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Do incumbent governments do better in economic crises?

- October 14, 2008

Andrew (like most other political scientists who have studied this) suggests that voters are likely to punish incumbent governments for adverse economic conditions. Josep Colomer, looking at the comparative data, “provides a different perspective”:http://jcolomer.blogspot.com/2008/10/economic-crisis-favor-incumbent.html.

bq. Let us just consider the following observations: the British prime minister, Gordon Brown, was judged to be politically sunk just a few weeks ago, when survey polls showed the labour party 20 percentage points behind the opposition; however, as the stock markets have fallen in recent weeks, Brown has risen in the polls up to the point to contemplate a full recovery in electoral expectations. Similarly, while banks and markets fall down, Merkel in Germany, Sarkozy in France, and Berlusconi in Italy get increasing support in public opinion in front to divided and ineffective oppositions. Also Zapatero, for one, won the election in Spain a few months ago by reaching not to talk very much about the impending economic recession, but now that it is dramatically visible the opposition is neither obtaining much benefit.

bq. All this suggests that the relation between economic performance and governments’ accountability can be changing in an important way. Traditional political science models of ‘economic voting’ assumed that voters rewarded or punished the incumbent rulers for the country’s economic performance during the most recent period. According to observations across a wide range of countries, voters would evaluate incumbent rulers in ‘retrospect’ to make them accountable for the economy because they believed that government’s actions effectively impinged on issues such as employment, economic growth and inflation. However, greater economic interdependence may be changing voters’ perceptions. Specifically, the international scope of the current crisis may be triggering a turn in favor of incumbent governments as a consequence of both a sense of government’s impotence and a reaction to seek refuge into the hands of the sitting rulers in times of emergency –in a similar way as it tends to happen with natural disasters, terrorist attacks or external aggressions.

bq. This hypothesis has been tested with more than 400 state-wide elections in 75 democratic countries since 1975 in a recent article by Timothy Hellwig (University of Houston) and David Samuels (University of Minnesota). The authors basically regress the change in percentage of votes received by the incumbent head of government’s party regarding the previous election on the annual percentage change in real per capita GDP and the degree of internationalization of the country’s economy in terms of trade and capital flows. The author’s findings strongly support the argument that economic internationalization reduces voters’ propensity to connect domestic economic performance and incumbent merits. In their words, “voters residing in more closed economies are likely to sanction national leaders for past performance outcomes, but voters in open economies are relatively less likely to attribute reward or blame to domestic politicians for economic performance”.

This is an interesting argument – and can perhaps be reconciled with McCain’s recent poor performance in the opinion polls. First, even if the US is a relatively open economy, it is still the most important economy in the world, and hence US voters might reasonably or unreasonably hold the US government more accountable than, say, Danish voters would hold the Danish government accountable. I haven’t read the piece that Colomer refers to but it would be interesting to see if the model had a better fit with a US dummy variable. Second, this may just be noise – as Republicans are conceding, the McCain campaign seems to have had particular difficulties with economic issues that, perhaps, a different presidential candidate with more experience would not have had.