Political Returns Research Articles

Economic spillovers and political payoffs in government competition for firms: Evidence from the Kansas City Border War

When jurisdictions use business incentives to compete for firms, the political payoffs of winning firms are privately derived by the politicians of the winning jurisdictions, but the economic payoffs, such as new jobs, can spill over to the residents of non-winning jurisdictions. I study how potential political payoffs shape government competition for firms using a simple model of government competition and firm location choice. I use the model to propose an empirical approach of deriving lower bounds on political payoffs with data on accepted incentives. Applying this approach to the recent state competition between Kansas and Missouri for firm relocation within Kansas City, I find that the two states derived sizable political payoffs.

The threat of political extraction and corporate cash holdings: The case of the GCC countries

This study examines the motives of corporations in the Gulf Cooperation Council (GCC) countries to hold cash with a focus on institutional characteristics related to the threat of political extraction. Using firm-level financial data and macro-level and institutional data and applying the GMM estimation method, the study finds that corruption (a proxy of the threat of political extraction) is positively related to cash holdings which suggests that the risk of political extraction induces GCC firms to accumulate cash to make political payoffs and preserve their financial flexibility. In terms of firm-level characteristics, GCC firms follow a pecking order as they deplete more cash the larger their capital expenditures. In addition, GCC firms save cash for transaction and precautionary purposes as indicated by the negative relation between cash and cash substitutes. This is the first study to examine the threat of political extraction on cash holdings using the context of the GCC, a cash-rich region with unique institutional settings. The findings on the GCC countries contribute to the ongoing debate regarding the political extraction-cash holdings relationship by examining a context under which corruption is likely to exert a positive impact on the level of cash holdings.

Equivocal Challenges: Tactical Ambiguity and Deferral of Claim-Making in the 1948 Bogotazo

AbstractThis article rethinks the dynamics of collective contention by emphasizing the role of tactical ambiguity. In the face of high political uncertainty, contentious mobilizations work best when they avoid explicit claim-making and engage instead in what I call equivocal challenges—i.e. provocative actions whose meaning will be defined by the response they elicit from specific targets. I provide detailed illustrative support for this argument through a study of the 1948 Bogotazo, by analyzing network data and repertoires of action extracted from archival sources. I conclude that rushed claim-making in contexts of political uncertainty may very well be a losing tactic and that conversely collective equivocation has significant political payoffs.

Pandemics and Post-Pandemic Times

This essay investigates some of the major pandemics in human history and scrutinizes their sociological, economic, and political pay-offs. To what extent can pandemics transform our society? How do the pandemics in history relate to the current? The Plague of Athens caused disappointment towards Greek gods since the Athenians felt they were not getting enough support from Apollo. The Plague of Justinian brought revolts across the empire and led to the end of Classical Antiquity. The Black Death changed the future vision of Europeans significantly because death was omnipresent. Although the death toll of cholera pandemic was limited, it triggered stigmatization, violence, and racism towards Asian people, especially to Indians. The Spanish conquistador Hernán Cortés would never have been able to colonize the Aztec civilization without the smallpox outbreak. After an episode of absurdism and Dadaism, the Spanish flu brought the Roaring Twenties with widespread use of radio, dance-halls, jazz, Harlem Renaissance, gay and lesbian scenes, and women’s suffrage. Coronavirus pandemic shows that society is digitizing at light speed among the art world. This essay also shows that our economy is a positive-sum economy in contrast to the zero-sum economy in times of the Black Death and before. There is also a delicate balance that must be maintained between keeping the pandemic under control and respecting the democratic principles. The essay concludes that each pandemic has an idiosyncratic nature and a pandemic can have different effects in different societies or regions in the world.

Tech Ethics: Speaking Ethics to Power, or Power Speaking Ethics?

In recent years, tens of product teams, research institutes, academic conferences, and college courses-the list goes on-have cropped up under the banner of tech ethics to grapple with the social and political impact of technology. For some, an orientation around ethics indicates a moment of humility in an industry characterized by hubris. Now even major tech corporations are seeking expertise outside of the technical sphere. In speaking tech ethics, we speak ethics to power. For others, the outlook is less rosy. Critical observers take tech ethics to just be the latest tool in the same-old corporate toolshed-new rhetoric in service of old interests. Tech ethics is a wolf in sheep's clothing. It is power speaking ethics. But debate about tech ethics concerns more than descriptive analyses of current efforts as such. The capacities of ethical tech as a political movement are also up for scrutiny. What is the political payoff of anyone speaking ethics at all? In this article, the author approaches the question by drawing on a critical history of another moral-turned-political movement. A critical inquiry into the ascendency of human rights, the author suggests, elucidates the multiple functions of moral reasoning and rhetoric in political movements and lends insight into how they may ultimately bear on political efficacy. The 20th century history of human rights gives reason to be suspicious of moral language that is evasive of engaging political and ideological battles. However, it also points to the possibility that long-standing moral ideals may be renewed and refashioned into new claims. Tech ethics may yet play such a role: placing explicitly moral demands on those typically taken to be exempt from moral standards. This demand reaches beyond what the specialized moniker of “tech ethics” suggests

Local institutions and public school spending under restricted suffrage: The case of post-unitary Italy

This paper studies the impact of legislative size on public spending on education, in a context of restricted suffrage. In 1860s Italy, male teachers were pivotal voters and were directly hired and fired by the local council. As a consequence, local legislators gained large political payoffs from public spending on education. Using a regression discontinuity design, I find that townships that were quasi-randomly assigned a larger council spent more on primary education by 6% of a standard deviation per additional councilman. Consistent with a pork-barrel mechanism, the legislative size effect on spending is driven by a surge in the appointment of male teachers, while female teachers, ineligible to vote, were not affected by legislative size. Higher school spending is associated with higher public education supply and a larger student population.

Technocratic Planning and Political Strategies: Territorial Policy in the EU

This commentary examines the EU’s halting development of territorial policy, most recently in macro-regional planning, and the responses of member states’ local and national governmental elites. Whether populist or not in their overall programmes, these elites have tended to resist EU initiatives in the name of a perceived national interest or to instrumentalise them in order to maximise their domestic political pay-off. These ‘sovereignty games’ (Adler-Nissen and Gammeltoft-Hansen 2008) have been a constant feature of the European integration process, but transnational territorial initiatives, involving a flexible mix of European and sub-regional bodies as well as national states (both members and non-members of the EU) tend to raise the stakes in these games.

Norms and Political Payoffs in Supreme Court Recusals

In times when the public and scholarly debates around the effects of norms on political decision making are at their height—and in light of the argument that government decisionmakers are now likelier than ever to put political payoffs above norms—we examine this question in an institutional setting where norms are expected to reign supreme: The Supreme Court. If politics fail to trump norms, we posit, the Court should be the institutional setting where this happens. We juxtapose randomly distributed health recusals with discretionary recusals on the Supreme Court of the United States, to test the predictions of a concise formal model predicting a central tendency where political payoffs would surpass norms even in courts. Findings from multivariate regression models strongly suggest that even justices on the high court are not immune to the tendency to abandon norms when institutional settings are conducive and with political payoffs sufficiently high. Political payoffs are brought to bear much earlier in the decision-making process than previously thought, and way ahead of the decision on the merits. This has been the case since the middle of the twentieth century. We conclude with lessons about the effects of norms in democratic institutions. (Data and replication material are available on the webpage of the Harvard Dataverse Project at: https://dataverse.harvard.edu/dataset.xhtml?persistentId=doi:10.7910/DVN/QDLNTI .)

An Interstate Compact to End the Economic Development Subsidy Arms Race

Targeted economic development subsidies do not work as advertised. In fact, the balance of economic theory and empirical evidence suggests that they are more likely to undermine development than to enhance it. Yet policymakers face strong incentives to continue to offer subsidies. Because subsidies are economically costly but politically valuable, they create a situation similar to a prisoner’s dilemma. An interstate compact offers a solution by changing the political payoffs. Importantly, interstate compacts enable policymakers to credibly commit to ending what many already see as a race to the bottom. Ending the mutually destructive subsidy war would allow state and local governments to repurpose up to $95 billion annually to tax relief and other projects with better payoffs.

Norms and Political Payoffs in Supreme Court Recusals

Norms and Political Payoffs in Supreme Court Recusals

How Not to Fight Corruption: Lessons from China

The most effective anticorruption strategies combine prevention and enforcement. Yet the political payoffs are greater for enforcement-centered strategies, even though they often fail to achieve durable objectives. Autocratic regimes with endemic corruption thus tend to prefer enforcement-centered anticorruption strategies: they are easier to contain, while prevention-centered strategies risk undermining the rulers’ bases of power. This explains why the ruling Chinese Communist Party (CCP) has consistently favored an enforcement-centered anticorruption strategy. However, an overemphasis on enforcement, in the Chinese political context at least, has resulted in the politicization of anticorruption efforts and a lack of sustainability of such efforts.

Self-Fulfilling Debt Crises, Revisited: The Art of the Desperate Deal

We revisit self-fulfilling rollover crises by introducing an alternative equilibrium selection that involves bond auctions at depressed but strictly positive equilibrium prices, a scenario in line with observed sovereign debt crises. We refer to these auctions as desperate deals, the defining feature of which is a price schedule that makes the government indifferent to default or repayment. The government randomizes at the time of repayment, which we show can be implemented in pure strategies by introducing stochastic political payoffs or external bailouts. Quantitatively, auctions at fire-sale prices are crucial for generating realistic spread volatility.

Machiavellian experimentation

This paper proposes the following mechanism whereby polarization of beliefs could eliminate political gridlock instead of intensifying disagreement: the expectation of political payoffs from being proven correct by a policy failure could drive decision makers who do not believe in the new policy to agree to policy experimentation, because they are confident that the experiment will fail, thus increasing their political power. We formalize this mechanism in a collective decision making model in the presence of heterogeneous beliefs in which any decision other than the default option requires unanimity. We show that this consideration of political payoffs can eliminate the inefficiency caused by a unanimous consent requirement when beliefs are polarized, but could also create under-experimentation when two actors hold beliefs that differ only slightly from one another. We further show that this under-experimentation can be reduced when the political payoffs become endogenous. We illustrate the empirical relevance of the mechanism in two examples with historical narratives: we focus on the decision making process of the Chinese leadership during the country’s transition starting in the late 1970s, and we further apply the model to the disagreement within the leadership of the Allied Forces on the Western Front of World War II in the autumn of 1944.

The Young in the Kirchnerist Age (Argentina. 2007-2015): Political Payoff or Transformation Tool?

<p><em>The objective of this text (which also involves a working hypothesis) is to contribute elements intended to analyze social policies as political and institutional resources which can add to the building of a presidential leadership. Taking this as a starting point, social policies designed for the young—which were especially fostered and financed during Cristina Fernández de Kirchner’s second term of office—are analyzed as elements that may have helped to build a political leadership. However, it is also appropriate to consider the presidency of Néstor Kirchner (2003-2007) in order to gain a better understanding of such a construction, since this is the point where the political-institutional scaffolding that propelled that leadership lies.</em></p><p><em>With regard to social interventions of the young, different studies conducted across Argentina have highlighted the increase of social participation and citizenship building. Those studies provide some hints in relation to the question raised when considering such interventions as political and institutional resources: are the young a political payoff or a transformation tool?</em></p>

The role of power conceptions when choosing a host city

Purpose– International sport competitions continue to attract a high number of spectators and the potential political, community building and financial payoffs are such that the competition to become a host city is often fierce. France has several attractive cities with all of the resources required to host these events, but they have repeatedly failed (Summer Olympic Games 2008 and 2012, Winter Olympic Games 2018, etc.). Most of the studies that have explored these failures have done so from a resource-based view. But when a city has all the required resources, what other factors may have been decisive? Could a misfit in the conception of power during the negotiation process explain it? The paper aims to discuss these issues.Design/methodology/approach– We looked at the specific failure of Marseille to host the 2007 America’s Cup and focused particularly on the conceptions of power held, respectively by Marseille representatives and the committee in charge of choosing the host city. In line with French qualitative methods we performed a single case study based on discourse analysis (23 interviews with the involved parties and 22 outside experts) to analyze the sources of power that Marseille and America’s Cup Management (ACM) had.Findings– The authors found that Marseille and ACM had different sources of power. According to Weber’s categories, Marseille had an “Organization” source of power: “it’s is a structure and an organization that implies specific rules” and ACM had a “Property” source of power: “it’s a commercial structure that has ownership rights to this very special event.” Analysis of the interviews reveals that points of disagreement reflected differing conceptions of power, which suggests new perspectives for future research in the context of failed negotiations in sports.Originality/value– Analyzing failure from another angle that the classical resource-based view: having the right resources is no longer enough; cities have to have the winning strategy.

Italian natural history museums on the verge of collapse?

The Italian natural history museums are facing a critical situation, due to the progressive loss of scientific relevance, decreasing economic investments, and scarcity of personnel. This is extremely alarming, especially for ensuring the long-term preservation of the precious collections they host. Moreover, a commitment in fieldwork to increase scientific collections and concurrent taxonomic research are rarely considered priorities, while most of the activities are addressed to public events with political payoffs, such as exhibits, didactic meetings, expositions, and talks. This is possibly due to the absence of a national museum that would have better steered research activities and overall concepts for collection management. We here propose that Italian natural history museums collaborate to instate a “metamuseum”, by establishing a reciprocal interaction network aimed at sharing budgetary and technical resources, which would assure better coordination of common long-term goals and scientific activities.

The Eastern Partnership and the EU-Turkey Energy Relations

Abstract This article discusses the prospects and challenges of energy cooperation between the European Union (EU) and Turkey within the context of the Eastern Partnership (EaP). Part of the EaP agenda is to advance energy cooperation between the EU and the partner states, particularly regarding the diversification of import routes. As an energy corridor between the EU and the hydrocarbon-rich Caspian states, Turkey is a strategic asset for European energy security. Turkey also has economic ties and political capital in the Caspian region that can help the EU reach out to its eastern partners. Despite robust incentives for cooperation, however, the EU-Turkey energy partnership has so far failed to meet mutual expectations. This article argues that this is primarily due to the inability of the two actors to credibly commit to regional energy cooperation. Commitment problem stems from two factors. First, the predominance of national energy interests over communal ones undermines credible commitment. The variation in energy needs of Member States prevents the EU from acting in unison in external energy policy. Similarly, Turkey also prioritizes its own energy security, particularly in its relations with suppliers, which undermines cooperation with the EU. Second, the EU and Turkey hold divergent perspectives on the potential political payoffs of energy cooperation. Turkish decision makers are convinced that energy cooperation warrants palpable progress in Turkey’s accession while most EU actors appear hesitant to establish a direct connection between energy and accession.

Is it Worth it? On the Returns to Holding Political Office

Despite the key role played by political payoffs in theory, very little is known empirically about the types of payoffs that motivate politicians. The purpose of this paper is to bring some light into this. I estimate causal effects of being elected in a local election on monetary returns. The claim for causality, I argue, can be made thanks to a research design where the income of some candidate who just barely won a seat is compared to that of some other candidate who was close to winning a seat for the same party, but ultimately did not. This research design is made possible thanks to a comprehensive, detailed data set covering all Swedish politicians who have run for office in the period 1991{2006. I establish that monetary returns are absent both in the short and long run. Instead, politicians seem to be motivated by non-monetary returns, and I show that being elected locally once (for exogenous reasons) can be an effective starting point for enjoying such payoffs.

Principles, Politics, and Prudence: Libya, the Responsibility to Protect, and the Use of Military Force

RESOLUTION 1973 (17 MARCH 2011) WAS THE FIRST TIME THE UNITED NATIONS Security Council authorized the use of military force for human protection purposes against a functioning de jure government. As such, it represents a significant development in the international politics of military force. But what are its likely consequences and how did it come about? We submit that Resolution 1973 and the subsequent enforcement operations, Odyssey Dawn and Unified Protector, were partly facilitated by the developing principle and practice of the Responsibility to Protect (R2P). Despite an increasing number of rhetorical commitments made by international institutions and many governments to prevent mass atrocities in the post--Cold War era, the use of force for human protection purposes remained severely constrained by principled objections rooted in international law and moral differences, the low political payoffs and potentially grave risks associated with humanitarian war, and the combination of difficult operational dilemmas and an absence of clear guidance about the strategies and tactics most likely to have positive effects in different circumstances. (1) Historically, these obstacles coalesced to produce a default policy environment that was strongly averse to the use of force to prevent or end the commission of genocide, war crimes, ethnic cleansing, or crimes against humanity (hereafter, genocide and mass atrocities). We submit that R2P has helped mitigate these three types of constraints, albeit unevenly, making UN-authorized humanitarian military intervention both politically possible in Libya and more likely in other similar cases. (2) First, R2P has largely resolved principled debate about whether international society should become engaged in such crises and replaced it with debates about how to best protect populations from grave abuses. Within international society, this principle is underscored by a widely shared understanding of the need for Security Council authorization for any use of military force. Second, R2P has helped to change international political calculations by establishing shared expectations and common interests, though of course national interests and domestic politics continue to shape decisions about using force. Third, it has provided a catalyst for more creative thinking about operational issues, most notably supporting moves toward using a broader range of measures to coerce and induce behavioral change and deepening understanding of the range of potential military measures and associated pitfalls. Nevertheless, while agreement on principles is important, reaching consensus on how to consistently apply those principles in response to specific cases is far more difficult, as the case of Syria in 2012 demonstrates only too well. (3) Moreover, while the use of force to protect populations from genocide and mass atrocities has become more likely, it is still rare and is likely to remain so for the foreseeable future. (4) To substantiate these claims, we begin this article by summarizing the road to the use of force in Libya, focusing on the forging of international consensus around Resolution 1973. Next, we contextualize Resolution 1973 by outlining the main principled, political, and prudential obstacles to using force for human protection purposes. In the final section, we revisit these obstacles and explore R2P's role in reshaping the way they are conceptualized and, in turn, the politics of using force to protect populations from genocide and mass atrocities. Libya: The Road to Humanitarian War On 19 March 2011, military forces from France, Canada, the United Kingdom, and the United States struck the air defenses and soldiers of Muammar Gaddafi's regime in Libya. These countries led a coalition of states with the expressed aim of enforcing the objectives set out by UN Security Council Resolution 1973, principally the operation of a no-fly zone over Libya, imposition of an arms embargo, and the protection of civilians on the ground. …

OPEC’s Strategies

This paper investigates rationale explanations of OPEC’s strategies. Accounting for market characteristics in particular the sluggishness of demand and supply allows to explain price jumps as rational OPEC strategies from a narrow economic perspective (up and down) as well as from political objectives (at least up) due to the political payoff from standing up against the ‘West’. Although the temptation to accrue this political payoff was and remains high, the narrow economic profit motive coupled with an imperfect cooperation among OPEC members explains past price volatility and high prices much better than the usual reference to political events. A more specific prediction is that OPEC will switch back to setting prices since the current quantity strategy encourages oil importing countries to appropriate rents in particular in connection with the need to mitigate global warming.