The economic voter and economic crisis

Theories of economic voting have a long tradition in political science and continue to inspire a large group of scholars. Classical economic voting theory assumes a reward-and-punishment mechanism (Key, 1966). This mechanism implies that incumbents are more likely to stay in power under a good economy, but are cast out under a bad economy (Lewis-Beck and Stegmaier, 2000). The economy has repeatedly been shown to be a major determinant of electoral behavior (see especially the recent book by Duch and Stevenson, 2008), but the current economic crisis seems to provide a marked illustration of how the economy affects voting. In recent elections across the Western industrialized world, most ruling coalitions lost their majority. Opposition parties, on the other hand, whether right wing or left wing, have appeared to benefit from the economic downturn.

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

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 dataset 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.