Do the welfare benefits weaken the economic vote? A cross-national analysis of the welfare state and economic voting
| Date | 01 January 2019 |
| DOI | 10.1177/0192512117716169 |
| Author | Jungsub Shin,Brandon Beomseob Park |
| Published date | 01 January 2019 |
| Subject Matter | Articles |
https://doi.org/10.1177/0192512117716169
International Political Science Review
2019, Vol. 40(1) 108 –125
© The Author(s) 2017
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DOI: 10.1177/0192512117716169
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Do the welfare benefits weaken
the economic vote? A cross-national
analysis of the welfare state and
economic voting
Brandon Beomseob Park
University of Missouri, USA
Jungsub Shin
Hanyang University, South Korea
Abstract
Comparative economic voting studies have found great instability in economic voting across countries and
over time. In explaining this instability, we highlight the role of welfare systems because strong welfare
protection attenuates voters’ incentives to base their vote on government economic performance. By
analyzing 174 legislature elections in 31 Organisation for Economic Co-operation and Development (OECD)
countries from 1980 to 2010 and by taking into account clarity of responsibility, we find that welfare
protection weakens the linkage between macroeconomic outcomes and incumbent electoral fortunes. This
result implies that strong welfare protection enables politicians to avoid blame for economic failures.
Keywords
Welfare state, economic voting, clarity of responsibility, electoral accountability
Introduction
Is the effect of economy on incumbents’ electoral fortunes always the same across countries and
over time? While decades of scholarship has shown that the economy matters for election out-
comes, a burgeoning literature has explored great instability in the strength of the economic vote
in different political and economic contexts. For instance, much scholarship has focused on how
the economic vote is affected by political contexts including clarity of responsibility (e.g. Powell
and Whitten, 1993), global governance (Hobolt and Tilley, 2014), and democratic transitions in
post-communist countries (Fidrmuc, 2000; Roberts, 2008). On the other hand, a growing literature
Corresponding author:
Jungsub Shin, Institute for Euro-African Studies, Hanyang University, Seoul, South Korea.
Email: jsshin.polisci@gmail.com
716169IPS0010.1177/0192512117716169International Political Science ReviewPark and Shin
research-article2017
Article
Park and Shin 109
has focused on economic contexts such as the welfare state (Pacek and Radcliff, 1995), level of
economic development (Gélineau, 2013; Remmer, 1991), and globalization (Hellwig and Samuels,
2007).
In this article, we focus on lack of welfare protection as an important factor in the instability of
economic voting. More specifically, our research examines whether high levels of welfare protec-
tion weaken the linkage between macroeconomic outcomes and incumbent electoral fortunes.
Several things drew our attention to this welfare state hypothesis. First, there is disagreement on
the role of welfare state in economic voting. Some argue that good welfare systems protect voters
against economic adversity, thus voters in welfare state are less likely to blame politicians for eco-
nomic failures (Pacek and Radcliff, 1995; Singer, 2011a). On the other hand, there are scholars
who find that there is no substantive association between welfare protection and economic voting
(Palmer and Whitten, 2002; Van der Brug et al., 2007).
Second, previous studies do not properly account for the role of clarity of responsibility. Clarity
of responsibility has been considered as one of the most important factors which causes fluctua-
tions in economic voting because citizens need to identify who is responsible in order to either
reward or punish incumbents for economic conditions. For example, divided government, coali-
tion government or federal systems may undermine voters’ ability to assign accountability for
economic performance, which eventually weakens the role of the economy in arriving at a vote
choice. That said, excluding clarity of responsibility in economic voting models might cause
omitted variable bias.
Third, existing studies, particularly Pacek and Radcliff (1995), contain methodological prob-
lems, such as including a lagged dependent variable (LDV) in fixed effects (FE) model. Scholars
in modern econometrics have argued that using FE in panel data with a LDV yields biased coef-
ficients because a LDV among the regressors violates the ‘strict exogeneity assumption’
(Wooldridge, 2013).
Fourth, social expenditure as a percentage of gross domestic product (GDP), which has conven-
tionally been used to measure the level of welfare state development, has limitations in validity and
in cross-national comparisons. Spending does not capture the central concepts in welfare state
scholarship, namely decommodification and social protection, which together imply emancipation
from market dependency (Esping-Andersen, 1990). Thus, a measure of social expenditure is less
valid to the extent that it does not measure the underlying concept that was meant to be measured.
In addition, the value of spending at a given time depends on other factors such as economic per-
formance and different demographic mixes rather than the extent of social rights. Accordingly,
using this measure makes cross-national analysis more difficult. To address these shortcomings,
we use the Combined Generosity Index in Comparative Welfare Entitlements Dataset 2 (CWED2)
(Scruggs et al., 2014). This dataset is useful for three reasons: (1) it measures what our theory tries
to capture; (2) the comprehensive information on systematic institutional features makes the com-
parative analysis more reliable; and (3) the dataset covers most of countries in our sample.
By using a new set of observations on recent elections and an improved methodology, we revisit
the welfare state and economic voting hypothesis. Methodologically, this article offers more accu-
rate estimates of economy’s impact on the incumbent’s vote share by using an improved welfare
measure (combined welfare generosity index) and taking clarity of responsibility into account. In
examining the impact of welfare generosity on economic voting, we expect the effect of macroeco-
nomic conditions on electoral outcomes to be weaker in generous welfare states than in stringent
welfare states because strong welfare protection provides a safety net that alleviates voter sensitiv-
ity to economic fluctuations. After analyzing 174 legislature (lower chamber) elections in 31
Organisation for Economic Co-operation and Development (OECD) countries from 1980 to 2010,
we find evidence supporting this expectation. The effects of the economy – GDP per capita growth
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