Politics and economics

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.

Daron Acemoğlu, Nicolas Ajzenman, Cevat Giray Aksoy, Martin Fiszbein, Carlos Molina, 15 September 2021

Concerns about the viability of democracy have deepened in recent decades amid growing discontent between and among voters, the rapid spread of misinformation, and the rise of extremist and populist parties across the West. Using large-scale survey data covering more than 110 countries, this column shows that individuals with longer exposure to successful democracies tend to exhibit stronger support for democratic institutions. Democracies breed their own support – but only when they can successfully deliver on promises of economic growth, peace, political stability, and the provision of essential public goods.

Davide Furceri, Michael Ganslmeier, Jonathan D. Ostry, 07 September 2021

The call for stricter climate change policies is gaining momentum in many countries. But despite rising public awareness, there could be political obstacles to adopting the measures needed to combat climate change. This column argues that policy design and timing are critical to overcoming political costs to climate mitigation policies, as is the need to provide effective social insurance policies. An implication is that political realities may often dictate the need to sacrifice some efficiency in climate mitigation policies in order to secure political buy-in. 

Jenny Guardado, 04 September 2021

The 2021 victory of Pedro Castillo as president of Peru is commonly attributed to the support of poor, rural, and indigenous groups. However, profound historical factors also played a role. In particular, areas where colonial rule was more ruthless in the 18th century – as measured by the expected returns to office, the tax burden, and the intensity of anti-colonial rebellions – exhibited higher support for Castillo in 2021. Interestingly, this support is not visible for other leftist and Marxist parties in the elections of 1980 and 1985.

Levi Boxell, 25 August 2021

Political polarisation can have significant effects on economic behaviour and political effectiveness. This column presents key trends in US political polarisation and discusses their implications. It shows that polarisation (1) has been increasing since the 1980s, (2) has grown at similar rates across different age groups, and (3) has increased more in the US relative to many other developed countries. Potential determinants for these trends in US political polarisation include racial divisions, elite polarisation, and cable TV news consumption.

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