Essays in political economy

Abstract

In the first chapter, I study whether the introduction of primary elections induces more or less political polarization. Before 1976, only representatives from Indiana had to pass through the primaries, whereas the reform introduced primaries for Indiana’s US senators too. Using a difference-in-differences, I show that primaries deliver less-polarized politicians and account for one-fifth of the pre-reform average ideological gap between parties. I interpret the results in the light of a conceptual framework in which primaries lower the cost of participating in candidate selection procedures, giving incentives to participate to moderate voters as well. The second chapter is coauthored with D. Iorio and A. Mattozzi. We use a newly collected dataset from 63 democracies, and we construct the tenure accumulated by the ruling party while in office. We merge these data with fiscal policy indicators. We find an expenditure elasticity of 0.061 and a deficit elasticity of 0.055 over the period 1972-2014. Our findings point into the direction of a honeymoon effect: the older is the coalition of parties, the more divisive tend to be the available policy choices, which require costly transfers in the form of public expenditure to keep coalition members together later on. In the third chapter, I exploit newly collected data on ties between local politicians in Italy from 1985 onwards, to study the relation between cross-party connections and future career prospects. Exploiting a difference-in-discontinuities design, I find that ruling coalition members connected with the runner-up are twice as likely to be promoted to the council in which the runner-up leads the opposition. The effect of connections with the leader of the rivals disappears when I consider appointments to boards of state-owned enterprises. These findings suggest that connected politicians act as political brokers and smooth the relationship between government and opposition.