And They Still Matter… Market Liberalism, Governments and Performance in 32 Western Democracies

Cumulated evidence points to fading partisan impacts on major socio-economic policies and higher aggregated outcomes. These findings are problematic in terms of democratic theory which assumes substantial alternation to be a basic element of proper representation. However, these findings are rooted in conventional measurements of party preferences. These measures face severe problems of temporal and cross country equivalence. If we replace left and right measures with government preferences towards market liberalism, this problem is by far reduced. I test the impact of government market liberalism on major dimensions of liberalization and higher aggregated outcomes using structural equation modelling over 32 countries from 1960-2010. Market liberalism explains the liberalization of Western societies significantly over the whole period. Additionally, impacts on outcomes of performance are very interesting. Market liberal governments do not perform systematically better than their interventionist counterparts, but raising inequality systematically.