Essays in Political Economics

Abstract: When Does Regression Discontinuity Design Work? Evidence from Random Election OutcomesWe use elections data in which a large number of ties in vote counts between candidates are resolved via a lottery to study the personal incumbency advantage. We benchmark non-experimental regression discontinuity design (RDD) estimates against the estimate produced by this experiment that suggests that there is no personal incumbency advantage. In contrast, conventional local polynomial RDD estimates suggest a moderate and statistically significant effect. Bias-corrected RDD estimates that apply robust inference are, however, in line with the experimental estimate.Rank Effects in Political PromotionsWe study the effect of candidates’ personal vote ranks on promotions to political power in an open-list proportional representation system. Using a regression discontinuity design and data from Finnish local elections, we find that ranking first within a party enhances a politician’s chances of getting promoted to the position of municipal board chair. Our evidence suggests that the mechanism behind the rank effects is primarily unrelated to electoral incentives, but is rather related to party-specific norms or political culture.Victorian Voting: The Origins of Party Orientation and Class AlignmentUsing individual elector level panel data from nineteenth-century United Kingdom poll books, we reassess the development of a party-centered electorate. We show that (i) the electorate was party-centered by the time of the extension of the franchise in 1867; (ii) a decline in candidate-centered voting is largely attributable to changes in the behavior of the working class; and (iii) the enfranchised working class aligned with the Liberal left. Our findings can plausibly explain the subsequent development of the party system.Class, Social Mobility, and Voting: Evidence from Historical Voting RecordsWe examine the mechanisms of class-based voting by evaluating the effects of social mobility on voting behavior in the nineteenth-century England. While we do not find any strong evidence of a cleavage along the working and middle class divide, we find that he landed gentry, farm workers, non-skilled workers and white-collar workers voted on average more for the Conservatives, and petty bourgeoisie and skilled workers for the Liberals. The changes in voting behavior due to social mobility are immediate and mainly consistent with the same cleavage.Public Employees as Politicians: Evidence from Close ElectionsWe analyze the effect of municipal employees’ political representation in municipal councils on local public spending. One more councilor employed by the public sector increases spending by about 1%. The effect largely comes through the largest party and is specific to the employment sector of the municipal employee.Politician Quality, Ideology, and Fiscal PolicyUsing local councils in Finland as a test bed, I show that (i) electing more high-income, incumbent, and competent politicians improves fiscal sustainability outcomes but does not decrease the size of the public sector, and (ii) symmetrically, electing more university-educated local councilors leads to an increase in public spending without any adverse effects on fiscal sustainability. Survey data reveal that the qualities are differentially associated with economic ideology, and these correlations tally with the policy effects.