Periodic Reporting for period 4 - PolEc (The Political Economy of Power Relations)
Période du rapport: 2021-03-01 au 2022-09-30
In the existing research in international relations, plenty of attention has been given to the distribution of military power, which alone is not a relevant explanatory variable of war in empirical studies. An incentive to go to war exists when one player has a relative military power that is significantly larger than her relative political and economic power vis a vis the opponent. Recognizing this problem has led me to a number of projects aimed to provide theoretical and empirical guidance for future researchers interested in evaluating the risk of conflict in different situations and/or in evaluating different intervention policies. The positive analysis objectives for this international relations part of the POLEC project involved obtaining a more accurate set of predictions on conflict risk with the new ”mismatch” framework and obtaining consistent empirical tests both for interstate and intrastate conflict. Other positive analysis objectives of the international relations component of the project involved obtaining a better understanding on what determines secessionist vs centrist conflict incentives and how do geography and natural resources affect the crucial mismatch and the related difficulties in negotiations to resolve disputes. At the normative level, the objective has been to evaluate how the distribution of power affects the efficacy of different types of third party intervention policies, from military intervention to mediation and international inspections. The second half of the Political Economy of Power Relations project concerned the interplay of politics, bureaucracy and economic institutions, and their relative role for a large number of relevant outcomes, ranging from economic growth, legislative and regulatory complexity, democratic backsliding and populism. I wanted to show that institutional constraints limiting political responsiveness can determine shifts of power towards extreme parties, and had the objective to clarify the implications of a lower and lower trust in institutions and politicians on the populism demand and supply. Moreover, the political instability of these last two decades can determine an avalange of bad consequences on bureaucratic efficiency, legislative production, voters’ participation and economic outcomes. The main objective, once again, has been to show the importance of studying all these changes in the different spheres of power together, rather than focusing separately on each phenomenon in isolation.
The results achieved in the five years of the Political Economy of Power Relations project with respect to conflict can be summarized as follows: in an article on the Journal of Economic Literature with Sonno I have first illustrated with a simple empirical analysis that for conflict risk at the interstate level one needs to consider both strength asymmetries and economic dependence; a 2022 article on “Theory of Power Wars” with Herrera and Nunnari published on the Quarterly Journal of Political Science provides the first dynamic theory of the crucial importance of the mismatch between relative military power and relative political power for conflict also at the civil war level; a third complementary paper on “Power Mismatch and Civil Conflict in Africa” with Ogliari and Hong required new machine learning methodology in order to construct valid measures of military and political power of ethnic groups, and hence the contribution is also to provide new data and measures for future researchers and practicioners. Beside the theoretical and empirical confirmation of the ”power mismatch” idea offered by these three articles, I have published two articles, both with Meirowitz, Ramsay and Squintani, on the role of third parties to resolve conflicts, and on how the effectiveness of such an intervention by third parties may depend on the distribution of powers between the opponents in conflict. One of these two papers, published in 2019 on the Journal of Political Economy, concerned the importance of mediation even to reduce militarization incentives, and the second one on the Quarterly Journal of Political Science in 2022 has demonstrated how third parties can reduce probability of conflict and militarization incentives more by soft interventions than hard ones. A sixth article, joint with Esteban, Flamand and Rohner, addressing the secessionist vs centrist conflict incentives, is under review. As a way to disseminate these results to the international relations and conflict research community in economics, I have organized a workshop in 2021 at Bocconi in hybrid format, also including a section on the upcoming Handbook of Economics of Conflict. A similar number of results has been achieved for the second part of the project concerning the interrelated dynamics of political and bureaucratic incentives. Most important, the article “From Weber to Kafka: Political Instability and Overproduction of Laws” with Gratton, Guiso and Michelacci, published on the American Economic Review in 2021, has demonstrated that political instability can generate incentives to overlegislate and overregulate, and the consequent additional burdon on the bureaucracy can further alter the legislators’ incentives, creating a loop that can bring to a Kafkaesque steady state. An important objective for my research agenda was to understand under what conditions it is optimal to maintain checks and balances vs concentration of legislative power in one chamber, and this led eventually to the publication of a general theoretical normative article in 2022 on the International Economic Review with Gratton, entitled “Optimal Checks and Balances under Policy Uncertainty.” Delegation of policy making and legislative power has been addressed in an article joint with Ash and Vannoni on PSRM in 2020, entitled “Divided Government, Delegation and Civil Service Reform.” A further empirical and methodological article on how to disentangle discretion and delegation incentives using text analysis, again with Ash and Vannoni, has been published in 2021 on Political Analysis journal. Still in 2021 I have published another methodological paper on Political 2 Analysis same journal with Ash and Osnabrugge on how to detect political strategies from congressional texts, and an article on the Journal of Public Economics with Sasso on “Bureaucrats under Populism,” again emphasizing the consequences of an important change in politics for the functioning of the bureaucracy. Finally, the research on populism produced a publication on the journal Economic Policy in 2019 with Guiso, Herrera and Sonno on “Global Crises and Populism”. In terms of dissemination, I have presented many of these articles in keynote lectures, and in seminars at econometric society and European association meetings.
On the international relations component of the research agenda connected to the Political Economy of Power Relations project, the main future publication – beside the papers under review mentioned on power wars and secessionist vs centrist conflict – is a chapter on mismatch and natural resources as causes of conflict on the Handbook of Economics of Conflict, which I am editing for North Holland.
On the second research agenda related to the project, I have various working papers that extend the analysis conducted for Italy on the AER 2021 article to the United States, at the state and federal level, and a number of papers under review and in progress on populism.
On the second research agenda related to the project, I have various working papers that extend the analysis conducted for Italy on the AER 2021 article to the United States, at the state and federal level, and a number of papers under review and in progress on populism.