Political Support for Reforms: The Role of Unemployment and the Private Sector

26 Pages Posted: 12 May 1997  

Jan Fidrmuc

Brunel University - Department of Economics and Finance; Centre for Economic Policy Research (CEPR); University of Michigan at Ann Arbor - The William Davidson Institute

Date Written: October 1997

Abstract

I perform an empirical analysis of the relationship between economics and politics in the countries in transition. I use regional results of national elections in the Czech Republic, Hungary, Poland and Slovakia to link variations in support for reforms with the economic effects of reforms across regions. I show that support for reform is endogenous--the reform engenders constituencies that support or oppose it. In particular, high unemployment decreases support for parties associated with the reform and increases support for left-wing parties. The emerging private sector in general increases support for reform and reduces support for the communists and extreme left. This general pattern holds both within countries and across countries. The electoral failures of pro-reform parties in some transition countries can then be explained by imbalance between constituencies supporting and opposing radical economic reform.

JEL Classification: E24, E61, J64, O11

Suggested Citation

Fidrmuc, Jan, Political Support for Reforms: The Role of Unemployment and the Private Sector (October 1997). Available at SSRN: https://ssrn.com/abstract=330 or http://dx.doi.org/10.2139/ssrn.330

Jan Fidrmuc (Contact Author)

Brunel University - Department of Economics and Finance ( email )

Uxbridge UB8 3PH
United Kingdom
+44 1895 266 528 (Phone)
+44 1895 269 770 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

University of Michigan at Ann Arbor - The William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

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