Synopsis for Chapter 9 Elections and the Economy
Timothy Hellwig
Indiana University
This chapter examines the effects of the economy on elections. Does the economy matter for elections? Why does it matter more or less in certain places than others? Are the sources of variation in the economy’s influence on the vote found at the level of the individual voter or at the national level? Further, which actors drive the economy-election connection – voters, politicians, both, or neither? These questions—and the consequences they imply for democratic elections as instruments of political accountability—are the focus of this chapter.
I proceed in three main parts. I begin with the voters, asking why and how citizens incorporate information about the economy into their decision at the ballot box. I report results of analyses of survey data from 28 established and emerging democracies. Results show that while individual perceptions of economic conditions bear on vote choice, the relationship varies widely. To shed light on the sources of these differences, I identify four sources of debate among students of economic voting: the different ways voters evaluate economic performance, questions of “which economy” the voter evaluates—the national economy or one’s pocketbook, the relationship between voter perceptions and the actual economy, and measurement issues involved in gauging voter choice.
The second part of the chapter migrates from the micro to the macro. It is one thing to measure the influence of the economy on an individual’s preference for one party over another, but what does this mean for election outcomes themselves? I examine the economy-election connection using aggregate-level data from 77 countries over a 50-year span year. Results show that the extent to which economic performance matters for election outcomes depends on a variety of factors. All else equal, the influence of the economy on incumbent party vote shares is strongest in presidential regimes and weakest in hybrid systems. Results also show, however, that economy-election relationship works better for younger and less institutionalized democracies relative to older, more consolidated ones. Far from being anomalous, I argue that these findings are consistent with the incentives different political environments provide.
The third section shifts the focus from the voters to political elites. Here I argue that voter propensities to connect the economy to their choice at the polls—the focus of most work on economic voting—is itself shaped by politicians. Politicians deliver messages designed to increase their chances—or harm their competitors’—in the next election. Some political systems facilitate manipulation by elites while others impede it. The argument is illustrated through aggregate-level analyses that take into account opportunistic election timing, issue polarization among competing political parties, and the implementation of policies designed to tie policymakers’ hands. The conclusion suggests that a complete understanding of how the economy matters for how democratic elections work must give greater credence to the role of strategic political elites.