Ugur Ozdemir

Estimating the effects of activists in two-party and multi-party systems: comparing the United States and Israel

This article presents an electoral model where activist groups contribute resources to their favored parties. These resources are then used by the party candidates to enhance the electoral perception of their quality or valence. We construct an empirical model of the United States presidential election of 2008 and employ the electoral perception of the character traits of the two candidates. We use a simulation technique to determine the local Nash equilibrium, under vote share maximization, of this model. The result shows that the unique vote-maximizing equilibrium is one where the two candidates adopt convergent positions, close to the electoral center. This result conflicts with the estimated positions of the candidates in opposed quadrants of the policy space. The difference between estimated positions and equilibrium positions allows us to estimate the influence of activist groups on the candidates. We compare this estimation with that of Israel for the election of 1996, and show that vote maximization leads low valence parties to position themselves far from the electoral origin. We argue that these low valence parties in Israel will be dependent on support of radical activist groups, resulting in a degree of political fragmentation.

Competition for popular support: a valence model of elections in Turkey

Models of elections tend to predict that parties will maximize votes by converging to an electoral center. There is no empirical support for this prediction. In order to account for the phenomenon of political divergence, this paper offers a stochastic electoral model where party leaders or candidates are differentiated by differing valences—the electoral perception of the quality of the party leader. If valence is simply intrinsic, then it can be shown that there is a “convergence coefficient”, defined in terms of the empirical parameters, that must be bounded above by the dimension of the space, in order for the electoral mean to be a Nash equilibrium. This model is applied to elections in Turkey in 1999 and 2002. The idea of valence is then extended to include the possibility that activist groups contribute resources to their favored parties in response to policy concessions from the parties. The equilibrium result is that parties, in order to maximize vote share, must balance a centripetal electoral force against a centrifugal activist effect. We estimate pure spatial models and models with sociodemographic valences, and use simulations to compare the equilibrium predictions with the estimated party positions.

Empirical and Formal Models of the United States Presidential Elections in 2000 and 2004

This chapter develops a general stochastic model of elections in which the electoral response is affected by the valence (or quality) of the candidates. In an attempt to explain non-convergence of candidate positions in the 2000 and 2004 Presidential elections, a formal spatial stochastic model, based on intrinsic valence, is presented. A pure spatial model of the election is constructed. It is shown that the equilibria, under vote maximization, do indeed lie at the electoral origin. Other work on Presidential elections in the United States has suggested that a superior empirical model should incorporate the electoral perceptions of the candidate character traits. The chapter then considers a joint model with sociodemographic valences as well as electoral perception of traits and shows by simulation that the vote maximizing equilibrium positions were close to, but not precisely at, the electoral origin. This model used electoral estimates of the candidates.positions. These differed substantially from the estimated equilibria of the traits model. To account for this difference, a more general formal model is then considered where the valence differences between the candidates were due to resources that were contributed to the candidates by party activists. The trade off between activist and electoral support is given by a (first order) balance condition involving, called the centrifugal marginal activist pull. Survey information on party activists, who contributed resources to the candidates, was obtained. It is argued that the difference between the equilibrium obtained from the spatial model with traits, and the estimated candidate positions, is compatible with the location of these activists. The final model is one where the activist resources are used by candidates to target individual voters or groups of voters. The balance condition in this case involves a complex constrained optimization problem, that captures the essence of modern electoral politics.

Pass the Bucks: Investment Incentives as Political Credit-Claiming Devices Evidence from a Survey Experiment

Both countries and subnational governments commonly engage in competition for mobile capital, offering generous location incentives to attract investment. The use of tax incentives is a paradox, whereby fiscally strained governments offer lucrative tax treatment to firms, yet the economics research has consistently shown tax incentives have little impact on the investment decisions of businesses. In this paper we construct a formal model of firm specific tax incentives that focuses on how politicians take credit or minimize blame for firms’ investment decisions. We test the empirical implications of this model using an internet survey, which employs a randomized experiment to test how voters evaluate the performance of incumbent U.S. governors. Our findings illustrate the key political benefit of offering tax incentives for politicians. Politicians can use these incentives to take credit for investment flowing into their districts.

Application of a Theorem in Stochastic Models of Elections

Previous empirical research has developed stochastic electoral models for Israel, Turkey, and other polities. The work suggests that convergence to an electoral center (often predicted by electoral models) is a nongeneric phenomenon. In an attempt to explain nonconvergence, a formal model based on intrinsic valence is presented. This theory showed that there are necessary and sufficient conditions for convergence. The necessary condition is that a convergence coefficient c is bounded above by the dimension w of the policy space, while a sufficient condition is that the coefficient is bounded above by 1. This coefficient is defined in terms of the difference in exogenous valences, the “spatial coefficient”, and the electoral variance. The theoretical model is then applied to empirical analyses of elections in the United States and Britain. These empirical models include sociodemographic valence and electoral perceptions of character trait. It is shown that the model implies convergence to positions close to the electoral origin. To explain party divergence, the model is then extended to incorporate activist valences. This extension gives a first-order balance condition that allows the party to calculate the optimal marginal condition to maximize vote share. We argue that the equilibrium positions of presidential candidates in US elections and by party leaders in British elections are principally due to the influence of activists, rather than the centripetal effect of the electorate.