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Morten Bennedsen - One of the best experts on this subject based on the ideXlab platform.
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the value of local Political connections in a low corruption environment
Journal of Financial Economics, 2013Co-Authors: Mario Daniele Amore, Morten BennedsenAbstract:We use exogenous changes in Danish local municipality sizes to identify a large positive effect of Political Power on the profitability of firms related by family to local politicians. Our difference-in-differences estimate is consistent with a unitary elasticity of connected firms’ performance to Political Power (as measured by population per elected politician). Increasing Power boosts firms’ operating returns, especially in industries relying heavily on public demand. Focusing on arguably the world's least corrupt country, we highlight the importance of corporate rent seeking at local governmental levels, which account for nearly half of total public expenditures.
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the value of local Political connections in a low corruption environment
Social Science Research Network, 2013Co-Authors: Mario Daniele Amore, Morten BennedsenAbstract:We use exogenous changes in Danish local municipality sizes to identify a large positive effect of Political Power on the profitability of firms related by family to local politicians. Our difference-in-differences estimate is consistent with a unitary elasticity of connected firms' performance to Political Power (as measured by population per elected politician). Increasing Power boosts firms' operating returns, especially in industries relying heavily on public demand. We confirm our main finding via several alternative models. Focusing on arguably the world's least corrupt country, we highlight the importance of corporate rent seeking at local governmental levels, which account for nearly half of total public expenditures.
Bertrall L Ross - One of the best experts on this subject based on the ideXlab platform.
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measuring Political Power suspect class determinations and the poor
California Law Review, 2016Co-Authors: Bertrall L RossAbstract:Which classes are considered suspect under equal protection doctrine? The answer determines whether courts will defer to legislatures and other government actors when they single out a group for special burdens, or intervene to protect that group from such treatment. Laws burdening suspect classes receive the strictest scrutiny possible—and under current doctrine, whether a class is suspect turns largely on whether the court views the group as possessing Political Power. But how do courts know when a class lacks Political Power? A liberal plurality of the Supreme Court initially suggested that Political Power should be measured according to a group’s descriptive representation in politics. Under that measure, the mostly white, male, wealthy, straight makeup of most of the nation’s decisionmaking councils would indicate that other groups lack Political Power. But that measure never received majority support from the Court. Instead, the Court consolidated around a different measure of Political Power, one that focused on democratic actions favorable to a group. If laws have been enacted protecting the group from discrimination or otherwise advancing the group’s interest, the Court assumes that the group can attract lawmakers’ attention and therefore does not need judicial protection. In the forty years since the Court introduced this standard, it has not deemed a single class suspect under it. In fact, it is hard to imagine any class ever meeting the standard of Political Powerlessness under this measure. Even the most Politically marginalized groups (such as the poor, non-citizens, and felons) have benefited from laws favoring their interests. Is favorable democratic action really an accurate measure of Political Power? Focusing on the poor, we advance the first empirical test of the Supreme Court’s measure of Political Power. Our findings suggest that legislators’ support for anti-poverty legislation is not motivated by the Political Power of the poor—implying that favorable democratic action does not always accurately indicate a group’s Political Power. Given these findings, we argue that the court should rely on a more holistic, and thus more reliable, measure of Political Power. The measure should include favorable legislative actions, but also indicators of lobbying activity, Political responsiveness, voter turnout, and descriptive representation in politics. MEASURING Power: SUSPECT CLASS DETERMINATIONS AND THE POOR Bertrall L. Ross II & Su Li
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measuring Political Power suspect class determinations and the poor
Social Science Research Network, 2015Co-Authors: Bertrall L RossAbstract:Which classes are considered suspect under equal protection doctrine? The answer determines whether courts will defer to legislatures and other government actors when they single out a group for special burdens, or intervene to protect that group from such treatment. Laws burdening suspect classes receive the strictest scrutiny possible and, under current doctrine, whether a class is suspect turns largely on whether the court views the group as possessing Political Power. But how do courts know when a class has Political Power? A plurality of the Supreme Court initially suggested that Political Power should be measured according to a group’s descriptive representation in politics. Under that measure, the mostly white, male, wealthy, and straight makeup of most of the nation’s decision-making councils would indicate that other less well represented groups lack Political Power. But that measure never received majority support from the Court. Instead, the Court consolidated around a different measure of Political Power, one that focused on democratic actions favorable to a group. If laws have been enacted protecting the group from discrimination or otherwise advancing the group’s interest, the Court assumes that the group can attract lawmakers’ attention and therefore does not need judicial protection.In the forty years since the Court introduced this measure of Political Power, it has not found a single class suspect. In fact, it is hard to imagine the Court finding any class to be Politically Powerless under this measure. Even the most Politically marginalized groups (such as the poor, non-citizens, and felons) have benefited from laws favoring their interests. This leads us to question whether favorable democratic action is a reliable measure of Political Power? Focusing on the poor, we advance the first empirical test of the Supreme Court’s measure of Political Power. Our findings suggest that legislators’ support for anti-poverty legislation is not motivated by the Political Power of the poor — implying that favorable democratic action does not always reliably indicate a group’s Political Power. Given these findings, we argue that the court should rely on a more holistic, and thus more reliable, measure of Political Power. The measure should include favorable legislative actions, but also indicators of lobbying activity, Political responsiveness, voter turnout, and descriptive representation in politics.
Mario Daniele Amore - One of the best experts on this subject based on the ideXlab platform.
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the value of local Political connections in a low corruption environment
Journal of Financial Economics, 2013Co-Authors: Mario Daniele Amore, Morten BennedsenAbstract:We use exogenous changes in Danish local municipality sizes to identify a large positive effect of Political Power on the profitability of firms related by family to local politicians. Our difference-in-differences estimate is consistent with a unitary elasticity of connected firms’ performance to Political Power (as measured by population per elected politician). Increasing Power boosts firms’ operating returns, especially in industries relying heavily on public demand. Focusing on arguably the world's least corrupt country, we highlight the importance of corporate rent seeking at local governmental levels, which account for nearly half of total public expenditures.
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the value of local Political connections in a low corruption environment
Social Science Research Network, 2013Co-Authors: Mario Daniele Amore, Morten BennedsenAbstract:We use exogenous changes in Danish local municipality sizes to identify a large positive effect of Political Power on the profitability of firms related by family to local politicians. Our difference-in-differences estimate is consistent with a unitary elasticity of connected firms' performance to Political Power (as measured by population per elected politician). Increasing Power boosts firms' operating returns, especially in industries relying heavily on public demand. We confirm our main finding via several alternative models. Focusing on arguably the world's least corrupt country, we highlight the importance of corporate rent seeking at local governmental levels, which account for nearly half of total public expenditures.
Jennie C. Stephens - One of the best experts on this subject based on the ideXlab platform.
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Political Power and renewable energy futures: A critical review
Energy Research and Social Science, 2018Co-Authors: Matthew J Burke, Jennie C. StephensAbstract:Inspired by the energy democracy movement, this conceptual review critically explores relationships between concentrated or distributed renewable energy and Political Power. Advocates assert that because the renewable energy transition is fundamentally a Political struggle, efforts to shift from fossil fuels and decarbonize societies will not prove effective without confronting and destabilizing dominant systems of energy Power. The objectives of this paper include: 1) theorizing and exploring the relationships between renewable energy and Political Power, 2) critically assessing tensions associated with an energy democracy agenda, and 3) drawing out the implications for democratizing renewable energy development in practice. Distributed energy-politics posits that distributed energy sources and technologies enable and organize distributed Political Power and vice versa. Efforts are underway to find ways to re-organize distributed energy flows into aggregated and concentrated stocks of energy and other forms of Political Power. More democratic renewable energy futures may benefit from strengthening democratic practices and outcomes, extending democratization of energy systems across all components, stages and end uses, and sharpening positions relative to dominant pressures of capitalism and market ideology, the ideology of unlimited growth, and the modernist/industrialist agenda. Renewable energy systems offer a possibility but not a certainty for more democratic energy futures.
Daron Acemoglu - One of the best experts on this subject based on the ideXlab platform.
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de facto Political Power and institutional persistence
The American Economic Review, 2006Co-Authors: Daron Acemoglu, James A RobinsonAbstract:Much of the empirical work and the conceptual discussion of the impact of institutions on economic development either implicitly or explicitly assumes that institutions persist. Although Acemoglu et al. (2001) provide evidence that constraints on the executive persist, many aspects of institutions change frequently. Less-developed countries cycle between democracy and dictatorship and often change their constitutions. Relatedly, while the current economic problems in Latin America are often traced back to colonial times (Stanley L. Engerman and Kenneth L. Sokoloff, 1997; Acemoglu et al., 2002), the specific institutions that once underpinned the colonial economy, such as the encomienda, the mita, or slavery, vanished long ago. These observations suggest that we need to develop a framework in which changes in certain dimensions of institutions are consistent with overall institutional persistence. In this paper, we make an attempt to highlight some important mechanisms for understanding simultaneous change and persistence in institutions. Institutional persistence, in this context, refers to the persistence of a cluster of economic institutions, such as the extent of enforcement of property rights for a broad cross section of society (Acemoglu et al., 2001). Such lack of property rights enforcement may be driven by quite different specific institutions, e.g., risk of expropriation, entry barriers, or economic systems such as serfdom or slavery. In turn, these different specific economic institutions may exist under different Political institutions, including dictatorships, absolutist monarchies, oligarchies, and corrupt or even populist democracies. Given this rich array of possibilities, a useful framework must specify which aspects of institutions can change, which others have a tendency to persist in equilibrium, and how the persistence of certain types of institutions could have lasting effects on economic outcomes. In this paper, we provide a simple model of the coexistence of change and persistence in institutions. First we describe some existing approaches to the persistence of social arrangements, as well as the essence of the mechanism we propose. Next, we illustrate the key issues using the experience of the southern United States, and last we provide a simple model that formalizes the main mechanism in the paper. We conclude by discussing a complementary mechanism to the one presented in this paper.
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institutions as the fundamental cause of long run growth
Research Papers in Economics, 2004Co-Authors: Daron Acemoglu, Simon Johnson, James A RobinsonAbstract:This Paper develops the empirical and theoretical case that differences in economic institutions are the fundamental cause of differences in economic development. We first document the empirical importance of institutions by focusing on two ‘quasi-natural experiments’ in history, the division of Korea into two parts with very different economic institutions and the colonization of much of the world by European Powers starting in the fifteenth century. We then develop the basic outline of a framework for thinking about why economic institutions differ across countries. Economic institutions determine the incentives of and the constraints on economic actors, and shape economic outcomes. As such, they are social decisions, chosen for their consequences. Because different groups and individuals typically benefit from different economic institutions, there is generally a conflict over these social choices, ultimately resolved in favour of groups with greater Political Power. The distribution of Political Power in society is in turn determined by Political institutions and the distribution of resources. Political institutions allocate de jure Political Power, while groups with greater economic might typically possess greater de facto Political Power. We therefore view the appropriate theoretical framework as a dynamic one with Political institutions and the distribution of resources as the state variables. These variables themselves change over time because prevailing economic institutions affect the distribution of resources, and because groups with de facto Political Power today strive to change Political institutions in order to increase their de jure Political Power in the future. Economic institutions encouraging economic growth emerge when Political institutions allocate Power to groups with interests in broad-based property rights enforcement, when they create effective constraints on Power-holders, and when there are relatively few rents to be captured by Power-holders. We illustrate the assumptions, the workings and the implications of this framework using a number of historical examples.
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why not a Political coase theorem social conflict commitment and politics
Journal of Comparative Economics, 2003Co-Authors: Daron AcemogluAbstract:Abstract Do societies choose inefficient policies and institutions? An extension of the Coase theorem to politics would suggest the answer is no. This paper discusses various approaches to Political economy and develops the argument that there are strong empirical and theoretical grounds for believing that inefficient policies and institutions are prevalent. We conclude that these inefficient institutions and policies are chosen because they serve the interests of politicians or social groups that hold Political Power at the expense of the rest. The theoretical case depends on commitment problems inherent in politics; parties holding Political Power cannot make commitments to bind their future actions because there is no outside agency with the coercive capacity to enforce such arrangements. Journal of Comparative Economics 31 (4) (2003) 620–652.
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Political losers as a barrier to economic development
The American Economic Review, 2000Co-Authors: Daron Acemoglu, James A RobinsonAbstract:Per capita income in many sub-Saharan African countries, such as Chad and Niger, is less than 1/30th of that of the United States. Most economists and social scientists suspect that this is in part due to institutional failures that stop these societies from adopting the best technologies. A particularly interesting historical example comes from the diffusion of railways in the 19th century. While railways are regarded as a key technology driving the Industrial Revolution, there were large lags in their diffusion. For example, in 1850 the United States had 14,518 km of track, Britain 9,797 km, and Germany 5,856 km; in the Russian and Hapsburg empires there were just 501 km and 1,357 kim, respectively (all data from Brian R. Mitchell [1993]). Why do societies, as in this example, fail to adopt the best available technologies? One answer is that existing Powerful "interest groups" block the introduction of new technologies in order to protect their economic rents, and societies are able to make technological advances only if they can defeat such groups. Economic monopolies may be one example. A monopolist might wish to block the introduction of a new technology by a rival that will capture the market. This idea, which we call the "economic-losers hypothesis" was discussed by Simon Kuznets (1968), developed at length by Joel Mokyr (1990) in the context of technology adoption, and formalized by Per Krusell and Jose-Victor Rios-Rull (1996) and Stephen L. Parente and Edward C. Prescott (1997). Related ideas are widely discussed in the literature on international trade policy with many formal models (e.g., Gene M. Grossman and Elhanan Helpman, 1994). There are problems with this story, however. First, despite the intuitive appeal of the idea, there are relatively few instances where major economic change was blocked by economic losers. Mokyr (1990) emphasizes the attempts of many skilled artisans to block the introduction of new machines. The most famous example is the Luddites, skilled weavers who were thrown out of work by mechanization. Interestingly, however, many of these groups, including the Luddites, were ultimately unable to block economic progress. Equally important, the economic-losers hypothesis relies on the presumption that certain groups have the Political Power to block innovation. But if so, why not use this Power to simply tax the gains generated by the introduction of the new technology? This might be because there are limits on the nature of fiscal instruments, though it seems plausible that groups with sufficient Political Power to block innovation would be able subsequently to lobby effectively for redistribution. A more important reason, however, may be that the introduction of new technology, and economic change more generally, may simultaneously affect the distribution of Political Power. We argue that the effect of economic change on Political Power is a key factor in determining whether technological advances and beneficial economic changes will be blocked. In other words, we propose a "Political-loser hypothesis." We argue that it is groups whose Political Power (not economic rents) is eroded who will block technological advances. If agents are economic losers but have no Political Power, they cannot impede technological progress. If they have and maintain Political Power (i.e., are not Political losers), then they have no incentive to block progress. It is therefore agents who have t Discussant: Gene Grossman, Princeton University.
