Commodity Shocks and Incumbency Effects

Commodity Prices ◽

Quality Changes ◽

Agricultural Commodities ◽

Voter Preferences ◽

Suggestive Evidence ◽

Local Economic Growth

Abstract Why do incumbents enjoy an electoral advantage in some political settings but suffer from a disadvantage in others? We propose a novel explanation linking variation in incumbency effects with exogenous commodity shocks. While voters attempt to sanction incumbents for economic performance, changes in commodity prices affect their evaluations and condition the electoral fortunes of incumbents vis-à-vis challengers. We test our argument in Brazilian municipalities, combining a plausibly exogenous measure of variation in commodity prices with a close election regression discontinuity design. Our results show that increases in the price of agricultural commodities greatly enhance the prospects of incumbents, while negative shocks exacerbate their incumbency disadvantage, especially in rural municipalities. Further investigation suggests that commodity shocks do not operate via voter learning about candidate quality, changes in the pool of candidates, shifts in voter preferences, or strategic elite investments. Instead, we find suggestive evidence that commodity shocks affect voters' evaluations through their effect on local economic growth.

Politics and Local Economic Growth: Evidence from India

American Economic Journal Applied Economics ◽

10.1257/app.20150512 ◽

2017 ◽

Vol 9 (1) ◽

pp. 229-273 ◽

Cited By ~ 34

Author(s):

Sam Asher ◽

Paul Novosad

Keyword(s):

Economic Growth ◽

Private Sector ◽

Economic Impact ◽

Present Evidence ◽

Share Prices ◽

Local Economic Growth ◽

Night Lights ◽

Ruling Party

Political favoritism affects the allocation of government resources, but is it consequential for growth? Using a close election regression discontinuity design and data from India, we measure the local economic impact of being represented by a politician in the ruling party. Favoritism leads to higher private sector employment, higher share prices of firms, and increased output as measured by night lights; the three effects are similar and economically substantive. Finally, we present evidence that politicians influence firms primarily through control over the implementation of regulation. (JEL D72, L51, O17, O18, O43, R11)

How Sticky Is Retirement Behavior in the U.S.?

Review of Economics and Statistics ◽

10.1162/rest_a_01151 ◽

2021 ◽

pp. 1-55

Author(s):

Manasi Deshpande ◽

Itzik Fadlon ◽

Colin Gray

Keyword(s):

Social Security ◽

Administrative Data ◽

Cohort Analysis ◽

Retirement Age ◽

Suggestive Evidence ◽

Research Designs ◽

Retirement Behavior ◽

The U.S

Abstract We study how increases in the U.S. Social Security full retirement age (FRA) affect benefit claiming behavior and retirement behavior separately. Using long panels of Social Security administrative data, we implement complementary research designs of a traditional cohort analysis and a regression-discontinuity design. We find that while claiming ages strongly and immediately shift in response to increases in the FRA, retirement ages exhibit persistent “stickiness” at the old FRA of 65. We use several strategies to explore the likely mechanisms behind the stickiness in retirement and find suggestive evidence that employers play a role in workers' responses to the FRA.

Bank branching, concentration, and local economic growth in pre-WW1 England and Wales

European Review of Economic History ◽

10.1093/erehj/heaa025 ◽

2020 ◽

Author(s):

Walter Jansson

Keyword(s):

Economic Growth ◽

Economic Performance ◽

Instrumental Variable ◽

Fixed Effects ◽

Banking Sector ◽

Positive Impact ◽

Local Economic Growth ◽

Panel Fixed Effects ◽

The Relationship ◽

Bank Branching

Abstract This paper explores the relationship between the spread of bank offices, banking sector concentration, and economic growth in English and Welsh counties in the four decades before WW1. During this period, banks rapidly expanded their branch networks, while banking sector concentration increased. Findings from both panel fixed effects and instrumental variable regressions suggest that an increase in the number of bank offices in English and Welsh counties had a positive impact on local economic growth. There is no evidence of banking sector concentration being negatively associated with local economic performance prior to WW1.

When Running for Office Runs in the Family: Horizontal Dynasties, Policy, and Development in the Philippines

Comparative Political Studies ◽

10.1177/00104140211024292 ◽

2021 ◽

pp. 001041402110242

Author(s):

Dean Dulay ◽

Laurence Go

Keyword(s):

Economic Growth ◽

Developing Countries ◽

Government Spending ◽

The Philippines ◽

Institutional Constraints ◽

Policy Choices ◽

The Family ◽

Growth Economic

Political dynasties exist in practically every type of democracy, but take different forms in different places. Yet the types of dynastic structures have remained unexplored. We argue that horizontal dynasties—multiple members from the same political family holding different political offices concurrently—affect policymaking by replacing potential political rivals, who may oppose an incumbent’s policy choices, with a member of the family. But in developing countries, the policy change that accrues from dynastic status may not lead to higher levels of economic development. We test this argument’s implications in the Philippines. Using a close elections regression discontinuity design on a sample of mayors, we show that (i) horizontally dynastic mayors have higher levels of government spending, (ii) direct institutional constraints are the mechanism that drives this core result, and (iii) horizontally dynastic mayors do not lead to higher economic growth economic growth or lower poverty.

The unintended psychological and behavioral drawbacks of big push strategies

10.31234/osf.io/yem6d ◽

2020 ◽

Author(s):

Xin Qin ◽

Kai Chi Yam ◽

Guangrong Ma ◽

Chen Chen ◽

Hang Zhu ◽

...

Keyword(s):

Economic Growth ◽

Poverty Rate ◽

Developing Regions ◽

Selfish Behavior ◽

Policy Makers ◽

Psychological Entitlement ◽

Western Development ◽

Big Push

Governments and policy makers often adopt big push strategies to help under-developing regions achieve economic growth and shake off poverty. Although numerous studies have documented big push strategies’ positive impacts on indicators of economic development (e.g., poverty rate, unemployment rate, etc.), the current research presents evidence of serious psychological and behavioral drawbacks of such policies. Specifically, we examine China’s Great Western Development (GWD) Program as a recent prominent example of a big push strategy, in which about 370 million people receive preferential benefits while more than 1 billion people do not. Using a regression discontinuity design based on distance from the boundary of the GWD Program (+/- 100 km), we find that individuals residing in non-GWD regions report higher levels of psychological entitlement compared to their counterparts residing in GWD regions. As a result of increased psychological entitlement, these individuals engage in more selfish behavior and less prosocial behavior. Our results offer initial evidence of the unintended psychological and behavioral consequences of big push strategies.