Effects of Winner Identity on Policy Choices and Economic Outcomes

• In Event: Political Leadership

Abstract

Democracies’ ability to deliver social and economic outcomes aligned with people’s preferences depends on the extent to which elected governments turn electoral results into actual policies. Representatives may fail to implement the policies for which they were elected, due to limited capacity, misaligned incentives, or constraints imposed by supranational and subnational forces. In this paper, we study the impact of election results by assessing the extent to which policies and ensuing outcomes reflect the partisan orientation and other attributes of the winner. Rigorous evidence on this question so far has mostly been limited to subnational elections within specific countries. Instead, we study a sample of (more consequential) national elections, which determine the identity of the candidate or party in power at the national level. To achieve the highest possible external validity and obtain sufficient statistical power, we combine a variety of academic and crowdsourced datasets to construct a worldwide database containing all nearly 4,000 available aggregate results of presidential and parliamentary elections conducted since 1789. Our analysis accounts for the many subtle differences between electoral systems across countries as well as the technical complications arising from coups or parliament dissolutions. We first measure the impact of electing a challenger instead of reelecting the incumbent, using as outcomes the absolute value of the difference between post- and pre-election policies and outcomes. In other words, we ask whether voters obtain the change (in policies and ensuing outcomes) for which they vote when they put a new party in power. If the effect of electing a challenger is small overall, it might contribute to an explanation of people’s perception that “all politicians are the same” and their dissatisfaction with democratically elected governments. Second, we study the extent to which the policies implemented by the winner change with her age, gender, prior experience and political orientation. Finally, we compare the size of our estimates across periods characterized by more or less intense globalization and across countries with different degrees of decentralization and institutional checks and balances, to identify which factors are responsible for weakening the link between electoral results and national outcomes.

Authors

• Vincent Pons, Harvard Business School

• Benjamin Marx, MIT Economics