Essays in Empirical Political Economy

• Department of Economics

PhD thesis defence by Tuuli Tähtinen

This thesis consists of three independent essays in empirical political economy.

In the first chapter I study how populist representation affects other parties' ideological positions. I use variation created by close elections to identify ideological shifts resulting from a change in party representation, holding voter preferences constant. I use candidate level survey data from a voting advice application, and I model candidates’ responses using item response theory to obtain measures of political ideology. I show that higher populist representation causes mainstream parties to become more ideologically aligned with the populist party. The results demonstrate that increased populist representation can spread populist ideologies.

In the second chapter I investigate whether social media affects occurrence of conflict. I focus on the ongoing Myanmar conflict because in such context internet is mainly accessed via mobile phones and the Facebook app in particular. I take advantage of a shock in Facebook availability and use local variation in cell phone coverage as an exogenous determinant of social media availability. I find that social media availability decreases conflict, especially organised violence involving rebel groups. The analysis also reveals significant heterogeneity, suggesting that inflammatory content on social media may escalate conflict in areas with deep ethnic cleavages.

In the third chapter, jointly with Nikolaj Broberg and Thomas Walsh, we investigate how political alignment affects implementation of punitive welfare measures in the UK. We use a regression discontinuity design based on close elections to compare the rate of sanctions to unemployment benefits across constituencies that are aligned or unaligned with the government. We find that implementation of the sanction regime is significantly more lenient in constituencies won by the government parties. Our findings suggest pork barrel politics can also influence the allocation of economic "bads", even within a highly centralised system, and can undermine institutions which should be neutral to local partisan considerations.