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Session Overview
Session
H01: Political Economy III
Time:
Friday, 20/Aug/2021:
9:00am - 10:30am


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Presentations
9:00am - 9:22am

Political Recruitment At Work

Linuz Aggeborn1, Henrik Andersson2

1Uppsala University, Sweden; 2Uppsala University, Sweden

We investigate whether there is recruitment into politics from workplace networks with

Swedish registry data from 2002–2018. Most politicians in Sweden are leisure-politician, meaning that they are employed at regular workplaces in addition of being politicians. In order to identify the causal effect, we restrict the analysis to small cells of individuals that work in close proximity at the same workplace and with the same profession. Our results indicate that an individual is more likely to become a politician if that person had a colleague that was a politician in the previous mandate period. Our mechanism analysis indicates that partisan recruitment may explain the main effect and we also find some evidences for the existence of inbreeding-bias in workplace networks.

Aggeborn-Political Recruitment At Work-313.pdf


9:22am - 9:45am

What Are the Priorities of Bureaucrats? Evidence from Conjoint Experiments with Procurement Officials

Sebastian Blesse1, Janne Tukiainen2,3, Albrecht Bohne1, Leonardo Giuffrida1, Jan Jääskeläinen4, Antti Sieppi5, Ari Luukinen5

1ZEW Mannheim, Germany; 2VATT; 3University of Turku; 4Aalto University; 5FCCA

How do bureaucrats form decisions when performing complex tasks? We address this question in the context of public procurement by surveying more than 950 real-life bureaucrats in Finland and Germany about decisions on tender outcomes. The survey includes experimental vignettes in order to study the relative importance of bid price, quality, degree of competition, past-performance reputation, litigation risks, and regional favoritism for tender decisions. First, bureaucrats state to have substantial discretion but no important incentives. Second, our experiment identifies that procurers value avoiding negative risks with respect to prices and supplier reputation higher than grasping related symmetric opportunities. Third, avoiding bidders with bad past performance appears most important. Fourth, buyers value a certain degree of competition while litigation concerns and regional favoritism are benign. Moreover, our findings point towards the role of intrinsic motivation among public buyers in countries with high public sector capacity.

Blesse-What Are the Priorities of Bureaucrats Evidence from Conjoint Experiments with Procurement.pdf


9:45am - 10:07am

The Effect of Lobbying Activity in Mixed Oligopoly at Free Entry Market

Tsuyoshi Shinozaki1, Isidoro Mazza2, Minoru Kunizaki3, Mitsuyoshi Yanagihara4

1Tohoku Gakuin University, Japan; 2Catania University, Italy; 3Aichi University, Japan; 4Nagoya University, Japan

This paper shows that whether socially optimal level of privatization can be achieved or not under competitive lobbying depends on market structure. We prove that (i) with an exogenous number of private firms, optimal degree of privatization becomes lower by the competitive lobbying compared with the socially optimal level, however, (ii) in free entry case, optimal degree of privatization is the same as with the socially optimal level. This result is in sharp contrast to the finding in the previous literatures that, in a non-mixed oligopoly market, competitive lobbying has no effect on the policy such as optimal tariff, optimal tax rates, and optimal regulations. Our finding means that if a country imposes entry regulation of private firms, social optimal level of privatization cannot be achieved but once a country allows free entry of private firms, socially optimal level of privatization Matsumura and Kanda (2005) found are naturally achieved.

Shinozaki-The Effect of Lobbying Activity in Mixed Oligopoly-457.pdf


10:07am - 10:30am

Are Overly Attractive Government Jobs Distorting the Labor Market? Evidence from Bangladesh

Shahida Pervin

National Graduate Institute for Policy Studies (GRIPS), Japan

Overly attractive government jobs may lead to labor market distortions with potential dampening effects on output and productivity. Exploiting an age ceiling policy that permits job aspirants' eligibility for government jobs until their 30th birthday, I estimate the impact of becoming ineligible for public service jobs on employment. Findings from population censuses and labor force surveys data over 25 years from 1991 to 2017 show that after age 30 the likelihood of employment increases by four to five percentage points over the whole period with little fluctuation across different years and levels of education. This suggests that young people are likely to wait and try for government jobs until they reach the age ceiling. This study provides the first microeconometric evidence on labor market impacts of the public sector premium. Whether this premium is distortionary depends on the opportunity cost of the time spent preparing for government jobs.

Pervin-Are Overly Attractive Government Jobs Distorting the Labor Market Evidence-432.pdf


 
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