Raquel Tebaldi, Franziska Gassmann, Bruno Martorano
{"title":"Re-election incentives and the adoption of early childhood development programmes: The case of the \"Happy Child\" Programme in Brazil","authors":"Raquel Tebaldi, Franziska Gassmann, Bruno Martorano","doi":"10.1016/j.ejpoleco.2024.102616","DOIUrl":"10.1016/j.ejpoleco.2024.102616","url":null,"abstract":"<div><div>What incentives matter for governments to adopt pro-poor early childhood development (ECD) policies? This paper addresses this question by employing a regression discontinuity design (RDD) to study the effect of mayoral re-election incentives on the adoption of the “Happy Child” ECD Programme in Brazil. The analysis finds that municipalities with first-term mayors (those that were eligible for re-election for another consecutive mandate) had a higher probability of programme adoption by 2018 of over 10 percentage points. These results confirm theoretical expectations about the role of re-election incentives and provide a significant contribution on the institutional determinants of the expansion of ECD programmes in developing countries.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"92 ","pages":"Article 102616"},"PeriodicalIF":2.4,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147661334","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"What happens to renters? Increased financing costs and government support","authors":"Hannah Loeffler","doi":"10.1016/j.ejpoleco.2025.102714","DOIUrl":"10.1016/j.ejpoleco.2025.102714","url":null,"abstract":"<div><div>How does the recent hike in interest rates translate into housing markets and shape preferences for government intervention? Homeownership constitutes the most typical form of private wealth accumulation. Yet, with the decade long period of low interest rates ending in 2022, higher financing costs decreased the affordability of ownership substantially. This paper analyzes implications for the political behavior and demands of renters. More specifically, I argue that the effects of the affordability shock hinge upon the importance of asset ownership achieving financial security in a given economy. Using both cross-national survey data and a survey experiment in Germany and the UK, I show that where homeownership is more central to financial security, demand for broad redistribution decreases, whereas support for government intervention in housing markets increase. It appears that in low-ownership societies, citizens see redistribution as the government’s responsibility, whereas in high-ownership societies, they expect government policies to help them build wealth - allowing them to privately provide for themselves. These findings highlight how institutional differences shape preferences for government intervention.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"92 ","pages":"Article 102714"},"PeriodicalIF":2.4,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147661745","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Wage bargaining structure and political budget cycles: A policy game approach","authors":"Hamzeh Arabzadeh","doi":"10.1016/j.ejpoleco.2024.102576","DOIUrl":"10.1016/j.ejpoleco.2024.102576","url":null,"abstract":"<div><div>Utilizing a panel dataset from OECD countries, this study unveils new evidence suggesting that the centralization of wage bargaining plays a significant role in mitigating Political Budget Cycles. To explain this empirical finding, the paper introduces a political economy model based on a policy game framework, encompassing three key agents: (i) an opportunistic government that decides on the level of budget deficits with the objective of enhancing its reelection prospects, (ii) workers/voters who decide on their sectoral affiliations, and (iii) unions that independently negotiate wages with firms. In this model, the opportunistic government has an incentive to run a budget deficit to favor the median voter, who is affiliated with non-tradable sectors. The mechanism emerges from the impact of debt-financed public spending on relative prices, and consequently, on relative wages between non-tradable and tradable sectors. Wage centralization mitigates the political incentive of opportunistic governments by attenuating the responsiveness of sectoral wages to sectoral prices, thereby pushing down budget deficits towards a socially more optimal level.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"92 ","pages":"Article 102576"},"PeriodicalIF":2.4,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141844077","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Municipal electoral competition and the economic condition of households: Evidence from the slums of Kolkata","authors":"Indranil De , Vidhya Unnikrishnan","doi":"10.1016/j.ejpoleco.2025.102701","DOIUrl":"10.1016/j.ejpoleco.2025.102701","url":null,"abstract":"<div><div>The effect of political competition on growth and other economic outcomes has largely been examined in the context of developed countries and at macro level. We address these limitations by taking the case of a developing country – India<span> – and examining the effect of competition and fragmentation at the urban local body level (the lowest tier of urban governance) on slum's economic outcomes such as occupation, expenditure and inequality. For this purpose, we collected primary data in slums in the major metropolitan region of Kolkata in 2012 and 2021. Our empirical findings suggest that political clout, political competition and political alignment influence the choice of occupation in slum households. The positive effect of the political clout variable on some employment categories (private sector) and not others (skilled or semiskilled labour) highlight the close link between economic mobility and political connections, which can perpetuate socioeconomic inequality. Further, political competition reduces inequality. The results suggest the need for India to consider planned development rather than development through political incentives.</span></div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"92 ","pages":"Article 102701"},"PeriodicalIF":2.4,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147661341","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Lernaean Hydra of populism","authors":"Anastasia Kafe , Vassilis Logothetis , Vassilis Sarantides","doi":"10.1016/j.ejpoleco.2025.102645","DOIUrl":"10.1016/j.ejpoleco.2025.102645","url":null,"abstract":"<div><div><span><span>The Great Recession had a profound impact on Greece's political landscape, fueling the rise of various anti-establishment parties. This culminated in a coalition government between the radical left party SYRIZA and the far-right party ANEL in January 2015, with an unrealistic agenda to renegotiate Greece's </span>bailout<span> agreements in order to end austerity and reverse the severe economic downturn that had begun in 2010. Using survey data, we focus on those who voted for SYRIZA and ANEL in January 2015 and analyze their </span></span>voting behavior<span><span> in the September snap election. Between the two elections, the coalition's failure to secure a new bailout<span> agreement led to the imposition of capital controls to prevent excessive deposit outflows, which in turn led to a sharp economic decline in the third quarter of 2015, when Prime Minister Alexis Tsipras called the snap election. Our results show that a significant portion of SYRIZA voters, representing nearly 90% of the coalition's electoral base, affected by the economic stress shifted their support to ideologically similar anti-establishment parties. This indicates a strong likelihood of voters transitioning between anti-establishment parties, highlighting a persistent cycle of </span></span>populism<span> even within the context of a liberal democracy in the European Union.</span></span></div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"92 ","pages":"Article 102645"},"PeriodicalIF":2.4,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147661744","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Electoral democracy, corruption, and tax evasion","authors":"Elvina Merkaj , Drini Imami","doi":"10.1016/j.ejpoleco.2025.102722","DOIUrl":"10.1016/j.ejpoleco.2025.102722","url":null,"abstract":"<div><div>A key challenge of developing and emerging economies is establishing effective tax systems, as fiscal capacity is essential for state building and economic growth. This study examines the relationship between electoral democracy, public sector corruption, and tax evasion through trade misinvoicing, using data from 53 developing and emerging economies to explore how political and institutional factors shape tax evasion. The analysis reveals a positive relationship between corruption and tax evasion. Most strikingly, the study findings show an inverted U-shaped relationship between democracy and tax evasion, where tax evasion initially increases with democratization but declines as institutions strengthen. However, these effects are complex, as the levels of democracy and corruption interact to influence the magnitude of their impact. Furthermore, electoral cycles further amplify tax evasion due to the intense competition for political power and the opportunities for illicit activities that arise in the electoral context.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"92 ","pages":"Article 102722"},"PeriodicalIF":2.4,"publicationDate":"2026-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147661340","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"When does state capacity Work? Social fragmentation and public goods provision in rural Japan","authors":"Jiali Shen","doi":"10.1016/j.ejpoleco.2025.102795","DOIUrl":"10.1016/j.ejpoleco.2025.102795","url":null,"abstract":"<div><div>It is widely assumed that strong state capacity improves public goods provision. Yet, most existing studies treat the state as an autonomous provider, overlooking how its effects depend on societal context. This study examines how social fragmentation conditions the relationship between state capacity and public goods provision, drawing on original data from rural Japan. The findings reveal that high state capacity enhances provision only where social fragmentation is high; in more cohesive regions, strong state intervention may disrupt informal cooperation, reducing effectiveness. This non-linear effect is robust across multiple checks and is mediated through the Japan Agricultural Cooperatives. These results highlight the conditional nature of state capacity and the importance of state–society relations in shaping public goods outcomes. The study contributes to broader debates on governance and development by demonstrating that state capacity does not operate in isolation, and its effectiveness varies with the structure of social relations.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"91 ","pages":"Article 102795"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145841333","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Tax centralization, political connections, and corporate tax avoidance","authors":"Yang Pan , Xihao Wu","doi":"10.1016/j.ejpoleco.2025.102792","DOIUrl":"10.1016/j.ejpoleco.2025.102792","url":null,"abstract":"<div><div>This study investigates whether and how the tax centralization reform (TCR) affects the role of political connections in corporate tax avoidance. Using China's consolidation of the State Tax Administration (STA) and Local Tax Bureaus (LTBs) as a quasi-natural experiment, we find that TCR significantly diminishes the tax-reduction advantages traditionally afforded by political connections. More specifically, our analysis shows that the reform weakens the influence of local government political ties on corporate tax avoidance strategies. Heterogeneity analysis further reveals that the moderating effect of TCR is more pronounced in regions characterized by greater government intervention. Additional tests reveal that TCR also reduces the impact of political connections on firms' tax deviation and tax risk. Collectively, these findings highlight the institutional advantages of tax centralization in curbing politically driven tax avoidance, offering important implications for emerging markets seeking to enhance tax enforcement and governance.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"91 ","pages":"Article 102792"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145841334","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Sebastian Blesse , Luisa Dörr , Florian Dorn , Max Lay
{"title":"Do fiscal rules undermine public investments? A review of empirical evidence","authors":"Sebastian Blesse , Luisa Dörr , Florian Dorn , Max Lay","doi":"10.1016/j.ejpoleco.2025.102775","DOIUrl":"10.1016/j.ejpoleco.2025.102775","url":null,"abstract":"<div><div>Fiscal rules are a frequent policy measure to restrict deficit-taking among incumbent politicians. In times of increased and sustained investment needs to mitigate the consequences of climate change, and to promote the digital and structural transformation, fiscal rules have become subject to criticism for undermining public investments. We review 36 existing empirical studies examining the effect of fiscal rules on public investments. We also discuss whether more public investments typically come at the cost of higher deficits and whether the effect on public investments differs between rigid and more flexible fiscal rules. Overall, we do not find majoritarian evidence for a negative effect of fiscal rules on overall public investments. Among the papers finding a (significant) effect of fiscal rules on public investments, the number of those that estimate a negative relationship, however, surpass the ones finding a positive relationship. Rigid fiscal rules seem to deter public investments as compared to more flexible and investment-friendly rules which, by contrast, rather increase public investments. Existing evidence does not suggest that public investments come at the cost of higher public deficits in a majority of studies (except in case of flexible fiscal rules). The design of fiscal rules appears to be crucial for higher public investments.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"91 ","pages":"Article 102775"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145791952","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Assessing the joint risks of fiscal crises and climate change","authors":"Jorge M. Uribe , Helena Chuliá","doi":"10.1016/j.ejpoleco.2025.102784","DOIUrl":"10.1016/j.ejpoleco.2025.102784","url":null,"abstract":"<div><div>We empirically examine the potential trade-off between reducing vulnerability to climate change and maintaining fiscal stability. Our findings indicate that governance, as a measure of institutional quality, is the key determinant of both fiscal stability and climate change preparedness. Thus, higher levels of institutional quality result in increased preparedness for climate hazards and a lower likelihood of fiscal crises. However, our survival analysis also highlights that fiscal stability is contingent upon the interest paid on debt, rather than solely the overall debt burden. Considering these findings, international efforts to address the consequences of climate change should aim to maintain relatively constant interest payments on debt among emerging and low-income countries during their ecological transition. Our results further suggest that enhancing human habitat conditions, while considering the role of governance, is the most effective means of simultaneously reducing the likelihood of a fiscal crisis and increasing preparedness for climate hazards.</div></div>","PeriodicalId":51439,"journal":{"name":"European Journal of Political Economy","volume":"91 ","pages":"Article 102784"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145705514","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}