69 Pages Posted: 16 Jan 2016
Date Written: January 1, 2016
What explains the sharp divide among European publics over the Grexit? We explore this question using original surveys from four of the largest European economies. We contend that differences in citizens' own economic interests, as well as the often-mentioned chasm between supporters of mainstream and extremist parties, provide little insight into the public divide over the Grexit. Instead, we show that the key factor is the split between the left and right. We then develop and test a set of theoretical explanations for this cleavage. We find that the left-right divide over the Grexit is not driven by differences in attitudes on redistribution, levels of empathy, or general EU support. Instead, we find that the primary mechanism is that left and right voters have different expectations about the impact of a Grexit on the European economy as a whole. These expectations largely reflect differences in core beliefs about the promise of a free-market approach.
Keywords: Grexit, bailouts, financial crisis, European Union, redistribution, public opinion
JEL Classification: F33
Suggested Citation: Suggested Citation
Bansak, Kirk and Bechtel, Michael M. and Hainmueller, Jens and Margalit, Yotam M., The Ideological Basis of the Grexit Debate (January 1, 2016). Stanford University Graduate School of Business Research Paper No. 16-9. Available at SSRN: https://ssrn.com/abstract=2715746 or http://dx.doi.org/10.2139/ssrn.2715746