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Did political constraints bind during transition? Evidence from Czech elections 1990 - 2002

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Orla Doyle
Patrick Paul Walsh (Department of Economics, Trinity College)

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Abstract

Many theoretical models of transition are driven by the assumption that economic decision making is subject to political constraints. In this paper we empirically test whether the winners and losers of economic reform determined voting behaviour in the first five national elections in the Czech Republic. We propose that voters, taking stock of endowments from the planning era, could predict whether they would become “winners” or “losers” of transition. Using survey data we measure the percentage of individuals by region who were “afraid” and “not afraid” of economic reform in 1990. We define the former as potential “winners” who should vote for pro-reform parties, while latter are potential “losers” who should support left-wing parties. Using national election results and regional economic indicators, we demonstrate that there is persistence in support for pro-reform and communist parties driven by prospective voting based on initial conditions in 1990. As a result, we show that regional unemployment rates in 2002 are good predictors of regional voting patterns in 1990.

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Paper provided by Trinity College Dublin, Department of Economics in its series Trinity Economics Papers with number 2000515.

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Date of creation: Sep 2005
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Handle: RePEc:tcd:tcduee:2000515

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  1. Alexander Repkine & Patrick P. Walsh, 1998. "European Trade and Foreign Direct Investment U-Shaping Industrial Output in Central and Eastern Europe - Theory and Evidence," IMF Working Papers 98/150, International Monetary Fund.
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  2. Fidrmuc, Jan, 2000. "Political support for reforms: Economics of voting in transition countries," European Economic Review, Elsevier, vol. 44(8), pages 1491-1513, August. [Downloadable!] (restricted)
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  3. Dewatripont, Mathias & Roland, Gerard, 1995. "The Design of Reform Packages under Uncertainty," American Economic Review, American Economic Association, vol. 85(5), pages 1207-23, December. [Downloadable!] (restricted)
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  4. Gerard Roland, 2002. "The Political Economy of Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 29-50, Winter. [Downloadable!] (restricted)
  5. Orla Doyle & Jan Fidrmuc, 2005. "Voice of the Diaspora: An Analysis of Market Voting Behaviour," The Institute for International Integration Studies Discussion Paper Series iiisdp042, IIIS. [Downloadable!]
  6. Doyle, Orla & Fidrmuc, Jan, 2004. "Voice of the Diaspora: An Analysis of Migrant Voting Behaviour," CEPR Discussion Papers 4619, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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