Voting and the economic cycle

Maloney, John; Pickering, Andrew

doi:10.1007/s11127-014-0205-z

Cited by 10 publications

(6 citation statements)

References 44 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In reality, it is unlikely that all voters adjust their expectations of government policy as soon as state-specific recession tendencies are discussed in the media. In particular, unsophisticated voters should remain unsophisticated, if recession expectations change [17]. …”

Section: Resultsmentioning

confidence: 99%

See 1 more Smart Citation

Political cycles: Beyond rational expectations

Bohn

2018

PLoS ONE

View full text Add to dashboard Cite

Motivation and methodExisting rational expectations models cannot satisfactorily explain why political budget manipulations systematically raise re-election chances and only occur in “specific contexts”. This paper offers a theoretical explanation by including unsophisticated voters into an opportunistic political cycle model; unsophisticated voters are unable to take the optimal behaviour of other agents (fully) into account, but may, nonetheless, vaguely suspect government deception.ResultsFirst, rationally expected manipulations are, on average, fruitless in equilibrium. By including unsophisticated voters we can, however, corroborate empirically found electoral effects of political budget manipulations. Second, unsophisticated voters become anxious and suspicious in an intransparent or uncertain world, but the government tries to “outperform” their scepticism by increasing budget manipulations in order to appear more competent and, ultimately, increase re-election chances. It is, therefore, not surprising that political budget cycles are observed in countries suffering from intransparencies such as developing countries or new democracies. Third and in addition, the model presented here predicts that political opportunism produces, unintentionally, a countercyclical policy effect in election years, thereby, for instance, alleviating the typical problem of policy procyclicality in developing countries.Additional contributionThe paper also offers a theoretical explanation for political distortions found in forecasts by US states. Based on overly optimistic revenue forecasts the incumbent state government can conduct expansionary fiscal policies in order to appear more competent prior to an upcoming election. Since the resulting deficit can only be observed afterwards, the government can effectively circumvent a constitutional balanced budget constraint. As a result, there are political forecast and budget cycles in the state. More generally, however, these findings may also apply to European countries where balanced budget constraints are or will be in place (for instance the debt brakes in Switzerland and Germany); similarly, they apply to the supra-national European Fiscal Compact of the European Union.

show abstract

Section: Resultsmentioning

confidence: 99%

“…In Bohn [16], voters can be mislead by the government because it can use its incumbency advantage to manipulate voters’ perceptions of the deficit. In Maloney and Pickering [17], sophisticated voters can distinguish (long-term) trend growth from short-term economic cycles, whereas unsophisticated voters only respond to raw GDP data.…”

Section: Introductionmentioning

confidence: 99%

Political cycles: Beyond rational expectations

Bohn

2018

PLoS ONE

View full text Add to dashboard Cite

show abstract

“…Since the beginning of the 2000's, some articles and books have studied the influence of economic conditions in globalized economies and the main result is that voters reward / punish less when the economies are highly globalized: see notably Hellwig (2001), Hellwig and Samuels (2007), and Duch andStevenson (2008, 2010). Maloney and Pickering (2015) have taken into account the influence of the global economy and have found favorable results for sophisticated voters (the economic variable is calculated with the difference between the national economy and global economy).…”

Section: The Popularity Function the Economy And Voters' Behaviourmentioning

confidence: 99%

“…Cho and Young (2002) use simultaneously these two positive and negative variables to study the influence of the unexpected inflation on the popularity of the American president and find favourable results for the asymmetry hypothesis. Another possibility is to use simultaneously an economic variable and the absolute value of this variable as Maloney and Pickering (2015) make for the vote and find favourable results for the raw economic growth and for the cyclical component of GDP. Headrick and Lanoue (1991) use this method with unemployment levels to study the asymmetry hypothesis for the government popularity in Great Britain.…”

Section: Estimationsmentioning

confidence: 99%

The impact of economic and political factors on popularity in France (1981–2017)

Auberger

2019

Fr Polit

View full text Add to dashboard Cite

In this article, we study a popularity function for the popularity of the French political parties (1981Q2-2017Q1). At first, we suppose that voters have a retrospective behaviour according to reward-punishment model in a closed economy. We show that the unemployment rate has a significant influence on the popularity of the French political parties. We find unfavourable results for the partisan hypothesis. We also show that the economic openness has an influence on popularity. We also find a partly expected result for the asymmetry hypothesis: punishment without reward. For the political variables, we show the significant influence of the honeymoon effect, the second order elections (regional or European), and the congresses of the Socialist party.

show abstract

“…() to be positively related to government quality (hence negatively related to rent‐seeking). High infrastructure spending represents low rents so far as it promotes structural non‐cyclical growth, which gains votes (Maloney and Pickering ) but may displace spending on other projects that are dearer to the government or sectional interests that it wants to help or please. A caveat here could be that infrastructure spending, for example the award of construction contracts, is particularly susceptible to resource diversion.…”

Section: Empirical Evidencementioning

confidence: 99%

The Economic Consequences of Political Donation Limits

Maloney

Pickering

2017

Economica

Self Cite

View full text Add to dashboard Cite

The economic consequences of limits on political donations depend on the degree of political competition. Donors, who are ideologically aligned with candidates, decide how much to contribute to their own candidate. They may benefit from rent-seeking by their own candidate but dislike rent-seeking by the opposition. Increased rent-seeking by politicians thus generates campaign contributions for themselves but also mobilizes donations to the opposing candidate, potentially to a greater extent. This latter effect acts as a deterrent to rent-seeking when contributions finance electoral campaigns and positively affect election chances. When political competition is low, incumbent donors outnumber opposition donors, and limits reduce rent-seeking. When political competition is high, donors are equalized and laissez-faire reduces rent-seeking. Consistent with these hypotheses, data from the USA suggest that limits are associated with better policies and stronger growth performance at low levels of political competition, while laissez-faire is preferred when political competition is high.

show abstract

Voting and the economic cycle

Cited by 10 publications

References 44 publications

Political cycles: Beyond rational expectations

Political cycles: Beyond rational expectations

The impact of economic and political factors on popularity in France (1981–2017)

The Economic Consequences of Political Donation Limits

Contact Info

Product

Resources

About