“Political Geography, Public Policy and Firm Behavior” (GEMPOL) is a national project led by our fellow Ignacio Jurado and funded through a grant by the Spanish Ministry of Science and Innovation (PID2020-119460RB-100, 2021-2024).
This project is aimed at studying how political geography shapes public policy and how this affects the behavior of both voters and non- voting actors (firms). Political geography refers to how voters of different ideologies are distributed in different parts of a territory. The concentration of voters of certain characteristics in certain parts of a territory has been found to be a driver of public policy. Politicians make public policy decisions based on political geography so that reelection prospects are increased by allocating funds strategically in different parts of a territory. Previous work has analyzed the electoral effects of political geography on certain types of public policies (mainly infrastructure). We intend to expand this work into new areas and answer two set of research questions: How does political geography affect behavior of non-voting political actors, and, in particular, firms? Firms are affected directly and indirectly by the political composition of the electorate. Public policy decisions aimed at maximizing electoral performance of incumbents affect firms located in the territories targeted by those policies. Therefore, political geography is likely to have value to firms. The first goal of this project is, thus, to quantify the value for firms of different political geographies and to understand their strategic decisions based on a particular political geography configuration. How much do policy decisions based on political geography differ from those that would be based on efficiency and welfare maximization? A second goal of this project is to extend our previous line of research to study not just the political geography incentives that shape policy decisions, but to quantify how much they differ from those that a benevolent planner would take. Are voters aware of the inefficiencies of public spending? The third goal of the project is to check whether citizens’ perceptions in this area correspond to reality and to analyze which voters perceive the inefficiencies of certain infrastructures the most.
