From 2014 onwards, Europe has witnessed an unprecedented influx of refugees. We conducted a survey experiment with almost 5,000 university students in Germany in which we randomly shifted the perception of refugees’ education level through information provision. We find that the perceived...

Nowadays, a solid budget serves as an important quality signal for the electorate. Therefore, politicians might face an incentive to influence tax revenue forecasts which are widely regarded as a key element for budget setups. Looking at the time period from 1996 to 2012, we systematically...

Expectations of consumers and investors are drivers of consumption and investment, and consequently the business cycle. In this paper, we study whether these expectations, as proxied by economic sentiment indicators, are affected by the political environment. First, we study the impact of...

We examine lobby influence on policy outcomes in a legislative vote-buying model with two competing lobbyists and endogenous policy proposals. We compare two polar cases: (1) the committee or (2) the lobbyist seeking policy change writes the bill. Surprisingly we find that if the salience of the...

This paper investigates whether political competition plays an important role in determining the level of agricultural protection. In order to do so, we exploit variation in political and economic data from 74 developing and developed countries for the post-war period. Our results robustly show...

Why do some economic systems depend on bank financing while others rely on capital markets and bond financing? We propose a political economy model in which elites favor a bank-based system, which increases their rents due to reduced competition. If suffrage is restricted to the elite, this will...

We study whether the number of signatures collected to qualify a popular initiative affects the probability of reforming the status quo. The initiative process is modeled as a sequential game under uncertainty: petitioners make an entry decision and collect signatures to qualify the initiative....

We examine whether compulsory voting (CV) influences habit-formation in voting asymmetrically across parties. We use a Differences-in-Differences and a Differences-in-Discontinuity approach to investigate the long-term effects of CV on turnout and party vote shares in Austria. The results show...

The role of electoral incentives vs. selection is ideally analyzed in a setting where the same legislators are selected to decide on policies under different electoral rules and where voter preferences on policies can be precisely measured. This is the first paper to look at such a situation....