Business Cycle and Political Election Outcomes: New Evidence from The Chilean Democracy
This paper explores the influence of economic variables in Chilean presidential elections. We use a panel where the dependent variable corresponds to the share of the vote obtained by the incumbent at a municipal level in the presidential elections of 1989, 1993 and 1999. We focus on the unemployment rate and the output-gap and find that both have a significant influence on the vote. The estimations also indicate that variables such as the crime rate, the poverty rate and the political coalition of the mayor in each municipality have an influence on the vote.
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