From preferences to policy: Essays in political economy

Public spending is an essential tool of the state to improve the welfare of citizens. How public money is spent matters for the well-being of both current and future generations. The goal of this thesis is to contribute to understanding differences in spending patterns across countries, electoral systems, and economic situations. In doing so, I study three distinct cases along the path from preference formation to the implementation of public policy. First, who makes policy determines what policy is chosen. Therefore, I study the role that electoral competition plays in the selection of politicians using data from U.S. congressional elections. Second, I study the role that public attitudes have directly on policy choice. Particularly, I focus on the effect of trust in politicians for the propensity to provide public goods. I show that politicians who represent areas with less trust in politics are less likely to work on topics relating to public goods. Finally, it is vital to understand the way that preferences are formed and how external shocks can affect them. I contribute to this question with a case study on refugee influx in the Netherlands in 2015. I show that voters closely exposed to refugees are more likely to discuss religious minorities online as well as vote for anti-immigration parties.