Channeling frustrations: Institutions,economic fluctuations,and political behavior

Abstract While the literature suggests that clear lines of responsibility lead to greater incumbent dependence on economic conditions for support, little has been said about how electorates channel frustrations in systems characterized by 'fuzzy' lines of responsibility, i.e., the shape and status of parliamentary government in relation to possible choice of electors open to them. The argument presented here is that fuzzy lines of responsibility result in lower incentives to participate in political processes and greater system dissatisfaction given economic circumstances. This decline is greater in systems in which incumbent responsibility is less easily identified by the individual citizen. To test this, data are collected from eight European nations over the period 1975–1992. Split sample and slope intervention models with robust estimation are employed at the individual level. System level aggregates are analyzed using pooled time–series analysis to confirm individual level findings. Finally, election turnout data are also analyzed to obtain election level verification of survey findings. Evidence suggests that participation is more heavily influenced by economic conditions in fuzzy settings. Coupled with existing literature, this suggests that while clear settings encourage punishment of the incumbent unclear settings tend to cause individuals to become more withdrawn and alienated. However, economic conditions are also important to overall system effects. The findings herein suggest that unclear or fuzzy settings increase the role of economic conditions in determination of system affect.     

The economic approach to political behavior: Governors,bureaucrats, and cost commissions

Cost control commissions provide two primary types of recommendations: widespread benefits-widespread costs and widespread benefits-narrow costs. Both types of recommendations are not of the form predicted by the standard economic models of political behavior. The paper explores why governors sanction these commissions and the types of recommendations governors will accept. Legislators use the maxim of concentrate benefits-spread costs to maximize votes. Governors, however, face a lower return to concentrated benefit policies and a lower cost from concentrated cost policies. This leads a governor to favor at the margin, policies which have widespread benefit-widespread cost or widespread benefit-concentrated cost. Evidence from 5 state cost control commissions support the difference between the politicians. The cost control commissions sanctioned by governors have proposed recommendations of the widespread benefit-widespread cost and widespread benefit-concentrated cost form. Governors accepted approximately two-thirds of the widespread benefit-concentrated cost proposals, although they were more likely to accept recommendations of the widespread benefit-widespread cost nature. Recommendations which required legislative approval saw a lower likelihood of acceptance. This is consistent with the view that legislators prefer concentrated to widespread benefit recommendations. qu][The politician's] favorite strategy is to create a commission to study a problem and make recommendations that may then be used as political cover. Call it government by commission.     

Electoral institutions, partisan status, and political support in Lesotho

Does the introduction of proportionality in electoral systems help to boost popular evaluations of democracy? This article takes advantage of an electoral reform in Lesotho to conduct a natural experiment. We trace shifts over time in popular political support, using Afrobarometer data collected before and after reform to measure mass satisfaction with democracy and public trust in political institutions. We find both direct and indirect effects. In the aggregate, Lesotho's transition from a majoritarian to a mixed electoral system is directly associated with increased levels of citizen support for the country's state and regime. Importantly, however, formal institutions have only indirect effects at the individual level, where a person's informal partisan status – as a member of a winning majority or losing minority – mediates the impacts of institutional change.     

Instrument choice,political reform and economic welfare

The purpose of this paper is to formally examine the effect of placing constraints, such as the line-item veto or a balanced budget amendment, on legislative behavior. There are two basic findings that emerge from the analysis. First, constraints on one type of instrument, such as spending, will in general result in more widespread use of other kinds of instruments, such as regulation. Second, it is naive to conclude that constraints on legislative behavior will promote economic efficiency and/or reduce the growth of government. The primary contribution of the paper is to suggest how changes in the political environment can affect instrument choice, economic welfare, and the size of government.This research was supported in part by a grant from the National Science Foundation Decision, Risk and Management Science Program. The author gratefully acknowledges the helpful comments of Ed Campos and Allan Meltzer. The views in this paper are solely those of the author and do not necessarily reflect the views of the Council.     

Groups and political behavior: Legitimation,deprivation, and competing values

This essay asks what might be most usefully studied in future analyses of the impact of groups on the voting behavior of individuals. A dimension of group analysis so far neglected concerns some value orientations that affect the relevance of group consciousness to voting or other political behavior. In particular, the legitimacy of group political action and of group politics more generally is of central importance. Connected to such evaluations is the character of group comparisons, such as in group-focused relative power deprivation. Also of relevance are competing political value constellations, especially individualism and majoritarianism. By the use of a variety of National Election Studies and Wisconsin survey data, these themes are explored empirically to show the extent of a group focus that goes beyond the usual measures of group consciousness. Relative approval of group-based pluralism is also shown to affect the patterns of relationships of major predictors of turnout. And finally, a LISREL analysis is presented that shows that a group focus is as important as a party focus in affecting the level of political alienation pertinent to voter participation.     

Informal institutions rule: institutional arrangements and economic performance

Institutions are widely believed to be important for economic development. This paper attempts to contribute to our understanding of how institutions matter by examining the effect of formal and informal institutional arrangements on economic progress. Formal institutions represent government defined and enforced constraints while informal institutions capture private constraints. The findings suggest that the presence of informal institutions is a strong determinant of development. In contrast, formal institutions are only successful when embedded in informal constraints, and codifying informal rules can lead to negative unintended consequences. This suggests that institutions cannot be easily transplanted in order to spur economic development.     

Political institutions and economic growth reconsidered

The debate on the relationship between institutions and economic development is discussed, focusing on two illustrations, i.e., the impact of democracy and political instability on economic growth. Various pitfalls of existing research are identified, like sensitivity of the outcomes to model specification, sample heterogeneity, measurement of political variables, and the treatment of the time dimension.     

Municipal corporations, economic calculation, and political pricing: exploring a theoretical antinomy

Most thinking about political economy treats states as unitary actors. In contrast, this paper treats states as ecologies of politically-based enterprises. Where a market is a congeries of business enterprises, a state is a congeries of political enterprises. Both sets of enterprises compete with one another in a setting where those who manage corporate capital are largely separate from those who supply it. Competition among political enterprises, however, cannot generate market prices because of the inalienability of property rights. In consequence, what arises is a system of pricing and calculation that exists parasitically upon the system of market prices.     

Competition in political and economic markets

Prepared as a response to Frey and Eichenberger's Anomalies in Political Economy. We thank Gordon Tullock for helpful discussions. This work was partially supported by the Taylor Experimental Laboratory at Washington University.     

Democracy and the quality of economic institutions: theory and evidence

Public Choice - We present a simple model, illustrating how democracy may improve the quality of the economic institutions. The model further suggests that institutional quality varies more across...     

Randomized experiments by government institutions and American political development

Public Choice - Are the methods of causal inference and, in particular, randomized controlled trials, compatible with the study of political history? While many important questions regarding...     

The political monetary business cycle: Political reality and economic theory

This paper addresses the issue of expectations incorporated into political business cycle models. Rational agents anticipate Democratic efforts to stimulate the economy via monetary policy, discounting money supply from the calculations for determining output variance, so that output under Democrats is wholly unaffected by changes in the money supply. Rational agents appear to be naive about Republicans, incorporating money supply into the calculations for determining output variance, so that output under Republicans is significantly related to money supply.     

The global economic crisis and domestic political agendas

There is an ongoing debate within the economic voting literature about whether the economy's salience systematically fluctuates over time or is constant. The recent global economic slowdown provides leverage to test the proposition that voters give greater weight to economic performance when it is weak. Data on voters' issue priorities from 2000 to 2011 shows that voters were more likely to consider the economy an important issue during periods of bad or volatile economic performance. A weak economy also focuses voter attention on corruption and crime while reducing attention to social policy and foreign affairs. Crime rates, terrorist attacks, globalization, and the level of development also affect the economy's place on the electoral agenda. Thus one impact of the recent financial downturn was a shift toward economic voting in countries where it was deepest.     

Cognitive links between economic grievances and political responses

Changes in the economy are associated with changes in support for the incumbent President (or members of his party) at the aggregate level but not generally at the individual level. That is, thepersonal impact of economic hardships has only rarely been linked to individual political responses. This paper finds again that various indicators of personal economic grievances are not in general associated with either economic policy preferences or support for President Carter. However, some rare circumstances in which the personal impact of economic grievances did have more power were identified, specifically when voters blamed the President for their economic hardships. Support was also found for Kinder and Kiewiet's (1979) notion that collective judgments about the health of the economy, rather than one's personal economic situation, drive political responses.