Context and the Economic Vote: A Multilevel Analysis

Voters use observed economic performance to infer the competence of incumbent politicians. These economic perceptions enter the voter's utility calculations modified by a weight that is minimized when the variance in exogenous shocks to the economy is very large relative to the variance in economic outcomes associated with the competence of politicians. Cross-national variations in the political and economic context systematically increase or undermine the voter's ability to ascertain the competency of incumbents. We test one hypothesis: As policy-making responsibility is shared more equally among parties, economic evaluations will be more important in the vote decision. We employ two multilevel modeling procedures for estimating the contextual variations in micro-level economic voting effects: a conventional pooled approach and a two-stage procedure. We compare the multivariate results of a pooled method with our two-stage estimation procedure and conclude that they are similar. Our empirical efforts use data from 163 national surveys from 18 countries over a 22-year period.