Mario Blejer, Piroska Nagy-Mohacsi, 22 November 2017

Global politics of late has been marked by the rise of anti-elite political movements and anti-establishment leaders. This column analyses the tactics of such populists through the lens of the ‘time inconsistency’ problem – that what is considered a long-term optimal policy today may not be optimal when that future arrives. Populist leaders seek to gain and increase their power by undermining democratic institutions and conventional commitment devices. Several ‘second generation’ institutional commitment devices to counter this are proposed.

Maria Petrova, Ananya Sen, Pinar Yildirim, 28 February 2017

New communication technologies change the way people become informed and stay connected, and can also change voter behaviour. This column uses a dataset covering 1,814 candidates for the US Senate with Twitter accounts to analyse how using a new social media technology can overcome the barriers of communicating with voters. Candidates receive more campaign donations after they join Twitter, but adopting the technology seems to help only new, inexperienced politicians. This suggests that new technologies can ease entry to politics for new candidates and promote political competition.

James Robinson, Ragnar Torvik, Thierry Verdier, 27 July 2015

Economists have long understood that policy chosen by politics is unlikely to be socially optimal. This is because politicians face the probability of losing power and may discount the future too much, or act to improve their re-election probability. This column explores these issues taking into account the fact that future government revenue is uncertain. Public income volatility acts to reduce the efficiency of public policy. This has important implications for developing countries that rely on income from volatile sources, such as natural resource extraction.

George Ward, 06 May 2015

A solid empirical result is that voters reward governments for recent economic prosperity. This column presents new evidence that the electoral fate of governing parties is also associated with the electorate’s wider ‘subjective well-being’. Policymakers who want to win should focus on more a broad range of factors that matter to the quality of people’s lives.

Vincenzo Galasso, Tommaso Nannicini, 22 September 2009

Political competition may produce better governance. This column shows that Italian politicians shirk less when they are from a more closely contested district. But it’s not simply a re-election incentive – parties are more likely to choose qualified candidates rather than loyalists to run in contestable district, therefore putting better politicians in office.

Micael Castanheira, 28 November 2008

Micael Castanheira of ECARES (Université Libre de Bruxelles) talks to Romesh Vaitilingam about the economic analysis of interactions between politicians, political parties and the voters. The interview was recorded at the annual congress of the European Economic Association in Milan in August 2008.

Marco Buti, Alessandro Turrini, Paul van den Noord, 17 June 2008

European politicians fear embracing reform means losing elections. This column reviews the evidence that rejects this and considers how well-functioning financial markets could front-load reform benefits thereby reducing political opposition. Financial reform may be an essential part of structural reform packages.

Bruno Frey, 24 August 2007

Economic logic suggests that politicians are overprotected and therefore too isolated from citizens; the social cost of a political assassination is much lower than its private cost to the politicians, and the private cost of protection is lower than the social cost. Moreover, authoritarian rulers are more overprotected and isolated than democratic politicians since assassinating them has more impact on policy.

Giancarlo Spagnolo, 06 August 2007

Competing firms are on the frontline of a ‘war’ to serve customers; they have little time or resources to grant favours to politicians. Politicians that manage to shield companies from competition can expect to share the ‘fat’ thus created. Maybe this is why many of Europe’s politicians embrace protectionism?

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