The evidence presented in the previous chapter established that economic voting in the world's advanced democracies is both pervasive and variable. The goal of the rest of this book is to identify the political and economic contexts that explain that variation. To do so, we develop a contextual theory of rational retrospective economic voting that points to specific kinds of political and economic institutions as the likely sources of cross-national and temporal variation in economic voting. However, before we make the effort to develop that theory and test its implications, we need first to establish that the variation in our estimates of economic voting described in the last chapter cannot be explained away as an artifact of the empirical methods we have employed to generate them. Three general methodological issues are of concern here: the choice of statistical models, measurement decisions, and model specification. We begin with an explanation of the two main statistical methods we use to conduct the empirical analysis in this and subsequent chapters. We then proceed to analyze our data to determine whether our estimated variation in the economic vote is an artifact of our particular statistical models, measurement choices, or specification decisions.

Two Methods for Exploring the Sources of Contextual Variation in the Economic Vote

In this section, we introduce two general empirical methodologies for testing hypotheses about the impact of contextual variables on individual-level behavioral relationships: The first is a one-stage approach in which the individual-level data from multiple contexts (in our case, voter-preference surveys) are pooled and the impact of context is estimated simultaneously with the individual behavioral relationships of interest.

It is virtually a universal belief among politicians, political commentators, and even voters that elections are referenda on the economy. Politicians fill their speeches with economic rhetoric; political commentators generate endless streams of economic analysis, and high-paid consultants base their statistical predictions on little else. The extent and depth of this belief is revealed most starkly when it appears to have been violated. When incumbents win despite a bad economy or lose despite a good one, we observe in the postelection hand-wringing a concerted search for ad hoc explanations that preserve the more fundamental belief that the economy matters. Perhaps voters' perceptions of the “real” economy were distorted; foreign policy issues may have overshadowed its effects; or, maybe, ineffective campaign strategies undermined the expected economic vote. Ultimately, however, in most elections, the economy is thought to be determinate.

Popular beliefs, of course, are not social science laws and exceptions to economic determinism are easy to find, even if they are often explained away as idiosyncratic. More generally, the systematic empirical work on economic voting, conducted in most of the advanced democracies over the last thirty years, reveals not a universal law of economic voting but, rather, a conditional one. Economic voting is very likely widespread and often important; but, its magnitude and nature across elections is almost certainly variable (Duch, 2001; Lewis-Beck and Stegmaier, 2000, 2006). There are limits, however, to the guidance the extant empirical literature can give us.

The previous chapter suggests that voters are attentive to economic fluctuations in a manner consistent with our competency theory. In this chapter, we explore whether there are features of the political-economic context that affect these competency signals in a systematic fashion and, hence, account for the contextual variation in economic voting that we saw in Chapter 3. For example, the evidence presented in the previous chapter suggests that voters understand the extent to which their domestic economy is subject to the influence of global economic factors. Does this help account for the contextual variation in economic voting? Although there has been speculation in the economic-voting literature about the links between these features of the policy-making context and the economic vote (Lewis-Beck, 1988; Powell and Whitten, 1993), the results have been mixed. Improving our understanding of this link requires a more developed theoretical understanding of how individuals use information regarding the political economic context to inform their vote choice.

Our competency theory provides an explanation for why, and how, fluctuations in the magnitude of the economic vote are related to these variations in political and economic contexts. Recall from the theoretical discussion in Chapter 5 that context matters because it influences the number of electorally versus nonelectorally dependent decision makers (or, using our abbreviations, EDDs versus NEDDs) associated with macro-economic policy outcomes, which in turn shapes the size of the incumbent's competency signal.

The previous chapter established that voters condition their economic vote on the current distribution of policy-making responsibility among parties competing for election. In this chapter, we examine whether the data also support our theoretical proposition that voters condition their economic vote on the extent to which parties are “in contention” for policy-making responsibility in the future. Our theory assumes that voters know the extent to which different parties and coalitions of parties contend for significant shares of policy-making responsibility. We support this assumption with survey evidence from three countries that shows that voters are surprisingly well informed about the pattern of cabinet contention, even in very complex coalitional systems. With this assurance that, in the few cases for which we have direct evidence, our information assumptions are plausible, we next propose two different methods for measuring beliefs about cabinet contention in the larger number of cases in our sample (for which direct survey data about beliefs are not available). Finally, in the rest of the chapter, we use these measures to test three general hypotheses (all implied by the theory in Chapter 8) about how the pattern of contention for policy-making responsibility conditions economic voting.

VOTER BELIEFS ABOUT THE PATTERN OF CONTENTION

Our model of economic voting assumes that voters have knowledge about which parties or coalitions of parties are likely to form the government or otherwise participate in policy making.

This book was initially motivated by a simple concern with understanding contextual variation in the economic vote. Accordingly, we set out first to describe the extent of contextual variation in the economic vote across countries, over time, and across parties. To explain this contextual variation, we develop a theoretical explanation rooted in the long tradition of rational-choice explanations of economic voting. These explanations provide a set of plausible (and testable) empirical hypotheses about the kinds of political and economic contexts that are likely to condition the economic vote. Finally, we leverage the evidence from our map of economic voting, along with measures of variation in political and economic context, to test these hypotheses. In this concluding chapter, we first summarize our results and evaluate the extent to which we have fulfilled these goals and ask what work remains to be done. Furthermore, we discuss how the lessons we have learned about economic voting in this project might speak to researchers interested in comparative political behavior more generally.

SUMMARY AND EVALUATION

Variation in the Economic Vote

Part I provides the most comprehensive and comparable description of contextual variation in individual economic voting yet available to political scientists. Our estimates of the economic vote are consistent with the limited comparative evidence already available in the literature. We also produce quite reasonable estimates of economic voting for those parties, countries, and time periods in which previous comparative work has not been available.

Two theoretical propositions come out of the discussion of administrative responsibility in the last chapter, each of which produces a straightforward hypothesis. The first concerns the distribution of the economic vote across parties. Parties with a greater share of the status quo distribution of administrative responsibility will receive a greater share of the economic vote than parties with a smaller share. The second concerns the overall size of the economic vote across all parties in an election. As the status quo distribution of administrative responsibility over parties becomes more equal, the overall economic vote declines.

The main task in testing these empirical hypotheses is the measurement of voters' beliefs about the share of administrative responsibility that each party holds. A variety of indicators of the status quo distribution of policy-making responsibility has been discussed in the literature: the current distribution of cabinet membership, the current distribution of cabinet portfolios, the coalition status of the government, the majority status of the government, the influence of the opposition on the government, the extent of collective cabinet responsibility, the distribution of legislative seats, the distribution of ministries specifically dealing with economic matters, and the role of the president. Furthermore, the values of these variables are so widely reported and so well known that we can assume voters' beliefs about them closely mirror the empirical reality, at least on average.