About Michael M. Bechtel

See http://mbechtel.com/

“Sell your islands, you bankrupt Greeks!” – Exploring Public Opinion Towards International Financial Bailouts

Priding itself on openly saying what “the man on the street” thinks, the German tabloid Bild suggested a seemingly simple strategy to deal with Greece’s debt problems: rather than relying on other countries’ financial assistance, Greece should instead sell some of its islands and, if necessary, the Acropolis as well. Perhaps unsurprisingly, European finance ministers ignored this recommendation and instead set up an EU bailout fund of €800 billion. Although the IMF, the European Commission, and others demanded an increase of the fund upward of €1 trillion, German finance minister Wolfgang Schäuble opposed further expansion, deeming it unacceptable to the German public. Indeed, several snap polls reported that about two thirds of the German citizens oppose such bailouts for over-indebted Euro countries.

Although public opinion is widely regarded as a major constraint on governments’ actions in the ongoing debate over the bailouts, scholars know very little about the factors that underlie voters’ attitudes towards such international transfers. In particular, it is unclear whether voters’ opinions reflect their assessments of how the bailouts would affect their own well-being, that of their country, or perhaps that of their fellow Europeans. In a new paper, Jens Hainmueller, Yotam Margalit, and I begin addressing this question. We conducted two large-scale surveys in Germany, the country shouldering the largest share of the EU’s financial rescue fund. Our results show that while the economic features of the bailout package itself strongly affect voters’ willingness to support the bailouts, individuals’ own economic standing has limited explanatory power in accounting for their position on the issue. In contrast, social dispositions such as altruism and cosmopolitanism are robustly associated with support for the bailouts. This suggests that the current divide in public opinion towards the bailouts is generally not along distributive lines between domestic winners and losers. Instead, the divide is better understood as a foreign policy issue that pits economic nationalist sentiments versus greater cosmopolitan affinity and other-regarding preferences.

Who Wants to Bail Out Other Countries and Why?

In the face of growing potential for sovereign defaults, Euro-zone countries have decided to contribute massive sums to bail out the struggling EU economies. The structure of the bailouts has provoked strong domestic reactions in both donor and potential recipient countries. Yet, despite the prominent role of public opinion in the debate over national contributions to funds to bail out other countries, we know very little about the factors that underlie voters’ attitudes toward financial rescue packages.

Who wants to send this to indebted EU countries? (Source: Deutsche Bundesbank)

To learn about why individuals support or oppose bailout packages for indebted EU countries, Jens Hainmueller (MIT), Yotam Margalit (Columbia University), and I have just fielded a large-scale online survey with several embedded experiments in which we explore which factors affect individuals’ willingness to support financial bailout programs.[1] We focus on public opinion in Germany, the country shouldering the largest share, about €200 billion, of the EU’s bailout program. Our study will explore factors like the rescue package’s size, the conditions imposed on the recipient country, as well as different types of justifications that relate to economic, solidarity, and altruistic motivations. We will complete the fieldwork within the coming weeks and will post first results in this blog soon afterwards, so stay tuned…

[1] We gratefully acknowledge financial support by ETH Zurich’s Cooper Fund.

What Will Make You a Swiss? Evidence from 30 Years of Naturalization Decisions in Swiss Municipalities

From time to time, great movies result from blatantly xenophobic policies. Beginning in 1970, James Schwarzenbach launched a couple of policy proposals to prevent the alleged foreign infiltration of Switzerland by restricting the share of immigrants in Swiss cantons to a maximum of ten percent. In response to these initiatives, the movie “The Swissmakers” (original title: “Die Schweizermacher” (1978), available with English subtitles) provided a satirical portrait of two policemen of the Swiss naturalization agency who have to prepare recommendations on immigrants’ naturalization requests. To that end, the two policemen visit applicants at home, talk to their neighbors about when they hang up their clothes on the balcony for drying, and engage in general surveillance to find out about their level of integration (or assimilation, as the instructor of the two policemen calls it in the fantastic opening scene) into the seemingly bourgeois Swiss society. Unsurprisingly, most applicants act strategically and become overly motivated to demonstrate their Swissness. A German couple even flies the Swiss flag every morning. “The Swissmakers” became the most successful Swiss movie of all times.

Naturalization agents at work in “The Swissmakers”: Moritz Fischer (Emil Steinberger) and Max Bodmer (Walo Lüönd) observing a German couple flying the flag on Sunday at 10.15am.

Naturalization agents at work in “The Swissmakers”: Moritz Fischer (Emil Steinberger) and Max Bodmer (Walo Lüönd) observing a German couple flying the flag on Sunday at 10.15am.

Although flying the Swiss flag does not plausibly constitute a key determinant of becoming a Swiss citizen, naturalization decisions in Switzerland have generated extremely valuable behavioral data on anti-immigrant preferences: Until 2003, some Swiss municipalities used referenda with closed ballots to decide each naturalization request. First, all eligible voters of the municipality received a written summary of pending naturalization requests that included detailed personal information about the applicants. Second, citizens voted over each request and those applicants which received a majority of “yes” votes were naturalized. In a recent paper, Jens Hainmueller (MIT) and Dominik Hangartner (LSE) analyze data on all 2’400 naturalization requests recorded from 1970 to 2003. This presents a unique opportunity to learn about whether and how applicant characteristics affected their chance of being naturalized and greatly improves on a large literature on preferences over immigration in political science and sociology, where researchers have mostly relied on survey data that is prone to social desirability bias.

According to the results, an applicant’s country of origin is the most powerful predictor of naturalization success. Applicants from former Yugoslavia and Turkey have a 40 percent higher risk of rejection than other observably similar applicants from rich European countries, for example, the Netherlands or Great Britain. Swiss voters also tend to prefer applicants with higher levels of education and occupational skill, although these effects are negligibly small. Based on the empirical estimates, an applicant from Turkey would, for example, require no less than 70 years of additional education to reach the same probability of being naturalized as another applicant from a European country who shares all other observable characteristics. Interestingly, linguistic integration is largely irrelevant for an applicant’s probability of success: Even requests in which the applicants’ language skills are described as perfectly fluent have no higher chance of being accepted.

The paper also presents evidence on which mechanisms (mainly statistical and taste-based discrimination) drive these results. For example, the country-of-origin disadvantage is most pronounced in municipalities in which citizens generally dislike immigrants as measured by the “yes” votes in the most recent anti-immigration referenda. Discrimination against Turkish and Yugoslavian applicants also increases in response to rapid surges of these groups in the 1990s while the country-of-origin disadvantage declines as the relative size of this group decreases. Compared with these factors, applicants’ factual level of education and integration seem to matter very little.

Overall, the main result of the paper seems to bear some resemblance with both the widespread perception of Yugoslavians being even less popular in Switzerland than Germans and the ending of “The Swissmakers”. Here, the Italian worker and the German couple get naturalized, while the senior police officer of the naturalization agency recommends rejecting the naturalization request by the female ballet dancer from Yugoslavia. She forestalls the rejection by withdrawing her application prior to the final decision to take up an offer to work in the Netherlands. Although the ballet dancer does not succeed in getting a Swiss passport, she does succeed in getting the junior policeman (played by the famous Swiss comedian Emil Steinberger), who falls in love with her and decides to leave the naturalization agency.

Incentives versus Culture: Do Legal Norms Affect Preferences for Political Participation?

Declining election turnout in many democracies regularly provokes public statements lamenting the eroding culture of political participation, arguably the key element of any democratic system. Such comments appear particularly relevant for Switzerland with its comparatively low turnout in elections and referenda. Suppose that a deteriorating political culture is indeed responsible for the observed decrease in political collective action and political interest. What can be done about it?

According to Arend Lijphart and other prominent political scientists, compulsory voting qualifies as a promising cure. Requiring citizens to vote is expected to increase turnout in elections, but also to fundamentally change a country’s political culture over time: Individuals that are socialized under compulsory voting will develop a preference for civic engagement, which should lead to considerably higher participation in all types of political collective action. But can legal norms really give rise to such powerful and widespread socialization effects that lead to lasting changes in a country’s political culture? Do norms trump culture?

In a recent paper, Dominik Hangartner (LSE/University of Zurich), Lukas Schmid (University of St. Gallen), and I try to address this question. We explore the effects of a severely sanctioned and long-standing, but eventually abolished compulsory voting law in the Swiss canton Vaud. Vaud practiced compulsory voting for federal referenda for more than twenty years (1925-1948). Abstention triggered a sizable fine that local police authorities collected by visiting nonvoters’ homes in person. We use this drastic policy intervention in combination with a synthetic control design to estimate the long-term and spillover effects of compulsory voting for federal referenda on different types of political collective action for which participation remained voluntary.

Figure 1: Average turnout in federal referenda in Vaud (black line) and synthetic Vaud (gray line), 1900-1970. Periods in which Vaud practiced compulsory voting are shaded gray.

Figure 1 shows the evolution of annual average turnout in federal referenda in the observed Vaud and the synthetic Vaud, which we constructed using a convex combination of control cantons that did not introduce compulsory voting. The introduction of compulsory voting in 1925 massively increased turnout in federal referenda. Over the treatment period (1925-1948), the effect is about 30 percentage points, on average, if compared with the synthetic Vaud. According to prominent theories of norm internalization and socialization, this should have stimulated turnout even after compulsory voting was abolished. Moreover, it should have also increased participation in other forms of political collective action.

The evidence suggests, however, that compulsory voting had no lasting effects on Vaud’s political culture. Immediately after it abolished compulsory voting, turnout quickly declined to levels that equal those in the synthetic control canton. In the paper we also present evidence suggesting that compulsory voting had some contemporaneous, positive spillover effects on closely related forms of civic engagement, for example, turnout in cantonal referenda and federal elections. These spillover effects of compulsory voting for federal referenda on turnout in cantonal referenda and federal elections that were not concurrent with a federal, direct-democratic vote remained modest, however, declined over time, and vanished as soon as Vaud abolished compulsory voting. In addition, we find that compulsory voting did not even have a notable contemporaneous impact on citizens’ political activity as measured by the number of signed petitions.

Overall, these results suggest that sanctioned legal norms can effectively increase political participation. At the same time, however, the findings highlight their limited potential to induce norm internalization and question prominent theories of socialization in the context of political collective action.

Exports, Sports Cars, and the Benefits of the Euro Crisis

Many export-orientated businesses in Switzerland complain about the strong Swiss franc. Admittedly, it makes their products more expensive for foreign customers. Some even would like to see the Swiss central bank intervene in the foreign exchange markets to stabilize the Euro. On the other hand, a strong domestic currency also has its (short-term) advantages, as foreign products get (relatively) cheaper.

Since a recent post highlights that academics run the risk of “over-intellectualising”, let me use a hedonistic example: Ferrari’s F430 has a 4.3 liter V8 engine that punches out 375 kW (about 490 hp), thereby producing the kind of forward thrust that many would like to enjoy. Far less enjoyable, at least for younger academics, is its basic list price: €169,600 or about CHF 263,000 when the car was introduced in 2004.

Figure 1: Ferrari F430

Figure 2 illustrates the benefits of a weakening Euro. It shows how the F430’s basic price of €169,000 evolved since its introduction in 2004 if we convert it into Swiss francs. The price remains relatively stable until the end of 2006. Beginning in early 2007, the F430 gets more expensive (up to CHF 281,000). The gray line in Figure 2 shows the average price of an F430 in the 2004 to 2008 period, which is CHF 266,000. Since autumn 2008, the F430 gets cheaper and cheaper. If you were to buy an F430 today, you would “merely” have to spend some CHF 205,000, which is CHF 63’000 or 22% less than its 2004 to 2008 average price.

Figure 2: Ferrari F430 Foreign Base Price

Given that the Euro countries will likely continue to bail out Greece and potentially also other countries, you might think about whether now is the time to make a dream come true. Please let me know if this information triggers a purchase decision.

The Electoral Effects of Arguments and Partisan Cues: A First Peek at Experimental Evidence from the Swiss Deportation Initiative

The Swiss accepted a controversial anti-foreign crime initiative in a direct democratic vote last month. The so-called deportation initiative will soon keep a group of experts busy who have to prepare a detailed legislative proposal to be submitted to parliament. However, already today the deportation initiative keeps at least four political scientists busy. Jens Hainmueller, Dominik Hangartner, Marc Helbling and I have started to analyze experimental data generated in the context of the deportation initiative.

We conducted a large-scale survey experiment in the week prior to the referendum to explore the effects of arguments and party cues on citizens’ preferences over the deportation initiative.[1] We randomly exposed respondents to one of the two key arguments that dominated the highly polarized pre-referendum campaign. The Swiss People’s Party (SVP), which instigated the deportation initiative, claimed that immigrants to Switzerland are disproportionately responsible for crime. The SVP argued that the deportation initiative would significantly reduce crime rates and thereby add to public security (pro argument). The Social Democratic Party (SP) said the deportation initiative would violate basic rights guaranteed in the Swiss constitution and even international law (con argument).

The preliminary results look as follows: We find that these arguments had no overall effect on citizens’ vote intentions. Those receiving the pro-argument were no more likely to approve the deportation initiative than citizens who received the con-argument. We also randomly provided respondents with information about which party supported (SVP) or opposed (SP) the deportation initiative. Again, we do not find any difference between these two groups.

However, the preliminary results suggest that may party cues may act as a negative heuristic: Voters who disliked the SP were significantly more likely to vote in favor of the deportation initiative if they received information about the SP opposing the initiative. To track this effect over time, we conducted a second survey in the week after the referendum, in which we called the same individuals. We find that the effect persists. Even two weeks after SP-nonidentifiers had received the SP cue, these citizens opposed the deportation initiative more strongly and had voted significantly more often in favor of it than voters who had received no such information.

The group of experts will have to submit their legislative proposal to the Swiss parliament by July 2011. We have decided to beat the experts at least once by delivering a working paper until June 2011.

[1] We thank the Wissenschaftszentrum Berlin and DemoSCOPE for financial support.

The Economist on “The Disposable Academic”

Having devoted one of the very first PoliSciZurich blog entries to recruitment strategies and students’ incentives to pursue a PhD in political science, I enjoyed reading this article in the economist. The author criticizes higher education and claims that there is a large oversupply of PhDs. Here are the key points:

  • Pyramid scheme character of the academic system: Tenured and well-paid academics use armies of low-paid PhD researchers and postdocs to bring in grants and beef up their publication records.
  • A PhD does not pay off in monetary terms: In non-academic sectors the earnings premium for a PhD is 26%. The premium for a master’s degree, which can be accomplished in as little as one year, is almost as high, at 23%. In some subjects the premium for a PhD vanishes entirely [According to this article in the Journal of Higher Education Policy and Management, there is no difference in the premium for an MA and a PhD in the social sciences for men. For Women, the difference is actually 4 percentage points].
  • Limited use for non-academic job market: Those who pay for research have realised that many PhDs find it tough to transfer their skills into the job market. Writing lab reports, giving academic presentations and conducting six-month literature reviews can be surprisingly unhelpful in a world where technical knowledge has to be assimilated quickly and presented simply to a wide audience.
  • Socially benefical, but bad individual choice: Academics tend to regard asking whether a PhD is worthwhile as analogous to wondering whether there is too much art or culture in the world. They believe that knowledge spills from universities into society, making it more productive and healthier. But doing a PhD may still be a bad choice for an individual.