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Essays in political economy

Tomasi, Arduino (2021) Essays in political economy. PhD thesis, London School of Economics and Political Science.

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Identification Number: 10.21953/lse.00004304


These essays are motivated by political economy problems in developing countries. The first chapter studies whether programmatic policies are irrelevant for politicians' electoral fortunes. I show that the answer is no with a political agency model where politicians' competence is uncertain to all. In my setup, an incumbent can allocate a budget to public goods and transfers, which differ in one key dimension: the former fluctuates more over time than the latter. When the incumbent increases the budget to public goods, two effects arise: his performance in office today reveals more information about his identity (an informativeness effect), and voters' anticipation of narrow transfers tomorrow increases the salience of political selection (a stakes effect). To the incumbent, these two effects move in opposing directions and, consequently, the strategic allocation of the budget helps him to advance his electoral fortunes. The second chapter studies a model where an economic elite wants to buy a public asset as cheaply as possible, whose ownership is decided by an incumbent politician. The elite can make a buying offer for the asset and manipulate the information that is available to voters about the incumbent's competence. By attacking the incumbent (trying to uncover bad news about his competence before making an offer) or threatening him (with uncovering bad), I show that the elite can reduce the prices that the incumbent would accept for selling the asset. I also show that the elite often uses threats against a leading incumbent and attacks against a trailing one. Finally, the third chapter (joint with Alberto Parmigiani) studies a model where an in uential citizen can try to get away with tax evasion by investing in the complexity of his evasion scheme |which we call "brains", and by committing to delivering punishment against those that investigate him - which we call "muscles". By characterizing the citizen's optimal strategies, the model yields a testable prediction: estimates of international tax evasion display an inverted U-shape along the quality of institutions. We provide evidence of this finding by building a panel dataset of estimated offshore wealth by individuals for 37 countries between 2002 to 2016.

Item Type: Thesis (PhD)
Additional Information: © 2021 Arduino Tomasi
Library of Congress subject classification: H Social Sciences > HB Economic Theory
J Political Science > JA Political science (General)
Sets: Departments > Government
Supervisor: Dewan, Torun and Hortala-Vallve, Rafael and Jablonski, Ryan and Wolton, Stephane

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