likely to produce the best outcomes. What makes it a retrospective theory is that it posits that voters use retrospective knowledge as a shortcut for forming their view as to which party this is. As mentioned earlier, Downs expects voters to augment their retrospective evaluations with a trend factor, reflecting their assumptions about the future course of present events. Given this framework, it is not unreasonable to interpret a voter’s reported prospective economic as- sessment as a projection of his or her retrospective economic assessment using a trend factor. The prospective interpretation of the selection model used in this thesis thus predicts that the retrospective and prospective economic evaluations are typically moderately correlated but that the prospective evaluations are the stronger predictor of party support.
1.8
Political context and the instability problem
An enduring problem for economic voting research has been the instability of its findings. It has frequently been the case that promising efforts to measure the economic voting effect have produced wildly different estimates in different countries and sometimes even the same countries at different times. Explaining this instability has increasingly become a focus for research in this area (Lewis-Beck and Paldam 2000, 113–114; Dorussen and Palmer 2002, 1– 5). This instability is particularly salient for a comparative study such as this one because it is clearly not reasonable to assume that the economic vote is the same for all of the different countries under study or even that it is stable across time. An understanding of political context is thus important and this section reviews what is already known about the impact of context on the economic vote. Non-contextual explanations for the instability problem have also been proposed. For example, van der Brug, van der Eijk and Franklin (2007, 16) argue that model misspecification is the principle cause of this instability5 but even if true, this does not mean that context does not also play a role. Voter heterogeneity has also been proposed as a possible cause of the instability problem (Dorussen and Palmer 2002, 7) but these possibilities are beyond the scope of this thesis.6 One way to take into account contextual differences is simply to model them without trying to explain them. For example, if the model allows for the possibility that, say, Poland and the Czech Republic have different levels of 5In particular, they argue that the instability results from the failure to take into account party competition. Their recommendation is to model party support explicitly rather than just vote choice and this is the approach taken in this thesis, as was discussed earlier in this chapter.
6As well as adding considerable extra complexity and consuming degrees of freedom, the required data is not readily available: ‘Information about relevant sources of voter heterogeneity is much more sparse, basically only available for a few countries and measured at irregular intervals’ (Dorussen 2002, 309).
economic voting then this can be accounted for. This is the method used by Chapter 3. Of course this is merely an empirical fix and does not solve the theoretical problem, as it sheds no extra light on these differences.
A more sophisticated approach requires an understanding of the causes of the variation between political contexts. The most influential theory of contextual variation in the economic vote is the theory of clarity of responsibility, which was introduced to the literature by Powell and Whitten (1993) and further developed by Whitten and Palmer (1999). According to this theory, economic voting is more likely to take place in contexts where voters can reasonably hold a particular incumbent responsible for the condition of the economy. While this can be reasonably done in a country like the United Kingdom, where there is very little to hinder prime ministers from taking whatever course of action they feel is required, this is not neces- sarily the case everywhere. For example, the German chancellor frequently has to negotiate policies with coalition partners as well as gain the support of the upper house if certain forms of legislation are required. Furthermore, certain policies may be beyond the jurisdiction of the federal government and require the support of the states to be implemented. This implies that it is less clear in Germany which government and who within the government, if anyone at all, ought to be held responsible for any unwelcome economic events. Accordingly, the argument runs, German voters ought to be less inclined to vote economically than their British coun- terparts. Much of the work in this area has focused on precisely how clarity of responsibility should be measured. In its original conception, the key variables were the voting cohesion of the incumbent parties, the strength and inclusiveness of the parliamentary committee system, opposition in any constitutionally significant upper house, and the presence of a minority or coalition government (Powell and Whitten 1993). Alternative measures have been proposed but these are discussed in Chapter 4, where a clarity of responsibility model is constructed.
An alternative contextual theory of economic voting has been developed by Duch and Stevenson (2008). Basing their model on the rational expectations literature, and particularly Alesina and Rosenthal (1995), they distinguish between two types of economic growth shocks. These are competency shocks, which derive from the actions of the incumbent government, and exogenous or nonpolitical shocks, which do not (Duch and Stevenson 2008, 132–133). The strength of the economic vote depends on the proportion of shocks which are compet- ency shocks (138). Duch and Stevenson (2008, 147) argue that this proportion is related to the mix of ‘electorally dependent’ and ‘nonelectorally dependent’ economic decision makers. Electorally dependent decision makers include both elected officers themselves and also the
1.9. THE GREAT RECESSION 31