Bad Governance and Myopic Voters: Economic Voting in the Portuguese Municipalities

A vast line of research on social and organisational psychology suggests that people’s satisfaction with authorities and decisions does not hinge exclusively on the delivery of short-term beneficial and tangible outcomes. People also care about how outcomes are reached, i.e., about the procedural fairness and the quality of governance. But an additional finding in this literature is that procedural fairness moderates the relationship between short-term outcomes and satisfaction. Unfair institutions, which fail to build trust between authorities and individuals and do not foster the belief that outcomes are likely to be beneficial over the long haul, increase the salience of short-term outcomes. Conversely, fair institutions lead to a less short-term transactional or myopic relationship between individuals and authorities. We test this general hypothesis with the help of economic, electoral and institutional data from Portuguese municipalities. We anticipate that procedural fairness in local governance — captured with an index of institutional and informational transparency — changes the time horizon of voters when using economic outcomes to punish or reward incumbent, with that horizon increasing (with voters caring more about cumulative long-term performance than with short-term performance) the higher the level of procedural fairness.