Electoral Opportunism: Disentangling Myopia and Moderation

Abstract

A central component of representative democracy, competitive elections imply that political incumbents face uncertainty about being re-elected into o ce. This study jointly considers two types of opportunistic behavior that may be triggered by such uncertainty-policy myopia and policy moderation-which hitherto have been the focus of separate research traditions. Disentangling the two behaviors theoretically and empirically, we evaluate their prevalence in economic policy-making among Swedish local governments. To this end, we apply a new measure of electoral competitiveness that captures the incumbent government's re-election probability, for which plausibly exogenous variation is generated by exploiting national-level vote intention polls. We find a substantial moderating e ect of competitiveness on incumbents' tax rate decisions-shifting policy towards the median voter-but little evidence of policy myopia. Further corroborated by original survey evidence on politicians' perceptions of their re-election prospects and opportunistic policy options, these findings challenge the widespread notion that electoral opportunism is inherently shortsighted .

Electoral competition and the party politics of public investments

“…The final contribution of this article concerns the theoretical foundations of the determinants of long-term investments. We do not find support for the myopia hypothesis, which proposes a U-shaped relationship between investments and electoral competition, supposing that investments should be lowest when electoral competition is the most intense and highest when a party is almost certain to win or lose the next election (Cronert and Nyman, 2020;Seiferling, 2019). The time inconsistency problem, rather than voters' myopia, represents the main impediment to investments, as parties are much more likely to propose investments in technology and infrastructure when they have a strong probability to win the next election.…”

Do voters' biases impede future‐oriented policy‐making?

“…With regard to the specific question of how the electoral competition facing the incumbent government matters for long‐term governance, the only study to our knowledge that investigates this question in Swedish municipalities is that by Cronert and Nyman (2022) on the dynamics of public finances between 1998 and 2018. The authors investigated how two types of policy outcomes commonly associated with short‐termism – the budget balance and public investments – were affected by changes in the estimated probability of re‐election of the incumbent local government into office, caused by plausibly exogenous trends in national‐level vote intention polls observed over the election period.…”

“…A long‐standing literature concerned with future‐oriented policy‐making, or long‐term governance, takes as its point of departure various types of biases among voters – such as time‐inconsistent consumption preferences (Strotz, 1955), a desire to exploit future generations (Bowen et al., 1960), lack of information about long‐term policy outcomes (Rogoff & Sibert, 1988; Rogoff, 1990) and a tendency to economize on cognitive effort when deciding on whom to cast their votes in an election (Jacobs, 2011). These biases are understood as providing incentives for incumbent governments to prioritize policies with more immediate payoff structures when seeking to please voters – and they are often seen as particularly problematic when elections are competitive – i.e., when their outcome is uncertain – because this is when the governments have most to gain from imposing myopic policy opportunistically to improve their re‐election prospects (Cronert & Nyman, 2022; Schultz, 1995).…”

Changing Prices in a Changing Climate: Electoral Competition and Fossil Fuel Taxation

“…We should expect electoral competition to play a crucial role is shaping the ability of governments to increase prices for any widely consumed good. Lastly, the paper provides a sharp test of intertemporal policy choice, contributing to debates in political science regarding the politics of long-term policymaking and the myopic effects of electoral competition (Alesina & Tabellini, 1990;Azzimonti, 2015;Boston, 2016;Cronert and Nyman (2021);Garrett, 1993;Hubscher and Sattler, 2017;Immergut and Abou-Chadi, 2014;Jacobs, 2011Jacobs, , 2016Nordhaus, 1975;Seiferling, 2020).…”

“…Second, the paper contributes to broader debates in political science and economics about the extent to which electoral competition has a myopic effect on politicians' behavior (Alesina & Tabellini, 1990;Cronert & Nyman, 2021;Hubscher and Sattler, 2017;Immergut and Abou-Chadi, 2014;Nordhaus, 1975;Schultz, 1995). To date, scholars have generally analyzed aggregate taxing and spending decisions, which can be blunt measures of political decision-making.…”