Current Series

Dondena Political Economy Seminar Series

  Spring 2018

12.45 pm via Rontgen 1

(Room numbers noted. Titles and abstracts will be posted as they become available.)


(Download the seminar series poster here)

6 February, 12:45pm, Room 3 b3 sr01

James Morrow

University of Michigan

A Theory of Treatymaking

We develop a formal model of multilateral treaty negotiations, showing their key theoretical differences from other forms of negotiations, such as bilateral conflict bargaining and legislative negotiations. We show how the strategic logic of states' negotiation positions and international organization drafting committees' proposals depend on the type of agreements being considered, including what types of public or club goods it generates, and the institutional rules governing ratification and entry into force.

20 February, 12:45pm, Room 3 b3 sr01

Livio Di Lonardo

Bocconi University

The Challenges of Regime Change

In recent years, regime change has been one of the main foreign policy tools used by the US and its allies to shape the international environment to their advantage. However, often overthrowing existing regimes has not delivered on the promise of bringing about more stable and favorable governments.To understand the challenges of regime change, we build a model in which a Foreign Actor seeks to overthrow the Leader of an opponent country. Importantly, the Leader also faces internal challenges to her tenure from an Elite faction, which seeks to overthrow the Leader and gain power. While the Leader and the Foreign Actor have conflicting interests, the Elite may or may not be aligned with the Foreign Actor. When the Elite is aligned with the Foreign Actor, the threat of an intervention from the Foreign Actor sometimes encourages but sometime discourages the Elite from attempting to overthrow the Leader from within. Interestingly, providing material support to the Elite so as to improve the likelihood it could defeat the Leader might not lead the Elite to challenge the Leader more often, forcing the Foreign Actor to intervene directly. Moreover, we show how the Leader benefits from facing an Elite faction that is not aligned with the Foreign Actor, even though this common ground has no effect on the Elite's desire to unseat the Leader. The presence of two hostile factions discourages the Foreign Actor from engaging in regime change, as the end result might not be much of an improvement over the status quo. Leaders who face "rogue Elites" are more likely to survive in power and more likely to impose costs on the Foreign Actor than Leader facing Elites aligned with the Foreign Actor.

8 March, Room 3 b3 sr01

Workshop on Political Economy

26 March, 12:45pm, Room 3 b3 sr01

Johannes Schneider

Universidad Carlos III de Madrid Joint with Applied Microeconomics Seminar Series

Managing a Conflict (joint with Benjamin Balzer)

We characterize the design of mechanisms aiming to settle conflicts that otherwise escalate to a costly game. Participation is voluntary. Players have private information about their strength in the escalation game. The designer fully controls settlement negotiations but has no control over the escalation game. We transform the mechanism design problem of conflict management to the information design problem of belief management conditional on escalation. The transformed problem identifies how the properties of the escalation game influence the optimal mechanism. Applying our results to two types of escalation games, we obtain qualitative differences driven by the game’s sensitivity to information.

17 April, 2:30pm, Room 3 b3 sr01

John S. Ahlquist

UC San Diego and Stanford University

The Political Consequences of Economic Shocks:  Evidence from Poland.

How do economic shocks influence domestic politics? We take advantage of a surprise revaluation of the Swiss franc in early 2015 to identify the Polish citizens with clear and direct economic exposure: those repaying mortgages denominated in Swiss francs. Using original survey data collected just prior to the 2015 Polish parliamentary elections and comparing current with past foreign exchange borrowers we show that individuals directly exposed to the shock were much more likely to demand government support. Those with no exposure to the shock were less likely to express an opinion on the matter. Current borrowers’ preferences for a generous resolution scheme translated into distinct voting behavior. Among former government voters, Swiss franc borrowers were more likely to desert the government and vote for the largest opposition party, PiS, which had promised the most generous bailout plan. The evidence suggests that PiS was able to use the franc shock to expand its electoral coalition beyond its core voters to include those directly affected by the franc shock, a subgroup otherwise unlikely to support PiS. Simulation results indicate that absent the franc shock PiS is unlikely to have won a parliamentary majority.

21 May, 12:30pm, Room 5 e4 sr04

Laurent Bouton

Georgetown University

(Joint with Applied Microeconomics Seminar Series)

Shedding New Light on the Economic Effects of Constitutions

This paper revisits the economic effects of constitutions. We propose a model of governmental resource allocation under political competition and contrast majoritarian and proportional representation systems. We derive predictions regarding the relationship between resource allocation and local characteristics that differ depending on the electoral system. In contrast with conventional wisdom, we identify a sprinkling effect that may lead to a more unequal allocation of resources under proportionalrepresentation than under a majoritarian system. Using satellite nightlight data as a geo-localized measure of government intervention and population as the source of local heterogeneity, we find support for the patterns predicted by our model. 

22 May, 12:45, Room 3 b3 sr01

Antonio Nicolò

University of Padova

Corruption, Endogenous Extremism and Conflict

When should we expect an ethnic group or more generally opposition group to select an extremist as leader or agent? How does this choice depend on the stakes or value of power sharing and on the presence of corruption? In what way the presence of corruption and extremism and their endogenous interaction determine the likelihood of conflict? We develop a simple bargaining and agency model with asymmetric information that yields answers to these questions. We show that when an agent is more likely to be subject to corruption the selection of group leader is more likely to be extreme, hence determining higher likelihood of conflict, which happens precisely when the selected extremist happens to resist the corruption attempts.

12 June, 12:45, Room 3 b3 sr01

Alberto Alesina

Harvard University

Immigration and redistribution

We design and conduct large-scale surveys and experiments in six countries (US, UK, Italy France Germany Sweden) to investigate how natives' perceptions of immigrants influence their preferences on redistribution. We find very large biases in natives' perceptions of the number and characteristics of immigrants: in all countries, respondents greatly overestimate the total number of immigrants, think immigrants have more culturally and religious distant origins, and are economically weaker -- less educated, more unemployed, poorer, and more reliant on government transfers—than is the case. While all respondents have misperceptions, those with the largest ones are the right-wing, the non-college educated, and the low-skilled working in immigration-intensive sectors. Support for redistribution is strongly correlated with the perceived composition of immigrants -- their origin and economic contribution. Given the very negative baseline views that respondents have of immigrants, when respondents are simply reminded of immigration in a randomized manner, they support less redistribution. To the contrary, experimentally showing respondents information about the true i) number, ii) origin, and iii) "hard work" of immigrants in their country manages to counteract and sometimes outweigh the negative priors and to generate more support for redistribution, including donations to charities.

Last updated 05 June 2018 - 09:48:45