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Inequality, macroeconomic performance and political polarization: An empirical analysis

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  • Proaño Acosta, Christian
  • Peña, Juan Carlos
  • Saalfeld, Thomas

Abstract

This paper investigates the macroeconomic and social determinants of voting behavior, and especially of political polarization, for 20 advanced countries using annual data ranging from 1970 to 2016 and covering 291 parliamentary elections. Using a panel estimation approach and rolling regressions we find empirical evidence supporting that a) traditionally established mainstream parties (center-left, center, and center-right) are penalized for poor economic performance; b) far-left (populist and radical parties) parties benefit from increasing unemployment rates; c) greater income inequality has increased the electoral support for far-right parties, particularly in recent times. Further, we do not find empirical support for the notion that social and economic globalization has led to an increase of popularity of far-right parties. These results have wide reaching implications for the current political situation in the Western world.

Suggested Citation

  • Proaño Acosta, Christian & Peña, Juan Carlos & Saalfeld, Thomas, 2019. "Inequality, macroeconomic performance and political polarization: An empirical analysis," BERG Working Paper Series 149, Bamberg University, Bamberg Economic Research Group.
    • Handle: RePEc:zbw:bamber:149
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    Cited by:

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    3. Schulz, Jan & Mayerhoffer, Daniel M., 2021. "A network approach to consumption," BERG Working Paper Series 173, Bamberg University, Bamberg Economic Research Group.
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    7. Mundt, Philipp & Cantner, Uwe & Inoue, Hiroyasu & Savin, Ivan & Vannuccini, Simone, 2021. "Market selection in global value chains," BERG Working Paper Series 170, Bamberg University, Bamberg Economic Research Group.

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    More about this item

    Keywords

    Income Inequality; Political Polarization; Globalization; Economic Voting Behavior;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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