We study the economic effects of religious practices in the context of the observance of Ramadan fasting, one of the central tenets of Islam. To establish causality, we exploit variation in the length of daily fasting due to the interaction between the rotating Islamic calendar and a country’s latitude. We report two key, quantitatively meaningful results: 1) longer Ramadan fasting has a negative effect on output growth in Muslim countries, and 2) it increases subjective well-being among Muslims. We find evidence that these patterns are consistent with a standard club-good explanation for the emergence of costly religious practices: increased strictness of fasting screens out the less committed members, while the more committed respond with an increase in their relative levels of participation. Together, our results underscore that religious practices can affect individual behavior and beliefs in ways that have negative implications for economic performance, but that nevertheless increase subjective well-being among followers.
We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms: newspapers cover state politics more when readers are closer to the capital, voters who live far from the capital are less knowledgeable and interested in state politics, and they turn out less in state elections. We also find that isolated capitals are associated with more money in state-level campaigns, and worse public good provision
We provide evidence that economic circumstances are a key intermediating variable for understanding the relationship between schooling and political protest. Using the World Values Survey, we find that individuals with higher levels of schooling, but whose income outcomes fall short of that predicted by their biographical characteristics, in turn display a greater propensity to engage in protest activities. We discuss a number of interpretations that are consistent with this finding, including the idea that economic conditions can affect how individuals trade off the use of their human capital between production and political activities. Our results could also reflect a link between education, “grievance”, and political protest, although we argue that this is unlikely to be the sole explanation. Separately, we show that the interaction between schooling and economic conditions matters too at the country level: Rising education levels coupled with macroeconomic weakness are associated with increased incumbent turnover, as well as subsequent pressures toward democratization.
This paper sheds light on the links between media and political polarization by looking at the introduction of broadcast TV in the US. We provide causal evidence that broadcast TV decreased the ideological extremism of US representatives. We then show that exposure to radio was associated with decreased polarization. We interpret this result using a simple framework that identifies two channels linking media environment to politicians’ incentives to polarize. First, the ideology effect: changes in the media environment may affect the distribution of citizens’ ideological views, with politicians moving their positions accordingly. Second, the motivation effect: the media may affect citizens’ political motivation, changing the ideological composition of the electorate and thereby impacting elite polarization while mass polarization is unchanged. The evidence on polarization and turnout is consistent with a prevalence of the ideology effect in the case of TV, as both of them decreased. Increased turnout associated with radio exposure is in turn consistent with a role for the motivation effect.
We investigate how the link between individual schooling and political participation is affected by country characteristics. Using individual survey data, we find that political participation is more responsive to schooling in land-abundant countries and less responsive in human capital– abundant countries, even while controlling for country political institutions and cultural attitudes. We find related evidence that political participation is less responsive to schooling in countries with a higher skill premium, as well as within countries for individuals in skilled occupations. The evidence motivates a theoretical explanation in which patterns of political participation are influenced by the opportunity cost of engaging in political rather than production activities.
I propose a framework in which individual political participation can take two distinct forms, voting and contributing resources to campaigns, in a context in which the negligible impact of any individual’s actions on aggregate outcomes is fully recognized by all agents. I then use the framework to reassess the relationship between inequality and redistribution. The model shows that, even though each contribution has a negligible impact, the interaction between contributions and voting leads to an endogenous wealth bias in the political process, as the advantage of wealthier individuals in providing contributions encourages parties to move their platforms closer to those individuals’ preferred positions. This mechanism can in turn explain why the standard median-voter-based prediction, that more inequality produces more redistribution, has received little empirical support: Higher inequality endogenously shifts the political system further in favor of the rich. In equilibrium, there is a non-monotonic relationship in which redistribution is initially increasing but eventually decreasing in inequality. I present some empirical evidence supporting the framework, using data on campaign contributions from US presidential elections. In particular, inequality increases contributions to Republicans, but not to Democrats, as predicted by the model.
We investigate the relationship between corruption and political stability, from both theoretical and empirical perspectives. We propose a model of incumbent behavior that features the interplay of two effects: A horizon effect, whereby greater instability leads the incumbent to embezzle more during his short window of opportunity; and a demand effect, by which the private sector is more willing to bribe stable incumbents. The horizon effect dominates at low levels of stability, since firms are unwilling to pay high bribes and unstable incumbents have strong incentives to embezzle, whereas the demand effect gains salience in more stable regimes. Together, these two effects generate a nonmonotonic, U-shaped relationship between total corruption and stability. On the empirical side, we find a robust U-shaped pattern between country indices of corruption perception and various measures of incumbent stability, including historically-observed average tenures of chief executives and governing parties: Regimes that are very stable or very unstable display higher levels of corruption when compared to those in an intermediate range of stability. These results suggest that minimizing corruption may require an electoral system that features some reelection incentives, but with an eventual term limit.
Fiscal policy is procyclical in many developing countries. We explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to “starve the Leviathan” to reduce political rents. Voters observe the state of the economy but not the rents appropriated by corrupt governments. When they observe a boom, voters optimally demand more public goods or lower taxes, and this induces a procyclical bias in fiscal policy. The empirical evidence is consistent with this explanation: Procyclicality of fiscal policy is more pronounced in more corrupt democracies.
This paper analyses the efficiency consequences of lobbying in a production economy with imperfect commitment. We first show that the Pareto efficiency result found for truthful equilibria of common agency games in static exchange economies no longer holds under these more general conditions. We construct a model of pressure groups where the set of efficient truthful common-agency equilibria has measure zero. Second, we show that under fairly general assumptions, the equilibrium will be biased against the group with the highest productivity of private capital, reflecting the fact that, on the margin, less productive groups find lobbying relatively more rewarding. Finally, as an application, if lobbies representing “the poor” and “the rich” have identical organizational capacities, we show that the equilibrium is biased towards the poor, who have a comparative advantage in politics, rather than in production. If the pressure groups differ in their organizational capacity, both pro-rich (oligarchic) and pro-poor (populist) equilibria may arise, all of which are inefficient with respect to the constrained optimum.