Does the Winner Take it All? Redistributive Policies and Political Extremism

68 Pages Posted: 15 Apr 2020

See all articles by Gianmarco Daniele

Gianmarco Daniele

University of Milan - Faculty of Law; Bocconi University

Amedeo Piolatto

Autonomous University of Barcelona; Barcelona Economics Institute (IEB); Barcelona Graduate School of Economics (Barcelona GSE)

Willem Sas

University of Stirling - Department of Economics; KU Leuven - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2020

Abstract

We show that regional heterogeneity of underlying fundamentals (e.g. economic history, geography, social capital) can lead to extreme voting in federations. When the outcome of federal policies – such as transfer schemes, market regulation or migration laws – depends on these fundamentals, the set of regions that wins or loses from a given policy is fixed. This gives voters a strategic incentive to distort the policy magnitude, by electing federal representatives that are extremely protective of regional interests. Interestingly, the benefits of selecting tough negotiators outweigh those of belonging to the ruling coalition. We test our predictions by looking at parties' performances at national and European Parliament elections from 1990 onwards, and find that strategic voting is indeed U-shaped: winning and losing member states vote more extremely than those in the middle. Our online survey provides further evidence.

Keywords: political extremism, interregional redistribution, federalism, strategic delegation, bargaining, coalitions, EU elections, Euroscepticism, populism

JEL Classification: D720, H600, H710, H770

Suggested Citation

Daniele, Gianmarco and Piolatto, Amedeo and Sas, Willem, Does the Winner Take it All? Redistributive Policies and Political Extremism (2020). CESifo Working Paper No. 8214, Available at SSRN: https://ssrn.com/abstract=3576291

Gianmarco Daniele (Contact Author)

University of Milan - Faculty of Law ( email )

Via Festa del Perdono, 7
20122 Milano
Italy

Bocconi University ( email )

Via Sarfatti 25
Milan, MI 20136
Italy

Amedeo Piolatto

Autonomous University of Barcelona ( email )

Department of Economics and Economic History
Edifici B - Campus Bellaterra
Barcelona, 08193
Spain

HOME PAGE: http://https://sites.google.com/site/piolatto/

Barcelona Economics Institute (IEB) ( email )

c/ John M. Keynes, 1-11
Barcelona, 08034
Spain

HOME PAGE: http://https://sites.google.com/site/piolatto/

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Willem Sas

University of Stirling - Department of Economics ( email )

Stirling, FK9 4LA
United Kingdom

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium

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