Category Archives: Political economy

The political power of daugthers

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Daughters and Left-Wing Voting

Andrew J. Oswald (University of Warwick and Cornell University) Nattavudh Powdthavee (University of London and University of York)

From the paper introduction:
“In remarkable research, the sociologist Rebecca Warner and the economist Ebonya Washington have shown that the gender of a person’s children seems to influence the attitudes and actions of the parent.
Warner (1991) and Warner and Steel (1999) study American and Canadian mothers and fathers. The authors’ key finding is that support for policies designed to address gender equity is greater among parents with daughters. This result emerges particularly strongly for fathers. Because parents invest a significant amount of themselves in their children, the authors argue, the anticipated and actual struggles that offspring face, and the public policies that tackle those, matter to those parents. In the words of Warner and Steel (1999), “child rearing might provide a mechanism for social change whereby fathers’ connection with their daughters undermines … patriarchy”. The authors demonstrate that people who parent only daughters are more likely to hold feminist views (for example, to favor affirmative action). By collecting data on the voting records of US congressmen, Washington (2004) is able to go beyond this. She provides persuasive evidence that congressmen with female children tend to vote liberally on reproductive rights issues such as teen access to contraceptives. In a revision, Washington (2008) argues for a wider result, namely, that the congressmen vote more liberally on a range of issues such as working families flexibility and tax-free education.
Our aim in this paper is to argue, with nationally representative random samples of men and women, that these results generalize to voting for entire political parties. We document evidence that having daughters leads people to be more sympathetic to left-wing parties. Giving birth to sons, by contrast, seems to make people more likely to vote for a right-wing party. Our data, which are primarily from Great Britain, are longitudinal. We also report corroborative results for a German panel. Access to longitudinal information gives us the opportunity — one denied to previous researchers — to observe people both before and after they have a new child of any particular gender. We can thereby test for political ‘switching’. Although panel data cannot resolve every difficulty of establishing cause-and-effect relationships, they allow sharper testing than can simple cross-section data. The paper checks that our result is not an artifact of family stopping-rules, discusses the predictions from a simple economic model, and tests for possible reverse causality.”

Also related:

Washington, Ebonya. (2008) “Family socialization: How daughters affect their legislator fathers’ voting on women’s issues.” American Economic Review, forthcoming.

Abstract. “Economists have long concerned themselves with environmental influences, such as neighborhood, peers and family on individuals’ beliefs and behaviors. However, the impact of children on parents’ behavior has been little studied. Parenting daughters, psychologists have shown, increases feminist sympathies. I test the hypothesis that children, much like neighbors or peers, can influence adult behavior. I demonstrate that the propensity to vote liberally on reproductive rights is significantly increasing in a congress person’s proportion of daughters. The result demonstrates not only the relevance of child to parent behavioral influence, but also the importance of personal ideology in a legislator’s voting decisions as it is not explained away by voter preferences.”

Lant Pritchett – Let their people come

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Acaba de salir un libro sobre los beneficios potenciales de una mayor movilidad internacional de la mano de obra (léase migración).  La premisa de Lant Pritchett–economista de MIT, profesor de Harvard e investigador del World Bank–es sencilla:  en el mundo actual, las ganancias de  una mayor movilidad laboral son mucho mayores que las ganancias de disminuir, aun más, las barreras al comercio internacional. 

¿Por qué?  Imperfectos  como lo son, los aranceles y tarifas promedio del mundo ya son relativamente bajos.  En cambio, las barreras migratorias siguen siendo gigantescas y socialmente costosas.  ¿Evidencia?  Los diferenciales en precios de bienes y servicios entre un país rico y uno pobre son de, digamos 30 a 40% (ie, el precio de una ipod o una big mac alrededor del mundo no difiere demasiado).  Sin embargo, los diferenciales en salarios entre un pais rico y uno pobre llegan a ser de más del 500%, es decir, de un orden de magnitud superior.   

In short, in today’s world, being pro-migration is much more pro-poor than being pro-trade.

El libro está disponible en linea aqui:
http://www.cgdev.org/content/publications/detail/10174

Dixit (non) system of work

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This is Avinash Dixit advice on keeping research simple and papers short:

“Over the last two decades the average length of economics papers has increased quite a lot. Advances in word-processing technology have greatly reduced the cost of producing words, but not the cost of producing ideas, with the result economists should expect — massive substitution.

My ideal is neatly captured in a question Frank Hahn posed to an author. As an editor of the Review of Economic Studies, Hahn asked the author to cut down his paper from 40 pages to its essential core of three pages. When the author wrote a long and indignant letter, Hahn responded in two sentences: “Crick and Watson described the structure of DNA in three pages. Kindly explain why your idea deserves more space.”
(…)
I have saved for the end the most important lesson I have learned from my experience, and which I believe has very general validity. Maintain a youthful sense of freedom to choose problems and the directions of work on them. Imagine yourself at twenty-three, not yet labeled or confined to a particular “field,” and not yet pressured to produce something quickly for the approaching tenure review. Try to preserve this mental frame in your research, even as your body, and the part of your mind dealing with other matters, continue to age and decay. 

Unfortunately, in the US most academics do not regain this freedom until they are thirty-five, by which time it is too late for many of them to be twenty-three. Their research brain is beyond rejuvenation, and it is time for them to leave the research frontier and join the conference circuit or the policy community.”

 

 

Democracy and revolution

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A no-nonsense quote of the day from Tyler Cowen in his NYT column:
 
It’s an Election, Not a Revolution
This election is certainly important. But based on the historical record, it isn’t likely to result in a major swing in economic policy. Fundamentally, democracy is not a finely tuned mechanism that can be used to direct economic policy as a lever might lift a pulley. The connection between what voters want, or think they want, and what ultimately happens in the economy, is far less direct. (…)
Rather than being cynics, we should be realists. Democracy is reasonably good at some things: pushing scoundrels out of office, checking their worst excesses by requiring openness, and simply giving large numbers of people the feeling of having a voice. Democracy is not nearly as good at others: holding politicians accountable for their economic promises or translating the preferences of intellectuals into public policy.
THAT might sound pessimistic, but it’s not. Many Americans will be living longer, finding new sources of learning and recreation, creating more rewarding jobs, striking up new loves and friendships, and, yes, earning more money. Just don’t expect most of these gains to come out of the voting booth or, for that matter, Washington.

Tracking the 2008 US Presidential election

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Aquí están las últimas encuestas de Gallup:
http://www.gallup.com/poll/election2008.aspx

Y las cotizaciones de los betting markets:

Iowa electronic market
2008 U.S. Presidential Vote Share Market
2008 U.S. Presidential Winner Takes All Market
2008 U.S. Democratic Convention Winner Takes All Market
2008 U.S. Republican Convention Winner Takes All Market

Intrade:
Democratic to win Dem convention
Obama to win presidency

Social science and the public

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This is Robin Hanson (at Overcoming Bias) on how much social scientists know and how little of it makes it to public or political debates.

Social scientists know lots.
As a physics student and computer science researcher, I assimilated the usual “hard science” perception that “social science” is an oxymoron — no one knows much about it, so your opinion is as good as anyone’s. When I finally decided I needed social science credentials, to turn my institution hobby into a career, I focused on experimental economics, the only sort a hard scientist could trust, and Caltech, with impeccable hard science credentials. But I was soon thoroughly convinced: social scientists know tons.

Why then do so many people think otherwise? Many say it is because social scientists are stupid, or the social world is too complex or uncontrollable. Better answers are that social expertize conflicts with our overconfidence about familiar experience, or with our democratic ideology that everyone’s political opinions should get equal weight. But the best answer, I think is that most public talk by social experts reflects little social science. That is, what social experts say in legal or congressional testimony, or in newspapers or magazines, mostly reflects what they and we want and expect to hear, instead of what expert evidence reveals.

(…) social scientists have data and theory giving powerful insight into a great many social issues, at least to those with open minds. Open minded social scientists talking privately can make great intellectual progress. But powerful forces are eager to distort the messages social scientists give the public on important topics. Academics with deserved reputations for careful accurate work on obscure academic topics tend to adopt different standards when writing editorials or advising politicians. Even if most academics would not do this, those selected for such roles usually do.

(…) a mechanism that could cut through this fog and tell the public what honest social scientists really think might have great social value, at least if the public could be shamed into listening to them.

New Hampshire and momentum in presidential primaries

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Las elecciones primarias en USA apenas comienzan pero ya arrojan resultados interesantes.   He aquí una especulación sobre las encuestas en New Hampshire y, por otro lado, teoría y evidencia sobre  el “momentum” durante las primarias de 2004.
 

 

Before Iowa, Hillary was beating Obama in NH by like 20 points, or at least double digits. After Iowa, Obama got this huge surge in the polls. You can see the time series here. It’s a mystery why the polls were so wrong. I think it comes down to:

 

First – Erikson, Panagopoulos, and Wlezien wrote a paper showing that the Gallup poll overestimates fluctuation in the electorate when using the likely voter screen early in the election. In a nutshell, what happens is this: because the Gallup poll (and most other polls) are interested in interviewing “likely voters” only, they ask a series of screening questions at the beginning of the poll to gauge the respondents’ interest in the election. They then have some formula to determine who is a “likely voter”, and they throw out the remainder of the results. This paper examined the results that were thrown out along with the poll and found that, when something is going wrong for a candidate, their supporters are less enthusiastic and therefore less likely to be considered “likely voters” during this screening process. As a result, many of the supporters of the “losing” candidate just aren’t counted in the poll, because pollsters think they’re not going to vote. This makes fluctuations in polling seem more dramatic than they actually are. (…) This means Obama was never actually leading in NH, and all this talk about “something happened in the last 24 hours” is all a load of BS.

Second – survey weighting. Whenever a pollster does a survey, they need to make the poll representative of the voting electorate. (They) essentially guess what the demographic makeup of the electorate is going to be. Usually this is done on historical data and census data, but it’s always really hard in primaries because they’re not very consistent.  So the pollster will first try to get this breakdown in who they actually talk to, and if they can’t, they’ll then “weight” the survey to simulate the expected breakdown. (…)The pollsters probably saw how weird the electorate was in Iowa (i.e. so many people turned out, and so many young people), that they probably tried to compensate by weighting young people a ton in the following polls to NH. Now, we know that young people support Obama disproportionately. If the pollsters overcompensated for young people, then Obama’s support was artificially strengthened in the polls.

 

MOMENTUM AND SOCIAL LEARNING IN PRESIDENTIAL PRIMARIES

Brian Knight and Nathan Schiff (NBER Working Paper 13637)

http://www.nber.org/papers/w13637

 

Do outcomes of primaries depend upon the sequencing of states? Do sequential, relative to simultaneous, systems lead to different outcomes in terms of the selection of candidates? In our view, the key distinction is that sequential, relative to simultaneous, elections provide late voters with an opportunity to learn about the desirability of the various candidates from the behavior of early voters. This opportunity for late voters to learn from early voting returns can in turn lead to momentum effects.

We develop and estimate a simple model of voter behavior under sequential elections. In the model, voters are uncertain about candidate quality, and voters in late states attempt to infer private information held by early voters from voting returns in early states.  Candidates experience momentum effects when their performance in early states exceeds voter expectations. The magnitude of momentum effects depends upon prior beliefs about the quality of candidates held by voters, expectations about candidate performance, and the degree of variation in state-level preferences. Our empirical application focuses on the 2004 Democratic primary. We find that Kerry benefited substantially from surprising wins in early states and took votes away from Dean, who stumbled in early states after holding strong leads in polling data prior to the primary season.  

The estimated model demonstrates that social learning is strongest in early states and that, by the end of the campaign, returns in other states are largely ignored by voters in the latest states. The voting weights implied by the estimated model demonstrate that early voters have up to 20 times the influence of late voters in the selection of candidates, demonstrating a significant departure from the ideal of “one person, one vote.”

Finally, we simulate the election under a number of counterfactual primary systems and show that the race would have been much tighter under a simultaneous system and that electoral outcomes are sensitive to the order of voting. While these results are specific to the 2004 primary, we feel that they are informative more generally in the debate over the design of electoral systems in the United States and elsewhere.

 

 
 
 

Labor market institutions

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Next spring, in my political economy course, I want to cover some major public policy areas: education, health, pensions, poverty-alleviation, taxation, energy, trade and competition policy, and obviously, labor regulation. This would be a nice reading assignment:
 
Labor Market Institutions Around the World
Richard B. Freeman
NBER Working Paper No. 13242, July 2007

The paper documents the large cross-country differences in labor institutions that make them a candidate
explanatory factor for the divergent economic performance of countries and reviews what economists
have learned about the effects of these institutions on economic outcomes. It identifies three ways
in which institutions affect economic performance: by altering incentives, by facilitating efficient bargaining,
and by increasing information, communication, and trust. The evidence shows that labor institutions
reduce the dispersion of earnings and income inequality, which alters incentives, but finds equivocal
effects on other aggregate outcomes, such as employment and unemployment. Given weaknesses
in the cross-country data on which most studies focus, the paper argues for increased use of micro-data,
simulations, and experiments to illuminate how labor institutions operate and affect outcomes.

 

Campaign Advertising and Election Outcomes

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The recent electoral reform in Mexico will surely change the use of TV and radio ads in political campaigns.  Will this make “media effects” larger or smaller?  The Brazilian experience seems to say larger.
 
 

By: Bernardo S. da Silveira (Department of Economic, New York University)
João Manoel Pinho de Mello (Department of Economics, PUC-Rio)
URL: http://d.repec.org/n?u=RePEc:rio:texdis:550&r=pol
Despite the “minimal effects” conventional wisdom, the question of whether campaign advertising influence elections outcome remains open. This is paradoxical because in the absence of a causal link from advertising to candidate performance, it is difficult to rationalize the amounts spent on campaigns in general, and on TV advertising in particular. Most studies using US data, however, suffer from omitted variable bias and reverse causality problems caused by the decentralized market-based method of allocating campaign spending and TV advertising. In contrast with received literature, we explore a quasi-natural experiment produced by the Brazilian electoral legislation, and show that TV and radio advertising has a much larger impact on election outcomes than previously found by the literature. In Brazil, by law, campaign advertising is free of charge and allocated among candidates in a centralized manner. Guber natorial elections work in a runoff system. While in the first round, candidates’ TV and radio time shares are determined by their coalitions’ share of seats in the national parliament, the two most voted candidates split equally TV time if a second round is necessary. Thus, differences in TV and radio advertising time between the first and second rounds are explored as a source of exogenous variation to evaluate the impact of TV advertising on election outcomes. Estimates suggest that a one percentage point increase in TV time causes a 0.241 percentage point increase in votes. Since TV advertising is the most important item in campaign expenditures, this result sheds light on the more general question of the effect of campaign spending on elections outcome.
Keywords: Campaign Expenditures, Election Outcomes, Endogeneity, Quasi-Natural Experiments
JEL: G12 C22 C53 E44

 

Rational chimps?

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Luego de 20 mil años (o más) de evolución, científicos alemanes comprueban que los chimpancés juegan con más egoísmo juegos de ultimátum que los homo sapiens.  ¿Cómo interpretar esta evidencia?  Algunas posibilidades:

a) Los modelos de teoría de juegos son para chimpancés.

b) Los humanos son “rule utilitarians” mientras que los chimpancés son “act utilitarians”

c) Los chimpancés juegan “one shot strategies” mientras que los humanos como si fuera un juego repetido.
d) Los chimpancés tienen horizontes muy cortos o son más impacientes que los humanos. 
e) Los chimpancés no tienen noción alguna de “justicia” o no han desarrollado la convención social de reciprocidad.
 
Noten que empíricamente es muy difícil distinguir cuál es el mecanismo subyacente pues las opciones anteriores nos llevan a una predicción similar.
 

LEIPZIG, Germany, Oct. 8 (UPI) — German researchers have demonstrated chimpanzees make choices that protect their self-interest more consistently than do humans.

Researchers from the Max Planck Institute of Evolutionary Anthropology in Leipzig studied the chimp’s choices by using an economic game with two players. In the game, a human or chimpanzee who receives something of value can offer to share it with another. If the proposed share is rejected, neither player gets anything.
Humans typically make offers close to 50 percent of the reward. They also reject as unfair offers of significantly less than half of the reward, even though this choice means they get nothing.
The study, however, showed chimpanzees reliably made offers of substantially less than 50 percent, and accepted offers of any size, no matter how small.  The researchers concluded chimpanzees do not show a willingness to make fair offers and reject unfair ones. In this way, they protect their self interest and are unwilling to pay a cost to punish someone they perceive as unfair.

The study appeared in the Oct. 5 issue of the journal Science.

 
 
 

Il liberismo è di sinistra?

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In Mexico the so called right-wing ruling party wants to raise higher tax revenues (to increase social spending, for instance), to allow private investments in energy (to promote growth and employment)–and many more so called neoliberal reforms—all of which the lefty oppositon party adamantly oppose.  Granted, such means and ends are somewhat debatable but remind me again which party is more concerned about the poor?  Indeed, the “left vs. right-wing” policy label brings more confusion than clarity in many countries.  This VoxEU short op-ed by Alesina and Giavazzi (authors of The future of Europe, MIT 2006) is right on the mark.  (By the way, I will surely refer back to VoxEU, the new and notable blog with “research-based policy analysis and commentary from Europe’s leading economists”, in my political economy class.)

 

Why the Left should learn to love liberalism

By Alberto Alesina  and Francesco Giavazzi (5 October 2007)

 

“Anti-reformists in Europe claim to be protecting Europe’s weak and poor. Nothing could be further from the truth. Labour-market flexibility, deregulation of the service industry, pension reforms and greater competition in university funding might harm the interest of well-connected, privileged citizens but it would open up opportunities for Europe’s youth and disadvantaged groups. A real left-wing agenda would embrace reform.

Continental Europe is in the midst of a burning discussion about the pros and cons of market-friendly reforms and greater economic liberalism. We all know what the package contains – competition, labour-market flexibility, liberalisation of services, lower taxes, and privatisations.

The traditional debate runs as follows. These reforms are “right wing” policies. They may increase efficiency – perhaps even economic growth – but they also tend to increase inequality and to be detrimental for the poorest in society. Therefore – and here comes the typical “socially compassionate” European argument – be very careful moving in that direction. Governments should proceed cautiously and be ready to backtrack at any point.

Much of this reasoning is fundamentally wrong. Labour-market flexibility, deregulation of the service industry, pension reforms and greater competition in university funding is not anti-equality. Such reforms shift financing from taxpayers to the users themselves and, as such, tend to eliminate rents. They tend to increase productivity by basing rewards on merit rather than on being an insider. They tend to open up opportunities for younger workers who are not yet well-connected. Pursuing pro-market reforms does not imply facing a trade-off between efficiency and social justice. In this sense, pro-market policies are “left wing”, if that means reducing the economic privileges enjoyed by “insiders”.

 

Read the whole thing.

 

Should Economists Rule the World?

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“Should Economists Rule the World?
Trends and Implications of Leadership Patterns in the Developing World, 1960—2005”
Anil Hira, Political Science, Simon Fraser University.
International Political Science Review, Vol. 28, No. 3, 325-360 (2007)
 
Abstract: This article examines more carefully the oft-made hypotheses that (1) “technocrats” or politicians with an economics background are increasingly common and (2) that this “improvement” in qualifications will lead to improvements in economic policy. The article presents a database on the qualifications of leaders of the world’s major countries over the past four decades. The article finds that while there is evidence for increasing “technification,” there are also distinct and persistent historical patterns among Asian, African, Middle Eastern, and Latin American leaders. Using statistical analysis, the article finds that we cannot conclude that leadership training in economics leads to better economic outcomes.
 
 
Por supuesto, no podemos dar crédito alguno a este análisis: obviamente este tipo de cosas no se pueden medir estadísticamente.  El autor, un politólogo, está sesgado por su agenda “anti-economista”.  Lo que pasa es que los políticos y los poderes fácticos no permiten a los economistas implementar “fist best policies”.  Es toda una conspiración… :-)

Sullivan’s liberal mantra

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A bit of motivational reading, for a change…
 
Life, Liberty and the Pursuit of Happiness – by Andrew Sullivan
Link (audio version included)  

 
“I believe in life. I believe in treasuring it as a mystery that will never be fully understood, as a sanctity that should never be destroyed, as an invitation to experience now what can only be remembered tomorrow.
(…) I believe in liberty. I believe that within every soul lies the capacity to reach for its own good, that within every physical body there endures an unalienable right to be free from coercion. I believe in a system of government that places that liberty at the center of its concerns, that enforces the law solely to protect that freedom, that sides with the individual against the claims of family and tribe and church and nation, that sees innocence before guilt and dignity before stigma. I believe in the right to own property, to maintain it against the benign suffocation of a government that would tax more and more of it away. I believe in freedom of speech and of contract, the right to offend and blaspheme, as well as the right to convert and bear witness.
(…) I believe in the pursuit of happiness. Not its attainment, nor its final definition, but its pursuit. I believe in the journey, not the arrival; in conversation, not monologues; in multiple questions rather than any single answer. I believe in the struggle to remake ourselves and challenge each other in the spirit of eternal forgiveness, in the awareness that none of us knows for sure what happiness truly is, but each of us knows the imperative to keep searching. I believe in the possibility of surprising joy, of serenity through pain, of homecoming through exile.
(…) And I believe in a country that enshrines each of these three things, a country that promises nothing but the promise of being more fully human, and never guarantees its success. In that constant failure to arrive — implied at the very beginning — lies the possibility of a permanently fresh start, an old newness, a way of revitalizing ourselves and our civilization in ways few foresaw and one day many will forget.“

 

Krugman on political journalism

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Paul Krugman has a blog now: “The conscience of a liberal”.  Which is good news because, unlike his NYT column, the blog does not require a paid subscription.  For starters, I agree with his criticism of political journalism (which is slightly related to the troubles “narrative explanations in general).

What I Hate About Political Coverage

Warning: this is a bit (actually, more than a bit) of a rant.

One of my pet peeves about political reporting is the fact that some of my journalistic colleagues seem to want to be in another business – namely, theater criticism. Instead of telling us what candidates are actually saying – and whether it’s true or false, sensible or silly – they tell us how it went over, and how they think it affects the horse race. During the 2004 campaign I went through two months’ worth of TV news from the major broadcast and cable networks to see what voters had been told about the Bush and Kerry health care plans; what I found, and wrote about, were several stories on how the plans were playing, but not one story about what was actually in the plans.

There are two big problems with this kind of reporting. The important problem is that it fails to inform the public about what matters. In 2004, very few people had any idea about the very real differences between the candidates on domestic policy. It remains to be seen whether 2008 is any better.

The other problem, which has become very apparent lately, is that this sort of coverage often fails even on its own terms, because the way things look to inside-the-Beltway pundits can be very different from the way they look to real people.