“Firm Donations and Political Rhetoric: Evidence from a National Ban” with Caroline Le Pennec-Çaldichoury (HEC Montréal) and Elisa Mougin (Sciences Po Paris). American Economic Journal: Economic Policy, forthcoming.
Do campaign finance regulations influence politicians? We study the effects of a French ban on political donations from firms passed in 1995. We use a difference-in-differences approach and a novel dataset combining the campaign manifestos issued by every candidate running for a seat in the French parliament with detailed data on their campaign contributions. The ban on firm donations could affect political rhetoric, either through a resource effect or through a change in the pool of potential donors. We show that banning firm donations discourages candidates from advertising their local presence, as well as economic issues, during the campaign. The ban also leads candidates from non-mainstream parties to use more polarized language. These findings suggest that politicians strategically adjust their campaign communication to secure contributions from specific sources, and that campaign finance reforms may affect the information made available to voters through their impact on candidates’ rhetoric.
“Media Competition and News Diets” with Charles Angelucci (Columbia University) and Michael Sinkinson (Yale University). Conditionally accepted, American Economic Journal: Microeconomics.
Technological innovations in content delivery, such as the advent of broadcast television or of the Internet, threaten local newspapers’ ability to bundle their original local content with third-party content such as wire national news. We examine how the entry of television – with its initial focus on national news – affected local newspapers as well as consumer news diets in the United States. We develop a model of local media and show that entry of national television news could reduce the provision of local news. We construct a novel dataset of U.S. newspapers’ economic performance and content choices from 1944 to 1964 and exploit quasi-random variation in the rollout of television to show that this new technology was a negative shock in both the readership and advertising markets for newspapers. Newspapers responded by providing less content, particularly local news. We tie this change towards increasingly nationalized news diets to a decrease in split-ticket voting across Congressional and Presidential elections.
We measure how a network of heroes can legitimize and diffuse extreme political behaviors. We exploit newly-declassified intelligence files, novel voting data and regimental histories to show that home municipalities of French line regiments arbitrarily rotated under Philippe Pétain’s generalship through the heroic WWI battlefield of Verdun diverge politically thereafter, particularly following Pétain’s own overt espousal of authoritarian views. Further, under Pétain’s collaborationist Vichy regime (1940-44), they raise 7% more active Nazi collaborators per capita. These effects extend across all forms of Nazi collaboration and diffuse beyond the veterans themselves.
This paper received the Oliver Williamson Best Conference Paper Award, for the best paper delivered at the SIOE (Society for Institutional & Organizational Economics) 2020 Conference.
What is the impact of campaign spending on votes? Does it vary across election types, political parties or electoral settings? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that handle the endogenous and strategic nature of campaign spending in multiparty systems. This paper provides novel contributions in both of these areas. We build a new comprehensive dataset of all French legislative and UK general elections over the 1993-2017 period. We propose new empirical specifications, including a new instrument that relies on the fact that candidates are differentially affected by regulation on the source of funding on which they depend the most. We find that an increase in spending per voter consistently improves candidates' vote share, both at British and French elections, and that the effect is heterogeneous depending on candidates' party. In particular, we show that spending by radical and extreme parties has much lower returns than spending by mainstream parties, and that this can be partly explained by the social stigma attached to extreme voting. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of why campaigns matter.
"The Production of Information in an Online World" with Nicolas Hervé (INA) and Marie-Luce Viaud (INA), Review of Economic Studies, 2020, 87(5): 2126-2164.
News production requires investment, and competitors’ ability to appropriate a story may reduce a media’s incentives to provide original content. Yet, there is little legal protection of intellectual property rights in online news production, which raises the issue of the extent of copying online and the incentives to provide original content. In this paper, we build a unique dataset combining all the online content produced by French news media during the year 2013 with new micro audience data. We develop a topic detection algorithm that identifies each news event, trace the timeline of each story, and study news propagation. We provide new evidence on online news production. First, we document high reactivity of online media: one quarter of the news stories are reproduced online in under 4 minutes. We show that this is accompanied by substantial copying, both at the extensive and at the intensive margins, which may constitute a severe threat to the commercial viability of the news media. Next, we estimate the returns to originality in online news production. Using article-level variations and media-level daily audience combined with article-level social media statistics, we find that original content producers tend to receive more viewers, thereby mitigating the newsgathering incentive problem raised by copying.
“Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944-2014”, Journal of Public Economics, 2020, 85.
This paper investigates the impact of increased media competition on the quantity and quality of news provided and, ultimately, on political participation. I build a new county-level panel dataset of local newspaper presence, newspapers’ number of journalists, costs and revenues and political turnout in France, from 1944 to 2014. I estimate the effect of newspaper entry by comparing counties that experience entry to similar counties in the same years that do not. Both sets of counties exhibit similar trends prior to entry, but those with entry experience substantial declines in the average number of journalists. An increased number of newspapers is also associated with fewer articles and less hard news provision. Newspaper entry, and the associated decline in information provision, is ultimately found to decrease voter turnout at local elections. Exploiting the long time span covered by my data, I discuss a number of mechanisms that may drive these empirical findings. First, I examine the relationship between increased competition and media capture in the aftermath of WW2, when newspapers were biased and the advertising market was underdeveloped. I then show that in the recent period the effects are stronger in counties with more homogeneous populations, as predicted by a vertical product differentiation framework, whereas there is little impact in counties with more heterogeneous populations.
"Sex and the Mission: The Conflicting Effects of Early Christian Investments on sub-Saharan Africa's HIV Epidemic" with Valeria Rueda, Journal of Demographic Economics, 2020, 86(3): 213-257.
This article investigates the long-term impact of historical missionary activity on HIV in sub-Saharan Africa. On the one hand, missionaries were the first to invest in modern medicine in the region. On the other hand, Christianity influenced sexual beliefs and behaviors that affect the risk of contagion. We build a new geocoded dataset locating Protestant and Catholic missions in the early 20th century, as well as the health facilities they invested in, that we combine with individual-level DHS data. With these data, we can address separately these two channels, within regions close to historical missionary settlements. First, we show that proximity to historical missionary health facilities decreases the likelihood of HIV; persistence in healthcare provision and safer sexual behaviors in the region explain this result. Second, we show that regions close to historical missionary settlements exhibit higher likelihood of HIV. This effect is driven by the Christian population in our sample. This suggests conversion to Christianity as a possible explanatory channel. Our findings are robust to alternative specifications addressing selection.
"Newspapers in Times of Low Advertising Revenues" with Charles Angelucci, American Economic Journal: Microeconomics, 2019, 11(3): 319-364.
We model the consequences on newspapers’ content and prices of a reduction in advertising revenues. Newspapers choose the size of their newsroom, and readers are heterogeneous in their ideal amount of journalistic-intensive content. We show that a reduction in advertising revenues lowers newspapers’ incentives to pro-duce journalistic-intensive content. We also build a unique dataset on French newspapers between 1960 and 1974 and perform a difference-in-differences analysis exploiting the introduction of advertising on television, which affected national newspapers more severely than local ones. We find robust evidence of a decrease in the amount of journalistic-intensive content produced and the subscription price.
"Tax Revenues and the Fiscal Cost of Trade Liberalization, 1792-2006" with Lucie Gadenne, Explorations in Economic History, 2018, 70: 1-24.
This article examines the impact of trade liberalization on government revenues. Using a new dataset on tax revenues for 130 countries between 1792 and 2006, we identify ninety-nine episodes of trade liberalization defined as a large fall in trade tax revenues not accompanied by a decrease in trade. Seven took place before World War One, seven in the interwar period, eighteen in the Bretton Woods period and the remainder after 1970. We examine the extent to which countries were able to recover the tax revenues lost by liberalizing trade by using other sources of revenue. We find that historical (pre-1970) trade liberalization episodes were unlikely to be accompanied by decreases in tax revenues, especially during the Bretton Woods era. In the recent period however, over 40% of the developing countries in our sample experience a fall in total tax revenues that lasts more than ten years after an episode of trade liberalization. Overall, trade liberalization led to larger and longer-lived declines in tax revenues in developing countries since 1970 than in today’s rich countries in the 19th and 20th centuries. Results are similar when we consider government expenditures, suggesting decreases in trade tax revenues negatively affect governments’ capacity to provide public services in many developing countries.
"Taxation, Corruption and Growth" with P. Aghion, U. Akcigit and W. Kerr, European Economic Review, 2016, 86: 24-51.
"The Long-Term Effects of the Printing Press in sub-Saharan Africa" with Valeria Rueda, American Economic Journal: Applied Economics, 2016, 8(3): 69-99.
This article investigates the long-term consequences of the printing press in the nineteenth century sub-Saharan Africa on social capital nowadays. Protestant missionaries were the first to import the printing press and to allow the indigenous population to use it. We build a new geocoded dataset locating Protestant missions in 1903. This dataset includes, for each mission station, the geographic location and its characteristics, as well as the printing-, educational-, and health-related investments undertaken by the mission. We show that, within regions close to missions, proximity to a printing press is associated with higher newspaper readership, trust, education, and political participation.
"Improving 'National Brands': Reputation for Quality and Export Promotion Policies" with Dorothée Rouzet, Journal of International Economics, 2015, 95(2): 274-290.
This paper studies the effect of firm and country reputation on exports when buyers cannot observe quality prior to purchase. Firm-level demand is determined by expected quality, which is driven by the dynamics of consumer learning through experience and the country of origin's reputation for quality. We show that asymmetric information can result in multiple steady-state equilibria with endogenous reputation. We identify two types of steady states: a high-quality equilibrium (HQE) and a low-quality equilibrium (LQE). In a LQE, only the lowest-quality and the highest-quality firms are active; a range of relatively high-quality firms are permanently kept out of the market by the informational friction. Countries with bad quality reputation can therefore be locked into exporting low-quality, low-cost goods. Our model delivers novel insights about the dynamic impact of trade policies. First, an export subsidy increases the steady-state average quality of exports and welfare in a LQE,but decreases both quality and welfare in a HQE. Second, there is a tax/subsidy scheme based on the duration of export experience that replicates the perfect information outcome. Third, a minimum quality standard can help an economy initially in a LQE moving to a HQE.
"Improving upon the World Bank's Country Policy and Institutional Assessment: A New Performance Indicator Based on Aid Effectiveness", Journal of Globalization and Development, 2014, 5(2): 213-233.
"Political Inequality." Prepared for the Annual Review of Economics.
Inequality in political participation and influence has strongly increased in recent decades. In this paper, we focus on three aspects of political inequality: the increasing concentration of both political and charitable donations, the growing gap in descriptive representation, and the persistent lack of substantive representation. Based on the existing literature as well as on novel evidence, we relate these aspects to the recent widening of turnout inequality. We then examine novel forms of participation – e.g. the rise of small donors in the US – and the efficiency of policies aimed at improving representation. Finally, we discuss new avenues for research.
"The Far-Right Donation Gap" with Moritz Hengel and Yuchen Huang.
We document a widespread decline in the share of donors to charities in Western countries over the past decade, and show that this can be in part explained by a lower propensity to donate among far-right voters. Focusing on France, we first conduct a large-scale survey (N = 12, 600) and show that far-right voters are significantly less likely to report a charitable donation than the rest of the population, conditional on a rich set of controls. Second, using administrative tax data for the universe of French municipalities (N ≃ 33, 000) combined with electoral results, we find that the negative relationship between vote shares for the far right and charitable donations holds in a broad range of specifications, at both the extensive and the intensive margin, and controlling for municipality fixed effects. Third, we exploit unique geo-localized donation data from several charities and document similar patterns. All evidence points towards a drop in the propensity to donate driven by a shift in social norms that threatens general acceptance of the charitable sector.
"Small Campaign Donors" with Laurent Bouton (Georgetown University), Edgard Dewitte (SciencesPo Paris) and Vincent Pons (Harvard Business School).
In this paper, we study the characteristics and behavior of small donors, and compare them to those of large donors. We first build a novel dataset including all the 340 million individual contributions reported to the U.S. Federal Election Commission between 2005 and 2020. Due to the particular legal structure of the new online fundraising platforms first used by Democrats (ActBlue) and now Republicans (WinRed), we are able to extract contribution-level information about a majority of the small donations. This allows us to identify “small" donors, i.e. donors who give less than $200 during a two-year electoral cycle to each committee , and to differentiate them from “large" donors. The analysis of this novel dataset delivers several new insights. First, we provide evidence on the growing number of small donors in the U.S. and on the magnitude of their contributions. Second, we find that small donors include more women and more ethnic minorities than large donors – with minorities still under-represented –, while they do not differ much in terms of their geographical distribution. Third, using a saturated fixed effects model to explore the determinants of contributions by small and large donors, we find that the closeness of a race, whether the candidate and the donor live in the same district or state, and, to a lesser extent, the ethnic alignment between the donor and the candidate have a positive impact on contributions. We also find that donors contribute more to more extreme candidates. These effects are lower for small donors. Finally, we show that campaign TV ads affect the number and the size of contributions, and more so for small donors.
"Hosting Media Bias: Evidence from the Universe of French Television and Radio Shows, 2002-2020" with Moritz Hengel (Sciences Po Paris), Nicolas Hervé (INA) and Camille Urvoy (University of Mannheim).
Democracies need informed voters – voters who are exposed to a diverse range of views. News media take an active role in the process of informing voters; yet, they vary in their coverage of political views. In this paper, we explore whether differences in political coverage are mainly driven by the editorial choices of (a few) owners, or by the preferences of journalists, or both. To do so, we build a novel dataset on millions of French television and radio shows over 20 years, with information on the identity of hosts, guests, and guests’ political leaning. We estimate a two-way fixed effects model identified thanks to the many hosts working on multiple channels. We show that hosts largely comply with outlet-level decisions, which account for around 90% of cross-channel differences in political representation. Complementing these results, we study how hosts adapted to a major ownership-driven change in editorial line, and find that the hosts who stay after the takeover comply with the new owner’s preferences. Our findings have important implications for the optimal regulation of the media industry. We also show the limitations of existing legal rules regarding media pluralism and fair access to the media and the urgent need to foster comparative research on alternative regulations.
"Is Charitable Giving Political? Evidence from Wealth and Income Tax Returns" with Malka Guillot (HEC Liège).
Is charitable giving politically motivated? In this article, we use exhaustive administrative household panel data and a natural experiment to quantify empirically the motivations for giving. Our dataset includes all the households filing their income tax and/or their wealth tax returns in France between 2006 and 2019. In France, both charitable and political donations benefit from a 66% income tax credit, but only the charitable ones are eligible for the 75% wealth tax credit. We exploit the 2017 wealth-tax reform – a change in the taxable base that led to a drop of two third in the number of liable households and, as a result, an increase in the price of charitable giving – and show that charitable and political donations are substitute. According to our estimates, a one-percent increase in the price of charitable giving leads to an increase of around 0.12% in political donations. Next, using city-level information, we show that the increase in the price of charitable giving mostly benefits pro-business political parties. Finally, we document that the drop in charitable donations is mostly driven by politically-involved nonprofit organizations, pointing toward political motivations behind charitable giving.
"Political Determinants of the News Market: Novel Data and Quasi-Experimental Evidence from India" with Guilhem Cassan (University of Namur) and Francesca Jensenius (Norwegian Institute of International Affairs). Submitted.
Information conveyed through news media influences political behavior. But to what extent are media markets themselves shaped by political determinants? We build a novel panel data set of newspaper markets in India from 2002 to 2017 to measure the impact of changes in electoral importance on how news markets develop over time. We exploit the announcement of an exogenous change in the boundaries of electoral constituencies to causally identify the relationship between the (future) electoral importance of news markets and the change in the number and circulation of newspapers. Using both an event-study and a staggered difference-in-differences approaches, we show that markets that became more electorally important experienced a significant rise in both circulation and the number of titles per capita. Both supply and demand seem to drive the increase, but we estimate that the former explains almost all the variation in the short run and around 60% in the long run. Finally, we document how effects vary with prior levels of political competition and newspapers’ characteristics, and discuss implications for voting behavior and democratic accountability.
"Social Media Influence Mainstream Media: Evidence from Two Billion Tweets" with Nicolas Hervé (INA) and Béatrice Mazoyer (Medialab). Submitted.
Social media are increasingly influencing society and politics, despite the fact that legacy media remain the most consumed source of news. In this paper, we study the propagation of information from social media to mainstream media, and investigate whether news editors’ editorial decisions are influenced by the popularity of news stories on social media. To do so, we build a novel dataset including around 70% of all the tweets produced in French between August 2018 and July 2019 and the content published online by 200 mainstream media outlets. We then develop novel algorithms to identify and link events on social and mainstream media. To isolate the causal impact of popularity, we rely on the structure of the Twitter network and propose a new instrument based on the interaction between measures of user centrality and “social media news pressure” at the time of the event. We show that the social media popularity of a story increases the coverage of the same story by mainstream media. This effect varies depending on the media outlets’ characteristics, in particular on whether they use a paywall. Finally, we investigate consumers’ reaction to a surge in social media popularity. Our findings shed new light on news production decisions in the digital age and the welfare effects of social media.
"It Takes Money to Make MPs : New Evidence from 150 Years of British Campaign Spending" with Edgard Dewitte (Sciences Po Paris). Submitted.
We study electoral campaigns over the long run, through the lens of their spending. In particular, we ask whether changing media technologies and electoral environments impacted patterns of spending and their correlation with electoral results. To do so, we build a novel exhaustive dataset on general elections in the United Kingdom from 1857 to 2017, which includes information on campaign spending (itemized by expense categories), electoral outcomes and socio-demographic characteristics for 69, 042 election-constituency-candidates. We start by providing new insights on the history of British political campaigns, in particular the growing importance of advertising material, including via digital means, to the detriment of paid staff and electoral meetings. We then show that there is a strong positive correlation between expenditures and votes, and that overall the magnitude of this relationship has strongly increased since the 1880s, with a peak in the last quarter of the 20th century. We link these transformations to changes in the conduct of campaigns, and to the introduction of new information technologies. We show in particular that the expansion of local radio and broadband Internet increased the sensitivity of the electoral results to differences in campaign spending. These results encourage greater contextualization in the drafting of campaign finance regulations.
