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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: data derived from content analysis of party manifestos is used as measures of party preferences. In a panel of 23 OECD countries, a positive impact of party support for various market-liberal policies on economic performance can be detected. In particular, I 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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  • Osterloh, Steffen, 2012. "Words speak louder than actions: The impact of politics on economic performance," Journal of Comparative Economics, Elsevier, vol. 40(3), pages 318-336.
    • Handle: RePEc:eee:jcecon:v:40:y:2012:i:3:p:318-336
    DOI: 10.1016/j.jce.2012.05.004
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    1. Partiprogram och ekonomisk tillväxt
      by Niclas Berggren in Nonicoclolasos on 2010-12-28 09:57:18

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    More about this item

    Keywords

    Economic growth; Political economy; Ideology; Panel data; Model averaging;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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