How will the economy affect the election? What political science research tells us

By Harold Jansen on Sep 16, 2008

The election was pushed off the front pages by the crisis surrounding the financial industry in the United States, the subsequent carnage on the stock markets, and the implications for the global economy. What impact might all of this have on the election? Political science research into the economy and voting provides us with some clues about what to look for.


The economy matters. Simply put, what we find is that incumbents are more likely to get re-elected when the economy is doing well and more likely to get defeated when the economy is performing poorly. Given how globalized the international economy is and how little governments can influence the economy in today’s world, that may seem a bit unfair or a bit strange. However, governments take lots of credit when the economy is going well, bragging about the thousands of jobs that were create, so it seems only fair that they pay a price when things go south..


Specifically, we also know that voters are more likely to make their decisions based on how the economy as a whole is doing, not how they personally are doing. Voters seem to think that their personal economic fortunes are their own responsibility, but the government bears some responsibility for the overall health of the economy. Furthermore, voters are more likely to make up their minds based on how the economy has performed in the recent past, not how they anticipate it will perform in the near future. They look back, not forwards. Canadian voters also seem to be particularly moved by unemployment, rather than economic growth or inflation. Finally, what matters is voters’ perceptions of how the economy is doing, not what’s actually happening. Those perceptions may or may not be correct. In one of may favourite bits of research on the economy and voting in Canada, Richard Nadeau and the 1997 Canadian Election Study team found that Atlantic Canadian voters’ incorrect perceptions that unemployment had worsened during Jean Chretien’s first term in office nearly cost the Liberals a majority government (PDF version of the article available here).


While the economy matters, it is important to avoid simplistic models of voting that suggest that the economy is going to drive voter behaviour over and above everything else. Voting is multi-faceted, driven by a variety of things, including social group membership, identities, beliefs and values, attachments to parties, assessments of leaders, issues and rational calculations about how to maximize the value of the vote. The economy is one of several influences on voters’ vote decisions.


So, what might we expect in the Canadian election? Based on the research, we might expect that the Conservatives will pay a price for this. The economy has worsened since they’ve been in office. Economic growth has slowed. Unemployment, which was in decline over the first two years the party was in office has been edging up in 2008. There have been a number of high profile layoffs in the automotive sector. Despite this, I don’t think the Conservatives will pay much of an electoral price just yet. There is a lag between what happens in the economy and people’s perceptions of what’s happening. I don’t think it’s completely sunk in yet for most people that Canada’s economic boom has slowed. What the crisis will do is shift attention to economic management as an issue and much of the campaign dynamic depends on which issues are ascendant at any point in time. A focus on the economy generally doesn’t play well for the NDP, which Canadians have historically not trusted on economic matters. The Liberals might point (and already have done so) to the fact that the economy was in good shape when they were in office. A more serious criticism might be that the Conservatives have eroded the federal government’s fiscal capacity to respond to a slowdown in the economy. Through a series of tax cuts and giveaways, particularly the politically astute but economically dubious cut to the GST, the government is closer to deficit position than at any point in several years. If government revenues decline, the Conservatives might face some difficult decisions down the road.


So, the economy is likely not going to decisive in this election. It will play a small role, but there are so many other things on the table, I suspect its impact will be blunted. But I’d be concerned if I were the government in the election after this one. By that point, the impact of this will have been felt and understood by Canadians. I suspect this is a big reason why we’re having an election now and not in a year, as mandated by the government’s fixed election date law.


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The difference between women and men

I feel I should make a clarification: Women are more likely than men to consider the overall health of the economy. Men, however, are more likely to consider their own pocketbooks and assign some credit or blame for their personal financial situation to the government. The citation for that is buried somewhere in my comp prep notes. :)

Additionally, it begs the question how well informed the Canadians are about the general state of the economy, and there's some evidence to suggest that when people say they're evaluating the overall economy, what they're really doing is evaluating their own personal financial situation and projecting that to the nation. 

That said, I think you're right, Harold. 

Gender strikes again

Ah, thanks for the little nuances, Melanee. I'd love to see the citation for the gendered effect: very interesting.

Better devil you know...

I agree with the conclusion, however I don't think we are done yet with the economic turmoil during the election. I would think there is a link in the minds of voters with who will help the economy back on track faster. I would think people would turn to the Conservatives. The Liberals and the Green Shift plan may lose out as it's precieved as more expensive (at least in the short term).

“Political science without biography is a form of taxidermy.” Harold D. Lasswell

Have you changed your opinion on if the economy is a factor?

I think this blog was posted on the first day we heard about the start of the economic issues in the US. I'm curious if you have changed your mind on if the delay factor and that the economy won't be a factor.

(I write this as I watch the X challenge debate with the finance group)

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