Does the World Economy Swing National Elections?

20 Pages Posted: 8 Nov 2004

See all articles by Andrew Leigh

Andrew Leigh

Australian House of Representatives Parliament House; Centre for Applied Macroeconomic Analysis, ANU; IZA

Multiple version iconThere are 2 versions of this paper

Date Written: October 2004

Abstract

Do voters reward national leaders who are more competent economic managers, or merely those who happen to be in power when the world economy booms? According to rational voting models, electors should parse out the state of the world economy when deciding whether to re-elect their national leader. I test this theory using data from 268 democratic elections held between 1978 and 1999, comparing the effect of world growth ("luck") and national growth relative to world growth ("competence"). In the preferred specification, which allows for countries to have different degrees of global integration, an extra percentage point of world growth boosts incumbents' chances of re-election by 9 percent, while an extra percentage point of national growth relative to world growth only boosts an incumbent's chances of re-election by 4 percent. Voters are more likely to reward competence in countries that are richer and better educated. Controlling for income, higher rates of newspaper readership reduce the returns to luck, while higher rates of television viewing reduce the returns to competence.

Keywords: Rational voting, elections, growth, media

JEL Classification: D72, D80, O40

Suggested Citation

Leigh, Andrew, Does the World Economy Swing National Elections? (October 2004). Available at SSRN: https://ssrn.com/abstract=615481 or http://dx.doi.org/10.2139/ssrn.615481

Andrew Leigh (Contact Author)

Australian House of Representatives Parliament House ( email )

Canberra, 2600
Australia

Centre for Applied Macroeconomic Analysis, ANU ( email )

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200
Australia

IZA ( email )

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