Economic Voting in Europe and Latin America: Citizen Reactions to Economic Cycles

As Lewis Beck and Paldam (2000) established, there are two main links in the causal chain of the economic vote: (i) from economic conditions to voter perceptions; and (ii) from voter perceptions to the vote. Most studies in the field of economic voting have focused on the second part of this causal chain (ii). It is well established that citizens’ economic evaluations affect voting behavior, and that this relationship is shaped by the country context, including clarity of responsibility. However, less is known about the first part of this chain (i), how a country’s economic cycles shape citizens’ perceptions of the economic performance of their country, and how this in turn affects the economic vote. This paper aims to contribute to a deeper understanding of the complete causal chain of economic voting. In this paper we examine how periods of economic prosperity and economic crisis affect citizens’ retrospective evaluations of economic outcomes, and their voting behavior. We expect that in countries accustomed to a greater degree of economic fluctuations, citizens are less likely to evaluate modest declines in economic performance negatively, compared to those in countries with relatively stable economies. In turn, relative to the objective measures of economic performance, we expect a weaker economic vote in countries used to unstable economic conditions. To examine this question, we use individual level data on retrospective economic assessments and voting behavior from the Latinobarometer and the Latin American Public Opinion Project (covering 16 countries), and the Eurobarometer (covering 14 countries), from 1996 to 2016. The combined data covers a total of 30 nations over a period of 20 years, offering sufficient variability in economic and political contexts. This individual level data is combined with data on macroeconomic conditions from the World Bank. Multilevel modelling is used to assess the impact of contextual factors, including each country’s economic history, as well as individual-level factors that influence retrospective economic evaluations and the vote. This paper contributes to literature on the role of context shaping the economic vote, and on the relationship between objective economic conditions and citizens’ subjective assessments of economic performance.