Of Honeymoons and Economic Performance: Comment on Hibbs

Professor Hibbs's article presents an ingenious model wherein political support of the government depends on “cumulative discounted relative performance.†Specifically, “the worse (better) the performance of the prior government, the higher (lower) will be the initial support of the new government… (G)overnments following bad acts by the opposition are likely to enjoy greater initial support than governments following good acts.†This is a reasonable hypothesis, and it may well be correct. However, Hibbs offers no evidence of its correctness other than the overall performance of his model, and he reports no consideration, let alone rejection, of alternative hypotheses. Instead he assumes that the discounted past performance affects the new government's support with the opposite sign but with the same slope. Pursuit of Hibbs's illustrative example shows that the assumption is far from trivial, and that it produces some startling results.