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Macroeconomics, economic crisis and electoral outcomes: A national European pool

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Abstract

An abundance of comparative survey research argues the presence of economic voting as an individual force in European elections, thereby refuting a possible ecological fallacy. But the hypothesis of economic voting at the aggregate level, with macroeconomics influencing overall electoral outcomes, seems less sure. Indeed, there might be a micrological fallacy at work, with the supposed individual economic vote effect not adding up to a national electoral effect after all. Certainly that would account for the spotty evidence linking macroeconomics and national election outcomes. We examine the possibility of a micrological fallacy through rigorous analysis of a large time-series-cross-sectional data set of European nations. From these results, it becomes clear that the macroeconomy strongly moves national election outcomes, with hard times punishing governing parties, and good times rewarding them. Further, this economy–election connection appears asymmetric, altering under economic crisis. Indeed, we show that economic crisis, defined as negative growth, has much greater electoral effects than positive economic growth. Hard times clearly make governments more accountable to their electorates.

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Notes

  1. It is known that estimates from an FE and LDV model may be biased, with this bias increasing as t (that is, number of elections in a country) becomes smaller. One approach to overcoming this source of bias is to use a difference GMM (generalized method of moments) estimator. But these data cannot be fully considered as panels, since we are not following the same incumbents over time. Rather, the incumbent parties change from election to election. Consequently using, for example, an Arellano and Bond estimator with its automatic autocorrelation correction (at two lags of the dependent variable) would be incorrect. The results from several Monte Carlo simulation, however, indicate that, assuming a sound specification, the approach used here in dynamic Model 2 performs as well or better than more complicated IV estimators (Adolph et al, 2005, p. 18) (see also Beck and Katz, 2009; Judson and Owen, 1999).

  2. Results are not shown, but are available from the authors on request.

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Correspondence to Ruth Dassonneville.

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Dassonneville, R., Lewis-Beck, M. Macroeconomics, economic crisis and electoral outcomes: A national European pool. Acta Polit 49, 372–394 (2014). https://doi.org/10.1057/ap.2014.12

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