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Is there an Economic Vote in Referendums?

Comparative Politics
Referendums and Initiatives
Decision Making
Voting Behaviour
Arndt Leininger
Freie Universität Berlin
Arndt Leininger
Freie Universität Berlin

Abstract

Referendums provide citizens with more control over policy. Yet, citizens may decide how to vote based on extraneous factors, with negative consequences for the quality and legitimacy of decisions taken. I analyze the relationship between individuals' assessment of the national as well as their own economic situation and their vote choice in the 2016 Italian constitutional reform. The economic vote may be the best available evidence for electoral accountability. However, it seems entirely undesirable in referendums because these should be about substantive issues not the government's handling of the economy. I show that the more negative a respondent's evaluation of the economy the lower their likelihood to vote "yes" on the government's reform proposal. This relationship is remarkably strong: an average respondent with a very positive evaluation of the economy has a 88% probability of supporting the government compared to only 12% for a respondent with a very negative evaluation. Contrary to expectations, this relationship is stronger for high information voters. The fact that economic evaluations are a strong determinant of vote choice is quite worrying. It suggests that the outcome of a referendum may also depend upon when in the business cycle a referendum is held.