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Words speak louder than actions: The impact of politics on economic performance

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  • Osterloh, Steffen

Abstract

In this paper, a new approach to disclose the impact of politics on economic growth is presented: we use data derived from content analysis of party manifestos as measures of party preferences. In a panel of 23 OECD countries, we detect a positive impact of party support for various market-liberal policies on economic performance. In particular, we show that parties which were more concerned with market interventions and - to a lesser extent - welfare state policies impacted on growth negatively; those which proposed incentives for business as well as technology and infrastructure had a positive impact. Moreover, the robustness of the results is demonstrated in a model averaging framework. --

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 10-092.

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Date of creation: 2010
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Handle: RePEc:zbw:zewdip:10092

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Keywords: economic growth; political economy; ideology; panel data; model averaging;

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Partiprogram och ekonomisk tillväxt
    by Niclas Berggren in Nonicoclolasos on 2010-12-28 03:57:18
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Cited by:
  1. François Facchini & Mickaël Melki, 2013. "Political Ideology and Economic Growth: Evidence from the French Democracy," Documents de travail du Centre d'Economie de la Sorbonne, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne 13077, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  2. Brech, Viktor & Potrafke, Niklas, 2014. "Donor ideology and types of foreign aid," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 61-75.

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