Inflation and political instability in eight Latin American countries 1946-83

The path of consumer price rises is compared with data for the incidence of political change and the frequency of military regimes from 1946 to 1984 for the following countries: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay and Venezuela. A highly significant connection between the frequency of military government and the level of inflation is found. This appears to be due to two other significant results: (i) The military regimes are relatively unstable ones. (ii) Inflation normally turns upwards under civilian and downwards under military regimes, i.e., the military regimes are relatively strong in fighting inflation. Finally, it is demonstrated that few regimes survive a spell of hyperinflation.     

The VP-function: A survey of the literature on vote and popularity functions after 25 years

VP-functions explain the support for the government at votes and polls by economic and political variables. Most studies analyze macro time series. We also cover studies of individual voters, socio-economic groups and regional cross-sections. The theory starts from the Responsibility Hypothesis: voters hold the government responsible for economic conditions. It works in two party/block systems, but not else. Voters in most countries are found to be sociotropic. Egotropic voting also occurs. Voters' myopia is well established. Voting is retrospective as expectations are static. It costs the average government almost 2% of the vote to rule.     

A rational-voter explanation of the cost of ruling

It is well known that the average government loses votes — the so-called cost of ruling. We show that the loss can be explained as a perfectly rational demand for change in a median voter model, once the model is amended to let the two parties be visibly different.