Research
Recent activity
New paper: Pack-Crack-Pack: Gerrymandering with Differential Turnout, with L. Bouton, G. Genicot, and A. Stashko
This paper studies the manipulation of electoral maps by political parties, known as gerrymandering. At the core of our analysis is the recognition that districts must have the same population size but only voters matter for electoral incentives. Using a novel model of gerrymandering that allows for heterogeneity in turnout rates, we show that parties adopt different gerrymandering strategies depending on the turnout rates of their supporters relative to those of their opponents. The broad pattern is to pack-crack-pack along the turnout dimension. That is, parties benefit from packing both supporters with a low turnout rate and opponents with a high turnout rate in some districts, while creating districts that mix supporters and opponents with intermediate turnout rates. This framework allows us to derive a number of empirical implications about the link between partisan support, turnout rates, and electoral maps. Using a novel empirical strategy that relies on the comparison of maps proposed by Democrats and Republicans during the 2020 redistricting cycle in the US, we then bring such empirical implications to the data and find support for them.
Resubmitted: A Theory of Small Campaign Contributions, joint with Laurent Bouton and Allan Drazen [new version].
Popular and academic discussions have mostly concentrated on large donors, even though small donors are a major source of financing for political campaigns. We propose a theory of small donors with a key novelty: it centers on the interactions between small donors and the parties' fund-raising strategy. In equilibrium, parties microtarget donors with a higher contribution potential (i.e., richer and with more intense preferences) and increase their total fundraising effort in close races. The parties' strategic fundraising amplifies the effect of income on contributions, and leads to closeness, underdog and bandwagon effects. We then study the welfare effects of a number of common campaign finance laws. We find that, due to equilibrium effects, those tools may produce outcomes opposite to intended objectives. Finally, we identify a tax-and-subsidy scheme that mutes the effect of income while still allowing donors to voice the intensity of their support.
Accepted for publication: How Trump Triumphed: Multi-Candidate Primaries with Buffoons, joint with Steffen Huck, Johannes Leutgeb, and Andrew Schotter, European Economic Review
While people on all sides of the political spectrum were amazed that Donald Trump won the Republican nomination this paper demonstrates that Trump’s victory was not a crazy event but rather the equilibrium outcome of a multi-candidate race where one candidate, the buffoon, is viewed as likely to self-destruct and hence unworthy of attack. We model such primaries as a truel (a three-way duel), solve for its equilibrium, and test its implications in the lab. We find that people recognize a buffoon when they see one and aim their attacks elsewhere with the unfortunate consequence that the buffoon has an enhanced probability of winning. This result is strongest amongst those subjects who demonstrate an ability to best respond suggesting that our results would only be stronger when this game is played by experts and for higher stakes. Policy brief: Stimulating Orphan Disease Research: from low-cost repurposing to pricey nichebusting , joint with Georges Siotis, i3h policy briefOrphan (or “Rare”) Diseases are both vastly different from more “normal” diseases and a bellwether for medicine at large: in the future, many medicinal products may be tailored to each patient, making the target diseases “rare” by standard definitions. About 6% of the European population suffers from at least one rare disease (roughly 36 million individuals in the EU). We document that the market for rare diseases suffers from a number of significant market imperfections. Some diseases have become so profitable that a re-calibration of current policy is warranted. However, the overwhelming majority of rare diseases are instead left under- or un-researched. Current regulations prove insufficient for these, and additional – quite different – interventions should come to complement existing ones.
Publications in refereed journals
Micael Castanheira, Steffen Huck, Johannes Leutgeb, and Andrew Schotter (2023) How Trump Triumphed: Multi-Candidate Primaries with Buffoons, European Economic Review, Vol 157, August
Georges Siotis, Carmine Ornaghi, and Micael Castanheira (2023) : Evolving Market Boundaries and Competition Policy Enforcement in the Pharmaceutical Industry, European Journal of Law and Economics.
Génicot, Garance ® Bouton, Laurent ® Castanheira, Micael (2021) "Electoral Systems and Inequalities in Government Interventions", Journal of the European Economic Association, Vol 19, Issue 6 (December)
Castanheira, Micael, Carmine Ornaghi, Georges Siotis, and Maria-Angeles de Frutos (2019) "The Unexpected Consequences of Generic Entry", Journal of Health Economics, Vol.68, December, 22p. [VoxEU column: http://voxeu.org/article/unexpected-consequences-asymmetric-competition ]
Bouton, Laurent, Micael Castanheira, and Aniol Llorente-Saguer (2017). "Multicandidate Elections: Aggregate Uncertainty in the Laboratory", Games and Economic Behavior, 101(1), pp132–150 [latest draft]
Bouton, Laurent, Micael Castanheira, and Aniol Llorente-Saguer (2016). "Divided Majority and Information Aggregation: Theory and Experiment" [Latest Draft - Oct. 2015]and [Supplementary Appendix], Journal of Public Economics, 134(2), pp114-128
Aragonès, Enriqueta, Micael Castanheira and Marco Giani (2015). "Electoral Competition through Issue Selection", American Journal of Political Science, January 2015: 71-90 [download latest draft] [PDF from AJPS Website]
Castanheira, Micael, Gaëtan Nicodème and Paola Profeta (2012). “On the political economics of tax reforms: survey and empirical assessment”, International Tax and Public Finance, Vol 19(4), pp598-624 [download latest draft]
Bouton, Laurent and Micael Castanheira (2012). “One Person, Many Votes: Divided Majority and Information Aggregation”, Econometrica, Vol80, No1, pp43-87 [download latest draft]
Castanheira, Micael, Benoît Crutzen and Nicolas Sahuguet. (2010). “Party Organization and Electoral Competition”, Journal of Law, Economics, and Organization, Vol. 26(1) [download latest draft]
Castanheira, Micael, Benoît Crutzen and Nicolas Sahuguet (2010). “The impact of party organization on electoral outcomes”, Revue Economique, Vol 61(4): 677-696 [download latest draft]
Carrillo, Juan and Micael Castanheira (2008). “Information and Strategic Political Polarization”, The Economic Journal, Vol. 118, Issue 530, pp845-874 (lead article) [download latest draft]
Castanheira, Micael. (2003). “Why Vote for Losers?”, Journal of the European Economic Association, Vol. 1, Issue 5, pp1207-1238 [download latest draft]
Castanheira, Micael. (2003). “Public Finance and the Optimal Speed of Transition”, Economics of Transition, Vol. 11, No3, pp435-462 [download latest draft]
Castanheira, Micael. (2003). “Victory Margins and the Paradox of Voting”, European Journal of Political Economy, Vol. 19, Issue 4, pp817-841 [download latest draft]
Castanheira, Micael and Gérard Roland. (2000). “The Optimal Speed of Transition: A General Equilibrium Analysis”, International Economic Review, Vol.41, No1, pp219-239 [download latest draft]
Other publications
Castanheira, Micael, Benoît Rihoux and Nils Bandelow (2018). Sustainable Governance Indicators: 2017 Belgium Report. Bertelsmann Stiftung, http://www.sgi-network.org/docs/2018/country/SGI2018_Belgium.pdf
Isabelle de Laminne, Etienne de Callataÿ, Philippe Defeyt, Alexandre de Streel, Olivier Lefebvre, Luc Leruth, Pierre Pestieau, and Micael Castanheira (2018). "Pistes et éclairages économiques. Pour une transition technologique cohérente et équitable". http://moneystore.be/wp-content/uploads/doc/manifeste_transition_technologique_2018.pdf
Castanheira, Micael, Benoît Rihoux and Nils Bandelow (2017). Sustainable Governance Indicators: 2017 Belgium Report. Bertelsmann Stiftung, http://www.sgi-network.org/docs/2017/country/SGI2017_Belgium.pdf
Castanheira, Micael, Benoît Rihoux and Nils Bandelow (2016). Sustainable Governance Indicators: 2016 Belgium Report. Bertelsmann Stiftung, http://bit.ly/2hhh0n4
Castanheira, Micael, Benoît Rihoux and Nils Bandelow (2015). Sustainable Governance Indicators: 2015 Belgium Report. Bertelsmann Stiftung, http://bit.ly/1ZYCYuS
Isabelle de Laminne, Micael Castanheira, Bruno Colmant, Etienne de Callataÿ, Alexandre de Streel, and Pierre Pestieau (2014). "Pistes et éclairages économiques. Orientations structurelles pour la Belgique". http://www.moneystore.be/wp-content/uploads/doc/manifeste_economistes_coq_janvier_2014.pdf
Castanheira, Micael (2014). "Where the economics of personal income tax reforms meet political constraints". Reflets et Perspectives de la Vie Economique, LIII(1): 87-111 [Latest Draft]
Castanheira, Micael (2011). Le défi des réformes structurelles, editor. Special issue of Reflets et perspectives de la vie économique (Tome L, 2011, Issue3), De Boeck Editions
Castanheira, Micael (2011). “Dossier : le défi des réformes structurelles” in Reflets et perspectives de la vie économique, Tome L, Issue 3, pp5-12. [link]
Castanheira, Micael and Vincenzo Galasso (2011). “Which reforms for a fair and sustainable pension system?”, in Reflets et perspectives de la vie économique, Tome L, Issue 3, pp187-202. [download the latest draft]
Castanheira, M., Nicodème, G. and Profeta, P. (2010). “On the political economics of taxation”, in Padovano, F. and Petretto, A. (eds), Public Choice and Political Economy, Milan: FrancoAngeli, pp76-102 [download the latest draft]
Aragonés, Enriqueta and Micael Castanheira (2010) “Approval Voting”, in New Palgrave Dictionary of Economics [download the latest draft]
Castanheira, Micael and Reinhilde Veugelers (2009). “When and how does education lead to economic growth? A survey with policy suggestions”, in Quel état pour quelles performances économiques?, CIFoP : 18è congrès des économistes belges de langue française, pp89-110. [download latest draft]
Bouton, Laurent and Micael Castanheira (2009). “The Condorcet-Duverger Trade-Off: swing voters and voting equilibria”, in Aragonés, E., C. Beviá, H. Llavador and N. Schofield, Eds., The Political Economy of Democracy, Fundacion BBVA, pp121-142 [download latest draft]
Castanheira, Micael (2008) « Réformes et Mondialisation : Exploiter la Diversité », in Weyemberg and Magnette editors : L’Union européenne : la fin d’une crise ?, Editions de l’Université libre de Bruxelles, pp115-131
Castanheira, Micael (2007) « Les méthodes de la réforme : une approche politico-économique », in Nos Régions d’Europe, Charleroi: CIFOP Editions, pp449-466
Castanheira, Micael and Jean Hindriks, editors (2007). Réalités et Illusions: réformer sans tabou, Special issue of Reflets et perspectives de la vie économique, De Boeck Editor, 212 pages
Castanheira, Micael and Abdul Noury (2007). “Les positions politiques des partis belges”, Reflets et perspectives de la vie économique, XLVI, n°1, pp15-29, De Boeck Editor
Boeri,T., M. Castanheira, R. Faini, and V. Galasso editors (2006). Reforms without Prejudice. Oxford: Oxford University Press, 322 pages
“How to gain political support for reforms?” (2006), joint with S. Carcillo, V. Galasso, G. Nicoletti, E. Perotti, and L. Tsyganok, in Boeri, Castanheira, Faini, and Galasso (editors), Reforms without Prejudice. Oxford: Oxford University Press, pp141-262
“Economie Politique de la Taxation” (2006), joint with Christian Valenduc. Reflets et Perspectives de la Vie Economique. Tome XLV, n°3. pp19-37
“Regions in Europe: Sisyphus or Phoenix?” (2004), in Magnette, P., et Remacle, E. (eds.) La Grande Europe, pp167-184 (joint with Georges Siotis)
“Political Economy of Growth: Lessons Learned and Challenges Ahead” (2003), in McMahon, G., and L. Squire (eds) Explaining Growth: A Global Research Project, Palgrave (joint with Hadi Esfahani). pp159-212
Workbook to accompany ‘Political Economics: Explaining Economic Policy’ (2000), MIT Press (joint with Isabelle Brocas, Ronny Razin, and David Strömberg). 240 pages.
“La politique de l’union européenne en faveur des régions moins favorisées : théorie et pratique” (2000), in Magnette, P., et Remacle, E. (eds.) Le nouveau modèle européen. Les politiques internes et externes, joint with Georges Siotis, pp47-62.
“Le phénomène de convergence et l'effort de solidarité européen” (1994), 11è congrès des Economistes Belges de Langue Française, with Georges Siotis. 27 pages.