Economics
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Item Essays on Voter Behavior and Party Representation(2024) Perilla Garcia, Jorge Enrique; Kaplan, Ethan; Drazen, Allan; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In this dissertation I study how political agents such as voters and corporations behave in a context of increasing political polarization. I investigate the role that access to power has on the electoral performance of radical parties, the effect of racial unrest in the United States on campaign contributions, and whether political giving by corporations and individuals has polarized in recent years. In the last few decades, radical parties have become increasingly important in Europe and Latin America. These parties often adopt policies that depart from the mainstream economic consensus and may threaten democratic institutions. In chapter 2 of this dissertation, I explore the role that the incumbency effect may play in the success of far-right and far-left parties in Europe and Latin America. I find that, on average, and in a sample of municipal council elections held in Colombia, Sweden, Finland, Spain, and Brazil, radical parties enjoy an incumbency advantage that is as large as that of non-radical parties. To estimate these effects, I compare elections where parties marginally win or lose an additional seat in the council. This study provides suggestive evidence that far-left parties have a larger incumbency advantage than far-right parties. The wide heterogeneity of far-right parties in Sweden and Colombia is the primary driver of this difference. I posit that the difference in question could be attributed primarily to the far-right Sweden Democrats’ nonparticipation in coalitions in municipal governments and the absence of an effect of incumbency on the probability of running again for political parties in Sweden. The findings from this chapter suggest that the normal course of the democratic process may lead to radical parties encroaching on positions of power. In chapter 3, I study the effect of racial unrest on campaign contributions and how this effect is mediated by media coverage. Using a regression discontinuity in time, I find that political donations increased after the killing of George Floyd in May 2020. Exploiting discontinuities in media market borders in the United States I find that counties that were more exposed to coverage of the protests by a TV station owned by Sinclair, a conservative media conglomerate, were less likely to support Republican candidates. I provide suggestive evidence that this non-intuitive result could be the consequence of higher coverage of protests by Sinclair-owned TV stations when compared to other TV stations. By rising salience of the issue of racial tensions where Democrats were more trusted than Republicans, this increased media coverage may have depressed donations to the Republican party. I also report suggestive evidence that in counties exposed to more TV ads about police brutality there was higher support for the Democratic party than in less exposed counties. In chapter 4, in a joint work with Ethan Kaplan, Andrew Sweeting, and Yidan Xu, we measure and decompose the partisanship of corporate campaign contributions from 1990 to 2020 using a variance index approach, and provide a comparison analysis of individual donations. Despite previously documented trends towards greater partisanship in voting and political discourse, the donations of corporate PACs have remained bipartisan both in aggregate and individually. This is true across most, but not all, sectors of the economy. Individual giving is, and always has been, partisan at the individual level (individuals usually only give to one party), although there was greater partisanship in the giving of the largest individual contributors in the 2020 election. We make suggestions for future research including suggestions on how to measure other dimensions of corporate polarization which may be more salient to the public.Item Essays on Budgetary Institutions: Theory and Evidence(2006-11-27) Amoroso, Nicolas Emiliano; Drazen, Allan; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)The dissertation offers an analysis of the role of budgetary institutions on the determination of fiscal outcomes. In the second chapter I provide a theoretical model that rationalizes differences in fiscal outcomes of two countries that are supposed to obey the same set of numerical constraints on the budget. I argue that these differences arise from heterogeneity in the degree of budgetary transparency that make these rules more or less binding. Moreover, the model is able to accommodate not only long run results, where stronger institutions will always cause more constrained fiscal outcomes, but also short run implications, where countries with relatively stronger institutions can be paired with relatively unconstrained outcomes. The main lesson of the chapter is that, in a democratic environment, transparency of the budgetary process is the main ingredient responsible for the good behavior of the government, and that numeric constraints will have very different effects depending on the level of transparency. In the third chapter I conduct an empirical investigation across a set of countries, of the effects of budgetary institutions on fiscal outcomes. I exploit a new dataset on budgetary practices across countries, to construct several measures of the three recognized budgetary institutions: numerical rules, procedural rules, and budgetary transparency. The main finding of the chapter is that among budgetary institutions, transparency is the only one that is consistently associated with more fiscal discipline, a finding that goes in hand with the results of the model in the previous chapter. The fourth chapter provides an empirical investigation of the effects of budgetary transparency on fiscal outcomes in the American States. I construct a transparency measure across time from the mid 1980s that allows me, not only to look at the evolution of transparency in the American States, but to take account of possible fixed effects in the estimations. My results essentially corroborate those obtained elsewhere in the literature, that greater fiscal transparency among the American States is associated with larger size of government, but I show that this effect is less robust and economically relevant than previously thought.