Political Economics I
This course aims to equip graduate students with theoretical tools in political economics. The first five weeks introduce the models widely accepted as the standard tools to analyse the process of policy-making. Weeks 6 and 7 look at several approaches to model voter turnout, conflict, and lobbying. The last week is devoted for students to receive feedback on their research proposal as the term paper.
The course is scheduled to be run every Friday morning (9:00 to 12:10) at Osaka University from 6 October to 1 December, 2017. If you wish to audit the course, email me.
The reading list below is subject to change.
Click the title of each week's lecture for slides. Press the Space key to move on to the next slide and Shift + Space to go back to the previous slide.
Week 1: Introduction and Median Voter Theorem
Classic
Downs, Anthony. 1957. An Economic Theory of Democracy. Harper.
Modern treatment of the model
Chapter 2 and Sections 3.1-3.3 of Persson, Torsten, and Guido Tabellini. 2000. Political Economics: Explaining Economic Policy. Cambridge, Massachusetts: MIT Press.
Application to the impact of franchise extension on government size
Meltzer, Allan H., and Scott F. Richard. 1981. “A Rational Theory of the Size of Government.” Journal of Political Economy 89(5): 914–27.
Fujiwara, Thomas. 2015. "Voting Technology, Political Responsiveness, and Infant Health: Evidence from Brazil." Econometrica 83(2): 423-64.
Week 2: Citizen-candidate Model
Classic
Osborne, Martin J., and Al Slivinski. 1996. “A Model of Political Competition with Citizen-Candidates.” Quarterly Journal of Economics 111(1): 65–96.
Besley, Timothy, and Stephen Coate. 1997. “An Economic Model of Representative Democracy.” Quarterly Journal of Economics 112(1): 85–114.
See also Chapter 5 of Persson, Torsten, and Guido Tabellini. 2000. Political Economics: Explaining Economic Policy. Cambridge, Massachusetts: MIT Press.
Evidence for the model assumption
Lee, D. S., E. Moretti, and M. J. Butler. 2004. “Do Voters Affect or Elect Policies? Evidence from the U. S. House.” Quarterly Journal of Economics 119(3): 807–59.
Application to the impact of politicians’ wage
Caselli, Francesco, and Massimo Morelli. 2004. “Bad Politicians.” Journal of Public Economics 88: 759–82.
Gagliarducci, Stefano, and Tommaso Nannicini. 2013. “Do Better Paid Politicians Perform Better? Disentangling Incentives from Selection.” Journal of the European Economic Association 11(2): 369–98.
Further readings
Dal Bó, Ernesto et al. 2017. “Who Becomes a Politician?” NBER Working Paper, no. 23120.
Levy, Gilat. 2004. “A Model of Political Parties.” Journal of Economic Theory 115(2): 250–77.
Week 3: Probabilistic Voting Model
Classic
Lindbeck, Assar, and Jörgen W. Weibull. 1987. “Balanced-Budget Redistribution as the Outcome of Political Competition.” Public Choice 52: 273–97.
Modern treatment of the model
Section 3.4 of Persson, Torsten, and Guido Tabellini. 2000. Political Economics: Explaining Economic Policy. Cambridge, Massachusetts: MIT Press.
Evidence for the model implication
Casey, Katherine. 2015. “Crossing Party Lines: The Effects of Information on Redistributive Politics.” American Economic Review 105(8): 2410–48.
Application to the impact of electoral rules
Chapter 8 of Persson, Torsten, and Guido Tabellini. 2000. Political Economics: Explaining Economic Policy. Cambridge, Massachusetts: MIT Press.
Persson, Torsten, and Guido Tabellini. 2004. “Constitutional Rules and Fiscal Policy Outcomes.” American Economic Review 94(1): 25–45.
See also Persson, Torsten, and Guido Enrico Tabellini. 2003. The Economic Effects of Constitutions. MIT Press.
Further reading
Robinson, James A, and Ragnar Torvik. 2009. “The Real Swing Voter’sCurse.” American Economic Review 99(2): 310–15.
Week 4: Political Agency Model
Classic
Barro, Robert J. 1973. “The Control of Politicians: An Economic Model.” Public Choice 14: 19–42.
Ferejohn, John. 1986. “Incumbent Performance and Electoral Control.” Public Choice 50: 5–25.
Modern treatment of the model
Section 3.3 of Besley, Timothy. 2006. Principled Agents? The Political Economy of Good Government. Oxford University Press.
Evidence for the model implication
Ferraz, Claudio, and Frederico Finan. 2008. “Exposing Corrupt Politicians: The Effects of Brazil’s Publicly Released Audits on Electoral Outcomes.” Quarterly Journal of Economics 123(2): 703–45.
Application to the impact of term limits
Ferraz, Claudio, and Frederico Finan. 2011. “Electoral Accountability and Corruption: Evidence from the Audits of Local Governments.” American Economic Review 101(4): 1274–1311.
Smart, Michael, and Daniel M. Sturm. 2013. “Term Limits and Electoral Accountability.” Journal of Public Economics 107: 93–102.
See also Section 3.4.3 of Besley, Timothy. 2006. Principled Agents? The Political Economy of Good Government. Oxford University Press.
Further readings
Besley, Timothy, and Robin Burgess. 2002. “The Political Economy of Government Responsiveness: Theory and Evidence from India.” Quarterly Journal of Economics 117: 1415–51.
List, J. A., and D. M. Sturm. 2006. “How Elections Matter: Theory and Evidence from Environmental Policy.” Quarterly Journal of Economics 121(4): 1249–81.
Week 5: Legislative Bargaining Model
Classic
Baron, David P., and John Ferejohn. 1989. “Bargaining in Legislatures.” American Political Science Review 83(4): 1181–1206.
Modern treatment of the model
Section 5.4 of Persson, Torsten, and Guido Tabellini. 2000. Political Economics: Explaining Economic Policy. Cambridge, Massachusetts: MIT Press.
Evidence for the model implication
Knight, Brian. 2005. “Estimating the Value of Proposal Power.” American Economic Review 95(5): 1639–52.
Application to the impact of presidential versus parliamentary systems
Persson, Torsten, Gérard Roland, and Guido Tabellini. 2000. “Comparative Politics and Public Finance.” Journal of Political Economy 108(6): 1121–61.
See also Chapter 10 of Persson, Torsten, and Guido Tabellini. 2000. Political Economics: Explaining Economic Policy. Cambridge, Massachusetts: MIT Press.
Persson, Torsten, and Guido Tabellini. 2004. “Constitutional Rules and Fiscal Policy Outcomes.” American Economic Review 94(1): 25–45.
See also Persson, Torsten, and Guido Enrico Tabellini. 2003. The Economic Effects of Constitutions. MIT Press.
Further reading
Battaglini, Marco, and Stephen Coate. 2007. “Inefficiency in Legislative Policymaking: A Dynamic Analysis.” American Economic Review 97(1): 118–49.
Battaglini, Marco, and Stephen Coate. 2008. “A Dynamic Theory of Public Spending, Taxation, and Debt.” American Economic Review 98(1): 201–36.
Week 6 Part 1: Models of Voter Turnout
Survey
Feddersen, Timothy J. 2004. “Rational Choice Theory and the Paradox of Not Voting.” Journal of Economic Perspectives 18(1): 99-112.
Section I.1 of Steve Coate. 2011. “Economics 7380: Public Choice.” Lecture note, Cornell University.
Pivotal Voting Model
Palfrey, Thomas R. and Howard Rosenthal. 1985. “Voter Participation and Strategic Uncertainty.” American Political Science Review 79(1): 62-78.
Ethical Voting Model
Feddersen, Timothy and Alvaro Sandroni. 2006. “A Theory of Participation in Elections.” American Economic Review 96(4):1271-82.
Coate, Stephen and Michael Conlin. 2004. “A Group Rule-Utilitarian Approach to Voter Turnout: Theory and Evidence.” American Economic Review 94(5):1476-1504.
Week 6 Part 2: Models of Conflict
Survey
Section 2 of Blattman, Christopher and Edward Miguel. 2010. “Civil War.” Journal of Economic Literature 48(1):3–57.
Contest model
Garfinkel, Michelle R., and Stergios Skaperdas. 2006. “Economics of Conflict: An Overview.” In Handbook of Defense Economics, eds. T. Sandler and K. Hartley. Elsevier.
Evidence for model implications
Dube, Oeindrila, and Juan F. Vargas. 2013. “Commodity Price Shocks and Civil Conflict: Evidence from Colombia.” Review of Economic Studies 80(4): 1384–1421.
Asymmetric information
Fearon, James D. 1995. “Rationalist Explanations for War.” International Organization 49(3):379–414.
Commitment
Powell, Robert. 2006. “War as a Commitment Problem.” International Organization 60:169–203.
Week 7: Models of Lobbying
Survey
Chapters 4-10 of Gene M. Grossman and Elhanan. Helpman. 2001. Special Interest Politics. MIT Press.
Contest model
Kang, Karam. 2016. “Policy Influence and Private Returns from Lobbying in the Energy Sector.” Review of Economic Studies 83(1): 269–305.
Strategic information transmission with provable information
Austen-Smith, David, and JohnR. Wright. 1992. “Competitive Lobbying for a Legislator’s Vote.” Social Choice and Welfare 9(3): 229–57.
Bennedsen, Morten, and Sven E. Feldmann. 2002. “Lobbying Legislatures.” Journal of Political Economy 110(4): 919–46.
Cheap talk
Krishna, V. and J. Morgan. 2001. “A Model of Expertise.” Quarterly Journal of Economics 116(2):747–75.
Evidence
Bertrand, Marianne, Matilde Bombardini, and Francesco Trebbi. 2014. “Is It Whom You Know or What You Know? An Empirical Assessment of the Lobbying Process.” American Economic Review 104(12): 3885–3920.
Week 8: Term Paper Workshop
How to find a good research question
Finkelstein, Amy. 2007. “An unofficial guide to trying to do empirical work” (MS Powerpoint file).
How to make a presentation of applied economics research
Shapiro, Jesse. 2014(?). “How to Give an Applied Micro Talk: Unauthoritative Notes”