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Rethinking Electoral Volatility

- September 1, 2009

In the aftermath of this weekend’s “Japanese elections”:http://www.google.com/hostednews/ap/article/ALeqM5jCB2T9ZN5XC3YCv0fX-ysClgq4XQD9AE0NGO1, we’re once again hearing a lot of discussion about sweeping elections or even “political earthquakes”:http://www.gqmagazine.co.uk/gq-daily-news/articles/090901-laurie-laird-the-japanese-election.aspx. When political scientists want to think about changes in election results across successive elections, we turn to measures of _electoral volatility_, or, more specifically in most cases, the “Pedersen Index of Electoral Volatility”:http://en.wikipedia.org/wiki/Pedersen_index.

The Pedersen Index is a fairly neat measure that calculates the change in each party’s results from the first election to the second election, and then summarizes this volatility across all of the parties (see “here”:http://janda.org/c24/Readings/Pedersen/Pedersen.htm for more details.) Given its (general) ease of calculation and its fairly close approximation of the underlying concept, it is no wonder that the measure has become fairly common in the comparative politics literature.

The measure, however, suffers from a fairly serious flaw, especially when we move to newly competitive party systems. Namely, the measure does nothing to distinguish between volatility caused when voters shift between two existing parties and volatility caused by new party entry and old party exit. Put another way, both the 2009 Japanese elections and the “2001 Polish elections”:http://en.wikipedia.org/wiki/Polish_parliamentary_election,_2001 will generate high volatility scores; however, in the Polish case, over 40% of the vote went to essentially new parties. This in turn has important implications for both policy – e.g., foreign investors might have a very different take on making long term investments in countries where votes swing between established parties and where new parties are constantly entering the political scene – and theory, i.e., we might expect different variables to explain swings in votes between established parties as opposed to decisions regarding new party entry.

With this in mind, “Eleanor Powell”:http://www.yale.edu/polisci/people/epowell.html and I have a “new paper”:http://homepages.nyu.edu/~jat7/Powell_Tucker_Volatility.pdf that develops rules for calculating these two separate types of volatility – which we have creatively labeled Type A and Type B volatility – and then compares the two volatility measures across 80 elections from 21 post-communist countries. (For anyone who is interested, we’ll be presenting the paper at APSA this Friday, September 4th, at 2:00 PM on Panel 11-31.)

Some of the initial findings are quite interesting.

For example, here’s a graph of the total volatility (as calculated by the standard Pedersen Index) by election over time:


We can clearly see a gentle downward slope, leading us to conclude that volatility is falling in the post-communist world, much as we might expect in consolidating party systems. However, here’s a graph of just the Type B Volatility (i.e., the volatility caused by voters switching between parties that contested both elections):


Now our downward slope has disappeared. So in terms of volatility across existing political parties, there does _not_ seem to be much stability developing over time. So where did the decrease in volatility come from in the overall Pedersen Index? Here’s the Type A volatility (i.e., the volatility caused by new party entry and old party exit):


So what is apparently going on is that there is a decline in the volatility caused by new party entry and old party exit. This is also an encouraging sign for the development of stability in new party systems, but it is one we would not have been able to identify using the Pedersen Index alone. For more, see the “paper”:http://homepages.nyu.edu/~jat7/Powell_Tucker_Volatility.pdf.

And bonus points for anyone who can come up with a better name for the two types of volatility measures…

[Hat tip to “Mik Laver”:http://politics.as.nyu.edu/object/MichaelLaver.html, whose comments on another paper during a reading group were the impetus for this research.]