Politics and economics

Levi Boxell, 13 October 2021

With the array of television news networks, the expansion of internet services and the rise of social media, voters see more images daily than at any previous moment in history. And yet, the literature on media bias tends to focus far more on text than photos. This column constructs a dataset of nearly one million image files from the 2016 US election cycle and finds deeply partisan coverage of different candidates. Media bias also varied in response to electoral incentives – in particular when switching from the primaries to the general election.

Peter Robertson, 09 October 2021

US military spending is said to be greater than the next 11 countries combined. However, the conventional use of market exchange rates to compare across countries dramatically overstates US spending relative to other countries. This column introduces a military purchasing power parity exchange rate for 59 countries based on the relative unit cost ratio across counties. This ‘military PPP’ shows that the US military budget in 2019 was smaller than that of the next three largest military spenders – China, India, and Russia – combined.

Filippo Gori, 07 October 2021

Once again, the US finds itself in the midst of a debt ceiling crisis, but what can we learn from previous instances? This column assesses the impact of the 2011 US debt ceiling crisis on US federal government credit risk and on US banks’ funding costs. It estimates that during the first two quarters of 2011, as a result of the disagreement between Republicans and Democrats over the rise in the US debt ceiling, US government credit default swaps increased by 46 basis points, while bank funding costs increased by about 18 basis points.  

Michal Bauer, Jana Cahlíková, Julie Chytilová, Gérard Roland, Tomáš Želinský, 01 October 2021

Scapegoating refers to a social phenomenon whereby members of an aggrieved majority group retaliate against innocent third parties, usually members of vulnerable minority groups. This column uses an experiment set up between May and September 2017 in Eastern Slovakia – where a large Roma minority regularly suffers from discrimination – to measure how an injustice that affects a member of one’s own group shapes the punishment of an unconnected bystander (or scapegoat). The experiment shows that members of a majority group will systematically shift punishment onto innocent members of an ethnic minority. 

Giacomo Magistretti, Marco Tabellini, 20 September 2021

Can democracy be exported? This column uses a large cross-country dataset from 1960 to 2015 to show that, while the ‘top-down’ imposition of political institutions is not desirable and rarely successful, democracy can indeed be ‘exported’ – from more democratic to less democratic countries – through repeated trade interactions. The finding suggests that economic integration might be advantageous to less democratic countries not only directly by fostering GDP growth, but also indirectly by favouring the transition to democracy and the socioeconomic and political benefits associated with it.

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