Research

Publications

“Electoral Institutions and Intra-party Cohesion” forthcoming in Journal of Political Economy Microeconomics (with K. Matakos, O. Troumpounis, J. Tukiainen, and D. Xefteris)

By utilizing unique data capturing candidatesâ ideological positions in Finnish municipal elections and leveraging exogenous changes in council size at different population thresholds as a proxy for electoral rule disproportionality and the expected advantage to the election winner, we identify a positive effect of council size on party cohesion. We propose the following mechanism: if a more diverse set of candidates is electorally appealing but less efficient in serving policy-related goals, parties face weaker incentives to maintain cohesion in institutional settings, such as smaller councils, which reward higher vote shares more generously.

"Information, Trust, and Political Participation: The Long Shadow of the Ottoman Legacy", Journal of Historical Political Economy, Vol. 2(1), pp. 159-187 (with S. Bermek and K. Matakos, 2022)

What are the historical legacies of the early 19th century on state modernization and capacity-building efforts, and did they produce any unintended consequences? We focus on the Ottoman Tanzimât reforms — an attempt to modernize the bureaucracy and build fiscal (and military) state capacity following the Napoleonic paradigm — and explore their legacy on political participation in the modern Greece. We first show that the presence of an Ottoman administrative headquarter (sanjak) — the basis of the Tanzimât reforms — within current Greek NUTS-3 regions is associated with higher levels of public sector employment even to this day. We then exploit the retrospective revision of Greece's past public finances in 2010 as a natural experiment; this changed voters' expectations about future public sector job creation differentially across high and low public sector regions, leading to a larger decline in the turnout in the former. We link this differential decline in political participation to the Ottoman legacy of bureaucratic reforms as this effect is driven by those NUTS-3 regions that used to host Ottoman administrative hubs. We provide suggestive evidence of a possible mechanism based on voters' ego-tropic motivations: the expectation of deeper public spending cuts (due to the surprise revelation of past deficits) weakened the historically strong party–voter linkages (dating back to the 19th century) and reduced political participation. In contrast, we find no evidence that other socio-tropic factors can account for the differential change in the turnout across the two groups of regions. Our findings highlight that, in addition to civic-duty motivations, electoral participation and political engagement are also a strategic decision driven by ego-tropic motivations (at least for some voters). The normative implication is that higher voter turnout need not always be a sign of a robust and functioning polity.

Working Papers

“Studying a Sin Tax Scheme with Multiple Reforms. Lessons for Consumption Taxation” (with S. Jysmä and T. Kosonen)

This paper studies the relationship between substitutability of taxed and nontaxed goods and the price elasticity of demand. We organize the paper through a simple model that yields as a result a highly convex relationship between the demand elasticity and how close non-taxed substitutes are available. Empirically we analyze a Finnish sin tax scheme for sweets, soda and ice cream providing us with quasi-experimental variation through multiple reforms. We have product and storelevel data on sales and prices containing hundreds of millions of observations. We also develop survey evidence on substitution preferences across categories of goods. Our estimated consumption elasticity is close to zero for sweets and ice cream that have intermediate non-taxed substitute: cookies. In a stark contrast, when the tax rate was doubled for sugary soft drinks but not for their close substitute non-sugary soft drinks, consumption elasticity is close to unity. These estimates align well with our theory framework wherein even with intermediate non-taxed substitutes available the demand elasticity is close to zero, while it is close to unity when very close substitutes are available. We also provide evidence that the quasiexperimental price elasticity estimates in the previous literature align with our theory framework.

“Refugee Migration and the Politics of Redistribution: Do Supply and Demand Meet?” (with K. Matakos and J. Tukiainen)

We study whether establishing new asylum-seeker centers influences the redistribution related policy positions of candidates in local elections in Finland - a country where municipalities have significant control over fiscal policies. The sudden and unprecedentedly large inflow of the asylum seekers in autumn 2015 and the resulting establishment of asylum centres facilitates a difference-in-differences research design. We focus on the supply side of redistributive politics and find that on average candidates do not respond to the presence of the centers by proposing less (or more) redistribution in a voting aid application survey. Our estimates are precise enough to rule out even fairly small effects both for all the candidates and the elected ones. In contrast, on the demand side, there is evidence of various voter responses on average suggesting that electoral politics may limit to some extent the impact of voter preferences on such policies. However, in the very smallest municipalities where there are many refugees per capita we find that also the candidates become less favorable towards redistribution. In other words, intensity of exposure to refugee migration seems to be behind any observed supply-side response regarding redistribution.

“Does Political Experience Influence Policy Positions?”

In this paper, I investigate whether there is an incumbency effect with respect to policy positions regarding degree of redistribution or public sector size in an RDD set-up. I also investigate if tenure makes politicians choose less extreme policy positions or more aligned with national party position average, general regional position average or regional party position average. I do not find an impact and can rule out an effect larger than 20% of the standard deviation for all the outcomes. The results suggest that being in office does not change politicians' policy positions.

“How Does Economic Crisis Influence Politicians' Environmental Policy Positions?” 

I study whether a change in the local unemployment rate is associated with changes in candidate positioning in Finnish municipal elections. I find that when the unemployment rate is higher, politicians become more willing to prioritize employment over environmental protection, which is consistent with the existence of an environmental business cycle. The results are robust to different definitions of unemployment and is not driven by any single party.

“How Policies Influence Voter Sentiments: Evidence from Asylum Center Placements” 

I study whether establishing an asylum center for refugees in a municipality is associated with voting result changes in Finland. My contribution is to investigate the political reactions to immigrants at a very early stage of an immigration process. There seems to be no impact on voting shares of the anti-immigration party on the municipality level or on the sub-municipality level but the results for the pro-immigrant party are less conclusive. I do not find evidence on the heterogenous effects related to the cultural homogeneity.

Work In Progress

“Impact of the COVID-19 pandemic on the UK labour market” (with J. Portes)

“Deaths of Despair: Did Declining Life Expectancy Cause Brexit” (with K. Matakos and D. Minos)

Policy Work

“Makeisveron vaikutus makeisten hintoihin ja kulutukseen” (Impact of the Sweets Tax on the Prices and Consumption of the Sweets), Labour Institute for Economic Research Report 38, 2019 (with T. Kosonen)

“Turvapaikanhakijat. Mitä tiedämme kustannuksista” (Asylum Seekers. What Do We Know of the Fiscal Impacts?), Finnish Ministry of Finance Publication 41/2017

Other Writing

"Työnohjausta akateemisille ekonomisteille" (Career Guidance to Academic Economists), Kansantaloudellinen Aikakauskirja 4/2022, pp. 619-621

“CORE-projekti uudistaa taloustieteen opetusta” (The CORE Project Reforms How Economics Is Taught), Kansantaloudellinen Aikakauskirja 4/2020, pp. 663-672