Pierluigi Balduzzi, Emanuele Brancati, Marco Brianti, Fabio Schiantarelli, 20 February 2020

The effects of shocks to political risk can be captured by the change in the spread of sovereign credit default swaps. This column shows how the rise of populist movements in Italy following the financial crisis and sovereign debt crisis affects domestic and euro area financial markets, and also impacts the Italian real economy. Italy has been an ideal laboratory to explore and learn about the economic consequences of political risk shocks, and the instability there implies that this is likely to continue to be the case in the future.

Filip Matějka, Guido Tabellini, 10 January 2020

Digital technologies provide a vast and accessible supply of information for voters. And yet, research suggests that the American electorate is no better informed than it was in the late 1980s. This column argues that the digital revolution has changed the distribution of news and data, increasing informational asymmetries across issues, amplifying the influence of extremist voters, and diverting attention away from important but non-controversial policies. 

Francesco Drago, Roberto Galbiati, Francesco Sobbrio, 24 December 2019

Assessing how voters respond to public policies they like or dislike is challenging due to the absence of counterfactual scenarios. This column exploits a collective pardon of prisoners in response to prison overcrowding in Italy in 2006 to show that voters punish incumbent politicians for unpopular policies they are deemed responsible for. Regions with greater incidents of recidivism were those where incumbent politicians fared more poorly in post-pardon elections.

Ruben Durante, 20 December 2019

New research demonstrates what we all suspected: for decades, politicians have routinely used busy news days to bury unpopular announcements. Ruben Durante educates Tim Phillips in the politics of distraction.

Milena Djourelova, Ruben Durante, 17 November 2019

It is often suspected that politicians time announcements of controversial policies strategically to avoid public scrutiny. This column reports evidence from a systematic analysis of executive orders issued by US presidents, showing that their timing is consistent with strategic behaviour. Presidents tend to issue executive orders, and specifically ones that are likely to generate negative publicity, in coincidence with other important events that distract the media and the public.

Li Yang, Filip Novokmet, Branko Milanovic, 09 October 2019

The historically unprecedented economic and social transformation in China over the past four decades has seen urban areas becoming much richer, but also much more unequal. This column analyses changes in the Chinese urban elite. It finds that, compared to the 1980s, the elite today consists mainly of professionals, self-employed, and smaller and larger business people, they are much better educated, and they receive a much greater share of total urban income. This is reflected also in the composition of the Communist Party of China.

Yasmine Bekkouche, Julia Cagé, 14 September 2019

There is growing concern that money has corrupted politics. This column uses data from French elections since 1993 to show that an increase in spending per voter has consistently increased a candidate’s vote share. Caps on spending may increase this impact, as marginal effects are large. The price of a vote varies widely, and is most expensive for the extreme right. 

Alma Cohen, Moshe Hazan, Roberto Tallarita, David Weiss, 24 July 2019

With power over corporate resources as well as stature and prestige in the economic system, public-company CEOs to have sizeable influence over policy and political decisions. This column examines the political donations of more than 3,800 US CEOs of S&P 1500 companies to analyse their political preferences over time, across industries and geographical regions, and by gender. It shows that US public company CEOs have a significant preference for Republicans, who may benefit from public companies’ expanded freedom to spend money on politics.

Vitezslav Titl, Benny Geys, 13 January 2019

Despite public concerns about the role and influence of big donors on politics, questions remain regarding the mechanisms behind political favouritism to donor corporations. Using 2006–2014 data on political donations and public procurement allocations in the Czech Republic, this column finds that firms that increase their donations to a political party see the value of their public procurement contracts rise in the following year. Contracting authorities appear to engage in different forms of strategic behaviour to favour corporate donors, who tend to face fewer competitors in more regulated and open procurement procedures.

Thomas Le Barbanchon, Julien Sauvagnat, 08 December 2018

Despite many efforts to close the gender gap, women remain underrepresented in politics. This column shows that in the case of France, voters’ preferences towards gender shapes political selection and ultimately the gender composition of elected politicians. This suggests that gender parity in policymaking relies on improving the slow-changing attitudes of voters towards male and female political candidates.

Nathan Nunn, Nancy Qian, Jaya Wen, 29 September 2018

Cultural values and beliefs have an impact on social and economic development, but the interplay between culture and political institutions is still not well understood. This column examines the effect of trust on political stability in democratic and non-democratic regimes, specifically in the face of severe economic downturns. It finds that democratic regimes with high levels of trust are much less likely to experience leader turnover than low-trust countries, while there is no effect among non-democracies, and that countries with higher levels of trust experience faster economic growth in the years immediately following a recession. 

Jakob Molinder, Kerstin Enflo, Tobias Karlsson, 20 September 2018

Conflicts in the labour market are detrimental to economic growth and welfare. Sweden was among the countries with the highest incidents of industrial disputes in the 1920s, but experienced declining levels from the 1930s onward. Using Swedish data from 1919 to 1938, this column shows that towns with both powerful unions and strong Social Democratic presence experienced labour market peace. The results point toward the importance of labour market peace for strategic political reasons, rather than to politicians offering tangible concessions via municipal governmental power.

Marianne Bertrand, Matilde Bombardini, Raymond Fisman, Francesco Trebbi, 03 September 2018

Special interests use donations to influence the political process. This column shows that philanthropic efforts in the US are targeted, at least in part, to influence legislators. Districts with influential politicians receive more donations, as do non-profits with politicians on their boards. This is problematic because, unlike PAC contributions and lobbying, influence by charity is hard for the public to observe.

Paul Tucker, 18 June 2018

The last few decades have seen a shift of power from elected to unelected officials - inlcuding central bankers, regulators, and the judiciary. Sir Paul Tucker introduces his research on how the broad mandate given to independent policymakers is at odds with their ability to retain power when their policies fail. This video was recorded at the Imperial College Business School.

Roger Farmer, 29 May 2018

Simon Wren-Lewis, 12 May 2018

Ashoka Mody, 01 April 2018

K. Kıvanç Karaman, Sevket Pamuk, Seçil Yıldırım-Karaman, 24 February 2018

There is a notable lack of long-run analyses of monetary systems and their stability. This column addresses this gap by looking at the monetary systems of major European states between 1300 and 1914. The evidence collected suggests that, despite many switches between standards and systems, fiscal capacity and political regimes ultimately shaped patterns of monetary stability. Theories of monetary stability that rely on the mechanics of monetary systems perform poorly when such a long-run perspective is taken.

Paolo Manasse, Dimitris Katsikas, 01 February 2018

The basic ingredients of the policy prescriptions in response to the euro area debt crisis were quite similar across Southern Europe. This column explores the economic, political, and institutional factors that differentially affected the success of these prescriptions from country to country. Policy timing and sequencing, the balance between fiscal consolidation and structural reforms, and external constraints all play crucial roles. Future reform programmes should be calibrated to the distinct economic, social, and political features of targeted countries.

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