Does the World Economy Swing National Elections?

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Does the World Economy Swing National Elections?

Author Info

Andrew Leigh

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Andrew Keith Leigh

Abstract

Do voters reward national leaders who are more competent economic managers, or merely those who happen to be in power when the world economy booms? According to rational voting models, electors should parse out the state of the world economy when deciding whether to re-elect their national leader. I test this theory using data from 268 democratic elections held between 1978 and 1999, comparing the effect of world growth (“luck”) and national growth relative to world growth (“competence”). In the preferred specification, which allows for countries to have different degrees of global integration, an extra percentage point of world growth boosts incumbents’ chances of re-election by 9 percent, while an extra percentage point of national growth relative to world growth only boosts an incumbent’s chances of re-election by 4 percent. Voters are more likely to reward competence in countries that are richer and better educated. Controlling for income, higher rates of newspaper readership reduce the returns to luck, while higher rates of television viewing reduce the returns to competence.

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Paper provided by Centre for Economic Policy Research, Research School of Social Sciences, Australian National University in its series CEPR Discussion Papers with number 485.

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Length: 18 pages
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:auu:dpaper:485

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Article
- Andrew Leigh, 2009. "Does the World Economy Swing National Elections?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(2), pages 163-181, 04. [Downloadable!] (restricted)

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-06-03 (All new papers)
NEP-POL-2006-06-03 (Positive Political Economics)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Other versions:
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Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

John Maloney & Andrew Pickering, 2008. "Ideology, Competence and Luck: What determines general election results?," Bristol Economics Discussion Papers 08/607, Department of Economics, University of Bristol, UK. [Downloadable!]
Gikas Hardouvelis & Dimitrios Thomakos, 2007. "Consumer Confidence and Elections," Working Papers 0003, University of Peloponnese, Department of Economics. [Downloadable!]
Other versions:
- Dimitrios D. Thomakos & Gikas A. Hardouvelis, 2007. "Consumer Confidence and Elections," Working Paper Series 42-07, Rimini Centre for Economic Analysis, revised Jul 2007. [Downloadable!]
- Hardouvelis, Gikas A & Thomakos, Dimitrios D, 2008. "Consumer Confidence and Elections," CEPR Discussion Papers 6701, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)

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