Essays in political economy

Abstract

This thesis examines the reciprocity between the economy and elections, politicians, and policies. To inform voters about the consequences of their ballot choices, understanding the triangular relationship between the economy, political actors, and policies is essential. In representative democracies, people do not elect policies. They elect politicians, who serve as imperfect intermediaries to carry out the people's will. The four chapters aim to improve transparency about the origins and effects of economic policies. They each address certain aspects of policy preferences, formulation, timing, and impact. While each chapter constitutes a self-contained study, I encourage the reader to follow the given structure: Chapter 1 studies the consequences of a specific tax reform, a tariff increase, for GDP growth, the balance of trade, and state finances. Chapter 2 investigates how politicians time tax policies around elections. Chapter 3 examines the influence of extraordinary politicians on global economic expectations. Chapter 4 connects local exogenous shocks to voters' policy preferences and electoral outcomes. Unanticipated events and electoral uncertainty are common themes of all papers.