Essays on the economic origins of party-system structure and political participation

This dissertation explores the economic origins of party-system structure and the role of economic institutions in determining political outcomes and electoral partici- pation. Chapter 2 studies the impact of unemployment on electoral fragmentation. Employing a four-party model of redistributive politics with two dimensions of choice (economic policy and ideology), we uncover a non-monotonic relationship between unemployment and fragmentation. In equilibrium, big parties woo the unemployed voters who are relatively more willing to switch their votes in response to generous redistribution. When the tax-base is large enough, allowing for more redistribution, an initial rise in unemployment favors the big parties by increasing the amount of the target constituency that is up for grabs. We identify two necessary conditions for opportunistic parties to be able to capitalize on this relationship: (i) the exis- tence of an e¤ective public redistribution mechanism and (ii) the lack of institutional checks and balances. Using data from OECD economies, we confirm empirically the relationship between economic and political outcomes. We find that variation in unemployment alone can account for two-thirds of the variation in party-system fragmentation. Using data from Greek local elections, to exploit the information shock, we test the role of institutional constraints in limiting opportunistic redis- tribution and increasing fragmentation. Overall, Chapter 2 lays a theoretical and empirical framework that relates economic outcomes with party-system structure. It also provides a special interest politics justification for redistribution. Finally, it highlights the importance of institutional constraints and economic institutions in guaranteeing political pluralism and power-sharing. Chapter 3, using again data from Greek elections explores empirically the link between economic adversity, trust and voter turnout. It identifies two links: one normative, declining trust in the party-system, and one rationalistic, the weakening of party-group linkages. We find that the fiscal shock caused a collapse in voter turn-out. Moreover, the decline was larger in regions with relatively larger public sector. Using suitable instruments from the institutional set-up of Ottoman Greece, we document a negative relationship between economic adversity and voter turn-out operating through both links (trust and party-group linkages). We also show that the size of the public sector acts as a catalyst in exacerbating the e¤ects of economic shocks on turn-out. The policy implications are clear: financial or institutional measures that reduce the size of public sector and aim at increasing transparency, trust and voter participation might have a second-order negative effect on turnout by reducing party-voter linkages. For Greece, the latter effect dominates, raising questions for the future of political participation

When state elections have more racially diverse candidates, policies to tackle inequality are less likely to be seen as important

Traditional political theory suggests that as income inequalities increase, voters will tend to demand more policies which are aimed at tackling inequality. And yet, despite the rise of the 1%, we have not seen a comprehensive response from politicians with such policies. In new research, Konstantinos Matakos and Dimitrios Xefteris argue that race and identity may be a mitigating factor. They find that when elections have more diverse candidates, race and identity overtake inequality as issues of importance, and that this is linked to the election of fewer candidates with redistributive platforms

Adapting or compounding? The effects of recurring labour shocks on stated and revealed preferences for redistribution

The evidence on the impact of employment shocks on preferences for redistribution is mixed on stated outcomes and sparse on revealed ones. We conduct a survey of US workers to measure the impact of repeated labour market shocks on both stated and revealed redistributive preferences. We measure the former by support on seven different policies and the latter through donations. We look at experiences of both mild shocks (having to reduce working hours) and hard shocks (unemployment), as well as past unemployment during formative years. We find evidence of adaptation to unemployment on policy preferences and compounding for milder shocks on donations, suggesting that the effects of repeated shocks on preferences for redistribution are not independent. Our results show that unemployment impacts preferences in a self-interested way, while milder shocks lead to broader support for redistribution

Take Back Control? The Effects of Supranational Integration on Party-System Polarization

In this paper, we examine the relationship between supranational integration and domestic party-system polarization (extremism). We first construct a theoretical argument that uncovers the key trade-off between the “output legitimacy” of a supranationally integrated party system and the inevitable loss of “input legitimacy” caused by externally imposed policy constraints. This translates into a strategic tradeoff between responsibility and responsiveness at the party level of electoral competition. We hypothesize that while moderate supranational policy constraints can initially speed-up platform convergence, ever-closer political integration may reverse the trend towards higher levels of party-system polarization and party extremism.We apply our framework to the case of EU integration and test our key non-monotonic prediction both at the party-system level of polarization and at the party level of ideological extremism. Finally, we apply to synthetic control method (SCM) for causal inference in comparative case studies to study how political integration and supranational policy constraints have affected their overall level of party-system polarization over time. Our overall empirical analysis strongly corroborates our theoretical argument

Electoral rule disproportionality and platform polarization

Despite common perception, existing theoretical literature lacks a complete for- mal argument regarding the relationship between the electoral rule disproportionality and platform polarization. In this paper, we build a model that incorporates the disproportionality of the electoral system in a standard Downsian electoral competition setup with mainly, but not necessarily purely, policy-motivated parties. We first show that in equilibrium, platform polarization is decreasing in the level of the electoral rule disproportionality. We then argue that the number of parties has a positive effect on platform polarization when polarization is measured by the distance between the two most distant platforms. This effect does not hold when polarization is measured by the widely used Dalton index. Constructing a dataset covering more than 300 elections, our main theoretical findings are empirically supported, pointing towards the electoral rule disproportionality as a major determinant of polarization

Waking up the golden dawn: does exposure to the refugee crisis increase support for extreme far-right parties?

Does exposure to the refugee crisis fuel support for extreme-right parties? Despite heated debates about the political repercussions of the refugee crisis in Europe, there exists very little - and sometimes conflicting - evidence with which to assess the impact of a large influx of refugees on natives' political attitudes and behavior. We provide causal evidence from a natural experiment in Greece, where some Aegean islands close to the Turkish border experienced sudden and drastic increases in the number of Syrian refugees while other islands slightly farther away - but with otherwise similar institutional and socioeconomic characteristics - did not. Placebo tests suggest that precrisis trends in vote shares for exposed and nonexposed islands were virtually identical. This allows us to obtain unbiased estimates of the electoral consequences of the refugee crisis. Our study shows that among islands that faced a massive but transient inflow of refugees passing through just before the September 2015 election, vote shares for Golden Dawn, the most extreme-right party in Europe, moderately increased by 2 percentage points (a 44 percent increase at the average). The finding that mere exposure to the refugee crisis is sufficient to fuel support for extreme-right parties has important implications for our theoretical understanding of the drivers of antirefugee backlash

Electoral Rules, Strategic Entry and Polarization

How does electoral rule disproportionality affect the structure of the party system (i.e. the number and the policy platforms of the competing parties)? By studying a model where both party entry and platform choice are endogenous we are able to provide a unified theory: An increasing electoral rule disproportionality exhibits: a) a first-order negative effect on platform polarization, b) a second-order negative effect on the number of parties (as polarization decreases, centrist parties are squeezed between other contenders and prefer not to enter), and c) an additional third-order negative effect on polarization via the reduction of the number of parties. We then conduct a laboratory experiment and strongly confirm the theoretical predictions of the model

A Pink Slip for the Blue Reform: Is Selection, Experience, or Ideology the Elixir of Populists’ Survival?

Why do some populist parties thrive while others fail or split? Is it possible for populists to maintain anti-establishment nature while being in a coalition with the mainstream parties? We study the populist Finns Party that split while being part of a coalition government. The splinter party Blue Reform retained its part in government and most of the experienced political personnel, yet it failed in the next election while the rump party remained popular. Leveraging rich data on electoral candidates and voters, we explore various potential drivers of the electoral persistence of populist parties: candidate quality, selection, office perks, and ideological motivations. Our results indicate that ideological proximity with voters and their demand for descriptive representation are keys for the electoral success of populist parties. This has implications for the political and policy consequences of including populists in government. In particular, our work highlights that there are limits on the electoral returns to ideological moderation, and that political experience and the perks of office alone do not guarantee populists’ survival. </p