1. The Global Economy, Competency and the Economic Vote Ray Duch & Randy Stevenson
APSA Annual Meeting 9/1/2006

2. Three Interesting Puzzles
How to measure it?
How to explain its contextual variation – theory!
Some – hopefully – convincing evidence.

3. Measuring the Economic Vote
163 voting studies; 18 countries; 20 years
Two stage method
Magnitude of economic vote (individual-level)
Contextual effects (aggregate-level)
Hierarchical models

4. Predicted Vote Equivalent evaluation question in each country study
Similar set of control variables
in each country study

5. Economic Vote
Magnitude of
Economic Vote

6. Summary of Method
Comparable questions on vote choice and economic perceptions.
Similar control variables.
MNL estimation.
4. Simulate difference in predicted vote – sum over sample.

7. Second Stage Results

8. There is an economic vote
Median economic vote is about 4.4%.
Point estimates range from -18 to 4%.
70% of EV fall below 0.

10. Often there is NO economic vote!
UK: 1992 and 1997
Germany: 1987
US Congressional elections
US presidential elections (1988 & 2000)
Point out that this is consistent with other empirical research

11. Rational Retrospective Voting
Rational Expectations
Maximize their expected utilities and form expectations optimally.
Persson and Tabellini (1990); Alesina and Rosenthal (1995)

12. Competency Model Variance in the incumbent’s “Competency Signal”
competence shock.
“Competency Signal”
Equilibrium
economic performance.
Known competence
at previous time
point.
Utility of casting economic
vote for the incumbent.
Variance in exogenous
shocks to economy.
Utility of casting economic
vote for the opposition.

13. Signal from Global Economy?
Variation in domestic economy deviates from global economy = strong competency signal.

14. Hypotheses: Domestic and global economies are informative.
Pay attention to fluctuations in economies.
Opinions reflect actual economic outcomes.
EV is conditioned by economic signals.

15. Six nation study of voters
Denmark, UK, France, Germany, Spain and Italy
Test assumptions regarding voter knowledge of fluctuations in domestic/global economy
Test hypothesis that they use these cues to condition their economic vote

17. Domestic versus Global
Distinguish between domestic versus global economic shocks.
Perceptions grounded in actual outcomes.

19. Variance in Domestic/Global Economy

20. Signal conditions economic vote

21. Macro-contextual evidence
Test assumption that the domestic/global economies are informative.
Test the argument that these signals condition the EV.

22. Macro-economic signals

24. Signals condition economic vote

25. Signal conditions economic vote

26. Conclusions
A competency signaling model explains contextual variation in EV
Voters are up to the information requirements of a competency model.
Both micro and macro-evidence indicates competency signals condition EV