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The Impact of the Economy on Presidential Elections Throughout US History

Abstract

As numerous studies in the US and elsewhere document, voters often hold incumbents accountable for recent economic circumstances. However, our knowledge of the conditions that allow voters to do so remains incomplete. In particular, most findings about economic voting come from studies of modern economies (post World War II). Modern economies have a host of characteristics that seem to lend themselves to economic voting. Their governments play a large role in the economy and have the Keynesian toolset necessary to influence the economy. Their voters are educated and have access to detailed economic data from ubiquitous media. Are these and other modern conditions necessary for economic voting? Would voters still hold politicians accountable even under adverse conditions? Using economic measures now available back to the 1790s, we study economic voting from the earliest days of the US Republic when none of these conditions were met. Voters, we find, appear to judge incumbent presidents on the economy all the way back to George Washington. Consistent with this pattern, we also find that the economy appears to shape presidents' decisions to run again throughout US history. These findings support recent comparative evidence that economic voting is pervasive across a variety of contexts.

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Notes

  1. 1.

    Replication materials for this study can be accessed at https://doi.org/10.7910/DVN/DTSJUI.

  2. 2.

    Note that Jacobson and Kellner (1981) make a similar argument about the decisions of members of congress to seek re-election.

  3. 3.

    Specifically, the Fugitive Slave Act split Fillmore’s Whig party, he narrowly lost re-nomination, and the Whig defeat in the general election signaled its end as a national party. Hayes came to power through the Compromise of 1877, and strife over “Rutherfraud’s” ascendance may have spurred him to honor his pre-election pledge of serving only one term (of course, numerous candidates broke such promises). LBJ’s 1968 withdrawal during the nomination process may have been due to the Vietnam War—while he initially ran for a second full term, he withdrew after barely defeating anti-war candidate Eugene McCarthy in the New Hampshire primary. Ford’s loss may have stemmed in part from his unpopular pardon of Nixon and a primary fight with Ronald Reagan.

  4. 4.

    Several former presidents sought non-consecutive terms (such as van Buren, Fillmore, Grant, and Theodore Roosevelt), but these do not factor into our analysis.

  5. 5.

    In part, the absence of autocorrelation arises because we code our dependent variables not based on candidate or party but incumbent. In a regression of our key run-win dependent variable on election-year GDP growth, the Durbin-Watson statistic is almost exactly 2, indicating no presence of autocorrelation at lag 1 in the residuals. The Breusch-Godfrey LM test for autocorrelation yields a p-value of 0.31 for the first lag and 0.10 for the second lag. In our analysis examining incumbent party vote share, we do detect autocorrelation but it's only clearly present post-World War II.

  6. 6.

    We code the Quasi-War as unpopular in the 1800 election; the War of 1812 as unpopular in 1812 but popular in 1816; the Mexican–American War as popular in 1848; the Civil War as popular in 1864; the Spanish-American war as popular in 1900; World War I as unpopular in 1920; World War II as popular in 1944; the Korean War as unpopular in 1952; the Vietnam War as unpopular in 1968 but popular in 1972; and the Iraq war as unpopular in 2004.

  7. 7.

    We tried an alternative version coding 1800, 1812, 1848, 1972, and 2004 to neither popular nor unpopular, a more conservative coding. We also tried a liberal version where we coded 1916, 1940, and 1964 as popular (popular for staying out in 1916 and 1940 and for responding to an alleged attack in 1964).

  8. 8.

    The control variables generally have their expected effects. Imminent death decreases the probability of running again and winning. War has the opposite of the expected effect on running again. The party’s years in power has a negative effect on winning. Further analysis, however, reveals that this effect is absent in America’s first century (SI section 2). Party dominance weakly predicts running again, but better predicts winning. The presence of multiple candidates understandably hurts the incumbent’s chances of winning, although this may just represent a post-treatment consequence of a weak incumbent.

  9. 9.

    Some states held popular votes before 1824, but the reporting was inconsistent, with totals for individual electors and totals across the candidates' electors sometimes failing to match.

  10. 10.

    Another possible explanation for the weak relationship between election-year growth and incumbent vote percent is that the composition of the United States changed considerably across elections as states joined the union, making election to election comparisons of incumbent vote percent noisy. To explore this possibility, we recalculated incumbent vote percent only among states in the union in the prior election. We also explored analyzing change in incumbent party and incumbent candidate vote share by controlling for lagged incumbent vote, again focusing only on states in the union in subsequent elections. These analyses, however, yielded very similar estimates to those in Table 3.

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Table 4 Descriptive statistics

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Guntermann, E., Lenz, G.S. & Myers, J.R. The Impact of the Economy on Presidential Elections Throughout US History. Polit Behav 43, 837–857 (2021). https://doi.org/10.1007/s11109-021-09677-y

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Keywords

  • American politics
  • Economic voting
  • Presidential elections