Economy or austerity? Drivers of retrospective voting before and during the Great Recession
| Published date | 01 March 2022 |
| DOI | 10.1177/0192512120919138 |
| Author | Marco Giuliani |
| Date | 01 March 2022 |
| Subject Matter | Articles |
https://doi.org/
International Political Science Review
2022, Vol. 43(2) 173 –190
© The Author(s) 2020
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DOI: 10.1177/0192512120919138
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Article
Economy or austerity? Drivers
of retrospective voting before
and during the Great
Recession
Marco Giuliani
Universita
`degli studi di Milano, Italy
Abstract
During the Great Recession, exceptionally harsh economic conditions were often countered by
austerity policies that, according to many, further worsened and protracted the negative con-
juncture. Both elements, the poor state of the economy and the contractionary manoeuvers, are
supposed to reduce the electoral prospects for incumbents. In this article, we compare the
relative explanatory powers of these two theories before and during the economic crisis. We
demonstrate that in normal times citizens are fiscally responsible, whereas during the Great
Recession, and under certain conditions, austerity policies systematically reduced the support
for incumbents on top of the state of the economy. This happened when the burdens of the
manoeuvers were shared by many, in more equal societies, when the country was constrained by
external conditionalities and when readjustments were mostly based on tax increases.
Keywords
Economic vote, austerity, Great Recession, electoral behaviour, conditionality, inequality
Introduction
Political scientists and economists share a common concern regarding the relationship
between the economic and political arenas. The theory of economic voting postulates that
voters evaluate the incumbent parties on the basis of their capacity to manage the economy.
Corresponding author:
Marco Giuliani, Dipartimento di Science sociali e politiche, Universita
`degli studi di Milano, Via Conservatorio 7, Milano,
20122, Italy.
Email: marco.giuliani@unimi.it
174 International Political Science Review 43(2)
Citizens use this cognitive shortcut in order to decide if they should confirm or punish
incumbents in the ballot. This theory has been extensively confirmed by numerous empirical
analyses and has proved to be adaptable with minor adjustments to normal and exceptional
times (Dassonneville and Lewis-Beck, 2019a; Lewis-Beck and Lobo, 2017).
Other scholars, mostly economists, postulate a different mechanism. Adopting a typical
rational choice perspective, they connect the fiscal policy choices of incumbents, i.e. their
chosen combination of revenues and expenditures, to the voters’ reaction.
Under the assumption that public output enters positively into the utility functions of citizens,
the expenditure by itself will secure support for the politician. The taxes, however, will reduce
the disposable income of citizens, thereby affecting them negatively and reducing support for the
politician. (Buchanan and Wagner, 1977: 100)
We name this perspective, which emphasizes the unpopularity of the reduction of the
public deficit, the ‘theory of the electoral consequences of fiscal adjustments’ – in short, the
‘theory of austerity vote’. Also, this approach has a long intellectual history and has pro-
vided more fine-grained hypotheses for understanding what happened in the past and in the
more recent period of the economic crisis.
Both perspectives resonate well with the empirical evidence provided by the qualitative
literature investigating the Great Recession. The harsh economic conditions mobilized citi-
zens against their governments, producing in certain areas of the world what has been
dubbed an ‘electoral and government epidemics’ (Bosco and Verney, 2016). At the same
time, the austerity policies adopted by many executives, following the advice of international
and supranational organizations such as the International Monetary Fund and the
European Union, attracted their own share of criticisms and triggered further dissatisfaction
and contestation. From Zuccotti Park in New York to Syntagma Square in Athens, from
the Austurv€
ollur in Reykjav�
ık to the Puerta del Sol in Madrid, the protest took different
forms, identified different targets and had different electoral consequences due to the specific
combination of economic conditions and austerity policies peculiar to each national context.
Yet, the two approaches are not equivalent, and what they observe are not simply two
sides of the same coin. The economic vote theory focuses on outcomes: the state of the
economy. The theory of fiscal adjustment focuses on outputs: the deliberate choices of
incumbents. The former approach is based on sociotropic evaluations, at least in its version
based on objective data, whereas the latter is micro-founded on individual utility functions.
The former perspective relies on an indirect judgment on a valence issue such as the man-
agerial capacity of incumbents, the latter one on a direct judgment on a positional issue such
as the adoption of an expansionary versus a contractionary fiscal policy. Moreover, the
policy choices of incumbents are not simply dictated by events or the actual state of the
economy, so there is no correlation between macroeconomic indices and the incumbents’
policy choices. Faced by a similar crisis situation, policy-makers have reacted dissimilarly:
forcing expansionary policies, such as the so-called Abenomics, or preferring a more austere
approach – as what happened in many European countries.
Using a dataset composed of electoral and economic data relative to 36 democratic
countries that went to the polls for a general election 159 times between the years 2000
and 2015, we aim at comparing the prediction of the above introduced theories, detailing
their utility and explanatory fit in ordinary and in exceptional times, before and during the
Great Recession. We demonstrate that the theory of economic voting has a wider
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