Policy Inertia, Election Uncertainty and Incumbency Disadvantage of Political Parties

57 Pages Posted: 25 Oct 2019

See all articles by Satyajit Chatterjee

Satyajit Chatterjee

Federal Reserve Bank of Philadelphia

Burcu Eyigungor

Federal Reserve Bank of Philadelphia

Date Written: 2019-10-24

Abstract

We document that postwar U.S. elections show a strong pattern of "incumbency disadvantage": If a party has held the presidency of the country or the governorship of a state for some time, that party tends to lose popularity in the subsequent election. We show that this fact can be explained by a combination of policy inertia and unpredictability in election outcomes. A quantitative analysis shows that the observed magnitude of incumbency disadvantage can arise in several different models of policy inertia. Normative and positive implications of policy inertia leading to incumbency disadvantage are explored.

Keywords: rational partisan model, policy inertia, incumbency disadvantage, election uncertainty, prospective voting

JEL Classification: D72, H50

Suggested Citation

Chatterjee, Satyajit and Eyigungor, Burcu, Policy Inertia, Election Uncertainty and Incumbency Disadvantage of Political Parties (2019-10-24). FRB of Philadelphia Working Paper No. 19-40, Available at SSRN: https://ssrn.com/abstract=3475294 or http://dx.doi.org/https://doi.org/10.21799/frbp.wp.2019.40

Satyajit Chatterjee (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

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Philadelphia, PA 19106-1574
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HOME PAGE: http://sites.google.com/site/chatterjeesatyajit/home

Burcu Eyigungor

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

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