Do Individual Heterogeneity and Spatial Correlation Matter? An Innovative Approach to the Characterisation of the European Political Space

In this paper we refine the interpretation of the European two-dimensional political space and the investigation of its determinants compared to the approach commonly adopted in the spatial voting literature. Specifically, we take into account heterogeneity and cross-correlation among legislators by explicitly including into the model a spatial effect which, in turn, relies on new sets of linguistic, geographical, institutional and cultural metrics. We confirm that the first dimension of the European political space is mainly explained by the Members of European Parliament's ideological position on a left-right scale. We also find that correlation across legislators plays a significant role in explaining the first dimension when their pairwise distance is defined according to an individualism index, which turns out to be closely related to left-right ideology positioning. Even more interestingly, we show that "space" intended in a broad economic sense plays an important role in interpreting the second dimension of the political spectrum. The most relevant metric that induces spatial effects along the second dimension is based on an institutional index. Moreover, we also find that the second dimension is influenced by the gender composition of the political parties.