UE250 - Introduction to Political Economy/Introduction à l'économie politique [M1 PPD]

Intervenant·e·s

• Ekaterina Zhuravskaya [référent·e]   directrice d'études, EHESS / Paris School of Economics (PJSE)

Version française: Ce cours de niveau master (M1) introduit les concepts fondamentaux et les questions de recherche au cœur de l’économie politique contemporaine, avec un accent particulier sur les applications empiriques. Le cours débute par les modèles de base de la démocratie représentative, incluant l’engagement envers les promesses électorales et l’existence d’un vainqueur de Condorcet. Il aborde ensuite la convergence des politiques en l’absence de vainqueur de Condorcet, à travers le modèle de vote probabiliste et le modèle du citoyen-candidat sans engagement crédible. Le cours examine ensuite le rôle de la sélection politique et des institutions : effets de la représentation politique (quotas, réservations), importance des leaders, et rôle des partis. Il analyse les limites du contrôle électoral, notamment à travers les mandats limités, ainsi que le rôle de l’information et de la surveillance dans la réduction de la corruption et des comportements opportunistes. Une attention particulière est portée aux cycles politiques opportunistes et aux mécanismes d’agence politique. Le cours explore également la rationalité des électeurs, le paradoxe du vote, et les déterminants de la participation électorale. Il aborde ensuite les questions de redistribution et de conflits distributifs, avant de traiter l’économie politique des régimes autoritaires, des processus de démocratisation et de leurs revers. Enfin, le cours couvre des thèmes contemporains tels que le populisme et la construction des nations. Dans l’ensemble, ce cours offre aux étudiants une compréhension rigoureuse et fondée sur les données de l’interaction entre institutions politiques et résultats économiques, ainsi que des mécanismes qui façonnent le comportement politique.

English version: This master’s-level (M1) course introduces the core concepts and research questions in contemporary political economy, with a strong emphasis on empirical evidence. The course begins with foundational models of representative democracy, including commitment to campaign promises and the existence of a Condorcet winner. It then examines policy convergence in the absence of a Condorcet winner, using probabilistic voting models and citizen-candidate models without credible commitment. The course next studies political selection and institutions: the effects of political representation (such as quotas), whether leaders and parties matter, and how institutional design shapes policy outcomes. It analyzes the limits of electoral control, focusing on term limits, as well as the role of information and monitoring in reducing corruption and disciplining politicians. Particular attention is given to political agency and opportunistic political cycles. The course also explores voter rationality, the paradox of voting, and the determinants of political participation. It then turns to redistribution and distributive conflict, followed by the political economy of authoritarian regimes, democratization, and reversals. The final part of the course addresses contemporary topics such as populism and nation-building. Overall, the course provides students with a rigorous, empirically grounded understanding of how political institutions shape economic outcomes and how political behavior is formed.

level: M1, 24 hours

sessions: 12 sessions, 2 hours each

grading: midterm and final exam

Recommended (but not required) background reading:

• Persson, Torsten and Guido Tabellini (2000) Political Economics: Explaining Economic Outcomes, MIT Press.
• Besley, Tim (2006) Principled Agents: Selection and Incentives in Politics, Oxford Univ. Press.
• Acemoglu, Daron and James Robinson (2006) Economic Origins of Dictatorship and Democracy, Cambridge Univ. Press.

Starred readings are compulsory!

Topic 1. A. What is political economy? B. Basic models of representative democracy with commitment to campaign promises and Condorcet winner

• Persson and Tabellini (2000) ch 1, 2, 3
• Husted, Thomas and Lawrence Kenny (1997). ‘The Effect of the Expansion of the Voting Franchise on the Size of Government”, Journal of Political Economy, 105(1), 54-81.
• *** Miller, Grant (2008). “Women’s Suffrage, Political Responsiveness, and Child Survival in American History”, Quarterly Journal of Economics, 123(3), 1287-1327.

Topic 2. Policy convergence without Condorcet winner: probabilistic voting model; No commitment to campaign promises, citizen-candidate model

• *** Chattopadhyay, Raghabendra and Esther Duflo (2004). “Women as Policy Makers: Evidence from a Randomized Policy Experiment in India,” Econometrica, 72(5), 1409-1443.
• Persson and Tabellini (2000) ch 3, 4, 5

Topic 3: Effects of political reservation; do leaders matter?

• *** Pande, Rohini (2003). “Can Mandated Political Representation Increase Policy Influence for Disadvantaged Minorities? Theory and Evidence from India,” American Economic Review, 93(4), 1132-1151.
• Besley, Timothy, Olle Folke, Torsten Persson, Johanna Rickne (2017) "Gender Quotas and the Crisis of the Mediocre Man: Theory and Evidence from Sweden" AMERICAN ECONOMIC REVIEW, VOL. 107, NO. 8, AUGUST 2017. (pp. 2204-42)
• *** Besley, Timothy, [2005], “Political Selection” Journal of Economic Perspectives, 19(3), 43-60.
• Lee, David, and Enrico Moretti, and Matthew J. Butler (2004). “Do Voters Affect or Elect Policies? Evidence from the U.S. House,” Quarterly Journal of Economics, 119(3), 807-859.
• *** Jones, B. and B. Olken (2005), "Do leaders matter? National Leadership and Growth Since World War II," Quarterly Journal of Economics, 120(3) 835-864.
• Ferreira, F and J. Gyourko (2009), “Do political parties matter? Evidence from U.S. cities,” Quarterly Journal of Economics, 124 (1), 399-422.
• Pettersson-Lidbom, P. (2008), “Do parties matter for economic outcomes? A Regression-discontinuity approach,” Journal of the European Economic Association, 6 (5), 1037- 1056.
• Besley, Timothy. 2004. “Paying Politicians: Theory and Evidence.” Journal of the European Economic Association, 2:193–215.
• Caselli, Francesco, and Massimo Morelli. 2004. “Bad Politicians.” Journal of Public Economics, 88:759–782.

Topic 4: Political agency and failure of electoral control: term limits

• Shleifer, A.  and R. Vishny (1993), "Corruption" Quarterly Journal of Economics, August, 1993. 
• Shleifer, Andrei and Robert Vishny (1994). “Politicians and Firms”, Quarterly Journal of Economics, 109: 995-1026.
• *** Ferraz, Claudio and Frederico Finan (2011). “Electoral accountability and corruption: Evidence from the audit if local governments.” American Economic Review, American Economic Association, vol. 101(4), pages 1274-1311, June.
• Besley, Timothy, and Jose G.Montalvo 2011 “Do Educated Leaders Matter?” Economic Journal, 121, issue 554
• Besley, Timothy, Jose G.Montalvo, and Marta Reynal-Querol 2011 “Do Democracies Select More Educated Leaders?” American Political Science Review, 105, issue 03, p. 552-566.

Topic 5: Political agency and failure of electoral control: Information and monitoring

• Olken, Benjamin A. 2006. “Corruption and the Costs of Redistribution: Micro Evidence from Indonesia.” Journal of Public Economics 90(4-5):853–870.
• *** Olken, Benjamin A. 2007. “Monitoring Corruption: Evidence from a Field Experiment in Indonesia.” Journal of Political Economy 115:200–249.
• Bertrand, Marianne, Simeon Djankov, Rema Hanna and Sendhil Mullainathan. 2007. “Obtaining a Driver’s License in India: An Experimental Approach to Studying Corruption.” The Quarterly Journal of Economics 122(4):1639–1676.
• *** Ferraz, Claudio and Frederico Finan (2008). “Exposing Corrupt Politicians: The Effects of Brazil's Publicly Released Audits on Electoral Outcomes” The Quarterly Journal of Economics, Volume 123, Issue 2, May 2008, Pages 703–745.

Topic 6: Opportunistic political cycles

• *** Akhmedov, Akhmed, & Ekaterina Zhuravskaya, 2004. "Opportunistic Political Cycles: Test in A Young Democracy Setting," Quarterly Journal of Economics, MIT Press, vol. 119(4), pages 1301-1338, November. 
• Drazen, Allan “The Political Business Cycle after 25 Years” NBER Macroeconomics Annual , Vol. 15, (2000), pp. 75-117
• Shi, Min & Svensson, Jakob, 2006. "Political budget cycles: Do they differ across countries and why?," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1367-1389, September. 
• Johnson, Joseph M. & W. Mark Crain, 2004. "Effects of Term Limits on Fiscal Performance: Evidence from Democratic Nations," Public Choice, Springer, vol. 119(1_2), pages 73-90, 04.
• *** Mironov, M. and  Zhuravskaya, E. (2014) “Corruption in Procurement: Evidence from Financial Transactions Data” American Economic Journal: Economic Policy, vol. 8, no. 2, may 2016, (pp. 287-321).
• Pettersson-Lidbom, P. (2008), “Do parties matter for economic outcomes? A Regression-discontinuity approach,” Journal of the European Economic Association, 6 (5), 1037- 1056.
• Alesina, Alberto, and Gerald Cohen 1999. “Political Cycles and the Macroeconomy.” MIT press. Ch. 2,3,6.
• Alesina, Alberto, and Nouriel Roubini “Political Cycles in OECD Economies”  The Review of Economic Studies, Vol. 59, No. 4 (Oct., 1992), pp. 663-688

Topic 7: Voter rationality and voting paradox

• *** Manacorda, Marco, Edward Miguel, and Andrea Vigorito. (2011). “Government Transfers and Political Support”, American Economic Journal: Applied Economics,, vol. 3(3), pages 1-28, July.
• Wolfers, Justin (2007). “Are Voters Rational? Evidence from Gubernatorial Elections”, unpublished working paper.
• *** Mullainathan, Sendhil and Ebonya Washington (2009). “Sticking with Your Vote: Cognitive Dissonance and Political Attitudes”, American Economic Journal: Applied Economics, 1(1), 86-111.
• Madestam A., and D. Yanagizawa-Drott  "Shaping the Nation: The Effect of Fourth of July on Political Preferences and Behavior in the United States," mimeo
• Coate, Stephen, Michael Conlin, and Andrea Moro (2008). “The performance of pivotal-voter models in small-scale elections: Evidence from Texas liquor referenda”, Journal of Public Economics, 92, 582–596.
• Gerber, Alan, Donald Green, and Christopher Larimer (2008). “Social Pressure and Voter Turnout: Evidence from a Large-Scale Field Experiment”, American Political Science Review, 102(1), 33-48.
• *** Washington, Ebonya (2006). “How Black Candidates Affect Voter Turnout”, Quarterly Journal of Economics, 121(3), 973-998.
• Gerber, A. and D. Green, “The Effect of Canvassing, Telephone Calls and Direct Mail on Voter Turnout: A Field Experiment,” American Journal of Political Science, 2000.
• Guiso and Pinotti "Democratization and Civic Capital " (2013) The Oxford Handbook of the Italian Economy Since Unification.
• ***Healy, Andrew J., Malhotra, Neil, and Mo, Cecilia Hyunjung. 2010. “Irrelevant Events Affect Voters’ Evaluations of Government Performance.” Proceedings of the National Academy of Sciences of the United States of America 107, no. 29 (July 20): 12804–12809. https://doi.org/10.1073/pnas.1007420107.

Topic 8: Redistribution

• Alesina, Alberto and George-Marios Angeletos, 2005, “Fairness and Redistribution: US versus Europe,” American Economic Review, 95(4), 960-980
• *** Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 465-90, May. 
• Acemoglu, D. and J. Robinson, “Inefficient Redistribution,” American Political Science Review, 2001.
• Coate, S. and S. Morris, “On the Form of Transfers to Special Interests,” Journal of Political Economy, 1995.
• Acemoglu, D., “Why not a Political Coase Theorem? Social Conflict, Commitment, and Politics,” Journal of Comparative Economics, 2003.
• Ansolabere, Figuerido and Snyder, 2003, “Why is there So little Money in US Politics”, Journal of Economic Perspectives, vol. 17, n.1, pp. 105-130.
• Singhal Monica, “Special Interest Groups and the Allocation of Public Funds”, Journal of Public Economics, Volume 92, Issues 3–4, April 2008, Pages 548–564

Topic 9: Authoritarian states, democratizations, reversals

• *** Acemoglu Daron, Suresh Naidu, Pascual Restrepo, and James A. Robinson “Democracy Does Cause Growth,” Journal of Political Economy, forthcoming.
• Acemoglu, Daron And James A. Robinson, 2001, “A theory of political transitions”, American Economic Review, 91:4,  938-‐963.
• Torsten Persson and Guido Tabellini, Democracy and Development: The Devil in the Details
• Acemoglu Daron, Simon Johnson, James A. Robinson, Pierre Yared, "Reevaluating the modernization hypothesis." Journal of Monetary Economics, Volume 56, Issue 8, November 2009, Pages 1043-1058.
• Acemoglu, Daron, Simon Johnson, James Robinson, and Pierre Yared. (2008). “Income and Democracy”, American Economic Review, 98(3), 808-842
•  *** Dal Bo, Pedro, Andrew Foster, Louis Putterman (2010) "Institutions and Behavior: Experimental Evidence on the Effects of Democracy", American Economic Review, 100(5), 2205-2229.
• Masayuki Kudamatsu, 2012. "Has Democratization Reduced Infant Mortality In Sub-Saharan Africa? Evidence From Micro Data," Journal of the European Economic Association, vol. 10(6), pages 1294-1317, December.
• Besley Timothy and Masayuki Kudamatsu (2008) "Making Autocracy Work" in Institutions and Economic Performance (edited by Elhanan Helpman, Harvard University Press), pp. 452-510.
• Barro, Robert, 1999, “Determinants of Democracy,” Journal of Political Economy, 107(6), S158-S183.
• Papaioannou, Elias and Gregorios Siourounis, 2007, “Initial Factors Behind the Third Wave of Democratization,” Journal of comparative economics, 2008
• Boix, Carles, and Susan C. Stokes “Endogenous Democratization” World Politics , Vol. 55, No. 4 (Jul., 2003), pp. 517-549
• *** Brückner Markus and Antonio Ciccone "Rain and the Democratic Window of Opportunity" Econometrica, Volume79, Issue3, May 2011, Pages 923-947
• Acemoglu and Robinson, Chapters 3, 6, and 9

Topic 10: Political Economy of Populism

• *** Sergei Guriev and Elias Papaioannou. "The Political Economy of Populism." Forthcoming, Journal of Economic Literature.
• *** Fetzer, Thiemo. 2019. \Did Austerity Cause Brexit?" American Economic Review 109 (11): 3849-86.
• Inglehart, Ronald, and Pippa Norris. 2017. “Trump and the Populist Authoritarian Parties: The Silent Revolution in Reverse." Perspectives on Politics 15 (2): 443-54. https://doi.org/10.1017/S1537592717000111.
• Giampaolo Bonomi, Nicola Gennaioli, and Guido Tabellini (2021) “Identity, Beliefs, and Political Conflict”.  The Quarterly Journal of Economics, Volume 136, Issue 4, November 2021, Pages 2371–2411, https://doi.org/10.1093/qje/qjab034

Topic 11: Political economy of nation building

• ***Dominic Rogner and Ekaterina Zhuravskaya Nation Building: Big Lessons from Successes and failures, CEPR e-book, 2023
  • *** Chapter 1
  • Chapters 2 through 26.