvest, oil and gas drilling, grazing) and conduct less rigorous environmental reviews than field offices in the districts of representatives who favor environmental regulation. By extending existing theories about interactions between politicians and bureaucrats to consider informal means of influence, this work speaks to (1) the role of local political interests in shaping agency-wide policy outcomes and (2) the importance of considering informal and implicit means of influence that operate in concert with explicit control mechanisms to shape bureaucratic behavior.
Foreign lobbying through domestic subsidiaries
Jieun Lee
Economics & Politics, forthcoming
Abstract:
How much of lobbying activities disclosed under the Lobbying Disclosure Act (LDA) actually represent foreign clients? What are their interests? By identifying the global ultimate owners of all corporate clients filing with the LDA, I find that majority-owned subsidiaries of foreign multinational corporations (MNCs) account for nearly 20% of corporate lobbying spending in 2015-2016. This amount is comparable to the entire foreign lobbying spending reported under the Foreign Agents Registration Act (FARA). Domestic subsidiaries of foreign MNCs are also found to lobby more frequently and spend more lobbying than American multinationals, after controlling for firm size, industry, and PAC contributions. These subsidiaries actively lobby on issue areas that clearly benefit their foreign parents. The findings suggest that foreign MNCs may actively influence U.S. policies through their domestic subsidiaries, and that the FARA captures only part of foreign lobbying in the United States.
Negation of Sanctions: The Personal Effect of Political Contributions
Sarah Fulmer, April Knill, and Xiaoyun Yu
Journal of Financial and Quantitative Analysis, forthcoming
Abstract:
We show that political contributions are associated with reduced civil and criminal sanctions for fraudulent executives. These managers benefit more from contributions if their firm also gained from the fraud, if they occupy top positions in firms with weak boards, or if they contribute to powerful politicians. Political contributions reduce budgetary resources for government enforcers and lengthen the SEC's case time-to-resolution. They also facilitate penalty transfer from fraudulent managers to the firm, resulting in their entrenchment and long-term destruction of shareholder value. Our findings highlight an agency cost of political contributions and a mechanism undermining the disciplining effect of regulations.
A Theory of Special Legislation and Its Decline
Slade Mendenhall
George Mason University Working Paper, August 2022
Abstract:
For most of a millennium, "legislation" largely meant special legislation: narrow bills tailored to the interests of particular persons, firms, or property. Generally applicable acts that covered all persons were greeted with suspicion. Today, the reverse is true: experts and the public believe that laws, to be good, must be broad and have largely abolished special legislation. This article frames both special legislation and its abolition as efficient solutions under alternate institutional constraints. It argues that scholars have failed to recognize the substitute nature of special legislation and the administrative state and finds criticisms of special legislation to be attenuated when subjected to comparative institutional analysis. Finally, it argues that rent-extraction during the American transportation boom was the immediate impetus for the shift.
Humanitarianism, Egalitarianism, and Public Support for Political Compromise
David Barker, Christopher Carman & Shaun Bowler
American Politics Research, forthcoming
Abstract:
Democratic policymaking requires compromise, but public support for it varies substantially. Scholars know relatively little about the psychology of such public attitudes. In this investigation, we consider the predictive capacities of humanitarianism (a commitment to helping those who are suffering) and egalitarianism (a commitment to treating people equally). Such altruistic values, we argue, foster concern for the common good and a cooperative vision of democratic policymaking - which, in turn, engender support for compromise. Moreover, we suggest that partisan differences in such values (with Democrats being more likely than Republicans to prioritize them, on average), help explain Democrats' disproportionate support for compromise. Data from two nationally representative studies are consistent with this theoretical perspective, offering novel insights into the roots of political compromise, the reach of core values as political determinants, and the dynamics of partisan asymmetry.
Human-centred mechanism design with Democratic AI
Raphael Koster et al.
Nature Human Behaviour, forthcoming
Abstract:
Building artificial intelligence (AI) that aligns with human values is an unsolved problem. Here we developed a human-in-the-loop research pipeline called Democratic AI, in which reinforcement learning is used to design a social mechanism that humans prefer by majority. A large group of humans played an online investment game that involved deciding whether to keep a monetary endowment or to share it with others for collective benefit. Shared revenue was returned to players under two different redistribution mechanisms, one designed by the AI and the other by humans. The AI discovered a mechanism that redressed initial wealth imbalance, sanctioned free riders and successfully won the majority vote. By optimizing for human preferences, Democratic AI offers a proof of concept for value-aligned policy innovation.
Policy Consequences of Civil Society: Evidence from German-American Counter-Mobilization to Prohibition
Tobias Resch & Benjamin Schneer
Harvard Working Paper, June 2022
Abstract:
What impact do mass civil society groups have on public policy? We study this issue by analyzing opposition to national prohibition by German-American groups and associations in the early twentieth century, before and after state-sponsored suppression of them that coincided with U.S. entry to World War I. We measure German-American civil society and organizational strength across time and geography based on historical club directories, newspaper directories and petitioning activity. Comparing votes in the House of Representatives on two near-identical proposals for constitutional amendments - the defeat of the Hobson Prohibition Amendment in 1914 and the successful passage of the eventual Eighteenth Amendment in 1917 - we find suppression mattered most in districts located at the middle of the German-American population distribution, where we hypothesize representatives were most persuadable. We estimate that without suppression of German-American organizations the Prohibition Amendment would not have received enough support for passage. Our findings add to an understanding of when and under what circumstances groups and organizations successfully influence public policy and provide a new explanation for the passage of the Prohibition Amendment.